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): February 14, 2020

 

 

 

ATLAS TECHNICAL CONSULTANTS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-38745   83-0808563
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

 

13215 Bee Cave Parkway, Building B, Suite 230

Austin, Texas 78738

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (512) 575-3637

 

Boxwood Merger Corp.

8801 Calera Drive

Austin, Texas 78735

(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:

 

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 (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A common stock, $0.0001 par value per share   ATCX   The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Class A common stock   ATCXW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Introductory Note

 

On February 14, 2020 (the “Closing Date”), Atlas Technical Consultants, Inc. (formerly known as Boxwood Merger Corp.), a Delaware corporation (the “Company”), consummated its previously announced acquisition of Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), pursuant to the Unit Purchase Agreement, dated as of August 12, 2019, as amended on January 22, 2020 (the “Purchase Agreement”), by and among the Company, Atlas TC Holdings LLC, a wholly-owned subsidiary of the Company and a Delaware limited liability company (“Holdings”), Atlas TC Buyer LLC, a wholly-owned subsidiary of Holdings and a Delaware limited liability company (the “Buyer”), Atlas Intermediate and Atlas Technical Consultants Holdings LP, a Delaware limited partnership (the “Seller”). The acquisition of Atlas Intermediate pursuant to the Purchase Agreement together with the other transactions contemplated by the Purchase Agreement is referred to herein as the “business combination.”

 

Following the consummation of the business combination (the “Closing”), the combined company is organized in an “Up-C” structure in which the business of Atlas Intermediate and its subsidiaries is held by Holdings and will continue to operate through the subsidiaries of Atlas Intermediate, and in which the Company’s only direct assets will consist of common units of Holdings (“Holdings Units”). The Company is the sole manager of Holdings in accordance with the terms of the amended and restated limited liability company agreement of Holdings (the “Holdings LLC Agreement”) entered into in connection with the consummation of the business combination.

 

In connection with the consummation of the business combination, the Company changed its name from “Boxwood Merger Corp.” to “Atlas Technical Consultants, Inc.” Unless the context otherwise requires, the “Company” refers to the registrant and its subsidiaries, including Atlas Intermediate and its subsidiaries, after the Closing, and “Boxwood” refers to the registrant prior to the Closing.

 

Item 1.01. Entry into a Material Definitive Agreement.

 

GSO Subscription Agreement

 

On February 14, 2020, in connection with the Closing and the previously disclosed Commitment Letter, dated as of January 22, 2020 (the “Commitment Letter”), Holdings and GSO COF III AIX-2 LP (“GSO COF”) entered into a subscription agreement (the “Subscription Agreement”) pursuant to which, GSO COF purchased 145,000 units of a new class of Series A Senior Preferred Units of Holdings (the “Preferred Units”) at a price per Preferred Unit of $978.21 for an aggregate cash purchase price of $141,840,000, which represents a 2.12% original issue discount on the Preferred Units (such purchase, the “GSO Placement”).

 

The GSO Placement was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder.

 

The foregoing description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by the full text of the Subscription Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

 

Terms of the Preferred Units

 

Ranking

 

The Preferred Units rank senior in priority to all other existing and future equity securities of Holdings with respect to liquidation preference and distribution rights.

 

Liquidation Preference

 

The Preferred Units have a liquidation preference of $1,000 per Preferred Unit (the “Liquidation Preference”).

 

Dividends

 

Subject to any limitations set forth in the Credit Facility (as defined herein), the Preferred Units pay a dividend of 5% per annum, plus either an additional 6.25% per annum in cash or 7.25% per annum in additional Preferred Units, at Holdings’ option, payable quarterly in arrears.

 

If a cash dividend is not able to be made because of a limitation under the Credit Facilities, then the Liquidation Preference with respect to any Unit shall increase to 3.5625% in any quarter until a cash dividend can be made.

 

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Voting

 

The Preferred Units do not possess voting rights.

 

Conversion

 

The Preferred Units are not convertible into any other security of Holdings.

 

Redemption

 

Holdings may redeem the Preferred Units beginning on the second anniversary of the Closing Date at a price of 103% of the Liquidation Preference (the “Redemption Premium”), and on the third anniversary of their issuance at the Liquidation Preference, in each case plus accrued and unpaid dividends. The Preferred Units may only be redeemed by Holdings within the first two years of the Closing date upon a change of control as described below, in which case such Preferred Units will be redeemed at a customary make-whole amount as if the Preferred Units were redeemed on the second anniversary.

 

Subject to the terms of Holdings’ and its subsidiaries’ senior credit agreements, Holdings will be required to redeem the Preferred Units at the Redemption Premium, plus accrued and unpaid dividends, in the event of (i) a change of control, (ii) sales or other dispositions of all or substantially all of Holdings’ assets and (iii) the insolvency or bankruptcy of Holdings or any of its material subsidiaries.

 

Finally, holders of the Preferred Units may require Holdings to redeem their Preferred Units at the Liquidation Preference, plus accrued and unpaid dividends, beginning on the eighth anniversary of the Closing Date, subject to certain customary limitations.

 

Covenants of Holdings

 

The terms of the Preferred Units include customary covenants for preferred equity, including limitations on debt incurrence, equity issuances and the payments of dividends.

 

Board Observer

 

GSO COF has the right to appoint one non-voting observer to Boxwood’s and Holdings’ respective Boards of Directors.

 

The foregoing description of the terms of the Preferred Units does not purport to be complete and is qualified in its entirety by the terms and conditions of the Holdings LLC Agreement, a copy of which is filed as Exhibit 10.8 hereto and is incorporated by reference herein.

 

Support Letter

 

On February 14, 2020, in connection with the Closing, Boxwood entered into a support agreement (the “Support Agreement”) with GSO Capital Opportunities Fund III, LP (“GSO Fund”), pursuant to which, instead of purchasing shares of Class A common stock directly from the Company, as had previously been contemplated by the Commitment Letter, GSO Fund purchased 1,000,000 publicly-traded shares of Class A common stock that were withdrawn from redemption, at a price of $10.26 per share (the “Market Purchase”).  In connection with the Market Purchase, Boxwood agreed, among other things, (i) to sell to the GSO Fund 1,000,000 shares of Class A common stock if the Market Purchase was not consummated in satisfaction of GSO Fund’s obligations under the Commitment Letter (ii) to reduce the original issue discount on the Preferred Units from 2% to 2.12% and (iii) to provide certain indemnification rights in connection with the Market Purchase.

 

The foregoing description of the Support Letter does not purport to be complete and is qualified in its entirety by the full text of the Support Letter, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

 

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Credit Agreement

  

In connection with business combination, Buyer, as the initial borrower, entered into a senior credit facility (the “Credit Facility”) consisting of (i) a $281.0 million senior secured Term Loan and (ii) a $40.0 million senior secured Revolver pursuant to that certain Credit Agreement dated February 14, 2020, by and among Holdings, Buyer, and pursuant to the business combination, Atlas Intermediate, which will become the new borrower by operation of law and as further provided in Section 9.19 of such Credit Agreement, the lenders party thereto, the issuing banks party thereto and Macquarie Capital Funding LLC, as administrative agent and swing line lender (the “Credit Agreement”).

 

The Term Loan will mature on the date that is seven years after date hereof and the Revolver will mature on the date that is five years after date hereof. The Term Loan will be funded at closing and used, in part, to fully repay and terminate outstanding obligations of approximately $171 million, pay transaction expenses incurred in connection with the business combination and for other general working capital purposes.

 

Interest is payable monthly or at the end of the applicable interest period in arrears on any outstanding borrowings. The interest rates under the Credit Facility will be will be equal to either (i) Adjusted LIBO Rate (as defined in the Credit Agreement), plus a 4.75%, or (ii) an Alternate Base Rate (as defined in the Credit Agreement), plus 3.75%.

 

The Credit Facility is guaranteed by Holdings and secured by (i) a first priority pledge of the equity interests of subsidiaries of Holdings and Atlas Intermediate and (ii) a first priority lien on substantially all other assets of Holdings, Atlas Intermediate and all of their direct and indirect subsidiaries.

 

The Credit Agreement contains a financial covenant which requires Holdings, Atlas Intermediate and all of their direct and indirect subsidiaries on a consolidated basis to maintain a Total Net Leverage Ratio (as defined in the Credit Agreement) tested on a quarterly basis that does not exceed (i) 5.50 to 1.0 with respect to the fiscal quarters ending on June 30, 2020 and September 30, 2020 and (ii) 5.00 to 1.00 with respect to the fiscal quarter ending December 31, 2020 and as of the end of each fiscal quarter thereafter.

 

The Credit Agreement also includes a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of each of Holdings, Atlas Intermediate and all of their direct and indirect subsidiaries to:

 

incur additional indebtedness and make guarantees;
incur liens on assets;
engage in mergers or consolidations or fundamental changes;
dispose of assets;
pay dividends and distributions or repurchase capital stock;
make investments, loans and advances, including acquisitions;
amend organizational documents and other material contracts;
enter into certain agreements that would restrict the ability to incur liens on assets;
repay certain junior indebtedness;
enter into certain transactions with affiliates;
enter into sale leaseback transactions; and
change the conduct of its business.

  

The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments of junior indebtedness subject, in each case, to compliance with certain financial metrics and/or certain other conditions and (ii) a number of other traditional exceptions that grant the Company continued flexibility to operate and develop its business.

 

The Credit Agreement also includes customary affirmative covenants, representations and warranties and events of default.

     

The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the Credit Agreement, which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

  

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Nomination Agreement

 

On February 14, 2020, in connection with the Closing, the Company entered into a nomination agreement with Seller (the “Nomination Agreement”). Under the Nomination Agreement, Seller has the right to designate a certain number of individuals for nomination by the Company’s Board of Directors (the “Board”) to be elected by the Company’s stockholders based on the percentage of the voting power of the outstanding Class A common stock and Class B common stock, par value $0.0001 (the “Class B common stock,” and, together with the Class A common stock, “common stock”) beneficially owned by the Seller and its affiliates, in the aggregate, as follows: (i) for so long as the Seller beneficially owns at least 50% of the aggregate voting power of the Company, the Seller will have the right to nominate at least a majority of all directors of the Board; (ii) for so long as the Seller beneficially owns less than 50% and equal to or greater than 35% of the aggregate voting power of the Company, the Seller will have the right to designate three directors; (iii) for so long as the Seller beneficially owns less than 35% and equal to or greater than 15% of the aggregate voting power of the Company, the Seller will have the right to designate two directors; and (iv) for so long as the Seller beneficially owns less than 15% and equal to or greater than 5% of the aggregate voting power of the Company, the Seller will have the right to designate one director. In accordance with the terms of the Nomination Agreement, the size of the Board will be fixed based on the number of individuals the Seller is entitled to designate for nomination to be elected as directors.

 

The Nomination Agreement also provides that the members of the management team of Atlas Intermediate shall not, transfer shares of common stock or warrants to purchase shares of common stock beneficially owned or otherwise held by them prior to the termination of the Initial Lock Up Period.

 

The foregoing description of the Nomination Agreement does not purport to be complete and is qualified in its entirety by the full text of the Nomination Agreement, the form of which is attached hereto as Exhibit 10.4 and is incorporated by reference herein.

 

Continuing Members Registration Rights Agreement

 

On February 14, 2020, in connection with the Closing, the Company entered into a registration rights agreement (the “Continuing Members RRA”) with the Seller and its limited partners (the “Continuing Members”). Under the Continuing Members RRA, the Company will have certain obligations to register for resale under the Securities Act all or any portion of the shares of the Class A common stock that the Continuing Members hold as of the date of the Continuing Members RRA and that they may acquire thereafter, including upon the exchange or redemption of any other security therefor (collectively, the “Continuing Member Registrable Securities”).

 

The Company is required to, within 30 days of the Closing Date, file a registration statement registering the resale of the Continuing Member Registrable Securities. Additionally, Atlas Technical Consultants SPV, LLC and Arrow Environmental SPV LLC (together, “BCP”) may demand an unlimited number of underwritten offerings for all or part of the Continuing Member Registrable Securities held by BCP and the other Continuing Members under the Continuing Member RRA.

 

Holders of the Continuing Member Registrable Securities have certain “piggy-back” registration rights with respect to registration statements. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

The foregoing description of the Continuing Member RRA does not purport to be complete and is qualified in its entirety by the full text of the Continuing Members RRA, which is attached hereto as Exhibit 10.5 and is incorporated by reference herein. 

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GSO Registration Rights Agreement

 

On February 14, 2020, in connection with the Closing, the Company entered into a registration rights agreement (the “GSO RRA”) with GSO Capital Opportunities Fund III LP and the other holders party thereto (together, “GSO”). Under the GSO RRA, the Company will have certain obligations to register for resale under the Securities Act all or any portion of the shares of the Class A common stock that the Continuing Members hold as of the date of the GSO RRA and that they may acquire thereafter, including upon the exchange or redemption of any other security therefor (collectively, the “GSO Registrable Securities”).

  

The Company is required to, within 30 days of the Closing Date, file a registration statement registering the resale of the RRA Registrable Securities. Additionally, GSO may demand up to two underwritten offerings for all or part of the RRA Registrable Securities held by GSO under the GSO RRA.

 

Holders of the GSO Registrable Securities have certain “piggy-back” registration rights with respect to registration statements and rights to require the Company to register for resale the GSO Registrable Securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

The GSO RRA does not contemplate the payment of penalties or liquidated damages to GSO as a result of a failure to register, or delays with respect to the registration of, the GSO Registrable Securities.

 

The foregoing description of the GSO RRA does not purport to be complete and is qualified in its entirety by the full text of the GSO RRA, the form of which is attached hereto as Exhibit 10.6 and is incorporated by reference herein.

 

Voting Agreement

 

On February 14, 2020, in connection with the Closing, the Company and Boxwood Sponsor LLC (the “Sponsor”) entered into voting agreement (the “Voting Agreement”) pursuant to which the Sponsor agreed to vote its shares of Class A common stock in favor of each individual nominated for election to the Board who has been recommended by the Board for such appointment or nomination pursuant to the Nomination Agreement at every meeting of the stockholders of the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written resolution of the stockholders of the Company or the Board with respect to the election of members of the Board, subject to the terms and conditions set forth therein.

 

The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by the full text of the Voting Agreement, which is attached hereto as Exhibit 10.7 and is incorporated by reference herein.

 

Lock-Up Agreement

 

On February 14, 2020, in connection with the Closing, the Company and the Sponsor entered into a lock-up agreement (the “Lock-Up Agreement”) pursuant to which the Sponsor agreed to not transfer, sell, assign or otherwise dispose of any Class A common stock or warrants to purchase Class A common stock of the Company during the period commencing on the Closing Date and ending on the earlier of (a) the date that is twelve months following the Closing Date or (b) if BCP transfers either (i) shares of common stock beneficially owned or otherwise held by BCP resulting in gross proceeds to BCP equal to at least $50,000,000 or (ii) all shares of common stock beneficially owned or otherwise held by BCP which were subject to an initial six month restriction on transfer, if the proceeds received from the transfer of such shares of common stock is less than $50,000,000, the date on which the reported sales price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30 trading day period.

 

The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the full text of the Lock-Up Agreement, which is attached hereto as Exhibit 10.8 and is incorporated by reference herein.

  

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Amended and Restated Limited Liability Company Agreement of Holdings

 

On February 14, 2020, in connection with the Closing, the Company and other member parties thereto entered into the amended and restated limited liability company agreement of Holdings (the “LLC Agreement”). The LLC Agreement sets forth, among other things, the rights and obligations of the holders of Holdings Units.

 

Managing Member.    Under the LLC Agreement, the Company is the sole managing member of Holdings. As the sole managing member, the Company is able to control all of the day-to-day business affairs and decision-making of Holdings without the approval of any other member, unless otherwise stated in the LLC Agreement. As such, the Company, through its officers and directors, is responsible for all operational and administrative decisions of Holdings and the day-to-day management of Holdings’ business. Pursuant to the terms of the LLC Agreement, the Company may not resign or cease to be the managing member of Holdings unless proper provision is made, in compliance with the LLC Agreement, so that the obligations of the Company, its successor (if applicable) and any new managing member and the rights of all members under the LLC Agreement and applicable law remain in full force and effect.

  

Compensation; Reimbursement.    The Company will not be entitled to compensation for its services as managing member. The Company, as managing member, and other members of Holdings will be entitled to reimbursement by Holdings for all costs, fees, operating expenses and other expenses of Holdings (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to Holdings) incurred in pursuing and conducting, or otherwise related to, the activities of Holdings.

 

Distributions.    Distributions to Holdings’ equity holders may be declared by the managing member out of funds legally available therefor in such amounts and on such terms (including the payment dates of such distributions) as the managing member shall determine (in its sole discretion in accordance with the fiduciary duties as provided in the LLC Agreement) using such record date as the managing member may designate; provided that, so long as the Preferred Units remain outstanding, such distributions shall only be declared at the end of a quarter so long as there remain funds legally available therefor after the cash payments required to be paid to the Preferred Unitholders in such Quarter. Any such distribution shall be made to Holdings’ equity holders as of the close of business on such record date on a pro rata basis (subject to certain exceptions) in accordance with the number of Holdings Units owned by each member as of the close of business on such record date.

 

Common Unit Redemption Right.    The LLC Agreement provides that Bernhard Capital Partners Management LP and its affiliates, and following the date that is six months from the Closing Date, each of the other members of Holdings (other than the Company and its subsidiaries) has a right to cause Holdings to redeem from time to time, all or a portion of such member’s Holdings Units (together with an equal number of shares of Class B common stock) for either (x) the delivery by Holdings of a number of shares of Class A common stock equal to the number of Holdings Units surrendered or (y) at Holdings’ election made in accordance with the LLC Agreement, the delivery by Holdings of cash equal to the Cash Election Amount (as defined in the LLC Agreement) calculated with respect to such redemption.

 

If (i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the shares of Class A common stock are converted or changed into another security, securities or other property, or (ii) the Company, by dividend or otherwise, distributes to all holders of the shares of Class A common stock evidences of its indebtedness or assets, including securities (including shares of Class A common stock and any rights, options or warrants to all holders of the shares of Class A common stock to subscribe for, to purchase or to otherwise acquire shares of Class A common stock, or other securities or rights convertible into, or exchangeable or exercisable for, shares of Class A common stock) but excluding any cash dividend or distribution as well as any such distribution of indebtedness or assets received by the Company from Holdings in respect of the Holdings Units, then upon any subsequent redemption, in addition to the shares of Class A common stock or the Cash Election Amount, as applicable, each member of Holdings shall be entitled to receive the amount of such security, securities or other property that such member would have received if such redemption had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization, other similar transaction, dividend or other distribution, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction.

 

Preferred Units.    The LLC Agreement sets forth the rights and terms of the Preferred Units. A summary of which is set forth above.

 

The foregoing description of the LLC Agreement does not purport to be complete and is qualified in its entirety by the full text of the LLC Agreement, the form of which is attached hereto as Exhibit 10.9 and is incorporated by reference herein.

 

Restrictive Covenant Agreement

 

On February 14, 2020, in connection with the Closing, Holdings and BCP entered into a restrictive covenant agreement (the “Restrictive Covenant Agreement”) pursuant to which the BCP parties covenanted not to (i) for a period of two years, induce or attempt to induce any of the executives named therein or any other executive officer of Atlas Intermediate to leave the employ of Atlas Intermediate, (ii) for a period of two years, hire any executive who was employed by Atlas Intermediate at any time during the 12 month period prior to the Closing, (iii) for a period of two years, induce or attempt to induce any person that is a customer, supplier or material business relation of Atlas Intermediate to cease doing business with Atlas Intermediate, (iv) make certain types of disparaging or false statements and (v) disclose certain confidential information, subject to the terms and conditions therein.

 

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The foregoing description of the Restrictive Covenant Agreement does not purport to be complete and is qualified in its entirety by the full text of the Restrictive Covenant Agreement, which is attached hereto as Exhibit 10.10 and is incorporated by reference herein.

 

Item 2.01 Completion of Acquisition of Assets

 

The disclosure set forth in the “Introductory Note” above is incorporated herein by reference.

 

The business combination was approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on February 11, 2020 (the “Special Meeting”). The business combination was completed on February 14, 2020.

 

As of the Closing Date and following the completion of the business combination, the Company had the following outstanding securities:

 

  5,827,342 shares of Class A Common Stock;

 

  23,912,988 shares of Class B Common Stock;

  

  23,750,000 warrants, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.

 

As of the Closing Date and following the completion of the business combination, the Seller and its limited partners (the “Continuing Members”) owned an aggregate of 23,912,988 Holdings Units redeemable on a one-for-one basis for shares of Class A Common Stock. Upon the redemption by any Continuing Member of Holdings Units for shares of Class A common stock, a corresponding number of shares of Class B Common Stock held by such Continuing Member will be cancelled.

 

At the Closing, following the cancellation of 1,750,000 shares of the Sponsor’s Class F common stock, par value $0.0001 (the “Class F common stock”) contemplated by the Purchase Agreement, and the conversion of each outstanding share of the Class F common stock to one share of Class A common stock, the Sponsor owned an aggregate 1,975,000 shares of Class A Common Stock and 3,750,000 private placement warrants.

 

The rules of the Nasdaq Stock Market define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Following the Closing Date and following the completion of the business combination, the Seller and its limited partners hold approximately 80% of the voting power of the Company. As a result, the Company is a controlled company under the listing rules of the Nasdaq Stock Market (a “Controlled Company”) and the rules of the Securities and Exchange Commission. As a Controlled Company, the Company qualifies for exemptions from certain corporate governance rules, including (i) a board of directors comprised of a majority of independent directors; (ii) compensation of the Company’s executive officers being determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. Following the Closing, the Company intends to rely on the exemptions described in clauses (ii), (iii) and (iv) above. If the Company ceases to be a Controlled Company, and its securities are still listed on Nasdaq, it will be required to comply with these requirements by the date its status as a Controlled Company changes or within specified transition periods applicable to certain provisions, as the case may be.

 

Prior to the Closing, the Company was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose assets primarily consist of interests in its subsidiaries, including Holdings.

 

Cautionary Note Regarding Forward-Looking Statements

 

The statements contained in this Current Report on Form 8-K that are not purely historical are forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding the Company’s or management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Current Report on Form 8-K may include, for example, statements about the anticipated benefits of the business combination, the future financial performance of the Company and expansion plans and opportunities.

 

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The forward-looking statements contained in this Current Report on Form 8-K are based on the Company’s and management team’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that were anticipated. These forward-looking statements involving a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:

 

the Company’s ability to maintain the listing of our Class A common stock and warrants on Nasdaq;
the Company’s ability to raise financing in the future;
the Company’s success in retaining or recruiting, or changes required in, our officers, key employees or directors;
the Company’s securities’ potential liquidity and trading;
changes adversely affecting the business in which the Company is engaged;
the risks associated with cyclical demand for the Company’s services and vulnerability to industry downturns and regional and national downturns;
fluctuations in the Company’s revenue and operating results;
unfavorable conditions or further disruptions in the capital and credit markets;
the Company’s ability to generate cash, service indebtedness and incur additional indebtedness;
competition from existing and new competitors;
the Company’s ability to integrate any business we acquire;
the Company’s ability to recruit and retain experienced personnel;
risks related to legal proceedings or claims, including liability claims;
the Company’s dependence on third-party contractors to provide various services;
safety and environmental requirements that may subject the Company to unanticipated liabilities;
general economic conditions; and
other factors detailed under the section entitled “Risk Factors” in the Definitive Proxy Statement filed by Boxwood with the Securities and Exchange Commission on November 12, 2020 (the “Proxy Statement”) and “Update to Risk Factors” in the Proxy Supplement filed with the Securities and Exchange Commission on January 28, 2020 (the “Proxy Supplement”) which are incorporated herein by reference.

 

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 

 

Business and Properties

 

The business of Atlas prior to the business combination is described in the Proxy Statement in the section entitled “Business of Atlas,” which is incorporated herein by reference. The business of the Company prior to the business combination is described in the Proxy Statement in the section entitled “Other Information Related to Boxwood,” which is incorporated by reference herein.

 

Risk Factors

 

Certain risks associated with the Company’s business are described in the Proxy Statement in the section entitled “Risk Factors” and in the Proxy Supplement in the section entitled “Update to Risk Factors,” which are incorporated by reference herein.

 

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The Company is a Controlled Company. As a result, it qualifies for, and has elected to rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies.

 

Upon the completion of the business combination, BCP beneficially owned a majority of the voting power of all outstanding shares of the Company’s common stock, making it a Controlled Company. Pursuant to Nasdaq listing standards, a Controlled Company may elect not to comply with certain Nasdaq listing standards that would otherwise require it to have: (i) a board of directors comprised of a majority of independent directors; (ii) compensation of our executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. Following the closing of the business combination, the Company intends to rely on the exemptions described in clauses (ii), (iii) and (iv) above.

 

Accordingly, the Company’s stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

 

In addition, on June 20, 2012, the SEC passed final rules implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 pertaining to compensation committee independence and the role and disclosure of compensation consultants and other advisers to the compensation committee. The SEC’s rules direct each of the national securities exchanges (including Nasdaq) to develop listing standards requiring, among other things, that: (i) compensation committees be composed of fully independent directors, as determined pursuant to new independence requirements; (ii) compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisors; and (iii) compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisors, certain independence factors, including factors that examine the relationship between the consultant or advisor’s employer and us. As a Controlled Company, the Company is not subject to these compensation committee independence requirements.

 

Unaudited Pro Forma Condensed Combined Financial Information

 

The information set forth in Exhibit 99.1 to this Current Report on Form 8-K is incorporated by reference herein.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Boxwood

 

Management’s discussion and analysis of financial condition and results of operations of Boxwood described in the Proxy Statement in the section entitled “Boxwood Management’s Discussion and Analysis of Financial Condition and Results of Operations” is incorporated by reference herein. In addition, management’s discussion and analysis of financial condition and results of operations of Boxwood described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019 is incorporated by reference herein.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Atlas Intermediate

 

The information set forth in Exhibit 99.2 to this Current Report on Form 8-K is incorporated by reference herein.

 

Quantitative and Qualitative Information About Market Risk

 

The section entitled “Quantitative and Qualitative Information about Market Risk set forth in Exhibit 99.2 to this Current Report on Form 8-K is incorporated by reference herein.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information known to the Company regarding the beneficial ownership of the Company’s voting common stock as of February 14, 2020 by:

 

each person known to us to be the beneficial owner of more than 5% of our outstanding common stock;

 

each of our executive officers and directors; and

 

all executive officers and directors as a group.

 

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Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.

 

The table below represents beneficial ownership of voting common stock, comprised of Class A common stock and Class B common stock. The beneficial ownership of our voting common stock is based on 29,740,330 shares of common stock outstanding, of which 5,827,342 shares are Class A common stock and 23,912,988 shares are Class B common stock.

 

The beneficial ownership percentages set forth below take into account the issuance of shares of Class A common stock upon the exercise of warrants to purchase shares of Class A common stock that will become exercisable 30 days after the Closing Date.

  

Name and Address of Beneficial Owner(1)   Number of
shares
    %  
Directors, Executive Officers            
L. Joe Boyer(2)     510,000       1.7 %
Walter Powell(3)     180,000       *  
Stephen M. Kadenacy(4)(10)     5,975,000       17.9 %
Brian Ferraioli            
Leonard Lemoine            
Jeff Jenkins            
George P. Bevan            
R. Foster Duncan            
Daniel G. Weiss            
Joe Reece(5)     25,000       *  
All Directors and Executive Officers as a Group (Ten Individuals)     6,690,000       18.6 %
Five Percent Holders:                
Bernhard Capital Partners(6)     20,102,059       67.59 %
GSO Entity(7)     2,200,000       7.4 %
Boxwood Sponsor LLC(4)(8)     5,975,000       17.9 %
MIHI LLC(8)(9)     6,175,000       18.4 %

 

 

* Less than 1%.
(1) Unless otherwise noted, the business address of each of the stockholders listed is 13215 Bee Cave Parkway Building A, Suite 260, Austin, Texas 78738.
(2) Comprised solely of shares of Class B common stock.
(3) Comprised solely of shares of Class B common stock.
(4) Comprised of 2,225,000 shares of Class A common stock and 3,750,000 shares of Class A common stock underlying private placement warrants that will become exercisable 30 days after the Closing Date.
(5) Mr. Reece holds an economic interest in Boxwood Management Company, LLC and pecuniary interests in the securities beneficially owned by Boxwood Management Company, LLC. Mr. Reece disclaims such beneficial ownership except to the extent of his pecuniary interest therein.
(6) Comprised solely of shares of Class B common stock. B CP’s interest is held through Atlas Technical Consultants Holdings LP and indirectly by the BCP Energy Services Funds. The general partner of Atlas Technical Consultants Holdings LP is Atlas Technical Consultants Holdings GP LLC, which is indirectly wholly owned by BCP Energy Services Fund, LP, BCP Energy Services Fund-A, LP and BCP Energy Services Executive Fund, LP (collectively, the “BCP Energy Services Funds”). The general partner of all three BCP Energy Services Funds is BCP Energy Services Fund GP, LP. The general partner of BCP Energy Services Fund GP, LP is BCP Energy Services Fund UGP, LLC. BCP Energy Services Fund UGP, LLC is managed by J.M. Bernhard, Jr. and Jeff Jenkins. Each of the BCP entities and Messrs. Bernhard and Jenkins may be deemed to beneficially own such shares directly or indirectly controlled, but each disclaims beneficial ownership of such shares in excess of its pecuniary interest therein. The address of each of the BCP entities and Messrs. Bernhard and Jenkins is 400 Convention Street, Suite 1010, Baton Rouge, Louisiana 70802.
(7) GSO Capital Opportunities Fund III LP (the “GSO Entity”) directly holds the reported shares shown above. GSO Capital Opportunities Associates III LLC is the general partner of GSO Capital Opportunities Fund III LP. GSO Holdings I L.L.C. is the managing member of GSO Capital Opportunities Associates III LLC. Blackstone Holdings II L.P. is the managing member of GSO Holdings I L.L.C. with respect to securities beneficially owned by the GSO Entity. Blackstone Holdings I/II GP L.L.C. is the general partner of each of Blackstone Holdings I L.P. and Blackstone Holdings II L.P. The Blackstone Group Inc. is the sole member of Blackstone Holdings I/II GP L.L.C. Blackstone Group Management L.L.C. is the sole holder of the Class C common stock of The Blackstone Group Inc. Blackstone Group Management L.L.C. is wholly-owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of the foregoing entities and individuals disclaims beneficial ownership of the securities held directly by the GSO Entity (other than the GSO Entity to the extent of its direct holdings). The business address of this stockholder is c/o GSO Capital Partners LP, 345 Park Avenue, 31st Floor, New York, New York 10154.

 

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(8) Boxwood Sponsor LLC is jointly owned and managed by MIHI Boxwood Sponsor, LLC, which is controlled by MIHI LLC, and Boxwood Management Company, LLC. MIHI LLC and Boxwood Management Company, LLC have shared voting and dispositive power with respect to the shares held by Boxwood Sponsor LLC and, as such, may be deemed to beneficially own the shares held by Boxwood Sponsor LLC. Each of MIHI LLC and Boxwood Management Company, LLC disclaim such beneficial ownership except to the extent of their respective pecuniary interests therein.
(9) Comprised of 2,425,000 shares of Class A common stock and 3,750,000 shares of Class A common stock underlying private placement warrants that will become exercisable 30 days after the Closing Date. MIHI LLC owns a majority interest in, and is the sole manager of, MIHI Boxwood Sponsor, LLC. As such, MIHI LLC may be deemed to beneficially own the shares held by our Sponsor. MIHI LLC is a member managed LLC. MIHI LLC is indirectly controlled by Macquarie Group Limited, a publicly listed company in Australia. Shemara Wikramanayake is the chief executive officer of Macquarie Group Limited and in such position has voting and dispositive power with respect to securities held by MIHI Boxwood Sponsor, LLC. By virtue of the relationships described in this footnote, Macquarie Group Limited and Ms. Wikramanayake may be deemed to share beneficial ownership of all shares held by MIHI Boxwood Sponsor, LLC. Each of Macquarie Group Limited and Ms. Wikramanayake expressly disclaims any such beneficial ownership, except to the extent of their individual pecuniary interests therein. The address of each of MIHI LLC and MIHI Boxwood Sponsor, LLC is c/o Macquarie Capital (USA) Inc., 125 West 55th Street, L-22, New York, NY 10019-5369.
(10) Mr. Kadenacy owns a majority interest in, and is the sole manager of, Boxwood Management Company, LLC. As such, he may be deemed to beneficially own the shares held by Boxwood Management Company, LLC or Boxwood Sponsor LLC. Mr. Kadenacy disclaims such beneficial ownership except to the extent of his pecuniary interest therein.

 

Directors and Executive Officers

 

Information with respect to the Company’s directors and executive officers immediately following the Closing is set forth in the Proxy Statement in the section entitled “Management of the Company Following the business combination,” which is incorporated by reference herein.

 

In connection with and effective upon the Closing, each of Boxwood’s officers and directors resigned.

 

At the Special Meeting, each of L. Joe Boyer, Stephen Kadenacy, Duncan Murdoch, George P. Bevan, R. Foster Duncan, Daniel G. Weiss and Joe Reece were elected by the Company’s stockholders to serve as directors of the Company, with Messrs. Boyer and Reece to serve as Class I directors, Messrs. Weiss and Duncan to serve as Class II directors and Messrs. Kadenacy, Murdoch and Bevan to serve as Class III directors.

 

At the time of the Closing, Duncan Murdoch delivered a letter to the Company and the Board stating that he is no longer willing to serve on the Board and as such, will no longer be joining the Board. In addition, the size of the Board was increased to nine members effective upon the Closing pursuant to and in accordance with the Nomination Agreement.

 

Effective as of immediately following the Closing, the Board appointed Jeff Jenkins, Leonard Lemoine and Brian Ferraioli to serve as directors of the Board pursuant to the terms of the Nomination Agreement.

 

Brian Ferraioli

 

Mr. Ferraioli is a director of the Company as of the Closing. Mr. Ferraioli is also an operating partner at Bernhard Capital Partners, and has worked with the firm since 2017. Mr. Ferraioli served as Executive Vice President and Chief Financial Officer of KBR, Inc., an engineering, construction and services company from 2013 to 2017. Prior to KBR, Mr. Ferraioli was Executive Vice President and Chief Financial Officer at The Shaw Group, Inc. (now part of McDermott International, Inc.) from July 2007 to February 2013, when the company was acquired by Chicago Bridge & Iron Company N.V. Prior to joining The Shaw Group, Mr. Ferraioli served as Vice President and Controller of Foster Wheeler, AG. Mr. Ferraioli is a Director and Chairman of the Audit Committee of Vistra Energy Corp, is a Director of, Chair of the Audit Committee and on the Compensation Committee of Charah Solutions, Inc. and is a Director of and Chair of the Audit Committee of Team, Inc. Mr. Ferraioli has approximately 40 years of experience in senior finance and accounting roles in the engineering and construction industries and is also a National Association of Corporate Directors Governance Fellow. Previously, Mr. Ferraioli served as a director and chairman of the audit committee of Babcock & Wilcox Enterprises and its predecessor company Babcock & Wilcox, Inc. He also previously served on the board of directors of Adolfson & Peterson, a privately owned construction company. Mr. Ferraioli received his B.S. in accounting from Seton Hall University and his M.B.A. from Columbia University.

 

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Jeff Jenkins

 

Mr. Jenkins is a director of the Company as of the Closing. Mr. Jenkins is also a founder and partner of Bernhard Capital Partners, and has been with the firm since its inception in 2013. He serves as a member of the Investment Committee and the Portfolio Committee and is involved in all areas of the firm’s investment activities. Mr. Jenkins serves on the Board of Directors for Brown & Root, Bernhard LLC and Epic Piping. Prior to founding Bernhard Capital, Mr. Jenkins spent ten years working for The Shaw Group where he served many vital positions. During his tenure at Shaw, Mr. Jenkins served as Chief Operating Officer of Shaw Environmental and Infrastructure, where he was responsible for operations and business development. Prior to this role, he served as President of the Commercial, State, and Local group within the Environmental and Infrastructure division. Before moving into his operating roles, Mr. Jenkins served as Vice President of the Office of the Chairman where he led overall corporate development and placed a special emphasis on mergers and acquisitions, joint ventures and business development efforts. Prior to joining Shaw, Mr. Jenkins was a Corporate and Securities Attorney at Vinson & Elkins LLP where his practice focused primarily on mergers and acquisitions, private equity and venture capital, and public securities work in a broad range of industries. Mr. Jenkins received his B.A. from Louisiana State University and his J.D. from Louisiana State University after attending law school at the University of Texas.

 

Leonard K. Lemoine

 

Leonard K. “Lenny” Lemoine is the President and Chief Executive Officer of The Lemoine Company, LLC (“Lemoine”), a position he has held since January of 2011. Lemoine was founded in 1975 and has steadily grown from a small construction company, to one of the most respected, full-service contracting and construction management firms in the Southeastern United States. Lemoine constructs and manages projects ranging from minor interior renovations to some of the most complex healthcare facilities, commercial public and industrial landmarks in our region. Mr. Lemoine received his B.S. from Louisiana State University in 1979.

 

Messrs. Boyer, Reece and Ferraioli serve as Class I directors, with terms expiring at the Company’s first annual meeting of stockholders following the Closing; Messrs. Weiss, Jenkins and Duncan serve as Class II directors, with terms expiring at the Company’s second annual meeting of stockholders following the Closing; and Messrs. Kadenacy, Lemoine and Bevan serve as Class III directors, with terms expiring at the Company’s third annual meeting of stockholders following the Closing.

 

12

 

 

Director Independence

 

The Board has determined that each of Messrs. Bevan, Duncan, Weiss, Lemoine, Jenkins, Ferraioli, Kadenacy and Reece are independent within the meaning of Nasdaq Listing Rule 5605(a)(2).

 

Committees of the Board of Directors

 

Effective upon completion of the business combination, the Board established the audit committee (the “Audit Committee”). Members will serve on this committee until their successor is appointed or their removal from, or vacation of, such committee.

 

Audit Committee

 

The principal functions of the Audit Committee are detailed in the Audit Committee charter, which is available on the Company’s website, and include, among others:

 

appointing the Company’s independent registered public accounting firm;
evaluating the independent registered public accounting firm’s qualifications, independence and performance;
determining the engagement of the independent registered public accounting firm;
reviewing and approving the scope of the annual audit and the audit fee;
discussing with management and the independent registered public accounting firm the results of the annual audit and reviewing the Company’s quarterly financial statements;
approving the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;
monitoring the rotation of partners of the independent registered public accounting firm on the Company’s engagement team in accordance with requirements established by the SEC;
being responsible for reviewing the Company’s financial statements and the Company’s management’s discussion and analysis of financial condition and results of operations to be included in the Company’s annual and quarterly reports to be filed with the SEC;
reviewing the Company’s critical accounting policies and estimates; and
reviewing the Audit Committee charter and the committee’s performance at least annually.

 

The members of the Audit Committee are Messrs. Murdoch, Duncan and Reece, with Mr. Murdoch serving as the chair of the committee. Under the rules of the SEC, members of the Audit Committee must also meet heightened independence standards. The Company believes that all of the members of the Audit Committee qualify as independent directors as defined under the applicable rules and regulations of the SEC and Nasdaq with respect to audit committee membership. The Company also believes that Mr. Duncan qualifies as its “audit committee financial expert,” as such term is defined in Item 401(h) of Regulation S-K.

 

Indemnification of Directors and Officers

 

The section entitled “Management of the Company Following the Business Combination—Limitation on Liability and Indemnification Matters” in the Proxy Statement is incorporated by herein by reference.

 

Director and Executive Officer Compensation

 

The following disclosure concerns the compensation of Boxwood’s officers and directors for the fiscal years ended December 31, 2019.

 

13

 

 

Boxwood

 

Prior to the consummation of the business combination, none of Boxwood’s executive officers or directors received any cash compensation for services rendered to it. The Sponsor, executive officers, directors, and their respective affiliates, were reimbursed for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination. Boxwood’s audit committee reviewed on a quarterly basis all payments that were made to the Sponsor, executive officers, directors and Boxwood’s or their affiliates. We note that some named executive officers had economic interests in our Sponsor.

 

After the completion of the business combination, directors or members of Boxwood’s management team who remain with us may be paid consulting, management or other fees from the combined company.

 

Atlas Intermediate

 

The following disclosure concerns the material components of the compensation for Atlas Intermediate’s principal executive officer and its other most highly compensated executive officer, who are referred to in this section as “named executive officers,” for the fiscal year ended December 31, 2019 (i.e., pre-business combination). This section provides information in accordance with the scaled SEC disclosure rules available to “emerging growth companies.”

 

Named Executive Officers

 

As of the fiscal year ended December 31, 2019, Atlas Intermediate had two named executive officers, as follows:

 

L. Joe Boyer, Chief Executive Officer of Atlas Technical Consultants LLC (formerly Atlas Technical Consultants Intermediate Holdco LLC), which is an indirect wholly-owned subsidiary of Atlas Technical Consultants Holdings LP (“Atlas Holdings”); and
Walter Powell, Chief Financial Officer of Atlas Technical Consultants LLC.

 

Summary Compensation Table

 

The following table presents summary information regarding the total compensation paid to, earned by and awarded to each of Atlas’ named executive officers during the fiscal years ended December 31, 2019 and 2018.

 

Name and Principal Position   Year     Salary
($)
    Bonus
($)(1)
    All Other Compensation
($)
    Total
($)
 
L. Joe Boyer Chief Executive Officer – Atlas Technical Consultants LLC     2019       500,000       367,610       58,400 (2)     926,010  
      2018       400,000       400,000       42,662 (3)     842,662  
                                         
Walter Powell Chief Financial Officer – Atlas Technical Consultants LLC     2019       320,000       181,004       37,800 (4)     538,804  
      2018       275,000       206,250       24,585 (5)     505,835  

 

 

(1) Reflects performance-based, discretionary cash bonuses earned for the 2019 and 2018 performance years. In determining bonus amounts for 2019 and 2018, Atlas relied on its judgment after a comprehensive review of company and individual performance, as well as consideration of qualitative and other factors, without being tied to any formulas or pre-established weightings.
(2) Reflects (i) a car allowance of $16,800, (ii) employer retirement plan contributions of $2,000 and (iii) the remaining amounts being attributable to employer retirement plan contributions.
(3) Reflects (i) a car allowance of $5,600, (ii) employer-paid executive life insurance premiums of $21,062 and (iii) the remaining amounts being attributable to employer retirement plan contributions.
(4) Reflects (i) a car allowance of $16,800 (ii) employer-paid executive life insurance premiums of $7,985 and (iii) the remaining amounts being attributable to employer retirement plan contributions.
(5) Reflects (i) a car allowance of $5,600, (ii) employer-paid executive life insurance premiums of $7,985 and (iii) the remaining amounts being attributable to employer retirement plan contributions.

 

Employment Agreement

 

Atlas has entered into an employment agreement with Mr. Boyer, which agreement sets forth certain terms and conditions of employment, including base salary, employee benefits and severance benefits.

 

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Prior Employment Agreement with Mr. Boyer

 

On October 23, 2017, Atlas Technical Consultants LLC entered into an employment agreement with Mr. Boyer to serve as its Chief Executive Officer, with an initial term of three years and automatic one-year renewals thereafter (the “Prior Boyer Agreement”). Under the Prior Boyer Agreement, Mr. Boyer’s annual base salary was initially set at $400,000 (with potential adjustments to be approved by the board of managers of Atlas Technical Consultants Holdings GP LLC (“Holdco GP”)). Mr. Boyer was also eligible under the agreement to (i) earn an annual performance bonus, (ii) receive incentive equity interests in Atlas Holdings, (iii) participate in applicable benefit plans and other benefits provided generally to similarly situated employees of Atlas Technical Consultants LLC and (iv) receive reimbursement for reasonable business expenses.

 

Under the Prior Boyer Agreement, if Mr. Boyer’s employment was terminated by Atlas Technical Consultants LLC without cause or by Mr. Boyer for good reason, he would have been entitled to receive, subject to his execution of a release of claims, (i) his annual bonus, to the extent earned, pro-rated for any fractional years, (ii) a severance payment equal to 100% of his then-applicable base salary, payable in ratable installments over the 12 months following his termination and (iii) continuation of health benefits for the 12 months following his termination. Upon his death or permanent disability, Mr. Boyer would have been entitled to receive (i) his annual bonus, to the extent earned, pro-rated for any fractional years and (ii) a severance payment equal to 100% of his then-applicable base salary, payable in ratable installments over the 12 months following his termination.

 

In addition to the Prior Boyer Agreement, and as a condition to his employment, Mr. Boyer also entered into a Confidentiality, Non-Interference, and Invention Assignment Agreement on October 23, 2017, with Atlas Technical Consultants LLC. The agreement contains customary confidentiality, assignment of developments, non-competition, non-interference, non-solicitation and non-disparagement provisions. The non-competition, non-interference and non-solicitation provisions generally extend for 12 months after termination of Mr. Boyer’s employment, while the confidentiality and non-disparagement provisions extend indefinitely.

 

New Employment Agreement with Mr. Boyer.

 

The description of Mr. Boyer’s new employment agreement contained in “Management—Employment Agreement” is incorporated herein by reference. The Company intends to develop an executive compensation program that is designed to align compensation with the Company’s business objectives and the creation of stockholder value while enabling the Company to attract, motivate and retain individuals who contribute to its long-term success. Decisions on the executive compensation program will be made by the Compensation Committee.

 

Post Business Combination

 

The Company intends to develop an executive compensation program that is designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, motivate and retain individuals who contribute to the long-term success of the Company.

 

Incentive Plan

 

The Board adopted and the stockholders of the Company approved the Atlas Technical Consultants, Inc. 2019 Incentive Plan (the “Incentive Plan”), effective upon Closing. The material terms of the Incentive Plan are described in the section entitled “The Incentive Plan Proposal” in the Proxy Statement, which is incorporated herein by reference.

 

The foregoing description of the Incentive Plan does not purport to be complete and is qualified in its entirety by the full text of the Incentive Plan, which is attached hereto as Exhibit 10.11 and is incorporated herein by reference.

 

Certain Relationships and Related Party Transactions

 

The information set forth under “Item 1.01. Entry into a Material Definitive Agreement—Nomination Agreement”, “—Continuing Members Registration Rights Agreement”, “—Voting Agreement,” “—Lock-up Agreement” and “—Credit Agreement” is incorporated herein by reference.

 

The information set forth in the section entitled “Certain Relationships and Related Party Transactions” in the Proxy Statement is incorporated herein by reference.

 

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Financial Advisor Engagement

 

In connection with the business combination, Boxwood engaged Macquarie Capital, an affiliate of the Sponsor, to act as its financial advisor. At the Closing, Boxwood paid Macquarie Capital a $4 million fee, comprised of $2 million in cash and 200 shares of newly issued common stock valued at $10 per share.

 

Placement Agent Engagements

 

In connection with the business combination, Boxwood engaged placement agents, including Macquarie Capital and Helena Advisors, LLC (“Helena”), to act as its placement agents in connection with the private placement of any PIPE securities with any PIPE investors. Macquarie Capital is an affiliate of the Sponsor and Joe Reece, a member of the Board, formerly served as the Founder and Chief Executive Officer of Helena from October 2018 to October 2019. At the Closing, Boxwood paid Macquarie and Helena cash fees of approximately $0.4 million and approximately $0.4 million, respectively.

 

Legal Proceedings

 

The section entitled “Other Information Related to Boxwood—Legal Proceedings” in the Proxy Statement is incorporated herein by reference, the section entitled “Business of Atlas—Legal and Environmental” in the Proxy Statement is incorporated herein by reference and the section entitled “Supplemental Information to the Definitive Proxy Statement—Update to Legal Proceedings” in the Proxy Supplement is incorporated herein by reference.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

The Company’s units (consisting of one share of Class A common stock and one redeemable warrant), Class A common stock and warrants were historically quoted on NASDAQ under the symbols “BWMCU,” “BWMC” and “BWMCW,” respectively. The Company’s units commenced public trading on November 16, 2018, and the shares of Class A Common Stock and warrants commenced public trading on January 17, 2019.

 

On February 14, 2020, in connection and concurrently with the Closing, all of the units of the Company separated into their component parts of one share of Class A common stock and one warrant to purchase one share of Class A common stock of the Company, and the units ceased trading on Nasdaq. Following the Closing, the Company’s Class A common stock and warrants will continue to be listed on Nasdaq under the new trading symbols of “ATCX” and “ATCXW,” respectively.

 

There is no public market for the Class B common stock.

 

As of the Closing Date but prior to the consummation of the business combination, there was approximately 1 holder of record of Class A common stock and four holders of record of Class F common stock.

 

The Company has not paid any cash dividends on the Class A common stock to date. The payment of cash dividends in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and the Company’s general financial condition. The payment of any cash dividends will be within the discretion of our Board at such time.

 

Description of the Company’s Securities

 

The information set forth in the section entitled “Description of Securities” in the Proxy Statement is incorporated by reference herein.

 

Financial Statements and Supplementary Data

 

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant

 

The information set forth in the section entitled “Credit Agreement” in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

 

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Item 3.02 Unregistered Sales of Equity Securities

 

Class A Common Stock Issuance

 

On February 3, 2020, the Company entered into a subscription agreement with SCST, Inc., a California corporation pursuant to which it agreed to acquire 105,977 shares of Class A common stock (the “SCST Stock”) in a private placement not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. The issuance of the SCST Stock was completed at Closing.

 

In connection with the business combination, GSO was transferred 1,200,000 shares of Class F common stock pursuant to the previously disclosed closing payment letter, dated January 22, between Boxwood and GSO, as consideration for the purchase of Preferred Units made pursuant to the Subscription Agreement. These shares were then automatically converted into 1,200,000 shares of Class A common stock. In connection with this issuance, 1,200,000 shares of the Sponsor’s Class F common stock were cancelled.

 

In connection with the business combination, the Company issued 200,000 shares of Class A common stock to Macquarie Capital as consideration for their services as a financial advisor.

 

The Company common stock issued in the business combination was not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

Class B Common Stock Issuance

 

On the Closing Date, the Company issued 23,912,988 shares of Class B common stock to the Seller in connection with the business combination. These issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Descriptions of the rights, preferences and privileges of the Class B common stock are set forth under “—Description of the Company’s Securities” above.

 

Item 3.03 Material Modification to Rights of Security Holders

 

Second Amended and Restated Charter

 

On February 14, 2020, the Company filed the second amended and restated certificate of incorporation (the “A&R Charter”) with the Secretary of State of the State of Delaware. The material terms of the A&R Charter and the general effect upon the rights of holders of the Company’s capital stock are included in the Proxy Statement under the sections entitled “The Business Combination Proposal — Related Agreements — Second Amended and Restated Charter, ” “The Charter Amendment Proposal” and the “Advisory Charter Proposals,” which are incorporated by reference herein.

 

The foregoing description of the A&R Charter does not purport to be complete and is qualified by reference to the A&R Charter, a copy of which is attached as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Amended and Restated Bylaws

 

On February 13, 2020, the Board amended the Amended and Restated Bylaws of the Company (the “Bylaws”). The general effect of such amendments is to: (i) no longer permit stockholder action by written consent, (ii) reflect the Nomination Agreement, (iii) place customary requirements on stockholders seeking to nominate an individual as a director, (iv) revise the indemnification provisions to reflect the Charter, (v) prescribe that the number of directors of the Board be set by resolution of the Board from time to time, (vi) provide that any vacancy on the Board may be filled by the affirmative vote of a majority of the Board and (vii) permit the Chief Executive Officer to call a special meeting of the Board.

 

The foregoing description of the Bylaws does not purport to be complete and is qualified by reference to the Bylaws, a copy of which is attached as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Item 5.01 Changes in Control of Registrant.

 

To the extent required, the information set forth under “Introductory Note” and “Nomination Agreement” in Item 1.01 and Item 2.01 is incorporated herein by reference.

 

 

2 Party term to be checked after Credit Facility description added.

 

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

The information set forth in the sections entitled “Directors and Executive Officers,” “Indemnification of Directors and Officers” and “Director and Executive Officer Compensation” of the Proxy Statement are incorporated herein by reference.

 

The information set forth under “Directors and Executive Officers” in Item 2.01 is incorporated herein by reference.

 

In addition, the Incentive Plan became effective upon Closing. The material terms of the Incentive Plan are described in the section entitled “The Incentive Plan Proposal” in the Proxy Statement, which is incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

The disclosure set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference herein.

 

Item 5.06 Change in Shell Company Status

 

As a result of the business combination, which fulfilled the definition of an initial business combination as required by the Company’s amended and restated certificate of incorporation, the Company ceased to be a shell company, as defined in Rule 12b-2 of the Exchange Act, as of the Closing Date. The material terms of the business combination are described in the Proxy Statement in the section entitled “Proposal No. 1—The Business Combination Proposal” and the Proxy Supplement in the section entitled “Supplemental Information to the Definitive Proxy Statement” which are incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(a)       Financial Statements of Businesses Acquired

 

The unaudited condensed consolidated and combined financial statements of Atlas Intermediate Holdings LLC and ATC Group Partners LLC as of September 30, 2019, and for the nine-month period ended September 30, 2019 are attached hereto as Exhibit 99.3 and are incorporated by reference herein.

 

The historical financial statements of Atlas Intermediate as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 included in the Proxy Statement beginning on page F-1 are incorporated herein by reference.

 

(b)       Pro Forma Financial Information

 

The unaudited pro forma condensed combined financial information of the Company is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

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(d)       Exhibits:

 

Exhibit No.   Description
2.1   Unit Purchase Agreement, dated August 12, 2019, by and among the Company, Atlas TC Holdings LLC, Atlas TC Buyer LLC, Atlas Intermediate Holdings LLC and Atlas Technical Consultants Holdings LP (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2019).
2.2   Amendment No. 1 to Unit Purchase Agreement, dated as of January 23, 2020, by and among the Company, Atlas TC Holdings LLC, Atlas TC Buyer LLC, Atlas Intermediate Holdings LLC and Atlas Technical Consultants LP (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
3.1   Second Amended and Restated Certificate of Incorporation of Atlas Technical Consultants, Inc..
3.2   Second Amended and Restated Bylaws of Atlas Technical Consultants, Inc.
4.3   Warrant Agreement, dated November 15, 2018, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.1   Subscription Agreement, dated as of February 14, 2020 between Atlas TC Holdings LLC and GSO COF III AIV-2 LP.
10.2   Support Letter, dated as of February 14, 2020, between Boxwood Merger Corp. and GSO Capital Partners LP.
10.3   Credit Agreement, dated as of February 14, 2020, by and among Atlas TC Holdings LLC, Atlas TC Buyer LLC, Atlas Intermediate Holdings LLC, the lenders and issuing banks from time to time party thereto, and Macquarie Capital Funding LLC, as administrative agent and collateral agent.
10.4   Nomination Agreement dated as of February 14, 2019, by and among Atlas Technical Consultants, Inc., BCP Energy Services Fund, LP, BCP Energy Services Fund-A, LP and BCP Energy Services Executive Fund, LP.
10.5   Registration Rights Agreement, dated as of February 14, 2019, by and among Atlas Technical Consultants, Inc. and Atlas Technical Consultants Holdings LP and its limited partners.
10.6   Registration Rights Agreement, dated as of February 14, 2020, by and among Boxwood Merger Corp. and GSO Capital Opportunities Fund III LP.
10.7   Voting Agreement, dated as of February 14, 2019, by and between Atlas Technical Consultants, Inc. and Boxwood Sponsor LLC.
10.8   Lockup Agreement, dated as of February 14, 2019, by and between Atlas Technical Consultants, Inc. and Boxwood Sponsor LLC.
10.9   Amended and Restated Limited Liability Company Agreement of Atlas TC Holdings LLC, dated as of February 14, 2020.
10.10   Restrictive Covenant Agreement, dated February 14, 2020, by and among Atlas Technical Consultants Holdings LP, Atlas Technical Consultants, SPV, LLC and Arrow Environmental SPV, LLC.
10.11   Atlas Technical Consultants, Inc. 2019 Omnibus Incentive Plan.
10.12   Commitment Letter, dated as of January 23, 2020, by and among Boxwood Merger Corp., Atlas TC Holdings LLC and GSO Capital Partners LP (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
10.13   Closing Payment Letter, dated as of January 23, 2020, by and among Boxwood Merger Corp., Atlas TC Holdings LLC and GSO Capital Partners LP (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
10.14   Forfeiture Agreement, dated as of January 23, 2020, by and among Boxwood Sponsor, LLC and Atlas Technical Consultants Holdings LP (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
10.15   Amendment No. 1 to Commitment Letter, dated as of January 23, 2020, by and among Boxwood Merger Corp., Macquarie Capital Funding LLC, Macquarie Capital (USA) Inc. and Natixis, New York Branch (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2020).
10.16   Debt Commitment Letter, dated August 12, 2019, by and among Boxwood Merger Corp., Macquarie Capital Funding LLC, Macquarie Capital (USA) Inc. and Natixis, New York Branch (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2019).
10.17   Employment Agreement, dated as of August 12, 2019, by and between Boxwood Merger Corp. and L. Joe Boyer (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2019).

 

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10.18   Stockholder Support Agreement, dated as of August 12, 2019, by and between Atlas Technical Consultants Holdings LP, Boxwood Sponsor LLC, MIHI Boxwood Sponsor LLC, MIHI LLC, Boxwood Management Company, LLC and the Company’s officers and directors (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 13, 2019).
10.19   Letter Agreement, dated November 15, 2018, among the Company, Boxwood Sponsor, LLC, and each of the officers and directors of the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.20   Investment Management Trust Agreement, dated November 15, 2018, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.21   Registration Rights Agreement, dated November 15, 2018, among the Company, Boxwood Sponsor, LLC and initial stockholders party thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.22   Securities Purchase Agreement, dated November 15, 2018, between the Company and Boxwood Sponsor, LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.23   Expense Advancement Agreement, dated November 15, 2018, between the Company and Boxwood (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.24   Letter Agreement, dated November 15, 2018, between the Company and Macquarie Capital (USA) Inc. (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.25   Letter Agreement, dated November 15, 2018, among the Company, MIHI LLC and Boxwood Management Company, LLC (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2018).
10.26   Promissory Note, Dated August 22, 2018, issued to Boxwood Sponsor LLC (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 26, 2018).
10.27   Securities Subscription Agreement, dated June 28, 2017, between the Registrant and MIHI LLC (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 26, 2018).
10.28   Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 26, 2018).
10.29   Securities Assignment Agreement, dated as of October 22, 2018, between Boxwood Sponsor LLC and the independent director nominees (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 filed with the SEC on October 26, 2018).
21.1   Subsidiaries of the Company.
99.1   Unaudited pro forma condensed consolidated combined financial information of Atlas Intermediate Holdings, LLC for the year ended December 31, 2018 and as of and for the nine months ended September 30, 2019.
99.2   Management’s Discussion and Analysis of Financial Condition and Operations.    
99.3   The unaudited condensed consolidated and combined financial statements of Atlas Intermediate Holdings LLC and ATC Group Partners LLC as of September 30, 2019, and for the nine-month period ended September 30, 2019 are attached hereto as Exhibit 99.3 and are incorporated by reference herein.

 

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SIGNATURE

 

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.

 

  ATLAS TECHNICAL CONSULTANTS, INC.
   
  By: /s/ L. Joe Boyer
Dated: February 14, 2020   Name:  L. Joe Boyer
   

Title:

Chief Executive Officer

 

 

 

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Exhibit 3.1

  

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION 

OF 

BOXWOOD MERGER CORP.

 

Boxwood Merger Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

 

1. The original certificate of incorporation of the Corporation, under the name “M Acquisition Company III Corporation,” was filed with the Secretary of State of the State of Delaware on June 28, 2017, and was amended pursuant to a certificate of amendment filed with the Secretary of State of the State of Delaware on August 20, 2018, and was further amended and restated pursuant to an Amended and Restated Certificate of Incorporation of the Corporation filed with the Secretary of State of the State of Delaware on November 14, 2018 (as so amended and restated, the “Prior Charter”).

 

2. This Second Amended and Restated Certificate of Incorporation (the “Second Amended and Restated Certificate”) was duly adopted by the Board of Directors of the Corporation and the stockholders of the Corporation in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware.

 

3. This Second Amended and Restated Certificate of Incorporation shall become effective on the date of filing with the Secretary of State of the State of Delaware.

 

4. This Second Amended and Restated Certificate amends and restates the provisions of the Prior Charter in its entirety as follows:

 

Article I

NAME

 

The name of the corporation is Atlas Technical Consultants, Inc. (the “Corporation”).

 

Article II

REGISTERED AGENT; OFFICES

 

Section 1. Registered Office. The address of the Corporation’s registered office in the State of Delaware is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808, County of New Castle, and the name of the Corporation’s registered agent at such address is Corporation Service Company.

 

Article III

PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as amended (the “DGCL”).

 

 

 

 

Article IV

CAPITALIZATION

 

Section 1. Authorized Capital Stock. The Corporation is authorized to issue two classes of capital stock, designated Common Stock and Preferred Stock. The total number of shares of capital stock that the Corporation is authorized to issue is 501,000,000 shares, consisting of two classes as follows: (i) 500,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), including two series as follows: (A) 400,000,000 shares of Class A Common Stock and (B) 100,000,000 shares of Class B Common Stock (the “Class B Common Stock”), and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”).

 

Section 2. Preferred Stock. The Preferred Stock may be issued in one or more series. The Board is hereby authorized to issue the shares of Preferred Stock in such series and to fix by resolutions or resolutions from time to time before issuance the number of shares to be included in any such series and the designation, powers, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof. The authority of the Board with respect to each such series will include, without limiting the generality of the foregoing, the right to determine any or all of the following:

 

(a) the number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series;

 

(b) the voting powers, if any, and whether such voting powers are full or limited in such series;

 

(c) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;

 

(d) whether dividends, if any, will be cumulative or noncumulative, the dividend rate of such series, and the dates and preferences of dividends on such series;

 

(e) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Corporation;

 

(f) the provisions, if any, pursuant to which the shares of such series will be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock, or any other security, of the Corporation or any other corporation or other entity, and the rates or other determinants of conversion or exchange applicable thereto;

 

(g) the right, if any, to subscribe for or to purchase any securities of the Corporation or any other corporation or other entity;

 

(h) the provisions, if any, of a sinking fund applicable to such series; and

 

(i) any other relative, participating, optional, or other special powers, preferences or rights and qualifications, limitations, or restrictions thereof;

 

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all as may be determined from time to time by the Board and stated or expressed in the resolution or resolutions providing for the issuance of such Preferred Stock (collectively, a “Preferred Stock Designation”).

 

Section 3. Common Stock.

 

(a) Voting Generally.

 

(i) Except as otherwise required by law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation and the holders of the Preferred Stock, as such, shall not be entitled to vote.

 

(ii) Except as otherwise required by law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), the holders of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Common Stock are entitled to vote.

 

(iii) Except as otherwise required by law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), at any annual or special meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class B Common Stock voting together as a single class (or, if any holders of Preferred Stock are entitled to vote together with the holders of Class A Common Stock and Class B Common Stock, the holders of Class A Common Stock and Class B Common Stock and the Preferred Stock shall vote together as a single class), shall have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required by law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of any series of Common Stock shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock, are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate (including any Preferred Stock Designation) or the DGCL.

 

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(b) Class A Common Stock.

 

(i) Dividends. Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, the holders of shares of Class A Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions; provided that, in the event of any dividend or other distribution received by the Corporation from the Partnership in respect of the Units or other equity interests of the Partnership held by the Corporation, including upon any liquidation, dissolution or winding up of the Partnership (any such dividend or distribution, a “Partnership Distribution ”), the Board shall to the extent the Corporation has lawful funds then available, declare and pay in connection with such Partnership Distribution a dividend or other distribution on the shares of Class A Common Stock in an amount equal to 100% of such Partnership Distribution, net of reserves for taxes payable by the Corporation as reasonably determined by the Board (a “Pass-Through Distribution”), and the holders of Class A Common Stock shall share equally on a per share basis in such Pass-Through Distribution. The Board shall fix the record date for any Pass-Through Distribution to be the same date as the record date for the corresponding Partnership Distribution fixed by the managing member of the Partnership or, if necessary to comply with applicable law, such later date that is as soon as practicable after the record date for the Partnership Distribution fixed by the managing member of the Partnership. To the extent that a Partnership Distribution is paid in a form other than cash, the Corporation shall sell a portion of such Partnership Distribution sufficient to reserve for taxes payable by the Corporation as reasonably determined by the Board, and the balance of such Partnership Distribution shall be a Pass-Through Distribution.

 

(ii) Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares of Class A Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Common Stock held by them. A dissolution, liquidation or winding-up of the Corporation, as such terms are used in this paragraph (ii), shall not be deemed to be occasioned by or to include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a sale, lease, exchange or conveyance of all or a part of the assets of the Corporation.

 

(c) Class B Common Stock

 

(i) Dividends. Except as provided in subsection (f) below, holders of Class B Common Stock shall not be entitled to receive any dividends.

 

(ii) Liquidation, Dissolution or Winding Up of the Corporation. The holders of Class B Common Stock shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation. A dissolution, liquidation or winding-up of the Corporation, as such terms are used in this paragraph (ii), shall not be deemed to be occasioned by or to include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a sale, lease, exchange or conveyance of all or a part of the assets of the Corporation.

 

(iii) Transfer of Class B Common Stock.

 

(1) A holder of Class B Common Stock may surrender shares of Class B Common Stock to the Corporation for no consideration at any time. Following the surrender of any shares of Class B Common Stock to the Corporation, the Corporation will take all actions necessary to retire such shares and such shares shall not be re-issued by the Corporation.

 

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(2) A holder of Class B Common Stock may transfer shares of Class B Common Stock to any transferee (other than the Corporation) only if, and only to the extent permitted by the LLC Agreement, such holder also simultaneously transfers an equal number of such holder’s Units to such transferee. Upon a transfer of Units in accordance with the LLC Agreement, an equal number of shares of Class B Common Stock held by the holder of such Units will automatically and simultaneously be transferred to the same transferee of such Units. The transfer restrictions described in this Section 3(c)(iv)(2) are referred to as the “Restrictions”.

 

(3) Any purported transfer of shares of Class B Common Stock in violation of the Restrictions shall be null and void. If, notwithstanding the Restrictions, a person shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported owner (“Purported Owner”) of shares of Class B Common Stock in violation of the Restrictions, then the Purported Owner shall not obtain any rights in and to such shares of Class B Common Stock (the “Restricted Shares”), and the purported transfer of the Restricted Shares to the Purported Owner shall not be recognized by the Corporation’s transfer agent (the “Transfer Agent”).

 

(4) Upon a determination by the Board (including the vote of the majority of the disinterested directors serving on the Board at such time), or by a committee composed solely of disinterested directors, that a person has attempted or may attempt to transfer or to acquire Restricted Shares in violation of the Restrictions, the Corporation shall refuse to give effect to such transfer or acquisition on the books and records of the Corporation. In furtherance of the foregoing, the Corporation shall cause the Transfer Agent to refuse to record the Purported Owner’s transferor as the record owner of the Restricted Shares and shall institute proceedings to enjoin or rescind any such transfer or acquisition.

 

(5) The Board (including the vote of a majority of the disinterested directors serving on the Board at such time), or by a committee composed solely of disinterested directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind, by bylaw or otherwise, regulations and procedures that are consistent with the provisions of this Section 3(c)(iv) for determining whether any transfer or acquisition of shares of Class B Common Stock would violate the Restrictions and for the orderly application, administration and implementation of the provisions of this Section 3(c). Any such procedures and regulations shall be kept on file with the Secretary of the Corporation and with the Transfer Agent and shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to holders of shares of Class B Common Stock.

 

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(6) The Board (including a majority of the disinterested directors serving on the Board at such time), or by a committee composed solely of disinterested directors, shall have, all powers necessary to implement the Restrictions, including without limitation, the power to prohibit the transfer of any shares of Class B Common Stock in violation thereof.

 

(iv) Issuance of Class A Common Stock Upon Redemption; Cancellation of Class B Common Stock.

 

(1) Shares of Class B Common Stock shall be redeemable for shares of Class A Common Stock on the terms and subject to the conditions set forth in the LLC Agreement. The Corporation will at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of issuance upon redemption of the Class B Common Stock for Class A Common Stock pursuant to the LLC Agreement, such number of shares of Class A Common Stock that shall be issuable upon any such redemption pursuant to the LLC Agreement; provided that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of any such redemption of shares of Class B Common Stock pursuant to the LLC Agreement by delivering to the holder of such shares of Class B Common Stock upon such redemption, cash in lieu of shares of Class A Common Stock in the amount permitted by and provided in the LLC Agreement or shares of Class A Common Stock which are held in the treasury of the Corporation. All shares of Class A Common Stock that shall be issued upon any such redemption will, upon issuance in accordance with the LLC Agreement, be validly issued, fully paid and nonassessable. To the extent that any holder of Class B Common Stock exercises its right pursuant to the LLC Agreement to have some or all of such holder’s Units redeemed by the Partnership in accordance with the LLC Agreement, then simultaneous with the payment of the consideration due under the LLC Agreement to such holder of Class B Common Stock for such holders Units, the Corporation shall redeem for no consideration such number of shares of Class B Common Stock registered in the name of the redeeming or exchanging holder of Class B Common Stock equal to the number of Units held by such holder of Class B Common Stock that are redeemed or exchanged in such redemption or exchange transaction shall be automatically transferred to the Corporation, retired and canceled and shall not be reissued. 

 

(2) Notwithstanding the Restrictions, (A) in the event that an outstanding share of Class B Common Stock shall cease to be held by a registered holder of Units, such share of Class B Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock be transferred to the Corporation, retired and cancelled for no consideration, and shall not be re-issued by the Corporation and (B) in the event that one or more of the Units held by a registered holder of Class B Common Stock ceases to be held by such holder (other than as a result of a transfer of one or more Units together with an equal number of shares of Class B Common Stock as permitted by the LLC Agreement), a corresponding number of shares of Class B Common Stock registered in the name of such holder shall automatically and without further action on the part of the Corporation or such holder be transferred to the Corporation, retired and cancelled for no consideration, and such shares shall not be re-issued by the Corporation.

 

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(v) Restrictive Legend. All certificates or book entries representing shares of Class B Common Stock, as the case may be, shall bear a legend substantially in the following form (or in such other form as the Board may determine):

 

THE SECURITIES REPRESENTED BY THIS BOOK ENTRY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).

 

THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT.

 

THESE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME, AND THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ATLAS TC HOLDINGS LLC, DATED AS OF FEBRUARY 13, 2020, AMONG THE MEMBERS LISTED THEREIN, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR). AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED.

 

(d) Conversion Rights. Except as set forth in this Second Amended and Restated Certificate, the Common Stock shall not be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same class of the Corporation’s capital stock.

 

(e) Preemptive Rights. No stockholder shall, by reason of the holding of shares of any class or series of capital stock of the Corporation, have any preemptive or preferential right to acquire or subscribe for any shares or securities of any class or series, whether now or hereafter authorized, which may at any time be issued, sold or offered for sale by the Corporation, unless specifically provided for in a Preferred Stock Designation.

 

(f) Stock Split or Reverse Stock Split. In no event shall the shares of either Class A Common Stock or Class B Common Stock be split, subdivided, or combined (including by way of stock dividend) unless the outstanding shares of the other class shall be proportionately split, subdivided or combined.

 

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(g) Authorization and Issuance of Additional Shares; Repurchases or Redemptions.

 

(i) If at any time the Corporation issues a share of Class A Common Stock or any other Equity Security of the Corporation (other than Class B Common Stock), (1) the Corporation shall cause the Partnership to issue to the Corporation one Unit (if the Corporation issues a share of Class A Common Stock), or such other Equity Security of the Partnership (if the Corporation issues Equity Securities other than Class A Common Stock) corresponding to such Equity Securities issued by the Corporation, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Corporation and (2) the net proceeds received by the Corporation with respect to issuance of the corresponding share of Class A Common Stock or other Equity Security, if any, shall be concurrently contributed by the Corporation to the Partnership as a capital contribution. Notwithstanding the foregoing, this Section 3(h)(i) shall not apply to (x) the issuance and distribution to holders of shares of Class A Common Stock of rights to purchase Equity Securities of the Corporation under a “poison pill” or similar stockholders rights plan (and upon any redemption of Units for Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right under such plan) or (y) the issuance under the Corporation’s employee benefits plans of any warrants, options, other rights to acquire Equity Securities of the Corporation or rights or property that may be converted into or settled in Equity Securities of the Corporation, but shall in each of the foregoing cases apply to the issuance of Equity Securities of the Corporation in connection with the exercise or settlement of such rights, warrants, options or other rights or property.

 

(ii) The Corporation shall not in any manner effect any subdivision (by stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Units, with corresponding changes made with respect to any other exchangeable or convertible securities. The Corporation shall not in any manner effect any subdivision (by stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of any outstanding Equity Securities of the Corporation (other than the Common Stock) unless accompanied by an identical subdivision or combination, as applicable, of the corresponding Equity Securities of the Partnership, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

(iii) The Corporation may not redeem, repurchase or otherwise acquire (1) any shares of Class A Common Stock unless substantially simultaneously the Partnership redeems, repurchases or otherwise acquires from the Corporation an equal number of Units for the same form and amount of consideration per security or (2) any other Equity Securities of the Corporation (other than Class B Common Stock) unless substantially simultaneously the Partnership redeems, repurchases or otherwise acquires from the Corporation an equal number of Equity Securities of the Partnership of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Corporation for the same form and amount of consideration per security. Notwithstanding the foregoing, to the extent that any consideration payable by the Corporation in connection with the redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of the Corporation or any of its subsidiaries consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities (including in connection with the cashless exercise of an option or warrant), then the redemption or repurchase of the corresponding Units or other Equity Securities of the Partnership shall be effectuated in an equivalent manner.

 

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(h) Certain Terms. As used in this Second Amended and Restated Certificate, (i) “Partnership” shall mean Atlas TC Holdings LLC, a Delaware limited liability company, or any successor entity thereto, (ii) “LLC Agreement” shall mean the Limited Liability Company Agreement of the Partnership, dated as of February 13, 2020, as such agreement may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms, (iii) “Unit” shall mean a unit representing limited liability company interests in the Partnership authorized and issued under the LLC Agreement and constituting a “Unit” as defined in the LLC Agreement as in effect as of the effective time of this Second Amended and Restated Certificate, and (iv) “Equity Securities” shall mean (1) with respect to the Corporation, any and all shares, interests, participation or other equivalents (however designated) of capital stock, including all Common Stock and Preferred Stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing and (2) with respect to the Partnership or any of its subsidiaries, (A) Units or other equity interests in the Partnership or any subsidiary of the Partnership, (B) obligations, evidences of indebtedness or other securities or interests convertible or exchangeable into Units or other equity interests in the Partnership or any subsidiary of the Partnership, and (C) warrants, options or other rights to purchase or otherwise acquire Units or other equity interests in the Partnership or any subsidiary of the Partnership.

 

Section 4. Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to purchase shares of any class or series of the Corporation’s capital stock or other securities of the Corporation, and such rights, warrants and options shall be evidenced by instrument(s) approved by the Board. The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock subject thereto may not be less than the par value thereof.

 

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Article V

BYLAWS

 

The Board may make, amend, and repeal the Amended and Restated Bylaws (the “Bylaws”) of the Corporation, provided, however, that so long as the Director Nomination Agreement remains in effect, the Board shall not approve any amendment, alteration or repeal of any provision of the Bylaws, or the adoption of any new Bylaw, that would be contrary to or inconsistent with the terms of the Director Nomination Agreement. Any Bylaw made by the Board under the powers conferred hereby may be amended or repealed by the Board (except as specified in any such Bylaw so made or amended) or by the stockholders in the manner provided in the Bylaws of the Corporation. In addition to any other vote required by law, the affirmative vote of the holders of at least 6623% of the Voting Stock (as defined below), voting together as a single class, is required to amend or repeal, or to adopt any provision inconsistent with, this Article V; provided, however, that so long as the Director Nomination Agreement, dated as of February 13, 2020, by and among the Corporation, Boxwood Sponsor LLC, a Delaware limited liability company, Atlas Technical Consultants Holdings LP, a Delaware limited partnership, and other parties (as it may be amended and/or restated, the “Director Nomination Agreement”), remains in effect, the Board may not approve any amendment, alteration or repeal of any provision of the bylaws of the Corporation, or the adoption of any new bylaw of the Corporation, that would be contrary to or inconsistent with the terms of the Director Nomination Agreement without the written consent of the Parties to the Director Nomination Agreement. Notwithstanding the foregoing, nothing in the bylaws of the Corporation shall be deemed to limit the ability of the parties to the Director Nomination Agreement to amend, alter or repeal any provision of the Director Nomination Agreement pursuant to the terms thereof, provided that no amendment to the Director Nomination Agreement (whether or not such amendment modifies any provision of the Director Nomination Agreement to which the bylaws of the Corporation are subject) shall amend the bylaws of the Corporation. For the purposes of this Second Amended and Restated Certificate, “Voting Stock” means stock of the Corporation of any class or series entitled to vote generally in the election of directors. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws other than Article VIII of the Bylaws; provided further, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or this Second Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least 6623% of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal Article VIII of the Bylaws.

 

Article VI

MEETINGS OF STOCKHOLDERS

 

Section 1. Annual Meetings. Except as otherwise expressly provided by law, the annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held at such date, time and place, if any, as shall be determined exclusively by resolution of the Board in its sole and absolute discretion.

 

Section 2. Special Meetings. Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders to call a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by another person or persons.

 

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Section 3. Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

 

Section 4. No Action by Written Consent. Subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders of the Corporation.

 

Article VII

BOARD OF DIRECTORS

 

Section 1. Number, Election, and Terms of Directors. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional directors under circumstances specified in any Preferred Stock Designation and to the terms of the Director Nomination Agreement, the number of directors will be fixed from time to time in the manner provided in the Bylaws of the Corporation. Subject to Section 6 of this Article VII, the directors, other than those who may be elected by the holders of any series of Preferred Stock, will be classified with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible, designated Class I, Class II, and Class III. At any meeting of stockholders at which directors are to be elected, the number of directors elected may not exceed the greatest number of directors then in office in any class of directors. The directors first appointed to Class I will hold office for a term expiring at the first annual meeting of stockholders following the consummation of the Initial Business Combination; the directors first appointed to Class II will hold office for a term expiring at the second annual meeting of stockholders following the consummation of the Initial Business Combination; and the directors first appointed to Class III will hold office for a term expiring at the third annual meeting of stockholders following the consummation of the Initial Business Combination, with the members of each class to hold office until their successors are elected and qualified. At each succeeding annual meeting of the stockholders of the Corporation, the successors to the class of directors whose term expires at that meeting will be elected by plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election and until their successors are elected and qualified. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional directors under circumstances specified in any Preferred Stock Designation, directors may be elected by the stockholders only at an annual meeting of stockholders. Election of directors of the Corporation need not be by written ballot unless requested by the presiding officer or by the holders of a majority of the Voting Stock present in person or represented by proxy at a meeting of the stockholders at which directors are to be elected. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.

 

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Section 2. Newly Created Directorships and Vacancies. Subject to the terms of the Director Nomination Agreement, and the rights, if any, of the holders of any series of Preferred Stock to elect additional directors under circumstances specified in any Preferred Stock Designation and Section 6 of this Article VII, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board resulting from death, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or by a sole remaining director. Any director elected in accordance with the preceding sentence will hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director’s successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. If the number of directors is changed, any increase or decrease shall be apportioned by the Board among the classes so as to maintain the number of directors in each class as nearly equal as possible; provided, however, that no decrease in the number of directors constituting the Board may shorten the term of any incumbent director.

 

Section 3. Removal. Subject to the terms of the Director Nomination Agreement, and to the rights, if any, of the holders of any series of Preferred Stock to elect additional directors under circumstances specified in any Preferred Stock Designation and Section 6 of this Article VII, any director may be removed from office by the stockholders only for cause and only in the manner provided in this Article VII, Section 4. At any annual meeting or special meeting of the stockholders, the notice of which states that the removal of a director or directors is among the purposes of the meeting and identifies the director or directors proposed to be removed, the affirmative vote of the holders of at least majority of the voting power of the outstanding Voting Stock, voting together as a single class, may remove such director or directors for cause. Notwithstanding the foregoing, in the event that a stockholder party to the Director Nomination Agreement provides notice to the Corporation to remove a director designated by such stockholder pursuant to the terms of the Director Nomination Agreement, whether such removal is with or without cause, the Corporation may take all necessary action to cause such removal, to the extent permitted by applicable law, and such director or director may be removed with or without cause.

 

Section 4. Preferred Stock – Directors. Notwithstanding any other provision of this Article VII, and except as otherwise required by law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the number of directors constituting the entire board shall automatically be increased by such specified number of directors and the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Second Amended and Restated Certificate, including any Preferred Stock Designation, and such directors shall not be included in any of the classes created pursuant to this Article VII unless expressly provided by such terms. Except as otherwise provided in a Preferred Stock Designation, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.

 

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Article VIII

LIMITED LIABILITY

 

To the full extent permitted by the DGCL and any other applicable law currently or hereafter in effect, no director of the Corporation will be personally liable to the Corporation or its stockholders for or with respect to any breach of fiduciary duty or other act or omission as a director of the Corporation, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the preceding sentence, a director of the Corporation shall not be liable to the fullest extent permitted by any amendment to the DGCL hereafter enacted that further limits the liability of a director. No repeal or modification of this Article VIII will adversely affect the protection of any director of the Corporation provided hereby in relation to any breach of fiduciary duty or other act or omission as a director of the Corporation occurring prior to the effectiveness of such repeal or modification.

 

Article IX

INDEMNIFICATION

 

Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified by the Corporation to the fullest extent permitted or required by the DGCL and any other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith (“Indemnifiable Losses”); provided, however, that, except as provided in Section 4 of this Article IX with respect to Proceedings to enforce rights to indemnification, the Corporation shall indemnify any such Indemnitee pursuant to this Section 1 in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

 

Section 2. Right to Advancement of Expenses. The right to indemnification conferred in Section 1 of this Article IX shall include the right to advancement by the Corporation of any and all expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an “Advancement of Expenses”); provided, however, that, if the DGCL so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to an employee benefit plan) shall be made pursuant to this Section 2 only upon delivery to the Corporation of an undertaking (an “Undertaking”), by or on behalf of such Indemnitee, to repay, without interest, all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 2. An Indemnitee’s right to an Advancement of Expenses pursuant to this Section 2 is not subject to the satisfaction of any standard of conduct and is not conditioned upon any prior determination that Indemnitee is entitled to indemnification under Section 1 of this Article IX with respect to the related Proceeding or the absence of any prior determination to the contrary.

 

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Section 3. Contract Rights. The rights to indemnification and to the Advancement of Expenses conferred in Sections 1 and 2 of this Article IX shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

Section 4. Right of Indemnitee to Bring Suit. If a claim under Section 1 or 2 of this Article IX is not paid in full by the Corporation within 60 calendar days after a written claim has been received by the Corporation, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to the fullest extent permitted or required by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader reimbursements of prosecution or defense expenses than such law permitted the Corporation to provide prior to such amendment), to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Corporation shall be entitled to recover such expenses, without interest, upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board of Directors or a committee thereof, its stockholders or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors or a committee thereof, its stockholders or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Corporation to recover an Advancement of Expenses hereunder pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, shall be on the Corporation.

 

Section 5. Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, this Second Amended and Restated Certificate, the Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise. Nothing contained in this Article IX shall limit or otherwise affect any such other right or the Corporation’s power to confer any such other right.

 

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Section 6. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 7. No Duplication of Payments. The Corporation shall not be liable under this Article IX to make any payment to an Indemnitee in respect of any Indemnifiable Losses to the extent that the Indemnitee has otherwise actually received payment (net of any expenses incurred in connection therewith and any repayment by the Indemnitee made with respect thereto) under any insurance policy or from any other source in respect of such Indemnifiable Losses.

 

Article X

CORPORATE OPPORTUNITIES

 

The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity pursuant to Section 122(17) of the DGCL.  An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of (i) Bernhard Capital Partners Management LP or any of its Affiliates (other than the Corporation and its subsidiaries), successors, partners, principals, directors, officers, current and former members, managers and employees, including any of the foregoing who serve as officers or directors of the Corporation or (ii) Boxwood Sponsor LLC, MIHI Boxwood Sponsor, LLC, MIHI LLC or Boxwood Management Company, LLC or any of their respective Affiliates (other than the Corporation and its subsidiaries), successors, partners, principals, directors, officers, current and former members, managers and employees (including, for the avoidance of doubt, any of the foregoing notwithstanding the dissolution of any of the foregoing entities following the date of this Second Amended and Restated Certificate), including any of the foregoing who serve as officers or directors of the Corporation (collectively, “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation, such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue, and to the extent the director is permitted to refer that opportunity to the Corporation without violating any legal or contractual obligation. Any amendment, repeal or modification of the foregoing provisions of this Article X shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification. For purposes of this Article X, “Affiliate” means, with respect to any person, any other person that controls, is controlled by, or is under common control with such person.

 

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Article XI

AMENDMENTS

 

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate (including any Preferred Stock Designation), in the manner now or hereafter prescribed by this Second Amended and Restated Certificate and the DGCL, all rights, preferences and privileges herein conferred upon stockholders, directors or any other persons by and pursuant to this Second Amended and Restated Certificate in its present form or as hereafter amended are granted subject to the right reserved in this Article XI. Notwithstanding anything to the contrary contained in this Second Amended and Restated Certificate or the Bylaws, and notwithstanding that a lesser percentage or vote may be permitted from time to time by applicable law, no provision of Article IV, Article VII, Article IX, Article X, and this Article XI (except by virtue of a filing of a Preferred Stock Designation, but subject to any vote required by law or by other provisions of this Second Amended and Restated Certificate with respect to such Preferred Stock Designation) may be altered, amended or repealed in any respect, nor may any provision of this Second Amended and Restated Certificate or of the Bylaws inconsistent therewith be adopted, unless in addition to any other vote required by this Second Amended and Restated Certificate or otherwise required by law, such alteration, amendment, repeal or adoption is approved at a meeting of the stockholders called for that purpose by the affirmative vote of the holders of at least 662⁄3% of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class; provided, however, that, so long as the Director Nomination Agreement remains in effect, no provision of this Second Amended and Restated Certificate may be amended, altered or repealed in any manner that would be contrary to or inconsistent with the terms of the Director Nomination Agreement.

 

Article XII

EXCLUSIVE FORUM FOR CERTAIN LAWSUITS

 

Section 1. Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) shall be the sole and exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Second Amended and Restated Certificate or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) arising under the Securities Act of 1933, as amended, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Notwithstanding the foregoing, the provisions of this Section 1 will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of any consented to the provisions of this Section 1.

 

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Article XIII

SEVERABILITY

 

If any provision or provisions (or any part thereof) of this Second Amended and Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any person, entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Second Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Second Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby, and (ii) the provisions of this Second Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Second Amended and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.

 

Article XIV

SECTION 203 OF THE DGCL

 

The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL as now in effect or hereafter amended, or any successor statute thereto, and the restrictions contained in Section 203 of the DGCL shall not apply to the Corporation.

 

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IN WITNESS WHEREOF, Boxwood Merger Corp. has caused this Second Amended and Restated Certificate to be duly executed in its name and on its behalf by an authorized officer as of this 13th day of February, 2020.

 

BOXWOOD MERGER CORP. 

 

By:    
Name:    
Title:    

 

 

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Exhibit 3.2

  

AMENDED AND RESTATED BY LAWS
OF
Atlas Technical Consultants, Inc. (f/K/A Boxwood merger corp.)
(THE “CORPORATION”)

 

Article I
OFFICES

 

Section 1.1 Registered Office. The registered office of the Corporation within the State of Delaware shall be located at the office of the Corporation’s registered agent as stated in the Corporation’s Amended & Restated Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”).

 

Section 1.2 Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.

 

Article II
STOCKHOLDERS MEETINGS

 

Section 2.1 Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders shall elect those directors of the Corporation to fill any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.

 

Section 2.2 Special Meetings. Subject to the rights, if any, of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board and the ability of the stockholders to call a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of the stockholders may not be called by another person or persons.

 

Section 2.3 Notices. Notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting.

 

 

 

 

Section 2.4 Quorum. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.

 

Section 2.5 Voting of Shares.

 

(a) Voting Lists. The Corporation shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any meeting of stockholders.

 

(b) Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

 

(c) Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority.

 

(i) A stockholder may execute a document authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent.

 

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(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such transmission must either set forth or be submitted with information from which it can be determined that the transmission was authorized by the stockholder.

 

Any copy, facsimile telecommunication or other reliable reproduction of the document (including any electronic transmission) authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the document for any and all purposes for which the original document could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire document.

 

(d) Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at which a quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting, unless the matter is one upon which, by applicable law, the Certificate of Incorporation, these Bylaws or applicable stock exchange rules, a different or minimum vote is required, in which case the different or minimum vote shall be the required vote for such matter.

 

(e) Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.

 

Section 2.6 Adjournments. Any meeting of stockholders, annual or special, may be adjourned, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

 

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Section 2.7 Advance Notice for Business.

 

(a) Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto), (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or duly authorized committee thereof or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.7(a) and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election as a director pursuant to Section 3.4 will be considered for election at such meeting.

 

(i) In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely advance notice thereof in proper written form to the Secretary of the Corporation and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary with respect to such business, to be timely must be delivered to the Secretary or mailed and received at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.7(a).

 

(ii) To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these Bylaws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

 

(iii) The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.7(a). If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation.

 

(iv) In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

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(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only pursuant to Section 3.4.

 

(c) Public Announcement. For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor thereto).

 

Section 2.8 Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these Bylaws or such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

Section 2.9 Consents in Lieu of Meeting. Except as may be otherwise provided for or fixed pursuant to the Certificate of Incorporation relating to the rights of the holders of any outstanding series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders of the Corporation.

 

Article III
DIRECTORS

 

Section 3.1 Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Delaware.

 

Section 3.2 Number of Directors. The Board shall consist of one or more members. Notwithstanding anything to the contrary contained herein, the exact number of directors shall be fixed from time to time by resolution of the Board. No decrease in the number of directors shall shorten the term of any incumbent director.

 

Section 3.3 Vacancies. Notwithstanding anything to the contrary contained herein, any vacancy, including a vacancy due to an increase in the size of the Board, may be filled by the Board, by the affirmative vote of a majority of the remaining directors, even though less than a quorum, or by the shareholders at an annual or special meeting called for that purpose. A director elected to fill a vacancy shall hold office for the unexpired term of his or her predecessor in office and until a qualified successor shall have been elected and qualified.

 

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Section 3.4 Advance Notice for Nomination of Directors.

 

(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors or as contemplated by and pursuant to the terms of the Director Nomination Agreement, dated as of February 13, 2020, by and among the Corporation, Atlas Technical Consultants Holdings LP and other parties thereto (as it may be amended and/or restated from time to time, the “Director Nomination Agreement”). Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction of the Board or a duly authorized committee thereof or (ii) by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 3.4 and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in this Section 3.4.

 

(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder’s notice to the Secretary must be delivered to the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 3.4.

 

(c) Notwithstanding anything in Section 3.4(b) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the 100th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 3.4 shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation.

 

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(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation, if any, that are owned beneficially or of record by the person, (D) a written questionnaire with respect to the background and qualification of such proposed nominee (which questionnaire shall be provided by the Secretary of the Corporation upon written request) and a written statement and agreement executed by each such nominee acknowledging, among other things, that such person consents to being named in the Corporation’s proxy statement as a nominee and to serving as a director if elected and intends to serve as a director for the full term for which such person is standing for election, and (E) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, without regard to the application of the Exchange Act to either the nomination or the Corporation; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the nomination is made, and a representation that the stockholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting within five business days after the record date for such meeting, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), and any other person acting in concert with any of the foregoing, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement, or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting, (D) a description of any agreement, arrangement, or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, the stockholder or the beneficial owner, if any, on whose behalf the nomination is being made and any of their affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of such person or any of their affiliates or associates with respect to shares of stock of the Corporation, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement, or understanding in effect as of the record date for the meeting within five business days after the record date for such meeting, (E) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, (F) a representation whether the stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination and/or otherwise to solicit proxies from stockholders in support of the nomination, and (G) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independent, or lack thereof, of such nominee.

 

(e) If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.4 or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 3.4, then such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this Section 3.4, if the stockholder does not provide the information required under this Section 3.4 to the Corporation, including the updated information required by Section 3.4(d)(ii)(B), Section 3.4(d)(ii)(C), and Section 3.4(d)(ii)(D) within five business days after the record date for such meeting, or if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.

 

(f) In addition to the provisions of this Section 3.4, a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.4 shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.

 

Section 3.5 Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like reimbursement of expenses for service on the committee.

 

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Article IV
BOARD MEETINGS

 

Section 4.1 Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.

 

Section 4.2 Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places (within or without the State of Delaware) as shall from time to time be determined by the Board.

 

Section 4.3 Special Meetings. Special meetings of the Board (a) may be called by the Chairman of the Board, the President or the Chief Executive Officer and (b) shall be called by the Chairman of the Board, President, Chief Executive Officer or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting.

 

Section 4.4 Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

Section 4.5 Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 4.6 Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

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Article V
COMMITTEES OF DIRECTORS

 

Section 5.1 Establishment. Subject to the terms of the Director Nomination Agreement, the Board may by resolution of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required by the resolution designating such committee. Subject to the terms of the Director Nomination Agreement, the Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.

 

Section 5.2 Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.

 

Section 5.3 Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

 

Section 5.4 Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these Bylaws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these Bylaws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article IV of these Bylaws.

 

Article VI
OFFICERS

 

Section 6.1 Officers. The officers of the Corporation elected by the Board shall be a Chairman of the Board, a Chief Executive Officer, a President, a Chief Financial Officer, a Treasurer, a Secretary and such other officers (including without limitation, Vice Presidents and Assistant Secretaries) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these Bylaws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.

 

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(a) Chairman of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board. The Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held by the same person.

 

(b) Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person.

 

(c) President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated by the Board. The position of President and Chief Executive Officer may be held by the same person.

 

(d) Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.

 

(e) Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office (including, without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief Financial Officer’s hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board, the Chief Executive Officer or the President may authorize).

 

(f) Treasurer. The Treasurer shall have the custody of the corporate funds and securities, except as otherwise provided by the Board, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the president and the directors, at the regular meetings of the Board, or whenever they may require it, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.

 

(g) Secretary.

 

(i) The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.

 

(ii) The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.

 

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(h) Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.

 

Section 6.2 Term of Office; Removal; Vacancies. The elected officers of the Corporation shall hold office until their successors are duly elected and qualified or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.

 

Section 6.3 Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.

 

Article VII
SHARES

 

Section 7.1 Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.

 

Section 7.2 Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

 

Section 7.3 Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by any two authorized officer of the Corporation, which authorized officers shall include, without limitation, (a) the Chairman of the Board, the Chief Executive Officer, the President, any or a Vice President, and (b) the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Secretary and any or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.

 

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Section 7.4 Consideration and Payment for Shares.

 

(a) Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of cash, tangible or intangible property or any benefit to the Corporation or any combination thereof.

 

(b) Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.

 

Section 7.5 Lost, Destroyed or Wrongfully Taken Certificates.

 

(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.

 

(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall, to the fullest extent permitted by law, be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.

 

Section 7.6 Transfer of Stock.

 

(a) If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement requesting the registration of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer as requested if:

 

(i) In the case of certificated shares, the certificate representing such shares has been surrendered;

 

(ii) (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C) with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;

 

(iii) the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable assurance that the endorsement or instruction is genuine and authorized as the Corporation may request;

 

(iv) the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in accordance with Section 7.8(a); and

 

(v) such other conditions for such transfer as shall be provided for under applicable law have been satisfied.

 

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(b) Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.

 

Section 7.7 Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.

 

Section 7.8 Effect of the Corporation’s Restriction on Transfer.

 

(a) A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated shares, contained in a notice sent pursuant to Section 7.2, may be enforced against the holder of such shares or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder.

 

(b) A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless: (i) the shares are certificated and such restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated and such restriction was contained in a notice sent pursuant to Section 7.2.

 

Section 7.9 Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.

 

Article VIII
INDEMNIFICATION

 

Section 8.1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified by the Corporation to the fullest extent permitted or required by the DGCL and any other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith (“Indemnifiable Losses”); provided, however, that, except as provided in Section 8.4 of this Article VIII with respect to Proceedings to enforce rights to indemnification, the Corporation shall indemnify any such Indemnitee pursuant to this Section 8.1 in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

 

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Section 8.2 Right to Advancement of Expenses. The right to indemnification conferred in Section 8.1 of this Article VIII shall include the right to advancement by the Corporation of any and all expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an “Advancement of Expenses”); provided, however, that, if the DGCL so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to an employee benefit plan) shall be made pursuant to this Section 8.2 only upon delivery to the Corporation of an undertaking (an “Undertaking”), by or on behalf of such Indemnitee, to repay, without interest, all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 8.2. An Indemnitee’s right to an Advancement of Expenses pursuant to this Section 8.2 is not subject to the satisfaction of any standard of conduct and is not conditioned upon any prior determination that Indemnitee is entitled to indemnification under Section 8.1 of this Article VIII with respect to the related Proceeding or the absence of any prior determination to the contrary.

 

Section 8.3 Contract Rights. The rights to indemnification and to the Advancement of Expenses conferred in Sections 8.1 and 8.2 of this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators

 

Section 8.4 Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or 8.2 of this Article VIII is not paid in full by the Corporation within 60 calendar days after a written claim has been received by the Corporation, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to the fullest extent permitted or required by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader reimbursements of prosecution or defense expenses than such law permitted the Corporation to provide prior to such amendment), to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Corporation shall be entitled to recover such expenses, without interest, upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board of Directors or a committee thereof, its stockholders or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board or a committee thereof, its stockholders or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Corporation to recover an Advancement of Expenses hereunder pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, shall be on the Corporation.

 

Section 8.5 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Article VIII shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Certificate of Incorporation, these Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise. Nothing contained in this Article VIII shall limit or otherwise affect any such other right or the Corporation’s power to confer any such other right

 

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Section 8.6 Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 8.7 No Duplication of Payments. The Corporation shall not be liable under this Article VIII to make any payment to an Indemnitee in respect of any Indemnifiable Losses to the extent that the Indemnitee has otherwise actually received payment (net of any expenses incurred in connection therewith and any repayment by the Indemnitee made with respect thereto) under any insurance policy or from any other source in respect of such Indemnifiable Losses.

 

Section 8.8 Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided however, that amendments or repeals of this Article VIII by the stockholders shall require the affirmative vote of the stockholders holding at least 6623%  of the voting power of all outstanding shares of capital stock of the Corporation.

 

Section 8.9 Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

Article IX
MISCELLANEOUS

 

Section 9.1 Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these Bylaws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held at any place.

 

Section 9.2 Fixing Record Dates.

 

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 9.2(a) at the adjourned meeting.

 

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(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

(c) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board, (i) when no prior action of the Board is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board is required by law, the record date for such purpose shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

 

Section 9.3 Means of Giving Notice.

 

(a) Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.

 

(b) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

(c) Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.

 

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(d) Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

 

Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230 (b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.

 

Section 9.4 Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these Bylaws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

 

Section 9.5 Meeting Attendance via Remote Communication Equipment.

 

(a) Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:

 

(i) participate in a meeting of stockholders; and

 

(ii) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.

 

(b) Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these Bylaws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting.

 

17

 

 

Section 9.6 Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.

 

Section 9.7 Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.

 

Section 9.8 Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.

 

Section 9.9 Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.

 

Section 9.10 Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

 

Section 9.11 Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.

 

Section 9.12 Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 9.13 Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.

 

18

 

 

Section 9.14 Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.

 

Section 9.15 Conflicts. So long as the Director Nomination Agreement is in effect, it is intended that these Bylaws be interpreted in a manner consistent with the applicable provisions of the Director Nomination Agreement, and that such provisions of the Director Nomination Agreement be incorporated into these Bylaws and be a part hereof. In the event of any conflict between the terms of these Bylaws and those contained in the Director Nomination Agreement, the terms and provisions of the Director Nomination Agreement shall govern and control and these Bylaws shall be construed so as to give effect to such provisions.

 

Section 9.16 Amendments. Subject to the Certificate of Incorporation, the affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting (except as otherwise provided in Section 8.7) power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws.

 

 

 19

 

 

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

SUBSCRIPTION AGREEMENT

 

dated as of February 14, 2020

 

between

 

ATLAS TC HOLDINGS LLC

 

and

 

GSO COF III AIV-2 LP

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

RECITALS 1
   
ARTICLE I PURCHASE; CLOSING 2
     
1.1 Purchase 2
1.2 Closing 2
1.3 Closing Conditions 2
     
ARTICLE II REPRESENTATIONS AND WARRANTIES 5
     
2.1 Representations and Warranties of the Company 5
2.2 Representations and Warranties of the Purchaser 11
     
ARTICLE III COVENANTS 13
     
3.1 Actions 13
3.2 Waivers Under or Amendments to Acquisition Agreement 13
     
ARTICLE IV MISCELLANEOUS 14
     
4.1 Expenses 14
4.2 Amendment; Waiver 14
4.3 Counterparts and Facsimile 14
4.4 Governing Law 14
4.5 WAIVER OF JURY TRIAL 14
4.6 Notices 14
4.7 Entire Agreement, Etc 15
4.8 Interpretation; Other Definitions 16
4.9 Captions 16
4.10 Severability 17
4.11 No Third-Party Beneficiaries 17
4.12 Public Announcements 17
4.13 Specific Performance 17
4.14 No Recourse 17

 

(i)

 

 

INDEX OF DEFINED TERMS

 

Term

 

Location of
Definition

Acquisition Agreement   Recitals
Acquisition Co.   Recitals
Action   2.1(h)
Affiliate   4.8(a)
Agreement   Preamble
Amended and Restated Operating Agreement   1.2(b)
Anti-Corruption Laws   2.1(o)
Beneficial Ownership Regulation   1.3(c)(ix)
business day   4.8(e)
Closing   1.2(a)
Closing Date   1.2(a)
Commitment Letter   Recitals
Company   Preamble
Company Parties   2.1(o)
Company Subsidiary   2.1(a)(ii)
Company’s knowledge   4.8(g)
control/controlled by/under common control with   4.8(a)
Exchange Act   4.8(f)
Fair Value   2.1(j)(i)
Governmental Entity   2.1(e)
GSO   Recitals
including/includes/included/include   4.8(c)
Indebtedness   2.1(b)
knowledge of the Company   4.8(g)
Liabilities   2.1(j)(iii)
Liens   2.1(c)
Material Adverse Effect   2.1(d)(ii)
OFAC   2.1(n)
Payment Letter   Recitals
person   4.8(f)
Preferred Commitment   Recitals
Present Fair Salable Value   2.1(j)(ii)
Purchase   1.1(a)
Purchase Price   1.1(a)
Purchaser   Preamble
Purchaser Parties   2.2(m)
SEC   2.1(f)
Securities Act   1.3(c)(viii)
Seller   Recitals
SPAC   Recitals
Subsidiary   2.1(a)(ii)
Target   Recitals
Transaction   Recitals
Units   Recitals

(ii)

 

 

LIST OF ANNEXES AND EXHIBITS

 

Annex I Organizational Chart of the Company
Annex II Outstanding Equity Interests and Indebtedness of the Company
   
Exhibit A Form of Solvency Certificate

 

(iii)

 

 

SUBSCRIPTION AGREEMENT, dated as of February 14, 2020 (this “Agreement”), between Atlas TC Holdings LLC, a Delaware limited liability company (the “Company”), and GSO COF III AIV-2 LP (the “Purchaser”).

 

RECITALS:

 

A. The Transaction. The Company, Boxwood Merger Corp., a Delaware corporation (the “SPAC”), Atlas Intermediate Holdings LLC, a Delaware limited liability company (the “Target”), Atlas TC Buyer LLC (“Acquisition Co.”), a newly formed Delaware limited liability company and a wholly-owned subsidiary of the Company, and Atlas Technical Consultants Holdings, LP, a Delaware limited partnership (the “Seller”), have entered into that certain Unit Purchase Agreement, dated as of August 12, 2019 (together with all exhibits, schedules and disclosure letters thereto, as such agreement may have been or be amended from time to time, the “Acquisition Agreement”), pursuant to which the SPAC will acquire all of the outstanding equity interests of the Target through Acquisition Co. (the “Transaction”).

 

B. The Preferred Commitment and Payment Letter.

 

1. In connection with the Transaction and the consummation of the other transactions contemplated in the Commitment Letter and each of the exhibits thereto, dated January 23, 2020, from GSO Capital Partners LP, a Delaware limited partnership (“GSO”), addressed to the SPAC and the Company (the “Commitment Letter”), the Purchaser has committed to purchase from the Company, and the Company shall sell to the Purchaser, Series A Preferred Units of the Company (the “Units”) for an aggregate cash purchase price of $142,100,000 (the “Preferred Commitment”). Capitalized terms used but not defined herein shall have the meanings given such terms in the Commitment Letter.

 

2. The Company and GSO entered into a closing payment letter agreement, dated January 23, 2020 (as the same may be amended, the “Payment Letter”), providing for, among other things, the payment by the Company to GSO of certain fees in connection with the Preferred Commitment.

 

C. The Investment. Immediately prior to the completion of the Transaction and in fulfillment of the Preferred Commitment, the Company intends to sell to the Purchaser, and the Purchaser intends to purchase from the Company, as an investment in the Company and on the terms and conditions hereof, the Units.

 

- 1 -

 

 

NOW, THEREFORE, in consideration of the premises, representations, warranties and the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

PURCHASE; CLOSING

 

1.1 Purchase. On the terms and subject to the conditions set forth herein, at the Closing, the Purchaser will purchase from the Company, and the Company will sell to the Purchaser, free and clear of all Liens (other than those set forth in the Amended and Restated Operating Agreement (as defined below) or arising by reason of any act of the Purchaser or under applicable securities laws) 145,000 Units at a per Unit price of $978.2069 for an aggregate cash purchase price of $141,840,000 (the “Purchase Price”) (such purchase and sale, the “Purchase”) which represents a 2.17931% original issue discount on the Units.

 

1.2 Closing.

 

(a) The closing of the purchase of the Units referred to in Section 1.1 by the Purchaser pursuant hereto (the “Closing”) shall occur at 9:00 A.M., New York City time, on the date hereof, at the New York offices of Winston and Strawn LLP, or at such other time and location as agreed by the Purchaser and the Company in writing. The date of the Closing is referred to as the “Closing Date.”

 

(b) At the Closing, (i) the Company will (A) make entries in its register of members in order to record and give effect to the issuance of the Units to the Purchaser, (B) deliver to the Purchaser an amended and restated operating agreement of the Company, in the form of Exhibit A attached hereto (the “Amended and Restated Operating Agreement”) duly executed by the Company and all of the members of the Company (other than Purchaser), (C) deliver all other items required to be delivered pursuant to Section 1.3(c), and shall instruct its officers to reflect the issuance of the Units (which are uncertificated) to the Purchaser, and (D) reimburse the Purchaser for all expenses then due in connection with the transactions contemplated hereby, to the extent invoiced at least one business day prior to the date hereof, and all other amounts required to be paid to the Purchaser on the Closing Date pursuant to the Payment Letter and (ii) the Purchaser will deliver (A) the Purchase Price by wire transfer of immediately available funds to a bank account that has been designated in writing by the Company not less than two business days prior to the Closing, and (B) the items required to be delivered pursuant to Section 1.3(d).

 

1.3 Closing Conditions.

 

(a) The Closing shall be subject to the satisfaction or valid waiver by each party of conditions that, on the Closing Date:

 

(i) no federal, state, local, foreign or supranational government, any court, administrative, regulatory or other governmental agency, commission or authority, any non-governmental self-regulatory agency, commission or authority or any arbitral body of competent jurisdiction (a “Governmental Entity”) shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise preventing, restraining or prohibiting consummation of the transactions contemplated hereby, and no Governmental Entity shall have instituted or threatened in writing a proceeding seeking to impose any such prevention, restraint or prohibition; and

 

- 2 -

 

 

(ii) all conditions precedent to the closing of the Transaction, including the approval of the SPAC’s stockholders, shall have been satisfied or waived (other than those conditions which, by their nature, are to be satisfied at the closing of the Transaction, but subject to the satisfaction of those conditions at such time).

 

(b) The obligation of the Company to consummate the Closing shall be subject to the satisfaction or valid waiver by the Company of the additional conditions that, on the Closing Date:

 

(i) all representations and warranties of the Purchaser contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date; and

 

(ii) the Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c) The obligation of the Purchaser to consummate the Closing shall be subject to the satisfaction or valid waiver by the Purchaser of the conditions that, on the Closing Date:

 

(i) all representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that, in each case, any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects;

 

(ii) the Acquisition Agreement Representations shall be true and correct in all material respects on and as of the Closing Date, except in the case of any such Acquisition Agreement Representations which expressly relates to a given date or period, in which case, such Acquisition Agreement Representations shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be; provided that, to the extent that any of such representations and warranties are qualified by or subject to a materiality, “material adverse effect”, “material adverse change” or similar term or qualification, such representations and warranties shall be true in all respects;

 

(iii) substantially concurrently with the Closing hereunder, (A) the Company shall have received the Minimum Equity Amount, (B) the Equity Rollover shall have occurred, (C) the Debt Financing shall have been consummated on terms and conditions satisfactory to the Purchaser, and the Acquisition Co. shall have received no more than $281,000,000 in respect of the First Lien Term Facility, and (D) the Refinancing shall have occurred (with all applicable related Liens and guarantees to be released and terminated or customary provisions therefor made);

 

- 3 -

 

 

(iv) substantially concurrently with the Closing hereunder, the Transaction shall have been or shall be consummated in accordance with the terms and conditions of the Acquisition Agreement, as from time to time waived, amended, supplemented or otherwise modified, other than any such waiver, amendment, supplement, consent or other modification thereto that, individually or in the aggregate, would reasonably be expected to be materially adverse to the interests of the Purchaser unless the Purchaser shall have consented thereto; provided that any change in the definition of “Material Adverse Effect” in the Acquisition Agreement shall be deemed to be materially adverse to the interests of the Purchaser;

 

(v) the Company shall have delivered to the Purchaser: (A) a duly executed certificate from an authorized officer of the Company, dated as of the Closing Date, certifying (1) that the conditions set forth in Sections 1.3(c)(i), (ii) and (vi) have been satisfied, (2) that each of the certificate of formation of the Company and the Amended and Restated Operating Agreement, each attached thereto, is in full force and effect as of the Closing, and (3) that the resolutions of the managing member of the Company approving this Agreement and the transactions contemplated hereby were duly adopted; (B) a certificate of good standing with respect to the Company issued by the jurisdiction of its formation, stamped with a date no older than ten business days prior to the Closing Date; and (C) a solvency certificate of the Company dated as of the Closing Date, substantially in the form of Exhibit A attached hereto;

 

(vi) since December 31, 2018, there has been no Material Adverse Effect (as defined in the Acquisition Agreement as in effect on January 23, 2020);

 

(vii) the Purchaser shall have received unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the SPAC and the Target for any subsequent fiscal quarter ended at least 45 days prior to the Closing Date;

 

(viii) the Purchaser shall have received a pro forma consolidated balance sheet and related pro forma consolidated income statements of the Company and its Subsidiaries as of the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements of the Target have been delivered pursuant to Section 1.3(c)(vii), prepared giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of the pro forma balance sheet) or as of the beginning of such period (in the case of the pro forma income statement), which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”), or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)); and

 

- 4 -

 

 

(ix) the Purchaser shall have received, (x) at least three business days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act, in each case, to the extent requested of the SPAC and the Company by the Purchaser at least 10 days prior to the Closing Date and (y) at least three business days prior to the Closing Date, with respect to the Company or the SPAC to the extent that either qualifies as a “legal entity customer” under 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation and requested of the SPAC and the Company by the Purchaser at least 10 days prior to the Closing Date

 

(d) The Purchaser agrees that, at or prior to the Closing, the Purchaser shall deliver to the Company a duly completed and executed (i) Internal Revenue Service Form W-9 and (ii) a counterpart signature page to the Amended and Restated Operating Agreement.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

2.1 Representations and Warranties of the Company. The Company represents and warrants to the Purchaser as follows:

 

(a) Formation and Authority.

 

(i) The Company is duly formed, validly existing and in good standing as a limited liability company under the laws of the State of Delaware and has all requisite limited liability company power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company has furnished to the Purchaser true, correct and complete copies of the operating agreement of the Company as in effect immediately prior to the Closing and the Acquisition Agreement (including all schedules and exhibits thereto) in the form executed and delivered by the parties thereto as of August 12, 2019, as amended as of the date hereof.

 

(ii) Each Company Subsidiary is duly organized, validly existing, duly qualified to do business and in good standing under the laws of the jurisdiction of its formation (if the concept of “good standing” is a recognized concept in such jurisdiction) and has all requisite power and authority to carry on its business as presently conducted and as proposed to be conducted. The organizational chart set forth in Annex I is true, correct and complete as of immediately prior to the Closing. As used herein, “Subsidiary” means, with respect to any person, any corporation, partnership, joint venture, limited liability company or other entity (A) of which such person or a subsidiary of such person is a general partner or (B) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity, is directly or indirectly owned by such person and/or one or more subsidiaries thereof; and “Company Subsidiary” means, as of immediately prior to the Closing, any Subsidiary of the Company.

 

- 5 -

 

 

(b) Capitalization. Annex II sets forth the outstanding equity interests and Indebtedness of the Company immediately prior to the Closing. Except as set forth on Annex II, the Company has not (A) issued or authorized the issuance of any equity interests of the Company or any securities convertible into or exchangeable or exercisable for equity interests of the Company, (B) repurchased or redeemed, or authorized the repurchase or redemption of, any equity interests of the Company. All of the issued and outstanding equity interests of the Company have been validly issued and are fully paid, nonassessable and free of preemptive rights. Except as reflected on Annex II or as contemplated by the Acquisition Agreement, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable for, any equity securities of the Company or any securities representing the right to purchase or otherwise receive any equity interests of the Company. For the purposes of this Section 2.1(b), “Indebtedness” means, with respect to any person, without duplication, (i) all obligations of such person for borrowed money, or with respect to deposits or advances of any kind to such person, (ii) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (iii) all capitalized lease obligations of such person, (iv) all guarantees and arrangements having the economic effect of a guarantee of such person of any Indebtedness of any other person, or (v) all obligations or undertakings of such person to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations or property of others. No other class of equity interest of the Company ranks pari passu with or senior to the Units. There are no Units or instruments issued by the Company or to which the Company is a party containing anti-dilution or similar provisions that will be triggered by the issuance of the Units to the Purchaser, as contemplated by the terms hereof.

 

(c) Company’s Subsidiaries. The Company owns, directly or indirectly, all of the issued and outstanding equity interests in each of the Company Subsidiaries, free and clear of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests and other encumbrances of any kind (“Liens”), and all of such equity interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Company Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any equity security of such Company Subsidiary or any securities representing the right to purchase or otherwise receive any equity security of such Company Subsidiary.

 

- 6 -

 

 

(d) Authorization.

 

(i) The Company has the limited liability company power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby have been duly authorized by the managing member of the Company. This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Purchaser, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles). No other proceedings are necessary for the execution and delivery by the Company of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.

 

(ii) Neither the execution and delivery by the Company of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the material properties or assets of the Company or any Company Subsidiary under any of the terms, conditions or provisions of (i) its certificate of formation, operating agreement or other governing instrument of the Company or any Company Subsidiary or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which it may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject, or (B) subject to compliance with the statutes and regulations referred to in Section 2.1(e), violate any law, statute, ordinance, rule, regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective properties or assets, in each case, except in the case of clauses (A)(ii) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, the term “Material Adverse Effect” means (1) a material adverse change in, or a material adverse effect upon, the business, properties, results of operations or condition (financial or otherwise) of the Company and Company Subsidiaries taken as a whole or (2) a material impairment of the ability of the Company to perform under this Agreement.

 

(e) Governmental Consents. No material notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or expiration or termination of any statutory waiting period, is necessary for the consummation by the Company of the transactions contemplated by this Agreement, other than such authorizations, orders, consents or approvals as have already been obtained by the Company.

 

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(f) Offering of Units. Neither the Company nor any person acting on its behalf has taken any action (including any offering of any Units of the Company under circumstances which would require the integration of such offering with the offering of any of the Units to be issued pursuant to this Agreement under the Securities Act, and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) promulgated thereunder) which might subject the offering, issuance or sale of any of the Units to the Purchaser pursuant to this Agreement to the registration requirements of the Securities Act.

 

(g) Status of Units. The issuance of the Units has been duly authorized by all necessary limited liability company action and, when issued and delivered to the Purchaser against full payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, will not subject the holders thereof to personal liability and will not have been issued in violation of, or subject to, any preemptive or similar rights created under the Amended and Restated Operating Agreement, or under the laws of the State of Delaware. When issued and paid for in accordance with the terms of this Agreement, the Units will be free and clear of all Liens, except (i) as set forth in the Amended and Restated Operating Agreement, (ii) Liens created by or imposed upon the Purchaser and (iii) restrictions on transfer under federal, state and/or foreign securities laws.

 

(h) Compliance with Laws. The Company and each Company Subsidiary have all material permits, licenses, franchises, authorizations, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company or such Company Subsidiary. The Company and each Company Subsidiary has complied in all material respects and is not in default or violation in any material respect of, and none of them is, to the knowledge of the Company, under investigation with respect to or, to the knowledge of the Company, has been threatened to be charged with or given notice of any material violation of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity, other than such noncompliance, defaults or violations that would not reasonably be expected to have a Material Adverse Effect. Except for statutory or regulatory restrictions of general application, no Governmental Entity has placed any material restriction on the business or properties of the Company or any Company Subsidiary.

 

(i) Acquisition Agreement Representations. The conditions set forth in Section 2.6(b)(i) of the Acquisition Agreement and, to the knowledge of the Company, the conditions set forth in Section 2.6(c)(i) of the Acquisition Agreement have been satisfied.

 

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(j) Solvency. Immediately after giving effect to the consummation of the Transactions (i) the Fair Value of the assets of the Company and its Subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities, (ii) the Present Fair Salable Value of the assets of the Company and its Subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities; (iii) the Company and its Subsidiaries on a consolidated basis taken as a whole do not have Unreasonably Small Capital; and (iv) the Company and its Subsidiaries taken as a whole will be able to pay their Liabilities as they mature. For purposes hereof,

 

(i) “Fair Value” means the amount at which the assets (both tangible and intangible), in their entirety, of the Company and its Subsidiaries taken as a whole would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

 

(ii) “Present Fair Salable Value” means the amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Company and its Subsidiaries taken as a whole are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.

 

(iii) “Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Company and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions, determined in accordance with GAAP consistently applied.

 

(iv) “Will be able to pay their Liabilities as they mature” means for the period from the date hereof through the Term Maturity Date (as defined in the Debt Financing Documentation), the Company and its Subsidiaries on a consolidated basis taken as a whole will have sufficient assets and cash flow to pay their Liabilities as those Liabilities mature or (in the case of contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by the Company and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.

 

(v) “Do not have Unreasonably Small Capital” means the Company and its subsidiaries on a consolidated basis taken as a whole after consummation of the Transactions is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern.

 

(k) Beneficial Ownership. As of the Closing Date, the information included in the certification of the Company regarding beneficial ownership as required by 31 C.F.R. § 1010.230, if applicable, is true and correct in all respects.

 

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(l) Federal Reserve Regulations. None of the Company nor any of its Subsidiaries is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States of America), or extending credit for the purpose of purchasing or carrying margin stock. No part of the proceeds of the sale of the Units hereunder will be used, directly or indirectly, to purchase or carry any margin stock or to refinance any Indebtedness originally incurred for such purpose, or for any other purpose that entails a violation of the provisions of Regulations U or X of the Board of Governors of the Federal Reserve System of the United States of America.

 

(m) Investment Company. None of the Company or any of its Subsidiaries is required to register as an “investment company” under the Investment Company Act of 1940, as amended from time to time.

 

(n) Sanctions and Anti-Terrorism Laws. Neither the Company nor any of its Subsidiaries or their respective officers, directors or, to the knowledge of any officer of the Company, employees appears on, or is owned or controlled by persons that appear on, the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”), or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States. Unless authorized by OFAC, neither the Company nor any of its Subsidiaries does business or conducts any transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. Neither the Company nor any of its Subsidiaries will directly or, to the knowledge of the Company or such Subsidiary, indirectly use the proceeds from the sale of the Units hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. Neither the Company nor any of its Subsidiaries is in violation of Executive Order No. 13224 or the USA PATRIOT Act or any other applicable anti-terrorism laws, anti-money laundering laws or laws relating to any international economic sanctions administered or enforced by the United States government (including without limitation, OFAC), the United Nations Security Council, the European Union or Her Majesty’s Treasury.

 

(o) Anti-Corruption Laws. The Company, its Subsidiaries, their respective directors and officers, and to the knowledge of the Company, their respective agents and employees, have conducted their businesses in compliance with all applicable laws, rules and regulations from time to time concerning or relating to bribery, corruption, or improper payments, including U.S. Foreign Corrupt Practices Act of 1977 (“Anti-Corruption Laws”). No part of the proceeds of the purchase of the Units will be used by the Company and its Subsidiaries, directly or, to the knowledge of the Company or such Subsidiaries, indirectly, in any manner that violates any provision of applicable Anti-Corruption Laws.

 

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(p) Tax Matters. The Company was formed on July 30, 2019 and is treated as a partnership for federal, state and local tax purposes, and each Company Subsidiary is disregarded as an entity for federal state and local income tax purposes. Neither the Company nor any of its Subsidiaries has engaged in business activities, directly or indirectly, other than those directly associated with the Acquisition Agreement and the transactions described therein. The Company and each of its Subsidiaries have timely filed all tax returns required to be filed, and have paid all taxes required to be paid.

 

(q) Brokers and Finders. No broker or finder is entitled to any brokerage or finder’s fee or other commission payable by the Purchaser in connection with this Agreement or the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company, the Company Subsidiaries or any of their respective directors, officers or employees.

 

(r) No Waiver or Modification of Closing Conditions. None of the conditions to Closing for the Transaction as set forth in the Acquisition Agreement which, if waived, amended, supplemented, consented to or otherwise modified, would be, individually or in the aggregate, materially adverse to the interests of the Purchaser has been waived, amended, supplemented, consented to or otherwise modified.

 

(s) No Other Representations and Warranties; Non-Reliance. Except for the specific representations and warranties contained in this Section 2.1 and in any certificate or agreement delivered pursuant hereto, none of the Company, any person on behalf of the Company or any of the Company’s Affiliates (collectively, the “Company Parties”) has made, makes or shall be deemed to make any other express or implied representation or warranty with respect to the Company or the Transaction and the Company Parties disclaim any such representation or warranty. Except for the specific representations and warranties expressly made by the Purchaser in Section 2.2, and in any certificate or agreement delivered pursuant hereto, the Company Parties specifically disclaim that they are relying upon any other representations or warranties that may have been made by the Purchaser.

 

2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows:

 

(a) Organization and Power. It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation (if the concept of “good standing” is a recognized concept in such jurisdiction) and has all requisite power and authority to carry on its business as presently conducted and as proposed to be conducted.

 

(b) Authorization. It has full power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby have been duly authorized by the Purchaser. This Agreement, when executed and delivered by it, will constitute the valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally or (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. No other proceedings are necessary for the execution and delivery by the Purchaser of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.

 

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(c) Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required on the part of it in connection with the consummation of the transactions contemplated by this Agreement.

 

(d) Compliance with Other Instruments. The execution, delivery and performance by it of this Agreement and the consummation by it of the transactions contemplated by this Agreement will not result in any violation or default (i) of any provisions of its organizational documents, (ii) of any instrument, judgment, order, writ or decree to which it is a party or by which it is bound, (iii) under any note, indenture or mortgage to which it is a party or by which it is bound, (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound or (v) of any provision of federal or state statute, rule or regulation applicable to it, in each case (other than clause (i)), which would have a material adverse effect on it or its ability to consummate the transactions contemplated by this Agreement.

 

(e) Purchase Entirely for Own Account. This Agreement is made with it in reliance upon its representation to the Company, which by its execution of this Agreement, it hereby confirms, that the Units to be acquired by it will be acquired for investment for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that it has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of law.

 

(f) Disclosure of Information. It has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Units and the Transaction with the Company’s management.

 

(g) Restricted Securities. It understands that the offer and sale of the Units to it has not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of its representations as expressed herein. It understands that the Units are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, it may only transfer the Units if they are registered with the SEC and qualified by state authorities, or pursuant to an exemption from such registration and qualification requirements. It acknowledges that the Company has no obligation to register or qualify the Units for resale. It further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Units, and on requirements relating to the Company which are outside of its control, and which the Company is under no obligation and may not be able to satisfy.

 

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(h) High Degree of Risk. It understands that its agreement to purchase the Units involves a high degree of risk which could cause it to lose all or part of its investment.

 

(i) Accredited Investor. It is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

(j) General Solicitation. It is not acquiring the Units as a result of any advertisement, article, notice or other communication regarding the Units published in any newspaper, magazine or similar media, broadcast over television or radio, disseminated over the Internet or presented at any seminar or any other general solicitation or general advertisement.

 

(k) No Legal, Tax or Investment Advice. It understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to it in connection with the acquisition of the Units constitutes legal, tax or investment advice. It has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its acquisition of the Units.

 

(l) Residence. Its principal place of business are the offices located at the address set forth in Section 4.6.

 

(m) No Other Representations and Warranties; Non-Reliance. Except for the specific representations and warranties contained in this Section 2.2 and in any certificate or agreement delivered pursuant hereto, none of the Purchaser nor any person acting on behalf of the Purchaser nor any of the Purchaser’s Affiliates (the “Purchaser Parties”) has made, makes or shall be deemed to make any other express or implied representation or warranty with respect to the Purchaser and the Purchaser Parties disclaim any such representation or warranty. Except for the specific representations and warranties expressly made by the Company in Section 2.1 and in any certificate or agreement delivered pursuant hereto, the Purchaser Parties specifically disclaim that they are relying upon any other representations or warranties that may have been made by the Company or any Company Party.

 

ARTICLE III

COVENANTS

 

3.1 Actions. Each party shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the other parties may reasonably request to consummate or implement the transactions contemplated hereby.

 

3.2 Waivers Under or Amendments to Acquisition Agreement. The Company shall provide the Purchaser with (i) advance notice as soon as reasonably practicable in the event that the Company or the SPAC proposes to waive, or to agree to any waiver of, any of the closing conditions set forth in Section 2.6(a) or (b) of the Acquisition Agreement and (ii) prompt notice of any amendment to the Acquisition Agreement in the interim between the date hereof and the consummation of the Transaction thereunder.

 

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ARTICLE IV

MISCELLANEOUS

 

4.1 Expenses. Each of the parties will bear and pay all other costs and expenses incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement, except that the Company shall reimburse the Purchaser for its fees and expenses as provided in Section 1.2(b)(i)(D).

 

4.2 Amendment; Waiver. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver of any party to this Agreement, as the case may be, will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. The right of a party to any remedy pursuant to this Agreement shall not be waived or otherwise affected by any investigation or examination conducted, or any knowledge possessed or acquired (or capable of being possessed or acquired), by such party at any time concerning any circumstance, action, omission or event relating to the accuracy or performance of any representation, warranty, covenant or obligation.

 

4.3 Counterparts and Facsimile. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by email and such emails will be deemed as sufficient as if actual signature pages had been delivered.

 

4.4 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed entirely within such State. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in the County of New Castle, City of Wilmington, State of Delaware for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.

 

4.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

4.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

 

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If to the Purchaser to:

 

    GSO Capital Partners LP
    345 Park Avenue, 31st Floor
    New York, New York 10154
    Attention:  Robert Petrini; Marisa J. Beeney
   

Email:  robert.petrini@gsocap.com; marisa.beeney@gsocap.com

 

    with a copy to (which copy alone shall not constitute notice):
   

 

Willkie Farr & Gallagher LLP

    787 Seventh Avenue
    New York, NY 10019
    Attention:  William H. Gump
    Viktor Okasmaa
    Email:  wgump@willkie.com
   

vokasmaa@willkie.com

 

 

If to the Company:

     
    Atlas TC Holdings LLC
    8801 Calera Dr.
    Austin, TX 78735
    Attention:  Steven Kadenacy
   

Email:  sk@boxwoodmc.com

 

    with a required copy to (which copy shall not constitute notice):
   

 

Winston & Strawn LLP

    200 Park Avenue
    New York, NY 10166-4193
    Attention:  Joel Rubinstein
    Jason Osborn
    Email:  jrubinstein@winston.com
    josborn@winston.com

 

4.7 Entire Agreement, Etc. (a) Except as otherwise provided herein, this Agreement (including the Exhibits and Annexes hereto) constitutes the entire agreement, and supersedes all other prior agreements and other understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof; and (b) this Agreement will not be assignable by operation of law or otherwise (any attempted assignment in contravention hereof being null and void); provided that the Purchaser may assign its rights and obligations under this Agreement to any Affiliate, but only if the transferee agrees in writing for the benefit of the Company (with a copy thereof to be furnished to the Company) to be bound by the terms of this Agreement (any such transferee shall be included in the term “Purchaser”); provided, further, that no such assignment shall relieve the Purchaser of its obligations hereunder.

 

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4.8 Interpretation; Other Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex and schedule references not attributed to a particular document shall be references to such exhibits, annexes and schedules to this Agreement. In addition, the following terms are ascribed the following meanings:

 

(a) the term “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise; provided, that other than for purposes of Section 4.14 of this Agreement, any reference to an “Affiliate” of the Purchaser shall exclude any person outside of the credit-focused business of The Blackstone Group Inc.;

 

(b) the word “or” is not exclusive;

 

(c) the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

 

(d) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision;

 

(e) “business day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other governmental action to close;

 

(f) “person” has the meaning given to it in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act; and

 

(g) to the “knowledge of the Company” or “Company’s knowledge” means the actual knowledge of Stephen Kadenacy, Daniel E. Esters and Duncan Murdoch.

 

4.9 Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

 

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4.10 Severability. If any provision of this Agreement or the application thereof to any person (including the officers and managers of the parties hereto) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

 

4.11 No Third-Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto, any benefit right or remedies.

 

4.12 Public Announcements. The parties hereto will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement, and neither the Company nor the Purchaser will make any such news release or public disclosure without first consulting with the other, and, in each case, also receiving the other’s consent (which shall not be unreasonably withheld, conditioned or delayed) and each party shall coordinate with the party whose consent is required with respect to any such news release or public disclosure. Notwithstanding the foregoing, Purchaser may make any public disclosure of this Agreement and the terms set forth herein as required by applicable securities laws or regulations and the rules of the stock exchange upon which its securities are listed.

 

4.13 Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms of this Agreement, this being in addition to any other remedies to which they are entitled at law or equity.

 

4.14 No Recourse. This Agreement may only be enforced against the named parties hereto. All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as parties hereto or that are subject to the terms hereof, and no past, present or future officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of the Purchaser or any party hereto (including any person negotiating or executing this Agreement on behalf of a party hereto) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby and by the other certificates delivered pursuant thereto.

 

* * *

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.

 

  ATLAS TC HOLDINGS LLC
     
  By: /s/ Stephen M. Kadenacy
  Name:  Stephen M. Kadenacy
  Title: Chief Executive Officer
     
  GSO COF III AIV-2 LP
   
  By:

GSO Capital Opportunities Associates III LLC, its general partner

     
  By: /s/ Marisa J. Beeney
  Name:  Marisa J. Beeney
  Title: Authorized Signatory

 

[Signature Page to Subscription Agreement]

 

 

 

 

Annex I

 

Organizational Chart of the Company

 

 

 

 

 

Annex II

 

Outstanding Equity Interests and Indebtedness of the Company

 

Holder   Membership Interests
Boxwoood Merger Corp.   100%

 

 

 

 

Exhibit A

 

Form of Solvency Certificate

 

February 14, 2020

 

This Solvency Certificate (this “Certificate”) is delivered pursuant to Section 1.3(c)(v)(C) of the Subscription Agreement, dated as of February 14, 2020 (as amended, restated, amended and restated, supplemented and/or otherwise modified, the “Subscription Agreement”), by and among Atlas TC Holdings LLC (“Issuer”) and GSO COF III AIV-2 LP. Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Subscription Agreement.

 

I, [●], the [Chief Financial Officer / other senior financial officer] of Issuer, in that capacity only and not in my individual capacity, DO HEREBY CERTIFY on that as of the date hereof, and based upon facts and circumstances as they exist as of the date hereof, that:

 

1. For purposes of this certificate, the terms below shall have the following definitions:

 

(a) “Fair Value”

 

The amount at which the assets (both tangible and intangible), in their entirety, of Issuer and its subsidiaries taken as a whole would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

 

(b) “Present Fair Salable Value”

 

The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of Issuer and its subsidiaries taken as a whole are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.

 

(c) “Liabilities”

 

The recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of Issuer and its subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions, determined in accordance with GAAP consistently applied.

 

(d) “Will be able to pay their Liabilities as they mature”

 

For the period from the date hereof through the Term Maturity Date (as defined in the Debt Financing Documentation), Issuer and its subsidiaries on a consolidated basis taken as a whole will have sufficient assets and cash flow to pay their Liabilities as those liabilities mature or (in the case of contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by Issuer and its subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.

 

 

 

 

(e) “Do not have Unreasonably Small Capital”

 

Issuer and its subsidiaries on a consolidated basis taken as a whole after consummation of the Transactions is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern.

 

2. Based on and subject to the foregoing, I hereby certify on behalf of Issuer that immediately after giving effect to the consummation of the Transactions, it is my opinion that (i) the Fair Value of the assets of Issuer and its subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities, (ii) the Present Fair Salable Value of the assets of Issuer and its subsidiaries on a consolidated basis taken as a whole exceeds their Liabilities; (iii) Issuer and its subsidiaries on a consolidated basis taken as a whole do not have Unreasonably Small Capital; and (iv) Issuer and its subsidiaries taken as a whole will be able to pay their Liabilities as they mature.

 

 3. In reaching the conclusions set forth in this Certificate, the undersigned (i) has made such investigations and inquiries as the undersigned has deemed appropriate, having taken into account the nature of the particular business anticipated to be conducted by Issuer and its subsidiaries after consummation of the transactions contemplated by the Subscription Agreement, (ii) has reviewed the Subscription Agreement and the financial statements referred to therein and (iii) in the undersigned’s capacity as [Chief Financial Officer], is familiar with the financial condition of Issuer and its subsidiaries.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

IN WITNESS WHEREOF, I have executed this Certificate as of the date first written above.

 

  Sincerely,
     
  ATLAS TC HOLDINGS LLC
   
  By:             
  Name:  
  Title:  

 

 

 

 

Exhibit 10.2

 

Boxwood Merger Corp.

8801 Calera Dr.

Austin, TX 78735

 

February 14, 2020

 

GSO Capital Opportunities Fund III, LP

c/o GSO Capital Partners LP

345 Park Avenue, 31st Floor

New York, NY 10154

Attn: Marisa J. Beeney

 

Re: Project Atlas

 

Support Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Commitment Letter, dated January 23, 2020, and each of the Exhibits attached thereto (the “Commitment Letter”), addressed to Boxwood Merger Corp., a Delaware corporation (the “Company”), and Atlas TC Holdings LLC, a Delaware limited liability company, from GSO Capital Partners LP (together with its affiliates and funds and accounts managed or advised by it, “GSO”), and relating to the Company’s intended acquisition of all of the outstanding equity interests of Atlas Intermediate Holdings LLC, a Delaware limited liability company (the “Target”), pursuant to which GSO agreed to, among other things, purchase 1,000,000 shares of Class A common stock of the Company (the “Common Stock”) at $10.00 per share in a PIPE transaction (the “Common Stock Commitment”). Defined terms used herein but not otherwise defined herein shall have the meaning set forth in the Commitment Letter.

 

Notwithstanding the terms of the Commitment Letter, the Company has requested that, in lieu of the contemplated PIPE transaction, GSO instead purchase the Common Stock from a third party. In consideration of the foregoing, and to induce GSO’s affiliate to enter into that certain Stock Purchase Agreement, dated on or about the date of this letter (the “SPA”), between GSO Capital Opportunities Fund III LP (“GSO COF III”) and I-Bankers Securities, Inc. (“IBSI”), the Company hereby agrees as follows:

 

To the Company’s knowledge, neither GSO nor any of its representatives is in possession of any material, non-public information about the Company and its subsidiaries, the Target and its subsidiaries, or any of the foregoing’s respective businesses, financial condition or operations.

 

GSO’s obligation to satisfy its Common Stock Commitment shall be deemed fully performed and satisfied upon the closing of the purchase of 1,000,000 shares of Common Stock pursuant to the SPA and/or the Subscription Agreement.

 

In the event that the transactions contemplated by the SPA are not consummated for any reason, including upon a termination of the SPA, or the number of shares of Common Stock purchased by GSO COF III thereunder is fewer than 1,000,000 shares, GSO’s obligation to satisfy its Common Stock Commitment shall be satisfied by the Company’s sale and issuance of the Common Stock to GSO COF III, on the terms and conditions set forth in the Subscription Agreement attached hereto as Exhibit A, such that the number of shares of Common Stock purchased by GSO COF III pursuant to the SPA and the Subscription Agreement in the aggregate equals 1,000,000, and the Company agrees to sell and issue such Common Stock to GSO COF III on such terms and conditions.

 

 

 

 

The Company shall indemnify and hold harmless GSO and its affiliates and their respective controlling persons and their respective officers, directors, employees, agents, advisors, partners and other representatives and the successors and permitted assigns of each of the foregoing (each, an “Indemnified Person”), from and against any and all losses, claims, damages and liabilities of any kind or nature and reasonable and documented or invoiced out-of-pocket fees and expenses, joint or several, to which any such Indemnified Person becomes subject to the extent arising out of any claim, litigation, investigation or proceeding (including any inquiry or investigation) (any of the foregoing, a “Proceeding”) relating to or resulting from or in connection with the SPA, regardless of whether any such Indemnified Person is a party thereto, whether or not such Proceedings are brought by IBSI, its equity holders, affiliates, creditors or any third party, and to reimburse each such Indemnified Person promptly following written demand for any reasonable and documented or invoiced out-of-pocket legal fees and expenses and other reasonable and documented or invoiced out-of-pocket fees and expenses to the extent incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related fees or expenses to the extent that they have resulted from (i) the willful misconduct, bad faith or gross negligence of, or material breach of the SPA by such Indemnified Person or any of such Indemnified Person’s controlling persons, controlled affiliates or any of its or their respective officers, directors, employees or partners, in each case, who are involved in the transactions contemplated thereby (in each case, as determined by a court of competent jurisdiction in a final and non-appealable decision) or (ii) the diminution in value of the Common Stock acquired pursuant to the SPA.

 

This support letter (“Support Letter”) shall constitute a part of the Equity Financing Documentation for all purposes under the Commitment Letter. This Support Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by the parties hereto. This Support Letter may not be assigned by any party without the consent of the other party. This Support Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Support Letter by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Support Letter. This Support Letter is strictly confidential and may not be shared by you with any other person unless required by law or consented to by the other parties hereto. This Support Letter shall be governed by, and construed in accordance with, the laws of the State of New York. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS SUPPORT LETTER OR CONDUCT IN CONNECTION WITH THIS SUPPORT LETTER IS HEREBY WAIVED.

 

[SIGNATURE PAGES TO FOLLOW]

 

2

 

 

BOXWOOD MERGER CORP.  
   
By /s/ Stephen M. Kadenacy  
  Name: Stephen M. Kadenacy  
  Title: Chief Executive Officer

 

 

[Signature Page to Support Letter]

 

 

 

 

Agreed and acknowledged:  
     
GSO CAPITAL PARTNERS LP  
     
By /s/ Marisa Beeney  
  Name: Marisa Beeney  
  Title: Authorized Signatory  
 

 

[Signature Page to Support Letter]

 

 

 

 

EXHIBIT A

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into this 14th day of February, 2020, by and between GSO Capital Opportunities Fund III LP, a Delaware limited partnership (the “Buyer”), and I-Bankers Securities, Inc., a Texas corporation (the “Seller”).

 

WHEREAS, the Seller intends to acquire prior to the Settlement, shares of Class A common stock, par value $0.0001 per share (“Boxwood Shares”), of Boxwood Merger Corp., a Delaware corporation (the “Company”) (such acquisition of Boxwood Shares, the “Initial Trade”); and

 

WHEREAS, following the Initial Trade, the Buyer desires to buy from the Seller, and the Seller desires to sell to the Buyer, 1,000,000 Boxwood Shares (or if the Seller does not beneficially own 1,000,000 Boxwood Shares at such time, then such lesser amount that the Seller beneficially owns on the Settlement Date) (the “Shares”), on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, the Buyer and the Seller, in consideration of the terms and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:

 

1. PURCHASE OF SHARES.

 

a. Subject to the terms and conditions hereof, the Buyer hereby agrees to purchase from the Seller, and the Seller hereby agrees to convey, sell, assign and transfer to the Buyer, the Shares, free and clear of all liens, encumbrances and rights of others (except for those arising under this Agreement or state or federal securities laws), for a purchase price of $ [●] per share, and the “Purchase Price” hereunder shall be equal to the product of (i) such per share price and (ii) the number of Shares actually purchased and sold hereunder. The Shares will be delivered against the payment of the Purchase Price at the settlement of the purchase and sale of Shares provided for in Section 2 (the “Settlement”). Following the Initial Trade until the time of Settlement and subject to the terms of this Agreement, the Seller shall hold its interest in the Shares sold hereunder as agent for the Buyer.

 

b. For U.S. federal income tax purposes, the parties hereto intend that the date of this Agreement shall be treated as the “trade date” as that term is used in Revenue Rulings 93-84, 1993-2 C.B. 225 and 66-97, 1966-1 C.B. 190. Accordingly the parties (and their owners, as determined for federal income tax purposes, in the case of any parties hereto that are disregarded entities for U.S. federal income tax purposes) hereto intend that the date hereof shall be the effective date of the sale of the Shares for U.S. federal income tax purposes and shall agree to report the transaction in a manner consistent with such treatment for U.S. federal income tax purposes, unless otherwise required by applicable law.

 

2. SETTLEMENT.

 

a. Subject to each of the terms of this Agreement, the date of the Settlement shall be February 14, 2020 (the “Settlement Date”).

 

b. At the Settlement, the Buyer shall make a wire transfer of the Purchase Price to the Seller in accordance with wire transfer instructions delivered by the Seller to the Buyer no later than 1:00 p.m. New York time one business day prior to the Settlement Date.

 

 

 

 

c. At the Settlement, the Seller shall effect by book entry, in accordance with the applicable procedures of Depository Trust Company, the delivery of the Shares to the Buyer.

 

d. The obligation of the Buyer to effectuate the Settlement and the occurrence of the Settlement Date shall be subject to (i) the accuracy of the representations and warranties of the Seller made herein, and (ii) the consummation of the Initial Trade.

 

e. The obligation of the Seller to effectuate the Settlement and the occurrence of the Settlement Date shall be subject to (i) the accuracy of the representations and warranties of the Buyer made herein, and (ii) the consummation of the Initial Trade.

 

3. REPRESENTATIONS OF THE SELLER. The Seller makes the following representations to the Buyer as of the date hereof and as of the Settlement Date:

 

a. The Seller has the requisite corporate, limited liability company and/or limited partnership power and authority to enter into this Agreement and to perform its obligations hereunder.

 

b. The Shares are owned beneficially by the Seller. The Seller has full right and title to the Shares, free and clear of any lien or encumbrance whatsoever (except for those arising under state or federal securities laws), and full and unrestricted right and power to sell the Shares pursuant to the provisions of this Agreement without obtaining the consent or approval of any other person that has not been obtained.

 

c. The sale of the Shares by the Seller hereunder does not violate or represent a breach of, or constitute a default under, any instruments governing the Seller, any law, regulation or order, or any agreement to which the Seller is a party or by which the Seller is bound. The Seller is not party to any other agreement, commitment, contract or other instrument which would adversely affect its ability to perform its obligations hereunder and/or the purchase and sale transactions contemplated by this Agreement.

 

d. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

e. The Seller acknowledges and agrees that neither the Buyer nor any of its Affiliates has given any investment advice or rendered any opinion to the Seller as to whether the sale of the Shares is prudent, and the Seller is not relying on any representation or warranty by any other party hereto, except as expressly set forth in this Agreement. The term “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise; provided, that other than for purposes of Sections 3.k of this Agreement, any reference to an “Affiliate” of the Buyer shall exclude any person outside of the credit-focused business of The Blackstone Group Inc.

 

-1-

 

 

f. The Seller has made an independent decision to sell and transfer the Shares to the Buyer based on the information available to the Seller, which the Seller has determined is adequate for that purpose.

 

g. The Seller acknowledges that in connection with, among other things, the Buyer’s desire to purchase the Shares, the Buyer and its representatives have conducted a thorough due diligence investigation of the Company and its subsidiaries (the “Company Group”) and the Company Group’s business, financial affairs and operations, which included access to certain information and discussions with the Company’s management. As a result, the Buyer may have received, may have access to, and may be in possession of material, non-public, confidential information concerning the Shares or the Company Group (the “Material Information”) that is not known or otherwise available to the Seller and that may be material in the decision to sell the Shares, including but not limited to the information of the type described below:

 

i. Financial and Operational Details: Information including, but not limited to, internal and external budgets, projections, corporate office expenditures, employee compensation and senior management incentive plans relating to the Company Group and its Affiliates and certain other persons;

 

ii. Litigation: Information regarding current status of certain litigation pending against the Company Group and its Affiliates and certain other persons;

 

iii. Strategic Discussions: Information regarding strategic decisions considered by the Company Group, including, but not limited to, expansions, divestitures, mergers, acquisitions, joint venture partnerships, corporate or other conversions, restructurings and other strategic matters considered by the Company Group, and other strategic board discussions;

 

iv. Capital Raise: Information related to the Company Group’s efforts to raise capital from various sources, including, without limitation, the proposed terms thereof;

 

v. Management and Board: Information relating to hiring, firing, compensation, retention and/or promotion regarding the Company Group’s managers;

 

-2-

 

 

vi. Capital Budgeting and Capital Structure Alternatives: Information regarding uses of the Company Group’s capital, including priorities for capital deployment, and capital structure, including any amendments, refinancing plans, dividends and other material items related to the capital structure and the fundings of loans or other capital contemplated in connection with this Agreement;

 

vii. Data Room: Access to, and information obtained from reviewing documents provided by the Company Group and its Affiliates in, one or more electronic data rooms (i.e., via Intralinks, Syndtrak or other similar electronic data room platforms); and

 

viii. Other Miscellaneous Information: Other information, including material nonpublic information, gathered from conversations with Company Group’s management and other stakeholders.

 

h. If the Material Information were disclosed to the Seller, the Material Information could foreseeably affect (i) the Seller’s willingness to enter into the transaction contemplated hereby and (ii) the price the Seller would be willing to receive in connection with the sale of the Shares. Moreover, the Material Information may indicate that the value of the Shares is substantially different from the purchase price contemplated to be paid by the Buyer to the Seller for the Shares.

 

i. Notwithstanding the Buyer’s possession of the Material Information, which is not being disclosed, and the other items set forth in this Agreement, the Seller desires to enter into this Agreement.

 

j. The Seller is a sophisticated investor with respect to the Shares and has adequate information concerning the business and financial condition of the Company, and understands the disadvantage to which any party hereto may be subject on account of the disparity of information as between the parties. The Seller believes, by reason of its business or financial experience, that it is capable of evaluating the merits and risks of the purchase and sale of the Shares pursuant to this Agreement, and of protecting its own interest in connection with such transfer.

 

k. To the fullest extent permitted by law, the Seller, on behalf of itself and each of its Affiliates, expressly waives and fully releases and discharges the Buyer, including its Affiliates and the Buyer’s and its Affiliates’ respective current and former partners, members, managers, officers, directors, employees, representatives and agents (collectively, the “Buyer Released Persons”), from any and all actions, proceedings, suits, judgments, liens and executions of any kind, claims, debts, loss, damages and demands whatsoever, in law or in equity, including attorneys’ fees, that the Seller ever had, now has or hereafter shall or may have, whether known or unknown for, upon or by reason of, any claim asserted with regard to, based upon or arising from the Buyer’s failure to disclose, or the Seller’s failure or inability to obtain and review, the Material Information, including, without limitation, claims it may have or hereafter acquire under applicable U.S. (federal or state) securities laws, but in any event excluding (x) claims arising as a result of fraud and (y) the right of the Seller to make a claim against the Buyer as a result of a breach by the Buyer of a provision, representation, warranty or covenant hereunder that is unrelated to the Material Information (“Seller Excluded Claims”). The Seller shall not institute or maintain any cause of action, suit, complaint or other proceeding against any Buyer Released Person as a result of a Buyer Released Person’s failure to disclose the Material Information to the Seller, other than with respect to Seller Excluded Claims. The Seller shall indemnify each Buyer Released Person from any loss, claim, cost, expense or damage arising out of any breach by the Seller of its representations, warranties or covenants under this Agreement.

 

-3-

 

 

l. The Seller acknowledges that the Buyer and its Affiliates may have interests in other investments issued by the Company. The interests of the Buyer and its Affiliates in such investments may conflict with those of the Seller and the Seller expressly releases the Buyer Released Persons from any and all liabilities arising from any such conflict of interest, and the Seller agrees to make no claim against the Buyer Released Persons in respect of any such conflict.

 

m. The Buyer is relying on the representations set forth in this Section 3 in engaging in the transaction contemplated hereby, and would not engage in such transaction in the absence of such representations.

 

4. REPRESENTATIONS OF THE BUYER. The Buyer represents as follows to the Seller as of the date hereof and as of the Settlement Date:

 

a. The Buyer has the requisite corporate, limited liability company and/or limited partnership power and authority to enter into this Agreement and to perform its obligations hereunder.

 

b. The purchase of the Shares by the Buyer hereunder does not violate or represent a breach of, or constitute a default under, any instruments governing the Buyer, any law, regulation or order, or any agreement to which the Buyer is a party or by which the Buyer is bound.

 

c. This Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

d. The Buyer acknowledges and agrees that neither the Seller nor any of its Affiliates has given any investment advice or rendered any opinion to the Buyer as to whether the purchase or sale of the Shares is prudent or suitable, and the Buyer is not relying on any representation or warranty by any other party hereto, except as expressly set forth in this Agreement.

 

e. The Buyer has made an independent decision to purchase the Shares from the Seller based on the information available to the Buyer, which the Buyer has determined is adequate for that purpose.

 

f. The Buyer acknowledges that the Seller may have the right to receive non-public materials. As a result, the Seller may have received, may have access to, and may be in possession of Material Information that is not known or otherwise available to the Buyer and that may be material in the decision to purchase the Shares, including but not limited to the information of the type described below:

 

-4-

 

 

i. Financial and Operational Details: Information including, but not limited to, internal and external budgets, projections, corporate office expenditures, employee compensation and senior management incentive plans relating to the Company Group and its Affiliates and certain other persons;

 

ii. Litigation: Information regarding current status of certain litigation pending against the Company Group and its Affiliates and certain other persons;

 

iii. Strategic Discussions: Information regarding strategic decisions considered by the Company Group, including, but not limited to, expansions, divestitures, mergers, acquisitions, joint venture partnerships, corporate or other conversions, restructurings and other strategic matters considered by the Company Group, and other strategic board discussions;

 

iv. Capital Raise: Information related to the Company Group’s efforts to raise capital from various sources, including, without limitation, the proposed terms thereof;

 

v. Management and Board: Information relating to hiring, firing, compensation, retention and/or promotion regarding the Company Group’s managers;

 

vi. Capital Budgeting and Capital Structure Alternatives: Information regarding uses of the Company Group’s capital, including priorities for capital deployment, and capital structure, including any amendments, refinancing plans, dividends and other material items related to the capital structure and the fundings of loans or other capital contemplated in connection with this Agreement;

 

vii. Data Room: Access to, and information obtained from reviewing documents provided by the Company Group and its Affiliates in, one or more electronic data rooms (i.e., via Intralinks, Syndtrak or other similar electronic data room platforms); and

 

viii. Other Miscellaneous Information: Other information, including material nonpublic information, gathered from conversations with Company Group’s management and other stakeholders.

 

g. The Buyer acknowledges that the Seller may have received, may have access to, and may be in possession of Material Information that is not known or otherwise available to the Buyer and that may be material in the decision to acquire the Shares.

 

-5-

 

 

h. If the Material Information were disclosed to the Buyer, the Material Information could foreseeably affect (i) the Buyer’s willingness to enter into the transaction contemplated hereby and (ii) the price the Buyer would be willing to pay in connection with the purchase of the Shares. Moreover, the Material Information may indicate that the value of the Shares is substantially different from the purchase price contemplated to be paid by the Buyer to the Seller for the Shares.

 

i. Notwithstanding the Seller’s possession of the Material Information, which is not being disclosed, and the other items set forth in this Agreement, the Buyer desires to enter into this Agreement.

 

j. The Buyer is a sophisticated investor with respect to the Shares and has adequate information concerning the business and financial condition of the Company, and understands the disadvantage to which any party hereto may be subject on account of the disparity of information as between the parties. The Buyer believes, by reason of its business or financial experience, that it is capable of evaluating the merits and risks of the transfer pursuant to this Agreement, and of protecting its own interest in connection with such transfer.

 

k. To the fullest extent permitted by law, the Buyer, on behalf of itself and each of its Affiliates, expressly waives and fully releases and discharges the Seller, including its Affiliates and the Seller’s and its Affiliates’ respective current and former partners, members, managers, officers, directors, employees, representatives and agents (collectively, the “Seller Released Persons”), from any and all actions, proceedings, suits, judgments, liens and executions of any kind, claims, debts, loss, damages and demands whatsoever, in law or in equity, including attorneys’ fees, that the Buyer ever had, now has or hereafter shall or may have, whether known or unknown for, upon or by reason of, any claim asserted with regard to, based upon or arising from the Seller’s failure to disclose, or the Buyer’s failure or inability to obtain and review, the Material Information, including, without limitation, claims the Buyer may have or hereafter acquire under applicable U.S. (federal or state) securities laws, but in any event excluding (x) claims arising as a result of fraud and (y) the right of the Buyer to make a claim against the Seller as a result of a breach by the Seller of a provision, representation, warranty or covenant hereunder that is unrelated to the Material Information (“Buyer Excluded Claims”). The Buyer shall not institute or maintain any cause of action, suit, complaint or other proceeding against any Seller Released Person as a result of a Seller Released Person’s failure to disclose the Material Information to the Buyer, other than with respect to Buyer Excluded Claims. The Buyer shall indemnify each Seller Released Person from any loss, claim, cost, expense or damage arising out of any breach by the applicable Buyer of its representations, warranties or covenants under this Agreement.

 

l. The Buyer acknowledges that the Seller may have interests in other investments issued by the Company. The interests of the Seller in such investments may conflict with those of the Buyer and the Buyer expressly releases the Seller Released Persons from any and all liabilities arising from such conflict of interest, and the Buyer agrees to make no claim against the Seller Released Persons in respect of any such conflict.

 

-6-

 

 

m. The Seller is relying on the representations set forth in this Section 4 in engaging in the transaction contemplated hereby, and would not engage in such transaction in the absence of such representations.

 

5. MISCELLANEOUS.

 

a. Except as expressly provided in this Agreement, all of the covenants, terms, provisions, conditions and agreements contained herein shall be binding upon and shall inure to the benefit of the successors and assigns of the Buyer and the Seller. The Buyer Released Persons shall be third-party beneficiaries of and entitled to enforce Sections 3.k and 3.l of this Agreement. The Seller Released Persons shall be third-party beneficiaries of and entitled to enforce Sections 4.k and 4.l of this Agreement.

 

b. The provisions of this Agreement shall survive the occurrence of the Settlement Date.

 

c. The Buyer and the Seller agree to use all reasonable efforts and execute any and all documents, amendments, notices and certificates, and to take any such additional actions, which may be necessary or convenient to effect the consummation of the transactions contemplated by this Agreement and further the intent of the parties hereunder.

 

d. This Agreement may be amended or modified only by a writing signed by the Buyer and the Seller.

 

e. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY DISPUTE OF CLAIMS ARISING IN CONNECTION THEREWITH SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. With respect to all matters relating to this Agreement, each of the parties hereto hereby irrevocably and unconditionally (i) submits to the exclusive jurisdiction of the U.S. District Court for the Southern District of New York State or, if that court does not have subject matter jurisdiction, in any State court located in the City and County of New York; (ii) agrees that such party shall bring any and all claims concerning this Agreement and/or the transactions contemplated hereunder (whether based on contract, tort or otherwise) solely in such courts and that such claims shall be heard and determined exclusively in such courts, (iii) waives, to the fullest extent such party may effectively do so, the defense of an inconvenient forum, (iv) agrees that a final judgment of such courts shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law, and (v) consents to the service of any process, summons, notice or document in any such suit, action or proceeding by registered mail addressed to the addresses specified in Section 5.g below. Nothing herein will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect such party’s right to bring any suit, action or proceeding against the other party or such other party’s property in the courts of other jurisdictions. EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

-7-

 

 

f. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed signature page to this Agreement by facsimile transmission or in electronic (e.g., “pdf” or “tif”) format shall be as effective as delivery of a manually signed counterpart of this Agreement.

 

g. Any notice, request, claim, demand or other communication under this Agreement shall be in writing and shall be delivered by hand, by e-mail or by overnight courier service to the address for each party listed below, and shall be deemed to have been given when receipt is acknowledged for personal delivery or e-mail or one day after deposit with overnight courier service, addressed as follows:

 

    If to the Buyer:
       
    c/o GSO Capital Partners LP
    345 Park Avenue, 31st Floor
    New York, New York 10154
    Attention:  Robert Petrini; Marisa J. Beeney
    Email:  robert.petrini@gsocap.com; marisa.beeney@gsocap.com
       
    with a copy to (which copy alone shall not constitute notice):
       
    Willkie Farr & Gallagher LLP
    787 Seventh Avenue
    New York, NY 10019
    Attention:  William H. Gump
    Viktor Okasmaa
    Email:  wgump@willkie.com
    vokasmaa@willkie.com
       
    If to the Seller:
       
    I-Bankers Securities, Inc.
    535 5th Avenue, 4th Floor
    New York, NY 10017
    Attention: Shelley Leonard
    Email: shelley@ibsgroup.net
       
    With a copy to:
       
    Schiff Hardin LLP
    901 K Street NW, Suite 700
    Washington, DC 20001
    Attention: Ralph V. De Martino
    Email: rdemartino@schiffhardin.com

 

-8-

 

 

h. The execution and/or delivery of any agreements or documents by the Buyer and the Seller in connection with the Settlement, including this Agreement, shall be without recourse to or warranty by any of their respective Affiliates.

 

i. Each party hereto acknowledges and agrees that it will pay its own costs and expenses in connection with the negotiation and performance of this Agreement and the transactions contemplated hereby.

 

j. If the Settlement Date shall not have occurred on or prior to February 19, 2020, this Agreement may be terminated by either the Seller or the Buyer upon written notice to the other party; provided, however, that the right to terminate this Agreement under this Section 5.j shall not be available to the Seller or the Buyer if such party fails to perform any of its material obligations under this Agreement and such failure causes or results in, the failure of the Settlement Date to occur on or prior to February 19, 2020. In the event of the termination of this Agreement as provided in this Section 5.j, this Agreement shall forthwith terminate and this Agreement and the transactions contemplated hereby shall become void and have no effect, except that nothing herein will relieve any party from liability for any breach by such party of any representation, warranty, agreement or covenant contained herein occurring prior to such termination.

 

[Remainder of the page is left intentionally blank]

 

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  BUYER:
   
  GSO Capital Opportunities Fund III LP
   
  By: GSO Capital Opportunities Associates III LLC, its general partner
   
  By: /s/ Marisa J. Beeney
  Name: Marisa J. Beeney
  Title: Authorized Signatory

 

[Signature page to Stock Purchase Agreement]

 

 

 

 

  SELLER:
     
  I-BANKERS SECURITIES, INC.
   
  By: /s/ Shelley Leonard
  Name: Shelley Leonard
  Title: President

 

[Signature page to Stock Purchase Agreement]

 

 

Exhibit 10.3 

 

 

CREDIT AGREEMENT

 

dated as of

 

February 14, 2020

 

among

 

ATLAS TC HOLDINGS LLC,

as Holdings,

 

ATLAS TC BUYER LLC,

as Initial Borrower

 

ATLAS INTERMEDIATE HOLDINGS LLC,

as New Borrower,

 

The Lenders and Issuing Banks From Time to Time Party Hereto

and

 

MACQUARIE CAPITAL FUNDING LLC,

as Administrative Agent and as Collateral Agent

 

 

 

MACQUARIE CAPITAL (usa) INC.

and

NATIXIS, NEW YORK BRANCH,

as Joint Lead Arrangers and Joint Bookrunners 

 

 

 

 

Table of Contents

 

    Page
     
ARTICLE I Definitions 1
SECTION 1.01 Defined Terms 1
SECTION 1.02 Classification of Loans and Borrowings 66
SECTION 1.03 Terms Generally 66
SECTION 1.04 Accounting Terms; GAAP 67
SECTION 1.05 Effectuation of Transactions 67
SECTION 1.06 Limited Conditionality Transactions 68
     
ARTICLE II The Credits 70
SECTION 2.01 Commitments 70
SECTION 2.02 Loans and Borrowings 70
SECTION 2.03 Requests for Borrowings 71
SECTION 2.04 Swing Line Facility 72
SECTION 2.05 Letters of Credit 74
SECTION 2.06 Funding of Borrowings 81
SECTION 2.07 Interest Elections 82
SECTION 2.08 Termination and Reduction of Commitments 83
SECTION 2.09 Repayment of Loans; Evidence of Debt 83
SECTION 2.10 Amortization of Term Loans 84
SECTION 2.11 Prepayment of Loans 85
SECTION 2.12 Fees 95
SECTION 2.13 Interest 96
SECTION 2.14 Alternate Rate of Interest 97
SECTION 2.15 Increased Costs 98
SECTION 2.16 Break Funding Payments 100
SECTION 2.17 Taxes 100
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Setoffs 103
SECTION 2.19 Mitigation Obligations; Replacement of Lenders 104
SECTION 2.20 Incremental Credit Extensions 105
SECTION 2.21 Refinancing Amendments 108
SECTION 2.22 Defaulting Lenders 109
SECTION 2.23 Illegality 111
SECTION 2.24 Loan Modification Offers 111

 

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Table of Contents

(continued)

 

    Page
     
ARTICLE III Representations and Warranties 113
SECTION 3.01 Organization; Powers 113
SECTION 3.02 Authorization; Enforceability 113
SECTION 3.03 Governmental and Other Third Party Approvals; No Conflicts 113
SECTION 3.04 Financial Condition; No Material Adverse Effect 113
SECTION 3.05 Properties 114
SECTION 3.06 Litigation and Environmental Matters 114
SECTION 3.07 Compliance with Laws and Agreements 115
SECTION 3.08 Investment Company Status 115
SECTION 3.09 Taxes 115
SECTION 3.10 ERISA 115
SECTION 3.11 Disclosure 116
SECTION 3.12 Subsidiaries 116
SECTION 3.13 Intellectual Property; Licenses, Etc. 116
SECTION 3.14 Solvency 116
SECTION 3.15 Senior Indebtedness 117
SECTION 3.16 Federal Reserve Regulations 117
SECTION 3.17 Use of Proceeds 117
SECTION 3.18 Sanctions and Anti-Terrorism Laws 118
SECTION 3.19 Anti-Corruption Laws 118
SECTION 3.20 Security Interests 118
SECTION 3.21 Beneficial Ownership Regulation 118
SECTION 3.22 Employment 118
     
ARTICLE IV Conditions 119
SECTION 4.01 Closing Date 119
SECTION 4.02 Each Credit Event 121
     
ARTICLE V Affirmative Covenants 122
SECTION 5.01 Financial Statements and Other Information 122
SECTION 5.02 Notices of Material Events 125
SECTION 5.03 Information Regarding Collateral 126
SECTION 5.04 Existence; Conduct of Business 126
SECTION 5.05 Payment of Taxes, etc. 127

 

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Table of Contents

(continued)

 

    Page
     
SECTION 5.06 Maintenance of Properties 127
SECTION 5.07 Insurance 127
SECTION 5.08 Books and Records; Inspection and Audit Rights 128
SECTION 5.09 Compliance with Laws and Organizational Documents 128
SECTION 5.10 Use of Proceeds and Letters of Credit 128
SECTION 5.11 Additional Subsidiaries 128
SECTION 5.12 Further Assurances; After-Acquired Property 129
SECTION 5.13 Designation of Subsidiaries 130
SECTION 5.14 Certain Post-Closing Obligations 130
SECTION 5.15 Sanctions; Anti-Corruption Laws and Anti-Money Laundering Laws 130
SECTION 5.16 Maintenance of Ratings 131
SECTION 5.17 Lender Conference Calls 131
SECTION 5.18 Merger 131
     
ARTICLE VI Negative Covenants 131
SECTION 6.01 Indebtedness; Certain Equity Securities 131
SECTION 6.02 Liens 137
SECTION 6.03 Fundamental Changes; Line of Business; Holdings Covenant 140
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions 142
SECTION 6.05 Asset Sales 145
SECTION 6.06 Sale and Leaseback Transactions 147
SECTION 6.07 Restricted Payments; Certain Payments of Indebtedness 147
SECTION 6.08 Transactions with Affiliates 152
SECTION 6.09 Restrictive Agreements 152
SECTION 6.10 Amendment of Junior Financing 154
SECTION 6.11 Financial Performance Covenant 154
SECTION 6.12 Changes in Fiscal Periods 154
SECTION 6.13 Amendments of Organizational Documents 155
SECTION 6.14 Prohibition on Division/Series Transactions 155
     
ARTICLE VII Events of Default 155
SECTION 7.01 Events of Default 155
SECTION 7.02 Right to Cure 158
SECTION 7.03 Application of Proceeds 159

 

-iii-

 

 

Table of Contents

(continued)

 

    Page
     
ARTICLE VIII Administrative Agent 160
SECTION 8.01 Appointment and Authority 160
SECTION 8.02 Rights as a Lender 160
SECTION 8.03 Exculpatory Provisions 160
SECTION 8.04 Reliance by Administrative Agent 162
SECTION 8.05 Delegation of Duties 162
SECTION 8.06 Resignation of Administrative Agent 162
SECTION 8.07 Non-Reliance on Administrative Agent and Other Lenders 164
SECTION 8.08 No Other Duties, Etc. 165
SECTION 8.09 Administrative Agent May File Proofs of Claim 165
SECTION 8.10 No Waiver; Cumulative Remedies; Enforcement 166
SECTION 8.11 Withholding Taxes 166
SECTION 8.12 Certain ERISA Matters 167
     
ARTICLE IX Miscellaneous 168
SECTION 9.01 Notices 168
SECTION 9.02 Waivers; Amendments 169
SECTION 9.03 Expenses; Indemnity; Damage Waiver 172
SECTION 9.04 Successors and Assigns 174
SECTION 9.05 Survival 179
SECTION 9.06 Counterparts; Integration; Effectiveness 180
SECTION 9.07 Severability 180
SECTION 9.08 Right of Setoff 180
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process 181
SECTION 9.10 WAIVER OF JURY TRIAL 181
SECTION 9.11 Headings 182
SECTION 9.12 Confidentiality 182
SECTION 9.13 USA PATRIOT Act 183
SECTION 9.14 Release of Liens and Guarantees 184
SECTION 9.15 No Advisory or Fiduciary Responsibility 185
SECTION 9.16 Interest Rate Limitation 185
SECTION 9.17 Intercreditor Agreements 185
SECTION 9.18 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 186
SECTION 9.19 Acknowledgment and Assumption of the New Borrower 186
SECTION 9.20 Acknowledgement Regarding Any Supported QFC. 187

 

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SCHEDULES:    
     
Schedule 1.01 Indebtedness to be Refinanced
Schedule 2.01 Commitments and Loans
Schedule 3.12 Subsidiaries
Schedule 5.14 Certain Post-Closing Obligations
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04(e) Existing Investments
Schedule 6.08 Existing Affiliate Transactions
Schedule 6.09(a) Existing Restrictions (Liens)
Schedule 6.09(b) Existing Restrictions (Distributions and Transfers)
Schedule 9.01 Notices
     
EXHIBITS:    
     
Exhibit A Form of Assignment and Assumption
Exhibit B Form of Guarantee Agreement
Exhibit C Form of Perfection Certificate
Exhibit D Form of Collateral Agreement
Exhibit E Form of Letter of Credit Request
Exhibit F Form of Prepayment Notice
Exhibit G Form of Interest Election Request
Exhibit H Form of Closing Certificate
Exhibit I Form of Intercompany Note
Exhibit J Form of Specified Discount Prepayment Notice
Exhibit K Form of Specified Discount Prepayment Response
Exhibit L Form of Discount Range Prepayment Notice
Exhibit M Form of Discount Range Prepayment Offer
Exhibit N Form of Solicited Discounted Prepayment Notice
Exhibit O Form of Solicited Discounted Prepayment Offer
Exhibit P Form of Acceptance and Prepayment Notice
Exhibit Q-1 Form of United States Tax Compliance Certificate 1
Exhibit Q-2 Form of United States Tax Compliance Certificate 2
Exhibit Q-3 Form of United States Tax Compliance Certificate 3
Exhibit Q-4 Form of United States Tax Compliance Certificate 4
Exhibit R Form of Note
Exhibit S Form of Borrowing Request
Exhibit T Form of Compliance Certificate

 

 

 

 

CREDIT AGREEMENT, dated as of February 14, 2020 (this “Agreement”), among ATLAS TC HOLDINGS LLC, a Delaware limited liability company (“Holdings”), Atlas TC BUYER LLC, a Delaware limited liability company (the “Initial Borrower”), immediately following consummation of, and after giving effect to, the Merger (as defined below), ATLAS INTERMEDIATE HOLDINGS LLC, a Delaware limited liability company (the “Company” and as successor to the Initial Borrower by operation of law and as further provided in Section 9.19, the “New Borrower”), the LENDERS and ISSUING BANKS from time to time party hereto and MACQUARIE CAPITAL FUNDING LLC as administrative agent (the “Administrative Agent”) and Swing Line Lender (as hereinafter defined).

 

PRELIMINARY STATEMENTS

 

(i) Pursuant to the Amended and Restated Unit Purchase Agreement, dated as of August 12, 2019, as amended on January 23, 2020, among the Initial Borrower, the SPAC, the Company and Atlas Technical Consultants Holdings, LP, a Delaware limited partnership (together with all exhibits, schedules and disclosure letters thereto, the “Acquisition Agreement”), the Initial Borrower will acquire all of the outstanding Equity Interests of the Company (the “Acquisition”) on the terms and subject to the conditions set forth in the Acquisition Agreement, and (ii) immediately following the consummation of the Acquisition on the Closing Date, the Initial Borrower will merge with and into the Company, with the Company being the surviving Person of such merger (the “Merger”).

 

The Initial Borrower has requested that the applicable Lenders extend credit to the Borrower in the form of (i) the Initial Term Loans in an initial aggregate principal amount of $281,000,000, (ii) the Revolving Loans in an aggregate principal amount of $40,000,000, (iii) Letters of Credit in an aggregate amount of $5,000,000 and (iv) Swing Loans in an aggregate principal amount of $5,000,000.

 

The proceeds of the Initial Term Loans, together with the proceeds of the SPAC Equity Contribution and the proceeds of the Revolving Loans not to exceed $10,000,000 utilized on the Closing Date, will be used to (i) fund the Transactions (including to pay the Transaction Costs) and (ii) fund the Long Engineering Acquisition in the aggregate amount of $10,500,000.

 

After the Closing Date, the proceeds of the Revolving Loans, Swing Loans and Letters of Credit will be used for working capital and general corporate requirements of the Borrower and its Restricted Subsidiaries, including the funding of Permitted Acquisitions, other permitted Investments and/or any other transaction not prohibited by the terms of this Agreement.

 

The parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01 Defined Terms.

 

As used in this Agreement, the following terms have the meanings specified below:

 

ABR” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

 

Acceptable Discount” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(2).

 

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Acceptable Prepayment Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(3).

 

Acceptance and Prepayment Notice” means an irrevocable written notice from a Term Lender accepting a Solicited Discounted Prepayment Offer to make a Discounted Term Loan Prepayment at the Acceptable Discount specified therein pursuant to Section 2.11(a)(ii)(D) substantially in the form of Exhibit P.

 

Acceptance Date” has the meaning specified in Section 2.11(a)(ii)(D)(2).

 

Accepting Lenders” has the meaning specified in Section 2.24(a).

 

Acquired EBITDA” means, with respect to any Acquired Entity or Business or any Converted Restricted Subsidiary (any of the foregoing, a “Pro Forma Entity”) for any period, as the amount for such period of Consolidated EBITDA of such Pro Forma Entity (determined as if references to the Borrower and its Restricted Subsidiaries in the definition of “Consolidated EBITDA” were references to such Pro Forma Entity and its subsidiaries that will become Restricted Subsidiaries), all as determined on a consolidated basis for such Pro Forma Entity.

 

Acquired Entity or Business” has the meaning given such term in the definition of “Consolidated EBITDA.”

 

Acquisition” has the meaning given to such term in the preliminary statements hereto.

 

Acquisition Agreement” has the meaning given to such term in the preliminary statements hereto.

 

Acquisition Agreement Representations” means the representations and warranties made by the Company and the seller or sellers of the Company with respect to the Company and its Subsidiaries and their respective businesses (including the ownership of the Equity Interests of the Company by the seller or sellers thereof) in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the Initial Borrower has (or the Initial Borrower’s applicable Affiliates have) the right to terminate the Initial Borrower’s (or such Affiliate’s) obligations under the Acquisition Agreement, or to decline to consummate the Acquisition, as a result of a breach of such representations and warranties.

 

Additional Lender” means any Additional Revolving Lender or any Additional Term Lender, as applicable.

 

-2-

 

 

Additional Revolving Lender” means, at any time, any bank, financial institution or other institutional lender or investor that agrees to provide any portion of any (a) Incremental Revolving Commitment Increase pursuant to an Incremental Facility Amendment in accordance with Section 2.20 or (b) Credit Agreement Refinancing Indebtedness pursuant to a Refinancing Amendment in accordance with Section 2.21; provided that each Additional Revolving Lender shall be subject to the approval of the Administrative Agent (and, if such Additional Revolving Lender will provide an Incremental Revolving Commitment Increase, the Swing Line Lender and each Issuing Bank), in each case only if such consent would be required under Section 9.04(b) for an assignment of Revolving Loans or Revolving Commitments, as applicable, to such bank, financial institution or other institutional lender or investor (such approval in each case not to be unreasonably withheld, conditioned or delayed) and the Borrower.

 

Additional Term Lender” means, at any time, any bank, financial institution or other institutional lender or investor that agrees to provide any portion of any (a) Incremental Term Loans pursuant to an Incremental Facility Amendment in accordance with Section 2.20 or (b) Credit Agreement Refinancing Indebtedness pursuant to a Refinancing Amendment in accordance with Section 2.21; provided that each Additional Term Lender shall be subject to the approval of the Administrative Agent if such consent would be required under Section 9.04(b) for an assignment of Term Loans or Term Commitments, as applicable, to such bank, financial institution or other institutional lender or investor (such approval not to be unreasonably withheld, conditioned or delayed) and the Borrower.

 

Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, a rate per annum equal to the product of (i) the LIBO Rate as in effect at such time for such Interest Period and (ii) the Statutory Reserve Rate; provided that, in any event, the Adjusted LIBO Rate shall not be less than 1.0% per annum.

 

Administrative Agent” means Macquarie Capital Funding LLC, in its capacity as administrative agent hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article VIII.

 

Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

 

Affected Class” has the meaning specified in Section 2.24(a).

 

Affiliate” means, with respect to a specified Person, another Person that directly or indirectly Controls or is Controlled by or is under common Control with the Person specified.

 

Agent” means the Administrative Agent, the Collateral Agent, each Joint Lead Arranger, each Joint Bookrunner, and any successors and assigns in such capacity, and “Agents” means two or more of them.

 

Agent Parties” has the meaning given to such term in Section 9.01(c).

 

Agreement” has the meaning given to such term in the preliminary statements hereto.

 

Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1.00% and (c) the Adjusted LIBO Rate for the applicable Loan on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1.00%; provided that, solely for purposes of the foregoing, the Adjusted LIBO Rate for any day shall be calculated using the LIBO Rate based on the rate per annum determined by the Administrative Agent by reference to the ICE Benchmark Administration Interest Settlement Rates (as set forth by any service selected by the Administrative Agent that has been nominated by the ICE Benchmark Administration Limited (or any Person which takes over the administration of that rate) as an authorized information vendor for the purpose of displaying such rates) (the “ICE LIBOR”) as published by Bloomberg (or such other commercially available source providing quotations of ICE LIBOR as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m. (London time) two (2) Business Days prior to such date for deposits in dollars for a period equal to one month. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate or the Adjusted LIBO Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition of Federal Funds Effective Rate or by virtue of the provisions of Section 2.14 or 2.23, the Alternate Base Rate shall be determined without regard to clause (b) or (c), as applicable, of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

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Anti-Corruption Laws” means all applicable laws, rules and regulations from time to time concerning or relating to bribery, corruption, or improper payments, including the FCPA.

 

Applicable Account” means, with respect to any payment to be made to the Administrative Agent hereunder, the account specified by the Administrative Agent from time to time for the purpose of receiving payments of such type.

 

Applicable Discount” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(2).

 

Applicable Fronting Exposure” means, with respect to any Person that is an Issuing Bank at any time, the sum of (a) the aggregate amount of all Letters of Credit issued by such Person in its capacity as an Issuing Bank that remains available for drawing at such time and (b) the aggregate amount of all LC Disbursements made by such Person in its capacity as an Issuing Bank that have not yet been reimbursed by or on behalf of the Borrower at such time.

 

Applicable Percentage” means, at any time with respect to any Revolving Lender, the percentage of the aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time; provided that, at any time any Revolving Lender shall be a Defaulting Lender, “Applicable Percentage” shall mean the percentage of the total Revolving Commitments (disregarding any such Defaulting Lender’s Revolving Commitment) represented by such Lender’s Revolving Commitment. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments pursuant to this Agreement and to any Lender’s status as a Defaulting Lender at the time of determination.

 

Applicable Rate” means, for any day, (i) 3.75% per annum, in the case of an ABR Loan or (ii) 4.75% per annum, in the case of a Eurodollar Loan.

 

Approved Bank” has the meaning assigned to such term in the definition of the term “Permitted Investments.”

 

Approved Foreign Bank” has the meaning assigned to such term in the definition of “Permitted Investments.”

 

Approved Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course of its activities and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

Asset Sale Percentage” means, with respect to any prepayment required by Section 2.11(c), if the Secured Net Leverage Ratio (prior to giving effect to the applicable prepayment pursuant to Section 2.11(c), but after giving effect to any voluntary prepayments made pursuant to Section 2.11(a) prior to the date of such prepayment) as of the date of such proposed prepayment is (a) greater than 3.40 to 1.00, 100%, (b) greater than 2.90 to 1.00 but less than or equal to 3.40 to 1.00, 50% and (c) less than or equal to 2.90 to 1.00, 0%.

 

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Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any Person whose consent is required by Section 9.04), substantially in the form of Exhibit A or any other form reasonably approved by the Administrative Agent.

 

Auction Agent” means (a) the Administrative Agent or (b) any other financial institution or advisor employed by the Borrower (whether or not an Affiliate of the Administrative Agent) to act as an arranger in connection with any Discounted Term Loan Prepayment pursuant to Section 2.11(a)(ii)(A); provided that the Borrower shall not designate the Administrative Agent as the Auction Agent without the written consent of the Administrative Agent (it being understood that the Administrative Agent shall be under no obligation to agree to act as the Auction Agent).

 

Audited Financial Statements” means (i) the audited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows of the SPAC for its fiscal year ended December 31, 2018 and (ii) the audited consolidated balance sheet and related statements of income, stockholder’s equity and cash flows of the Company for the fiscal years ended December 31, 2016, December 31, 2017 and December 31, 2018.

 

Available Amount” means, as of any date of determination, a cumulative amount equal to (without duplication):

 

(a) the greater of (A) $10,000,000 and (B) 12.5% of Consolidated EBITDA for the most recently completed Test Period (the “Starter Basket”); plus

 

(b) the remainder of (A) the sum of an amount (which amount shall not be less than zero) equal to the sum of Excess Cash Flow (but not less than zero in any period) for the fiscal year of the Borrower ending on December 31, 2020 (but, in the case of such fiscal year, only for the period from the Closing Date through and including December 31 2020) and Excess Cash Flow for each succeeding completed fiscal year of the Borrower as of such date, in each case, that was not required to prepay Term Borrowings pursuant to Section 2.11(d) or other secured pari passu term Indebtedness as permitted by such Section 2.11(d) minus (B) the aggregate amount by which the required payment of Term Borrowings pursuant to Section 2.11(d) for any fiscal year of the Borrower has been reduced by operation of the first proviso to such Section 2.11(d); plus

 

(c) the aggregate amount of returns, profits, distributions and similar amounts (whether by means of a sale or other disposition, a repayment of a loan or advance, a dividend or otherwise) received in cash or Permitted Investments by the Borrower and its Restricted Subsidiaries on Investments made using the Available Amount (not to exceed the original amount of such Investments); plus

 

(d) the aggregate amount of Investments of the Borrower or any of its Restricted Subsidiaries in any Unrestricted Subsidiary made using the Available Amount that has been re-designated as a Restricted Subsidiary or that has been merged or consolidated with or into the Borrower or any of its Restricted Subsidiaries (up to the lesser of (i) the fair market value (as reasonably determined in good faith by the Borrower) of the Investments of the Borrower and its Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such re-designation or merger or consolidation and (ii) the fair market value (as reasonably determined in good faith by the Borrower) of the original Investment by the Borrower and its Restricted Subsidiaries in such Unrestricted Subsidiary); plus

 

(e) the aggregate amount of Net Proceeds of a sale or other Disposition of any Unrestricted Subsidiary (including the issuance of stock of an Unrestricted Subsidiary) received in cash or Permitted Investments by the Borrower or any of its Restricted Subsidiaries to the extent the original Investment or Investments therein were made in reliance on the Available Amount (not to exceed the original amount of such Investment or Investments); plus

 

-5-

 

 

(f) to the extent not included in Consolidated Net Income or otherwise refreshing another basket under Section 6.04, dividends or other distributions or returns on capital received by the Borrower or any of its Restricted Subsidiaries in cash from an Unrestricted Subsidiary (unless otherwise excluded pursuant to Section 6.07(a)(vi)(A)) to the extent the original Investment or Investments therein were made in reliance on the Available Amount; plus

 

(g) the aggregate amount of any Retained Declined Proceeds since the Closing Date; plus

 

(h) the aggregate amount of Net Proceeds of new public or private issuances of Qualified Equity Interests of Holdings or any parent of Holdings which are received in cash and are contributed to the Borrower, in each case, after the Closing Date; plus

 

(i) the aggregate amount of capital contributions received in cash or Permitted Investments by Holdings and contributed to the Borrower, in each case, after the Closing Date (other than in respect of any Disqualified Equity Interest); plus

 

(j) the aggregate amount of Net Proceeds received in cash by the Borrower or any of its Restricted Subsidiaries from Indebtedness and Disqualified Equity Interest issuances issued after the Closing Date and which have been exchanged or converted into Qualified Equity Interests of Holdings or any parent of Holdings;

 

provided that, in no event, shall the Available Amount include (i) any Cure Amounts or (ii) any other equity proceeds as provided in Sections 6.04(b), 6.07(a)(v), 6.07(a)(viii) and 6.07(a)(xi).

 

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

Bankruptcy Code” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.

 

Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBO Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.

 

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Benchmark Replacement Adjustment” means, with respect to any replacement of the LIBO Rate with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero), that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.

 

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate”, the definition of “Interest Period”, timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).

 

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Benchmark Replacement Date” means the earlier to occur of the following events with respect to the LIBO Rate:

 

(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (x) the date of the public statement or publication of information referenced therein and (y) the date on which the administrator of the LIBO Rate permanently or indefinitely ceases to provide the LIBO Rate; or

 

(b) in the case of clause (c) of the definition of “Benchmark Transition Event”, the date of the public statement or publication of information referenced therein.

 

Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the LIBO Rate:

 

(a) a public statement or publication of information by or on behalf of the administrator of the LIBO Rate announcing that such administrator has ceased or will cease to provide the LIBO Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate;

 

(b) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBO Rate, the Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBO Rate, a resolution authority with jurisdiction over the administrator for the LIBO Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBO Rate, which states that the administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate; or

 

(c) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBO Rate announcing that the LIBO Rate is no longer representative.

 

Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the ninetieth (90th) day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than ninety (90) days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.

 

Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the LIBO Rate and solely to the extent that the LIBO Rate has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder in accordance with clauses (b) through (e) of Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder pursuant to clauses (b) through (e) of Section 2.14.

 

Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

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Beneficial Ownership Regulation” has the meaning assigned to such term in Section 4.01(l).

 

Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

Board of Directors” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person or any committee thereof duly authorized to act on behalf of such board, (b) in the case of any limited liability company, the board of managers, board of directors, manager or managing member of such Person or the functional equivalent of the foregoing or any committee thereof duly authorized to act on behalf of such board, manager or managing member, (c) in the case of any partnership, the board of directors or board of managers of the general partner of such Person and (d) in any other case, the functional equivalent of the foregoing.

 

Board of Governors” means the Board of Governors of the Federal Reserve System of the United States of America.

 

Borrower” means (a) prior to the consummation of the Merger, the Initial Borrower and (b) from and after the consummation of the Merger, the New Borrower or (if applicable) a Successor Borrower.

 

Borrower Materials” has the meaning assigned to such term in Section 5.01.

 

Borrower Offer of Specified Discount Prepayment” means the offer by the Borrower to make a voluntary prepayment of Term Loans at a Specified Discount to par pursuant to Section 2.11(a)(ii)(B).

 

Borrower Solicitation of Discounted Prepayment Offers” means the solicitation by the Borrower of offers for, and the subsequent acceptance, if any, by a Term Lender of, a voluntary prepayment of Term Loans at a discount to par pursuant to Section 2.11(a)(ii)(D).

 

Borrower Solicitation of Discount Range Prepayment Offers” means the solicitation by the Borrower of offers for, and the corresponding acceptance by a Term Lender of, a voluntary prepayment of Term Loans at a specified range at a discount to par pursuant to Section 2.11(a)(ii)(C).

 

Borrowing” means Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

Borrowing Minimum” means (a) in the case of a Eurodollar Borrowing, $1,000,000, (b) in the case of an ABR Borrowing (other than a Swing Loan), $500,000 and (c) in the case of a Swing Loan, $250,000.

 

Borrowing Multiple” means (a) in the case of a Eurodollar Borrowing, $1,000,000, (b) in the case of an ABR Borrowing (other than a Swing Loan), $500,000 and (c) in the case of a Swing Loan, $50,000.

 

Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03, substantially in the form of Exhibit S or any other form reasonably approved by the Administrative Agent.

 

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Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by Requirements of Law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP; provided, that all obligations of any Person that are or would be characterized as an operating lease as determined in accordance with GAAP as in effect on December 31, 2018 (whether or not such operating lease was in effect on such date) shall continue to be accounted for as an operating lease (and not as a Capitalized Lease or Capital Lease Obligation) for purposes of this Agreement regardless of any change in GAAP following December 31, 2018 that would otherwise require such obligation to be recharacterized as a Capital Lease Obligation. For purposes of Section 6.02, a Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased and such property shall be deemed to be owned by the lessee.

 

Capitalized Leases” means all leases that have been, in accordance with GAAP as in effect on December 31, 2018, recorded as capitalized leases; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability in accordance with GAAP.

 

Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and its Restricted Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrower and its Restricted Subsidiaries.

 

Cash Management Obligations” means (a) obligations of Holdings, the Borrower or any of its Restricted Subsidiaries in respect of any overdraft and related liabilities arising from treasury, depository, cash pooling arrangements and cash management services or any automated clearing house transfers of funds and (b) other obligations in respect of netting services, employee credit or purchase card programs and similar arrangements.

 

Cash Management Services” has the meaning assigned to such term in the definition of “Secured Cash Management Obligations.”

 

Casualty Event” means any event that gives rise to the receipt by Holdings, the Borrower or any of its Restricted Subsidiaries of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or real property (including any improvements thereon).

 

CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Code that is owned directly or indirectly by a Loan Party.

 

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Change of Control” means (a) the failure of Holdings to directly own all of the Equity Interests of the Borrower, (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group, other than the Permitted Holders (directly or indirectly, including through one or more holding companies), of Equity Interests representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings, (c) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group, other than the Permitted Holders (directly or indirectly, including through one or more holding companies), of Equity Interests representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the SPAC, or (d) the occurrence of a “Change of Control” (or similar event, however denominated), as defined in the documentation governing (x) any First Lien Indebtedness, any other Indebtedness that is secured by the Collateral on a junior basis to the Obligations or any unsecured Indebtedness incurred pursuant to Section 6.01(ix), (xv) or (xx), in each case, that is Material Indebtedness or (y) the New Holdings Preferred Equity. For purposes of this definition, (i) “beneficial ownership” shall be as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act and (ii) the phrase “Person or group” is within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person or “group” and its subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan.

 

Change in Law” means: (a) the adoption of any rule, regulation, treaty or other law after the date of this Agreement, (b) any change in any rule, regulation, treaty or other law or in the administration, interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules, regulations, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted, implemented, promulgated or issued.

 

Class” when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Other Revolving Loans, Swing Loans, Initial Term Loans, Incremental Term Loans or Other Term Loans, (b) any Commitment, refers to whether such Commitment is a Revolving Commitment, Other Revolving Commitment, Term Commitment or Other Term Commitment and (c) any Lender, refers to whether such Lender has a Loan or Commitment with respect to a particular Class of Loans or Commitments. Other Term Commitments, Other Term Loans, Other Revolving Commitments (and the Other Revolving Loans made pursuant thereto) and Incremental Term Loans that have different terms and conditions shall be construed to be in different Classes.

 

Closing Date” means February 14, 2020, the first date on which all conditions precedent in ‎Section 4.01 are satisfied or waived in accordance with ‎Section 4.01.

 

Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

Collateral” means any and all assets, whether real or personal, tangible or intangible, on which Liens are purported to be granted pursuant to any of the Security Documents as security for the Secured Obligations.

 

Collateral Agent” has the meaning given to such term in Section 8.01(b) and its successors in such capacity as provided in Article VIII.

 

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Collateral Agreement” means the Collateral Agreement among the Borrower, each other Loan Party and the Collateral Agent, substantially in the form of Exhibit D.

 

Collateral and Guarantee Requirement” means, at any time, the requirement that:

 

(a) the Administrative Agent shall have received from (i) Holdings, the Borrower and each of its Restricted Subsidiaries (other than any Excluded Subsidiary, including any Restricted Subsidiary that becomes an Excluded Subsidiary and is otherwise permitted to be released from any obligations hereunder or under the other Loan Documents pursuant to Section 9.14) either (x) a counterpart of the Guarantee Agreement duly executed and delivered on behalf of such Person or (y) in the case of any Person that becomes or is required to become a Loan Party after the Closing Date (including by ceasing to be an Excluded Subsidiary), a supplement to the Guarantee Agreement, in substantially the form specified therein, duly executed and delivered on behalf of such Person, (ii) Holdings, the Borrower and each Subsidiary Loan Party either (x) a counterpart of the Collateral Agreement duly executed and delivered on behalf of such Person or (y) in the case of any Person that becomes or is required to become a Subsidiary Loan Party after the Closing Date (including by ceasing to be an Excluded Subsidiary), a supplement to the Collateral Agreement, in substantially the form specified therein, duly executed and delivered on behalf of such Person, in each case under this clause (a) together with, in the case of any such Loan Documents executed and delivered after the Closing Date, to the extent reasonably requested by the Administrative Agent, opinions and documents of the type referred to in Sections 4.01(b), 4.01(c), 4.01(d), 4.01(f), 4.01(l), 4.01(p) and 4.01(q) and (iii) Holdings, the Borrower and each Subsidiary Loan Party either (x) a counterpart of each Intercreditor Agreement (to the extent then in effect) or (y) in the case of any Person that becomes or is required to become a Subsidiary Loan Party after the Closing Date (including by ceasing to be an Excluded Subsidiary), a joinder to each such Intercreditor Agreement, in substantially the form specified therein;

 

(b) all outstanding Equity Interests of the Borrower and each of its Restricted Subsidiaries (other than any Equity Interests constituting Excluded Assets) owned by or on behalf of any Loan Party shall have been pledged pursuant to the Collateral Agreement, and the Collateral Agent shall have received certificates, if any, or other instruments, if any, representing all such Equity Interests (other than such Equity Interests constituting Excluded Assets), together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;

 

(c) if any Indebtedness for borrowed money of Holdings, the Borrower or any Subsidiary in a principal amount of $5,000,000 or more is owing by such obligor to any Loan Party (or, when aggregated with all other such Indebtedness owed to any Loan Party by any such obligors, exceed a principal amount of $10,000,000 in the aggregate) and such Indebtedness shall be evidenced by a promissory note, such promissory note shall be pledged pursuant to the Collateral Agreement, and the Collateral Agent shall have received all such promissory notes, together with undated instruments of transfer with respect thereto endorsed in blank; provided, however, that the foregoing delivery requirement with respect to any intercompany indebtedness may be satisfied by delivery of the Intercompany Note executed by all Loan Parties as payees and all such obligors as payors;

 

(d) all certificates, agreements, documents and instruments, including Uniform Commercial Code financing statements and Intellectual Property Security Agreements required by this Agreement, the Security Documents or any Requirements of Law and reasonably requested by the Administrative Agent to be filed, delivered, registered or recorded to create the Liens intended to be created by the Security Documents and perfect such Liens to the extent required by, and with the priority required by, this Agreement, the Security Documents and the other provisions of the term “Collateral and Guarantee Requirement,” shall have been filed, registered or recorded or delivered to the Administrative Agent in proper form for filing, registration or recording; and

 

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(e) the Administrative Agent shall have received with respect to each Material Real Property, (i) counterparts of a Mortgage with respect to such Material Real Property duly executed and delivered by the record owner of such Mortgaged Property (it being understood that if a mortgage tax will be owed on the entire amount of the Indebtedness evidenced hereby, the Administrative Agent will cooperate with the Borrower or the other applicable Loan Party in order to minimize the amount of mortgage tax payable in connection with such Mortgage as permitted by, and in accordance with, applicable law including, to the extent permitted by applicable law, limiting the amount secured by such Mortgage to the fair market value of the respective Mortgaged Property (as reasonably determined in good faith by the Borrower) at the time such Mortgage is entered into if such limitation results in such mortgage tax being calculated based upon such fair market value), (ii) a policy or policies of title insurance (or marked unconditional commitment to issue such policy or policies) issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a first priority Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such customary lender’s endorsements (other than a creditor’s rights endorsement) as the Administrative Agent may reasonably request to the extent available in the applicable jurisdiction at commercially reasonable rates (it being agreed that the Administrative Agent shall accept zoning reports from a nationally recognized zoning company in lieu of zoning endorsements in jurisdictions in which zoning endorsements are either not available or not available at commercially reasonable rates), in an amount equal to the fair market value of such Mortgaged Property or as otherwise reasonably agreed by the Borrower and the Administrative Agent; provided that in no event will the Borrower be required to obtain independent appraisals of such Mortgaged Properties, unless required by FIRREA, (iii) a completed “Life-of-Loan” Federal Emergency Management Agency standard flood hazard determination with respect to each Mortgaged Property, and if any improved Mortgaged Property is located in an area determined by the Federal Emergency Management Agency (or any successor agency) to be located in special flood hazard area, a duly executed notice about special flood hazard area status and flood disaster assistance and evidence of such flood insurance as provided in Section 5.07(b), (iv) opinions, addressed to the Administrative Agent, the Collateral Agent and the other Secured Parties, from counsel qualified to opine in the jurisdiction in which the applicable Loan Party is organized and in each jurisdiction where a Mortgaged Property is located regarding such customary matters as may be in form and substance reasonably satisfactory to the Administrative Agent, (v) a new survey in form and substance reasonably acceptable to the Administrative Agent or existing survey together with a no change affidavit of such Mortgaged Property, sufficient for the title insurance company to remove the standard survey exceptions and issue the survey related endorsements and otherwise reasonably satisfactory to the Administrative Agent, and (vi) evidence of payment of title insurance premiums and expenses and all recording, mortgage, transfer and stamp taxes and fees payable in connection with recording the Mortgage, any amendments thereto and any fixture filings in appropriate county land office(s).

 

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Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, the foregoing provisions of this definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance, legal opinions or other deliverables with respect to, particular assets of the Loan Parties that constitute Excluded Assets or in the assets of any Subsidiary that is an Excluded Subsidiary. In addition, notwithstanding anything to the contrary contained herein or in any other Loan Document, the Borrower and the other Loan Parties shall not be required, nor shall the Administrative Agent be authorized, (i) to perfect the above-described pledges, security interests and mortgages or any other pledge, security interest or mortgage granted in connection with the Loan Documents by any means other than by (A) the filing of Uniform Commercial Code financing statements in the applicable filing offices, (B) the filing of any Mortgage with respect to real property that constitutes Collateral, (C) filings in the United State Patent and Trademark Office or the United State Copyright Office for Intellectual Property that constitutes Collateral, and (D) taking possession of any stock certificates or intercompany or other notes or instruments that constitute Collateral, (ii) to enter into any deposit account control agreement, securities account control agreement or other control agreement with respect to any deposit account, securities account or other asset (other than in respect of Equity Interests of the Borrower or any of its Subsidiaries that constitute an “uncertificated security” within the meaning of Article 8 of the UCC) requiring perfection through control agreements or (iii) to take any action in any non-U.S. jurisdiction or required by the laws of any non-U.S. jurisdiction to create any security interests in assets located or titled outside of the United States or to perfect or make enforceable any security interests in any such assets (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any jurisdiction other than the United States, any State thereof or the District of Columbia). The Administrative Agent may grant extensions of time for the creation and perfection of security interests in or the obtaining of title insurance, legal opinions or other deliverables with respect to particular assets or the provision of any Guarantee by any Subsidiary (including extensions beyond the Closing Date or in connection with assets acquired, or Subsidiaries formed or acquired, after the Closing Date) where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Security Documents.

 

Commitment” means with respect to any Lender, its Revolving Commitment, Other Revolving Commitment of any Class, Term Commitment, Other Term Commitment of any Class or any combination thereof (as the context requires).

 

Commitment Letter” means that certain Commitment Letter by and among the Borrower, the Joint Lead Arrangers and the Administrative Agent dated August 12, 2019, as may be amended, restated, supplemented or otherwise modified from time to time.

 

Commitment Fee Percentage” means (a) from the Closing Date until the first delivery of financial statements pursuant to Section 5.01(a) or (b) and the related Compliance Certificate pursuant to Section 5.01(d), 0.50%; and

 

(b)  thereafter, the following percentages per annum, based upon the First Lien Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 5.01(d):

 

Pricing Level   First Lien Net Leverage Ratio   Commitment Fee Rate  
1   Greater than 3.40 to 1.00     0.50 %
2   Greater than 2.90 to 1.00 but less than or equal to 3.40 to 1.00     0.375 %
3   Less than or equal to 2.90 to 1.00     0.25 %

 

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Any increase or decrease in the Commitment Fee Percentage resulting from a change in the First Lien Net Leverage Ratio shall become effective as of the first Business Day immediately following the date the respective financial statements are delivered to the Administrative Agent pursuant to Section 5.01(a) or (b), as applicable, and the related Compliance Certificate is delivered to the Administrative Agent pursuant to Section 5.01(d); provided that the highest pricing level (as set forth in the table above) shall apply as of the first Business Day after the date on which the respective financial statements were required to be delivered to the Administrative Agent but were not delivered pursuant to Section 5.01(a) or (b), as applicable, or the related Compliance Certificate was required to be delivered but was not delivered pursuant to Section 5.01(d) and shall continue to so apply to and including the date on which such financial statements and related Compliance Certificate are so delivered (and thereafter the pricing level otherwise determined in accordance with this definition shall apply).

 

In the event that the financial information in any Compliance Certificate previously delivered was incorrect or inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Commitment Fee Percentage for any applicable period than the Commitment Fee Percentage applied for such applicable period, then (a) the Borrower shall promptly (but, in any event, within three (3) Business Days) deliver to the Administrative Agent the correct Compliance Certificate for such applicable period, (b) the Commitment Fee Percentage shall be determined as if the pricing level for such higher Commitment Fee Percentage were applicable for such applicable period, and (c) the Borrower shall within three (3) Business Days thereafter pay to the Administrative Agent the accrued additional fees owing as a result of such increased Commitment Fee Percentage for such applicable period, which payment shall be promptly applied by the Administrative Agent in accordance with this Agreement. For the avoidance of doubt, any additional fees referred to above shall not be due and payable until the date that is three (3) Business Days after the date on which such corrected Compliance Certificate was required to have been delivered as provided above in this definition and accordingly, any nonpayment of such fees as a result of any such inaccuracy shall not constitute a Default (whether retroactively or otherwise) and none of such additional amounts shall be deemed overdue or accrue interest at a default rate, in each case at any time prior to the date that is three (3) Business Days following the date such additional fees were required to have been so paid.

 

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

Company” has the meaning given to such term in the preliminary statements hereto.

 

Compliance Certificate” means the certificate required to be delivered pursuant to Section 5.01(d), substantially in the form of Exhibit T.

 

Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, plus:

 

(a) without duplication and to the extent already deducted (and not added back or excluded) in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

 

(i) total interest expense and, to the extent not reflected in such total interest expense, the sum of (A) premium payments, debt discount, fees, charges and related expenses incurred in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets plus (B) the portion of rent expense with respect to such period under Capitalized Leases that is treated as interest expense in accordance with GAAP plus (C) the implied interest component of synthetic leases with respect to such period plus (D) any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations or such derivative instruments plus (E) bank and letter of credit fees and costs of surety bonds in connection with financing activities, plus (F) amortization or write-off of deferred financing fees, debt issuance costs, debt discount or premium, terminated hedging obligations and other commissions, financing fees and expenses and, adjusted, to the extent included, to exclude any refunds or similar credits received in connection with the purchasing or procurement of goods or services under any purchasing card or similar program;

 

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(ii) provision for taxes based on income, profits or capital, including federal, provincial, territorial, foreign, state, local, franchise, excise, and similar taxes and foreign withholding paid or accrued during such period (including in respect of repatriated funds) including penalties and interest related to such taxes or arising from any tax examinations (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto);

 

(iii) Non-Cash Charges;

 

(iv) extraordinary expenses, losses or charges (as defined in GAAP prior to the effectiveness of FASB ASU 2015-01);

 

(v) unusual or non-recurring expenses, losses or charges (including any unusual or non-recurring operating expenses, losses or charges directly attributable to the implementation of cost savings initiatives), severance, relocation costs, integration and facilities’ opening costs and other business optimization expenses and operating improvements (including related to new product introductions), systems development and establishment costs, recruiting fees, signing costs, retention or completion bonuses, transition costs, costs related to closure/consolidation of facilities, internal costs in respect of strategic initiatives and curtailments or modifications to pension and post-retirement employee benefit plans (including any settlement of pension liabilities), contract terminations and professional and consulting fees incurred in connection with any of the foregoing;

 

(vi) restructuring charges, accruals or reserves (including restructuring and integration costs related to acquisitions and adjustments to existing reserves), whether or not classified as restructuring expense on the consolidated financial statements;

 

(vii) the amount of any non-controlling interest consisting of income attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary;

 

(viii) (A) the amount of non-management board of directors fees, indemnities and related expenses paid or accrued in such period to (or on behalf of) Holdings (or any direct or indirect parent thereof) and (B) the amount of expenses relating to payments made to option holders of Holdings or any of its direct or indirect parent companies in connection with, or as a result of, any distribution being made to shareholders of such Person or its direct or indirect parent companies, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted in the Loan Documents;

 

(ix) losses, expenses or charges (including all fees and expenses or charges relating thereto) (A) from abandoned, closed, disposed or discontinued operations and any losses on disposal of abandoned, closed or discontinued operations (but if such operations are classified as discontinued due to the fact that they are subject to an agreement to dispose of such operations, only when and to the extent such operations are actually disposed of) and (B) attributable to business dispositions or asset dispositions (other than in the ordinary course of business), as reasonably determined in good faith by a Financial Officer;

 

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(x) any non-cash loss attributable to the mark to market movement in the valuation of any Equity Interests, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging but only to the extent the cash impact resulting from such loss has not been realized);

 

(xi) any loss relating to amounts paid in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income for such period;

 

(xii) any costs or expenses incurred by the Borrower or any of its Restricted Subsidiaries pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, any severance agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are non-cash or otherwise funded with cash proceeds contributed to the capital of Holdings or Net Proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Equity Interests), in each case, which have been contributed to the Borrower;

 

(xiii) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of FASB Accounting Standards Codification 715, and any other items of a similar nature;

 

(xiv) charges, losses, lost profits, expenses (including litigation expenses, fee and charges) or write-offs to the extent indemnified or insured by a third party, including expenses or losses covered by indemnification provisions or by any insurance provider in connection with the Transactions, a Permitted Acquisition or any other acquisition or Investment, Disposition or any Casualty Event, in each case, to the extent that coverage has not been denied and so long as such amounts are actually reimbursed in cash within one (1) year after the related amount is first added to Consolidated EBITDA pursuant to this clause (a)(xiv) (and if not so reimbursed within one (1) year, such amount shall be deducted from Consolidated EBITDA during the next measurement period);

 

(xv) expenses incurred during such period in connection with earn-out and other deferred payments in connection with any acquisitions constituting an Investment permitted under this Agreement, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such earn-out or other deferred payments exceeds the liability booked by the applicable Person therefor; and

 

(xvi) to the extent that any of the expenses referred to in clause (ii) of the last sentence of the definition of Consolidated Net Income would have been added back to Consolidated EBITDA pursuant to any of the foregoing clauses of this definition had such expenses been incurred directly by the Borrower, the amount of such expenses; plus

 

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(b)  without duplication, the amount of “run rate” cost savings, operating expense reductions and synergies related to the Transactions or any Specified Transaction, any restructuring, cost saving initiative or other initiative projected by the Borrower in good faith to be realized as a result of actions either taken or with respect to which substantial steps have been taken or that are expected to be taken, in each case on or prior to the date that is twenty-four (24) months after the Closing Date (in the case of the Transactions) or such Specified Transaction or the implementation of such restructuring, cost saving or other initiative, as the case may be (which cost savings, operating expense reductions and synergies shall be added to Consolidated EBITDA until fully realized and calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of the relevant period), net of the amount of actual benefits realized from such actions; provided that (A) such cost savings, operating expense reductions and synergies are reasonably identifiable and factually supportable and (B) no cost savings, operating expense reductions or synergies shall be added pursuant to this clause (b) to the extent duplicative of any expenses or charges relating to such cost savings, operating expense reductions, other operating improvements or synergies that are included in clauses (a)(v) and (a)(vi) above or in the definitions of Pro Forma Adjustment and Pro Forma Basis (it being understood and agreed that “run rate” shall mean the full recurring benefit that is associated with any action taken); provided, however, the aggregate amounts increasing Consolidated EBITDA pursuant to this clause (b) and the similar adjustments pursuant to the definition of Pro Forma Adjustment and the proviso to the definition of Pro Forma Basis shall not exceed 20% of Consolidated EBITDA for the relevant period (calculated prior to giving effect to any such increase); plus

 

(c) without duplication, any other adjustments and add-backs reflected in the calculation of Consolidated EBITDA in the Model to the extent such adjustments continue to be applicable during the period in which Consolidated EBITDA is being calculated, in each case applied in good faith by the Borrower; less

 

(d) without duplication and to the extent included in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

 

(i) extraordinary gains (as defined in GAAP prior to the effectiveness of FASB ASU 2015-01) and unusual or non-recurring gains;

 

(ii) non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income or Consolidated EBITDA in any prior period) and other items of non-cash income;

 

(iii) gains or other income (A) from abandoned, closed, disposed or discontinued operations and any gains or other income on disposal of abandoned, closed or discontinued operations (but if such operations are classified as discontinued due to the fact that they are subject to an agreement to dispose of such operations, only when and to the extent such operations are actually disposed of) and (B) attributable to business dispositions or asset dispositions (other than in the ordinary course of business), as reasonably determined in good faith by a Financial Officer;

 

(iv) any non-cash gain attributable to the mark to market movement in the valuation of any Equity Interests, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging but only to the extent the cash impact resulting from such gain has not been realized);

 

(v) any gain relating to amounts received in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income in such period;

 

(vi) gains during period in connection with earn-outs and other deferred payments in connection with any acquisitions constituting an Investment permitted under this Agreement, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such earn-outs or other deferred payments is less than the liability booked by the applicable Person therefor; and

 

(vii) the amount of any non-controlling interest consisting of loss attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary; plus

 

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(e) without duplication, any cash income from investments recorded using the equity method of accounting or the cost method of accounting, to the extent not included in arriving at Consolidated Net Income, except to the extent such income was attributable to income that would be deducted pursuant to clause (d) above if it were income of the Borrower or its Restricted Subsidiaries; minus

 

(f) without duplication, any losses from investments recorded using the equity method of accounting or the cost method of accounting, to the extent not deducted in arriving at Consolidated Net Income, except to the extent such loss was attributable to losses that would be added back pursuant to clauses (a) and (b) above if it were a loss of the Borrower or a Restricted Subsidiary; plus

 

(g) without duplication, an amount, with respect to investments recorded using the equity method of accounting or the cost method of accounting, equal to the amount attributable to each such investment that would be added to Consolidated EBITDA pursuant to clauses (a) and (b) above if instead attributable to the Borrower or a Restricted Subsidiary of the Borrower, pro-rated according to the Borrower’s or its applicable Restricted Subsidiary’s percentage ownership in such investment; minus

 

(h) without duplication, an amount, with respect to investments recorded using the equity method of accounting or the cost method of accounting, equal to the amount attributable to each such investment that would be deducted from Consolidated EBITDA pursuant to clause (c) above if instead attributable to the Borrower or a Restricted Subsidiary of the Borrower, pro-rated according to the Borrower’s or its applicable Restricted Subsidiary’s percentage ownership in such investment, in each case, as determined on a consolidated basis for the Borrower and its Restricted Subsidiaries in accordance with GAAP; plus

 

(i) without duplication, the aggregate amount of credits received as a result of treatment of cash rent payments pursuant to GAAP;

 

in each case, as determined on a consolidated basis for the Borrower and its Restricted Subsidiaries in accordance with GAAP; provided that:

 

(I) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of assets or liabilities (including the net loss or gain resulting from hedging agreements for currency exchange risk and revaluations of intercompany balances),

 

(II) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of Financial Accounting Standards Codification No. 815—Derivatives and Hedging,

 

(III) there shall be included in determining Consolidated EBITDA for any period, without duplication, to the extent not included in Consolidated Net Income, the Acquired EBITDA of any Person, property, business or asset or attributable to any Person, property, business or asset acquired by the Borrower or any Restricted Subsidiary during such period (other than any Unrestricted Subsidiary) to the extent not subsequently sold, transferred or otherwise disposed of (but not including the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired) (each such Person, property, business or asset acquired, including pursuant to the Transactions or pursuant to a transaction consummated prior to the Closing Date, and not subsequently so disposed of, an “Acquired Entity or Business”), and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary during such period (each, a “Converted Restricted Subsidiary”), in each case based on the Acquired EBITDA of such Pro Forma Entity for such period (including the portion thereof occurring prior to such acquisition or conversion) determined on a historical Pro Forma Basis;

 

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(IV) there shall be, to the extent included in Consolidated Net Income, excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset (other than any Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or classified as discontinued operations in accordance with GAAP (other than (x) if so classified on the basis that it is being held for sale unless such sale has actually occurred during such period and (y) for periods prior to the applicable sale, transfer or other disposition) by the Borrower or any Restricted Subsidiary during such period (each such Person, property, business or asset so sold, transferred or otherwise disposed of, closed or classified, a “Sold Entity or Business”), and the Disposed EBITDA of any Restricted Subsidiary that is converted into an Unrestricted Subsidiary during such period (each, a “Converted Unrestricted Subsidiary”), in each case based on the Disposed EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closure, classification or conversion) determined on a historical Pro Forma Basis; and

 

(V) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA any expense (or income) as a result of adjustments recorded to contingent consideration liabilities relating to the Transactions or any Permitted Acquisition (or other similar Investment permitted hereunder).

 

Notwithstanding the foregoing, Consolidated EBITDA shall be deemed to equal (a) $12,984,000 for the fiscal quarter ended March 31, 2019, (b) $19,506,000 for the fiscal quarter ended June 30, 2019, (c) $22,134,000 for the fiscal quarter ended September 30, 2019 and (d) $18,282,000 for the fiscal quarter ended December 31, 2019 (it being understood that such amounts are subject to adjustments, as and to the extent otherwise contemplated in this Agreement, in connection with any Pro Forma Adjustment or any calculation on a Pro Forma Basis (other than as a result of the Long Engineering Acquisition if consummated within ten (10) Business Days after the Closing Date)); provided that (x) such amounts of Consolidated EBITDA for any such fiscal quarter shall be adjusted to include, without duplication, any cost savings that would otherwise be included pursuant to clause (b) of this definition (other than as a result of the Transactions or the Long Engineering Acquisition if consummated within ten (10) Business Days after the Closing Date) and (y) in the event that the Long Engineering Acquisition has not been consummated within ten (10) Business Days after the Closing Date, the above referenced amounts in preceding clauses (a), (b), (c) and (d) shall be $12,141,000, $18,538,000, $20,924,000 and $17,703,000, respectively.

 

Consolidated First Lien Indebtedness” means, as of any date of determination, the aggregate amount of Consolidated Total Indebtedness that constitutes First Lien Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP.

 

Consolidated Interest Expense” means, for any period, total cash interest expense and, to the extent not reflected in such total cash interest expense, the sum of (A) cash premium payments, debt discount, fees, charges and related expenses incurred in connection with borrowed money plus (B) the cash portion of rent expense with respect to such period under Capitalized Leases that is treated as interest expense in accordance with GAAP plus (C) cash payments in respect of bank and letter of credit fees and costs of surety bonds in connection with financing activities plus (D) the product of (x) the amount of all cash dividend payments on the New Holdings Preferred Equity to the extent paid pursuant to Section 6.07(a)(xiii) times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local income tax rate of the Borrower (assuming that the Borrower is a corporation and not a pass thru entity for federal income tax purposes), expressed as a decimal.

 

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Consolidated Net Income” means, for any period, the net income (loss) of the Borrower and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding (to the extent otherwise included therein), without duplication,

 

(a) the cumulative effect of a change in accounting principles during such period,

 

(b) any Transaction Costs incurred during such period,

 

(c) any fees and expenses (including any transaction or retention bonus or similar payment) incurred during such period, or any amortization thereof for such period, in connection with any acquisition, non-recurring costs to acquire equipment to the extent not capitalized in accordance with GAAP, Investment, recapitalization, asset disposition, non-competition agreement, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of or waiver or consent relating to any debt instrument (in each case, including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful (including, for the avoidance of doubt, the effects of expensing all transaction-related expenses in accordance with FASB Accounting Standards Codification 805 and gains or losses associated with FASB Accounting Standards Codification 460),

 

(d) any income (loss) (and all fees and expenses or charges relating thereto) for such period attributable to the early extinguishment of Indebtedness, hedging agreements or other derivative instruments,

 

(e) accruals and reserves that are established or adjusted as a result of the Transactions or any Permitted Acquisition or other similar Investment not prohibited under this Agreement in accordance with GAAP (including any adjustment of estimated payouts on earn-outs) or changes as a result of the adoption or modification of accounting policies during such period,

 

(f) stock-based award compensation expenses,

 

(g) any income (loss) attributable to deferred compensation plans or trusts,

 

(h) any income (loss) from Investments recorded using the equity method,

 

(i) the amount of any expense required to be recorded as compensation expense related to contingent transaction consideration,

 

(j) any unrealized or realized gain or loss due solely to fluctuations in currency values and the related tax effects, determined in accordance with GAAP, and

 

(k) the net income of any Person that is not a Subsidiary of the Borrower or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions paid in cash (or to the extent converted into cash) to the Borrower or a Restricted Subsidiary thereof in respect of such period.

 

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There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in such period. There shall be excluded from Consolidated Net Income for any period the effects from applying acquisition method accounting, including applying acquisition method accounting to inventory, property and equipment, loans and leases, software and other intangible assets and deferred revenue (including deferred costs related thereto and deferred rent) required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and its Restricted Subsidiaries), as a result of the Transactions, any acquisition or Investment consummated prior to the Closing Date and any Permitted Acquisitions (or other Investment not prohibited hereunder) or the amortization or write-off of any amounts thereof.

 

In addition, (i) to the extent not already included in Consolidated Net Income, Consolidated Net Income shall include the amount of proceeds received in cash from business interruption insurance and (ii) Consolidated Net Income shall be reduced (to the extent not already reduced hereby) by the amount of payments to or on behalf of Holdings or any direct or indirect parent thereof pursuant to Section 6.07(a)(vi) (other than sub-clauses (D) and (G) thereof) or Section 6.04(l) in lieu thereof, in each case, to the extent that such amounts otherwise would have reduced Consolidated Net Income if such amounts were a direct expense of the Borrower.

 

Consolidated Secured Indebtedness” means, as of any date of determination, the aggregate amount of Consolidated Total Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP that is secured by a Lien on any assets of the Borrower or any of its Restricted Subsidiaries.

 

Consolidated Total Indebtedness” means, as of any date of determination, (a) the aggregate amount of Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of the acquisition method accounting in connection with the Transactions or any Permitted Acquisition (or other similar Investment not prohibited hereunder)) consisting only of Indebtedness for borrowed money, drawn but unreimbursed obligations under letters of credit or similar instruments, obligations in respect of Capitalized Leases, purchase money Indebtedness, debt obligations evidenced by bonds, promissory notes, debentures, indentures, credit agreements or similar instruments and any guarantees of the foregoing minus (b) the aggregate amount of cash and Permitted Investments (in each case, free and clear of all Liens, other than Liens permitted pursuant to Section 6.02), excluding cash and Permitted Investments (x) that are listed as “restricted” on the consolidated balance sheet of the Borrower and its Restricted Subsidiaries as of such date unless “restricted” solely in favor of the facilities hereunder and in respect of secured Indebtedness subject to the terms of an Intercreditor Agreement or (y) representing $10,500,000 of proceeds of Initial Terms Loans that are deposited and maintained in the segregated restricted account of the Borrower referred to in Section 5.10.

 

Consolidated Working Capital” means, at any date, the excess of (a) the sum of all amounts (other than cash and Permitted Investments) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries at such date, excluding the current portion of current and deferred income taxes over (b) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries on such date, including deferred revenue but excluding, without duplication, (i) the current portion of any Funded Debt, (ii) all Indebtedness consisting of Loans and obligations under Letters of Credit to the extent otherwise included therein, (iii) the current portion of interest and (iv) the current portion of current and deferred income taxes; provided that, for purposes of calculating Excess Cash Flow, increases or decreases in working capital (A) arising from acquisitions or dispositions by the Borrower and its Restricted Subsidiaries outside the ordinary course of business shall be ignored and (B) shall exclude (I) the impact of non-cash adjustments contemplated in the Excess Cash Flow calculation, (II) the impact of adjusting items in the definition of Consolidated Net Income and (III) any changes in current assets or current liabilities as a result of (x) the effect of fluctuations in the amount of accrued or contingent obligations, assets or liabilities under hedging agreements or other derivative obligations, (y) any reclassification in accordance with GAAP of assets or liabilities, as applicable, between current and noncurrent or (z) the effects of acquisition method accounting.

 

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Contract Consideration” has the meaning assigned to such term in the definition of “Excess Cash Flow.”

 

Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound other than the Loan Document Obligations.

 

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies, or the dismissal or appointment of the management, of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

 

Converted Restricted Subsidiary” has the meaning given such term in the definition of “Consolidated EBITDA.”

 

Converted Unrestricted Subsidiary” has the meaning given such term in the definition of “Consolidated EBITDA.”

 

Credit Agreement Refinancing Indebtedness” means (a) Permitted First Priority Refinancing Debt, (b) Permitted Second Priority Refinancing Debt, (c) Permitted Unsecured Refinancing Debt or (d) other Indebtedness incurred pursuant to a Refinancing Amendment (including Other Term Loans and Other Revolving Loans), in each case, issued, incurred or otherwise obtained by the Borrower (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace or refinance, in whole or part, existing Term Loans or Revolving Loans (or unused Revolving Commitments) (“Refinanced Debt”); provided that such exchanging, extending, renewing, replacing or refinancing Indebtedness (a) is in an original aggregate principal amount not greater than the aggregate principal amount of the Refinanced Debt (plus any premium, commission, underwriting discount, accrued and unpaid interest and fees and expenses incurred in connection with such exchange, extension, renewal, replacement or refinancing), (b) does not mature earlier than, have a Weighted Average Life to Maturity shorter than, or have mandatory commitment reductions prior to maturity of, the Refinanced Debt (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which otherwise complies with such maturity requirement), provided that, if such Indebtedness is unsecured or secured by the Collateral on a junior lien basis to the Secured Obligations, (1) does not mature, have scheduled amortization or payments of principal, or have mandatory commitment reductions, prior to the date that is ninety-one (91) days after the Latest Maturity Date then in effect (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which otherwise complies with such maturity requirement) and (2) does not have any mandatory prepayment, redemption or offer to purchase events more onerous to Holdings, the Borrower and its Restricted Subsidiaries (as reasonably determined in good faith by the Borrower) than those set forth in this Agreement (and shall otherwise be subject to the terms of this Agreement), (c) shall not be guaranteed by any entity that is not a Loan Party, (d) in the case of any secured Indebtedness, (i) is not secured by any assets not securing the Secured Obligations and (ii) if not comprising Other Term Loans or Other Revolving Loans hereunder, is subject to the relevant Intercreditor Agreements, (e) such Refinanced Debt shall be repaid, defeased or satisfied and discharged, and all accrued and unpaid interest, fees, premium, commission and underwriting discount (if any) in connection therewith shall be repaid, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or otherwise obtained, (f) if the Refinanced Debt was (i) contractually subordinated to the Loan Document Obligations in right of payment, shall be contractually subordinated to the Loan Document Obligations on at least the same basis, (ii) contractually subordinated to the Loan Document Obligations in right of security, shall be contractually subordinated in right of security to the Loan Document Obligations on at least the same basis or be unsecured or (iii) unsecured, shall be unsecured and (g) has terms and conditions (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the Latest Maturity Date then in effect) that reflect terms and conditions at the time of incurrence or issuance not materially more favorable to the lenders thereof (as reasonably determined by the Borrower in good faith) than the terms and conditions of the applicable Refinanced Debt, except for (x) terms, conditions and other provisions applicable only to periods after the Latest Maturity Date then in effect or (y) such terms, conditions or other provisions as are reasonably acceptable to the Administrative Agent or added in the facilities under this Agreement for the benefit of the Lenders pursuant to an amendment hereto (with no consent of the Lenders being required for such amendment), it being acknowledged that with respect to any “springing” financial covenant or other covenant or provision only applicable to, or for the benefit of, a revolving credit facility, such covenant or provision shall also be added solely for the benefit of each revolving credit facility hereunder (and not for the benefit of any term loan facility hereunder).

 

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Cure Amount” has the meaning assigned to such term in Section 7.02(a).

 

Cure Right” has the meaning assigned to such term in Section 7.02(a).

 

Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

Defaulting Lender” means, subject to Section 2.22(b), any Lender that (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit or Swing Loans, within two (2) Business Days of the date required to be funded by it hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Borrower, the Administrative Agent, any Issuing Bank, the Swing Line Lender or any Lender that it does not intend to comply with its funding obligations or has made a public statement or provided any written notification to any Person to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after request by the Administrative Agent (whether acting on its own behalf or at the reasonable request of the Borrower (it being understood that the Administrative Agent shall comply with any such reasonable request)), the Swing Line Lender or any Issuing Bank, to confirm in a manner satisfactory to the Administrative Agent, the Swing Line Lender, such Issuing Bank and the Borrower that it will comply with its funding obligations (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent, any Issuing Bank or any Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, unless the subject of a good faith dispute or subsequently cured, or (e) has, or has a direct or indirect parent company that has, other than in connection with an Undisclosed Administration, (i) become or is insolvent, (ii) become the subject of a proceeding under any Debtor Relief Law or Bail-In Action, (iii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iv) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Banks, the Swing Line Lender and each Lender.

 

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Defaulting Lender Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Bank, such Defaulting Lender’s Applicable Percentage of the obligations with respect to the Letters of Credit issued by such Issuing Bank other than obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or cash collateralized in accordance with the terms hereof and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swing Loans made by the Swing Line Lender other than Swing Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

 

Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Borrower or a Restricted Subsidiary of the Borrower in connection with a Disposition pursuant to Section 6.05(l) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation (which amount will be reduced by the fair market value of the portion of the non-cash consideration converted to cash within one hundred eighty (180) days following the consummation of the applicable Disposition).

 

Discount Prepayment Accepting Lender” has the meaning assigned to such term in Section 2.11(a)(ii)(B)(2).

 

Discount Range” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(1).

 

Discount Range Prepayment Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(1).

 

Discount Range Prepayment Notice” means a written notice of a Borrower Solicitation of Discount Range Prepayment Offers made pursuant to Section 2.11(a)(ii)(C) substantially in the form of Exhibit L.

 

Discount Range Prepayment Offer” means the irrevocable written offer by a Term Lender, substantially in the form of Exhibit M, submitted in response to an invitation to submit offers following the Auction Agent’s receipt of a Discount Range Prepayment Notice.

 

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Discount Range Prepayment Response Date” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(1).

 

Discount Range Proration” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(3).

 

Discounted Prepayment Determination Date” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(3).

 

Discounted Prepayment Effective Date” means in the case of a Borrower Offer of Specified Discount Prepayment or Borrower Solicitation of Discount Range Prepayment Offer, five (5) Business Days following the receipt by each relevant Term Lender of notice from the Auction Agent in accordance with Section 2.11(a)(ii)(B), Section 2.11(a)(ii)(C) or Section 2.11(a)(ii)(D), as applicable, unless a shorter period is agreed to between the Borrower and the Auction Agent.

 

Discounted Term Loan Prepayment” has the meaning assigned to such term in Section 2.11(a)(ii)(A).

 

Dispose” and “Disposition” each have the meaning assigned to such term in Section 6.05.

 

Disposed EBITDA” means, with respect to any Sold Entity or Business or Converted Unrestricted Subsidiary for any period through (but not after) the date of such disposition or designation, the amount for such period of Consolidated EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary (determined as if references to the Borrower and its Restricted Subsidiaries in the definition of the term “Consolidated EBITDA” (and in the component financial definitions used therein) were references to such Sold Entity or Business and its subsidiaries or to such Converted Unrestricted Subsidiary and its subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business or Converted Unrestricted Subsidiary.

 

Disqualified Equity Interest” means, with respect to any Person, any Equity Interest in such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition:

 

(a) matures or is mandatorily redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests), whether pursuant to a sinking fund obligation or otherwise;

 

(b) is convertible or exchangeable, either mandatorily or at the option of the holder thereof, for Indebtedness or Equity Interests (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests); or

 

(c) is redeemable (other than solely for Equity Interests in such Person that do not constitute Disqualified Equity Interests and cash in lieu of fractional shares of such Equity Interests) or is required to be repurchased by such Person or any of its Affiliates, in whole or in part, at the option of the holder thereof;

 

in each case, on or prior to the date ninety-one (91) days after the Latest Maturity Date then in effect; provided, however, that (i) an Equity Interest in any Person that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Equity Interest upon the occurrence of an “asset sale” or a “change of control” or similar event shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after repayment in full of all the Loans and all other Loan Document Obligations that are accrued and payable, the cancellation or expiration of all Letters of Credit and the termination of all Commitments, (ii) the New Holdings Preferred Equity as constituted on the Closing Date shall not constitute Disqualified Equity Interests and (iii) if an Equity Interest in any Person is issued pursuant to any plan for the benefit of employees of Holdings (or any direct or indirect parent thereof) or any of its subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by Holdings (or any direct or indirect parent company thereof) or any of its subsidiaries in order to satisfy applicable statutory or regulatory obligations of such Person.

 

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Disqualified Lenders” means (i) those Persons identified by the Borrower to the Joint Lead Arrangers and the Administrative Agent in writing prior to August 12, 2019 as being “Disqualified Lenders,” (ii) those Persons who are competitors of Holdings, the Borrower and its Restricted Subsidiaries identified by the Borrower to the Administrative Agent from time to time in writing (including by email) as being “Disqualified Lenders”, which designation shall become effective three (3) Business Days after delivery of each such written designation to the Administrative Agent, but which shall not apply retroactively to disqualify any Persons that have previously acquired an assignment or participation interest in the Loans or Commitments and (iii) in the case of each Person identified pursuant to clauses (i) and (ii) above, any of their Affiliates that are either (x) identified in writing by the Borrower to the Administrative Agent from time to time, which designation shall become effective three (3) Business Days after delivery of each such written designation to the Administrative Agent, but which shall not apply retroactively to disqualify any Persons that have previously acquired an assignment or participation in the Loans or Commitments or (y) clearly identifiable as Affiliates at such time solely on the basis of such Affiliate’s name (other than, in either case, Affiliates that are bona fide debt funds, fixed income investors, regulated bank entities or unregulated lending entities generally engaged in making, purchasing, holding or otherwise investing in commercial loans, debt securities or similar extensions of credit in the ordinary course of business); provided that the term “Disqualified Lender” shall exclude any Person that the Borrower shall have designated as no longer being a “Disqualified Lender” by written notice delivered to the Administrative Agent from time to time. Such list of Disqualified Lenders shall be available for inspection upon request by any Lender.

 

Division/Series Transaction” means, with respect to any Loan Party and/or any of its Restricted Subsidiaries that is a limited liability company organized under the laws of its jurisdiction of organization, that any such Person (a) divides into two or more Persons (whether or not the original Loan Party or Restricted Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of its jurisdiction of organization.

 

dollars” or “$” refers to lawful money of the United States of America.

 

Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States, any state thereof or the District of Columbia.

 

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Early Opt-in Election” means the occurrence of:

 

(a) (i) a determination by the Administrative Agent that, or (ii) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined that, U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in clauses (b) through (e) of Section 2.14, are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate, and

 

(b) (i) the election by the Administrative Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent.

 

ECF Percentage” means, with respect to the prepayment required by Section 2.11(d) with respect to any fiscal year of the Borrower, if the Total Net Leverage Ratio (prior to giving effect to the applicable prepayment pursuant to Section 2.11(d), but after giving effect to any voluntary prepayments made pursuant to Section 2.11(a) prior to the date of such prepayment) as of the end of such fiscal year is (a) greater than 3.40 to 1.00, 50% of Excess Cash Flow for such fiscal year, (b) greater than 2.90 to 1.00 but less than or equal to 3.40 to 1.00, 25% of Excess Cash Flow for such fiscal year and (c) less than or equal to 2.90 to 1.00, 0% of Excess Cash Flow for such fiscal year.

 

EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

 

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

Effective Yield” means, as to any Indebtedness, the effective yield on such Indebtedness in the good faith determination of the Administrative Agent and consistent with generally accepted financial practices, taking into account the applicable interest rate margins, any interest rate floors (the effect of which floors shall be determined in a manner set forth in the proviso below), any amendment to the relevant interest rate margins and interest rate floors prior to the applicable date of determination, or similar devices and all fees, including upfront or similar fees or original issue discount (amortized over the shorter of (a) the remaining Weighted Average Life to Maturity of such Indebtedness and (b) the four years following the date of incurrence thereof) payable generally to lenders or other institutions providing such Indebtedness, but excluding any arrangement, syndication, commitment, structuring, ticking or other similar fees payable in connection therewith that are not generally shared with the relevant Lenders or other holders of such Indebtedness; provided that with respect to any Indebtedness that includes a “LIBOR floor” or “Base Rate floor,” (i) to the extent that the LIBO Rate or Alternate Base Rate (without giving effect to any floors in such definitions), as applicable, on the date that the Effective Yield is being calculated is less than such floor, the amount of such difference shall be deemed added to the interest rate margin for such Indebtedness for the purpose of calculating the Effective Yield and (ii) to the extent that the LIBO Rate or Alternate Base Rate (without giving effect to any floors in such definitions), as applicable, on the date that the Effective Yield is being calculated is greater than such floor, then the floor shall be disregarded in calculating the Effective Yield.

 

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Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than Holdings, the Borrower or any of their respective Subsidiaries or other Affiliates), other than, in each case, (i) a natural person, (ii) a Defaulting Lender or (iii) a Disqualified Lender; provided, however, the aggregate amount of Loans and Commitments permitted to be held by all GSO Entities at any time shall be subject to the limitations set forth in Section 9.04(h).

 

Environmental Laws” means all applicable treaties, rules, regulations, codes, ordinances, judgments, orders, decrees and other applicable Requirements of Law, and all applicable injunctions or binding agreements issued, promulgated or entered into by or with any Governmental Authority, in each instance relating to the protection of the environment, to preservation or reclamation of natural resources, to Release or threatened Release of any Hazardous Material or to the extent relating to exposure to Hazardous Materials, to health or safety matters.

 

Environmental Liability” means any liability, obligation, loss, claim, action, order or cost, contingent or otherwise (including any liability for damages, costs of medical monitoring, costs of environmental investigation, remediation or restoration, administrative oversight costs, consultants’ fees, fines, penalties or indemnities) directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law or permit, license or approval issued thereunder, (b) the generation, use, handling, recycling, transportation, storage, or treatment of any Hazardous Material, (c) exposure to any Hazardous Material, (d) the Release or threatened Release of any Hazardous Material or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

ERISA Affiliate” means (a) any entity, whether or not incorporated, that is under common control with any Loan Party within the meaning of Section 4001(a)(14) of ERISA; (b) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Code of which any Loan Party is a member; (c) any trade or business (whether or not incorporated) that is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code of which any Loan Party is a member; or (d) with respect to any Loan Party, any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Code of which that Loan Party, any corporation described in clause (b) above or any trade or business described in clause (c) above is a member.

 

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ERISA Event” means (a) any “reportable event,” as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); (e) the incurrence by a Loan Party or any ERISA Affiliate of any liability under Title IV of ERISA (other than premiums due and not delinquent under Section 4007 of ERISA) with respect to the termination of any Plan or by application of Section 4069 of ERISA with respect to any terminated plan; (f) the receipt by a Loan Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, or to an intention to terminate or to appoint a trustee to administer any plan or plans in respect of which such Loan Party or ERISA Affiliate would be deemed to be an employer under Section 4069 of ERISA; (g) the incurrence by a Loan Party or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Multiemployer Plan; (h) the receipt by a Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from a Loan Party or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability, or the failure of a Loan Party or any ERISA Affiliate to pay when due, after the expiration of any applicable grace period, any installment payment with respect to any Withdrawal Liability; (i) the withdrawal of a Loan Party or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; or (j) the failure to make a required contribution to any Plan that would result in the imposition of a lien or other encumbrance under Section 430 of the Code or Section 303 of ERISA, or the arising of such a lien or encumbrance

 

EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

Event of Default” has the meaning assigned to such term in Section 7.01.

 

Excess Cash Flow” means, for any period, an amount equal to the excess of:

 

(a) the sum, without duplication, of:

 

(i) Consolidated Net Income for such period;

 

(ii) an amount equal to the amount of all Non-Cash Charges to the extent deducted in arriving at such Consolidated Net Income;

 

(iii) decreases in Consolidated Working Capital and long-term account receivables for such period;

 

(iv) an amount equal to the aggregate net non-cash loss on dispositions by the Borrower and its Restricted Subsidiaries during such period (other than dispositions in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income, and

 

(v) any cash gains or other cash items of income that were excluded from the calculation of Consolidated Net Income for such period; less:

 

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(b) the sum, without duplication, of:

 

(i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income (including any amounts included in Consolidated Net Income of proceeds received or due from business interruption insurance or reimbursement of expenses and charges that are covered by indemnification and other reimbursement provisions in connection with any acquisition or other Investment or any disposition of any asset permitted under this Agreement to the extent such amounts are due but not received during such period) and cash charges included in clauses (a) through (i) of the definition of “Consolidated Net Income” (other than cash charges in respect of Transaction Costs paid on or about the Closing Date to the extent financed with the proceeds of Indebtedness incurred on the Closing Date or an equity investment on the Closing Date) that were excluded in the calculation of Consolidated Net Income;

 

(ii) without duplication of amounts deducted pursuant to clause (xii) below in prior fiscal years, the amount of capital expenditures made in cash or accrued during such period to the extent that such capital expenditures were financed with internally generated cash flow of the Borrower or its Restricted Subsidiaries (including, for this purpose, with the proceeds of Revolving Loans or Swing Loans);

 

(iii) the aggregate amount of all principal payments of Indebtedness (including (1) the principal component of payments in respect of Capitalized Leases, (2) the aggregate amount of scheduled amortization repayments on Indebtedness for borrowed money (including the Term Loans) and (3) the amount of any mandatory prepayment of Term Loans to the extent required due to a Disposition that resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase, but excluding all other prepayments of Term Loans, all prepayments of other Indebtedness using the Available Amount, all prepayments of other secured term Indebtedness to the extent made pursuant to the further proviso in Section 2.05(c) or the proviso to Section 2.05(d) and all prepayments of revolving loans (including Revolving Loans)) made during such period, other than (A) in respect of any revolving credit facility (other than the Revolving Commitments) except to the extent there is an equivalent permanent reduction in commitments thereunder and (B) to the extent financed with the proceeds of other long-term Indebtedness of the Borrower or its Restricted Subsidiaries;

 

(iv) an amount equal to the aggregate net non-cash gain on dispositions by the Borrower and its Restricted Subsidiaries during such period (other than dispositions in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income;

 

(v) increases in Consolidated Working Capital and long-term account receivables for such period;

 

(vi) cash payments by the Borrower and its Restricted Subsidiaries during such period in respect of long-term liabilities of the Borrower and its Restricted Subsidiaries other than in respect of Indebtedness;

 

(vii) without duplication of amounts deducted pursuant to clause (xii) below in prior fiscal years, the amount of Investments (other than (i) Investments in Permitted Investments and (ii) intercompany Investments among or between the Borrower and its Restricted Subsidiaries) and Permitted Acquisitions not prohibited by this Agreement to the extent that such Investments and Permitted Acquisitions were financed with internally generated cash flow of the Borrower and its Restricted Subsidiaries (other than in reliance on the Available Amount (other than the Starter Basket);

 

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(viii) the amount of dividends and other Restricted Payments (including the amount of Tax Distributions made by the Borrower during such period to the extent not deducted in arriving at Consolidated Net Income) paid in cash by the Borrower during such period, to the extent such dividends and other Restricted Payments were financed with internally generated cash flow of the Borrower and its Restricted Subsidiaries (other than in reliance on the Available Amount (other than the Starter Basket) and did not otherwise reduce Consolidated Net Income for such period;

 

(ix) the aggregate amount of expenditures actually made by the Borrower and its Restricted Subsidiaries in cash during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period;

 

(x) cash payments by the Borrower and its Restricted Subsidiaries during such period in respect of Non-Cash Charges that were added back to Excess Cash Flow pursuant to clause (a)(ii) above in any prior period;

 

(xi) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Borrower and its Restricted Subsidiaries during such period that are required to be made in connection with any prepayment of Indebtedness to the extent financed with internally generated cash flow of the Borrower and its Restricted Subsidiaries and which were not otherwise deducted in arriving at Consolidated Net Income for such period;

 

(xii) at the option of the Borrower, and without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the Borrower or any of its Restricted Subsidiaries pursuant to binding contracts, commitments or purchase orders (the “Contract Consideration”), in each case, entered into prior to or during such period relating to Permitted Acquisitions, other similar Investments or capital expenditures (including Capitalized Software Expenditures or other purchases of Intellectual Property) to be consummated or made during a subsequent period; provided, to the extent that the aggregate amount of internally generated cash actually utilized to finance such Permitted Acquisitions, other similar Investments or capital expenditures during such subsequent period is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such subsequent period;

 

(xiii) the amount of cash rent payments made in such period to the extent they exceed the amount of rent payments deducted in determining Consolidated Net Income for such period;

 

(xiv) the amount of taxes (including penalties and interest) paid in cash and/or tax reserves set aside or payable (without duplication) in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period; and

 

(xv) any cash losses that were excluded from the calculation of Consolidated Net Income for such period.

 

Excess Cash Flow Prepayment Amount” has the meaning assigned to such term in Section 2.11(d).

 

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Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time.

 

Excluded Assets” means (a) any fee-owned real property that is not Material Real Property and all leasehold (including ground lease) interests in real property (including requirements to deliver landlord lien waivers, estoppels and collateral access letters), (b) motor vehicles and other assets subject to certificates of title or ownership to the extent a Lien thereon cannot be perfected by the filing of a UCC financing statement, (c) letter of credit rights (except to the extent constituting supporting obligations (as defined under the UCC) in which a security interest can be perfected with the filing of a UCC-1 financing statement), (d) commercial tort claims with a value of less than $10,000,000 in the aggregate and commercial tort claims for which no complaint or counterclaim has been filed in a court of competent jurisdiction, (e) Equity Interests in any Person (other than the Borrower or any of its Wholly Owned Restricted Subsidiaries) to the extent (but only for so long as) the pledge thereof to the Administrative Agent is not permitted by the terms of such Person’s organizational or joint venture documents or would require the consent of one or more third parties (other than a Loan Party or a Subsidiary thereof) that has not been obtained (after giving effect to the applicable anti-assignment provisions of the UCC or other Requirements of Law), (f) voting Equity Interests constituting an amount greater than 65% of the total voting Equity Interests of any Subsidiary that is a CFC or a FSHCO and that is owned directly by a Borrower or Loan Guarantor, (g) any assets to the extent the creation or perfection of pledges thereof, or security interests therein, would reasonably be expected to result in material adverse tax consequences to Holdings, the Borrower or its Restricted Subsidiaries, as reasonably determined by the Borrower and the Administrative Agent, (h) any lease, license or other agreement or any property subject thereto, governmental approval or franchise with any Person if, to the extent and for so long as, the grant of a Lien thereon to secure the Secured Obligations constitutes a breach of or a default under, or creates a right of termination in favor of any party (other than any Loan Party or a Subsidiary thereof) to, such lease, license or other agreement, governmental approval or franchise (but only to the extent any of the foregoing is not rendered ineffective by, or is otherwise unenforceable under, the Uniform Commercial Code or any other Requirements of Law), (i) any asset subject to a Lien of the type permitted by Section 6.02(iv) (whether or not incurred pursuant to such Section) or a Lien permitted by Section 6.02(xi), in each case if, to the extent and for so long as the grant of a Lien thereon to secure the Secured Obligations constitutes a breach of or a default under, or creates a right of termination in favor of any party (other than any Loan Party or a Subsidiary thereof) to, any agreement pursuant to which such Lien has been created (but only to the extent any of the foregoing is not rendered ineffective by, or is otherwise unenforceable under, the Uniform Commercial Code or any other Requirements of Law), (j) any intent-to-use trademark applications filed in the United States Patent and Trademark Office, pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, prior to the accepted filing of a “Statement of Use” and issuance of a “Certificate of Registration” pursuant to Section 1(d) of the Lanham Act or an accepted filing of an “Amendment to Allege Use” whereby such intent-to-use trademark application is converted to a “use in commerce” application pursuant to Section 1(c) of the Lanham Act, (k) any asset if, to the extent and for so long as the grant of a Lien thereon to secure the Secured Obligations is prohibited by any Requirements of Law, rule or regulation, or agreements with any Governmental Authority (other than to the extent that any such prohibition would be rendered ineffective pursuant to the Uniform Commercial Code or any other applicable Requirements of Law) or which would require consent, approval, license or authorization from any Governmental Authority or regulatory authority, unless such consent, approval, license or authorization has been received, (l) margin stock (within the meaning of Regulation U of the Board of Governors, as in effect from time to time), (m) Equity Interests of any Unrestricted Subsidiary and any Restricted Subsidiary that is a captive insurance company or a not-for-profit entity and (n) any assets with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower (as agreed to in writing), the cost or other consequences of pledging such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

 

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Excluded Information” has the meaning assigned to such term in Section 2.11(a)(ii)(A).

 

Excluded Subsidiary” means (a) any Subsidiary that is not a Wholly Owned Subsidiary of Holdings, (b) any Subsidiary that is prohibited by applicable law, rule or regulation or contractual obligation existing on the Closing Date or, if later, the date such Subsidiary first becomes a Restricted Subsidiary (so long as such prohibition was not created in contemplation of the Transactions or such Person becoming a Restricted Subsidiary), from guaranteeing the Secured Obligations or which would require any governmental or regulatory consent, approval, license or authorization to do so, unless such consent, approval, license or authorization has been obtained, (c) any Foreign Subsidiary that is a CFC, (d) any Domestic Subsidiary (x) that is a Subsidiary of a Foreign Subsidiary that is a CFC, (y) that is a FSHCO or (z) substantially all of whose assets consist of capital stock of one or more Foreign Subsidiaries that are CFCs or FSHCOs, (e) any Immaterial Subsidiary, (f) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower (as agreed in writing), the burden or cost or other consequences (including any adverse tax consequences) of providing the Guarantee under the Guarantee Agreement shall be excessive in view of the benefits to be obtained by the Lenders therefrom, (g) any other Subsidiary excused from becoming a Loan Party pursuant to the last paragraph of the definition of the term “Collateral and Guarantee Requirement”, (h) any not-for profit Subsidiaries or captive insurance companies, (i) any special purpose securitization vehicle (or similar entity) to the extent that the related obligation is otherwise permitted hereunder and (j) each Unrestricted Subsidiary; provided, that any Immaterial Subsidiary that is a signatory to the Collateral Agreement and the Guarantee Agreement shall be deemed not to be an Excluded Subsidiary for purposes of this Agreement and the other Loan Documents; provided further that the Borrower may at any time and in its sole discretion, upon written notice to the Administrative Agent (and, in the case of a Foreign Subsidiary, with the prior written consent of the Administrative Agent), deem that any Restricted Subsidiary shall not be an Excluded Subsidiary for purposes of this Agreement and the other Loan Documents. Any Subsidiary that fails to meet the foregoing requirements shall continue to be deemed an “Excluded Subsidiary” hereunder until the date that is thirty (30) days following the date on which any Authorized Officer of Holdings or the Borrower obtains knowledge of such failure (or such later date as the Administrative Agent shall reasonably agree).

 

Excluded Swap Obligation” means, with respect to any Loan Guarantor at any time, any Secured Swap Obligation under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act, if, and to the extent that, all or a portion of the guarantee of such Loan Guarantor of, or the grant by such Loan Guarantor of a security interest to secure, such Secured Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Guarantor’s failure for any reason to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act (determined after giving effect to any “Keepwell”, support or other agreement for the benefit of such Loan Guarantor, at the time such guarantee or grant of a security interest becomes effective with respect to such related Secured Swap Obligation. If a Secured Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Secured Swap Obligation that is attributable to swaps that are or would be rendered illegal due to such guarantee or security interest.

 

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Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, (a) Taxes imposed on (or measured by) such recipient’s net income (however denominated) and franchise Taxes imposed on it (in lieu of net income Taxes) by a jurisdiction (i) as a result of such recipient being organized or having its principal office or, in the case of any Lender, its applicable lending office in such jurisdiction, or (ii) as a result of any other present or former connection between such recipient and the jurisdiction imposing such Tax (other than a connection arising solely from such recipient (x) having executed, delivered, become a party to, performed its obligations or received payments under, received or perfected a security interest under or enforced any Loan Documents or engaged in any other transaction pursuant to this Agreement or (y) with respect to any Taxes imposed as a result of any Loan Party’s connection with the taxing jurisdiction, having sold or assigned an interest in any Loan or Loan Documents), (b) any branch profits tax imposed under Section 884(a) of the Code, or any similar Tax, imposed by any jurisdiction described in clause (a) above, (c) any withholding Tax imposed pursuant to FATCA, (d) any withholding Tax that is attributable to a Lender’s failure to comply with Section 2.17(e) and (e) except in the case of an assignee pursuant to a request by the Borrower under Section 2.19, any U.S. federal withholding Taxes imposed on amounts payable to a Lender pursuant to a Requirement of Law in effect at the time such Lender becomes a party hereto (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts with respect to such withholding Tax under Section 2.17(a).

 

fair market value” means, with respect to any asset or group of assets on any date of determination, the value of the consideration obtainable in a sale of such asset or group of assets at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time taking into account the nature and characteristics of such assets, as reasonably determined by the Borrower in good faith (which determination shall be conclusive absent manifest error).

 

FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable thereto and not materially more onerous to comply with), any current or future Treasury regulations thereunder or other official administrative interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code as of the date of this Agreement (or any amended or successor version described above) and any law, regulation, rule, promulgation, guidance notes, practices or official agreement implementing intergovernmental agreements implementing the foregoing.

 

FCPA” means the U.S. Foreign Corrupt Practices Act of 1977.

 

Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. If the Federal Funds Effective Rate cannot reasonably be determined in accordance with the foregoing clauses, then the Administrative Agent may in its reasonable discretion, and acting in consultation with the Required Lenders and the Borrower, select an alternative method for determining the Federal Funds Effective Rate.

 

Fee Letter” means that certain Fee Letter by and among the Borrower, the Joint Lead Arrangers and the Administrative Agent, dated August 12, 2019, as may be amended, restated, supplemented or otherwise modified from time to time.

 

Financial Officer” means the chief financial officer, principal accounting officer, treasurer or corporate controller of the Borrower.

 

Financial Performance Covenant” means the covenant set forth in Section 6.11.

 

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Financing Transactions” means (a) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, (b) the borrowing of Loans hereunder and the use of the proceeds thereof and (c) the issuance, amendment or extension of Letters of Credit hereunder and the use of proceeds thereof.

 

FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

 

First Lien Agent” means Macquarie Capital Funding LLC, as administrative agent and collateral agent under this Agreement or any permitted successor thereto.

 

First Lien Indebtedness” means any Indebtedness of the Borrower and its Restricted Subsidiaries that is secured by a Lien on any asset of the Borrower or any of the Restricted Subsidiaries (other than a Lien that is junior to the Lien of the Collateral Agent pursuant to the Second Lien Intercreditor Agreement or another intercreditor or other subordination agreement that is reasonably satisfactory to the Administrative Agent).

 

First Lien Intercreditor Agreement” means a customary first lien intercreditor agreement among the Administrative Agent and one or more Senior Representatives for holders of Indebtedness permitted by this Agreement to be secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Loan Document Obligations, in form and substance reasonably acceptable to the Administrative Agent and the Borrower, which form shall be posted to the Lenders not less than five (5) Business Days before execution thereof and, if the Required Lenders shall not have objected to such form within three (3) Business Days after posting, then the Required Lenders shall be deemed to have agreed to the Administrative Agent’s entry into such First Lien Intercreditor Agreement and to have consented to the terms thereof.

 

First Lien Net Leverage Ratio” means, as of any date of determination, the ratio, on a Pro Forma Basis, of (a) Consolidated First Lien Indebtedness as of such date to (b) Consolidated EBITDA for the most recently completed Test Period.

 

Fixed Amounts” has the meaning assigned to such term in Section 1.07(b).

 

Fixed Incremental Amount” means an amount equal to the greater of (x) $73,000,000 (or, if the Long Engineering Acquisition has not been consummated within ten (10) Business Days after the Closing Date, $69,400,000) and (ii) 100% of Consolidated EBITDA for the most recently completed Test Period.

 

Flood Insurance Laws” means, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (v) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.

 

Foreign Lender” means a Lender that is not a United States person (as defined in Section 7701(a)(30) of the Code).

 

Foreign Prepayment Event” has the meaning assigned to such term in Section 2.11(g).

 

Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States, any state thereof or the District of Columbia.

 

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FSHCO” means any direct or indirect Domestic Subsidiary of the Borrower if substantially all of its assets (directly or through one or more disregarded entities) consists of Equity Interests (or any debt or other instrument treated as equity for U.S. federal income tax purposes) of one or more CFCs.

 

Funded Debt” means all Indebtedness of the Borrower and its Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans.

 

GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time; provided, however, that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith; provided, further, that if such an amendment is requested by the Borrower or the Required Lenders, then the Borrower and the Administrative Agent shall negotiate in good faith to enter into an amendment of the relevant affected provisions (without the payment of any amendment or similar fee to the Lenders) to preserve the original intent thereof in light of such change in GAAP or the application thereof. Notwithstanding any other provision contained herein, (a) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under FASB Accounting Standards Codification 825-Financial Instruments, or any successor thereto (including pursuant to the FASB Accounting Standards Codification), to value any Indebtedness at “fair value,” as defined therein and (b) the amount of any Indebtedness under GAAP with respect to Capital Lease Obligations shall be determined in accordance with the definition of Capital Lease Obligations.

 

Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, Governmental Authorities.

 

Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether federal, state, provincial, territorial, local or otherwise, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra national bodies such as the European Union or the European Central Bank).

 

GSO Entity” means GSO Capital Partners LP and each of its Affiliates and funds and accounts managed or advised by GSO Capital Partners LP or any such Affiliates.

 

GSO Entity Cap” has the meaning assigned to such term in Section 9.04(h).

 

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Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligations of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligations or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligations of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or other obligations; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Closing Date or entered into after the Closing Date in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined in good faith by a Financial Officer. The term “Guarantee” as a verb has a corresponding meaning.

 

Guarantee Agreement” means the guarantee agreement among the Loan Parties and the Administrative Agent, substantially in the form of Exhibit B.

 

Hazardous Materials” means all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum by-products or distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other materials, wastes, chemicals, pollutants, contaminants or harmful or deleterious substances of any nature and in any form regulated pursuant to any Environmental Law.

 

Holdings” has the meaning given to such term in the preliminary statements hereto.

 

Holdings LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of Atlas TC Holdings LLC, dated as of February 14, 2020.

 

ICE LIBOR” has the meaning assigned to such term in the definition of “Alternate Base Rate.”

 

Identified Participating Lenders” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(3).

 

Identified Qualifying Lenders” has the meaning specified in Section 2.11(a)(ii)(D)(3).

 

Immaterial Subsidiary” means any Subsidiary other than a Material Subsidiary.

 

Impacted Loans” has the meaning assigned to such term in Section 2.14(a)(ii).

 

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Incremental Cap” means, as of any date of determination, the sum of (I) (a) the greater of (x) $73,000,000 (or, if the Long Engineering Acquisition has not been consummated within ten (10) Business Days after the Closing Date, $69,400,000) and (y) 100% of Consolidated EBITDA for the most recently completed Test Period plus (b) (i) the aggregate principal amount of all Term Loans voluntarily prepaid pursuant to Section 2.11(a)(i), (ii) the aggregate amount of all Term Loans repurchased and prepaid pursuant to Section 2.11(a)(ii) or Section 9.04(f) and (iii) all reductions of Revolving Commitments pursuant to Section 2.08(b), in each case prior to such date (other than, in each case, prepayments, repurchases and commitment reductions (x) effected with the proceeds of the incurrence of long-term Indebtedness or the proceeds of any Cure Amounts and (y) in respect of Incremental Facilities that are incurred pursuant to clause (II) below), minus (c) the aggregate amount of all Incremental Facilities that was incurred in reliance on the foregoing clauses (I)(a) and/or (I)(b) plus (II) the maximum aggregate principal amount that can be incurred without causing the First Lien Net Leverage Ratio, after giving effect to the incurrence of such Incremental Facility (which shall assume that the full amount of any Incremental Revolving Commitment Increase being established at such time is fully drawn and with all proceeds from any Incremental Facility not being netted from Indebtedness in calculating the numerator of such First Lien Net Leverage Ratio) and the use of proceeds thereof, on a Pro Forma Basis, to exceed (x) 3.90 to 1.00 for the most recent Test Period ended (subject to Section 1.06 to the extent applicable) or (y) if incurred in connection with a Permitted Acquisition or other similar permitted Investment, the First Lien Net Leverage Ratio immediately prior to giving effect to such incurrence and any transactions occurring in connection therewith. In calculating the Incremental Cap, the Borrower may elect to use the amounts permitted under clause (II) of the preceding sentence before using clause (I) of the preceding sentence, and if both amounts are available and the Borrower does not make an election, the Borrower will be deemed to have utilized amounts permitted under clause (II) (and any amounts concurrently incurred under clause (I) shall not be included in the calculation of any amounts permitted to be incurred under clause (II)). The Borrower may, from time to time, reclassify any portion of any Incremental Facility incurred in reliance on clause (I) above as being incurred under clause (II) above if, at such time of reclassification, the Borrower would meet the applicable First Lien Net Leverage Ratio on a Pro Forma Basis in such clause (II) above (for purposes of clarity, with any such reclassification having the effect of increasing the Borrower’s ability to incur Indebtedness under clause (I) above on and after the date of such reclassification by the amount of Indebtedness so reclassified).

 

Incremental Facility Amendment” has the meaning assigned to such term in Section 2.20(e).

 

Incremental Facility” has the meaning assigned to such term in Section 2.20(a).

 

Incremental Revolving Commitment Increase” has the meaning assigned to such term in Section 2.20(a).

 

Incremental Term Loan” has the meaning assigned to such term in Section 2.20(a).

 

Incurrence Based Amounts” has the meaning assigned to such term in Section 1.07(b).

 

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Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (x) trade accounts payable in the ordinary course of business, (y) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid after being due and payable and (z) expenses accrued in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty (or similar instruments) and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; provided that the term “Indebtedness” shall not include (i) deferred or prepaid revenue, (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty, indemnity or other unperformed obligations of the seller, (iii) any obligations attributable to the exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, (iv) Indebtedness of any Person that is a direct or indirect parent of Holdings appearing on the balance sheet of Holdings or the Borrower, or solely by reason of push down accounting under GAAP, in each case, so long as none of Holdings, the Borrower or any Restricted Subsidiary thereof shall have any liability in respect of any such Indebtedness, (v) any non-compete or consulting obligations incurred in connection with a Permitted Acquisition or any similar Investment permitted hereunder, (vi) any reimbursement obligations under pre-paid contracts entered into with clients in the ordinary course of business and (vii) for the avoidance of doubt, any Qualified Equity Interests issued by Holdings or the Borrower. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the fair market value of the property encumbered thereby as determined by such Person in good faith. The amount of any Indebtedness that is issued at a discount to its initial principal amount shall be calculated based on the initial stated principal amount thereof without giving effect to such discount.

 

Indemnified Taxes” means (a) all Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in preceding clause (a), Other Taxes.

 

Indemnitee” has the meaning assigned to such term in Section 9.03(b).

 

Information” has the meaning assigned to such term in Section 9.12(a).

 

Initial Borrower” has the meaning given to such term in the preliminary statements hereto.

 

Initial Term Loans” means the Loans made pursuant to Section 2.01(a).

 

Intellectual Property” has the meaning assigned to such term in the Collateral Agreement.

 

Intellectual Property Security Agreement” means a short-form security agreement, suitable for filing with the United States Patent and Trademark Office or the United States Copyright Office (as applicable), with respect to any Intellectual Property that is registered, issued or applied for in the United States and that constitute Collateral.

 

Intercompany Note” means a promissory note substantially in the form of Exhibit I.

 

Intercreditor Agreement” means the First Lien Intercreditor Agreement or the Second Lien Intercreditor Agreement, as the context may require, and “Intercreditor Agreements” means both of them.

 

Interest Coverage Ratio” means, for any period, the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest Expense for such period.

 

Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing or Term Borrowing in accordance with Section 2.07, substantially in the form of Exhibit G or any other form reasonably approved by the Administrative Agent.

 

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Interest Payment Date” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

 

Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date such Borrowing is disbursed or converted to or continued as a Eurodollar Borrowing and ending on the date that is one (1), two (2), three (3) or six (6) months thereafter as selected by the Borrower in its Borrowing Request (or, if agreed to by each Lender participating therein, twelve (12) months or such other period less than one (1) month); provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month at the end of such Interest Period and (c) no Interest Period shall extend beyond (i) in the case of Term Loans, the Term Maturity Date and (ii) in the case of Revolving Loans, the Revolving Maturity Date. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness or other obligations of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. The amount, as of any date of determination, of (a) any Investment in the form of a loan or an advance shall be the principal amount thereof outstanding on such date, minus any cash payments actually received by such investor representing principal or interest in respect of such Investment (to the extent any such payment to be deducted does not exceed the remaining principal amount of such Investment and without duplication of amounts increasing the Available Amount), but without any adjustment for write-downs or write-offs (including as a result of forgiveness of any portion thereof) with respect to such loan or advance after the date thereof, (b) any Investment in the form of a Guarantee shall be equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof, as reasonably determined in good faith by a Financial Officer, (c) any Investment in the form of a transfer of Equity Interests or other non-cash property by the investor to the investee, including any such transfer in the form of a capital contribution, shall be the fair market value (as determined in good faith by a Financial Officer) of such Equity Interests or other property as of the time of the transfer, minus any payments actually received by such investor representing a return of capital of, or dividends or other distributions in respect of, such Investment (to the extent such payments do not exceed, in the aggregate, the original amount of such Investment and without duplication of amounts increasing the Available Amount), but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment, and (d) any Investment (other than any Investment referred to in clause (a), (b) or (c) above) by the specified Person in the form of a purchase or other acquisition for value of any Equity Interests, evidences of Indebtedness or other securities of any other Person shall be the original cost of such Investment (including any Indebtedness assumed in connection therewith), plus (i) the cost of all additions to the extent such additions represent an Investment thereto and minus (ii) the amount of any portion of such Investment that has been repaid to the investor in cash as a repayment of principal or a return of capital, and of any cash payments actually received by such investor representing interest, dividends or other distributions in respect of such Investment (to the extent the amounts referred to in clause (ii) do not, in the aggregate, exceed the original cost of such Investment plus the costs of additions thereto and without duplication of amounts increasing the Available Amount), but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment. For purposes of Section 6.04, if an Investment involves the acquisition of more than one Person, the amount of such Investment shall be allocated among the acquired Persons in accordance with GAAP; provided that pending the final determination of the amounts to be so allocated in accordance with GAAP, such allocation shall be as reasonably determined by a Financial Officer.

 

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ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be reasonably acceptable to the applicable Issuing Bank and in effect at the time of issuance of such Letter of Credit).

 

Issuing Bank” means (a) each of (i) Macquarie Capital Funding LLC or its Affiliates or designees and (ii) Natixis, New York Branch or its Affiliates or designees and (b) each Revolving Lender that shall have become an Issuing Bank hereunder as provided in Section 2.05(k) (other than any Person that shall have ceased to be an Issuing Bank as provided in Section 2.05(l)), each in its capacity as an issuer of Letters of Credit hereunder; provided that neither Macquarie Capital Funding LLC, Natixis, New York Branch nor any of their respective Affiliates or designees shall be required to issue commercial or trade Letters of Credit. Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates or designees of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate or designee with respect to Letters of Credit issued by such Affiliate or designee. In the event that there is more than one Issuing Bank at any time, references herein and in the other Loan Documents to the Issuing Bank shall be deemed to refer to the Issuing Bank in respect of the applicable Letter of Credit or to all Issuing Banks, as the context requires.

 

Issuing Bank Cap” has the meaning assigned to such term in the definition of Letter of Credit Sublimit.

 

Joint Bookrunners” means Macquarie Capital (USA) Inc. and Natixis, New York Branch in their respective capacities as joint bookrunners for the credit facilities hereunder as of the Closing Date.

 

Joint Lead Arrangers” means Macquarie Capital (USA) Inc., Natixis, New York Branch in their capacities as joint lead arrangers for the credit facilities hereunder as of the Closing Date.

 

Junior Financing” means (a) any Indebtedness that is expressly subordinated in right of payment to the Loan Document Obligations, (b) any Indebtedness that is secured on a junior basis to the Liens securing the Secured Obligations, (c) any unsecured Indebtedness that is incurred pursuant to Section 6.01(ix), (xv) or (xx) and (d) any Permitted Refinancing in respect of the foregoing.

 

Latest Maturity Date” means, at any date of determination, the latest maturity or expiration date applicable to any Loan or Commitment hereunder at such time, including the latest maturity or expiration date of any Incremental Facility, any Other Term Loan, any Other Term Commitment, any Other Revolving Loan or any Other Revolving Commitment, in each case as extended in accordance with this Agreement from time to time.

 

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LC Disbursement” means an honoring of a drawing by an Issuing Bank pursuant to a Letter of Credit.

 

LC Exposure” means, at any time, the sum of (a) the aggregate amount of all Letters of Credit that remains available for drawing at such time and (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.13 or 3.14 of the ISP or for any Letter of Credit issued with the exclusion of Article 36 of the UCP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

LCT Election” has the meaning assigned to such term in Section 1.06.

 

LCT Test Date” has the meaning assigned to such term in Section 1.06.

 

Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, an Incremental Facility Amendment, a Loan Modification Agreement or a Refinancing Amendment, in each case, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, “Lenders” includes the Swing Line Lender.

 

Letter of Credit” means any letter of credit issued pursuant to this Agreement other than any such letter of credit that shall have ceased to be a “Letter of Credit” outstanding hereunder pursuant to Section 9.05.

 

Letter of Credit Request” has the meaning assigned to such term in Section 2.05(b).

 

Letter of Credit Sublimit” means an amount equal to $5,000,000, (x) up to $3,000,000 of which Macquarie Capital Funding LLC, in its capacity as an Issuing Bank, has agreed to provide as of the Closing Date, subject to any adjustment or reduction pursuant to the terms and conditions hereof, (y) up to $2,000,000 of which Natixis, New York Branch, in its capacity as an Issuing Bank, has agreed to provide as of the Closing Date, subject to any adjustment or reduction pursuant to the terms and conditions hereof, and (z) in respect of any Revolving Lender that shall have become an Issuing Bank hereunder after the Closing Date pursuant to Section 2.05(k), that amount of the Letter of Credit Sublimit at such time that such Issuing Bank has agreed to provide, subject to any adjustment or reduction pursuant to the terms and conditions hereof (each of the amounts in preceding clauses (x), (y) and (z) as to any Issuing Bank is referred to herein as such Issuing Bank’s “Issuing Bank Cap”. The Letter of Credit Sublimit is part of and not in addition to the aggregate Revolving Commitments.

 

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LIBO Rate” means for any Interest Period with respect to a Eurodollar Borrowing, the rate per annum equal to the ICE Benchmark Administration LIBOR or the successor thereto if the ICE Benchmark Administration is no longer making a LIBO rate available, as published by Bloomberg (or such other commercially available source providing quotations of ICE LIBOR as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period, for dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If for any reason the Administrative Agent cannot determine such offered rate by the ICE Benchmark Administration (or any successor administrator of LIBOR rates), the Administrative Agent may, in its discretion, select a replacement index based on the arithmetic mean of the quotations, if any, of the interbank offered rate by first class banks in London or New York for deposits in comparable amounts and maturities. Each calculation by the Administrative Agent of the LIBO Rate shall be conclusive and binding for all purposes, absent manifest error. The provisions of this definition are subject to clauses (b) through (e) of Section 2.14.

 

Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

 

Limited Condition Transaction” means any Permitted Acquisition or any similar Investment permitted hereunder by the Borrower or one or more of its Restricted Subsidiaries, in each case, whose consummation is not conditioned on the availability of, or on obtaining, third-party financing.

 

Loan Document Obligations” means (a) the due and punctual payment in cash by the Borrower of (i) the principal of, premium, if any, and interest at the applicable rate or rates provided in this Agreement (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and obligations to provide cash collateral, and (iii) all other monetary obligations of the Borrower under or pursuant to this Agreement and each of the other Loan Documents, including obligations to pay fees, expenses, reimbursement obligations and indemnification obligations and obligations to provide cash collateral, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual payment in cash and performance of all other obligations of the Borrower under or pursuant to each of the Loan Documents and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to this Agreement and each of the other Loan Documents (including interest and other monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding).

 

Loan Documents” means this Agreement, any Refinancing Amendment, any Loan Modification Agreement, any Incremental Facility Amendment, the Guarantee Agreement, the Collateral Agreement, the other Security Documents, the First Lien Intercreditor Agreement (if applicable), the Second Lien Intercreditor Agreement (if applicable), and, except for purposes of Section 9.02, the Fee Letter and any Note delivered pursuant to Section 2.09(e).

 

Loan Guarantors” means Holdings and the Subsidiary Loan Parties.

 

Loan Modification Agreement” means a loan modification agreement, in form reasonably satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent and one or more Accepting Lenders, effecting one or more Permitted Amendments and such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.24.

 

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Loan Modification Offer” has the meaning specified in Section 2.24(a).

 

Loan Parties” means Holdings, the Borrower and the Subsidiary Loan Parties.

 

Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

Long Engineering Acquisition” means the acquisition by the Borrower or a Subsidiary Guarantor of all of the outstanding Equity Interests of Long Engineering, Inc. pursuant to the terms and conditions of the Equity Purchase Agreement, dated as of November 20, 2019, by and among Atlas Technical Consultants, LLC, Long Engineering, Inc., Long Engineering Holdings, Inc. and the other parties thereto.

 

Majority in Interest”, when used in reference to Lenders of any Class, means, at any time, (a) in the case of the Revolving Lenders, Lenders having Revolving Exposures and unused Revolving Commitments representing more than 50% of the sum of the aggregate Revolving Exposures and the unused aggregate Revolving Commitments at such time and (b) in the case of the Term Lenders of any Class, Lenders holding outstanding Term Loans of such Class representing more than 50% of all Term Loans of such Class outstanding at such time; provided that (i) the total outstanding Term Loans held by the Borrower or any Affiliate thereof and (ii) whenever there are one or more Defaulting Lenders, the total outstanding Term Loans and Revolving Exposures of, and the unused Revolving Commitments of, each Defaulting Lender, in each case, shall be excluded for purposes of making a determination of the Majority in Interest.

 

Management Investors” means the members of the Board of Directors, officers and employees of Holdings, the Borrower and/or its Subsidiaries who are (directly or indirectly through one or more investment vehicles) investors in Holdings (or any direct or indirect parent thereof).

 

Master Agreement” has the meaning assigned to such term in the definition of “Swap Agreement.”

 

Material Adverse Effect” means (i) on the Closing Date, a “Material Adverse Effect” (as defined in the Acquisition Agreement (as in effect on August 12, 2019)) and (ii) at any time thereafter, a material adverse effect on (a) the business, financial condition or results of operations, in each case, of Holdings, the Borrower and its Restricted Subsidiaries (taken as a whole), (b) the ability of the Borrower and the Loan Guarantors (taken as a whole) to perform their payment obligations under the Loan Documents or (c) the material rights and material remedies of the Administrative Agent, the Collateral Agent and the Lenders (taken as a whole) under the applicable Loan Documents.

 

Material Indebtedness” means Indebtedness for borrowed money (other than the Loan Document Obligations), Capital Lease Obligations, unreimbursed obligations for letter of credit drawings, financial guarantees and similar instruments (other than ordinary course of business contingent reimbursement obligations) or obligations in respect of one or more Swap Agreements, of any one or more of Holdings, the Borrower and its Restricted Subsidiaries in an aggregate principal amount of $10,000,000 or more. For purposes of determining Material Indebtedness, the “principal amount” of the obligations in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings, the Borrower or such Restricted Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

 

Material Non-Public Information” means (a) if Holdings or the Borrower is a public reporting company, material non-public information with respect to Holdings, the Borrower or its Subsidiaries, or the respective securities of any of the foregoing for purposes of United States Federal and state securities laws, and (b) if Holdings or the Borrower is not a public reporting company, information that is (i) of the type that would not be publicly available if Holdings or the Borrower were a public reporting company and (ii) material with respect to Holdings, the Borrower and its Subsidiaries or any of their respective securities for purposes of United States Federal and state securities laws.

 

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Material Real Property” means real property (including fixtures) located in the United States and fee owned by any Loan Party with a fair market value, as reasonably determined by the Borrower in good faith, greater than or equal to $2,500,000.

 

Material Subsidiary” means (i) each Wholly Owned Restricted Subsidiary that, as of the last day of the fiscal quarter of the Borrower most recently ended, had revenues or total assets for such fiscal quarter in excess of 2.5 % of the consolidated revenues or total assets, as applicable, of the Borrower and its Restricted Subsidiaries for such quarter; provided, in the event that the Immaterial Subsidiaries, taken together, had as of the last day of the fiscal quarter of the Borrower most recently ended revenues or total assets in excess of 5.0 % of the consolidated revenues or total assets, as applicable, of the Borrower and its Restricted Subsidiaries for such fiscal quarter, the Borrower shall designate at its sole discretion one or more Immaterial Subsidiaries to be a Material Subsidiary as may be necessary such that the foregoing 5.0% limit shall not be exceeded, and any such Subsidiary shall thereafter be deemed to be an Material Subsidiary hereunder.

 

Maximum Rate” has the meaning assigned to such term in Section 9.16.

 

Merger” has the meaning given to such term in the preliminary statements hereto.

 

Model” means the model delivered to the Administrative Agent and the Lenders on February 10, 2020 (together with any updates or modifications thereto reasonably agreed between the Borrower and the Administrative Agent and/or necessary to reflect any exercise of “market flex” as permitted under the Fee Letter).

 

Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

 

Mortgage” means a mortgage, deed of trust, assignment of leases and rents or other security document granting a Lien on any Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Secured Obligations, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent and the Borrower.

 

Mortgaged Property” means each parcel of Material Real Property with respect to which a Mortgage is granted pursuant to the Collateral and Guarantee Requirement, Section 5.11, Section 5.12 or Section 5.14 (if any).

 

Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be an obligation to contribute of) a Loan Party or an ERISA Affiliate, and each such plan for the five-year period immediately following the latest date on which a Loan Party or an ERISA Affiliate contributed to or had an obligation to contribute to such plan .

 

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Net Proceeds” means, with respect to any event, (a) the proceeds received in respect of such event in cash or Permitted Investments, including (i) any cash or Permitted Investments received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment or earn-out, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds that are actually received, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments that are actually received, minus (b) the sum of (i) all fees and out-of-pocket expenses paid by Holdings, the Borrower and its Restricted Subsidiaries in connection with such event (including attorney’s fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, underwriting discounts and commissions, other customary expenses and brokerage, consultant, accountant and other customary fees), (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), (x) the amount of all payments that are permitted hereunder and are made by Holdings, the Borrower and its Restricted Subsidiaries as a result of such event to repay Indebtedness permitted to be incurred hereunder (other than the Loans and any other secured Indebtedness that is subject to an Intercreditor Agreement) secured by such asset and otherwise subject to mandatory prepayment as a result of such event, (y) the pro rata portion of net cash proceeds thereof (calculated without regard to this clause (y)) attributable to minority interests and not available for distribution to or for the account of Holdings, the Borrower or its Restricted Subsidiaries as a result thereof and (z) the amount of any liabilities directly associated with such asset and retained by the Borrower or any Restricted Subsidiary and (iii) the amount of all taxes paid (or reasonably estimated to be payable), the amount of Tax Distributions, dividends and other restricted payments that Holdings, the Borrower and/or the Restricted Subsidiaries may make pursuant to Section 6.07(a)(vi)(A) or (B) as a result of such event, and the amount of any reserves established by Holdings, the Borrower and its Restricted Subsidiaries to fund contingent liabilities reasonably estimated to be payable, that are directly attributable to such event, provided that any reduction at any time in the amount of any such reserves (other than as a result of payments made in respect thereof) shall be deemed to constitute the receipt by the Borrower at such time of Net Proceeds in the amount of such reduction.

 

New Borrower” has the meaning given to such term in the preliminary statements hereto.

 

New Holdings Preferred Equity” means the single class of Series A senior preferred units of Holdings as constituted on the Closing Date as set forth in the Holdings LLC Agreement (as in effect on the Closing Date).

 

Non-Accepting Lender” has the meaning assigned to such term in Section 2.24(c).

 

Non-Cash Charges” means (a) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets (including goodwill), long-lived assets and Investments in debt and equity securities or as a result of a change in law or regulation, in each case pursuant to GAAP, and the amortization of intangibles pursuant to GAAP (which, without limiting the foregoing, shall include any impairment charges resulting from the application of FASB Statements No. 142 and 144 and the amortization of intangibles arising pursuant to No. 141), (b) all losses from Investments recorded using the equity method, (c) all Non-Cash Compensation Expenses, (d) the non-cash impact of acquisition method accounting, (e) depreciation and amortization (including, without limitation, as they relate to acquisition accounting, amortization of deferred financing fees or costs, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pension and other post-employment benefits) and (f) other non-cash charges (including non-cash charges related to deferred rent) (provided, in each case, that if any non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period, and excluding amortization of a prepaid cash item that was paid in a prior period).

 

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Non-Cash Compensation Expense” means any non-cash expenses and costs that result from the issuance of stock-based awards, partnership interest-based awards and similar incentive based compensation awards or arrangements.

 

Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(c).

 

Non-Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person other than a Wholly Owned Subsidiary.

 

Not Otherwise Applied” means, with reference to the Available Amount or pursuant to Section 6.01(xix), as applicable, that such amount was not previously applied pursuant to Sections 6.01(xix), 6.04(m)(B), 6.07(a)(vii)(B) and/or 6.07(b)(iv)(B).

 

Note” means a promissory note of the Borrower, in substantially the form of Exhibit R, payable to a Lender or its registered assigns (or, if requested by a Lender, to the order of such Lender) in any facility hereunder in a principal amount equal to the principal amount of the Revolving Commitment, Term Loans or Swing Line Sublimit, as applicable, of such Lender.

 

Notice of Swing Loan Refunding” has the meaning provided in Section 2.04(b).

 

Offered Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(1).

 

Offered Discount” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(1).

 

Organizational Documents” means, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person.

 

Other Revolving Commitments” means one or more Classes of Revolving Commitments hereunder or extended Revolving Commitments that result from a Refinancing Amendment or a Loan Modification Agreement.

 

Other Revolving Loans” means the Revolving Loans made pursuant to any Other Revolving Commitment or a Loan Modification Agreement.

 

Other Taxes” means any and all present or future recording, stamp, documentary, excise, transfer, sales, property or similar Taxes, charges or levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document, except any such Taxes that are described in (a)(ii) of the definition of Excluded Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19(b)).

 

Other Term Commitments” means one or more Classes of term loan commitments hereunder that result from a Refinancing Amendment or a Loan Modification Agreement.

 

Other Term Loans” means one or more Classes of Term Loans that result from a Refinancing Amendment or a Loan Modification Agreement.

 

Participant” has the meaning assigned to such term in Section 9.04(c)(i).

 

Participant Register” has the meaning assigned to such term in Section 9.04(c)(ii).

 

Participating Lender” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(2).

 

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PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

Perfection Certificate” means a certificate substantially in the form of Exhibit C.

 

Permitted Acquisition” means (i) the Long Engineering Acquisition, to the extent consummated within ten (10) Business Days after the Closing Date, and (ii) the purchase or other acquisition, by merger, consolidation or otherwise, by the Borrower or any of its Restricted Subsidiaries of at least a majority of the Equity Interests in, or all or substantially all the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of), any Person; provided that, in each case, (a) in the case of any purchase or other acquisition of Equity Interests in a Person, (i) such Person, upon the consummation of such purchase or acquisition, will be a Restricted Subsidiary (including as a result of a merger or consolidation between any Restricted Subsidiary and such Person), or (ii) such Person is merged into or consolidated with the Borrower or a Restricted Subsidiary and the Borrower (in the case of any merger or consolidation involving it) or such Restricted Subsidiary (in all other cases) is the surviving entity of such merger or consolidation, (b) the business of such Person, or such assets, as the case may be, constitute a business permitted by Section 6.03(b), (c) with respect to each such purchase or other acquisition, all actions required to be taken with respect to such newly created or acquired Restricted Subsidiary (including each subsidiary thereof) or assets in order to satisfy the requirements set forth in clauses (a), (b), (c) and (d) of the definition of the term “Collateral and Guarantee Requirement” to the extent applicable shall have been taken (or arrangements for the taking of such actions after the consummation of the Permitted Acquisition shall have been made that are reasonably satisfactory to the Administrative Agent) (unless such newly created or acquired Subsidiary is designated as an Unrestricted Subsidiary pursuant to Section 5.13 or is otherwise an Excluded Subsidiary), (d) (i) subject to Section 1.06, no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) to the extent that Section 1.06 is applicable, immediately before and immediately after the consummation of any such purchase or acquisition, no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing and (e) subject to Section 1.06, the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant on a Pro Forma Basis for the most recently ended Test Period (although this clause (e) shall not apply to the Long Engineering Acquisition to the extent consummated within ten (10) Business Days after the Closing Date.)

 

Permitted Amendment” means an amendment to this Agreement and, if applicable the other Loan Documents, effected in connection with a Loan Modification Offer pursuant to Section 2.24, providing for an extension of a maturity date applicable to the Loans and/or Commitments of the Accepting Lenders and, in connection therewith, (a) a change in the Applicable Rate with respect to the Loans and/or Commitments of the Accepting Lenders and/or (b) a change in the fees payable to, or the inclusion of new fees to be payable to, the Accepting Lenders and/or (c) a change in terms and conditions (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the Latest Maturity Date then in effect) that reflect terms and conditions at the time of such amendment not materially more favorable to the Lenders thereof after giving effect to such amendment (as reasonably determined in good faith by the Borrower) than those applicable prior to giving effect to such amendment (except for (x) covenants and other provisions applicable only to periods after the Latest Maturity Date then in effect of any facility under this Agreement remaining outstanding after giving effect to such amendment and (y) such terms are reasonably acceptable to the Administrative Agent or added in the facilities under this Agreement for the benefit of the Lenders pursuant to an amendment hereto (with no consent of the Lenders being required for such amendment).

 

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Permitted Encumbrances” means:

 

(a) Liens for Taxes, assessments or governmental charges that are not overdue for a period of more than thirty (30) days or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(b) Liens with respect to outstanding motor vehicle fines and Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or construction contractors’ Liens and other similar Liens arising in the ordinary course of business that secure amounts not overdue for a period of more than thirty (30) days or, if more than thirty (30) days overdue, are unfiled and no other action has been taken to enforce such Lien or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP, in each case so long as such Liens do not, either individually or in the aggregate, have a Material Adverse Effect;

 

(c) Liens incurred or deposits made in the ordinary course of business (i) in connection with workers’ compensation, unemployment insurance and other social security legislation or (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees or similar instrument for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrower or any of its Restricted Subsidiaries or otherwise supporting the payment of items set forth in the foregoing clause (i);

 

(d) Liens incurred or deposits made to secure the performance of bids, trade contracts (other than for the payment of Indebtedness for borrowed money), governmental contracts and leases (other than Capital Lease Obligations), statutory obligations, surety, stay, customs and appeal bonds, performance bonds, bankers acceptance facilities and other obligations of a like nature (including those to secure health, safety and environmental obligations) and obligations in respect of letters of credit, bank guarantees or similar instruments that have been posted to support the same, in each case incurred in the ordinary course of business or consistent with past practices;

 

(e) easements, rights-of-way, restrictions, encroachments, protrusions, zoning restrictions and other similar encumbrances and minor title defects and minor survey exceptions affecting real property that, in the aggregate, do not materially interfere with the ordinary conduct of the business of the Borrower and its Restricted Subsidiaries taken as a whole;

 

(f) Liens securing, or otherwise arising from, judgments not constituting an Event of Default under Section 7.01(j);

 

(g) Liens on (i) goods the purchase price of which is financed by a documentary letter of credit issued for the account of the Borrower or any of its Restricted Subsidiaries or Liens on bills of lading, drafts or other documents of title arising by operation of law or pursuant to the standard terms of agreements relating to letters of credit, bank guarantees and other similar instruments; provided that such Lien secures only the obligations of the Borrower or such Restricted Subsidiaries in respect of such letter of credit to the extent such obligations are permitted by Section 6.01 and (ii) specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

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(h) Liens arising from precautionary Uniform Commercial Code financing statements or similar filings made in respect of operating leases entered into by the Borrower or any of its Restricted Subsidiaries;

 

(i) rights of recapture of unused real property (other than any Mortgaged Property) in favor of the seller of such property set forth in customary purchase agreements and related arrangements with any Governmental Authority;

 

(j)  Liens in favor of deposit banks or securities intermediaries securing customary fees, expenses or charges in connection with the establishment, operation or maintenance of deposit accounts or securities accounts;

 

(k) Liens in favor of obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;

 

(l) Liens arising from grants of non-exclusive licenses or sublicenses of Intellectual Property made in the ordinary course of business;

 

(m) rights of setoff, banker’s lien, netting agreements and other Liens arising by operation of law or by of the terms of documents of banks or other financial institutions in relation to the maintenance of administration of deposit accounts, securities accounts, cash management arrangements or in connection with the issuance of letters of credit, bank guarantees or other similar instruments;

 

(n) Liens arising from the right of distress enjoyed by landlords or Liens otherwise granted to landlords, in either case, to secure the payment of arrears of rent or performance of other obligations in respect of leased properties, so long as such Liens are not exercised or except where the exercise of such Liens, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect;

 

(o)  Liens or security given to public utilities or to any municipality or Governmental Authority when required by the utility, municipality or Governmental Authority in connection with the supply of services or utilities to the Borrower and any of its Restricted Subsidiaries;

 

(p) servicing agreements, development agreements, site plan agreements, subdivision agreements, facilities sharing agreements, cost sharing agreements and other agreements pertaining to the use or development of any of the assets of the Person, provided the same, either individually or in the aggregate, do not result in (i) a substantial and prolonged interruption or disruption of the business activities of the Borrower and its Restricted Subsidiaries, taken as a whole, or (ii) a Material Adverse Effect;

 

(q) Liens solely on any cash earnest money deposits made by the Borrower or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Agreement; and

 

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(r) Liens securing Priority Obligations;

 

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness for borrowed money other than Liens referred to in clauses (d) and (k) above securing obligations under letters of credit or bank guarantees or similar instruments related thereto and in clause (g) above, in each case to the extent any such Lien would constitute a Lien securing Indebtedness for borrowed money.

 

Permitted First Priority Refinancing Debt” means any secured Indebtedness incurred by the Borrower in the form of one or more series of senior secured notes or senior secured loans; provided that (i) such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Secured Obligations and is not secured by any other assets or properties, (ii) such Indebtedness complies with the applicable requirements set forth in the definition of Credit Agreement Refinancing Indebtedness, (iii) such Indebtedness, if guaranteed, is not guaranteed by any Person other than another Loan Party, (iv) such Indebtedness shall not have the benefit of mandatory prepayment provisions that are more favorable to the applicable lenders or creditors than those of the Initial Term Loans (it being understood that any Indebtedness that is secured on a pari passu basis with the liens securing the Secured Obligations may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any mandatory repayments or prepayments in respect of any Initial Term Loans, and (v) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the relevant Intercreditor Agreement(s); provided that if such Indebtedness is the initial Permitted First Priority Refinancing Debt incurred by the Borrower, then the Borrower, Holdings, the Subsidiary Loan Parties, the Administrative Agent and the Senior Representative for such Indebtedness shall have executed and delivered the relevant Intercreditor Agreement(s). Permitted First Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Permitted Holders” means (a) the SPAC, (b) the Management Investors and (c) Bernhard Capital Partners Management LLP and its controlled investment Affiliates (other than any portfolio companies); provided that, for purposes of the definition of Change of Control, any voting Equity Interests held by the Management Investors in Holdings or any direct or direct parent company thereof in excess of 20% of the aggregate voting Equity Interests in Holdings or any direct or indirect parent company thereof shall be disregarded for purposes of determining the respective thresholds in the definition of Change of Control.

 

Permitted Investments” means any of the following, to the extent owned by the Borrower or any of its Restricted Subsidiaries:

 

(a) dollars or Canadian Dollars;

 

(b) readily marketable obligations issued or directly and fully guaranteed or insured by the government or any agency or instrumentality of the United States, having average maturities of not more than twelve (12) months from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

 

(c) time deposits with, or certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is a Lender or (ii) has combined capital and surplus of at least $250,000,000 in the case of U.S. banks and $100,000,000 (or the U.S. dollar equivalent as of the date of determination) in the case of foreign banks (any such bank in the foregoing clauses (i) or (ii) being an “Approved Bank”), in each case with average maturities of not more than twelve (12) months from the date of acquisition thereof;

 

(d) commercial paper and variable or fixed rate notes issued by an Approved Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case with average maturities of not more than twelve (12) months from the date of acquisition thereof;

 

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(e) repurchase agreements entered into by any Person with an Approved Bank, a bank or trust company (including any of the Lenders) or recognized securities dealer covering securities described in clauses (b) and (c) above;

 

(f) marketable short-term money market and similar highly liquid funds substantially all of the assets of which are comprised of securities of the types described in clauses (b) through (e) above;

 

(g) securities with average maturities of twelve (12) months or less from the date of acquisition issued or fully guaranteed by any state of the United States or by any political subdivision or taxing authority of any such state having an investment grade rating from either S&P or Moody’s (or the equivalent thereof);

 

(h) investments with average maturities of twelve (12) months or less from the date of acquisition in mutual funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s;

 

(i) instruments equivalent to those referred to in clauses (a) through (h) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Restricted Subsidiary organized in such jurisdiction;

 

(j) investments, classified in accordance with GAAP as current assets of the Borrower or any of its Restricted Subsidiaries, in money market investment programs that are registered under the Investment Company Act of 1940 or that are administered by financial institutions having capital of at least $250,000,000 or its equivalent, and, in either case, the portfolios of which are limited such that substantially all of such investments are of the character, quality and maturity described in clauses (a) through (i) of this definition;

 

(k) with respect to any Restricted Subsidiary that is organized under the laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia: (i) obligations of the national government of the country in which such Restricted Subsidiary maintains its chief executive office and principal place of business; provided such country is a member of the Organization for Economic Cooperation and Development, in each case maturing within one year after the date of investment therein, (ii) certificates of deposit of, bankers acceptances of, or time deposits with, any commercial bank which is organized and existing under the laws of the country in which such Restricted Subsidiary maintains its chief executive office and principal place of business; provided such country is a member of the Organization for Economic Cooperation and Development, and whose short-term commercial paper rating from S&P is at least “A-2” or the equivalent thereof or from Moody’s is at least “P-2” or the equivalent thereof (any such bank being an “Approved Foreign Bank”), and in each case with maturities of not more than twelve (12) months from the date of acquisition and (iii) the equivalent of demand deposit accounts which are maintained with an Approved Foreign Bank; and

 

(l) investment funds investing at least 95% of their assets in securities of the types described in clauses (a) through (k) above.

 

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Permitted Ratio Debt” means any Indebtedness permitted to be incurred pursuant Sections 6.01(a)(vii), (a)(viii), (a)(ix), (a)(xiv), (a)(xv) or (a)(xvi).

 

Permitted Refinancing” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium thereon plus other amounts paid, and fees and expenses incurred, in connection with such modification, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments then available and unutilized thereunder, (b) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 6.01(a)(v), Indebtedness resulting from such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or extended (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which otherwise complies with such maturity requirement), (c) if the Indebtedness being modified, refinanced, refunded, renewed or extended is subordinated in right of payment to the Loan Document Obligations, Indebtedness resulting from such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Loan Document Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended (as determined by the Borrower in good faith), (d) if the Indebtedness being modified, refinanced, refunded, renewed or extended is permitted pursuant to Section 6.01(a)(ii), (i) the other terms and conditions of any such Permitted Refinancing shall be as agreed between the Borrower and the lenders providing any such Permitted Refinancing and (ii) the primary obligor in respect of, and/or the Persons (if any) that Guarantee, the Indebtedness resulting from such modification, refinancing, refunding, renewal or extension are the primary obligor in respect of, and/or Persons (if any) that guaranteed the Indebtedness being modified, refinanced, refunded, renewed or extended and (e) if the Indebtedness being modified, refinanced, refunded, renewed or extended is permitted pursuant to Section 6.01(a)(vii), (a)(viii), (a)(ix), (a)(xiv), (a)(xv) or (a)(xvi), the Indebtedness resulting from such modification, refinancing, refunding, renewal or extension is (x) unsecured if the Indebtedness being modified, refinanced, refunded, renewed or extended is unsecured or (y) not secured on a more favorable basis than the Indebtedness being modified, refinanced, refunded, renewed or extended if such Indebtedness being modified, refinanced, refunded, renewed or extended is secured (as determined in good faith by the Borrower). For the avoidance of doubt, it is understood that a Permitted Refinancing may constitute a portion of an issuance of Indebtedness in excess of the amount of such Permitted Refinancing; provided that such excess amount is otherwise permitted to be incurred under Section 6.01(a) and , if applicable, secured under Section 6.02. For the avoidance of doubt, it is understood and agreed that a Permitted Refinancing includes successive Permitted Refinancings of the same Indebtedness.

 

Permitted Second Priority Refinancing Debt” means any secured Indebtedness incurred by the Borrower in the form of one or more series of second lien (or other junior lien) secured notes or second lien (or other junior lien) secured loans; provided that (i) such Indebtedness is secured by the Collateral on a second (or lesser) priority basis (but without regard to the control of remedies) with the Secured Obligations and is not secured by any other assets or properties, (ii) such Indebtedness complies with the applicable requirements set forth in the definition of Credit Agreement Refinancing Indebtedness, (iii) such Indebtedness, if guaranteed, is not guaranteed by any Person other than another Loan Party, (iv) such Indebtedness does not have mandatory redemption features (other than customary asset sale, insurance and condemnation proceeds events, change of control offers or events of default) that could result in redemptions of such Indebtedness prior to the maturity thereof (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which otherwise complies with such maturity requirement) and (v) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the relevant Intercreditor Agreement(s); provided that if such Indebtedness is the initial Permitted Second Priority Refinancing Debt incurred by the Borrower, then the Borrower, Holdings, the Subsidiary Loan Parties, the Administrative Agent and the Senior Representative for such Indebtedness shall have executed and delivered the relevant Intercreditor Agreement(s). Permitted Second Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

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Permitted Unsecured Refinancing Debt” means any unsecured Indebtedness incurred by the Borrower in the form of one or more series of unsecured notes or unsecured loans; provided that (i) such Indebtedness complies with the applicable requirements set forth in the definition of Credit Agreement Refinancing Indebtedness, (ii) such Indebtedness does not have mandatory redemption features (other than customary asset sale, insurance and condemnation proceeds events, change of control offers or events of default) that could result in redemptions of such Indebtedness prior to the maturity thereof (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which otherwise complies with such maturity requirement), (iii) such Indebtedness, if guaranteed, is not guaranteed by any Person other than another Loan Party, and (iv) such Indebtedness is not secured by any Lien on any property or assets of Holdings, the Borrower or any Restricted Subsidiary. Permitted Unsecured Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

 

Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity, whether existing as of the date hereof or subsequently created or coming to exist.

 

Plan” means any employee pension benefit plan as such term is defined in Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which a Loan Party or any ERISA Affiliate is an “employer” as defined in Section 3(5) of ERISA.

 

Platform” has the meaning assigned to such term in Section 5.01.

 

Prepayment Event” means:

 

(a) any sale, transfer or other disposition of any property or asset of Holdings, the Borrower or any of its Restricted Subsidiaries permitted by Sections 6.05(f), (k), (l), (n) and (o), other than (i) dispositions constituting a sale-leaseback to the extent consummated substantially contemporaneously with the acquisition by the Borrower or such Restricted Subsidiary of the property subject to such sale-leaseback transaction and (ii) dispositions resulting in aggregate Net Proceeds not exceeding (A) $2,500,000 in the case of any single transaction or series of related transactions and (B) $5,000,000 for all such transactions during any fiscal year of the Borrower; or

 

(b) the incurrence by Holdings, the Borrower or any of its Restricted Subsidiaries of any Indebtedness, other than Indebtedness permitted under Section 6.01 (other than Permitted Unsecured Refinancing Debt, Permitted First Priority Refinancing Debt, Permitted Second Priority Refinancing Debt, Other Term Loans, Other Revolving Loans and Other Revolving Commitments which shall constitute a Prepayment Event to the extent required by the definition of “Credit Agreement Refinancing Indebtedness”).

 

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Prime Rate” means the prime rate as published by The Wall Street Journal for such day, provided that if The Wall Street Journal ceases to publish for any reason such rate of interest, “Prime Rate” shall mean the prime lending rate as set forth on the Bloomberg page PRIMBB Index (or successor page) for such day (or such other service as determined by the Administrative Agent from time to time for purposes of providing quotations of prime lending interest rates). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. The prime rate is not necessarily the lowest rate charged by any financial institution to its customers.

 

Priority Obligation” means any obligation that is secured by a Lien on any Collateral in favor of a Governmental Authority, which Lien ranks prior to or pari passu with the Liens created thereon by the applicable Security Documents by operation of law, including any such Lien securing amounts owing for wages, vacation pay, severance pay, employee deductions, sales tax, excise tax, other Taxes, workers compensation, governmental royalties and stumpage or pension fund obligations.

 

Pro Forma Adjustment” means, for any Test Period, any adjustment to Consolidated EBITDA made in accordance with clauses (III) and (IV) to the proviso of the definition of Consolidated EBITDA.

 

Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” mean, with respect to compliance with any test, financial ratio or covenant hereunder required by the terms of this Agreement to be made on a Pro Forma Basis, that (a) to the extent applicable, the Pro Forma Adjustment shall have been made and (b) all Specified Transactions and the following transactions in connection therewith that have been made during the applicable period of measurement or subsequent to such period and prior to or simultaneously with the event for which the calculation is made shall be deemed to have occurred as of the first day of the applicable period of measurement in such test, financial ratio or covenant: (i) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (A) in the case of a Disposition of all or substantially all Equity Interests in any Restricted Subsidiary of the Borrower or any division, product line, or facility used for operations of the Borrower or any of its Restricted Subsidiaries, shall be excluded and (B) in the case of a Permitted Acquisition or Investment described in the definition of “Specified Transaction,” shall be included, (ii) any retirement of Indebtedness, and (iii) any Indebtedness incurred or assumed by the Borrower or any of its Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate that is or would be in effect with respect to such Indebtedness as at the relevant date of determination and interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period; provided that, without limiting the application of the Pro Forma Adjustment pursuant to clause (a) above, the foregoing pro forma adjustments may be applied to any such test or covenant solely to the extent that such adjustments are consistent with (and subject to any limitations set forth in) the definition of Consolidated EBITDA (including, without limitation, the provisos in clause (b) of the definition thereof) and give effect to operating expense reductions that are (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on Holdings, the Borrower or any of its Restricted Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of Pro Forma Adjustment, provided further that all pro forma adjustments made pursuant to this definition (including the Pro Forma Adjustment) with respect to the Transactions shall be consistent in character and amount with the adjustments reflected in the Pro Forma Financial Statements.

 

Pro Forma Entity” has the meaning given to such term in the definition of “Acquired EBITDA.”

 

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Pro Forma Financial Statements” has the meaning assigned to such term in Section 3.04(c).

 

Proposed Change” has the meaning assigned to such term in Section 9.02(c).

 

PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

Public Lender” has the meaning assigned to such term in Section 5.01.

 

Qualified Equity Interests” means Equity Interests of Holdings, the Borrower or a Restricted Subsidiary other than Disqualified Equity Interests.

 

Qualifying Lender” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(3).

 

Refinanced Debt” has the meaning assigned to such term in the definition of “Credit Agreement Refinancing Indebtedness.”

 

Refinancing” means the repayment of all the existing third party Indebtedness for borrowed money (and, if applicable, the termination of all commitments thereunder) of Holdings, the Initial Borrower, the Company and their respective Subsidiaries as of the Closing Date listed on Schedule 1.01 and the discharge (or the making of arrangements for discharge) of all guarantees and Liens related thereto.

 

Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower executed by each of (a) the Borrower and Holdings, (b) the Administrative Agent and (c) each Additional Lender and Lender that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Section 2.21.

 

Register” has the meaning assigned to such term in Section 9.04(b)(iv).

 

Registered Equivalent Notes” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.

 

Reimbursement Date” has the meaning assigned to such term in Section 2.05(f).

 

Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the partners, directors, officers, employees, trustees, agents, controlling persons, advisors and other representatives of such Person and of each of such Person’s Affiliates and permitted successors and assigns of each of the foregoing.

 

Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching, escaping, emptying, pumping, seepage or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) and including the environment within any building, or any structure, facility or fixture.

 

Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

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Removal Effective Date” has the meaning assigned to such term in Section 8.06.

 

Repricing Transaction” means (a) the incurrence by any Loan Party or any Subsidiary of a Loan Party of any Indebtedness in the form of, or any conversion of any Initial Term Loans into, a new or replacement tranche of term loans (i) with an Effective Yield for the respective Type of such Indebtedness less than the Effective Yield for the Initial Term Loans, but excluding Indebtedness incurred in connection with (A) a Change of Control or (B) a Transformative Acquisition, and (ii) the proceeds of which are used to prepay (or, in the case of a conversion, deemed to prepay, repay or replace), in whole or in part, outstanding principal of Initial Term Loans or (b) any effective reduction in the Effective Yield for the Initial Term Loans (e.g., by way of amendment, waiver or otherwise), except for a reduction in connection with (A) a Change of Control or (B) a Transformative Acquisition. Any determination by the Administrative Agent with respect to whether a Repricing Transaction shall have occurred shall be conclusive and binding on all Lenders holding the Initial Term Loans.

 

Required Lenders” means, at any time, Lenders having Revolving Exposures, Term Loans and unused Revolving Commitments representing more than 50.0% of the aggregate Revolving Exposures, outstanding Term Loans and unused Revolving Commitments at such time; provided that, to the extent set forth in Section 9.02 or Section 9.04 whenever there are one or more Defaulting Lenders, the total outstanding Term Loans and Revolving Exposures of, and the unused Revolving Commitments of, each Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

Required Revolving Lenders” means, at any time, Revolving Lenders having Revolving Exposures and unused Revolving Commitments representing more than 50.0% of the aggregate Revolving Exposures and unused Revolving Commitments at such time; provided that to the extent set forth in Section 9.02 or Section 9.04 whenever there are one or more Defaulting Lenders, the total outstanding Revolving Exposures of, and the unused Revolving Commitments of, each Defaulting Lender, shall be excluded for purposes of making a determination of Required Revolving Lenders.

 

Requirements of Law” means, with respect to any Person, any statutes, laws, treaties, rules, regulations, orders, decrees, writs, injunctions or determinations of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

Resignation Effective Date” has the meaning assigned to such term in Section 8.06.

 

Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer, or other similar officer, manager or a member of the Board of Directors of a Loan Party and with respect to certain limited liability companies or partnerships that do not have officers, any manager, sole member, managing member or general partner thereof, and as to any document delivered on the Closing Date or thereafter pursuant to paragraph (a)(i) of the definition of the term “Collateral and Guarantee Requirement,” any secretary or assistant secretary of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

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Restricted Payment” means (x)(i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Holdings, the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Holdings, the Borrower or any Restricted Subsidiary or any option, warrant or other right to acquire any such Equity Interests in Holdings, the Borrower or any Restricted Subsidiary and (ii) any payment of any fee, expense or similar amount to any holder of Equity Interests of Holdings, the Borrower or any Restricted Subsidiary in its capacity as such in connection with any amendment, modification, waiver, consent, enforcement or similar action on, or with respect to, any such Equity Interests or any documentation governing the same and (y) any payment or other distribution (whether in cash, securities or other property) of or in respect of principal, interest or other amounts on any intercompany indebtedness, advances or loans made by Holdings to the Borrower or any Restricted Subsidiary, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any intercompany indebtedness, advances or loans made by Holdings to the Borrower or any Restricted Subsidiary, or any other payment that has a substantially similar effect to any of the foregoing in this clause (y).

 

Restricted Subsidiary” means, unless otherwise specified herein, any Subsidiary of the Borrower other than an Unrestricted Subsidiary.

 

Retained Declined Proceeds” has the meaning assigned to such term in Section 2.11(e).

 

Revolving Availability Period” means the period from and including the Closing Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the Revolving Commitments.

 

Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swing Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to (i) assignments by or to such Lender pursuant to an Assignment and Assumption, (ii) a Refinancing Amendment, (iii) an Incremental Revolving Commitment Increase or (iv) a Loan Modification Agreement. The initial amount of each Lender’s Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption, Loan Modification Agreement or Refinancing Amendment pursuant to which such Lender shall have assumed its Revolving Commitment, as the case may be. The aggregate amount of the Lenders’ Revolving Commitments on the Closing Date is $40,000,000.

 

Revolving Exposure” means, with respect to any Revolving Lender at any time, the sum of the outstanding principal amount of such Revolving Lender’s Revolving Loans at such time, its LC Exposure at such time and its Swing Exposure at such time.

 

Revolving Lender” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

 

Revolving Loan” means a Loan made pursuant to clause (b) of Section 2.01.

 

Revolving Maturity Date” means (i) February 14, 2025 (or if such day is not a Business Day, the immediately preceding Business Day) or (ii) with respect to any Revolving Lender that has extended its Revolving Commitment pursuant to a Permitted Amendment and with respect to any Issuing Bank that has consented to such extension, the extended maturity date set forth in any such Loan Modification Agreement.

 

S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor to its rating agency business.

 

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Sanctions” means any international economic sanctions administered or enforced by the United States government (including without limitation, OFAC), the United Nations Security Council, the European Union or Her Majesty’s Treasury.

 

SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions.

 

Second Lien Intercreditor Agreement” means a customary second lien intercreditor agreement among the Administrative Agent and one or more Senior Representatives for holders of Indebtedness permitted by this Agreement to be secured by the Collateral on a junior basis with the Loan Document Obligations, in form and substance reasonably acceptable to the Administrative Agent and the Borrower, which form shall be posted to the Lenders not less than five (5) Business Days before execution thereof and, if the Required Lenders shall not have objected to such form within three (3) Business Days after posting, then the Required Lenders shall be deemed to have agreed to the Administrative Agent’s entry into such Second Lien Intercreditor Agreement and to have consented to the terms thereof.

 

Secured Cash Management Obligations” means the due and punctual payment and performance of all obligations of Holdings, the Borrower and its Restricted Subsidiaries in respect of any overdraft and related liabilities arising from treasury, depository, cash pooling arrangements and cash management services, corporate credit and purchasing cards and related programs or any automated clearing house transfers of funds (collectively, “Cash Management Services”) provided to Holdings, the Borrower or any Restricted Subsidiary (whether absolute or contingent and howsoever and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor)) that are (a) owed to the Administrative Agent or any of its Affiliates, (b) owed on the Closing Date to a Person that is a Lender or an Affiliate of a Lender as of the Closing Date or (c) owed to a Person that is an Agent, a Lender or an Affiliate of an Agent or Lender at the time such obligations are incurred.

 

Secured Net Leverage Ratio” means, as of any date of determination, the ratio, on a Pro Forma Basis, of (a) Consolidated Secured Indebtedness as of such date to (b) Consolidated EBITDA for the most recently completed Test Period.

 

Secured Obligations” means (a) the Loan Document Obligations, (b) the Secured Cash Management Obligations and (c) the Secured Swap Obligations (excluding with respect to any Loan Guarantor, Excluded Swap Obligations of such Loan Guarantor).

 

Secured Parties” has the meaning assigned to such term in the Collateral Agreement.

 

Secured Swap Obligations” means the due and punctual payment and performance of all obligations of Holdings, the Borrower and its Restricted Subsidiaries under each Swap Agreement that (a) is with a counterparty that is the Administrative Agent or any of its Affiliates, (b) is in effect on the Closing Date with a counterparty that is a Lender, an Agent or an Affiliate of a Lender or an Agent as of the Closing Date or (c) is entered into after the Closing Date with any counterparty that is a Lender, an Agent or an Affiliate of a Lender or an Agent at the time such Swap Agreement is entered into.

 

Security Documents” means the Intercreditor Agreements, the Collateral Agreement, the Mortgages and each other security agreement or pledge agreement executed and delivered pursuant to the Collateral and Guarantee Requirement, Sections 5.11, 5.12 or 5.14 to secure any of the Secured Obligations.

 

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Senior Representative” means, with respect to any series of Indebtedness permitted by this Agreement to be secured by the Collateral on a pari passu basis or junior or “silent” subordinated basis, the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or other agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.

 

Settlement” means the transfer of cash or other property with respect to any credit or debit card charge, check or other instrument, electronic funds transfer, or other type of paper-based or electronic payment, transfer, or charge transaction for which a Person acts as a processor, remitter, funds recipient or funds transmitter in the ordinary course of its business.

 

Settlement Asset” means any cash, receivable or other property, including a Settlement Receivable, due or conveyed to a Person in consideration for a Settlement made or arranged, or to be made or arranged, by such Person or an Affiliate of such Person.

 

Settlement Indebtedness” means any payment or reimbursement obligation in respect of a Settlement Payment.

 

Settlement Lien” means any Lien relating to any Settlement or Settlement Indebtedness (and may include, for the avoidance of doubt, the grant of a Lien in or other assignment of a Settlement Asset in consideration of a Settlement Payment, Liens securing intraday and overnight overdraft and automated clearing house exposure, and similar Liens).

 

Settlement Payment” means the transfer, or contractual undertaking (including by automated clearing house transaction) to effect a transfer, of cash or other property to effect a Settlement.

 

Settlement Receivable” means any general intangible, payment intangible, or instrument representing or reflecting an obligation to make payments to or for the benefit of a Person in consideration for a Settlement made or arranged, or to be made or arranged, by such Person.

 

SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

 

Sold Entity or Business” has the meaning assigned to such term in the definition of the term “Consolidated EBITDA.”

 

Solicited Discount Proration” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(3).

 

Solicited Discounted Prepayment Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(1).

 

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Solicited Discounted Prepayment Notice” means an irrevocable written notice of a Borrower Solicitation of Discounted Prepayment Offers made pursuant to Section 2.11(a)(ii)(D) substantially in the form of Exhibit N.

 

Solicited Discounted Prepayment Offer” means the irrevocable written offer by each Term Lender, substantially in the form of Exhibit O, submitted following the Administrative Agent’s receipt of a Solicited Discounted Prepayment Notice.

 

Solicited Discounted Prepayment Response Date” has the meaning assigned to such term in Section 2.11(a)(ii)(D)(1).

 

SPAC” means Boxwood Merger Corp., a Delaware corporation.

 

“Specified Default” means any Default under Section 7.01(a), (b), (h) or (i).

 

Specified Discount” has the meaning assigned to such term in Section 2.11(a)(ii)(B)(1).

 

Specified Discount Prepayment Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(B)(1).

 

Specified Discount Prepayment Notice” means an irrevocable written notice of the Borrower of Discounted Term Loan Prepayment made pursuant to Section 2.11(a)(ii)(B) substantially in the form of Exhibit J.

 

Specified Discount Prepayment Response Date” has the meaning assigned to such term in Section 2.11(a)(ii)(B)(1).

 

Specified Discount Prepayment Response” means the irrevocable written response by each Term Lender, substantially in the form of Exhibit K, to a Specified Discount Prepayment Notice.

 

Specified Discount Proration” has the meaning assigned to such term in Section 2.11(a)(ii)(B)(3).

 

Specified Indebtedness” means any Credit Agreement Refinancing Indebtedness and any Permitted Ratio Debt.

 

Specified Representations” means those representations and warranties made by the Borrower and the Loan Guarantors (after giving effect to the Acquisition) in Sections ‎3.01, 3.02, 3.03(b)(i), 3.08, 3.14, 3.16, 3.18, 3.19, 3.20 and 3.21.

 

Specified Transaction” means, with respect to any period, any Investment, sale, transfer or other disposition of assets, incurrence or repayment of Indebtedness, Restricted Payment, subsidiary designation or other event that by the terms of the Loan Documents requires “Pro Forma Compliance” with a test or covenant hereunder or requires such test or covenant to be calculated on a Pro Forma Basis.

 

Starter Basket” has the meaning assigned to such term in the definition of “Available Amount.”

 

Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve, liquid asset or similar percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by any Governmental Authority of the United States. Such reserve, liquid asset or similar percentages shall include those imposed pursuant to Regulation D of the Board of Governors. Eurodollar Loans shall be deemed to be subject to such reserve, liquid asset or similar requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D of the Board of Governors or any other applicable law, rule or regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

Submitted Amount” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(1).

 

Submitted Discount” has the meaning assigned to such term in Section 2.11(a)(ii)(C)(1).

 

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subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held (unless parent does not Control such entity).

 

Subsidiary” means any subsidiary of the Borrower (unless otherwise specified).

 

Subsidiary Loan Party” means each Subsidiary of the Borrower that is a party to the Guarantee Agreement.

 

Successor Borrower” has the meaning assigned to such term in Section 6.03(a)(iv).

 

Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

Swing Exposure” means, at any time, the aggregate principal amount of all Swing Loans outstanding at such time. The Swing Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate Swing Exposure at such time.

 

Swing Line Facility” means the credit facility established under Section 2.04 pursuant to which the Swing Line Lender may make Swing Loans.

 

Swing Line Lender” means Macquarie Capital Funding LLC (or its successors or assigns in such capacity).

 

Swing Line Sublimit” means $5,000,000.

 

Swing Loan” means any loan made by the Swing Line Lender under the Swing Line Facility pursuant to Section 2.04.

 

Swing Loan Maturity Date” means, with respect to any Swing Loan, the earlier of (i) seven (7) Business Days after the making of such Swing Loan and (ii) the Revolving Maturity Date.

 

Swing Loan Participation” has the meaning provided in Section 2.04(c).

 

Swing Loan Participation Amount” has the meaning provided in Section 2.04(c).

 

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Syndication Amendment” has the meaning assigned to such term in Section 5.19.

 

Syndication Date” has the meaning assigned to such term in Section 5.19.

 

Tax Distributions” has the meaning assigned to such term in Section 6.07(a)(vi)(A).

 

Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

Term Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make a Term Loan hereunder on the Closing Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Lender hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to (i) assignments by or to such Lender pursuant to an Assignment and Assumption, (ii) a Refinancing Amendment, (iii) an Incremental Facility Amendment in respect of any Term Loans or (iv) a Loan Modification Agreement. The amount of each Lender’s Term Commitment as of the Closing Date is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Commitment, Loan Modification Agreement or Refinancing Amendment, as the case may be. The aggregate Term Commitments on the Closing Date is $281,000,000.

 

Term Lender” means a Lender with a Term Commitment or an outstanding Term Loan.

 

Term Loans” means, individually or collectively as the context requires, Initial Term Loans, Other Term Loans and Incremental Term Loans.

 

Term Maturity Date” means (i) February 14, 2027 (or if such day is not a Business Day, the immediately preceding Business Day) or (ii) with respect to any Term Loans pursuant to a Permitted Amendment, the extended maturity date set forth in any such Loan Modification Agreement.

 

Term SOFR” means the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

Test Period” means, at any date of determination, the period of four (4) consecutive fiscal quarters of the Borrower then last ended as of such time for which financial statements have been delivered (or were required to have been delivered) pursuant to Section 5.01(a) or Section 5.01(b); provided that for any date of determination before the delivery of the first financial statements pursuant to Section 5.01(a) or Section 5.01(b), the Test Period shall be the period of four (4) consecutive fiscal quarters of the Borrower ended as of December 31, 2019.

 

Total Net Leverage Ratio” means, as of any date of determination, the ratio, on a Pro Forma Basis, of (a) Consolidated Total Indebtedness as of such date to (b) Consolidated EBITDA for the most recently completed Test Period.

 

Transaction Costs” means all fees, costs and expenses incurred or payable by Holdings, the Borrower or any Subsidiary in connection with the Transactions.

 

Transactions” means (a) the Acquisition, (b) the Merger, (c) the Financing Transactions, (d) the equity financing transactions set forth in Section 4.01(i), (e) the Refinancing and (f) the payment of the Transaction Costs.

 

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Transformative Acquisition” shall mean any acquisition by the Borrower or any Restricted Subsidiary of the Borrower that is either (a) not permitted by the terms of the Loan Documents immediately prior to the consummation of such acquisition or (b) if permitted by the terms of the Loan Documents immediately prior to the consummation of such acquisition, would not provide the Borrower and its Restricted Subsidiaries with adequate flexibility under the Loan Documents for the continuation and/or expansion of their combined operations following such consummation, as reasonably determined by the Borrower acting in good faith.

 

Type,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Collateral Agent’s security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a U.S. jurisdiction other than the State of New York, the term “UCC” and “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

 

UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce, in its Publication No. 600 (or such later version thereof as may be reasonably acceptable to the applicable Issuing Bank and in effect at the time of issuance of such Letter of Credit).

 

Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

 

Unaudited Financial Statements” means (i) the unaudited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows of the Company for its fiscal quarters ended March 31, 2019, June 30, 2019 and September 30, 2019 and (ii) the unaudited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows of the SPAC for its fiscal quarters ended March 31, 2019, June 30, 2019 and September 30, 2019.

 

Undisclosed Administration” means, in relation to a Lender, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.

 

United States Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(e)(ii)(C).

 

Unrestricted Available Amount” means the portion of the Available Amount set forth in clauses (d), (h), (i) and (j) of the definition thereof.

 

Unrestricted Subsidiary” means (i) any Subsidiary (other than the Borrower) designated by the Borrower as an Unrestricted Subsidiary pursuant to Section 5.13 subsequent to the Closing Date and (ii) any Subsidiary of an Unrestricted Subsidiary so designated.

 

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USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended from time to time.

 

Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

 

Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary that is a Wholly Owned Subsidiary.

 

Wholly Owned Subsidiary” means, with respect to any Person at any date, a subsidiary of such Person of which securities or other ownership interests representing 100% of the Equity Interests (other than (a) directors’ qualifying shares and (b) nominal shares issued to foreign nationals to the extent required by applicable Requirements of Law) are, as of such date, owned, controlled or held by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

 

Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

SECTION 1.02 Classification of Loans and Borrowings.

 

For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan” or “ABR Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing” or “Term Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03 Terms Generally.

 

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) unless otherwise provided herein, any definition of or reference to any agreement (including this Agreement and the other Loan Documents), instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or other modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Any reference herein or in any other Loan Document to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation) (including a Division/Series Transaction), as if it were a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute a Person or entity).

 

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SECTION 1.04 Accounting Terms; GAAP.

 

(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a manner consistent with that used in preparing the latest Audited Financial Statements of the Company delivered to the Administrative Agent on or prior to the Closing Date, except as otherwise specifically prescribed herein.

 

(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with any test contained in this Agreement, the Total Net Leverage Ratio, the Secured Net Leverage Ratio, the First Lien Net Leverage Ratio, the Interest Coverage Ratio and any other financial ratio or test (other than Excess Cash Flow) shall be calculated on a Pro Forma Basis to give effect to all Specified Transactions that have been made during the applicable period of measurement or subsequent to such period and prior to or simultaneously with the event for which the calculation is made (it being understood, for the avoidance of doubt, that solely for purposes of calculating quarterly compliance with Section 6.10, if applicable, the date of the required calculation shall be the last day of the Test Period, and no Specified Transaction occurring thereafter shall be taken into account).

 

SECTION 1.05 Effectuation of Transactions.

 

All references herein to Holdings, the Borrower and the other Subsidiaries shall be deemed to be references to such Persons, and all the representations and warranties of Holdings, the Borrower and the other Loan Parties contained in this Agreement and the other Loan Documents shall be deemed made, in each case, after giving effect to the Transactions to occur on the Closing Date, unless the context otherwise requires.

 

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SECTION 1.06 Limited Conditionality Transactions.

 

Notwithstanding anything in this Agreement or any other Loan Document to the contrary (except as otherwise expressly provided in clause (d)(ii) of the definition of “Permitted Acquisition” and in clauses (i) and (ii) of the proviso to the first sentence of Section 2.20(a)), when (a) calculating any applicable ratio, the amount or availability of the Available Amount or any other basket based on Consolidated Net Income or Consolidated EBITDA or total assets or determining other compliance with this Agreement (other than (x) determining actual (versus pro forma) compliance with the Financial Performance Covenant or (y) determining the ability to make a Restricted Payment or a prepayment, repayment, acquisition, redemption or similar payment on any Junior Financing), in connection with incurrence of Indebtedness, the creation of Liens, the making of any asset sale, the making of an Investment or the designation of a Subsidiary as restricted or unrestricted, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the creation of Liens, the making of any disposition, the making of an Investment or the designation of a Subsidiary as restricted, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof, but excluding any Restricted Payment or prepayment, repayment, acquisition, redemption or similar payment on any Junior Financing) such ratios and other provisions are calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending on or prior to the LCT Test Date for which financial statements of the Borrower have been (or were required to have been) delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, the Borrower could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with. For the avoidance of doubt, (i) if any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transaction, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio or basket availability with respect to any other Specified Transaction (other than with respect to any Restricted Payment or any prepayment, repayment, acquisition, redemption or similar payment on any Junior Financing) on or following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio or basket shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) had been consummated on the LCT Test Date.

 

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SECTION 1.07 Certain Determinations.

 

(a) For purposes of determining compliance with any of the covenants set forth in Article VI (including in connection with any Incremental Facility) at any time (whether at the time of incurrence or thereafter), any Lien, Investment, Indebtedness, Disposition, Restricted Payment or payment of Junior Financing meets the criteria of one, or more than one, of the clauses permitted pursuant to the relevant section of Article VI (including in connection with any Incremental Facility), the Borrower (i) shall in its sole discretion determine under which clause such Lien (other than Liens with respect to the Initial Term Loans and the Revolving Commitments, which shall only be designated under Section 6.02(i) and may not be redesignated pursuant to succeeding clause (ii)), Investment, Indebtedness (other than Indebtedness consisting of the Initial Term Loans and the Revolving Commitments, which shall only be designated under Section 6.01(i) and may not be redesignated pursuant to succeeding clause (ii)), Disposition, Restricted Payment or payment of Junior Financing (or, in each case, any portion there) is permitted and (ii) shall be permitted, in its sole discretion, to make any redetermination and/or to divide, classify or reclassify under which clause or clauses such Lien, Investment, Indebtedness, Disposition, Restricted Payment or payment of Junior Financing is permitted from time to time thereafter under the relevant Section as it may determine and without notice to the Administrative Agent or any Lender so long as the Borrower would meet the applicable conditions under such clause or clauses of such Section at such time. For the avoidance of doubt, if the applicable date for meeting any requirement hereunder or under any other Loan Document falls on a day that is not a Business Day, compliance with such requirement shall not be required until noon on the first Business Day following such applicable date.

 

(b) Notwithstanding anything to the contrary herein, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement (other than the incurrence of Indebtedness under the Revolving Commitments, except to the extent provided in the definition of Incremental Cap) that does not require compliance with a financial ratio or test (including, without limitation, any Total Net Leverage Ratio) (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with any such financial ratio or test (any such amounts, the “Incurrence Based Amounts”), it is understood and agreed that the Fixed Amounts (and any cash proceeds thereof) shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence Based Amounts in connection with such substantially concurrent incurrence, except that incurrences of Indebtedness and Liens constituting Fixed Amounts shall be taken into account for purposes of Incurrence Based Amounts other than Incurrence Based Amounts contained in Section 6.01 or Section 6.02.

 

(c) Notwithstanding anything to the contrary contained herein, in the event that the Long Engineering Acquisition has not been consummated within ten (10) Business Days after the Closing Date, then each of the dollar amounts in Article VI that also have a corresponding grower component based on Consolidated EBITDA (other than the Starter Basket and Section 6.07(a)(vii)) shall be reduced by the product of $3,600,000 multiplied by the respective percentage of Consolidated EBITDA set forth in the respective clause of each Section of Article VI.

 

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SECTION 1.08 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

SECTION 1.09 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

SECTION 1.10 Cashless Roll. Notwithstanding anything to the contrary contained in this Agreement, any Lender may exchange, continue or rollover all or a portion of its Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent and such Lender.

 

ARTICLE II

The Credits

 

SECTION 2.01 Commitments.

 

Subject to the terms and conditions set forth herein, (a) each Term Lender severally agrees to make Initial Term Loans to the Borrower on the Closing Date denominated in dollars in a principal amount not exceeding such Term Lender’s Term Commitment and (b) each Revolving Lender severally agrees to make Revolving Loans to the Borrower denominated in dollars from time to time during the Revolving Availability Period in an aggregate principal amount which will not result in either (x) such Revolving Lender’s Revolving Exposure exceeding such Revolving Lender’s Revolving Commitment or (y) the aggregate Revolving Exposures exceeding the aggregate Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts repaid or prepaid in respect of Term Loans may not be reborrowed.

 

SECTION 2.02 Loans and Borrowings.

 

(a) Each Loan (other than a Swing Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and other than as expressly provided herein with respect to a Defaulting Lender, no Lender shall be responsible for any other Lender’s failure to make Loans as required hereby.

 

(b) Subject to Section 2.14, each Revolving Borrowing and Term Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith; provided that all Borrowings made on the Closing Date must be made as ABR Borrowings unless the Borrower shall have given the notice required for a Eurodollar Borrowing under Section 2.03 (or such lesser notice as the Administrative Agent may agree) and provided an indemnity letter extending the benefits of Section 2.16 to Lenders in respect of such Borrowings. Each Swing Loan shall be an ABR Loan. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

 

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(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum; provided that a Eurodollar Borrowing that results from a continuation of an outstanding Eurodollar Borrowing may be in an aggregate amount that is equal to such outstanding Borrowing. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of eight (8) Eurodollar Borrowings outstanding (or such greater number that may be acceptable to the Administrative Agent). Notwithstanding anything to the contrary herein, an ABR Revolving Borrowing may be in an aggregate amount equal to the entire unused balance of the aggregate Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(f).

 

SECTION 2.03 Requests for Borrowings.

 

To request a Revolving Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent of such request in writing (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing (or, in the case of any Eurodollar Borrowing to be made on the Closing Date, one (1) Business Day) or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, one (1) Business Day before the date of the proposed Borrowing. Each Borrowing Request shall be irrevocable and shall be signed by the Borrower substantially in the form of Exhibit S. Each such written Borrowing Request shall specify the following information:

 

(i) whether the requested Borrowing is to be a Revolving Borrowing, a Term Borrowing or a Borrowing of any other Class (specifying the Class thereof);

 

(ii) the aggregate principal amount of such Borrowing;

 

(iii) the date of such Borrowing, which shall be a Business Day;

 

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

 

(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;

 

(vi) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06, or, in the case of any ABR Revolving Borrowing requested to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f), the identity of the Issuing Bank that made such LC Disbursement; and

 

(vii) that as of the date of such Borrowing, the conditions set forth in Sections 4.02(a) and 4.02(b) are satisfied.

 

If no election as to the Type of Borrowing is specified as to any Borrowing, then the requested Borrowing shall be a Eurodollar Borrowing with an Interest Period of one (1) month if the respective notice is received by the Administrative Agent by 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing, after which it shall be incurred as an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one (1) month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

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SECTION 2.04 Swing Line Facility.

 

(a) Swing Loans. During the Revolving Availability Period, the Swing Line Lender agrees, subject to the terms and conditions set forth in this Agreement, to make a Swing Loan or Swing Loans to the Borrower from time to time, which Swing Loans: (i) shall be payable on the Swing Loan Maturity Date applicable to each such Swing Loan; (ii) shall be made only in dollars; (iii) shall be made and maintained as ABR Loans; (iv) may be repaid or prepaid and reborrowed in accordance with the provisions hereof; (v) may only be made if after giving effect thereto (A) the aggregate principal amount of Swing Loans outstanding does not exceed the Swing Line Sublimit, and (B) the aggregate Revolving Exposures would not exceed the total Revolving Commitments; (vi) shall not be made if, after giving effect thereto, the Borrower would be required to prepay Loans or cash collateralize Letters of Credit pursuant to Section 2.05(j); and (vi) shall not be made if the proceeds thereof would be used to repay, in whole or in part, any outstanding Swing Loan. To request a Swing Loan, the Borrower shall notify the Administrative Agent and the Swing Line Lender of such request by written notice, not later than 10:00 a.m., New York City time, on the day of such proposed Swing Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and the aggregate principal amount of the requested Swing Loan.

 

(b) Swing Loan Refunding. The Swing Line Lender may at any time, in its sole and absolute discretion, direct that the Swing Loans owing to it be refunded by delivering a notice to such effect to the Administrative Agent, specifying the aggregate principal amount thereof (a “Notice of Swing Loan Refunding”). Promptly upon receipt of a Notice of Swing Loan Refunding, the Administrative Agent shall give notice of the contents thereof to the Revolving Lenders and, unless an Event of Default specified in Section 7.01(h) or (i) in respect of the Borrower has occurred, the Borrower. Each such Notice of Swing Loan Refunding shall be deemed to constitute delivery by the Borrower of a Borrowing Request requesting Revolving Loans consisting of ABR Loans in the amount of the Swing Loans to which it relates notwithstanding (i) that the Notice of Swing Loan Refunding may not comply with the requirements specified in Section 2.03, (ii) whether any conditions specified in Section 4.02 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Notice of Swing Loan Refunding or (v) any reduction in the total Revolving Commitments after any such Swing Loans were made. Each Revolving Lender (including the Swing Line Lender in the event that it has a Revolving Commitment) hereby unconditionally agrees (notwithstanding that any of the conditions specified in Section 4.02 or elsewhere in this Agreement shall not have been satisfied, but subject to the provisions of paragraph (d) below) to make a Revolving Loan to the Borrower in the amount of its Applicable Percentage of the aggregate amount of the Swing Loans to which such Notice of Swing Loan Refunding relates. Each such Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent in immediately available funds at the Applicable Account not later than 1:00 p.m. (New York City time), if such notice is received by such Lender prior to 11:00 a.m. (New York City time), or not later than 1:00 p.m. (New York City time) on the next Business Day, if such notice is received by such Lender after such time. The proceeds of such Revolving Loans shall be made immediately available directly to the Swing Line Lender and applied by it to repay the principal amount of the Swing Loans to which such Notice of Swing Loan Refunding relates.

 

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(c) Swing Loan Participation. If prior to the time a Revolving Loan would otherwise have been made as provided above as a consequence of a Notice of Swing Loan Refunding, any of the events specified in Section 7.01(h) or (i) shall have occurred in respect of the Borrower or one or more of the Revolving Lenders shall determine that it is legally prohibited from making a Revolving Loan under such circumstances, each Revolving Lender (other than the Swing Line Lender), or each Revolving Lender (other than such Swing Line Lender) so prohibited, as the case may be, shall, on the date such Revolving Loan would have been made by it (the “Purchase Date”), subject to the provisions of Section 2.04(d), purchase an undivided participating interest (a “Swing Loan Participation”) in the outstanding Swing Loans to which such Notice of Swing Loan Refunding relates, in an amount (the “Swing Loan Participation Amount”) equal to such Revolving Lender’s Applicable Percentage of such outstanding Swing Loans. On the Purchase Date, each such Revolving Lender or each such Revolving Lender so prohibited, as the case may be, shall pay to the Swing Line Lender, in immediately available funds, such Revolving Lender’s Swing Loan Participation Amount, and promptly upon receipt thereof the Swing Line Lender shall, if requested by such other Revolving Lender, deliver to such Revolving Lender a participation certificate, dated the date of the Swing Line Lender’s receipt of the funds from, and evidencing such Revolving Lender’s Swing Loan Participation in, such Swing Loans and its Swing Loan Participation Amount in respect thereof. If any amount required to be paid by a Revolving Lender to the Swing Line Lender pursuant to the above provisions in respect of any Swing Loan Participation is not paid on the date such payment is due, such Revolving Lender shall pay to the Swing Line Lender on demand interest on the amount not so paid at the overnight Federal Funds Effective Rate from the due date until such amount is paid in full. Whenever, at any time after the Swing Line Lender has received from any other Revolving Lender such Lender’s Swing Loan Participation Amount, the Swing Line Lender receives any payment from or on behalf of the Borrower on account of the related Swing Loans, the Swing Line Lender will promptly distribute to such Revolving Lender its ratable share of such amount based on its Applicable Percentage of such amount on such date on account of its Swing Loan Participation (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Lender’s participating interest was out-standing and funded); provided, however, that if such payment received by the Swing Line Lender is required to be returned, such Revolving Lender will return to the Swing Line Lender any portion thereof previously distributed to it by the Swing Line Lender.

 

(d) Obligations Unconditional. Each Revolving Lender’s obligation to make Revolving Loans pursuant to Section 2.04(b) and/or to purchase Swing Loan Participations in connection with a Notice of Swing Loan Refunding shall be subject to the conditions that such Revolving Lender shall have received a Notice of Swing Loan Refunding complying with the provisions hereof but otherwise shall be absolute and unconditional, shall be solely for the benefit of the Swing Line Lender, and shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right that such Revolving Lender may have against any other Lender, any Loan Party, or any other Person, or any Loan Party may have against any Lender or other Person, as the case may be, for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; (C) any event or circumstance involving a Material Adverse Effect; (D) any breach of any Loan Document by any party thereto; or (E) any other circumstance, happening or event, whether or not similar to any of the foregoing.

 

(e) Resignation of Swing Line Lender. Subject to the appointment and acceptance of a successor Swing Line Lender reasonably acceptable to the Borrower (which appointment and acceptance of a successor Swing Line Lender, however, shall not be required in connection with the resignation of the Administrative Agent pursuant to Section 8.06), the Swing Line Lender may resign at any time by giving thirty (30) days’ written notice to the Administrative Agent, the Lenders and the Borrower. The Borrower may terminate the appointment of the Swing Line Lender hereunder by providing a written notice thereof to the Swing Line Lender, with a copy to the Administrative Agent. Any such termination shall become effective upon the earlier of (i) the Swing Line Lender’s acknowledging receipt of such notice and (ii) the fifth (5th) Business Day following the date of the delivery thereof; provided that no such termination shall become effective until and unless the principal amount of all Swing Loans shall have been reduced to zero. At the time any such resignation or termination shall become effective, the Borrower shall pay all unpaid interest and fees accrued for the account of the resigning or terminated Swing Line Lender. Notwithstanding the effectiveness of any such resignation or termination, the resigning or terminated Swing Line Lender shall remain a party hereto and shall continue to have all the rights of a Swing Line Lender under this Agreement and the other Loan Documents with respect to Swing Loans made by it prior to such resignation or termination, including the right to require the Lenders to make Loans or fund risk participations in outstanding Swing Loans, but shall not make any additional Swing Loans.

 

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(f) Provisions Related to Extended Revolving Commitments. If the maturity date shall have occurred in respect of any Class of Revolving Commitments at a time when another Class or Classes of Revolving Commitments is or are in effect with a longer maturity date, then on the earliest occurring maturity date all then outstanding Swing Loans shall be repaid in full on such date (and there shall be no adjustment to the participations in such Swing Loans as a result of the occurrence of such maturity date); provided, however, that if on the occurrence of such earliest maturity date (after giving effect to any repayments of Revolving Loans and any reallocation of Letter of Credit participations as contemplated in Section 2.05(o)), there shall exist sufficient unutilized extended Revolving Commitments so that the respective outstanding Swing Loans could be incurred pursuant the extended Revolving Commitments which will remain in effect after the occurrence of such maturity date, then if consented to by the Swing Line Lender, there shall be an automatic adjustment on such date of the participations in such Swing Loans and same shall be deemed to have been incurred solely pursuant to the relevant extended Revolving Commitments, and such Swing Loans shall not be so required to be repaid in full on such earliest maturity date. For the avoidance of doubt, the commitment of the Swing Line Lender to act in its capacity as such cannot be extended beyond the Revolving Maturity Date or increased without its prior written consent

 

SECTION 2.05 Letters of Credit.

 

(a) General. Subject to the terms and conditions set forth herein (including Section 2.22), each Issuing Bank agrees, in reliance upon the agreements of the Revolving Lenders and the Borrower set forth in this Section 2.05 and elsewhere in the Loan Documents, to issue Letters of Credit in dollars for the Borrower’s own account (or for the account of any Wholly Owned Restricted Subsidiary of the Borrower so long as the Borrower and such Wholly Owned Restricted Subsidiary are co-obligors (on a joint and several basis) in respect of all Loan Document Obligations arising under or in respect of such Letter of Credit and are jointly and severally liable for all Loan Document Obligations in respect thereof), in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, which shall reflect the standard operating procedures of such Issuing Bank, at any time and from time to time during the period from the Closing Date until the date that is the fifth (5th) Business Day prior to the Revolving Maturity Date. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

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(b) Issuance, Amendment, Renewal or Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall deliver in writing by hand delivery or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the recipient) to the applicable Issuing Bank and the Administrative Agent at least five (5) Business Days before the requested date of issuance, amendment, renewal or extension (or, in the case of any such request to be made on the Closing Date, three (3) Business Days) or such shorter period as the applicable Issuing Bank and the Administrative Agent may agree, a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension, as the case may be (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section 2.05), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend, as the case may be, such Letter of Credit. Each such notice shall be in the form of Exhibit E, appropriately completed (each, a “Letter of Credit Request”). If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of any Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (i) the Applicable Fronting Exposure of each Issuing Bank shall not exceed its Issuing Bank Cap (unless otherwise agreed to in writing by such Issuing Bank), (ii) the aggregate Revolving Exposures shall not exceed the aggregate Revolving Commitments and (iii) the aggregate LC Exposure shall not exceed the Letter of Credit Sublimit. No Issuing Bank shall be under any obligation to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall enjoin or restrain such Issuing Bank from issuing the Letter of Credit, or any Requirements of Law applicable to such Issuing Bank or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such Issuing Bank with respect to the Letter of Credit any restriction, reserve, liquidity or capital requirement (for which such Issuing Bank is not otherwise fully compensated hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Issuing Bank in good faith deems material to it, (ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank now or hereafter in effect and applicable to letters of credit generally, (iii) except as otherwise agreed in writing by the Administrative Agent and the applicable Issuing Bank, such Letter of Credit is to be denominated in a currency other than dollars, (iv) except as otherwise agreed by the Administrative Agent and such Issuing Bank, the Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit, or (v) any Revolving Lender is at that time a Defaulting Lender, if after giving effect to Section 2.22(a)(iv), any Defaulting Lender Fronting Exposure remains outstanding, unless such Issuing Bank has entered into arrangements, including the delivery of cash collateral, reasonably satisfactory to such Issuing Bank with the Borrower or such Revolving Lender to eliminate such Issuing Bank’s Defaulting Lender Fronting Exposure arising from either the Letter of Credit then proposed to be issued or such Letter of Credit and all other LC Exposure as to which such Issuing Bank has Defaulting Lender Fronting Exposure. No Issuing Bank shall be under any obligation (i) to amend, renew or extend any Letter of Credit if (x) such Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof or (y) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit or (ii) to issue any Letter of Credit if such Letter of Credit contains any provisions for automatic reinstatement of all or any portion of the stated amount thereof after any drawing thereunder or after the expiry date of such Letter of Credit.

 

(c) Notice. Each Issuing Bank agrees that it shall not permit any issuance, amendment, renewal or extension of a Letter of Credit to occur unless it shall have given to the Administrative Agent written notice thereof required under paragraph (m) of this Section 2.05, together with a copy of the Letter of Credit so issued by it (as well as a copy of any amendment, renewal or extension thereof).

 

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(d) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, the date to which it has been renewed or extended (not in excess of one year from the last applicable expiry date)) and (ii) the date that is five (5) Business Days prior to the Revolving Maturity Date; provided that if such expiry date is not a Business Day, such Letter of Credit shall expire at or prior to the close of business on the next succeeding Business Day; provided further, that any Letter of Credit may, upon the request of the Borrower, include a provision whereby such Letter of Credit shall be renewed or extended automatically for additional consecutive periods of one year or less (but not beyond the date that is five (5) Business Days prior to the Revolving Maturity Date) unless the applicable Issuing Bank notifies the beneficiary thereof within the time period specified in such Letter of Credit or, if no such time period is specified, at least thirty (30) days prior to the then applicable expiration date, that such Letter of Credit will not be renewed or extended; provided further, that such Letter of Credit shall not be required to expire on such fifth (5th) Business Day prior to the Revolving Maturity Date if such Letter of Credit is cash collateralized or backstopped in an amount, by an institution and otherwise pursuant to arrangements, in each case reasonably acceptable to the applicable Issuing Bank.

 

(e) Participations. Immediately upon the issuance of each Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank that is the issuer thereof or the Lenders, each Revolving Lender shall be deemed to have purchased and the applicable Issuing Bank shall be deemed to have sold a participation in such Letter of Credit equal to such Revolving Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent in dollars, for the account of such Issuing Bank, such Revolving Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (f) of this Section 2.05, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its acquisition of participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or an Event of Default or any reduction or termination of the Revolving Commitments, and that each payment required to be made by it under the preceding sentence shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(f) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount (in same day funds) equal to such LC Disbursement in dollars not later than 2:00 p.m., New York City time, on the Business Day immediately following the day that the Borrower receives notice of such LC Disbursement (the “Reimbursement Date”), together with accrued interest thereon in accordance with paragraph (i) of this Section 2.05. Anything contained herein to the contrary notwithstanding, (i) unless the Borrower shall have notified the Administrative Agent and the applicable Issuing Bank prior to 2:00 p.m., New York City time, on the date such LC Disbursement is made that the Borrower intends to reimburse the applicable Issuing Bank for the amount of the LC Disbursement (including any accrued interest thereon) with funds other than the proceeds of Revolving Loans, the Borrower shall be deemed to have given a timely Borrowing Request to the Administrative Agent requesting Revolving Lenders to make Revolving Loans that are ABR Revolving Loans on the Reimbursement Date in an amount equal to such LC Disbursement (together with any accrued interest thereon), and (ii) subject to satisfaction or waiver of the conditions specified in Section 4.02, the Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that are ABR Revolving Loans in an aggregate principal amount equal to their respective Applicable Percentages of such LC Disbursement (together with any accrued interest thereon), the proceeds of which shall be applied directly by the Administrative Agent to reimburse the applicable Issuing Bank for the amount of such LC Disbursement (together with any accrued interest thereon); provided that if for any reason proceeds of Revolving Loans are not received by the applicable Issuing Bank on the Reimbursement Date in an amount equal to such LC Disbursement (together with any accrued interest thereon), the Borrower shall reimburse the applicable Issuing Bank, on demand, in an amount in same day funds equal to the excess of such LC Disbursement (together with any accrued interest thereon) over the aggregate amount of such Revolving Loans, if any, which are so received. The Revolving Loans made pursuant to this paragraph (f) shall be made without regard to the Borrowing Minimum.

 

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(g) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section 2.05 is absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, or any term or provision herein or therein, (ii) any exchange, change, waiver or release of any Collateral for, or any other Person's guarantee of or other liability for, any of the Secured Obligations, (iii) the existence of any claim, set-off, defense or other right which Holdings, the Borrower, any Subsidiary or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), any Issuing Bank, any Lender or any other Person or, in the case of a Lender, against the Borrower or any other Loan Party, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between the Borrower or one or more of its Subsidiaries and the beneficiary for which any Letter of Credit was procured), (iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (v) payment by an Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit (provided that the Borrower shall not be obligated to reimburse such LC Disbursements unless payment is made against presentation of a draft or other document that at least substantially complies with the terms of such Letter of Credit), (vi) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Holdings or any of its Subsidiaries, (vii) any breach hereof or any other Loan Document by any party hereto or thereto, (viii) the fact that a Default or an Event of Default shall have occurred and be continuing, or (ix) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.05, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. As between the Borrower and each Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by an Issuing Bank and the proceeds thereof, by the respective beneficiaries of such Letters of Credit or any assignees or transferees thereof. In furtherance and not in limitation of the foregoing, none of the Administrative Agent, the Lenders, the Issuing Banks or any of their Related Parties shall have any liability or responsibility for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged other than to confirm such documents comply with the terms of such Letter of Credit; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) its honor of any presentation under a Letter of Credit that appears on its face to substantially comply with the terms and conditions of such Letter of Credit; (v) any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder); (vi) errors in interpretation of technical terms; (vii) any loss or delay in the transmission of any document required in order to make a drawing under any such Letter of Credit; (viii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (ix) any consequences arising from causes beyond the control of an Issuing Bank, including any act by a Governmental Authority and fluctuation in currency exchange rates. None of the above shall affect or impair, or prevent the vesting of, any of an Issuing Bank’s rights or powers hereunder or place an Issuing Bank under any liability to the Borrower or any other Person. Notwithstanding the foregoing, none of the above shall be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential, incidental, exemplary or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by Requirements of Law) suffered by the Borrower that are caused by such Issuing Bank’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final, nonappealable judgment) when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if (notwithstanding the appearance of substantial compliance) such documents are not in strict compliance with the terms of such Letter of Credit, and any such acceptance or refusal shall be deemed not to constitute gross negligence or willful misconduct.

 

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(h) Disbursement Procedures. Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Each Issuing Bank shall promptly notify the Administrative Agent and the Borrower in writing of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement in accordance with paragraph (f) of this Section 2.05.

 

(i) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section 2.05, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be paid to the Administrative Agent, for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (f) of this Section 2.05 to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment and shall be payable on demand or, if no demand has been made, on the date on which the Borrower reimburses the applicable LC Disbursement in full.

 

(j) Cash Collateralization. If (i) effective immediately, without demand or other notice of any kind, as of any expiration date of a Letter of Credit, such Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, (ii) effective immediately, without demand or other notice of any kind, as of the occurrence and continuation of any Event of Default under paragraph (h) or (i) of Section 7.01, or (iii) any other Event of Default shall occur and be continuing or if the maturity of the Loans has been accelerated, then on the Business Day on which the Borrower receives notice from the Administrative Agent, the applicable Issuing Bank or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing more than 50% of the aggregate LC Exposure of all Revolving Lenders) demanding the deposit of cash collateral pursuant to this paragraph (although no such notice shall be required as set forth in clause (ii) above), the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Secured Parties, an amount of cash in dollars equal to 105% of the LC Exposure attributable to Letters of Credit, as of such date plus any accrued and unpaid interest thereon. The Borrower also shall deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.11(b). Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement and the other Loan Documents. At any time that there shall exist a Defaulting Lender, if any Defaulting Lender Fronting Exposure remains outstanding (after giving effect to Section 2.22(a)(iv)), then promptly upon the request of the Administrative Agent or an Issuing Bank, the Borrower shall deliver to the Administrative Agent cash collateral in an amount sufficient to cover such Defaulting Lender Fronting Exposure (after giving effect to any cash collateral provided by the Defaulting Lender). The Administrative Agent (for the benefit of the Secured Parties) shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent in Permitted Investments and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Notwithstanding anything to the contrary set forth in this Agreement, moneys in such account shall be applied by the Administrative Agent first to reimburse the Issuing Banks for LC Disbursements for which they have not been reimbursed and, to the extent not so applied, the balance shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing more than 50% of the aggregate LC Exposure of all the Revolving Lenders), such balance shall be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default or the existence of a Defaulting Lender, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived or after the termination of Defaulting Lender status, as applicable. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower as and to the extent that, after giving effect to such return, the Borrower would remain in compliance with Section 2.11(b) and no Event of Default shall have occurred and be continuing.

 

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(k) Designation of Additional Issuing Banks. The Borrower may, at any time and from time to time, designate as additional Issuing Banks one or more Revolving Lenders that agree in writing to serve in such capacity as provided below. The acceptance by a Revolving Lender of an appointment as an Issuing Bank hereunder shall be evidenced by an agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent and the Borrower, executed by the Borrower, the Administrative Agent and such designated Revolving Lender and, from and after the effective date of such agreement, (i) such Revolving Lender shall have all the rights and obligations of an Issuing Bank under this Agreement, (ii) such Revolving Lender’s Issuing Bank Cap shall be as set forth in such agreement and (iii) references herein to the term “Issuing Bank” shall be deemed to include such Revolving Lender in its capacity as an issuer of Letters of Credit hereunder.

 

(l) Resignation or Termination of an Issuing Bank. Subject to the appointment and acceptance of a successor Issuing Bank reasonably acceptable to the Borrower (to the extent that there is only one Issuing Bank hereunder at such time) or as otherwise provided in Section 8.06, any Issuing Bank may resign at any time by giving thirty (30) days’ written notice to the Administrative Agent, the Lenders and the Borrower. The Borrower may terminate the appointment of any Issuing Bank as an “Issuing Bank” hereunder by providing a written notice thereof to such Issuing Bank, with a copy to the Administrative Agent. Any such termination shall become effective upon the earlier of (i) such Issuing Bank’s acknowledging receipt of such notice and (ii) the fifth (5th) Business Day following the date of the delivery thereof; provided that no such termination shall become effective until and unless the LC Exposure attributable to all Letters of Credit issued by such Issuing Bank (or its Affiliates or designees) shall have been reduced to zero. At the time any such resignation or termination shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the resigning or terminated Issuing Bank pursuant to Section 2.12(b). Notwithstanding the effectiveness of any such resignation or termination, the resigning or terminated Issuing Bank shall remain a party hereto and shall continue to have all the rights of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation or termination, but shall not (a) be required (and shall be discharged from its obligations) to issue any additional Letters of Credit or renew, extend or increase the amount of Letters of Credit then outstanding, without affecting its rights and obligations with respect to Letters of Credit previously issued by it, or (b) be deemed an Issuing Bank for any other purpose.

 

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(m) Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section 2.05, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) within five (5) Business Days following the time that such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such issuance, amendment, renewal or extension, and face amount of the Letters of Credit issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank; provided that no Issuing Bank shall have any liability hereunder to any Person for any failure to deliver the reports contemplated by this paragraph (m).

 

(n) Applicability of ISP and UCP. Unless otherwise expressly agreed by the applicable Issuing Bank and the Borrower when a Letter of Credit is issued or when it is amended with the consent of the beneficiary thereof, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit. Notwithstanding the foregoing, the applicable Issuing Bank shall not be responsible to the Borrower for, and the applicable Issuing Bank’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of the applicable Issuing Bank required or permitted under any law, order or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the applicable law or any order of any Governmental Authority in a jurisdiction where the applicable Issuing Bank or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade (BAFT), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

 

(o) Provisions Related to Extended Revolving Commitments. If the maturity date in respect of any Class of Revolving Commitments occurs prior to the expiration of any Letter of Credit, then (i) if consented to by the Issuing Bank which issued such Letter of Credit, if one or more other Classes of Revolving Commitments in respect of which the maturity date shall not have occurred are then in effect, such Letters of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of the Revolving Lenders to purchase participations therein and to make Revolving Loans and payments in respect thereof pursuant to this Section 2.05) under (and ratably participated in by Revolving Lenders pursuant to) the Revolving Commitments in respect of such non-terminating Classes up to an aggregate amount not to exceed the aggregate principal amount of the unutilized Revolving Commitments thereunder at such time (it being understood that no partial face amount of any Letter of Credit may be so reallocated) and (ii) to the extent not reallocated pursuant to immediately preceding clause (i), the Borrower shall cash collateralize any such Letter of Credit in accordance with the terms hereof. If, for any reason, such cash collateral is not provided or the reallocation does not occur, the Revolving Lenders under the maturing Class shall continue to be responsible for their participating interests in the Letters of Credit. Except to the extent of reallocations of participations pursuant to clause (i) of the second preceding sentence, the occurrence of a maturity date with respect to a given Class of Revolving Commitments shall have no effect upon (and shall not diminish) the percentage participations of the Revolving Lenders in any Letter of Credit issued before such maturity date. Commencing with the maturity date of any Class of Revolving Commitments, the sub-limit for Letters of Credit shall be agreed with the Revolving Lenders under the extended Classes. For the avoidance of doubt, notwithstanding anything contained herein, the commitment of any Issuing Bank to act in its capacity as such cannot be extended beyond the Revolving Maturity Date or increased without its prior written consent.

 

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SECTION 2.06 Funding of Borrowings.

 

(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds in dollars by 12:00 noon, New York City time, to the Applicable Account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swing Loans shall be made as provided in Section 2.04 and Section 2.06(b). The Administrative Agent will make all such requested Loans available to the Borrower by promptly wiring the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(f) shall be remitted by the Administrative Agent directly to the applicable Issuing Bank.

 

(b) The Swing Line Lender shall make each Swing Loan in dollars to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 4:00 p.m., New York City time, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request.

 

(c) Unless the Administrative Agent shall have received written notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.06 and may, in reliance on such assumption and in its sole discretion, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender agrees to pay to the Administrative Agent an amount equal to such share on demand of the Administrative Agent. If such Lender does not pay such corresponding amount forthwith upon demand of the Administrative Agent therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower agrees to pay such corresponding amount to the Administrative Agent forthwith on demand. The Administrative Agent shall also be entitled to recover from such Lender or the Borrower interest on such corresponding amount, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, or (ii) in the case of the Borrower, the interest rate applicable to such Borrowing in accordance with Section 2.13. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

 

(d) The obligations of the Lenders hereunder to make Term Loans and Revolving Loans, to fund participations in Letters of Credit, to fund Swing Loan Participations and to make payments pursuant to Section 9.03(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 9.03(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.03(c).

 

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SECTION 2.07 Interest Elections.

 

(a) Each Revolving Borrowing and Term Borrowing initially shall be of the Type specified in the applicable Borrowing Request or designated by Section 2.03 and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or designated by Section 2.03. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.07. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swing Loans, which shall be made and maintained as ABR Loans and may not be converted to Eurodollar Loans.

 

(b) To make an election pursuant to this Section 2.07, the Borrower shall notify the Administrative Agent of such election in writing by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable and shall be signed by the Borrower.

 

(c) Each Interest Election Request shall specify the following information in compliance with Section 2.03:

 

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period.”

 

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(d) Promptly following receipt of an Interest Election Request in accordance with this Section 2.07, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to 11:00 a.m., New York City time, on the third Business Day prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to a Eurodollar Borrowing with an Interest Period of one (1) month’s duration. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and, except for an Event of Default under Section 7.01(h) or (i), the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

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SECTION 2.08 Termination and Reduction of Commitments.

 

(a) Unless previously terminated, (i) the Term Commitments shall terminate at the earlier of (x) upon the making of the Term Loans hereunder on the Closing Date and (y) 5:00 p.m., New York City time, on the Closing Date and (ii) the Revolving Commitments shall terminate on the Revolving Maturity Date.

 

(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments of any Class, provided that (i) each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000 unless such amount represents all of the remaining Commitments of such Class and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans or Swing Loans in accordance with Section 2.11, the aggregate Revolving Exposures would exceed the aggregate Revolving Commitments.

 

(c) The Borrower shall notify the Administrative Agent in writing of any election to terminate or reduce the Commitments under paragraph (b) of this Section 2.08 at least one (1) Business Day prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section 2.08 shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or the occurrence of some other identifiable event or condition, in which case such notice may be revoked by the Borrower (by written notice to the Administrative Agent on or prior to the specified effective date of termination) if such condition is not satisfied. Any termination or reduction of the Commitments of any Class shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Lenders in accordance with their respective Commitments of such Class.

 

SECTION 2.09 Repayment of Loans; Evidence of Debt.

 

(a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender as provided in Section 2.10. and (iii) to the Administrative Agent for the account of the Swing Line Lender the then unpaid principal amount of each Swing Loan made by the Swing Line Lender on the Swing Loan Maturity Date for such Swing Loan; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swing Loans that were outstanding on the date such Revolving Borrowing was requested.

 

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period and, in the case of a Swing Loan, the Swing Loan Maturity Date applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

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(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section 2.09 shall be prima facie evidence of the existence and amounts of the obligations recorded therein, provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to pay any amounts due hereunder in accordance with the terms of this Agreement. In the event of any inconsistency between the entries made pursuant to paragraphs (b) and (c) of this Section 2.09, the accounts maintained by the Administrative Agent pursuant to paragraph (c) of this Section 2.09 shall control.

 

(e) Any Lender may request to the Borrower that Loans of any Class made by it be evidenced by a Note. In such event, the Borrower shall execute and deliver (at the Borrower’s expense) to such Lender a Note payable to such Lender or its registered assigns (or, if requested by such Lender, to the order of such Lender and its registered assigns).

 

SECTION 2.10 Amortization of Term Loans.

 

(a) Subject to adjustment pursuant to paragraph (c) of this Section 2.10, the Borrower shall repay Borrowings of Initial Term Loans on the last day of each September, December, March and June (commencing on June 30, 2020) in the aggregate principal amount of Initial Term Loans as follows; provided that if any such date is not a Business Day, such payment shall be due on the next preceding Business Day:

 

Term Loan Payment Date   Amortization Payment  
June 30, 2020   $ 702,500  
September 30, 2020   $ 702,500  
December 31, 2020   $ 702,500  
March 31, 2021   $ 702,500  
June 30, 2021   $ 702,500  
September 30, 2021   $ 702,500  
December 31, 2021   $ 702,500  
March 31, 2022   $ 702,500  
June 30, 2022   $ 702,500  
September 30, 2022   $ 702,500  
December 31, 2022   $ 702,500  
March 31, 2023   $ 702,500  
June 30, 2023   $ 702,500  
September 30, 2023   $ 702,500  
December 31, 2023   $ 702,500  
March 31, 2024   $ 702,500  
June 30, 2024   $ 702,500  
September 30, 2024   $ 702,500  
December 31, 2024   $ 702,500  
March 31, 2025   $ 702,500  
June 30, 2025   $ 702,500  
September 30, 2025   $ 702,500  
December 31, 2025   $ 702,500  
March 31, 2026   $ 702,500  
June 30, 2026   $ 702,500  
September 30, 2026   $ 702,500  
December 31, 2026   $ 702,500  
Term Maturity Date     Remaining aggregate principal amount of all outstanding Initial Term Loans  

 

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(b) To the extent not previously paid, all outstanding Initial Term Loans shall be due and payable on the Term Maturity Date.

 

(c) Any prepayment of a Term Borrowing of any Class (i) pursuant to Section 2.11(a)(i) shall be applied to reduce the subsequent scheduled and outstanding repayments of the Term Borrowings of such Class to be made pursuant to this Section 2.10 as directed by the Borrower (and, in the absence of any such direction, in direct order of maturity), (ii) pursuant to Section 2.11(a)(ii), shall be applied to reduce the subsequent scheduled and outstanding repayments of the Term Borrowings of such Class to be made pursuant to this Section 2.10 in inverse order of maturity and (iii) pursuant to Section 2.11(c) or 2.11(d) shall be applied to reduce the subsequent scheduled and outstanding repayments of the Term Borrowings of such Class to be made pursuant to this Section 2.10, or, except as otherwise provided in any Refinancing Amendment or Loan Modification Agreement, pursuant to the corresponding section of such Refinancing Amendment or Loan Modification Agreement, as applicable, in direct order of maturity.

 

(d) Prior to any repayment of any Term Borrowings of any Class hereunder, the Borrower shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall notify the Administrative Agent by written notice of (by hand delivery, facsimile or other electronic transmissions) of such election not later than 2:00 p.m., New York City time, three (3) Business Days before the scheduled date of such repayment. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.16. Each repayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of Term Borrowings shall be accompanied by accrued interest on the amount repaid.

 

SECTION 2.11 Prepayment of Loans.

 

(a) (i) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty; provided, in the event that, on or prior to the date that is the six (6) month anniversary of the Closing Date, the Borrower (x) makes any prepayment or repayment (or conversion) of Initial Term Loans (with replacement of a Non-Accepting Lender pursuant to Section 2.24 or any of the mandatory prepayments described in Section 2.11(c) with respect to the incurrence of Indebtedness, in each case being deemed, for this purpose, to constitute a prepayment for purposes of this Section 2.11(a)) in connection with any Repricing Transaction or (y) effects any amendment of this Agreement resulting in a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Term Lenders, (I) a prepayment premium of 1.00% of the principal amount of the Initial Term Loans being prepaid or repaid (or converted) in connection with such Repricing Transaction and (II) in the case of preceding clause (y), an amount equal to 1.00% of the aggregate principal amount of the applicable Initial Term Loans outstanding immediately prior to such amendment that are subject to an effective pricing reduction pursuant to such Repricing Transaction (including the principal amount of any Initial Term Loans of any Non-Accepting Lender which are required to be assigned in accordance with Section 2.24 as a result of such Non-Accepting Lender’s failure to consent to such amendment).

 

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(ii) Notwithstanding anything in any Loan Document to the contrary, so long as no Default or Event of Default has occurred and is continuing, Holdings, the Borrower or any of their respective Subsidiaries may offer to prepay all or a portion of the outstanding Term Loans of any Class on the following basis:

 

(A) Holdings, the Borrower or any of their respective Subsidiaries shall have the right to make a voluntary prepayment of Term Loans of any Class at a discount to par (such prepayment, the “Discounted Term Loan Prepayment”) pursuant to a Borrower Offer of Specified Discount Prepayment, Borrower Solicitation of Discount Range Prepayment Offers or Borrower Solicitation of Discounted Prepayment Offers, in each case made in accordance with this Section 2.11(a)(ii); provided that (x) Holdings, the Borrower or any of their respective Subsidiaries shall not make any Borrowing of Revolving Loans or Swing Loans to fund any Discounted Term Loan Prepayment and (y) Holdings, the Borrower or any of their respective Subsidiaries shall not initiate any action under this Section 2.11(a)(ii) in order to make a Discounted Term Loan Prepayment unless (I) at least ten (10) Business Days shall have passed since the consummation of the most recent Discounted Term Loan Prepayment as a result of a prepayment made by Holdings, the Borrower or any of their respective Subsidiaries on the applicable Discounted Prepayment Effective Date; or (II) at least three (3) Business Days shall have passed since the date Holdings, the Borrower or any of their respective Subsidiaries were notified that no Term Lender was willing to accept any prepayment of any Term Loan at the Specified Discount, within the Discount Range or at any discount to par value, as applicable, or in the case of Borrower Solicitation of Discounted Prepayment Offers, the date of Holdings’, the Borrower’s or any of their respective Subsidiaries’ election not to accept any Solicited Discounted Prepayment Offers and (z) each Term Lender participating in any Discounted Term Loan Prepayment acknowledges and agrees that in connection with such Discounted Term Loan Prepayment, (1) the Borrower then may have, and later may come into possession of, information regarding the Term Loans or the Loan Parties hereunder that is not known to such Lender and that may be material to a decision by such Term Lender to participate in such Discounted Term Loan Prepayment (“Excluded Information”), (2) such Term Lender has independently and, without reliance on Holdings, any of its Subsidiaries, the Administrative Agent or any of their respective Affiliates, made its own analysis and determination to participate in such Discounted Term Loan Prepayment notwithstanding such Term Lender’s lack of knowledge of the Excluded Information and (3) none of Holdings, its Subsidiaries, the Administrative Agent, or any of their respective Affiliates shall have any liability to such Term Lender, and such Term Lender hereby waives and releases, to the extent permitted by Requirements of Law, any claims such Term Lender may have against Holdings, its Subsidiaries, the Administrative Agent, and their respective Affiliates, under applicable laws or otherwise, with respect to the nondisclosure of the Excluded Information; provided further that any Term Loan that is prepaid will be automatically and irrevocably cancelled.

 

(B) (1) Subject to the proviso to subsection (A) above, Holdings, the Borrower or any of their respective Subsidiaries may from time to time offer to make a Discounted Term Loan Prepayment by providing the Auction Agent with three (3) Business Days’ notice in the form of a Specified Discount Prepayment Notice; provided that (I) any such offer shall be made available, at the sole discretion of Holdings, the Borrower or any of their respective Subsidiaries, to each Term Lender and/or each Lender with respect to any Class of Term Loans on an individual tranche basis, (II) any such offer shall specify the aggregate principal amount offered to be prepaid (the “Specified Discount Prepayment Amount”) with respect to each applicable Class, the Class or Classes of Term Loans subject to such offer and the specific percentage discount to par (the “Specified Discount”) of such Term Loans to be prepaid (it being understood that different Specified Discounts and/or Specified Discount Prepayment Amounts may be offered with respect to different Classes of Term Loans and, in such an event, each such offer will be treated as a separate offer pursuant to the terms of this Section), (III) the Specified Discount Prepayment Amount shall be in an aggregate amount not less than $1,000,000 and whole increments of $500,000 in excess thereof and (IV) each such offer shall remain outstanding through the Specified Discount Prepayment Response Date. The Auction Agent will promptly provide each relevant Term Lender with a copy of such Specified Discount Prepayment Notice and a form of the Specified Discount Prepayment Response to be completed and returned by each such Term Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m., New York City time, on the third Business Day after the date of delivery of such notice to the relevant Term Lenders (the “Specified Discount Prepayment Response Date”).

 

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(2) Each relevant Term Lender receiving such offer shall notify the Auction Agent (or its delegate) by the Specified Discount Prepayment Response Date whether or not it agrees to accept a prepayment of any of its relevant then outstanding Term Loans at the Specified Discount and, if so (such accepting Term Lender, a “Discount Prepayment Accepting Lender”), the amount and the Classes of such Term Lender’s Term Loans to be prepaid at such offered discount. Each acceptance of a Discounted Term Loan Prepayment by a Discount Prepayment Accepting Lender shall be irrevocable. Any Term Lender whose Specified Discount Prepayment Response is not received by the Auction Agent by the Specified Discount Prepayment Response Date shall be deemed to have declined to accept the applicable Borrower Offer of Specified Discount Prepayment.

 

(3) If there is at least one Discount Prepayment Accepting Lender, Holdings, the Borrower or any of their respective Subsidiaries will make prepayment of outstanding Term Loans of the applicable Class pursuant to this paragraph (B) to each Discount Prepayment Accepting Lender in accordance with the respective outstanding amount and Classes of Term Loans specified in such Lender’s Specified Discount Prepayment Response given pursuant to subsection (2); provided that, if the aggregate principal amount of Term Loans accepted for prepayment by all Discount Prepayment Accepting Lenders exceeds the Specified Discount Prepayment Amount, such prepayment shall be made pro rata among the Discount Prepayment Accepting Lenders in accordance with the respective principal amounts accepted to be prepaid by each such Discount Prepayment Accepting Lender and the Auction Agent (in consultation with Holdings, the Borrower or any of their respective Subsidiaries and subject to rounding requirements of the Auction Agent made in its reasonable discretion) will calculate such proration (the “Specified Discount Proration”). The Auction Agent shall promptly, and in any case within three (3) Business Days, following the Specified Discount Prepayment Response Date, notify (I) the Administrative Agent (if not the Auction Agent), Holdings, the Borrower or any of their respective Subsidiaries of the respective Term Lenders’ responses to such offer, the Discounted Prepayment Effective Date and the aggregate principal amount of the Discounted Term Loan Prepayment and the Classes to be prepaid, (II) each Term Lender of the Discounted Prepayment Effective Date, and the aggregate principal amount and the Classes of Term Loans to be prepaid at the Specified Discount on such date and (III) each Discount Prepayment Accepting Lender of the Specified Discount Proration, if any, and confirmation of the principal amount, Class and Type of Term Loans of such Term Lender to be prepaid at the Specified Discount on such date. Each determination by the Auction Agent of the amounts stated in the foregoing notices to Holdings, the Borrower or any of their respective Subsidiaries and Term Lenders shall be conclusive and binding for all purposes absent manifest error. The payment amount specified in such notice to Holdings, the Borrower or any of their respective Subsidiaries shall be due and payable by Holdings, the Borrower or any of their respective Subsidiaries on the Discounted Prepayment Effective Date in accordance with subsection (F) below (subject to subsection (J) below).

 

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(C) (1) Subject to the proviso to subsection (A) above, Holdings, the Borrower or any of their respective Subsidiaries may from time to time solicit Discount Range Prepayment Offers by providing the Auction Agent with three (3) Business Days’ notice in the form of a Discount Range Prepayment Notice; provided that (I) any such solicitation shall be extended, at the sole discretion of Holdings, the Borrower or any of their respective Subsidiaries, to each Term Lender with respect to any Class of Term Loans on an individual Class basis, (II) any such notice shall specify the maximum aggregate principal amount of the relevant Term Loans (the “Discount Range Prepayment Amount”), the Class or Classes of Term Loans subject to such offer and the maximum and minimum percentage discounts to par (the “Discount Range”) of the principal amount of such Term Loans with respect to each relevant Class of Term Loans willing to be prepaid by Holdings, the Borrower or any of their respective Subsidiaries (it being understood that different Discount Ranges and/or Discount Range Prepayment Amounts may be offered with respect to different Classes of Term Loans and, in such an event, each such offer will be treated as a separate offer pursuant to the terms of this Section), (III) the Discount Range Prepayment Amount shall be in an aggregate amount not less than $1,000,000 and whole increments of $500,000 in excess thereof and (IV) each such solicitation by Holdings, the Borrower or any of their respective Subsidiaries shall remain outstanding through the Discount Range Prepayment Response Date. The Auction Agent will promptly provide each relevant Term Lender with a copy of such Discount Range Prepayment Notice and a form of the Discount Range Prepayment Offer to be submitted by a responding relevant Term Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m., New York City time, on the third Business Day after the date of delivery of such notice to the relevant Term Lenders (the “Discount Range Prepayment Response Date”). Each relevant Term Lender’s Discount Range Prepayment Offer shall be irrevocable and shall specify a discount to par within the Discount Range (the “ Submitted Discount”) at which such Term Lender is willing to allow prepayment of any or all of its then outstanding Term Loans of the applicable Class or Classes and the maximum aggregate principal amount and Classes of such Lender’s Term Loans (the “Submitted Amount”) such Term Lender is willing to have prepaid at the Submitted Discount. Any Term Lender whose Discount Range Prepayment Offer is not received by the Auction Agent by the Discount Range Prepayment Response Date shall be deemed to have declined to accept a Discounted Term Loan Prepayment of any of its Term Loans at any discount to their par value within the Discount Range.

 

(2) The Auction Agent shall review all Discount Range Prepayment Offers received on or before the applicable Discount Range Prepayment Response Date and shall determine (in consultation with Holdings, the Borrower or any of their respective Subsidiaries and subject to rounding requirements of the Auction Agent made in its sole reasonable discretion) the Applicable Discount and Term Loans to be prepaid at such Applicable Discount in accordance with this subsection (C). Holdings, the Borrower or any of their respective Subsidiaries agree to accept on the Discount Range Prepayment Response Date all Discount Range Prepayment Offers received by the Auction Agent by the Discount Range Prepayment Response Date, in the order from the Submitted Discount that is the largest discount to par to the Submitted Discount that is the smallest discount to par, up to and including the Submitted Discount that is the smallest discount to par within the Discount Range (such Submitted Discount that is the smallest discount to par within the Discount Range being referred to as the “Applicable Discount”) which yields a Discounted Term Loan Prepayment in an aggregate principal amount equal to the lower of (I) the Discount Range Prepayment Amount and (II) the sum of all Submitted Amounts. Each Lender that has submitted a Discount Range Prepayment Offer to accept prepayment at a discount to par that is larger than or equal to the Applicable Discount shall be deemed to have irrevocably consented to prepayment of Term Loans equal to its Submitted Amount (subject to any required proration pursuant to the following subsection (3)) at the Applicable Discount (each such Term Lender, a “Participating Lender”).

 

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(3) If there is at least one Participating Lender, Holdings, the Borrower or any of their respective Subsidiaries will prepay the respective outstanding Term Loans of each Participating Lender in the aggregate principal amount and of the Classes specified in such Term Lender’s Discount Range Prepayment Offer at the Applicable Discount; provided that if the Submitted Amount by all Participating Lenders offered at a discount to par greater than the Applicable Discount exceeds the Discount Range Prepayment Amount, prepayment of the principal amount of the relevant Term Loans for those Participating Lenders whose Submitted Discount is a discount to par greater than or equal to the Applicable Discount (the “Identified Participating Lenders”) shall be made pro rata among the Identified Participating Lenders in accordance with the Submitted Amount of each such Identified Participating Lender and the Auction Agent (in consultation with Holdings, the Borrower or any of their respective Subsidiaries and subject to rounding requirements of the Auction Agent made in its sole reasonable discretion) will calculate such proration (the “Discount Range Proration”). The Auction Agent shall promptly, and in any case within five (5) Business Days, following the Discount Range Prepayment Response Date, notify (I) the Administrative Agent (if not the Auction Agent), Holdings, the Borrower or any of their respective Subsidiaries of the respective Term Lenders’ responses to such solicitation, the Discounted Prepayment Effective Date, the Applicable Discount, and the aggregate principal amount of the Discounted Term Loan Prepayment and the Classes to be prepaid, (II) each Term Lender of the Discounted Prepayment Effective Date, the Applicable Discount, and the aggregate principal amount and Classes of Term Loans to be prepaid at the Applicable Discount on such date, (III) each Participating Lender of the aggregate principal amount and Classes of such Term Lender to be prepaid at the Applicable Discount on such date, and (z) if applicable, each Identified Participating Lender of the Discount Range Proration. Each determination by the Auction Agent of the amounts stated in the foregoing notices to Holdings, the Borrower or any of their respective Subsidiaries and Term Lenders shall be conclusive and binding for all purposes absent manifest error. The payment amount specified in such notice to Holdings, the Borrower or any of their respective Subsidiaries shall be due and payable by such Borrower on the Discounted Prepayment Effective Date in accordance with subsection (F) below (subject to subsection (J) below).

 

(D) (1) Subject to the proviso to subsection (A) above, Holdings, the Borrower or any of their respective Subsidiaries may from time to time solicit Solicited Discounted Prepayment Offers by providing the Auction Agent with three (3) Business Days’ notice in the form of a Solicited Discounted Prepayment Notice; provided that (I) any such solicitation shall be extended, at the sole discretion of Holdings, the Borrower or any of their respective Subsidiaries, to each Term Lender with respect to any Class of Term Loans on an individual Class basis, (II) any such notice shall specify the maximum aggregate dollar amount of the Term Loans (the “Solicited Discounted Prepayment Amount”) and the Class or Classes of Term Loans Holdings, the Borrower or any of their respective Subsidiaries is willing to prepay at a discount (it being understood that different Solicited Discounted Prepayment Amounts may be offered with respect to different Classes of Term Loans and, in such an event, each such offer will be treated as a separate offer pursuant to the terms of this Section), (III) the Solicited Discounted Prepayment Amount shall be in an aggregate amount not less than $1,000,000 and whole increments of $500,000 in excess thereof and (IV) each such solicitation by Holdings, the Borrower or any of their respective Subsidiaries shall remain outstanding through the Solicited Discounted Prepayment Response Date. The Auction Agent will promptly provide each relevant Term Lender with a copy of such Solicited Discounted Prepayment Notice and a form of the Solicited Discounted Prepayment Offer to be submitted by a responding Term Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m., New York City time on the third Business Day after the date of delivery of such notice to the relevant Term Lenders (the “Solicited Discounted Prepayment Response Date”). Each Term Lender’s Solicited Discounted Prepayment Offer shall (x) be irrevocable, (y) remain outstanding until the Acceptance Date, and (z) specify both a discount to par (the “Offered Discount”) such Term Lender is willing to allow to be applied to the prepayment of its then outstanding Term Loan and the maximum aggregate principal amount and Classes of such Term Loans (the “Offered Amount”) such Term Lender is willing to have prepaid subject to such Offered Discount. Any Term Lender whose Solicited Discounted Prepayment Offer is not received by the Auction Agent by the Solicited Discounted Prepayment Response Date shall be deemed to have declined prepayment of any of its Term Loans at any discount.

 

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(2) The Auction Agent shall promptly provide Holdings, the Borrower or any of their respective Subsidiaries with a copy of all Solicited Discounted Prepayment Offers received on or before the Solicited Discounted Prepayment Response Date. Holdings, the Borrower or any of their respective Subsidiaries shall review all such Solicited Discounted Prepayment Offers and select the largest of the Offered Discounts specified by the relevant responding Term Lenders in the Solicited Discounted Prepayment Offers that is acceptable to Holdings, the Borrower or any of their respective Subsidiaries (the “Acceptable Discount”), if any. If Holdings, the Borrower or any of their respective Subsidiaries elects to accept any Offered Discount as the Acceptable Discount, then as soon as practicable after the determination of the Acceptable Discount, but in no event later than by the third Business Day after the date of receipt by Holdings, the Borrower or any of their respective Subsidiaries from the Auction Agent of a copy of all Solicited Discounted Prepayment Offers pursuant to the first sentence of this subsection (2) (the “Acceptance Date”), Holdings, the Borrower or any of their respective Subsidiaries shall submit an Acceptance and Prepayment Notice to the Auction Agent setting forth the Acceptable Discount. If the Auction Agent shall fail to receive an Acceptance and Prepayment Notice from Holdings, the Borrower or any of their respective Subsidiaries by the Acceptance Date, Holdings, the Borrower or any of their respective Subsidiaries shall be deemed to have rejected all Solicited Discounted Prepayment Offers.

 

(3) Based upon the Acceptable Discount and the Solicited Discounted Prepayment Offers received by Auction Agent by the Solicited Discounted Prepayment Response Date, within three (3) Business Days after receipt of an Acceptance and Prepayment Notice (the “Discounted Prepayment Determination Date”), the Auction Agent will determine (in consultation with Holdings, the Borrower or any of their respective Subsidiaries and subject to rounding requirements of the Auction Agent made in its sole reasonable discretion) the aggregate principal amount and the Classes of Term Loans (the “Acceptable Prepayment Amount”) to be prepaid by Holdings, the Borrower or any of their respective Subsidiaries at the Acceptable Discount in accordance with this Section 2.11(a)(ii)(D). If Holdings, the Borrower or any of their respective Subsidiaries elects to accept any Acceptable Discount, then Holdings, the Borrower or any of their respective Subsidiaries agrees to accept all Solicited Discounted Prepayment Offers received by Auction Agent by the Solicited Discounted Prepayment Response Date, in the order from largest Offered Discount to smallest Offered Discount, up to and including the Acceptable Discount. Each Term Lender that has submitted a Solicited Discounted Prepayment Offer with a Offered Discount that is greater than or equal to the Acceptable Discount shall be deemed to have irrevocably consented to prepayment of Term Loans equal to its Offered Amount (subject to any required pro rata reduction pursuant to the following sentence) at the Acceptable Discount (each such Term Lender, a “Qualifying Lender”). Holdings, the Borrower or any of their respective Subsidiaries will prepay outstanding Term Loans pursuant to this subsection (D) to each Qualifying Lender in the aggregate principal amount and of the Classes specified in such Term Lender’s Solicited Discounted Prepayment Offer at the Acceptable Discount; provided that if the aggregate Offered Amount by all Qualifying Lenders whose Offered Discount is greater than or equal to the Acceptable Discount exceeds the Solicited Discounted Prepayment Amount, prepayment of the principal amount of the Term Loans for those Qualifying Lenders whose Offered Discount is greater than or equal to the Acceptable Discount (the “Identified Qualifying Lenders”) shall be made pro rata among the Identified Qualifying Lenders in accordance with the Offered Amount of each such Identified Qualifying Lender and the Auction Agent (in consultation with Holdings, the Borrower or any of their respective Subsidiaries and subject to rounding requirements of the Auction Agent made in its sole reasonable discretion) will calculate such proration (the “Solicited Discount Proration”). On or prior to the Discounted Prepayment Determination Date, the Auction Agent shall promptly notify (I) the Administrative Agent (if not the Auction Agent), Holdings, the Borrower or any of their respective Subsidiaries of the Discounted Prepayment Effective Date and Acceptable Prepayment Amount comprising the Discounted Term Loan Prepayment and the Classes to be prepaid, (II) each Term Lender who made a Solicited Discounted Prepayment Offer of the Discounted Prepayment Effective Date, the Acceptable Discount, and the Acceptable Prepayment Amount of all Term Loans and the Classes to be prepaid at the Applicable Discount on such date, (III) each Qualifying Lender of the aggregate principal amount and the Classes of such Term Lender to be prepaid at the Acceptable Discount on such date, and (IV) if applicable, each Identified Qualifying Lender of the Solicited Discount Proration. Each determination by the Auction Agent of the amounts stated in the foregoing notices to such Borrower and Term Lenders shall be conclusive and binding for all purposes absent manifest error. The payment amount specified in such notice to such Borrower shall be due and payable by such Borrower on the Discounted Prepayment Effective Date in accordance with subsection (F) below (subject to subsection (J) below).

 

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(E) In connection with any Discounted Term Loan Prepayment, Holdings, the Borrower or any of their respective Subsidiaries and the Term Lenders acknowledge and agree that the Auction Agent may require as a condition to any Discounted Term Loan Prepayment, the payment of reasonable and customary fees and expenses from Holdings, the Borrower or any of their respective Subsidiaries in connection therewith.

 

(F) If any Term Loan is prepaid in accordance with paragraphs (B) through (D) above, Holdings, the Borrower or any of their respective Subsidiaries shall prepay such Term Loans on the Discounted Prepayment Effective Date. Holdings, the Borrower or any of their respective Subsidiaries shall make such prepayment to the Auction Agent, for the account of the Discount Prepayment Accepting Lenders, Participating Lenders, or Qualifying Lenders, as applicable, at the Administrative Agent’s office in immediately available funds not later than 11:00 a.m., New York City time, on the Discounted Prepayment Effective Date and all such prepayments shall be applied to the remaining principal installments of the relevant Class of Term Loans in inverse order of maturity. The Term Loans so prepaid shall be accompanied by all accrued and unpaid interest on the par principal amount so prepaid up to, but not including, the Discounted Prepayment Effective Date. Each prepayment of the outstanding Term Loans pursuant to this Section 2.11(a)(ii) shall be paid to the Discount Prepayment Accepting Lenders, Participating Lenders, or Qualifying Lenders, as applicable. The aggregate principal amount of the Classes and installments of the relevant Term Loans outstanding shall be deemed reduced by the full par value of the aggregate principal amount of the Classes of Term Loans prepaid on the Discounted Prepayment Effective Date in any Discounted Term Loan Prepayment.

 

(G) To the extent not expressly provided for herein, each Discounted Term Loan Prepayment shall be consummated pursuant to procedures consistent with the provisions in this Section 2.11(a)(ii), established by the Auction Agent acting in its reasonable discretion and as reasonably agreed by Holdings, the Borrower or any of their respective Subsidiaries.

 

(H) Notwithstanding anything in any Loan Document to the contrary, for purposes of this Section 2.11(a)(ii), each notice or other communication required to be delivered or otherwise provided to the Auction Agent (or its delegate) shall be deemed to have been given upon Auction Agent’s (or its delegate’s) actual receipt during normal business hours of such notice or communication; provided that any notice or communication actually received outside of normal business hours shall be deemed to have been given as of the opening of business on the next Business Day.

 

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(I) Each of Holdings, the Borrower or any of their respective Subsidiaries and the Term Lenders acknowledge and agree that the Auction Agent may perform any and all of its duties under this Section 2.11(a)(ii) by itself or through any Affiliate of the Auction Agent and expressly consents to any such delegation of duties by the Auction Agent to such Affiliate and the performance of such delegated duties by such Affiliate. The exculpatory provisions pursuant to this Agreement shall apply to each Affiliate of the Auction Agent and its respective activities in connection with any Discounted Term Loan Prepayment provided for in this Section 2.11(a)(ii) as well as activities of the Auction Agent.

 

(J) Holdings, the Borrower or any of their respective Subsidiaries shall have the right, by written notice to the Auction Agent, to revoke in full (but not in part) its offer to make a Discounted Term Loan Prepayment and rescind the applicable Specified Discount Prepayment Notice, Discount Range Prepayment Notice or Solicited Discounted Prepayment Notice therefor at its discretion at any time on or prior to the applicable Specified Discount Prepayment Response Date, Discount Range Prepayment Response Date or Solicited Discounted Prepayment Response Date, as applicable (and if such offer is revoked pursuant to the preceding clauses, any failure by such Borrower to make any prepayment to a Term Lender, as applicable, pursuant to this Section 2.11(a)(ii) shall not constitute a Default or Event of Default under Section 7.01 or otherwise).

 

(b) (i) In the event and on each occasion that the aggregate Revolving Exposures exceed the aggregate Revolving Commitments, the Borrower shall immediately prepay Swing Loans or, if no Swing Loans are or will remain outstanding after such prepayment, Revolving Borrowings (or, if no such Revolving Borrowings are outstanding, deposit cash collateral in an account with the Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount necessary to eliminate such excess.

 

(ii) In the event that the Long Engineering Acquisition has not been consummated on or prior to February 28, 2020, the Borrower shall prepay outstanding Initial Term Loans in an aggregate principal amount of $10,500,000 on March 2, 2020.

 

(c) In the event and on each occasion that any Net Proceeds are received by or on behalf of Holdings, the Borrower or any of its Restricted Subsidiaries in respect of any Prepayment Event, the Borrower shall, within five (5) Business Days after such Net Proceeds are received (or, in the case of a Prepayment Event described in clause (b) of the definition of the term “Prepayment Event,” on the date of such Prepayment Event), prepay Term Borrowings in an aggregate amount equal to the Asset Sale Percentage of the amount of such Net Proceeds in respect of any Prepayment Event referred to in clause (a) of the definition thereof and 100% of the amount of such Net Proceeds in respect of any Prepayment Event referred to in clause (b) of the definition thereof; provided that, in the case of any event described in clause (a) of the definition of the term “Prepayment Event” but only so long as no Event of Default then exists or would result therefrom, if the Borrower or any of its Restricted Subsidiaries invest (or commit to invest) the Net Proceeds from such event (or a portion thereof) within 365 days after receipt of such Net Proceeds in assets of the Borrower and its Restricted Subsidiaries useful in the business of the Borrower and its Restricted Subsidiaries (including any acquisitions permitted under Section 6.04, but excluding investments in working capital assets), then no prepayment shall be required pursuant to this paragraph in respect of such Net Proceeds in respect of such event (or the applicable portion of such Net Proceeds, if applicable) except to the extent of any such Net Proceeds therefrom that have not been so invested (or committed to be invested, as applicable) by the end of such 365-day period (or if committed to be so invested within such 365-day period, have not been so invested within 180 days after the expiration of such 365-day period), at which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so invested (or committed to be invested); provided further, that the Borrower may use a portion of such Net Proceeds in the case of a Prepayment Event described in clause (a) of the definition thereof to prepay or repurchase any other secured Indebtedness in the form of term loans or notes that ranks pari passu to the Liens securing the Secured Obligations and is otherwise subject to the terms of the First Lien Intercreditor Agreement (to the extent a mandatory prepayment or offer to prepay such other Indebtedness is required under the applicable governing such other Indebtedness), in each case in an amount not to exceed the product of (x) the amount of such Net Proceeds and (y) a fraction, the numerator of which is the outstanding principal amount of such other secured Indebtedness and the denominator of which is the aggregate outstanding principal amount of all Term Loans and all such other secured Indebtedness.

 

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(d) Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2020, the Borrower shall prepay Term Borrowings in an aggregate amount (the “Excess Cash Flow Prepayment Amount”) equal to the ECF Percentage of Excess Cash Flow for such fiscal year (or, in the case of the Borrower’s fiscal year ending December 31, 2020, for the period from the Closing Date through and including December 31, 2020); provided that such amount shall, at the option of the Borrower, be reduced on a dollar-for-dollar basis for such fiscal year by the aggregate amount of prepayments and repurchases of (i) Term Loans (and, to the extent the Revolving Commitments are permanently reduced in a corresponding amount pursuant to Section 2.08, Revolving Loans) made pursuant to Section 2.11(a)(i) or (ii) Term Loans made pursuant to Section 2.11(a)(ii) or otherwise pursuant to Section 9.04(f), in either case, to the extent made with internally generated cash flow of the Borrower and its Restricted Subsidiaries during such fiscal year or after such fiscal year and prior to the time such prepayment is due (without duplication to subsequent years) as provided below (provided that such reduction as a result of prepayments pursuant to Section 2.11(a)(ii) or Section 9.04(f) shall (x) be limited to the actual amount of cash used to make such principal prepayment and (y) only be applicable if the applicable prepayment offer was made on a pro rata basis to all applicable Term Lenders); provided that the Borrower may use a portion of such Excess Cash Flow Prepayment Amount to prepay or repurchase any other secured Indebtedness in the form of term loans or notes that ranks pari passu to the Liens securing the Secured Obligations and is otherwise subject to the terms of the First Lien Intercreditor Agreement (to the extent a mandatory prepayment or offer to prepay such other Indebtedness is required under the applicable governing document of such other Indebtedness), in each case in an amount not to exceed the product of (x) the Excess Cash Flow Prepayment Amount and (y) a fraction, the numerator of which is the outstanding principal amount of such other secured Indebtedness and the denominator of which is the aggregate outstanding principal amount of all Term Loans and all such other secured Indebtedness. Each prepayment pursuant to this paragraph shall be made on or before the date that is five (5) days after the earlier of (x) the date on which financial statements are delivered pursuant to Section 5.01(a) with respect to the fiscal year for which Excess Cash Flow is being calculated and (y) the date on which financial statements are required to be delivered pursuant to Section 5.01(a) with respect to such fiscal year.

 

(e) Prior to any optional prepayment of Borrowings pursuant to Section 2.11(a)(i), the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section 2.11. In the event of any mandatory prepayment of Term Borrowings made at a time when Term Borrowings of more than one Class remain outstanding, the Borrower shall select Term Borrowings to be prepaid so that the aggregate amount of such prepayment is allocated between Term Borrowings of each Class pro rata based on the aggregate principal amount of outstanding Term Borrowings of each such Class; provided that (x) any Term Lender (and, to the extent provided in any Incremental Facility Amendment for any Class of Incremental Term Loans or the Refinancing Amendment or Loan Modification Agreement for any Class of Other Term Loans, any Lender that holds Incremental Term Loans or Other Term Loans of such Class) may elect, by notice to the Administrative Agent by written notice delivered (i) by 4:00 p.m. New York City time, at least two (2) Business Days prior to the prepayment date of a Eurodollar Borrowing or (ii) by 4:00 p.m. New York City time, at least one (1) Business Day prior to the prepayment date of an ABR Borrowing, to decline all or any portion of any prepayment of its Term Loans of any such Class pursuant to this Section 2.11 (other than (i) an optional prepayment pursuant to paragraph (a)(i) of this Section 2.11, (ii) a mandatory prepayment as a result of the Prepayment Event set forth in clause (b) of the definition thereof or (iii) a mandatory prepayment pursuant to paragraph (b)(ii) of Section 2.11, which (in each case) may not be declined), in which case the aggregate amount of the prepayment that would have been applied to prepay Term Loans of any such Class but was so declined shall be retained by the Borrower (such remaining declined amounts, “Retained Declined Proceeds”). Subject to Section 2.20(b)(e) and the terms of any Refinancing Amendment or Loan Modification Agreement, optional prepayments of Term Borrowings shall be allocated among the Classes of Term Borrowings as directed by the Borrower. Notwithstanding the foregoing, the Net Proceeds of any Credit Agreement Refinancing Indebtedness shall be applied, substantially concurrently with the incurrence thereof, to the prepayment of outstanding Term Loans or reduction of Revolving Commitments of the respective Class being so refinanced. In the absence of a designation by the Borrower as described in the preceding provisions of this paragraph of the Type of Borrowing of any Class, the Administrative Agent shall make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.16; provided that, in connection with any mandatory prepayments by the Borrower of the Term Loans pursuant to Section 2.11(c) or (d), such prepayments shall be applied on a pro rata basis to the then outstanding Term Loans being prepaid irrespective of whether such outstanding Term Loans are ABR Loans or Eurodollar Loans.

 

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(f) The Borrower shall notify the Administrative Agent of any prepayment pursuant to this Section 2.11 in writing, substantially in the form Exhibit F, of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment or (iii) in the case of a prepayment of a Swing Loan, not later than 10:00 a.m., New York City time, on the date of such prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that a notice of optional prepayment may state that such notice is conditional upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or the occurrence of some other identifiable event or condition, in which case such notice of prepayment may be revoked by the Borrower (by written notice to the Administrative Agent on or prior to the specified date of prepayment) if such condition is not satisfied. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13, and subject to Section 2.11(a)(i), shall be without premium or penalty. At the Borrower’s election in connection with any prepayment of Revolving Loans pursuant to this Section 2.11, such prepayment shall not, so long as no Default or Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender (under any of subclauses (a), (b) or (c) of the definition of “Defaulting Lender”) and shall be allocated ratably among the relevant non-Defaulting Lenders.

 

(g) Notwithstanding any other provisions of Section 2.11(c) or (d), (A) to the extent that (x) any or all the Net Proceeds of any Prepayment Event set forth in clause (a) of the definition thereof by a Foreign Subsidiary of the Borrower giving rise to a prepayment pursuant to Section 2.11(c) (a “Foreign Prepayment Event”) or (y) any portion of any Excess Cash Flow attributable to a Foreign Subsidiary giving rise to a prepayment pursuant to Section 2.11(d), in either case, are prohibited, delayed or restricted by applicable local law, rule or regulation from being repatriated to the Borrower, the portion of such Net Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Term Loans at the times provided in Section 2.11(c) or (d), as the case may be, and such amounts may be retained by such Foreign Subsidiary so long, but only so long, as the Borrower has reasonably determined in good faith that the applicable local law, rule or regulation will not permit repatriation to the Borrower, and, subject to succeeding clause (B), once the Borrower has reasonably determined in good faith that such repatriation of any of such affected Net Proceeds or Excess Cash Flow is permitted under the applicable local law, rule or regulation, such repatriation will be effected as soon as practicable and such repatriated Net Proceeds or Excess Cash Flow will be applied (net of additional taxes payable or reserved against as a result thereof) to the prepayment of the Term Loans pursuant to Section 2.11(c) or (d), as applicable, (B) to the extent that and for so long as the Borrower has reasonably determined in good faith (in consultation with the Administrative Agent) that repatriation of any of or all the Net Proceeds of any Foreign Prepayment Event or Excess Cash Flow from a Foreign Subsidiary would have a material adverse tax consequence with respect to such Net Proceeds or Excess Cash Flow, the Net Proceeds or Excess Cash Flow so affected will not be required to be applied to prepay Term Loans at the times provided in Section 2.11(c) or Section 2.11(d), as the case may be, and such amounts may be retained by such Foreign Subsidiary; provided that when the Borrower reasonably determines in good faith that repatriation of any of or all the Net Proceeds of any Foreign Prepayment Event or Excess Cash Flow, in each case, from a Foreign Subsidiary would no longer have a material adverse tax consequence with respect to such Net Proceeds or Excess Cash Flow, such Net Proceeds or Excess Cash Flow shall be applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to Section 2.11(c) or Section 2.11(d), as applicable; provided that, subject to the foregoing provisions of this paragraph (g), the Borrower shall use commercially reasonable efforts to permit such repatriation or remove such prohibition, as applicable.

 

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SECTION 2.12 Fees.

 

(a) The Borrower agrees to pay to the Administrative Agent in dollars for the account of each Revolving Lender (other than a Defaulting Lender) a commitment fee, which shall accrue at the rate of the Commitment Fee Percentage per annum on the average daily unused amount of the Revolving Commitment of such Revolving Lender during the period from and including the Closing Date to but excluding the date on which the Revolving Commitments terminate. Accrued commitment fees shall be payable in arrears on the last Business Day of March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the Closing Date. All commitment fees shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees, a Revolving Commitment of a Revolving Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Lender and all Swing Loans shall be disregarded.

 

(b) The Borrower agrees to pay (i) to the Administrative Agent in dollars for the account of each Revolving Lender (other than any Defaulting Lender unless such Defaulting Lender has provided cash collateral to fully cover its LC Exposure as otherwise provided herein) a participation fee with respect to its participations in Letters of Credit, which shall accrue at the Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the daily amount of such Revolving Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements but taking into account the maximum amount available to be drawn under all outstanding Letters of Credit, whether or not such maximum amount is then in effect) during the period from and including the Closing Date to and including the later of the date on which such Revolving Lender’s Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank in dollars a fronting fee, which shall accrue at the rate of 0.125% per annum (or such lesser rate as may be agreed to in writing by an Issuing Bank) on the daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements but taking into account the maximum amount available to be drawn under all outstanding Letters of Credit, whether or not such maximum amount is then in effect) during the period from and including the Closing Date to and including the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued to the last Business Day of March, June, September and December of each year shall be payable on the last Business Day of March, June, September and December, respectively, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

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(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent in the Fee Letter.

 

(d) The Borrower agrees to pay on the Closing Date to each Term Lender party to this Agreement as a Term Lender on the Closing Date, as fee compensation for the funding of such Term Lender’s Initial Term Loan, a closing fee in dollars in an amount equal to 1.00% of the stated principal amount of such Term Lender’s Initial Term Loan. Such fees shall be payable to each such Term Lender out of the proceeds of such Term Lender’s Initial Term Loan as and when funded on the Closing Date and shall be treated (and reported) by the Borrower and Term Lenders as a reduction in issue price of the Initial Term Loans for U.S. federal, state and local income tax purposes. Such closing fees will be in all respects fully earned, due and payable on the Closing Date and non-refundable and non-creditable thereafter.

 

(e) Notwithstanding the foregoing, and subject to Section 2.22 and Section 2.12(b), the Borrower shall not be obligated to pay any amounts to any Defaulting Lender pursuant to this Section 2.12.

 

(f) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Revolving Lenders entitled thereto. Fees owing and paid hereunder shall not be refundable under any circumstances.

 

SECTION 2.13 Interest.

 

(a) The Loans comprising each ABR Borrowing (including each Swing Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Eurodollar Borrowing plus the Applicable Rate.

 

(c) Notwithstanding the foregoing, any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder that is not paid when due, whether at stated maturity, upon acceleration or otherwise, shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal, premium or interest of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.13 or (ii) in the case of any other amount, 2.00% per annum plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this Section 2.13.

 

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(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans and Swing Loans, upon termination of the Revolving Commitments, provided that (i) interest accrued pursuant to paragraph (c) of this Section 2.13 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan or a Swing Loan prior to the end of the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) interest accrued in respect of any Swing Loan also shall be payable on the Swing Loan Maturity Date applicable thereto and (iv) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Eurodollar Loan shall be payable on the Closing Date of such conversion.

 

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to clause (a) of the definition of Alternate Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

SECTION 2.14 Alternate Rate of Interest; Effect of Benchmark Transition Event.

 

(a) If at least two (2) Business Days prior to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(i) (A) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period, or (B) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period (in each case with respect to the Loans impacted by this clause (B) or clause (i)(A) above, “Impacted Loans”), the Administrative Agent shall give notice thereof to the Borrower and the Lenders as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (x) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (y) if any Borrowing Request requests a Eurodollar Borrowing, then such Borrowing shall be made as an ABR Borrowing; provided, however, that, in each case, the Borrower may revoke any Borrowing Request that is pending when such notice is received; and

 

(ii) notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i)(A) of this Section 2.14 and/or is advised by the Required Lenders of their determination in accordance with clause (a)(i)(B) of this Section 2.14 and the Borrower shall so request, the Administrative Agent, the Required Lenders and the Borrower shall negotiate in good faith to amend the definition of “LIBO Rate” and other applicable provisions to preserve the original intent thereof in light of such change; provided that, until so amended, such Impacted Loans will be handled as otherwise provided pursuant to the terms of this Section 2.14.

 

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(b) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace the LIBO Rate with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m., New York City time, on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders accept such amendment. No replacement of the LIBO Rate with a Benchmark Replacement pursuant to clauses (b) through (e) of this Section 2.14 will occur prior to the applicable Benchmark Transition Start Date.

 

(c) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

 

(d) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or Lenders pursuant to clauses (b) through (e) of this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to clauses (b) through (e) of this Section 2.14.

 

(e) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Borrowing of, conversion to or continuation of a Eurodollar Borrowing to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to an ABR Borrowing. During any Benchmark Unavailability Period, the component of the Alternate Base Rate based upon the Adjusted LIBO Rate will not be used in any determination of the Alternate Base Rate.

 

SECTION 2.15 Increased Costs.

 

(a) If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any Issuing Bank (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

 

(ii) impose on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense (other than Excluded Taxes or Indemnified Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

 

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and the result of any of the foregoing shall be to increase the cost to the Administrative Agent or such Lender or Issuing Bank of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to the Administrative Agent or such Lender or Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or issue any Letter of Credit) or to reduce the amount of any sum received or receivable by the Administrative Agent or such Lender or Issuing Bank hereunder (whether of principal, interest or otherwise), then, from time to time upon request of the Administrative Agent or such Lender or Issuing Bank, the Borrower will pay to the Administrative Agent or such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate the Administrative Agent or such Lender or Issuing Bank, as the case may be, for such increased costs actually incurred or reduction actually suffered.

 

(b) If any Lender or Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Swing Loans and Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy), then, from time to time upon request of such Lender or Issuing Bank, the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction actually suffered.

 

(c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing Bank or its holding company in reasonable detail, as the case may be, as specified in paragraph (a) or (b) of this Section 2.15 delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case may be, the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.

 

(d) Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 2.15 shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section 2.15 for any increased costs incurred or reductions suffered more than one hundred eighty (180) days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the one hundred eighty (180) day period referred to above shall be extended to include the period of retroactive effect thereof.

 

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SECTION 2.16 Break Funding Payments.

 

In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(f) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 or Section 9.02(c), then, in any such event, the Borrower shall, after receipt of a written request by any Lender affected by any such event (which request shall set forth in reasonable detail the basis for requesting such amount), compensate each Lender for the loss, cost and expense (excluding loss of profit) actually incurred by it as a result of such event. Such loss, cost or expense shall in no event exceed that which would have been incurred by such Lender had it funded each Eurodollar Loan made by it at the Adjusted LIBO Rate for such Loan by a matching deposit or other borrowing in the applicable interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded. A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.16 and the reasons therefor delivered to the Borrower shall be prima facie evidence of such amounts. The Borrower shall pay such Lender the amount shown as due on any such certificate within fifteen (15) days after receipt of such demand. Notwithstanding the foregoing, this Section 2.16 will not apply to losses, costs or expenses resulting from Taxes, as to which Section 2.17 shall govern.

 

SECTION 2.17 Taxes.

 

(a) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction for any Taxes, except as required by applicable Requirements of Law. If the applicable withholding agent shall be required by applicable Requirements of Law (as determined in the good faith discretion of the applicable withholding agent) to deduct any Taxes from such payments, then the applicable withholding agent shall make such deductions and shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Requirements of Law, and if such Taxes are Indemnified Taxes, then the amount payable by the applicable Loan Party shall be increased as necessary so that after all such required deductions have been made (including such deductions applicable to additional amounts payable under this Section 2.17), each Lender (or, in the case of a payment made to the Administrative Agent for its own account, the Administrative Agent) receives an amount equal to the sum it would have received had no such deductions been made.

 

(b) Without limiting the provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Requirements of Law.

 

(c) The Borrower shall indemnify the Administrative Agent and each Lender within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender as the case may be, on or with respect to any payment by or on account of any obligation of any Loan Party under any Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.17) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the basis and calculation of the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d) As soon as practicable after any payment of any Taxes by a Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

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(e) Each Lender shall, at such times as are reasonably requested by the Borrower or the Administrative Agent, provide the Borrower and the Administrative Agent with any properly completed and executed documentation prescribed by any Requirement of Law, or reasonably requested by Borrower or the Administrative Agent, certifying as to any entitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under the Loan Documents. Each such Lender shall, whenever a lapse in time or change in circumstances renders any such documentation expired, obsolete or inaccurate in any respect (including any specific documentation required below in this Section 2.17(e)), deliver promptly to the Borrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the applicable withholding agent) or promptly notify the Borrower and the Administrative Agent in writing of its legal ineligibility to do so. Unless the applicable withholding agent has received forms or other documents satisfactory to it indicating that payments under any Loan Document to or for a Lender are not subject to withholding tax or are subject to Tax at a rate reduced by an applicable tax treaty, the Borrower, the Administrative Agent or other applicable withholding agent shall withhold amounts required to be withheld by applicable law from such payments at the applicable statutory rate. Notwithstanding anything to the contrary in the preceding three sentences, the completion, execution and submission of such documentation (other than such documentation set forth in paragraphs (e)(i), (e)(ii)(A)–(D), and (e)(iii) of this Section) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

Without limiting the generality of the foregoing:

 

(i) Each Lender that is a United States person (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement two properly completed and duly signed copies of Internal Revenue Service Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal backup withholding.

 

(ii) Each Foreign Lender shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent) whichever of the following is applicable:

 

(A) two properly completed and duly signed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable (or any successor forms) claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,

 

(B) two properly completed and duly signed copies of Internal Revenue Service Form W-8ECI (or any successor forms),

 

(C) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) two properly completed and duly signed certificates, substantially in the form of Exhibit Q (any such certificate a “United States Tax Compliance Certificate”), and (y) two properly completed and duly signed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable (or any successor forms),

 

(D) to the extent a Foreign Lender is not the beneficial owner (for example, where the Lender is a partnership or a participating Lender), two properly completed and duly signed copies of Internal Revenue Service Form W-8IMY (or any successor forms) of the Foreign Lender, accompanied by a Form W-8ECI, W-8BEN or W-8BEN-E, United States Tax Compliance Certificate, Form W-9, Form W-8IMY (or other successor forms) or any other required information from each beneficial owner that would be required under this Section 2.17 if such beneficial owner were a Lender, as applicable (provided that, if the Lender is a partnership (and not a participating Lender) and one or more direct or indirect partners are claiming the portfolio interest exemption, the United States Tax Compliance Certificate may be provided by such Lender on behalf of such direct or indirect partner(s)), or

 

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(E) any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.

 

(iii) If a payment made to any Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine whether such Lender has or has not complied with such Lender’s obligations under FATCA and, if necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. Notwithstanding any other provision of this clause (e), a Lender shall not be required to deliver any form that such Lender is not legally eligible to deliver.

 

(f) If the Borrower determines in good faith that a reasonable basis exists for contesting any Taxes for which indemnification has been demanded hereunder, the Administrative Agent or the relevant Lender, as applicable, shall use commercially reasonable efforts to cooperate with the Borrower in a reasonable challenge of such Taxes if so requested by the Borrower, provided that (a) the Administrative Agent or such Lender determines in its reasonable discretion that it would not be subject to any unreimbursed third party cost or expense or otherwise be prejudiced by cooperating in such challenge, (b) the Borrower pays all related expenses of the Administrative Agent or such Lender, as applicable, and (c) the Borrower indemnifies the Administrative Agent or such Lender, as applicable, for any liabilities or other costs incurred by such party in connection with such challenge. If the Administrative Agent or a Lender receives a refund of any Indemnified Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees promptly to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the Administrative Agent or any Lender, as applicable, be required to (x) pay any amount to the Borrower pursuant to this paragraph (f) the payment of which would place the Administrative Agent or such Lender in a less favorable net after-Tax position than the Administrative Agent or such Lender would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid or (y) make available its Tax returns (or any other information relating to Taxes which it deems confidential) to any Loan Party or any other Person.

 

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(g) The agreements in this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

(h) For purposes of this Section 2.17, the term “Lender” shall include any Issuing Bank and the term “applicable Requirements of Law” includes FATCA.

 

SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

 

(a) The Borrower shall make each payment required to be made by it under any Loan Document (whether of principal, premium, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New York City time), on the date when due, in immediately available funds, without condition or deduction for any counterclaim, recoupment or setoff. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest or fees thereon. All such payments shall be made to such account as may be specified by the Administrative Agent, except payments to be made directly to any Issuing Bank or the Swing Line Lender shall be made as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Except as otherwise provided herein, if any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate for the period of such extension. All payments or prepayments of any Loan shall be made in dollars, all reimbursements of any LC Disbursements shall be made in dollars, all payments of accrued interest payable on a Loan or LC Disbursement shall be made in dollars, and all other payments under each Loan Document shall be made in dollars.

 

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, premium, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of premium, principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

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(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of, premium, if any, or interest or fees on any of its Revolving Loans, Term Loans or participations in Swing Loans or LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans, Term Loans and participations in Swing Loans or LC Disbursements and accrued interest or fees thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans, Term Loans and participations in Swing Loans or LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest and fees on their respective Revolving Loans, Term Loans and participations in Swing Loans or LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest and (ii) the provisions of this paragraph shall not be construed to apply to (A) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Swing Loans or LC Disbursements to any assignee or participant or (C) any disproportionate payment obtained by a Lender of any Class as a result of the extension by Lenders of the maturity date or expiration date of some but not all Loans or Revolving Commitments of that Class or any increase in the Applicable Rate in respect of Loans of Lenders that have consented to any such extension. The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

(d) Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders, the Swing Line Lender or the Issuing Banks hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption and in its sole discretion, distribute to the Lenders, the Swing Line Lender or Issuing Banks, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, the Swing Line Lender or Issuing Banks, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, Swing Line Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), Section 2.05(e) or Section 2.05(f), Section 2.06(a) or Section 2.06(b), Section 2.18(d) or Section 9.03(c), then the Administrative Agent may, in its discretion and in the order determined by the Administrative Agent (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Section until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and to be applied to, any future funding obligations of such Lender under any such Section.

 

SECTION 2.19 Mitigation Obligations; Replacement of Lenders.

 

(a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 or any event gives rise to the operation of Section 2.23, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or its participation in any Letter of Credit affected by such event, or to assign and delegate its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment and delegation (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17 or mitigate the applicability of Section 2.23, as the case may be, and (ii) would not subject such Lender to any unreimbursed cost or expense reasonably deemed by such Lender to be material and would not be inconsistent with the internal policies of, or otherwise be disadvantageous in any material economic, legal or regulatory respect to, such Lender.

 

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(b) If (i) any Lender requests compensation under Section 2.15 or gives notice under Section 2.23, (ii) the Borrower is required to pay any additional amount to any Lender or to any Governmental Authority for the account of any Lender pursuant to Section 2.17 or (iii) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment and delegation); provided that (A) the Borrower shall have received the prior written consent of the Administrative Agent to the extent such consent would be required under Section 9.04(b) for an assignment of Loans or Commitments, as applicable (and if a Revolving Commitment is being assigned and delegated, each Issuing Bank and the Swing Line Lender), which consents, in each case, shall not unreasonably be withheld or delayed, (B) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and unreimbursed participations in LC Disbursements and Swing Loans, accrued but unpaid interest thereon, accrued but unpaid fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (C) the Borrower or such assignee shall have paid (unless waived) to the Administrative Agent the processing and recordation fee specified in Section 9.04(b)(ii) and (D) in the case of any such assignment resulting from a claim for compensation under Section 2.15, or payments required to be made pursuant to Section 2.17 or a notice given under Section 2.23, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise (including as a result of any action taken by such Lender under paragraph (a) above), the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and that the Lender required to make such assignment need not be a party thereto.

 

SECTION 2.20 Incremental Credit Extensions.

 

(a) The Borrower may at any time or from time to time on one or more occasions after the Closing Date, by written notice delivered to the Administrative Agent, request (i) one or more additional Classes of term loans hereunder or additional term loans of the same Class of any existing Class of term loans hereunder (the “Incremental Term Loans”) and/or (ii) one or more increases in the amount of the Revolving Commitments hereunder (each such increase, an “Incremental Revolving Commitment Increase” and, together with the Incremental Term Loans, the “Incremental Facilities”); provided that, subject to Section 1.06, at the time that any such Incremental Term Loan or Incremental Revolving Commitment Increase is made or effected (and also immediately after giving effect thereto), (A) (x) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (y) in the case of Incremental Term Loans the proceeds of which will be used to finance a Limited Condition Transaction in which an LCT Election has been made, no Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing at the time that any such Incremental Term Loan is made and (B) subject to customary “SunGard” provisions in the case of an Incremental Term Loan the proceeds of which shall be used to fund a Limited Condition Transaction in which an LCT Election has been made, each of the representations and warranties made by any Loan Party set forth in Article III and in any other Loan Document shall be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date of the effectiveness of any Incremental Facility Amendment with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (or in all respects, as the case may be) as of such earlier date. Notwithstanding anything to contrary herein, the aggregate principal amount of the Incremental Facilities that can be incurred at any time shall not exceed the Incremental Cap at such time. Each Incremental Facility shall be in a minimum principal amount of (x) $5,000,000 in the case of Incremental Term Loans, or (y) $2,000,000 in the case of Incremental Revolving Commitment Increases and, in either case, integral multiples of $500,000 in excess thereof (unless the Borrower and the Administrative Agent otherwise agree); provided that such amount may be less than either of the foregoing amounts if either such amount represents all the remaining availability under the aggregate principal amount of Incremental Facilities set forth above.

 

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(b) The Incremental Term Loans (a) shall rank equal in right of payment with the Term Loans, shall be secured on a pari passu basis only by the Collateral securing the Secured Obligations and shall only be guaranteed by the Loan Parties, (b) except with respect to an aggregate principal amount of Incremental Term Loans not greater than the Fixed Incremental Amount, shall not mature earlier than the Term Maturity Date, (c) except with respect to an aggregate principal amount of Incremental Term Loans not greater than the Fixed Incremental Amount, shall not have a shorter Weighted Average Life to Maturity than the remaining Term Loans, (d) shall have a maturity date (subject to preceding clause (b)), and interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, funding discounts, original issue discounts and prepayment terms and premiums for the Incremental Term Loans as determined by the Borrower and the Additional Term Lenders thereunder; provided that, except with respect to (A) an aggregate principal amount of Incremental Term Loans not greater than the Fixed Incremental Amount, (B) any Incremental Term Loans used to finance a Permitted Acquisition or other similar permitted Investment or (C) any Incremental Term Loans that mature more than one (1) year after the Term Maturity Date, in the event that the Effective Yield for any Incremental Term Loans incurred during the first twelve (12) months after the Closing Date is greater than the Effective Yield for the Initial Term Loans by more than 0.75% per annum, then the Effective Yield for the Initial Term Loans shall be increased to the extent necessary so that the Effective Yield for the Initial Term Loans is equal to the Effective Yield for the Incremental Term Loans minus 0.75% per annum (provided that the “LIBOR floor” applicable to the outstanding Initial Term Loans shall be increased to an amount not to exceed the “LIBOR floor” applicable to such Incremental Term Loans prior to any increase in the Applicable Rate applicable to such Initial Term Loans then outstanding); (e) shall be prepaid with the proceeds of voluntary or mandatory prepayment events on a pro rata basis with other then outstanding Term Loans (unless the Lenders or Additional Term Lenders of such Incremental Term Loans elect to receive a lesser share of any such prepayment); and (f) may otherwise have terms and conditions different from those of the Initial Term Loans; provided that, except with respect to matters contemplated by clauses (a), (b), (c), (d) and (e) above but subject to clause (c) below, the terms and conditions of any such Incremental Term Loans or any Incremental Revolving Commitment Increase, as applicable, shall not be materially more restrictive to Holdings, the Borrower and its Restricted Subsidiaries, when taken as a whole, as reasonably determined by the Borrower in good faith, than the terms of the Initial Term Loans or Revolving Loans, as applicable, unless (1) such term is also added for the benefit of any corresponding existing Term Loans or Revolving Loans, as applicable, without the consent of the Administrative Agent or any Lender being required, (2) any such provisions apply after the Latest Maturity Date at the time of incurrence of such Incremental Facility or (3) such terms shall be reasonably satisfactory to the Administrative Agent.

 

(c) The Incremental Revolving Commitment Increase shall be treated the same as the Revolving Commitments (including with respect to maturity date thereof) and shall be considered to be part of the Revolving Loans and Revolving Commitments (it being understood that, if required to consummate an Incremental Revolving Commitment Increase, the pricing, interest rate margins, rate floors and undrawn commitment fees on the Revolving Commitments may be increased and additional upfront or similar fees may be payable to the lenders providing the Incremental Revolving Commitment Increase (without any requirement to pay such fees to any existing Revolving Lenders)).

 

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(d) Each notice from the Borrower pursuant to this Section 2.20 shall set forth the requested amount of the relevant Incremental Term Loans or Incremental Revolving Commitment Increases.

 

(e) Commitments in respect of Incremental Term Loans and Incremental Revolving Commitment Increases shall become Commitments (or in the case of an Incremental Revolving Commitment Increase to be provided by an existing Lender with a Revolving Commitment, an increase in such Lender’s applicable Revolving Commitment) under this Agreement pursuant to an amendment (an “Incremental Facility Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. An Incremental Facility may be provided, subject to the prior written consent of the Borrower (not to be unreasonably withheld), by any existing Lender (it being understood that no existing Lender shall have the right to participate in any Incremental Facility or, unless it agrees, be obligated to provide any Loans pursuant thereto) or by any Additional Lender. Incremental Term Loans and loans under Incremental Revolving Commitment Increases shall be a “Loan” for all purposes of this Agreement and the other Loan Documents. The Incremental Facility Amendment may, subject to Section 2.20(b), without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.20 (including, in connection with an Incremental Revolving Commitment Increase, to reallocate Revolving Exposure on a pro rata basis among the relevant Revolving Lenders). The effectiveness of any Incremental Facility Amendment and the occurrence of any credit event (including the making (but not the conversion or continuation) of a Loan and the issuance, increase in the amount, or extension of a Letter of Credit thereunder) pursuant to such Incremental Facility Amendment shall be subject to the satisfaction of such conditions as the parties thereto shall agree and as required by this Section 2.20 and Section 4.02 (but otherwise subject to Section 1.06 to the extent applicable). The Borrower will use the proceeds of the Incremental Term Loans and Incremental Revolving Commitment Increases for any purpose not prohibited by this Agreement.

 

(f) Incremental Facilities may be provided by any existing Lender (in its sole discretion), or, subject to (i) the consent of the Administrative Agent (not to be unreasonably withheld or delayed) if such consent would be required under Section 9.04 for assignments of Term Loans, Revolving Loans or Commitments, as applicable, to the relevant person and (ii) in the case of any Incremental Revolving Commitment Increase, each Issuing Bank and the Swing Line Lender, if such consent would be required under Section 9.04 for assignments of Revolving Loans and Revolving Commitments to the relevant Person.

 

(g) Each Additional Lender shall become a Lender for all purposes in connection with this Agreement.

 

(h) The Lenders hereby irrevocably authorize the Administrative Agent and the Collateral Agent to enter into (i) any Incremental Facility Amendment and/or any amendment to any other Loan Document as may be necessary in order to (A) establish new Classes or sub-Classes in respect of Loans or Commitments pursuant to this Section 2.20 and (B) implement any restrictive terms or conditions permitted or required to be provided to the Lenders pursuant to clause (b) of this Section 2.20 (which amendment shall be entered into by the Administrative Agent upon the reasonable request of the Borrower) and (ii) such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.20.

 

(i) Notwithstanding anything to the contrary, this Section 2.20 shall supersede any provisions in Section 2.18 or Section 9.02 to the contrary.

 

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SECTION 2.21 Refinancing Amendments.

 

(a) At any time after the Closing Date, the Borrower may obtain, from any Lender or any Additional Lender, Credit Agreement Refinancing Indebtedness in respect of (i) all or any portion of the Term Loans then outstanding under this Agreement (which, for purposes of this clause (i), will be deemed to include any then outstanding Other Term Loans) or (ii) all or any portion of the Revolving Loans (or unused Revolving Commitments) under this Agreement (which, for purposes of this clause (ii), will be deemed to include any then outstanding Other Revolving Loans and Other Revolving Commitments), in the form of (x) Other Term Loans or Other Term Commitments or (y) Other Revolving Loans or Other Revolving Commitments, as the case may be, in each case pursuant to a Refinancing Amendment; provided that such Credit Agreement Refinancing Indebtedness (i) will be unsecured or will rank pari passu or junior in right of payment and of security with the other Loans and Commitments hereunder, (ii) will have such pricing and optional prepayment terms as may be agreed by the Borrower and the Lenders thereof, (iii) the Net Proceeds of such Credit Agreement Refinancing Indebtedness shall be applied, substantially concurrently with the incurrence thereof, to the prepayment of outstanding Term Loans or reduction of Revolving Commitments being so refinanced, as the case may be, (iv) to that extent that any such Credit Agreement Refinancing Indebtedness is in the form of Other Term Loans that are pari passu in right of payment and of security with the other Loans hereunder, such Other Term Loans may be prepaid with the proceeds of voluntary or mandatory prepayment events on a pro rata basis or less than pro rata basis (but not greater than pro rata basis) with other then outstanding Term Loans and (v) to the extent that any such Credit Agreement Refinancing Indebtedness is in the form of Other Term Loans that are not pari passu in right of payment or security with the other Loans hereunder, such Other Term Loans shall be prepaid with proceeds of voluntary or mandatory prepayment events on a junior basis to the other Loans. The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 4.02 and, to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent of legal opinions, board resolutions, officers’ certificates and/or reaffirmation agreements consistent with those delivered on the Closing Date under Section 4.01 (other than changes to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to the Administrative Agent). Each Class of Credit Agreement Refinancing Indebtedness incurred under this Section 2.21 shall be in an aggregate principal amount that is (x) not less than $5,000,000 in the case of Other Term Loans or $5,000,000 in the case of Other Revolving Loans and (y) an integral multiple of $1,000,000 in excess thereof (in each case unless the Borrower and the Administrative Agent otherwise agree). Any Refinancing Amendment may provide for the issuance of Letters of Credit for the account of the Borrower, pursuant to any Other Revolving Commitments established thereby, in each case on terms substantially equivalent to the terms applicable to Letters of Credit under the Revolving Commitments; provided that no Issuing Bank shall be required to act as “issuing bank” under any such Refinancing Amendment without its written consent and the Swing Line Lender shall not be required to act as “swing line lender” under any such Refinancing Amendment without its written consent. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment. Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments subject thereto as Other Term Loans, Other Revolving Loans, Other Revolving Commitments and/or Other Term Commitments). Any Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.21. In addition, if so provided in the relevant Refinancing Amendment and with the consent of each Issuing Bank, participations in Letters of Credit expiring on or after the Revolving Maturity Date shall be reallocated from Lenders holding Revolving Commitments to Lenders holding extended revolving commitments in accordance with the terms of such Refinancing Amendment; provided, however, that such participation interests shall, upon receipt thereof by the relevant Lenders holding Revolving Commitments, be deemed to be participation interests in respect of such Revolving Commitments and the terms of such participation interests (including, without limitation, the commission applicable thereto) shall be adjusted accordingly.

 

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(b) Notwithstanding anything to the contrary in this Section 2.21 or otherwise, (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on Other Revolving Commitments (and related outstanding Other Revolving Loans), (B) repayments required upon the maturity date of the Other Revolving Commitments and (C) repayment made in connection with a permanent repayment and termination of commitments (subject to clause (2) below)) of Other Revolving Loans after the date of obtaining any Other Revolving Commitments shall be made on a pro rata basis with all other Revolving Commitments, (2) the permanent repayment of Revolving Loans with respect to, and termination of, Other Revolving Commitments after the date of obtaining any Other Revolving Commitments shall be made on a pro rata basis with all other Revolving Commitments, except that the Borrower shall be permitted to permanently repay and terminate commitments of any such Class on a better than a pro rata basis as compared to any other Class with a later maturity date than such Class, (3) subject to the provisions of Sections 2.04 and 2.05 to the extent dealing with Swing Loans and Letters of Credit which mature or expire after a maturity date when there exists Revolving Commitments with a longer maturity date, all Swing Loans and Letters of Credit shall be participated on a pro rata basis by all Revolving Lenders with Other Revolving Commitments in accordance with their percentage of the Revolving Commitments (and except as provided in Sections 2.04 and 2.05, without giving effect to changes thereto on an earlier maturity date with respect to Swing Loans and Letters of Credit theretofore incurred or issued) and (4) assignments and participations of Other Revolving Commitments and Other Revolving Loans shall be governed by the same assignment and participation provisions applicable to Revolving Commitments and Revolving Loans.

 

(c) This Section 2.21 shall supersede any provisions in Section 2.18 or Section 9.02 to the contrary.

 

SECTION 2.22 Defaulting Lenders.

 

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 9.02.

 

(ii) Reallocation of Payments. Subject to the last sentence of Section 2.11(f), any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 9.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent and the Collateral Agent hereunder; second, in the case of a Revolving Lender, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the Swing Line Lender and each Issuing Bank; third, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fourth, in the case of a Revolving Lender, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; fifth, to the payment of any amounts owing to the Lenders, the Swing Line Lender or the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender, such Issuing Bank against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; sixth, so long as no Default or Event of Default exists, to the payment of any amounts owing to any Loan Party as a result of any judgment of a court of competent jurisdiction obtained by any Loan Party against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and seventh, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans or LC Disbursements and such Lender is a Defaulting Lender under clause (a) of the definition thereof, such payment shall be applied solely to pay the relevant Loans of, and LC Disbursements owed to, the relevant non-Defaulting Lenders on a pro rata basis prior to being applied pursuant to Section 2.05(j) or this Section 2.22(a)(ii). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to Section 2.05(j) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

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(iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to receive or accrue any commitment fee pursuant to Section 2.12(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (y) shall be limited in its right to receive Letter of Credit fees as provided in Section 2.12(b).

 

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Swing Loans pursuant to Section 2.04, Letters of Credit pursuant to Section 2.05 and the payments of participation fees pursuant to Section 2.12(b), the “Applicable Percentage” of each non-Defaulting Lender shall be computed without giving effect to the Revolving Commitment of that Defaulting Lender; provided that the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swing Loans shall not exceed the positive difference, if any, of (1) the Revolving Commitment of that non-Defaulting Lender minus (2) the aggregate principal amount of the Revolving Loans and participations in Swing Loans and Letters of Credit of that non-Defaulting Lender.

 

(v) Cash Collateral. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, cash collateralize each Issuing Banks Applicable Fronting Exposure in accordance with the procedures set forth in Section 2.05(j).

 

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swing Line Lender and each Issuing Bank agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash Collateral), such Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Swing Loans and Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.22(a)(iv) or the proviso to the definition thereof), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

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SECTION 2.23 Illegality.

 

If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain or fund Loans whose interest is determined by reference to the Adjusted LIBO Rate, or to determine or charge interest rates based upon the Adjusted LIBO Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Loans denominated in dollars or to convert ABR Loans denominated in dollars to Eurodollar Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by reference to the Adjusted LIBO Rate component of the Alternate Base Rate, the interest rate on such ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon three (3) Business Days’ notice from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans, and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Adjusted LIBO Rate, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without reference to the Adjusted LIBO Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Adjusted LIBO Rate. Each Lender agrees to notify the Administrative Agent and the Borrower in writing promptly upon becoming aware that it is no longer illegal for such Lender to determine or charge interest rates based upon the Adjusted LIBO Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

SECTION 2.24 Loan Modification Offers.

 

(a) At any time after the Closing Date, the Borrower may on one or more occasions, by written notice to the Administrative Agent, make one or more offers (each, a “Loan Modification Offer”) to all the Lenders of one or more Classes (each Class subject to such a Loan Modification Offer, an “Affected Class”) to effect one or more Permitted Amendments relating to such Affected Class pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to the Borrower (including mechanics to permit cashless rollovers and exchanges by Lenders). Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective. Permitted Amendments shall become effective only with respect to the Loans and Commitments of the Lenders of the Affected Class that accept the applicable Loan Modification Offer (such Lenders, the “Accepting Lenders”) and, in the case of any Accepting Lender, only with respect to such Lender’s Loans and Commitments of such Affected Class as to which such Lender’s acceptance has been made.

 

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(b) A Permitted Amendment shall be effected pursuant to a Loan Modification Agreement executed and delivered by Holdings, the Borrower, each applicable Accepting Lender and the Administrative Agent; provided that no Permitted Amendment shall become effective unless Holdings and the Borrower shall have delivered to the Administrative Agent such legal opinions, board resolutions, secretary’s certificates, officer’s certificates and other documents as shall be reasonably requested by the Administrative Agent in connection therewith. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each Loan Modification Agreement may, without the consent of any Lender other than the applicable Accepting Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to give effect to the provisions of this Section 2.24, including any amendments necessary to treat the applicable Loans and/or Commitments of the Accepting Lenders as a new “Class” of loans and/or commitments hereunder.

 

(c) If, in connection with any proposed Loan Modification Offer, any Lender declines to consent to such Loan Modification Offer on the terms and by the deadline set forth in such Loan Modification Offer (each such Lender, a “Non-Accepting Lender”), then the Borrower may, on notice to the Administrative Agent and the Non-Accepting Lender, (i) replace such Non-Accepting Lender in whole or in part by causing such Lender to (and such Lender shall be obligated to) assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04) all or any part of its interests, rights and obligations under this Agreement in respect of the Loans and Commitments of the Affected Class to one or more Eligible Assignees (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender; provided, further, that (a) the applicable assignee shall have agreed to provide Loans and/or Commitments on the terms set forth in the applicable Permitted Amendment, (b) such Non-Accepting Lender shall have received payment of an amount equal to the outstanding principal of the Loans of the Affected Class assigned by it pursuant to this Section 2.24(c), accrued interest thereon, accrued fees and all other amounts (including any amounts under Section 2.11(a)(i)) payable to it hereunder from the Borrower (in the case of any payment pursuant to Section 2.11(a)(i)) or otherwise from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) and (c) unless waived by the Administrative Agent, the Borrower or such Eligible Assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 9.04(b).

 

(d) Notwithstanding anything to the contrary, this Section 2.24 shall supersede any provisions in Section 2.18 or Section 9.02 to the contrary.

 

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ARTICLE III

 

Representations and Warranties

 

Each of Holdings and the Borrower represents and warrants to the Agents, the Issuing Banks and the Lenders that:

 

SECTION 3.01 Organization; Powers.

 

Each of Holdings, the Borrower and its Restricted Subsidiaries is (a) duly organized or incorporated and validly existing (to the extent such concept exists in the relevant jurisdictions) under the laws of the jurisdiction of its organization, (b) has the corporate or other organizational power and authority to carry on its business as now conducted and to execute, deliver and perform its obligations under each Loan Document to which it is a party and (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required and under the jurisdiction of its organization, except in the case of clause (c) above, where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.02 Authorization; Enforceability.

 

This Agreement has been duly authorized, executed and delivered by each of Holdings and the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of Holdings, the Borrower or such other Loan Party, as the case may be, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.03 Governmental and Other Third Party Approvals; No Conflicts.

 

The execution, delivery and performance by, and enforcement against, any Loan Party of this Agreement or any other Loan Document (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other Person, except such as have been obtained or made and are in full force and effect and except filings necessary to perfect Liens created under the Loan Documents, (b) will not violate (i) the Organizational Documents of, or (ii) any Requirements of Law applicable to, Holdings, the Borrower or any Restricted Subsidiary, (c) will not violate or result in a default under any indenture or other agreement or instrument binding upon Holdings, the Borrower or any Restricted Subsidiary or their respective assets, or give rise to a right thereunder to require any payment, repurchase or redemption to be made by Holdings, the Borrower or any Restricted Subsidiary, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation thereunder and (d) will not result in the creation or imposition of (or the obligation to create or impose) any Lien on any asset of Holdings, the Borrower or any Restricted Subsidiary, except Liens created under the Loan Documents or permitted by Section 6.02, except (in the case of each of preceding clauses (a), (b)(ii) and (c)) to the extent that the failure to obtain or make such consent, approval, registration, filing or action, or such violation, default or right, or imposition of Lien, as the case may be, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.04 Financial Condition; No Material Adverse Effect.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and (ii) fairly present in all material respects the financial condition of the SPAC and the Company and its Subsidiaries (as applicable) as of the respective dates thereof and their results of operations for the periods covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein.

 

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(b) The Unaudited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the SPAC and the Company and its Subsidiaries (as applicable) as of the date thereof and their respective results of operations for the periods covered thereby, subject, in the case of preceding clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

(c) The Borrower has heretofore furnished to the Joint Lead Arrangers the pro forma consolidated balance sheet and related pro forma consolidated income statements of the Borrower and its Subsidiaries as of the twelve-month period ended September 30, 2019, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of the pro forma balance sheet) or as of the beginning of such period (in the case of the pro forma income statement), which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)) (such pro forma balance sheet and statement of income, the “Pro Forma Financial Statements”). The Pro Forma Financial Statements have been prepared in good faith, based on assumptions believed by the Borrower to be reasonable as of the date of delivery thereof, and present fairly in all material respects on a pro forma basis and in accordance with GAAP the estimated financial position of the Borrower and its Subsidiaries as at September 30, 2019, and their estimated results of operations for the periods covered thereby, assuming that the Transactions had actually occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of income).

 

(d) Since December 31, 2018, nothing shall have occurred, and no condition or circumstance shall exist, that has had, or would be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

SECTION 3.05 Properties.

 

Each of Holdings, the Borrower and its Restricted Subsidiaries has good title to, or valid interests in, all its real and personal property material to its business (including all of the Mortgaged Properties), (i) free and clear of all Liens except for Liens permitted by Section 6.02 and (ii) except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or as proposed to be conducted or to utilize such properties for their intended purposes, in each case, except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the Closing Date, no Loan Party owns in fee any Material Real Property.

 

SECTION 3.06 Litigation and Environmental Matters.

 

(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of Holdings or the Borrower, threatened in writing against or affecting Holdings, the Borrower or any Restricted Subsidiary that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(b) Except with respect to any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, none of Holdings, the Borrower or any Restricted Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any Environmental Liability or (iv) has any basis to reasonably expect that Holdings, the Borrower or any Restricted Subsidiary will become subject to any Environmental Liability.

 

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SECTION 3.07 Compliance with Laws and Agreements.

 

Each of Holdings, the Borrower and its Restricted Subsidiaries is in compliance with all Requirements of Law and Contractual Obligation applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.08 Investment Company Status.

 

None of the Loan Parties is required to register as an “investment company” under the Investment Company Act of 1940, as amended from time to time.

 

SECTION 3.09 Taxes.

 

Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, Holdings, the Borrower and each Restricted Subsidiary (a) have timely filed or caused to be filed all Tax returns and reports required to have been filed and (b) have paid or caused to be paid all Taxes levied or imposed on their properties, income or assets (whether or not shown on a Tax return) including in their capacity as tax withholding agents, except any Taxes that are being contested in good faith by appropriate proceedings, provided that Holdings, the Borrower or such Restricted Subsidiary, as the case may be, has set aside on its books adequate reserves therefor in accordance with GAAP. There is no proposed Tax assessment, deficiency or other claim, in each case, in writing, against Holdings, the Borrower or any Restricted Subsidiary that would reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

 

SECTION 3.10 ERISA.

 

(a) Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal and state laws.

 

(b) Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) no ERISA Event has occurred during the six (6) year period prior to the date on which this representation is made or deemed made or is reasonably expected to occur, and (ii) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction that could reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA.

 

(c) Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) each employee benefit plan (as defined in Section 3(2) of ERISA) that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the Internal Revenue Service, (ii) to the knowledge of Holdings and the Borrower, nothing has occurred that would prevent or cause the loss of such tax-qualified status, and (iii) there are no pending or, to the knowledge of Holdings and the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any “employee benefit plan” (as defined in Section 3 of ERISA) that is maintained or contributed to by a Loan Party.

 

(d) If any Loan Party or ERISA Affiliate were to withdraw in a complete withdrawal from Multiemployer Plan as of the date this representation is made or deemed made, the aggregate withdrawal liability that would not reasonably be expected to have a Material Adverse Effect.

 

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SECTION 3.11 Disclosure.

 

Any of the confidential information memorandum, reports, financial statements, certificates or other written factual information (other than projections and information of a general economic or industry specific nature) furnished by or on behalf of any Loan Party to the Administrative Agent, any Joint Lead Arranger or any Lender in connection with the Transactions, or any Loan Document or delivered thereunder (as modified or supplemented by other information so furnished), when taken as a whole, is or will be, when furnished, true and correct in all material respects and do not or will not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to the Model and other projected financial information, Holdings and the Borrower represent only that such information was prepared in good faith based upon assumptions believed by them to be reasonable at the time delivered, it being understood that (i) any such projected financial information is merely a prediction as to future events and its not to be viewed as fact, (ii) such projected financial information is subject to significant uncertainties and contingencies, many of which are beyond the control of Holdings, the Borrower or any of its Subsidiaries and (iii) no assurance can be given that any particular projections will be realized and that actual results during the period or periods covered by any such projections may differ significantly from the projected results and such differences may be material.

 

SECTION 3.12 Subsidiaries.

 

As of the Closing Date, Schedule 3.12 sets forth the name of, and the ownership interest of Holdings and each of its Subsidiaries in, each Subsidiary of Holdings.

 

SECTION 3.13 Intellectual Property; Licenses, Etc.

 

Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each of Holdings, the Borrower and its Restricted Subsidiaries own, license or possess the right to use all Intellectual Property that is reasonably necessary for the operation of its business substantially as currently conducted. No Intellectual Property used by Holdings, the Borrower or any of its Restricted Subsidiaries in the operation of its business as currently conducted infringes upon the Intellectual Property of any Person, except for such infringements that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No claim or litigation regarding any of the Intellectual Property is pending or, to the knowledge of Holdings and the Borrower, threatened against Holdings, the Borrower or any Restricted Subsidiary, which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.14 Solvency.

 

Immediately after the consummation of each of the Transactions to occur on the Closing Date and after giving effect to each incurrence of Loans or issuance of Letters of Credit thereafter, (a) the Fair Value of the assets of the Borrower and its Subsidiaries on a consolidated basis exceeds their Liabilities, (b) the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries on a consolidated basis exceeds their Liabilities, (c) the Borrower and its Subsidiaries on a consolidated basis Do Not Have Unreasonably Small Capital and (d) the Borrower and its Subsidiaries on a consolidated basis Will Be Able to Pay Their Liabilities as They Mature. For purposes hereof,

 

(1) “Do Not Have Unreasonably Small Capital” means the Borrower and its Subsidiaries on a consolidated basis on a consolidated basis after consummation of the Transactions is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern for the period from the date hereof through the Term Maturity Date;

 

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(2) “Fair Value” means the amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries on a consolidated basis would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act;

 

(3) “Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP consistently applied;

 

(4) “Present Fair Salable Value” means the amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Borrower and its Subsidiaries on a consolidated basis are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated; and

 

(5) “Will be able to pay their Liabilities as they mature” means, for the period from the date hereof through the Term Maturity Date, the Borrower and its Subsidiaries on a consolidated basis will have sufficient assets and cash flow to pay their Liabilities as those Liabilities mature or (in the case of contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by the Borrower and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.

 

SECTION 3.15 Senior Indebtedness.

 

The Loan Document Obligations constitute “Senior Indebtedness” (or any comparable term) under and as defined in any applicable Intercreditor Agreement (to the extent in effect).

 

SECTION 3.16 Federal Reserve Regulations.

 

None of Holdings, the Borrower or any of its Restricted Subsidiaries is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors), or extending credit for the purpose of purchasing or carrying margin stock. No part of the proceeds of the Loans or any Letter of Credit will be used, directly or indirectly, to purchase or carry any margin stock or to refinance any Indebtedness originally incurred for such purpose, or for any other purpose that entails a violation (including on the part of any Lender or Issuing Bank) of the provisions of Regulations U or X of the Board of Governors.

 

SECTION 3.17 Use of Proceeds.

 

The Borrower will use the proceeds of the (a) Initial Term Loans made on the Closing Date to directly or indirectly finance (x) the Transactions (including to pay the Transaction Costs) and (y) the Long Engineering Acquisition within ten (10) Business Days after the Closing Date in an aggregate amount of $10,500,000 (and, if not so used within such ten (10) Business Day period, as a mandatory prepayment under Section 2.11(b)(ii)) and (b) the Revolving Loans and Swing Loans made, and Letters of Credit issued, after the Closing Date for working capital and other general corporate purposes of the Borrower and its Restricted Subsidiaries (including to fund Permitted Acquisitions and other permitted Investments and any other transactions permitted by this Agreement); provided, however, Revolving Loans may be incurred on the Closing Date (i) to fund any additional original issue discount or upfront fees imposed pursuant to the “Flex Provisions” (under and as defined in the Fee Letter) in accordance with the terms of the Fee Letter, (ii) to provide back to back support for, or to replace, existing letters of credit and (iii) to finance the Transactions (including to pay the Transaction Costs) and for working capital and general corporate purposes of the Borrower and its Restricted Subsidiaries in an aggregate amount not to exceed $10,000,000.

 

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SECTION 3.18 Sanctions and Anti-Terrorism Laws.

 

Neither Holdings, the Borrower nor any of its Restricted Subsidiaries or their respective officers, directors or, to the knowledge of any Responsible Officer of Holdings or the Borrower, employees appears on, or is owned or controlled by persons that appear on, the Specially Designated Nationals and Blocked Persons List published by the Office of Foreign Assets Control (“OFAC”), or is otherwise a person with which any U.S. person is prohibited from dealing under the laws of the United States. Unless authorized by OFAC, neither Holdings, the Borrower nor any of its Restricted Subsidiaries does business or conducts any transactions with the governments of, or persons within, any country under economic sanctions administered and enforced by OFAC. Neither Holdings, the Borrower nor any of its Restricted Subsidiaries will directly or, to the knowledge of Holdings, the Borrower or such Restricted Subsidiary, indirectly use the proceeds from the Loans or the Letters of Credit, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person to fund any activities of or business with any person that, at the time of such funding, is the subject of economic sanctions administered or enforced by OFAC, or is in any country or territory that, at the time of such funding or facilitation, is the subject of economic sanctions administered or enforced by OFAC. Neither Holdings, the Borrower nor any of its Restricted Subsidiaries is in violation of Executive Order No. 13224 or the USA PATRIOT Act or any other applicable anti-terrorism laws, anti-money laundering laws or laws relating to Sanctions.

 

SECTION 3.19 Anti-Corruption Laws.  

 

(a) Holdings, the Borrower and its Restricted Subsidiaries, their respective directors and officers, and to the knowledge of Holdings and the Borrower, their respective agents and employees, have conducted their businesses in compliance with Anti-Corruption Laws.

 

(b) No part of the proceeds of the Loans or Letters of Credit will be used by Holdings, the Borrower or its Restricted Subsidiaries, directly or, to the knowledge of Holdings, the Borrower or such Restricted Subsidiaries, indirectly, in any manner that violates any provision of applicable Anti-Corruption Laws.

 

SECTION 3.20 Security Interests. Once executed and delivered, each of the Security Documents creates, as security for the Secured Obligations, a valid and enforceable, and upon making the filings, recordings, and taking the other perfection steps, required by this Agreement and the applicable Security Documents, perfected security interest in and Lien on all of the Collateral described therein to the extent intended to be created thereby and required to be perfected therein, in favor of the Collateral Agent for the benefit of the Secured Parties, free and clear of all Liens (other than Liens permitted by Section 6.02), except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

 

SECTION 3.21 Beneficial Ownership Regulation. As of the Closing Date, the information included in the Beneficial Ownership Certification of the Borrower, if applicable, is true and correct in all respects.

 

SECTION 3.22 Employment. Neither Holdings, the Borrower nor any of its Restricted Subsidiaries is engaged in any unfair labor practice that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against Holdings, the Borrower or any of its Restricted Subsidiaries or, to the knowledge of Holdings and the Borrower, threatened in writing against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Holdings, the Borrower or any of its Restricted Subsidiaries, (ii) no strike, labor dispute, slowdown or stoppage pending against Holdings, the Borrower or any of its Restricted Subsidiaries or, to the knowledge of Holdings and the Borrower, threatened against Holdings, the Borrower or any of its Restricted Subsidiaries, (iii) no union representation question exists with respect to the employees of Holdings, the Borrower or any of its Restricted Subsidiaries, (iv) no equal employment opportunity charges or other claims of employment discrimination are pending or, to Holdings or the Borrower’s knowledge, threatened in writing against Holdings or any of its Restricted Subsidiaries and (v) no wage and hour department investigation has been made of Holdings, the Borrower or any of its Restricted Subsidiaries, except (with respect to any matter specified in clauses (i) through (v) above, individually or in the aggregate) such as would not reasonably be expected to have a Material Adverse Effect.

 

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ARTICLE IV
Conditions

 

SECTION 4.01 Closing Date.

 

The obligation of each Lender to make Loans and the obligations of each Issuing Bank to issue Letters of Credit hereunder on the Closing Date shall be subject to satisfaction of the following conditions (or waiver thereof in accordance with Section 9.02):

 

(a) The Administrative Agent (or its counsel) shall have received from each Loan Party either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed counterpart of this Agreement) that such party has signed a counterpart of this Agreement.

 

(b) The Administrative Agent shall have received a customary written opinion (addressed to the Administrative Agent, the Collateral Agent, the Lenders and the Issuing Banks and dated the Closing Date) of (x) Winston & Strawn LLP, as counsel for the Loan Parties and (y) Hawley Troxell Ennis & Hawley, LLP, as Idaho counsel for the Loan Parties. Each of Holdings and the Borrower hereby requests such counsel to deliver such opinions.

 

(c) The Administrative Agent shall have received a certificate of the Borrower (on behalf of each Loan Party), dated the Closing Date, substantially in the form of Exhibit H with appropriate insertions, or otherwise in form and substance reasonably satisfactory to the Administrative Agent, executed by any Responsible Officer of such Loan Party, and including or attaching the documents referred to in paragraph (d) of this Section 4.01.

 

(d) The Administrative Agent shall have received a copy of (i) each Organizational Document of each Loan Party certified, to the extent applicable, as of a recent date by the applicable Governmental Authority, (ii) signature and incumbency certificates of the Responsible Officers of each Loan Party executing the Loan Documents to which it is a party, (iii) copies of resolutions of the Board of Directors of each Loan Party approving and authorizing the execution, delivery and performance of the Loan Documents to which it is a party, certified as of the Closing Date by its secretary, an assistant secretary or a Responsible Officer as being in full force and effect without modification or amendment and (iv) a good standing certificate (to the extent such concept exists) from the applicable Governmental Authority of each Loan Party’s jurisdiction of incorporation, organization or formation.

 

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(e) The Administrative Agent shall have received all fees and other amounts previously agreed in writing by the Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners and the Borrower to be due and payable on or prior to the Closing Date, including, to the extent invoiced at least two (2) Business Days prior to the Closing Date, reimbursement or payment of all reasonable and documented out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party under the Commitment Letter or any Loan Document.

 

(f) The Collateral and Guarantee Requirement (other than in accordance with Section 5.14) shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Closing Date and signed by a Responsible Officer of the Borrower, together with all attachments contemplated thereby.

 

(g) The Administrative Agent shall have received the Audited Financial Statements, the Unaudited Financial Statements and the Pro Forma Financial Statements.

 

(h) The Administrative Agent shall have received a solvency certificate in the form attached to the Commitment Letter (appropriately completed), from the chief financial officer of the Borrower (or other authorized financial officer thereof reasonably acceptable to the Administrative Agent), dated the Closing Date, certifying that upon giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, are solvent.

 

(i) (a) Holdings and the Borrower shall have received (x) the SPAC Equity Contribution (as defined in the Commitment Letter) in the aggregate amount required by the Commitment Letter and (y) the Minimum Equity Amount (as defined in the Commitment Letter) (of which (A) at least $10,000,000 will consist of the SPAC Common Equity Contribution (as defined in the Commitment Letter) and (B) no more than $145,000,000, or less than $130,000,000, shall consist of cash proceeds from the issuance by Holdings of the New Holdings Preferred Equity), (b) the Equity Rollover (as defined in the Commitment Letter) shall have occurred as, and to the extent, provided in the Commitment Letter and (c) the Refinancing shall have occurred (with all applicable related liens and guarantees to be released and terminated or customary provisions therefor made).

 

(j) The Acquisition shall have been consummated, or shall be consummated substantially concurrently with the incurrence of the Loans hereunder on the Closing Date, in accordance with the terms of the Acquisition Agreement.

 

(k) The Acquisition Agreement Representations shall be true and correct and the Specified Representations shall be true and correct in all material respects on and as of the Closing Date, except in the case of any Specified Representation which expressly relates to a given date or period, in which case, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided that, to the extent that any of such representations and warranties are qualified by or subject to a materiality, “material adverse effect”, “material adverse change” or similar term or qualification, such representations and warranties shall be true in all respects.

 

(l) The Administrative Agent shall have received, (x) at least three (3) Business Days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act, in each case, to the extent requested of the Borrower by the Administrative Agent or the Joint Bookrunners at least ten (10) days prior to the Closing Date and (y) at least three (3) Business Days prior to the Closing Date, with respect to the Borrower to the extent that it qualifies as a “legal entity customer” under 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation and requested of the Borrower by the Administrative Agent or the Joint Bookrunners at least ten (10) days prior to the Closing Date.

 

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(m) Since December 31, 2018, there has been no Material Adverse Effect (as defined in the Acquisition Agreement as in effect on August 12, 2019).

 

(n) The Administrative Agent shall have received a Borrowing Request.

 

(o) The Administrative Agent shall have received the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of any Loan Party in the appropriate jurisdictions, together with copies of all such filings disclosed by such search.

 

(p) The Administrative Agent shall have received evidence of insurance coverage in compliance with the terms of Section 5.07.

 

For purposes of determining compliance with the conditions specified in this Section 4.01, each Lender shall be deemed to have consented to, approved, accepted or be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender prior to the borrowing on the Closing Date specifying its objection thereto and such Lender shall not have made available to the Administrative Agent such Lender’s ratable portion of such borrowing.

 

SECTION 4.02 Each Credit Event.

 

After the Closing Date, the obligation of each Lender (including the Swing Line Lender) to make a Loan on the occasion of any Borrowing, and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit (other than any Borrowing or issuance, amendment, renewal or extension of a Letter of Credit on the Closing Date), are subject to the satisfaction of the following conditions:

 

(a) subject to Section 2.20 (including with respect to the references to “SunGard” provisions therein) in the case of Incremental Term Loans, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as the case may be; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that, in each case, any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on the date of such credit extension or on such earlier date, as the case may be;

 

(b) subject to Section 2.20 (including with respect to the references to “SunGard” provisions therein) in the case of Incremental Term Loans, at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as the case may be, no Default or Event of Default shall have occurred and be continuing; and

 

(c) the Administrative Agent or, if applicable, the Swing Line Lender, shall have received a Borrowing Request in accordance with the requirements hereof or the Loan Parties shall have complied with the requirements of Section 2.03 or 2.04, as applicable, and (ii) the Administrative Agent and the relevant Issuing Bank shall have received a notice requesting the issuance of a Letter of Credit in accordance with the requirements Section 2.05.

 

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Each Borrowing (provided that a conversion or a continuation of a Borrowing shall not constitute a “Borrowing” for purposes of this Section 4.02) and each issuance, amendment, renewal or extension of a Letter of Credit (other than any Borrowing or issuance, amendment, renewal or extension of a Letter of Credit on the Closing Date) shall be deemed to constitute a representation and warranty by Holdings and the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section 4.02.

 

ARTICLE V

 

Affirmative Covenants

 

From and after the Closing Date and until the Commitments shall have expired or been terminated, the principal of and interest on each Loan and all fees, expenses and other amounts (other than (i) contingent amounts not yet due or for which no claim has been made and (ii) Secured Cash Management Obligations and Secured Swap Obligations) payable under any Loan Document shall have been paid in full and all Letters of Credit shall have expired or been terminated (unless such Letters of Credit have been cash collateralized or backstopped in accordance with the terms hereof or otherwise in amounts, by institutions and otherwise pursuant to arrangements, in each case reasonably satisfactory to the applicable Issuing Bank or deemed issued under another agreement reasonably acceptable to the applicable Issuing Bank) and all LC Disbursements shall have been fully reimbursed, each of Holdings and the Borrower covenants and agrees with the Lenders that:

 

SECTION 5.01 Financial Statements and Other Information.

 

Holdings or the Borrower will furnish to the Administrative Agent, on behalf of each Lender:

 

(a) commencing with the financial statements for the fiscal year ending December 31, 2019, on or before the date that is ninety (90) days after the end of each fiscal year of the Borrower, audited consolidated balance sheet and audited consolidated statements of operations and income, shareholders’ equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such year, and related notes thereto, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Grant Thornton LLP or other independent public accountants of recognized national standing (without any qualification as to scope or any “going concern” or like statement or exception (other than a “going concern” statement, explanatory note or like qualification or exception resulting solely from (A) an upcoming maturity date of any Indebtedness occurring within one year from the time such opinion is delivered or (B) any actual failure to satisfy a financial maintenance covenant or any potential inability to satisfy a financial maintenance covenant on a future date or in a future period) to the effect that such consolidated financial statements present fairly in all material respects the financial condition as of the end of and for such year and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

 

(b) commencing with the financial statements for the fiscal quarter ending March 31, 2020, on or before the date that is forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of the Borrower, unaudited consolidated balance sheet and unaudited consolidated statements of operations and income, shareholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year and the budget for such fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition as of the end of and for such fiscal quarter and such portion of the fiscal year and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

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(c) concurrently with the delivery of each set of consolidated financial statements referred to in paragraphs (a) and (b) above, the related unaudited consolidating financial information (i) that explains in reasonable detail the differences (if any) between the information relating to the Borrower and its Subsidiaries, on the one hand, and the information relating to the Borrower and its Restricted Subsidiaries on a standalone basis, on the other hand, and (ii) reflecting adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements;

 

(d) concurrently with the delivery of the financial statements under paragraphs (a) and (b) above, (A) a customary management discussion and analysis with respect to such financial statements, and (B) a Compliance Certificate executed by a Financial Officer (i) certifying as to whether a Default or an Event of Default then exists and, if a Default or an Event of Default does then exist, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations (A)  demonstrating compliance with the Financial Performance Covenant and (B) in the case of financial statements delivered under paragraph (a) above, beginning with the financial statements for the fiscal year of the Borrower ending December 31, 2020, of Excess Cash Flow for such fiscal year and the applicable Excess Cash Flow Prepayment Amount (if any) for such fiscal year and (iii) in the case of financial statements delivered under paragraph (a) above, setting forth a reasonably detailed calculation of the Net Proceeds received during the applicable period by or on behalf of Holdings, the Borrower or any of its Restricted Subsidiaries in respect of any event described in clause (a) of the definition of the term “Prepayment Event” and the portion of such Net Proceeds that has been invested or are intended to be reinvested in accordance with the proviso in Section 2.11(c);

 

(e) not later than ninety (90) days after the commencement of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2020), a detailed consolidated budget for the Borrower and its Restricted Subsidiaries for such fiscal year in the form customarily prepared by the Borrower;

 

(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and registration statements (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered to the Administrative Agent), exhibits to any registration statement and, if applicable, any registration statement on Form S-8) filed by the SPAC, Holdings, the Borrower or any of its Restricted Subsidiaries with the SEC or with any national securities exchange;

 

(g) promptly after furnishing thereof, copies of any material written notices received by any Loan Party or Restricted Subsidiary thereof or any material statements or reports furnished to any holder (or any agent, trustee or other representative thereof) of any Material Indebtedness or the New Holdings Preferred Equity, in each case, to the extent not otherwise required to be furnished to the Administrative Agent or the Lenders pursuant to any other clause of this Section 5.01; and

 

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(h) promptly following any request in writing by (x) the Administrative Agent, any Issuing Bank or any Lender through the Administrative Agent, such other information regarding the operations, business affairs and financial condition of Holdings, the Borrower or any of its Restricted Subsidiaries, or compliance with the terms of any Loan Document, as the Administrative Agent on its own behalf or on behalf of any Lender or Issuing Bank may reasonably request in writing and (y) any Agent, any Issuing Bank or any Lender, such other information that any Agent, any Lender or any Issuing Bank reasonably determines is required by regulatory authorities under the Beneficial Ownership Regulation and applicable “know your customer” and anti-money laundering rules and regulations, including Title III of the USA PATRIOT Act.

 

Notwithstanding the foregoing (but otherwise subject to paragraph (c) above (to the extent applicable)), the obligations in paragraphs (a) and (b) of this Section 5.01 may be satisfied with respect to financial information of the Borrower and its Subsidiaries by furnishing (A) the Form 10-K or 10-Q (or the equivalent), as applicable, of the Borrower (or a parent company thereof) filed with the SEC within the applicable time periods required by paragraph (a) or (b) above or (B) the applicable financial statements of Holdings (or any direct or indirect parent of Holdings) within the applicable time periods required by paragraph (a) or (b) above; provided that (i) to the extent such information relates to a parent of the Borrower, such information is accompanied by consolidating information, which may be unaudited, that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Borrower and its Subsidiaries on a standalone basis, on the other hand, and (ii) to the extent such information is in lieu of information required to be provided under Section 5.01(a), such materials are accompanied by a report and opinion of Grant Thornton LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (other than any exception or explanatory paragraph but not a qualification, that is expressly solely with respect to, or expressly resulting solely from, (i) an upcoming maturity date of any Indebtedness occurring within one year from the time such opinion is delivered or (ii) any potential inability to satisfy a financial maintenance covenant on a future date or in a future period).

 

Documents required to be delivered pursuant to Section 5.01(a), (b) or (f) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 9.01 (or otherwise notified pursuant to Section 9.01(d)), or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent). The Administrative Agent shall have no obligation to request the delivery of or maintain paper copies of the documents referred to above, and each Lender shall be solely responsible for timely accessing posted documents and maintaining its copies of such documents.

 

Notwithstanding anything to the contrary herein, none of Holdings, the Borrower or any Subsidiary shall be required to deliver, disclose, permit the inspection, examination or making of copies of or excerpts from, or any discussion of, any document, information, or other matter (i) that constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent (or any Lender (or their respective representatives or contractors)) is prohibited by applicable law, (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product or (iv) with respect to which any Loan Party owes confidentiality obligations (to the extent not created in contemplation of such Loan Party’s obligations under this Section 5.01) to any third party; provided that, if Holdings, the Borrower or any Subsidiary does not provide (or allow access to) information in reliance on the exclusions in this sentence, Holdings, the Borrower or such Subsidiary shall use commercially reasonable efforts to provide notice to the Administrative Agent promptly upon obtaining knowledge that such information is being withheld and Holdings, the Borrower or such Subsidiary shall use commercially reasonable efforts to communicate, to the extent permitted, the applicable information in a way that would not violate such restrictions and to eliminate such restrictions or would not waive any such privilege.

 

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The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Joint Lead Arrangers will make available to the Lenders and the Issuing Banks materials and/or information provided by or on behalf of Holdings or the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive Material Non-Public Information and who may be engaged in investment and other market-related activities with respect to the Borrower’s or its Affiliates’ securities. Holdings and the Borrower hereby agree that they will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC,” Holdings and the Borrower shall be deemed to have authorized the Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Issuing Banks and the Lenders to treat such Borrower Materials as not containing any Material Non-Public Information (although it may be sensitive and proprietary) (provided, however, to the extent that such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.12), (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information”, and (z) the Administrative Agent and the Joint Lead Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information”; provided that neither Holdings’ nor the Borrower’s failure to comply with this sentence shall constitute a Default or an Event of Default. Notwithstanding the foregoing, neither Holdings nor the Borrower shall be under any obligation to mark any Borrower Materials as “PUBLIC”. Each Loan Party hereby acknowledges and agrees that, unless either Holdings or the Borrower notifies the Administrative Agent in advance, all financial statements and certificates furnished pursuant to Sections 5.01(a), (b), (c) and (d) above are hereby deemed to be suitable for distribution, and to be made available, to all Lenders and may be treated by the Administrative Agent and the Lenders as not containing any Material Non-Public Information.

 

SECTION 5.02 Notices of Material Events.

 

Promptly after any Responsible Officer of Holdings or the Borrower obtains actual knowledge thereof, Holdings or the Borrower will furnish to the Administrative Agent (for distribution to each Lender through the Administrative Agent) written notice of the following:

 

(a) the occurrence of any Default or Event of Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of a Financial Officer or another executive officer of Holdings, the Borrower or any Subsidiary, affecting Holdings, the Borrower or any Subsidiary, in each case, that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(c) the occurrence of any ERISA Event that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(d) the occurrence of (x) any default or event of default under and as defined in any Material Indebtedness or (y) any event, condition or violation of the New Holdings Preferred Equity that results, or could reasonably be expected to result, in the obligation of Holdings to redeem the New Holdings Preferred Equity notwithstanding any restrictions set forth in this Agreement to redeem such Equity Interests;

 

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(e) (i) the receipt by Holdings, the Borrower or any of its Restricted Subsidiaries of a written notice of an Environmental Liability or (ii) any investigation, removal, remediation or other corrective action in response to any actual or alleged presence, Release or threatened Release of any Hazardous Material on, at, under or from any real property owned, leased or operated by Holdings, the Borrower or any of its Restricted Subsidiaries, in each case, that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and

 

(f) the occurrence or existence of any event, condition or circumstance that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Each notice delivered under this Section 5.02 shall be accompanied by a written statement of a Responsible Officer of Holdings or the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03 Information Regarding Collateral.

 

(a) Holdings or the Borrower will furnish to the Administrative Agent prompt (and in any event within thirty (30) days or such longer period as reasonably agreed to by the Administrative Agent) written notice of any change (i) in any Loan Party’s legal name (as set forth in its certificate of organization or like document), (ii) in the jurisdiction of incorporation or organization or the location of the chief executive office of any Loan Party or in the form of its organization or (iii) in any Loan Party’s organizational identification number to the extent that such Loan Party is organized or owns Mortgaged Property in a jurisdiction where an organizational identification number is required to be included in a UCC financing statement for such jurisdiction.

 

(b) Not later than five (5) days after delivery of financial statements pursuant to Section 5.01(a) or (b), Holdings or the Borrower will deliver to the Administrative Agent a certificate executed by a Responsible Officer of Holdings or the Borrower (i) setting forth the information required pursuant to Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, and 9 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section 5.03, (ii) identifying any Wholly Owned Restricted Subsidiary that has become, or ceased to be, a Material Subsidiary or an Excluded Subsidiary during the most recently ended fiscal quarter and (iii) certifying that all notices required to be given prior to the date of such certificate by Section 5.03 have been given.

 

SECTION 5.04 Existence; Conduct of Business.

 

Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, do or cause to be done all things necessary to obtain, preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, Intellectual Property and Governmental Approvals used in the conduct of its business, except to the extent (other than with respect to the preservation of the existence of Holdings and the Borrower) that the failure to do so would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or any Disposition permitted by Section 6.05.

 

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SECTION 5.05 Payment of Taxes, etc.

 

Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, pay all Taxes (whether or not shown on a Tax return) and other assessments, charges and levies of Governmental Authorities imposed upon it or its income or properties or in respect of its property or assets, before the same shall become delinquent or in default, except where (a) the same are being contested in good faith by an appropriate proceeding diligently conducted by Holdings, the Borrower or any of its Restricted Subsidiaries and for which adequate reserves in accordance with GAAP have been maintained or (b) the failure to make payment would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

SECTION 5.06 Maintenance of Properties.

 

Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, keep and maintain all tangible property material to the conduct of its business in good working order and condition (subject to casualty, condemnation and ordinary wear and tear), except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

SECTION 5.07 Insurance.

 

(a) Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, maintain, with insurance companies that Holdings and the Borrower believe (in the good faith judgment of the management of Holdings and the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least such amounts (after giving effect to any self-insurance which Holdings and the Borrower believe (in the good faith judgment of management of Holdings and the Borrower) is reasonable and prudent in light of the size and nature of its business) and against at least such risks (and with such risk retentions) as Holdings and the Borrower believe (in the good faith judgment or the management of Holdings and the Borrower) are reasonable and prudent in light of the size and nature of its business, and will furnish to the Lenders, upon written request from the Collateral Agent, information presented in reasonable detail as to the insurance so carried. Each such policy of insurance (other than directors and officers policies, workers compensation policies and business interruption insurance) shall (i) name the Collateral Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear and (ii) in the case of each casualty insurance policy, contain a loss payable clause or mortgagee endorsement that names the Collateral Agent, on behalf of the Lenders as the loss payee or mortgagee thereunder.

 

(b) If any portion of any improved Mortgaged Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the Flood Insurance Laws (as now or hereafter in effect or successor act thereto), then the Borrower will, or will cause each applicable Loan Party to, (i) maintain, or cause to be maintained, with insurance companies that the Borrower believes (in the good faith judgment of the management of the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (ii) furnish to the Lenders, upon written request from the Collateral Agent, information presented in reasonable detail as to the flood insurance so carried.

 

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SECTION 5.08 Books and Records; Inspection and Audit Rights.

 

Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, maintain proper books of record and account in which entries that are full, true and correct in all material respects and are in conformity with GAAP (or applicable local standards) consistently applied shall be made of all material financial transactions and matters involving the assets and business of Holdings, the Borrower or its Restricted Subsidiaries, as the case may be. Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise visitation and inspection rights of the Administrative Agent and the Lenders under this Section 5.08 and the Administrative Agent shall not exercise such rights more often than one time during any calendar year absent the existence of an Event of Default and such time shall be at the Borrower’s expense; provided, further that (a) when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice and (b) the Administrative Agent and the Lenders shall give Holdings and the Borrower the opportunity to participate in any discussions with Holdings’ or the Borrower’s independent public accountants.

 

SECTION 5.09 Compliance with Laws and Organizational Documents.

 

Each of Holdings and the Borrower will, and will cause each Restricted Subsidiary to, comply with its Organizational Documents and all Requirements of Law (including Environmental Laws) with respect to it, its property and its operations, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.10 Use of Proceeds and Letters of Credit.

 

The Borrower will use the proceeds of the Initial Term Loans, together with the proceeds of any Revolving Loans in an aggregate amount not to exceed $10,000,000, to directly or indirectly finance the Transactions (including to pay all or a portion of the Transaction Costs); provided, however,  (x) $10,500,000 of proceeds of the Initial Term Loans shall be used to effect the Long Engineering Acquisition (or, to the extent provided in Section 2.11(b)(ii), to mandatorily prepay outstanding Initial Term Loans) and (y) until such time as such proceeds are so used as provided in preceding clause (x), the Borrower will deposit and maintain such proceeds in a segregated restricted account of the Borrower. The proceeds of the Revolving Loans and Swing Loans incurred, and the Letters of Credit issued, after the Closing Date will be used only for general corporate purposes of the Borrower and its Restricted Subsidiaries, in each case, including capital expenditures, Permitted Acquisitions, permitted Restricted Payments, permitted refinancing of Indebtedness and any other transactions not prohibited by this Agreement; provided that the Borrower may not use the proceeds of any Swing Loans to refinance or prepay outstanding Swing Loans.

 

SECTION 5.11 Additional Subsidiaries.

 

(a) If (i) any additional Restricted Subsidiary is formed or acquired after the Closing Date, (ii) if any Subsidiary ceases to be an Excluded Subsidiary or (iii) if the Borrower, at its option, elects to cause a Domestic Subsidiary that is not a Wholly Owned Subsidiary to become a Subsidiary Loan Party, then, Holdings or the Borrower will, within thirty (30) days (or such longer period as may be agreed to by the Administrative Agent in its reasonable discretion) after such newly formed or acquired Restricted Subsidiary is formed or acquired or such Subsidiary ceases to be an Excluded Subsidiary or the Borrower has made such election, notify the Administrative Agent thereof, and will cause such Restricted Subsidiary (unless such Restricted Subsidiary is an Excluded Subsidiary) to satisfy the Collateral and Guarantee Requirement with respect to such Restricted Subsidiary and with respect to any Equity Interest in or Indebtedness of such Restricted Subsidiary owned by or on behalf of any Loan Party within thirty (30) days after such notice (or such longer period as the Administrative Agent shall reasonably agree) and the Administrative Agent shall have received a completed Perfection Certificate (or supplement thereof) with respect to such Restricted Subsidiary signed by a Responsible Officer of such Restricted Subsidiary, together with all attachments contemplated thereby.

 

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(b) Within sixty (60) days (or such longer period as otherwise provided in this Agreement or as the Administrative Agent may reasonably agree) after Holdings or the Borrower identifies any new Material Subsidiary pursuant to Section 5.03(b), all actions (if any) required to be taken with respect to such Subsidiary in order to satisfy the Collateral and Guarantee Requirement shall have been taken with respect to such Subsidiary, to the extent not already satisfied pursuant to Section 5.11(a).

 

(c) Notwithstanding the foregoing, in the event any real property which would qualify as Material Real Property is owned in fee by any Loan Party after the Closing Date (including any Subsidiary on or after the time it becomes a Loan Party pursuant to this Section 5.11) (including any such real property acquired pursuant to a Division/Series Transaction), Holdings, the Borrower or such other Loan Party shall be required to comply with the “Collateral and Guarantee Requirement” as it relates to such Material Real Property within ninety (90) days (or such longer period as may be agreed to by the Administrative Agent in its reasonable discretion) following the acquisition of such Material Real Property or the formation or acquisition of such Loan Party.

 

SECTION 5.12 Further Assurances; After-Acquired Property.

 

(a) Each of Holdings and the Borrower will, and will cause each other Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, Mortgages and other documents), that may be required under any applicable law or that the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties.

 

(b) If, after the Closing Date, any material assets (other than Excluded Assets), including any owned (but not leased or ground-leased) Material Real Property or improvements thereto or any interest therein, are acquired or constructed by the Borrower or any other Loan Party (other than assets constituting Collateral under a Security Document that become subject to the perfected Lien created by such Security Document upon acquisition thereof or constituting Excluded Assets), the Borrower will notify the Administrative Agent thereof, and the Borrower will cause such assets to be subjected to a Lien securing the Secured Obligations and will take and cause the other Loan Parties to take, such actions as shall be necessary and reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section 5.12 and as required pursuant to the “Collateral and Guarantee Requirement,” all at the expense of the Loan Parties and subject to the last paragraph of the definition of the term “Collateral and Guarantee Requirement.” In the event any Material Real Property is mortgaged pursuant to this Section 5.12(b), the Borrower or such other Loan Party, as applicable, shall be required to comply with the “Collateral and Guarantee Requirement” and paragraph (a) of this Section 5.12 within ninety (90) days following the acquisition of such Material Real Property or such longer time period as agreed by the Administrative Agent in its reasonable discretion.

 

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SECTION 5.13 Designation of Subsidiaries.

 

The Borrower may at any time after the Closing Date designate any Restricted Subsidiary of the Borrower as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such designation on a Pro Forma Basis, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (ii) immediately after giving effect to such designation, the Borrower shall be in compliance, on a Pro Forma Basis, with a Total Net Leverage Ratio of no greater than 3.90 to 1.00 (or, if lower, the Financial Performance Covenant), in either case, for the Test Period then most recently ended, (iii) no Subsidiary may be designated as an Unrestricted Subsidiary or continue as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purpose of any other Specified Indebtedness of Holdings, the Borrower or any Restricted Subsidiary, (iv) no Unrestricted Subsidiary may own, and none of Holdings, the Borrower or any of its Restricted Subsidiaries may transfer to any Unrestricted Subsidiary, any material Intellectual Property, (v) no Unrestricted Subsidiary may hold any Liens or Equity Interests of or in Holdings, the Borrower or any Restricted Subsidiary (or any of their respective assets) and (vi) at the time of such designation of an Unrestricted Subsidiary and after giving effect thereto, the aggregate assets or revenues of all Unrestricted Subsidiaries do not exceed 2.5% of the consolidated revenues or consolidated assets, as applicable, of the Borrower (including, for this purpose, all Unrestricted Subsidiaries). The designation of any Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment by the Borrower or the applicable Restricted Subsidiary therein at the date of designation in an amount equal to the portion of the fair market value (as reasonably determined by the Borrower in good faith) of the assets of such Restricted Subsidiary attributable to the Borrower’s or its applicable Restricted Subsidiary’s equity interest therein as reasonably estimated by the Borrower (and such designation shall only be permitted to the extent such Investment is otherwise permitted herein). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (i) the incurrence at the time of designation of any Investment, Indebtedness or Liens of such Subsidiary existing at such time and (ii) a return on any Investment by the Borrower in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal to the fair market value at the date of such designation of the Borrower’s or its Restricted Subsidiary’s (as applicable) Investment in such Unrestricted Subsidiary; provided that, immediately after such designation, the Borrower or its Restricted Subsidiary shall be deemed to continue to have an Investment in the resulting Restricted Subsidiary in an amount (if positive) equal to (a) the amount of the Borrower’s or its Restricted Subsidiary’s Investment in such Restricted Subsidiary at the time of such designation, less (b) the portion of the fair market value (as reasonably determined by the Borrower in good faith) of the assets of such Restricted Subsidiary attributable to the Borrower’s or it’s Restricted Subsidiary’s equity therein at the time of such designation.

 

SECTION 5.14 Certain Post-Closing Obligations.

 

As promptly as practicable, and in any event within the time periods after the Closing Date specified in Schedule 5.14 or such later date as the Administrative Agent agrees to in writing, Holdings, the Borrower and each other Loan Party shall deliver the documents or take the actions specified on Schedule 5.14 that would have been required to be delivered or taken on the Closing Date, in each case except to the extent otherwise agreed by the Administrative Agent pursuant to its authority as set forth in the definition of the term “Collateral and Guarantee Requirement.”

 

SECTION 5.15 Sanctions; Anti-Corruption Laws and Anti-Money Laundering Laws.

 

(a) The Borrower will not, directly or, to the knowledge of Holdings and the Borrower, indirectly, use the proceeds of the Loans or the Letters of Credit or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of (i) funding any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of any Sanctions, except where the activity or business is authorized by OFAC or would otherwise be lawful if conducted by a U.S. Person, or (ii) making any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, or in any other manner which would result in a violation of any Anti-Corruption Laws.

 

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(b) Holdings, the Borrower and its Restricted Subsidiaries will comply with the USA PATRIOT Act (to the extent applicable), applicable anti-money laundering laws, and all applicable Anti-Corruption laws and Sanctions.

 

SECTION 5.16 Maintenance of Ratings. The Borrower will use commercially reasonable efforts to maintain a public corporate credit rating from S&P and a public corporate family rating from Moody’s, in each case in respect of the Borrower, and a public rating of the Loans by each of S&P and Moody’s but not, in each case, any specific rating.

 

SECTION 5.17 Lender Conference Calls. The Borrower will host quarterly conference calls with Lenders to discuss the financial condition and results of operations of the Borrower and its Subsidiaries for the most recently ended period for which financial statements have been delivered pursuant to Section 5.01(a) and Section 5.01(b), at a date and time to be determined by the Borrower in consultation with the Administrative Agent.

 

SECTION 5.18 Merger. On the Closing Date and immediately following the consummation of the Acquisition, the Initial Borrower and the New Borrower will cause the Merger to be effected on, and effective as of, the Closing Date.

 

SECTION 5.19 Syndication Cooperation. At any time on and after the Closing Date and ending on the earlier of (a) a “Successful Syndication” (as defined in the Fee Letter) and (b) the date that is forty-five (45) days after the Closing Date (such earlier date, the “Syndication Date”), Holdings and the Borrower will (i) perform the syndication-related actions described in Sections 3 and 4 of the Commitment Letter in accordance with the terms thereof (notwithstanding any termination of the Commitment Letter) and (ii) agree to enter into, and cause each other Loan Party to enter into, any amendment hereto or other appropriate document or agreement necessary to implement any of the “Flex Provisions” (under and as defined in the Fee Letter) in accordance with the terms of the Fee Letter (any such amendment, a “Syndication Amendment”).

 

ARTICLE VI

 

Negative Covenants

 

From and after the Closing Date and until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable (other than (i) contingent amounts not yet due or for which no claim has been made and (ii) Secured Cash Management Obligations and Secured Swap Obligations) under any Loan Document have been paid in full and all Letters of Credit have expired or been terminated (unless such Letters of Credit have been cash collateralized or backstopped in amounts, by institutions and otherwise pursuant to arrangements, in each case reasonably satisfactory to the applicable Issuing Bank or deemed reissued under another agreement reasonably acceptable to the applicable Issuing Bank) and all LC Disbursements shall have been fully reimbursed, each of Holdings (with respect to Sections 6.03(c), 6.03(d), 6.07(a), 6.13 and 6.14 only) and the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01 Indebtedness; Certain Equity Securities. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

 

(i) Indebtedness of the Borrower and any of the Subsidiary Loan Parties under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.20 or Section 2.21);

 

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(ii) Indebtedness outstanding on the Closing Date and listed on Schedule 6.01 and any Permitted Refinancing thereof;

 

(iii) Guarantees by the Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder; provided that (A) each such Guarantee is otherwise permitted by Section 6.04, (B) no Guarantee by any Restricted Subsidiary of any Junior Financing or other Indebtedness of the Borrower or any other Loan Party shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Loan Document Obligations pursuant to the Guarantee Agreement, and (C) if the Indebtedness being Guaranteed is subordinated to the Loan Document Obligations, such Guarantee shall be subordinated to the Guarantee of the Loan Document Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness (as reasonably determined by the Borrower in good faith);

 

(iv) Indebtedness of the Borrower owing to any Restricted Subsidiary or of any Restricted Subsidiary owing to any other Restricted Subsidiary or the Borrower, in each case, to the extent permitted by Section 6.04; provided that all such Indebtedness of any Loan Party shall be subordinated to the Loan Document Obligations on terms (i) at least as favorable to the Lenders as those set forth in the Intercompany Note (as reasonably determined by the Borrower in good faith) or (ii) otherwise reasonably satisfactory to the Administrative Agent;

 

(v) (A) Indebtedness (including Capital Lease Obligations and purchase money indebtedness) of the Borrower or any of its Restricted Subsidiaries financing the acquisition, purchase, lease, construction, repair, replacement or improvement of fixed or capital property or equipment; provided that such Indebtedness is incurred concurrently with or within ninety (90) days after the applicable acquisition, purchase, lease, construction, repair, replacement or improvement, and (B) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clause (A) (or successive Permitted Refinancings thereof); provided, further that, at the time of any such incurrence of the Indebtedness and after giving Pro Forma Effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness that is outstanding in reliance on this clause (v) (excluding any Capital Leases Obligations incurred pursuant to a sale and leaseback transaction permitted under Section 6.06) shall not exceed the greater of (A) $11,000,000 and (B) 15% of Consolidated EBITDA for the most recently ended Test Period as of such time;

 

(vi) Indebtedness in respect of Swap Agreements incurred in the ordinary course of business and not for speculative purposes;

 

(vii) (A) First Lien Indebtedness of the Borrower, any Restricted Subsidiary or any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary) assumed after the Closing Date in connection with, but not in contemplation of, any Permitted Acquisition or any other similar Investment permitted by Section 6.04; provided that (i) such Indebtedness, if incurred by a Loan Party, is subject to the terms of the First Lien Intercreditor Agreement or subject to other intercreditor agreements otherwise reasonably satisfactory to the Administrative Agent and the Borrower, (ii) after giving effect to the assumption of such Indebtedness on a Pro Forma Basis, (I) the First Lien Net Leverage Ratio as of such time is (x) less than or equal to 3.90 to 1.00 or (y) less than the First Lien Net Leverage Ratio immediately prior to giving effect to the incurrence of such Indebtedness and Permitted Acquisition or similar Investment and (II) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn and (2) without “netting” the cash proceeds of such Indebtedness), (iii) the relevant Liens with respect to such Indebtedness are limited to the applicable assets so acquired and the proceeds thereof, (iv) no Event of Default shall have occurred and be continuing or would result therefrom and (v) the aggregate outstanding principal amount of such Indebtedness, if assumed by a Restricted Subsidiary that is not a Loan Party, together with the aggregate outstanding principal amount of Indebtedness assumed pursuant to Section 6.01(viii) and Section 6.01(ix) by a Restricted Subsidiary that is not a Loan Party, shall not exceed, at the time of assumption thereof and after giving Pro Forma Effect thereto, the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period; and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

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(viii) (A) Indebtedness of the Borrower, any Restricted Subsidiary or any Person that becomes a Restricted Subsidiary (or any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary) assumed after the Closing Date in connection with, but not in contemplation of, any Permitted Acquisition or any other similar Investment permitted by Section 6.04 that is secured on a junior basis to the Secured Obligations; provided that (i) such Indebtedness is secured on a junior basis to the Secured Obligations, with such priority being on terms and pursuant to documentation reasonably satisfactory to the Administrative Agent (it being understood that the terms of the Second Lien Intercreditor Agreement are satisfactory), (ii) after giving effect to such assumption of such Indebtedness on a Pro Forma Basis, (I) the Secured Net Leverage Ratio as of such time is (x) less than or equal to 3.90 to 1.00 or (y) less than the Secured Net Leverage Ratio immediately prior to giving effect to the incurrence of such Indebtedness and Permitted Acquisition or similar Investment and (II) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn and (2) without “netting” the cash proceeds of such Indebtedness), (iii) the relevant Liens with respect to such Indebtedness are limited to the applicable assets so acquired and the proceeds thereof, (iv) no Event of Default shall have occurred and be continuing or would result therefrom and (v) the aggregate outstanding principal amount of such Indebtedness, if assumed by a Restricted Subsidiary that is not a Loan Party, together with the aggregate outstanding principal amount of Indebtedness assumed pursuant to Section 6.01(vii) and Section 6.01(ix) by a Restricted Subsidiary that is not a Loan Party, shall not exceed, at the time of assumption thereof and after giving Pro Forma Effect thereto, the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period; and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

(ix) (A) Indebtedness of the Borrower, any Restricted Subsidiary or any Person that becomes a Restricted Subsidiary (or any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary) assumed after the Closing Date in connection with, but not in contemplation of, any Permitted Acquisition or any other similar Investment permitted by Section 6.04 that is unsecured; provided that (i) after giving effect to such assumption of such Indebtedness on a Pro Forma Basis, (a) either (I) the Total Net Leverage Ratio as of such time is (x) less than or equal to 4.15 to 1.00 or (y) less than the Total Net Leverage Ratio immediately prior to giving effect to the incurrence of such indebtedness and Permitted Acquisition or similar Investment transactions occurring in connection therewith or (II) the Interest Coverage Ratio as of such time exceeds 2.00 to 1.00 and (b) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn and (2) without “netting” the cash proceeds of such Indebtedness), (ii) no Event of Default shall have occurred and be continuing or would result therefrom and (iii) the aggregate outstanding principal amount of such Indebtedness, if assumed by a Restricted Subsidiary that is not a Loan Party, together with the aggregate principal amount of Indebtedness assumed pursuant to Section 6.01(vii) and Section 6.01(viii) by a Restricted Subsidiary that is not a Loan Party, shall not exceed, at the time of assumption thereof and after giving Pro Forma Effect thereto, the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period; and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

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(x) Settlement Indebtedness;

 

(xi) Indebtedness in respect of Cash Management Obligations and other similar Indebtedness in respect of netting services, automated clearinghouse arrangements, overdraft protections and similar arrangements, in each case, in connection with deposit accounts or from the honoring of a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;

 

(xii) Indebtedness consisting of obligations under deferred compensation (including indemnification obligations, obligations in respect of purchase price adjustments, earn-outs, incentive non-competes and other contingent obligations) or other similar arrangements incurred or assumed in connection with any Permitted Acquisition, any other similar Investment or any Disposition, in each case, permitted under this Agreement;

 

(xiii) Indebtedness of the Borrower or any of its Restricted Subsidiaries or any Person that becomes a Restricted Subsidiary after the Closing Date (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary); provided that at the time of the incurrence thereof and after giving Pro Forma Effect thereto, the aggregate principal amount of Indebtedness outstanding in reliance on this clause (xiii) shall not exceed the greater of $11,000,000 and 15% of Consolidated EBITDA for the most recently ended Test Period as of such time;

 

(xiv) (A) Indebtedness of the Borrower that is incurred or issued (as opposed to assumed) and is secured by the Collateral on a junior basis to the Secured Obligations, with such priority being on terms and pursuant to documentation reasonably satisfactory to the Administrative Agent (it being understood that the terms of the Second Lien Intercreditor Agreement are satisfactory); provided that (i) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (I) the Secured Net Leverage Ratio as of such time (x) is less than or equal to 3.90 to 1.00 or (y) if such Indebtedness is incurred in connection with a Permitted Acquisition or any other similar Investment permitted by Section 6.04, is less than the Secured Net Leverage Ratio immediately prior to giving effect to the incurrence of such Indebtedness and Permitted Acquisition or similar Investment and (II) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn and (2) without “netting” the cash proceeds of such Indebtedness), (ii) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (iii) such Indebtedness (I) shall only be incurred or issued by the Borrower, (II) shall be secured only by the Collateral securing the Secured Obligations and (III) shall only be guaranteed by the Loan Parties, (iv) such Indebtedness (1) does not mature earlier than, or have a Weighted Average Life to Maturity prior to, the date that is ninety-one (91) days after the Latest Maturity Date then in effect and (2) does not have payments of principal (other than scheduled amortization subject to the Weighted Average Life to Maturity requirement in the foregoing subclause (1), customary offers to repurchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date then in effect (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which does not mature earlier than ninety-one (91) days after the Latest Maturity Date then in effect), and (v) except (x) as provided in preceding clauses (i) through (iv) and (y) for interest rates, fees, funding discounts, original issue discount and prepayment premiums, such Indebtedness shall not be materially more restrictive to Holdings, the Borrower and its Restricted Subsidiaries, when taken as a whole, as reasonably determined by the Borrower in good faith, than the terms of this Agreement, unless (1) such terms are also added for the benefit of the Lenders hereunder, without the consent of the Administrative Agent or any Lender, (2) such terms apply after the Latest Maturity Date then in effect or (3) such terms are reasonably acceptable to the Administrative Agent and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

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(xv) (A) Indebtedness of the Borrower that is incurred or issued (as opposed to assumed) and is unsecured; provided that (i) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (a) either (I) the Total Net Leverage Ratio as of such time (x) is less than or equal to 4.15 to 1.00 or (y) if such Indebtedness is incurred in connection with a Permitted Acquisition or any other similar Investment permitted by Section 6.04, is less than the Total Net Leverage Ratio immediately prior to giving effect to the incurrence of such Indebtedness and Permitted Acquisition or similar Investment or (II) the Interest Coverage Ratio as of such time exceeds 2.00 to 1.00 and (b) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn then in effect and (2) without “netting” the cash proceeds of such Indebtedness), (ii) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (iii) such Indebtedness (I) shall only be incurred or issued by the Borrower and (II) shall only be guaranteed by the Loan Parties, (iv) such Indebtedness (1) does not mature earlier than, or have a Weighted Average Life to Maturity prior to, the date that is ninety-one (91) days after the Latest Maturity Date then in effect and (2) does not have payments of principal (other than scheduled amortization subject to the Weighted Average Life to Maturity requirement in the foregoing subclause (1), customary offers to repurchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date then in effect (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing which does not mature earlier than ninety-one (91) days after the Latest Maturity Date then in effect), and (v) except (x) as provided in preceding clauses (i) through (iv) and (y) for interest rates, fees, funding discounts, original issue discount and prepayment premiums, such Indebtedness shall not be materially more restrictive to Holdings, the Borrower and its Restricted Subsidiaries, when taken as a whole, as reasonably determined by the Borrower in good faith, than the terms of this Agreement, unless (1) such terms are also added for the benefit of the Lenders hereunder, without the consent of the Administrative Agent or any Lender, (2) such terms apply after the Latest Maturity Date then in effect or (3) such terms are reasonably acceptable to the Administrative Agent, and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

(xvi) (A) Indebtedness of the Borrower that is incurred or issued (as opposed to assumed) and is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Secured Obligations, and is subject to the terms of the First Lien Intercreditor Agreement or otherwise satisfactory to the Administrative Agent and the Borrower; provided that (i) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (I) the First Lien Net Leverage Ratio as of such time (x) is less than or equal to 3.90 to 1.00 or (y) if such Indebtedness is incurred in connection with a Permitted Acquisition or any other similar Investment permitted by Section 6.04, is less than the First Lien Net Leverage Ratio immediately prior to giving effect to the incurrence of such Indebtedness and Permitted Acquisition or similar Investment and (II) the Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Performance Covenant for the Test Period most recently ended (in each case, (1) assuming all commitments under any such Indebtedness were fully drawn and (2) without “netting” the cash proceeds of such Indebtedness), (ii) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (iii) such Indebtedness (I) shall only be incurred or issued by the Borrower, (II) shall be secured only by the Collateral securing the Secured Obligations and (III) shall only be guaranteed by the Loan Parties, (iv) such indebtedness (1) does not mature earlier than, or have a Weighted Average Life to Maturity prior to, the Latest Maturity Date then in effect, (2) does not have payments of principal (other than scheduled amortization subject to the Weighted Average Life to Maturity requirement in the foregoing subclause (1), customary offers to repurchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) earlier than the Latest Maturity Date then in effect (except in the case of customary bridge loans which, subject to customary conditions (including no payment or bankruptcy event of default), would either automatically be converted into or required to be exchanged for permanent refinancing Indebtedness which does not mature earlier than the Latest Maturity Date then in effect) and (3) in the event such Indebtedness is in the form of term loans with a maturity of one (1) year or less inside the Term Maturity Date and the Effective Yield for such Indebtedness is greater than the Effective Yield for the Initial Term Loans by more than 0.75% per annum, then the Effective Yield for the Initial Term Loans shall be increased to the extent necessary so that the Effective Yield for the Initial Term Loans are equal to the Effective Yield for such Indebtedness minus 0.75% per annum (provided that the “LIBOR floor” applicable to the outstanding Initial Term Loans shall be increased to an amount not to exceed the “LIBOR floor” applicable to such Indebtedness prior to any increase in the Applicable Rate applicable to such Initial Term Loans then outstanding), and (v) except (x) as provided in preceding clauses (i) through (iv) and (y) for interest rates, fees, funding discounts, original issue discount and prepayment premiums, such Indebtedness shall not be materially more restrictive to Holdings, the Borrower and its Restricted Subsidiaries, when taken as a whole, as reasonably determined by the Borrower in good faith, than the terms of this Agreement, unless (1) such terms are also added for the benefit of the Lenders hereunder, without the consent of the Administrative Agent or any Lender, (2) such terms apply after the Latest Maturity Date then in effect or (3) such terms are reasonably acceptable to the Administrative Agent, and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);

 

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(xvii) Indebtedness consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

 

(xviii) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;

 

(xix) Indebtedness of the Borrower and/or any of its Restricted Subsidiaries in an aggregate outstanding principal amount not to exceed 100% of the amount of Net Proceeds received by Holdings (and contributed to the Borrower) after the Closing Date from (i) the issuance or sale of Qualified Equity Interests of Holdings or (ii) any cash contribution to the common equity of Holdings with the Net Proceeds from the issuance and sale by Holdings (or any parent of Holdings) of its Qualified Equity Interest, in each case, (A) other than any Net Proceeds received from the sale of Equity Interest to, or contributions from, the Borrower or any of its Subsidiaries, (B) to the extent the relevant Net Proceeds are Not Otherwise Applied and (C) other than Cure Amounts;

 

(xx) Permitted Unsecured Refinancing Debt, and any Permitted Refinancing thereof;

 

(xxi) Permitted First Priority Refinancing Debt, and any Permitted Refinancing of any of the foregoing;

 

(xxii) Permitted Second Priority Refinancing Debt, and any Permitted Refinancing of any of the foregoing;

 

(xxiii) Indebtedness of any Restricted Subsidiary that is not a Loan Party; provided that the aggregate principal amount of Indebtedness outstanding in reliance on this clause (xxiii) shall not exceed, at the time of incurrence thereof and after giving Pro Forma Effect thereto, the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period;

 

(xxiv) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts, bankers’ acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other reimbursement-type obligations regarding workers compensation claims;

 

(xxv) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;

 

(xxvi) (x) Indebtedness representing deferred compensation or stock-based compensation owed to employees, consultants or independent contractors of Holdings, the Borrower or its Restricted Subsidiaries incurred in the ordinary course of business or consistent with past practice and (y) Indebtedness consisting of obligations of the Borrower or its Restricted Subsidiaries under deferred compensation to employees, consultants or independent contractors of the Borrower (or any direct or indirect parent thereof) or its Restricted Subsidiaries or other similar arrangements incurred by such Persons in connection with the Transactions and Permitted Acquisitions or any other similar Investment permitted by this Agreement;

 

(xxvii) Indebtedness consisting of unsecured promissory notes issued by the Borrower or any of its Restricted Subsidiaries to future, current or former officers, directors, employees, managers and consultants or their respective estates, spouses or former spouses, successors, executors, administrators, heirs, legatees or distributees, in each case to finance the purchase or redemption of Equity Interests of the Borrower (or any direct or indirect parent thereof) to the extent permitted by Section 6.07(a);

 

(xxviii) Capital Lease Obligations arising under any sale-leaseback transaction permitted hereunder in reliance upon Section 6.05(f); and

 

(xxix) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (i) through (xxviii) above.

 

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(b) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, issue any preferred Equity Interests or any Disqualified Equity Interests, except (A) in the case of the Borrower, preferred Equity Interests that are Qualified Equity Interests issued to Holdings and (B) in the case of a Restricted Subsidiary, (x) preferred Equity Interests (other than Disqualified Equity Interests) issued to and held by the Borrower or any Restricted Subsidiary; provided that, in the case of this clause (x), any preferred Equity Interests issued by a Subsidiary Loan Party shall be held by the Borrower or another Subsidiary Loan Party, and (y) preferred Equity Interests (other than Disqualified Equity Interests) issued by a Restricted Subsidiary that is not a Loan Party to and held by joint venture partners after the Closing Date; provided that, in the case of this clause (y), any such issuance of preferred Equity Interests shall be deemed to be incurred Indebtedness and subject to the relevant provisions set forth in (and must be permitted to be incurred at such time under the relevant provisions set forth in) Section 6.01(a).

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided, however, that if such Indebtedness is a Permitted Refinancing incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Permitted Refinancing does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. Notwithstanding any other provision of this Section 6.01, the maximum amount of Indebtedness the Borrower and its Restricted Subsidiaries may incur pursuant to this Section 6.01 shall not be deemed exceeded by fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of any extension, replacement, refunding, refinancing, renewal or defeasance of any Indebtedness.

 

SECTION 6.02 Liens.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset (in either case) now owned or hereafter acquired by it, except:

 

(i) Liens created under the Loan Documents;

 

(ii) Permitted Encumbrances;

 

(iii) Liens existing on the Closing Date; provided that any Lien securing Indebtedness or other obligations in excess of $2,500,000 individually and $5,000,000 in the aggregate shall only be permitted if set forth on Schedule 6.02 and any modifications, replacements, renewals or extensions thereof; provided further, that (A) such modified, replacement, renewal or extension Lien does not extend to any additional property other than (1) after-acquired property that is affixed or incorporated into the property covered by such Lien and (2) proceeds and products thereof, and (B) the obligations secured or benefited by such modified, replacement, renewal or extension Lien are permitted by Section 6.01;

 

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(iv) Liens securing Indebtedness permitted under Section 6.01(a)(v); provided that (A) such Liens attach concurrently with or within ninety (90) days after the acquisition, repair, replacement, construction or improvement (as applicable) of the property subject to such Liens and (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness except for replacements, additions, accessions and improvements to such property and the proceeds and the products thereof; provided further, that individual financings of equipment provided by one lender may be cross collateralized to other financings of equipment provided by such lender;

 

(v) (i) easements, leases, licenses, subleases or sublicenses granted to others (including licenses and sublicenses of Intellectual Property) that do not (A) interfere in any material respect with the business of the Borrower and its Restricted Subsidiaries, taken as a whole, or (B) secure any Indebtedness and (ii) any interest or title of a lessor, sublessor or licensor under any lease, sublease, license or sublicense (other than leases constituting Capital Lease Obligations) entered into by the Borrower or any of its Restricted Subsidiaries in the ordinary course of its business and covering only the assets so leased, subleased, licensed or sublicensed;

 

(vi) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(vii) Liens (A) of a collection bank arising under Section 4-210 of the Uniform Commercial Code, or any comparable or successor provision, on items in the course of collection, (B) attaching to pooling, commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, or (C) in favor of a banking or other financial institution or entity, or electronic payment service provider, arising as a matter of law encumbering deposits (including the right of setoff) and that are within the general parameters customary in the banking or finance industry;

 

(viii) Liens (A) on cash advances or escrow deposits in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 6.04 to be applied against the purchase price for such Investment or otherwise in connection with any escrow arrangements with respect to any such Investment or any Disposition permitted under Section 6.05 (including any letter of intent or purchase agreement with respect to such Investment or Disposition), or (B) consisting of an agreement to dispose of any property in a Disposition permitted under Section 6.05, in each case, solely to the extent such Investment or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

 

(ix) Liens on property or assets of any Restricted Subsidiary that is not a Loan Party, which Liens secure Indebtedness of such Restricted Subsidiary or another Restricted Subsidiary that is not a Loan Party, in each case permitted under Section 6.01(a);

 

(x) (x) Liens granted by a Restricted Subsidiary that is not a Loan Party in favor of the Borrower or any Restricted Subsidiary and (y) Liens granted by a Loan Party in favor of any other Loan Party (other Holdings) so long as, in the case of this clause (y), such Liens are subordinated to the Liens of the Collateral Agent on terms reasonably satisfactory to the Administrative Agent;

 

(xi) Liens existing on property or assets at the time of its acquisition or existing on the property or assets of any Person at the time such Person becomes a Restricted Subsidiary, in each case after the Closing Date and any modifications, replacements, renewals or extensions thereof; provided that (A) such Lien was not created in contemplation of such acquisition or such Person becoming a Restricted Subsidiary, (B) such Lien does not extend to or cover any other assets or property (other than the proceeds or products thereof and other than after-acquired property subject to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require or include, pursuant to their terms at such time, a pledge of after-acquired property, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition) and (C) if such Liens secure Indebtedness, the Indebtedness secured thereby is permitted under Section 6.01(a)(vii) or (viii);

 

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(xii) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale or purchase of goods by the Borrower or any of its Restricted Subsidiaries in the ordinary course of business;

 

(xiii) Liens deemed to exist in connection with Investments in repurchase agreements under clause (e) of the definition of the term “Permitted Investments”;

 

(xiv) Liens encumbering reasonable and customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(xv) Liens that are contractual rights of setoff (A) relating to the establishment of depository relations with banks not given in connection with the incurrence of Indebtedness, (B) relating to pooled deposit or sweep accounts to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower and its Restricted Subsidiaries or (C) relating to purchase orders and other agreements entered into with customers of the Borrower or any of its Restricted Subsidiaries in the ordinary course of business;

 

(xvi) ground leases in respect of real property on which facilities owned or leased by the Borrower or any of its Restricted Subsidiaries are located;

 

(xvii) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(xviii) Liens on Collateral securing Indebtedness permitted under Section 6.01(a)(xxi) or 6.01(a)(xxii);

 

(xix) Settlement Liens;

 

(xx) Liens on Collateral (or, to the extent provided therein, on assets of a Restricted Subsidiary that is not a Loan Party) securing Indebtedness permitted under Section 6.01(a)(vii), (a)(viii), (a)(xiv) or (a)(xvi);

 

(xxi) Liens on cash and Permitted Investments used to satisfy or discharge Indebtedness; provided such satisfaction or discharge is permitted hereunder;

 

(xxii) receipt of progress payments and advances from customers in the ordinary course of business to the extent the same creates a Lien on the related inventory and proceeds thereof;

 

(xxiii) Liens on Equity Interests of any joint venture (other than a Restricted Subsidiary) (a) securing obligations of such joint venture or (b) pursuant to the relevant joint venture agreement or arrangement; and

 

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(xxiv) other Liens; provided that at the time of the granting of and after giving Pro Forma Effect to any such Lien and the obligations secured thereby (including the use of proceeds thereof), the lesser of (x) the aggregate outstanding face amount of obligations secured by Liens existing in reliance on this clause (xxiv) and (y) the fair market value of the assets securing such obligations shall not exceed the greater of $11,000,000 and 15% of Consolidated EBITDA for the Test Period then last ended.

 

SECTION 6.03 Fundamental Changes; Line of Business; Holdings Covenant.

 

(a) The Borrower will not, and will not permit any Restricted Subsidiary to, merge into or consolidate or amalgamate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets (whether now owned or hereafter acquired) of the Borrower and its Restricted Subsidiaries, taken as a whole, to or in favor of any Person (including, in each case, pursuant to a Division/Series Transaction), except that:

 

(i) any Restricted Subsidiary may merge into or consolidate or amalgamate with (A) the Borrower; provided that the Borrower shall be the continuing or surviving Person, or (B) any one or more other Restricted Subsidiaries; provided that, when any Subsidiary Loan Party is merging, consolidating or amalgamating with another Restricted Subsidiary, (1) the continuing or surviving Person shall be a Subsidiary Loan Party or (2) if the continuing or surviving Person is not a Subsidiary Loan Party, the acquisition of such Subsidiary Loan Party by such surviving Restricted Subsidiary is otherwise permitted under Section 6.04 and, provided further, in the event that a Loan Party is the surviving Person of any such transaction, the Lien on and security interest in such property granted or to be granted in favor of the Collateral Agent under the applicable Security Documents shall be maintained or created in accordance with the terms of this Agreement and the other Loan Documents;

 

(ii) (A) any Restricted Subsidiary that is not a Loan Party may merge or consolidate with or into any other Restricted Subsidiary that is not a Loan Party and (B) any Restricted Subsidiary may liquidate or dissolve or change its legal form if the Borrower determines in good faith that such action is in the best interests of the Borrower and its Restricted Subsidiaries and is not materially disadvantageous to the Lenders so long as, in the case of a Subsidiary Loan Party, the Lien and security interest in the Collateral of such Subsidiary Loan Party granted in favor of the Collateral Agent under the applicable Security Documents shall be maintained in accordance with the terms of this Agreement and the other Loan Documents;

 

(iii) any Restricted Subsidiary may make a Disposition of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or another Restricted Subsidiary; provided that if the transferor in such a transaction is a Loan Party, then (A) the transferee must be a Loan Party (other than Holdings), (B) to the extent constituting an Investment, such Investment must be a permitted Investment in a Restricted Subsidiary that is not a Loan Party in accordance with Section 6.04 or (C) to the extent constituting a Disposition to a Restricted Subsidiary that is not a Loan Party, such Disposition is for fair market value (as reasonably determined in good faith by the Borrower) and any promissory note or other non-cash consideration received in respect thereof is a permitted Investment in a Restricted Subsidiary that is not a Loan Party in accordance with Section 6.04;

 

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(iv) the Borrower may merge or consolidate with any other Person; provided that (A) the Borrower shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger or consolidation is not the Borrower (any such Person, the “Successor Borrower”), (1) the Successor Borrower shall be a corporation organized or existing under the laws of the United States, any State thereof or the District of Columbia, (2) the Successor Borrower shall expressly assume all the Loan Document Obligations of the Borrower under this Agreement and the other Loan Documents to which the Borrower is a party pursuant to a supplement hereto or thereto in form and substance reasonably satisfactory to the Administrative Agent, (3) each Loan Party other than the Borrower, unless it is the other party to such merger or consolidation, shall have reaffirmed, pursuant to an agreement in form and substance reasonably satisfactory to the Administrative Agent, that its Guarantee of and grant of any Liens as security for the Secured Obligations shall apply to the Successor Borrower’s obligations under this Agreement and (4) the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer and an opinion of counsel, each stating that such merger or consolidation complies with this Agreement; provided, further that (x) in either case, if such Person is not a Subsidiary Loan Party, no Event of Default shall exist immediately before or after giving effect to such merger or consolidation and (y) if the foregoing requirements are satisfied, the Successor Borrower will succeed to, and be substituted for, the Borrower under this Agreement and the other Loan Documents; provided further, that the Borrower will provide any documentation and other information about the Successor Borrower as shall have been reasonably requested in writing by the Administrative Agent or any Lender or Issuing Bank through the Administrative Agent that the Administrative Agent or such Lender or Issuing Bank shall have reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including Title III of the USA PATRIOT Act and the Beneficial Ownership Regulation;

 

(v) any Restricted Subsidiary may merge, consolidate or amalgamate with any other Person in order to effect a Permitted Acquisition or similar Investment permitted pursuant to Section 6.04; provided that the continuing or surviving Person shall be the Borrower or a Restricted Subsidiary, which together with each of the Restricted Subsidiaries, shall have complied with the requirements of Sections 5.11 and 5.12; and

 

(vi) any Restricted Subsidiary may effect a merger, dissolution, liquidation consolidation or amalgamation to effect a Disposition permitted pursuant to Section 6.05.

 

(b) The Borrower and its Restricted Subsidiaries, taken as a whole, will not fundamentally and substantively alter the character of their business, taken as a whole, from the business conducted by them on the Closing Date and other business activities which are extensions thereof or otherwise incidental, reasonably related or ancillary to any of the foregoing.

 

(c) Holdings will not conduct, transact or otherwise engage in any business or operations other than (i) the ownership and/or acquisition of the Equity Interests of the Borrower, (ii) the maintenance of its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance, (iii) participating in tax, accounting and other administrative matters as a member of the consolidated group of Holdings and the Borrower, (iv) the performance of its obligations under and in connection with the Loan Documents, any documentation governing any Guarantees of Indebtedness otherwise permitted to be incurred by the Borrower or any Restricted Subsidiary hereunder to the extent that such Guarantee is otherwise contemplated hereunder, (v) any public offering of its common stock or any other issuance or registration of its Equity Interests (other than Disqualified Equity Interests) for sale or resale not prohibited by this Agreement, including the costs, fees and expenses related thereto; provided, however, that notwithstanding the foregoing or anything else in this Agreement to the contrary, Holdings will not issue any additional shares or units of New Holdings Preferred Equity after the Closing Date other than in respect of paid-in-kind dividends in accordance with the terms of the Holdings LLC Agreement (as in effect on the Closing Date) for those shares or units of New Holdings Preferred Equity issued on the Closing Date (and any paid-in-kind dividends thereon), (vi) making any Investment in the Borrower, (vii) incurring fees, costs and expenses relating to overhead and general operating including professional fees for legal, tax and accounting issues and paying taxes, (viii) providing indemnification to officers and members of its Board of Directors, (ix) activities incidental to the consummation of the Transactions and (x) activities incidental to the businesses or activities described in clauses (i) to (viii) of this paragraph.

 

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(d) Holdings will not (x) own or acquire any material assets (other than Equity Interests as referred to in paragraph (c)(i) above, cash and Permitted Investments and intercompany Investments permitted hereunder) or incur any liabilities (other than liabilities as referred to in paragraph (c) above, liabilities imposed by law, including tax liabilities, and other liabilities incidental to its existence and business and activities permitted by this Agreement) or (y) create or suffer to exist any consensual Liens on the Equity Interests of the Borrower other than to secure its Guarantee of Indebtedness of the Borrower permitted by Sections 6.01(a)(vi), (viii), (xiv) and (xvi).

 

SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, make or hold any Investment, except:

 

(a) Permitted Investments at the time such Permitted Investment is made;

 

(b) loans or advances to officers, members of the Board of Directors and employees of Holdings, the Borrower and its Restricted Subsidiaries (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes, (ii) in connection with such Person’s purchase of Equity Interests of Holdings (or any direct or indirect parent thereof) (provided that the amount of such loans and advances made in cash to such Person shall be contributed to the Borrower in cash in exchange for common equity or other Qualified Equity Interests) and such amounts shall not increase the Available Amount and (iii) for purposes not described in the foregoing clauses (i) and (ii), in an aggregate principal amount outstanding at any time not to exceed $2,500,000;

 

(c) Investments by the Borrower in any Restricted Subsidiary and Investments by any Restricted Subsidiary in the Borrower or any other Restricted Subsidiary; provided that, in the case of any Investment by a Loan Party in a Restricted Subsidiary that is not a Loan Party, (i) no Event of Default shall have occurred and be continuing or would result therefrom at the time such Investment is made and (ii) the aggregate amount of all such Investments made by Loan Parties after the Closing Date in Restricted Subsidiaries that are not Loan Parties in reliance on this clause (c), together with the aggregate cash consideration paid for Permitted Acquisitions of Persons that do not become Subsidiary Loan Parties (or are not merged with and into the Borrower or a Subsidiary Loan Party) or of assets that are not owned by the Borrower or a Subsidiary Loan Party after giving Pro Forma Effect to each such applicable Permitted Acquisition and any transactions occurring in connection therewith in reliance on clause (h) below, shall not exceed the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Investment;

 

(d) Investments consisting of extensions of trade credit in the ordinary course of business;

 

(e) Investments (i) existing or contemplated on the Closing Date and set forth on Schedule 6.04(e) and any modification, replacement, renewal, reinvestment or extension thereof and (ii) Investments existing on the Closing Date by the Borrower or any Restricted Subsidiary in the Borrower or any Restricted Subsidiary and any modification, renewal or extension thereof; provided that the amount of the original Investment is not increased except by the terms of such Investment as, and to the extent, set forth on Schedule 6.04(e) or as otherwise permitted by another clause of this Section 6.04;

 

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(f) Investments in Swap Agreements incurred in the ordinary course of business and not for speculative purposes;

 

(g) promissory notes and other non-cash consideration received in connection with Dispositions permitted by Section 6.05;

 

(h) Permitted Acquisitions; provided that the aggregate cash consideration paid for Permitted Acquisitions of Persons that do not become Subsidiary Loan Parties (or are not merged with and into the Borrower or a Subsidiary Loan Party) or of assets that are not owned by the Borrower or a Subsidiary Loan Party, together with the aggregate amount of all Investments made by Loan Parties after the Closing Date in Restricted Subsidiaries that are not Loan Parties in reliance on clause (c) above, shall not exceed the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Permitted Acquisition and any transactions occurring in connection therewith;

 

(i) the Transactions;

 

(j) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers in the ordinary course of business;

 

(k) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

 

(l) loans and advances to Holdings (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to Holdings (or such parent) in accordance with Section 6.07(a); provided that any such loan or advance shall reduce the amount of such applicable Restricted Payments thereafter permitted under Section 6.07(a) by a corresponding amount (if the applicable provision of Section 6.07(a) contains a maximum amount);

 

(m) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, additional Investments; provided that at the time any such Investment is made, the aggregate outstanding amount of such Investment made in reliance on this clause (m), together with the aggregate amount of all consideration paid in connection with all other Investments made in reliance on this clause (m) (including the aggregate principal amount of all Indebtedness assumed in connection with any such other Investment or acquisition previously made under this clause (m)), shall not exceed the sum of (A) the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Investment or other acquisition, plus (B) so long as after giving effect to such Investment on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.90 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Investment; provided that the foregoing Total Net Leverage Ratio incurrence test shall not apply to uses of the Unrestricted Available Amount for purposes of this clause (m)(B);

 

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(n) advances of payroll payments to employees in the ordinary course of business;

 

(o) Investments and other acquisitions to the extent that payment for such Investments is made with Qualified Equity Interests of Holdings (or any direct or indirect parent thereof);

 

(p) Investments of a Restricted Subsidiary acquired after the Closing Date or of a Person merged or consolidated with any Restricted Subsidiary in accordance with this Section 6.04 and Section 6.03 after the Closing Date or that otherwise becomes a Restricted Subsidiary (provided that if such Investment is made under Section 6.04(h), existing Investments in subsidiaries of such Restricted Subsidiary or Person shall comply with the requirements of Section 6.04(h)) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

(q) receivables owing to the Borrower or any Restricted Subsidiary, if created or acquired in the ordinary course of business;

 

(r) Investments (A) for utilities, security deposits, leases and similar prepaid expenses incurred in the ordinary course of business and (B) trade accounts created, or prepaid expenses accrued, in the ordinary course of business;

 

(s) non-cash Investments in connection with bona fide tax planning and reorganization activities; provided that after giving effect to any such non-cash Investments, the security interests of the Lenders in the Collateral, taken as a whole, and the Guarantees by the Loan Parties under the Guarantee Agreement, would not be materially impaired;

 

(t) additional Investments so long as at the time of any such Investment and after giving effect thereto, (A) on a Pro Forma Basis, the Total Net Leverage Ratio is no greater than 2.90 to 1.00 (or, to the extent that this clause (t) is used to make an Investment in, or to designate a Restricted Subsidiary as, an Unrestricted Subsidiary, the Total Net Leverage Ratio is no greater than 2.65 to 1.00) and (B) no Default or Event of Default exists or would result therefrom;

 

(u) Investments consisting of Indebtedness, Liens, fundamental changes, Dispositions and Restricted Payments permitted (other than by reference to this Section 6.04(u)) under Sections 6.01, 6.02, 6.03, 6.05 and 6.07, respectively;

 

(v) contributions to a “rabbi” trust for the benefit of employees, directors, consultants, independent contractors or other service providers or other grantor trust subject to claims of creditors in the case of a bankruptcy of the Borrower;

 

(w) to the extent that they constitute Investments, purchases and acquisitions of inventory, supplies, materials or equipment or purchases, acquisitions, licenses or leases of other assets, Intellectual Property, or other rights, in each case in the ordinary course of business and consistent with past practices;

 

(x) Investments in any Term Loans in accordance with Section 9.04(f);

 

(y) Investments in the ordinary course of business in connection with Settlements;

 

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(z) Investments arising as a result of sale-leaseback transactions permitted by Section 6.06; and

 

(aa) so long as no Default or Event of Default has occurred and is continuing or would otherwise result therefrom, Investments in joint ventures and Unrestricted Subsidiaries in an aggregate amount not exceed the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to the making of such Investment.

 

SECTION 6.05 Asset Sales.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, (i) sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it (including any disposition of property pursuant to a Division/Series Transaction) or (ii) permit any Restricted Subsidiary to issue any additional Equity Interest in such Restricted Subsidiary (other than (x) issuing directors’ qualifying shares and nominal shares issued to foreign nationals to the extent required by applicable Requirements of Law and (y) issuing Equity Interests to the Borrower or a Restricted Subsidiary or in the case of a Restricted Subsidiary that is not a Subsidiary Loan Party, joint venture partners in compliance with Section 6.01(b) or 6.04(c), as applicable) (each, a “Disposition” and the term “Dispose” as a verb has the corresponding meaning), except:

 

(a) Dispositions of obsolete, damaged, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful, or economically practicable to maintain, in the conduct of the business of the Borrower and its Restricted Subsidiaries (including allowing any registration or application for registration of any Intellectual Property that is no longer used or useful, or economically practicable to maintain, to lapse, go abandoned, or be invalidated);

 

(b) Dispositions of inventory and other assets (including Settlement Assets) in the ordinary course of business;

 

(c) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) an amount equal to Net Proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

 

(d) Dispositions of property to the Borrower or a Restricted Subsidiary; provided that if the transferor in such a transaction is a Loan Party, then either (i) the transferee must be a Loan Party (other than Holdings), (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in a Restricted Subsidiary that is not a Loan Party in accordance with Section 6.04 or (iii) to the extent constituting a Disposition to a Restricted Subsidiary that is not a Loan Party, such Disposition is for fair market value (as reasonably determined in good faith by the Borrower) and any promissory note or other non-cash consideration received in respect thereof is a permitted investment in a Restricted Subsidiary that is not a Loan Party in accordance with Section 6.04;

 

(e) Dispositions permitted by Section 6.03, Investments permitted by Section 6.04, Restricted Payments permitted by Section 6.07 and Liens permitted by Section 6.02, in each case, other than by reference to this Section 6.05(e);

 

(f) Dispositions of property pursuant to sale-leaseback transactions permitted by Section 6.06;

 

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(g) Dispositions of Permitted Investments for cash;

 

(h) Dispositions or forgiveness of accounts receivable in the ordinary course of business in connection with the collection or compromise thereof (including sales to factors or other third parties) and not as part of any financing transactions;

 

(i) leases, subleases, service agreements, product sales, licenses or sublicenses, in each case that do not materially interfere with the business of the Borrower and its Restricted Subsidiaries, taken as a whole;

 

(j) non-exclusive licenses or sublicenses of Intellectual Property in the ordinary course of business;

 

(k) transfers of property subject to Casualty Events;

 

(l) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, Dispositions of property to Persons other than Holdings, the Borrower or its Restricted Subsidiaries (including the sale or issuance of Equity Interests of a Restricted Subsidiary) for fair market value (as reasonably determined by a Responsible Officer of the Borrower in good faith) not otherwise permitted under this Section 6.05; provided that, with respect to any Disposition (or series of related Dispositions) pursuant to this clause (l) for a purchase price in excess of the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to such Disposition, the Borrower or any Restricted Subsidiary shall receive not less than 75% of such consideration in the form of cash or Permitted Investments; provided, however, that solely for the purposes of this clause (l), (A) any liabilities (as shown on the most recent balance sheet of the Borrower or such Restricted Subsidiary or in the footnotes thereto) of the Borrower or such Restricted Subsidiary, other than liabilities that are by their terms subordinated in right of payment to the Loan Document Obligations, that are assumed by the transferee with respect to the applicable Disposition and for which the Borrower and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing, shall be deemed to be cash, (B) any securities, notes or other obligations or assets received by the Borrower or such Restricted Subsidiary from such transferee that are converted by the Borrower or such Restricted Subsidiary into cash or Permitted Investments (to the extent of the cash or Permitted Investments received) within one hundred and eighty (180) days following the closing of the applicable Disposition shall be deemed to be cash, (C) Indebtedness of any Restricted Subsidiary that ceases to be a Restricted Subsidiary as a result of such Disposition (other than intercompany debt owed to the Borrower or its Restricted Subsidiaries), to the extent that the Borrower and all of the Restricted Subsidiaries (to the extent previously liable thereunder) are released from any guarantee of payment of the principal amount of such Indebtedness in connection with such Disposition, shall be deemed to be cash, (D) any Designated Non-Cash Consideration received by the Borrower or such Restricted Subsidiary in respect of such Disposition having an aggregate fair market value (as reasonably determined by a Responsible Officer of the Borrower in good faith), taken together with all other Designated Non-Cash Consideration received pursuant to this clause (l) that is at that time outstanding, not in excess of $5,000,000 at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value (as determined in good faith by the Borrower) of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be cash, (E) the Net Proceeds of such Disposition shall be applied and/or reinvested as (and to the extent) required by Section 2.11(c), and (F) no Dispositions of the Equity Interests of any Subsidiary Loan Party shall be permitted pursuant to this clause (l) unless all of the Equity Interests of such Subsidiary Loan Party are Disposed;

 

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(m) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(n) Dispositions of any assets (including Equity Interests) (A) acquired in connection with any Permitted Acquisition or other similar permitted Investment permitted hereunder, which assets are not used or useful to the core or principal business of the Borrower and its Restricted Subsidiaries and (B) made to obtain the approval of any applicable antitrust authority in connection with a Permitted Acquisition or other similar permitted Investment; provided that the Net Proceeds of such Dispositions shall be applied and/or reinvested as (and to the extent) required by Section 2.11(c);

 

(o) transfers of condemned property as a result of the exercise of “eminent domain” or other similar powers to the respective Governmental Authority or agency that has condemned the same (whether by deed in lieu of condemnation or otherwise), and transfers of property arising from foreclosure or similar action or that have been subject to a casualty to the respective insurer of such real property as part of an insurance settlement; and

 

(q) any Disposition of the Equity Interests of any Unrestricted Subsidiary.

 

SECTION 6.06 Sale and Leaseback Transactions.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any tangible property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or capital assets by the Borrower or any Restricted Subsidiary that is made for cash consideration in an amount not less than the fair market value (as reasonably determined in good faith by the Borrower) of such fixed or capital asset and is consummated within two hundred seventy (270) days after the Borrower or such Restricted Subsidiary, as applicable, acquires or completes the construction of such fixed or capital asset; provided that, the fair market value (as reasonably determined in good faith by the Borrower) of all such property subject to such arrangements shall not exceed, at the time of entry into any such arrangement and after giving Pro Forma Effect thereto, (i) the greater of $7,300,000 and 10% of Consolidated EBITDA for the most recently ended Test Period from and after the Closing Date or (ii) $2,500,000 in any fiscal year of the Borrower.

 

SECTION 6.07 Restricted Payments; Certain Payments of Indebtedness.

 

(a) Holdings and the Borrower will not, and will not permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:

 

(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that, in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary pro rata based on their relative ownership interests of the relevant class of Equity Interests of such Restricted Subsidiary;

 

(ii) Holdings, the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person (other than Disqualified Equity Interests) and, in the case of Holdings, subject to the limitations set forth in Section 6.03(c)(v);

 

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(iii) cashless redemption or conversion of Equity Interests of Holdings in exchange for common stock of the SPAC;

 

(iv) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise, vesting or settlement of Equity Interests (other than the New Holdings Preferred Equity) by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;

 

(v) Restricted Payments to Holdings, which Holdings shall use (A) to redeem, acquire, retire or repurchase shares of its Equity Interests through open market purchases or (B) to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), in each case in respect of this clause (B), held directly or indirectly by current or former officers, managers, consultants, members of the Board of Directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower or any of its Restricted Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount after the Closing Date, together with (in the case of either preceding clause (A) or (B)) the aggregate amount of loans and advances to Holdings (or any direct or indirect parent thereof) made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v), not to exceed (x) solely with respect to the preceding clause (A), $1,000,000 in the aggregate, and (y) collectively for the preceding clauses (A) and (B), $1,000,000 in any calendar year and $5,000,000 in the aggregate; provided that, after giving effect to any such Restricted Payments made in reliance on the foregoing, on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 4.50 to 1.00; provided further that such Restricted Payment may only be made in reliance on this clause (v);

 

(vi) the Borrower and its Restricted Subsidiaries may make the following Restricted Payments in cash to Holdings:

 

(A) cash distributions from Borrower to Holdings distributed solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings, including any franchise or similar taxes directly payable by Holdings, and (ii) so long as the Borrower and Holdings are flow-through entities for U.S. federal and state income tax purposes, payments to the members of Holdings for any taxable year, in an aggregate amount not to exceed the amount that the Borrower and its Subsidiaries would have been required to pay if, for such taxable period, the Borrower and such Subsidiaries had been members of a consolidated, combined or similar income tax group of corporations of which Holdings is the common parent that files on a consolidated, combined or similar basis (collectively, “Tax Distributions”); provided, however, that (x) any distributions pursuant to this clause (ii) in respect of any Unrestricted Subsidiary shall be permitted only to the extent that cash distributions were made by such  Unrestricted Subsidiary to the Borrower or any of its Restricted Subsidiaries for such  purpose and (y) for the avoidance of doubt, in no event shall any distributions be made pursuant to this clause (ii) in respect of any income that the holders of the New Holdings Preferred Equity or other Equity Interests of Holdings (or any parent thereof) may have as a result of any cash or non-cash dividends on the New Holdings Preferred Equity or any such other Equity Interests;

 

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(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business and otherwise directly attributable to the operations of the Borrower and its the Restricted Subsidiaries, (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors, managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries and (3) amounts that would otherwise be permitted to be paid pursuant to Section 6.08(iii);

 

(C) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests but not including any loans or advances made pursuant to Section 6.04(b)) to be contributed to the Borrower or its Restricted Subsidiaries or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Restricted Subsidiaries to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;

 

(D) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings to pay) fees and expenses related to any equity or debt offering not prohibited by this Agreement; provided, however,  notwithstanding the foregoing, any fees or expenses incurred in connection with the issuance of the New Holdings Preferred Equity in respect of periods after the Closing Date only shall be permitted to be made or paid if justified under another clause of this Section 6.07(a) as a permitted Restricted Payment; and

 

(E) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of Holdings or any direct or indirect parent company of Holdings to the extent such salaries, bonuses and other benefits are directly attributable to the operations of Holdings, the Borrower and its Restricted Subsidiaries;

 

(vii) in addition to the foregoing Restricted Payments and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may make additional Restricted Payments to Holdings (and Holdings in turn may make additional Restricted Payments), in an aggregate amount, when taken together with the aggregate amount of loans and advances previously made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (vii), not to exceed (A) the greater of $15,000,000 and 20.5% of Consolidated EBITDA for the most recently ended Test Period plus (B) to the extent that after giving effect to such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.90 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such Restricted Payment; provided that the foregoing Total Net Leverage Ratio incurrence test shall not apply to uses of the Unrestricted Available Amount for purposes of this clause (vii)(B);

 

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(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests) or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests (other than Disqualified Equity Interests and Cure Amounts); provided that (x) such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby and (y) such amounts shall not increase the Available Amount;

 

(ix) Holdings may (and the Borrower may make Restricted Payments to Holdings to enable Holdings to) (a) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion;

 

(x) the distribution, by dividend or otherwise, of shares of Equity Interests of, or Indebtedness owed to Holdings, the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and Permitted Investments);

 

(xi) Restricted Payments in an aggregate amount equal to the sum of (x) Net Proceeds of new public or private issuances of Qualified Equity Interests (excluding Qualified Equity Interests the proceeds of which will be applied as Cure Amounts) of Holdings (or any parent thereof) which are contributed to the Borrower after the Closing Date, plus (y) Net Proceeds of capital contributions received by Holdings (and contributed to the Borrower) after the Closing Date (other than in respect of any Disqualified Equity Interest or applied as Cure Amounts); provided that any such Net Proceeds received by the Borrower pursuant to this clause (xi) shall not build the Available Amount;

 

(xii) additional Restricted Payments; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.65 to 1.00 and (B) no Default or Event of Default exists or would result therefrom; and

 

(xiii) the Borrower may pay cash dividends to Holdings for the purpose of enabling Holdings to pay, and Holdings may pay, regularly scheduled quarterly cash dividends on the New Holdings Preferred Equity in an aggregate amount for any quarterly period not to exceed 1.25% of the aggregate liquidation preference of the New Holdings Preferred Stock as of the last day of the immediately preceding quarterly period of Holdings (or, in the case of the initial quarterly cash dividend payment on the New Holdings Preferred Equity, as of the Closing Date and after giving effect to the Transactions), in each case, so long as (i) no Specified Default or Event of Default then exists or would result therefrom and (ii) after giving effect to such Restricted Payment, on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 4.50 to 1.00.

 

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For the avoidance of doubt, Holdings may not issue any additional shares or units of New Holdings Preferred Equity after the Closing Date other than as permitted by Section 6.03(c)(iv).

 

(b) The Borrower will not, and will not permit any Restricted Subsidiary to, pay or make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or premium or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment that has a substantially similar effect to any of the foregoing, except:

 

(i) (a) to the extent such Junior Financing has such provisions which are permitted by the terms of this Agreement, payment of regularly scheduled interest and principal payments, (b) to the extent such Junior Financing has such provisions which are permitted by the terms of this Agreement, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal, premium and interest, and (c) payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, in each case, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;

 

(ii) refinancings of Junior Financings to the extent permitted by Section 6.01;

 

(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests or New Holdings Preferred Equity) of Holdings or any of its direct or indirect parent companies;

 

(iv) in addition to the foregoing, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may make additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity in an aggregate amount not to exceed $7,300,000 plus (B) to the extent that after giving effect to such prepayment, redemption, purchase, defeasance or other payment in respect of Junior Financing on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 3.90 to 1.00, the Available Amount that is Not Otherwise Applied as in effect immediately prior to the time of making of such prepayment, redemption, purchase, defeasance or other payment in respect of Junior Financing; provided that the foregoing Total Net Leverage Ratio incurrence test shall not apply to uses of the Unrestricted Available Amount for purposes of this clause (iv)(B);

 

(v) payments made in connection with the Transactions;

 

(vi) additional prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing prior to their scheduled maturity; provided that after giving effect to such Restricted Payment (A) on a Pro Forma Basis, the Total Net Leverage Ratio is equal to or less than 2.65 to 1.00 and (B) no Default or Event of Default then exists or would result therefrom; and

 

(vii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary to the extent not otherwise prohibited by any applicable subordination provisions.

 

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SECTION 6.08 Transactions with Affiliates.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (i) (A) transactions between or among the Borrower or any Restricted Subsidiary or any entity that becomes a Restricted Subsidiary as a result of such transaction to the extent such transactions are not prohibited hereunder and (B) transactions (or series of related transactions) involving aggregate payment or consideration of less than $5,000,000, (ii) on terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by such Person at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, (iii) the consummation of the Transactions and the payment of Transaction Costs, (iv) issuances of Qualified Equity Interests of the Borrower to Holdings the extent otherwise permitted by this Agreement, (v) employment and severance arrangements between the Borrower and its Restricted Subsidiaries and their respective officers and employees in the ordinary course of business or otherwise in connection with the Transactions (including loans and advances pursuant to Sections 6.04(b) and 6.04(n)), (vi) the payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the Board of Directors, officers and employees of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries in the ordinary course of business to the extent directly attributable to the ownership or operation of the Borrower and its Restricted Subsidiaries (provided that any such payments to Holdings (or any direct or indirect parent thereof) may only be made if otherwise permitted by Section 6.07(a)(vi)), (vii) transactions pursuant to permitted agreements in existence or contemplated on the Closing Date and set forth on Schedule 6.08 or any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect, (viii) Restricted Payments permitted under Section 6.07 and loans and advances in lieu thereof pursuant to Section 6.04(l), (ix) reasonable payments to or from, and transactions with, any joint venture in the ordinary course of business and (x) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and which are fair to the Borrower and its Restricted Subsidiaries, in the reasonable determination of the Borrower, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party.

 

SECTION 6.09 Restrictive Agreements.

 

(a) The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any agreement, instrument, deed or lease that prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of their respective properties or revenues, whether now owned or hereafter acquired, for the benefit of the Secured Parties with respect to the Secured Obligations or under the Loan Documents; provided that the foregoing shall not apply to:

 

(i) restrictions and conditions imposed by (1) Requirements of Law, (2) any Loan Document, (3) any documentation governing Permitted Unsecured Refinancing Debt, Permitted Second Priority Refinancing Debt or Permitted First Priority Refinancing Debt, (4) any documentation governing Indebtedness incurred pursuant to Section 6.01(a)(xxiii) and (5) any documentation governing any Permitted Refinancing incurred to refinance any such Indebtedness referenced in clauses (1) through (4) above, in each case, so long as such restrictions are not more restrictive in any material respect than the corresponding restrictions set forth in this Agreement and such restrictions, in any event, permit the Collateral Agent’s Liens on the Collateral;

 

(ii) restrictions and conditions existing on the Closing Date and set forth as Schedule 6.09(a) and any extension, renewal, amendment, modification or replacement thereof, except to the extent any such amendment, modification or replacement expands the scope of any such restriction or condition;

 

(iii) restrictions and conditions contained in agreements relating to the sale of a Subsidiary or any assets pending such sale; provided that such restrictions and conditions apply only to the Subsidiary or assets that is or are to be sold and such sale is permitted hereunder;

 

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(iv) customary provisions in leases, subleases, licenses, sublicenses and other contracts restricting the assignment thereof;

 

(v) restrictions imposed by any agreement relating to secured Indebtedness permitted by this Agreement (other than any secured Indebtedness referred to in clause (a) above) to the extent such restriction applies only to the property securing such Indebtedness;

 

(vi) any restrictions or conditions set forth in any agreement in effect at any time any Person becomes a Restricted Subsidiary (but not any modification or amendment expanding the scope of any such restriction or condition); provided that such agreement was not entered into in contemplation of such Person becoming a Restricted Subsidiary and the restriction or condition set forth in such agreement does not apply to the Borrower or any other Restricted Subsidiary;

 

(vii) restrictions or conditions in any Indebtedness permitted pursuant to Section 6.01 that is incurred or assumed by Restricted Subsidiaries that are not Loan Parties to the extent such restrictions or conditions are no more restrictive in any material respect than the restrictions and conditions in the Loan Documents or, in the case of Junior Financing, are market terms at the time of issuance and are imposed solely on such Restricted Subsidiary and its Subsidiaries;

 

(viii) customary restrictions on cash (or Permitted Investments) or other deposits imposed by agreements entered into in the ordinary course of business (or other restrictions on cash or deposits constituting Permitted Encumbrances);

 

(ix) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted by Section 6.04; and

 

(x) customary net worth provisions contained in real property leases entered into by Restricted Subsidiaries, so long as the Borrower has determined in good faith that such net worth provisions could not reasonably be expected to impair the ability of the Borrower and its Restricted Subsidiaries to meet their ongoing obligations.

 

(b) The Borrower will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist any encumbrance or restriction which prohibits or otherwise restricts the ability of any Restricted Subsidiary to (A) make Restricted Payments or pay any Indebtedness owed to the Borrower or any of its Restricted Subsidiaries, (B) make loans or advances to the Borrower or any of its Restricted Subsidiaries, (C) transfer any of its properties or assets to the Borrower or any Subsidiary Loan Party or (D) other than any Excluded Subsidiary, act as a Guarantor and pledge its assets pursuant to the Loan Documents, except in each case for prohibitions or restrictions existing under or by reason of:

 

(i) restrictions and conditions imposed by (1) Requirements of Law, (2) any Loan Document or (3) so long as such restrictions are not more restrictive in any material respect on the Borrower or any of its Restricted Subsidiaries than those set forth in this Agreement, (I) any documentation governing Permitted Unsecured Refinancing Debt, Permitted Second Priority Refinancing Debt or Permitted First Priority Refinancing Debt, (II) any documentation governing Permitted Ratio Debt and (III) any documentation governing any Permitted Refinancing incurred to refinance any such Indebtedness referenced in this clause (3);

 

(ii) restrictions deemed to exist by virtue of fiduciary duties, or civil, criminal, or personal liability imposed under applicable Law on officers and directors of Foreign Subsidiaries of the Borrower;

 

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(iii) restrictions and conditions existing on the Closing Date and set forth as Schedule 6.09(b) and any extension, renewal, amendment, modification or replacement thereof, except to the extent any such amendment, modification or replacement expands the scope of any such restriction or condition;

 

(iv) (x) restrictions in connection with Indebtedness permitted to be incurred hereunder by any Restricted Subsidiary that is not a Loan Party, and (y) other restrictions in connection with Indebtedness permitted to be incurred hereunder, so long as, in each case, such restrictions, when taken as a whole, would not materially impair the ability of the Borrower to meet its payment obligations under the Loan Documents;

 

(v) any restrictions or conditions set forth in any agreement in effect at any time any Person becomes a Restricted Subsidiary (but not any modification or amendment expanding the scope of any such restriction or condition); provided that such agreement was not entered into in contemplation of such Person becoming a Restricted Subsidiary and the restriction or condition set forth in such agreement does not apply to the Borrower or any other Restricted Subsidiary; and

 

(vi) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted by Section 6.04.

 

SECTION 6.10 Amendment of Junior Financing.

 

The Borrower will not, and will not permit any Restricted Subsidiary to, amend or modify any documentation governing any Junior Financing, in each case, to the extent the terms of such amendment or modification (i) would not have been permitted hereunder at the time the applicable Junior Financing was incurred or (ii ) would not be permitted by the applicable Intercreditor Agreement or subordination agreement.

 

SECTION 6.11 Financial Performance Covenant.

 

The Borrower will not permit the Total Net Leverage Ratio as of the last day of any fiscal quarter of the Borrower set forth below to exceed the ratio set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending   Ratio
June 30, 2020   5.50 to 1.00
September 30, 2020   5.50 to 1.00
December 31, 2020 and the last day of each fiscal quarter of the Borrower thereafter   5.00 to 1.00

 

SECTION 6.12 Changes in Fiscal Periods.

 

The Borrower will not make any change in its fiscal year; provided, however, that the Borrower may, upon written notice to the Administrative Agent, change its fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in its fiscal year.

 

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SECTION 6.13 Amendments of Organizational Documents

 

Holdings and the Borrower will not, and will not permit any Restricted Subsidiary to, amend or modify its Organizational Documents in a manner materially adverse to the Lenders; it being understood that, in any event (and without limiting the foregoing), Holdings will not amend, modify or otherwise change any provision of the New Holdings Preferred Equity that would (i) increase the cash or non-cash dividend rate thereon or make the dividends payable thereunder on a more frequent basis (except, for the avoidance of doubt, with respect to any automatic increase to the non-cash dividend rates provided for in the Holdings LLC Agreement (as in effect on the date hereof)), (ii) change any redemption date thereof to an earlier date, (iii) add any mandatory redemption provisions thereof or make any redemption provisions thereunder more restrictive on Holdings or less favorable to the Lenders, or (iv) make any of the “protective provisions” thereunder or other terms thereof more restrictive on Holdings and its Subsidiaries; provided, however, if any provisions of Sections 6.01, 6.05, 6.07(a) and/or 6.08 are amended, modified or otherwise changed after the Closing Date in a manner that is more restrictive on, or less favorable to, Holdings and its Subsidiaries, then the corresponding “protective provisions” of the New Holdings Preferred Equity may be amended, modified or changed in a consistent manner so long as any applicable cushions as between the provisions of this Agreement and those corresponding provisions of the New Holdings Preferred Equity are maintained.

 

SECTION 6.14 Prohibition on Division/Series Transactions

Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, neither Holdings nor the Borrower will (a) enter into (or agree to enter into) any Division/Series Transaction or (b) permit any new “series” to be created or issued under Holdings’ or the Borrower’s, as applicable, Organizational Documents.

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01 Events of Default.

 

If any of the following events (any such event, an “Event of Default”) shall occur:

 

(a) any Loan Party shall fail to pay any principal or premium of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(b) any Loan Party shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in paragraph (a) of this Section 7.01) payable under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) or more Business Days;

 

(c) any representation or warranty made or deemed made by or on behalf of Holdings, the Borrower or any of its Restricted Subsidiaries in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made, and if such incorrect representation or warranty is capable of being cured (including by a restatement of any relevant financial statements), such incorrectness shall remain incorrect for a period of thirty (30) days after the date such representation or warranty is made or deemed made;

 

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(d) Holdings, the Borrower or any of its Restricted Subsidiaries shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.04 (with respect to the existence of Holdings, the Borrower or any Subsidiary Loan Party), 5.10, 5.13, 5.14, 5.18, 5.19 or in Article VI; provided that any Event of Default under the Financial Performance Covenant is subject to cure as provided in Section 7.02;

 

(e) Holdings, the Borrower or any of its Restricted Subsidiaries shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in paragraph (a), (b) or (d) of this Section 7.01), and such failure shall continue unremedied for a period of thirty (30) days after the earlier of (x) written notice thereof from the Administrative Agent to the Borrower and (y) a Responsible Officer of a Loan Party having become aware of such default; provided that, any Default or Event of Default which may occur as a result of the failure to timely meet any delivery requirements under Section 5.01 or 5.02 shall cease to exist upon any delivery otherwise in compliance with such requirements;

 

(f) Holdings, the Borrower or any of its Restricted Subsidiaries shall fail to make any payment (whether of principal, interest or otherwise and regardless of amount) in respect of Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace period);

 

(g) (A) any event or condition exists or occurs that results in Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with all applicable grace periods having expired) the holder or holders of Material Indebtedness or any trustee or agent on its or their behalf to cause Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this paragraph (g) shall not apply to (i) secured Indebtedness that becomes due as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of the property or assets securing such Indebtedness (to the extent such sale, transfer or other disposition is not prohibited under this Agreement) or (ii) termination events or similar events occurring under any Swap Agreement that constitutes Material Indebtedness and not as a result of any other default thereunder by Holdings, the Borrower or any of its Restricted Subsidiaries (it being understood that paragraph (f) of this Section 7.01 will apply to any failure to make any payment required as a result of any such termination or similar event); provided that, in the case of this clause (g), such default or failure remains unremedied or has not been waived by the holders of any such Material Indebtedness prior to any termination of the Commitments, acceleration of the Loans or the exercise of any other remedies pursuant to this Section 7.01 or (B) any event or condition exists or occurs that would require Holdings to redeem any of the New Holdings Preferred Equity in the absence of any restrictions or limitations set forth herein;

 

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, court protection, reorganization or other relief in respect of Holdings, the Borrower, any Subsidiary Loan Party or any Material Subsidiary or its debts, or of a material part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, examiner, sequestrator, conservator or similar official for Holdings, the Borrower, any Subsidiary Loan Party or any Material Subsidiary or for a material part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall be entered;

 

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(i) Holdings, the Borrower, any Subsidiary Loan Party or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, court protection, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (h) of this Section 7.01, (iii) apply for or consent to the appointment of a receiver, trustee, examiner, custodian, sequestrator, conservator or similar official for Holdings, the Borrower, any Subsidiary Loan Party or any Material Subsidiary or for a material part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding or (v) make a general assignment for the benefit of creditors;

 

(j) one or more enforceable judgments for the payment of money in an aggregate amount of $10,000,000 or more (to the extent not paid or covered by insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) shall be rendered against Holdings, the Borrower and any of its Restricted Subsidiaries or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be effectively stayed, or any judgment creditor shall legally attach or levy upon assets of Holdings, the Borrower or any of its Restricted Subsidiaries that are material to the businesses and operations of Holdings, the Borrower and its Restricted Subsidiaries, taken as a whole, to enforce any such judgment;

 

(k) one or more ERISA Events occur that, individually or in the aggregate, have resulted or would reasonably be expected to result in a Material Adverse Effect;

 

(l) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on the Collateral (other than immaterial portions thereof), with the priority required by the applicable Security Documents, except (i) as a result of the sale or other disposition of the applicable Collateral to a Person that is not a Loan Party in a transaction permitted under the Loan Documents, (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Security Documents;

 

(m) any material provision of any material Loan Document or any Guarantee of the Loan Document Obligations shall for any reason not be (or asserted in writing by any Loan Party not to be) a legal, valid and binding obligation of any Loan Party thereto other than as expressly permitted hereunder or thereunder;

 

(n) any Guarantees of the Loan Document Obligations by any Loan Party pursuant to the Guarantee Agreement shall cease to be in full force and effect (in each case, other than in accordance with the terms of the Loan Documents);

 

(o) a Change of Control shall occur; or

 

(p) after the execution and delivery thereof, the Second Lien Intercreditor Agreement shall cease, for any reason, to be in full force and effect (other than in accordance with its terms) or the security interest of the Collateral Agent in any substantial portion of the Collateral shall for any other reason cease to be senior to the security interest of the Second Lien Agent on the Collateral, or, in either case, any Loan Party shall so assert,

 

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then, and in every such event (other than an event with respect to the Borrower described in paragraph (h) or (i) of this Section 7.01), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take one or more of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, (iii) require the deposit of cash collateral in respect of LC Exposure as provided in Section 2.05, and (iv) exercise (or direct the Collateral Agent to exercise) any and all rights and remedies under the Security Documents, the Guarantee Agreement, the other Loan Documents and applicable law, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Holdings, the Borrower and each other Loan Party; and in case of any event with respect to the Borrower described in paragraph (h) or (i) of this Section 7.01, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall immediately and automatically become due and payable, and the deposit of the such cash collateral in respect of LC Exposure shall immediately and automatically become due and payable and the deposit of the such cash collateral in respect of LC Exposure shall immediately and automatically become due, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Holdings, the Borrower and each other Loan Party.

 

SECTION 7.02 Right to Cure.

 

(a) Notwithstanding anything to the contrary contained in Section 7.01, in the event that the Borrower and its Restricted Subsidiaries fail to comply with the requirements of the Financial Performance Covenant as of the last day of any applicable fiscal quarter of the Borrower, at any time after the end of such fiscal quarter and until the expiration of the tenth (10th) Business Day subsequent to the date on which the financial statements with respect to such fiscal quarter (or the fiscal year ended on the last day of such fiscal quarter) are required to be delivered pursuant to Section 5.01(a) or (b), as applicable (such period, the “Cure Period”), Holdings shall have the right to issue Qualified Equity Interests (other than to the Borrower or a Subsidiary and other than New Holdings Preferred Equity) for cash or otherwise receive cash contributions to the capital of Holdings (other than from the Borrower or a Subsidiary) as cash common equity or other Qualified Equity Interests (other than New Holdings Preferred Equity) (which, in either case, Holdings shall contribute as cash common equity to the Borrower) (collectively, the “Cure Right”), and upon the receipt by the Borrower of 100% of the cash proceeds of such issuance (the “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right the Financial Performance Covenant shall be recalculated giving effect to the following pro forma adjustment:

 

(i) Consolidated EBITDA shall be increased with respect to such applicable fiscal quarter and any four (4) fiscal quarter period that contains such fiscal quarter, solely for the purpose of measuring actual (as opposed to pro forma) compliance with the Financial Performance Covenant and not for any other purpose under this Agreement, by an amount equal to the Cure Amount; and

 

(ii) if, after giving effect to the foregoing pro forma adjustment (without giving effect to any repayment of any Indebtedness with any portion of the Cure Amount or any portion of the Cure Amount on the balance sheet of the Borrower and its Restricted Subsidiaries), the Borrower and its Restricted Subsidiaries shall then be in compliance with the requirements of the Financial Performance Covenant, the Borrower and its Restricted Subsidiaries shall be deemed to have satisfied the requirements of the Financial Performance Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or Default or Event of Default of the Financial Performance Covenant that had occurred shall be deemed cured for the purposes of this Agreement;

 

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provided that the Borrower shall have notified the Administrative Agent of the exercise of such Cure Right within five (5) Business Days prior to the issuance of the relevant Qualified Equity Interests for cash or the receipt of the cash contributions by Holdings.

 

(b) Notwithstanding anything herein to the contrary, (i) in each four (4) consecutive fiscal quarter period of the Borrower there shall be at least two (2) fiscal quarters in which the Cure Right is not exercised, (ii) during the term of this Agreement, the Cure Right shall not be exercised more than five (5) times and (iii) for purposes of this Section 7.02, the Cure Amount shall be no greater than the amount required for purposes of complying with the Financial Performance Covenant and any amounts in excess thereof shall not be deemed to be a Cure Amount. Notwithstanding any other provision in this Agreement to the contrary, (i) no increase in Consolidated EBITDA on account of the exercise of any Cure Right shall be applicable for any other purpose under this Agreement or any other Loan Document, including determining pricing, the availability or amount of any covenant basket, carve-out or compliance on a Pro Forma Basis with the Financial Performance Covenant or any other financial ratio and (ii) there shall be no pro forma or other reduction of Indebtedness (including any Loans and including by way of cash netting) as a result of any Cure Amount in determining the Financial Performance Covenant (or any other leverage based test) for the applicable fiscal quarter in respect of which such Cure Right is exercised and for any subsequent period that includes such fiscal quarter (except, in the case of any such subsequent fiscal quarter, to the extent that all or any portion of such Cure Amount is actually used to permanently prepay or otherwise permanently reduce Indebtedness).

 

(c) For the avoidance of doubt, no Revolving Lender, Swing Line Lender or Issuing Bank, as applicable, shall be required to fund any Revolving Loans or Swing Loans, or issue (or increase) any Letters of Credit, as applicable, during such Cure Period.

 

(d) Upon receipt by the Administrative Agent of a written notice, prior to the end of the applicable Cure Period, that Holdings intends to exercise the Cure Right in respect of a fiscal quarter, none of the Administrative Agent, the Collateral Agent or the Lenders shall be permitted to accelerate Loans held by them, to terminate the Commitments or to exercise remedies against the Collateral solely on the basis of a failure to comply with the requirements of the Financial Performance Covenant, unless such failure is not cured pursuant to the exercise of the Cure Right on or prior to the end of the applicable Cure Period.

 

SECTION 7.03 Application of Proceeds.

 

After the exercise of remedies provided for in Section 7.01, any amounts received on account of the Secured Obligations shall be applied by the Administrative Agent in accordance with Section 4.02 of the Collateral Agreement and/or the similar provisions in the other Security Documents. Notwithstanding the foregoing, Excluded Swap Obligations with respect to any Subsidiary Loan Party shall not be paid with amounts received from such Subsidiary Loan Party or its assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Secured Obligations otherwise set forth in Section 4.02 of the Collateral Agreement and/or the similar provisions in the other Security Documents.

 

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ARTICLE VIII

 

Administrative Agent

 

SECTION 8.01 Appointment and Authority.

 

(a) Each of the Lenders and the Issuing Banks hereby irrevocably appoints Macquarie Capital Funding LLC to act on its behalf as the Administrative Agent and the Collateral Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent and the Collateral Agent (including through its agents or employees) to execute, deliver and administer the Loan Documents and to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent and Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article VIII are solely for the benefit of the Administrative Agent, the Collateral Agent, the Lenders and the Issuing Banks, and none of Holdings, the Borrower or any other Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Requirements of Law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

(b) The Administrative Agent shall also act as the “Collateral Agent” under the Loan Documents, and each of the Lenders and the Issuing Banks hereby irrevocably appoints and authorizes the Collateral Agent to act as the agent of such Lender and the Issuing Banks for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent and the Collateral Agent pursuant to Section 8.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article VIII and Article IX (including Section 9.03 as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

SECTION 8.02 Rights as a Lender.

 

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender or an Issuing Bank as any other Lender or Issuing Bank and may exercise the same as though it were not the Administrative Agent and the term “Lender”, “Lenders” or “Issuing Bank” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, own securities of, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders or the Issuing Banks.

 

SECTION 8.03 Exculpatory Provisions.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

 

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing;

 

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(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law;

 

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Holdings, the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity;

 

(d) shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 9.02 and in the last paragraph of Section 7.01) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment; provided that the Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice describing such Default or Event of Default is given to the Administrative Agent by Holdings, the Borrower, a Lender or an Issuing Bank; and

 

(e) shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, validity, perfection or priority of any Lien purported to be created by the Security Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent. The Administrative Agent shall not be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. Each party to this Agreement acknowledges and agrees that the Administrative Agent and the Collateral Agent may from time to time use one or more outside service providers for the tracking of all UCC financing statements (and/or other Collateral related filings and registrations from time to time) required to be filed or recorded pursuant to the Loan Documents and the notification to the Administrative Agent and the Collateral Agent, of, among other things, the upcoming lapse or expiration thereof, and that each of such service providers will be deemed to be acting at the request and on behalf of the Borrower and the other Loan Parties. The Administrative Agent and the Collateral Agent shall not be liable for any action taken or not taken by any such service provider. Notwithstanding anything herein to the contrary, the Administrative Agent shall not have any liability arising from any confirmation or determination of (x) the Revolving Exposure or the component amounts thereof, (y) the Effective Yield or (z) the terms and conditions of any Intercreditor Agreement.

 

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SECTION 8.04 Reliance by Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or an Issuing Bank unless the Administrative Agent shall have received written notice to the contrary from such Lender or an Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

SECTION 8.05 Delegation of Duties.

 

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article VIII and the indemnity provisions of Section 9.03 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any of its subagents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

SECTION 8.06 Resignation of Administrative Agent.

 

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph or as otherwise provided below in this paragraph, the Administrative Agent may resign upon thirty (30) days’ notice to the Lenders, the Swing Line Lender, the Issuing Banks and the Borrower and such notice shall also be effective in respect of its role as Collateral Agent unless the Administrative Agent otherwise agrees in writing. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the Borrower’s consent (such consent not to be unreasonably withheld or delayed) unless an Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing, to appoint a successor, which shall be a bank or trust company with an office in the United States, or an Affiliate of any such bank or trust company with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, the Swing Line Lender and the Issuing Banks, appoint a successor Administrative Agent, which shall be an Approved Bank or trust company with an office in New York, New York, or an Affiliate of any such Approved Bank or trust company (the date upon which the retiring Administrative Agent is replaced or such resignation otherwise becomes effective as provided below, the “Resignation Effective Date”); provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice or the Resignation Effective Date.

 

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If the Person serving as Administrative Agent is a Defaulting Lender, the Required Lenders and the Borrower may, to the extent permitted by applicable law, by notice in writing to such Person remove such Person as Administrative Agent and, with the consent of the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except (i) that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed and (ii) with respect to any outstanding payment obligations) and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder and under the other Loan Documents as set forth in this Section. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article VIII and Section 9.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

Any resignation or removal by Macquarie Capital Funding LLC as Administrative Agent pursuant to this Section 8.06 shall also constitute its (or its Affiliate’s or designee’s) resignation as Issuing Bank and Swing Line Lender. If Macquarie Capital Funding LLC resigns as an Issuing Bank, it shall retain all the rights, powers, privileges and duties of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as Issuing Bank and all LC Exposure with respect thereto, including the right to require the Lenders to make ABR Loans or fund risk participations in outstanding reimbursement obligations pursuant to Section 2.05. If Macquarie Capital Funding LLC resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make ABR Loans or fund risk participations in outstanding Swing Loans pursuant to Section 2.04. Upon the appointment by the Borrower of a successor Issuing Bank or Swing Line Lender hereunder (which successor shall in all cases be a Lender (or an Affiliate of a Lender) other than a Defaulting Lender), but otherwise subject to the immediately two preceding sentences, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Bank and/or Swing Line Lender, as applicable, (b) the retiring Issuing Bank and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder and under the other Loan Documents, and (c) the successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements reasonably satisfactory to Macquarie Capital Funding LLC to effectively assume the obligations of Macquarie Capital Funding LLC with respect to such Letters of Credit.

 

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SECTION 8.07 Non-Reliance on Administrative Agent and Other Lenders.

 

Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Each Lender and Issuing Bank acknowledges that the Administrative Agent and its Affiliates have not made any representation or warranty to it. Except for documents expressly required by any Loan Document to be transmitted by the Administrative Agent to the Lenders or any Issuing Bank, the Administrative Agent shall not have any duty or responsibility (either express or implied) to provide any Lender or Issuing Bank with any credit or other information concerning any Loan Party, including the business, prospects, operations, property, financial and other condition or creditworthiness of any Loan Party or any Affiliate of a Loan Party, that may come in to the possession of the Administrative Agent or any of its Affiliates.

 

Each Lender, by delivering its signature page to this Agreement and funding its Loans on the Closing Date, or delivering its signature page to an Assignment and Assumption, Incremental Facility Amendment or Refinancing Amendment pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Closing Date.

 

Except as otherwise provided in Section 8.10, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent and the Collateral Agent on behalf of the Secured Parties in accordance with the terms hereby and thereof. In the event of a foreclosure by the Administrative Agent or the Collateral Agent on any of the Collateral pursuant to a public or private sale or other disposition, the Administrative Agent, the Collateral Agent or any Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition, and the Administrative Agent or the Collateral Agent, as agent for and representative of the Lenders (but not any Lender or Lenders in its or their respective individual capacities unless Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any collateral payable by the Administrative Agent or the Collateral Agent on behalf of the Lenders at such sale or other disposition. Each Lender, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations, to have agreed to the foregoing provisions.

 

In furtherance of the foregoing and not in limitation thereof, no Swap Agreement or Cash Management Services the obligations under or in respect of which constitute Secured Obligations will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document. By accepting the benefits of the Collateral, each Secured Party that is a party to any such Swap Agreement or a provider of such Cash Management Services shall be deemed to have appointed the Administrative Agent and the Collateral Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph. Notwithstanding any other provision of this Section 8.07 to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, any Swap Agreement or Cash Management Services the obligations under or in respect of which constitute Secured Obligations unless the Administrative Agent has received written notice of such Secured Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Secured Party that is a party thereto.

 

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SECTION 8.08 No Other Duties, Etc.

 

Anything herein to the contrary notwithstanding, neither the Joint Lead Arrangers, the Joint Bookrunners nor any Person named on the cover page hereof as a Joint Lead Arranger or Joint Bookrunner shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or an Issuing Bank hereunder.

 

Each of the Lenders, Issuing Banks and other Secured Parties irrevocably authorizes and directs the Administrative Agent and the Collateral Agent to, and the Administrative Agent and the Collateral Agent, as applicable, shall (a) release and terminate, or to confirm or evidence any automatic release and termination of, any Guarantees and Liens created under the Loan Documents as provided in Section 9.14 or in any other Loan Document and (b) subordinate, at the request of the Borrower, any Lien on any property granted to or held by the Collateral Agent under any Security Document to the holder of any Lien on such property that is permitted by Section 6.02 and is otherwise in accordance with Section 9.14.

 

SECTION 8.09 Administrative Agent May File Proofs of Claim.

 

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or outstanding Letter of Credit shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letters of Credit outstanding and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Banks and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Banks and the Administrative Agent under Sections 2.12 and 9.03) allowed in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Banks, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.12 and 9.03.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or any Issuing Bank to authorize the Administrative Agent to vote in respect of the claim of any Lender or any Issuing Bank or in any such proceeding.

 

SECTION 8.10 No Waiver; Cumulative Remedies; Enforcement.

 

No failure by any Lender, any Issuing Bank or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. Each Lender agrees that, except as otherwise provided in any of the Loan Documents and without the prior written consent of the Required Lenders, it will not take any legal action or institute any action or proceeding against any Loan Party with respect to any of the Secured Loan Obligations or Collateral, or accelerate or otherwise enforce its portion of the Secured Loan Obligations.

 

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent and the Collateral Agent in accordance with Article VII for the benefit of all the Lenders and the Issuing Banks; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent or the Collateral Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent or the Collateral Agent) hereunder and under the other Loan Documents, (b) the Issuing Banks from exercising the rights and remedies that inure to its benefit (solely in its capacity as Issuing Bank) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 9.08 (subject to the terms of Section 2.18), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided further that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent and the Collateral Agent pursuant to Article VII and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.18, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

SECTION 8.11 Withholding Taxes.

 

To the extent required by any applicable Requirements of Law (as determined in good faith by the Administrative Agent), the Administrative Agent may deduct or withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. If the Internal Revenue Service or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold Tax from amounts paid to or for the account of any Lender for any reason (including because the appropriate form was not delivered or not property executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding Tax ineffective), such Lender shall indemnify and hold harmless the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Loan Parties pursuant to Section 2.17 and without limiting any obligation of the Loan Parties to do so pursuant to such Section) fully for all amounts paid, directly or indirectly, by the Administrative Agent as Taxes or otherwise, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses, whether or not such Tax was correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this Section 8.11. The agreements in this Section 8.11 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of this Agreement and the repayment, satisfaction or discharge of all other obligations under any Loan Document. For the avoidance of doubt, the term “Lender” in this Article VIII shall include any Issuing Bank.

 

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SECTION 8.12 Certain ERISA Matters.

 

Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

 

(a) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments or this Agreement,

 

(b) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84- 14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

 

(c) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

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In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01 Notices.

 

(a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, e-mail or other electronic transmission, as follows:

 

(i) if to Holdings, the Borrower, the other Loan Parties, the Administrative Agent or the Issuing Banks, to the address, fax number, e-mail address or telephone number specified for such Person on Schedule 9.01; and

 

(ii) if to any other Lender, to it at its address (or fax number, telephone number or e-mail address) set forth in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain Material Non-Public Information relating to the Borrower).

 

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; any notices and other communications sent by fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in paragraph (b) below shall be effective as provided in such paragraph (b).

 

(b) Electronic Communications. Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures reasonably approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Article II if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.

 

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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to Holdings, the Borrower, any Lender, any Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to Holdings, the Borrower or any of their Affiliates or any Lender, any Issuing Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d) Change of Address, Etc. Each of Holdings, the Borrower, the Administrative Agent and each Issuing Bank may change its address, electronic mail address, fax or telephone number for notices and other communications or website hereunder by notice to the other parties hereto. Each other Lender may change its address, fax or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and each Issuing Bank. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, fax number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e) Reliance by Administrative Agent, Issuing Banks and Lenders. The Administrative Agent, the Issuing Banks and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Issuing Bank, each Lender and the Related Parties from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower in the absence of gross negligence or willful misconduct as determined in a final and non-appealable judgment by a court of competent jurisdiction. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent and each of the parties hereto hereby consents to such recording.

 

SECTION 9.02 Waivers; Amendments.

 

(a) No failure or delay by the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender in exercising any right or power under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or the issuance, amendment, renewal or extension of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default or Event of Default at the time. No notice or demand on the Borrower or Holdings in any case shall entitle the Borrower or Holdings to any other or further notice or demand in similar or other circumstances.

 

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(b) Except as provided in Section 2.20 with respect to any Incremental Facility Amendment, Section 2.21 with respect to any Refinancing Amendment or Section 2.24 with respect to any Permitted Amendment, neither this Agreement, any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Holdings, the Borrower, the Administrative Agent (to the extent that such waiver, amendment or modification does not affect the rights, duties, privileges or obligations of the Administrative Agent under this Agreement or otherwise require the individual consent of the Administrative Agent pursuant to the terms hereof and the other Loan Documents, the Administrative Agent shall execute such waiver, amendment or other modification to the extent approved by the Required Lenders) and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent or the Collateral Agent (as applicable) and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth in Section 4.02 or the waiver of any Default or Event of Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute an extension or increase of any Commitment of any Lender), (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the reimbursement obligations of the Borrower for the LC Exposure at such time (it being understood that a waiver of any Default, Event of Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute a reduction or forgiveness of principal) or reduce the rate of interest thereon, or reduce any premiums or fees payable hereunder, without the written consent of each Lender directly and adversely affected thereby (it being understood that any change to the definition of Total Net Leverage Ratio, Senior Secured Net Leverage Ratio or First Lien Net Leverage Ratio or in the component definitions thereof shall not constitute a reduction of interest or fees for purposes of this clause (ii)), provided that only the consent of the Required Lenders shall be necessary to waive (or reduce) any obligation of the Borrower to pay default interest pursuant to Section 2.13(c), (iii) postpone the maturity of any Loan (it being understood that a waiver of any Default, Event of Default, mandatory prepayment or mandatory reduction of the Commitments shall not constitute a reduction or forgiveness of principal or an extension of any maturity date, date of any scheduled amortization payment or date for payment of interest or fees), or the date of any scheduled amortization payment of the principal amount of any Term Loan under Section 2.10 or the applicable Incremental Facility Amendment, Refinancing Amendment or Loan Modification Agreement, or the reimbursement date with respect to any LC Disbursement, or any date for the payment of any interest, premium or fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment (it being understood that a waiver of any Default or Event of Default shall not constitute an extension of any maturity date, date of any scheduled amortization payment or date for payment of interest, premium or fees) without the written consent of each Lender directly and adversely affected thereby, (iv) change any of the provisions of this Section 9.02(b) without the written consent of each Lender directly and adversely affected thereby; provided that any such change which is in favor of a Class of Lenders holding Loans maturing after the maturity of other Classes of Lenders (and only takes effect after the maturity of such other Classes of Loans or Commitments) will require the written consent of the Required Lenders with respect to each Class directly and adversely affected thereby, (v) reduce the percentage set forth in the definition of “Required Lenders”, “Required Revolving Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as the case may be), (vi) release all or substantially all the value of the Guarantees under the Guarantee Agreement (except as expressly provided in the Loan Documents) without the written consent of each Lender, (vii) release all or substantially all the Collateral from the Liens of the Security Documents, without the written consent of each Lender, except as expressly provided in the Loan Documents, (viii) modify the provisions of Section 2.18 or any other provision of this Agreement relating to pro rata sharing or pro rata payments without the consent of each Lender, (ix) modify the provisions of Section 7.03 of this Agreement or Section 4.02 of the Collateral Agreement without the consent of each Lender or (x) (I) amend, modify or waive any condition precedent set forth in Section 4.02 as it pertains to any Revolving Loan or Swing Loan without the consent of the Required Revolving Lenders and, as it pertains to Swing Loans, the Swing Line Lender (it being understood and agreed that the waiver of any Default or Event of Default shall only require the consent of the Required Lenders) and (II) amend, modify or waive any condition precedent set forth in Section 4.02 as it pertains to the issuance of any Letter of Credit by any Issuing Bank without the consent of the relevant Issuing Bank and the Required Revolving Lenders (it being understood and agreed that the waiver of any Default or Event of Default shall only require the consent of the Required Lenders); provided further that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Collateral Agent, the Swing Line Lender or any Issuing Bank without the prior written consent of the Administrative Agent, the Collateral Agent, the Swing Line Lender or such Issuing Bank, (B) any provision of this Agreement or any other Loan Document may be amended by an agreement in writing entered into by Holdings, the Borrower and the Administrative Agent to cure any ambiguity, omission, defect or inconsistency if the same is not objected to in writing by the Required Lenders to the Administrative Agent within five (5) Business Days following the Lenders’ receipt of notice thereof and (C) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of Lenders holding Loans or Commitments of a particular Class (but not the Lenders holding Loans or Commitments of any other Class) may be effected by an agreement or agreements in writing entered into by Holdings, the Borrower and the requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time. Notwithstanding the foregoing, (a) this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent, Holdings and the Borrower (i) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents and (ii) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders on substantially the same basis as the Lenders prior to such inclusion and (b) guarantees, Security Documents and related documents in connection with this Agreement may be in a form reasonably determined by the Administrative Agent and may be, together with this Agreement and the other Loan Documents, amended and waived with the consent of the Administrative Agent at the request of the Borrower without the need to obtain the consent of any other Lender if such amendment or waiver is delivered in order (i) to comply with local law or advice of local counsel, (ii) to cure ambiguities, defects or inconsistencies if the same is not objected to in writing by the Required Lenders to the Administrative Agent within five (5) Business Days following the Lenders’ receipt of notice thereof, (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents or (iv) to integrate any Incremental Facility or Credit Agreement Refinancing Indebtedness in a manner consistent with this Agreement and the other Loan Documents, including the relevant Intercreditor Agreement(s).

 

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(c) In connection with any proposed amendment, modification, waiver or termination (a “Proposed Change”) requiring the consent of all Lenders or all directly and adversely affected Lenders, if the consent of the Required Lenders (and, to the extent any Proposed Change requires the consent of Lenders holding Loans of any Class pursuant to clause (iv), (ix) or (xi) of paragraph (b) of this Section 9.02, the consent of a Majority in Interest of the outstanding Loans and unused Commitments of such Class) to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section 9.02 being referred to as a “Non-Consenting Lender”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Administrative Agent, (i) if no Event of Default under Section 7.01(a), (b), (h) or (i) exists, permanently prepay all of the Loans of any Class owing by it to, and terminating any Commitments of, such Non-Consenting Lender or (ii) require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that (a) the Borrower shall have received the prior written consent of the Administrative Agent to the extent such consent would be required under Section 9.04(b) for an assignment of Loans or Commitments, as applicable (and, if a Revolving Commitment is being assigned, each Issuing Bank and the Swing Line Lender), which consent shall not unreasonably be withheld, (b) such Non-Consenting Lender shall have received payment of an amount equal to the outstanding par principal amount of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder (including pursuant to Section 2.11(a)(i)) from the Eligible Assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all amounts owing under Section 2.11(a)(i) and all other amounts) and (c) unless waived, the Borrower or such Eligible Assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 9.04(b).

 

(d) Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, the Revolving Commitments, Term Loans and Revolving Exposure of any Lender that is at the time a Defaulting Lender shall not have any voting or approval rights under the Loan Documents and shall be excluded in determining whether all Lenders (or all Lenders of a Class), all affected Lenders (or all affected Lenders of a Class), a Majority in Interest of Lenders of any Class or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to this Section 9.02); provided that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

 

(e) Notwithstanding anything to the contrary contained herein, the Required Revolving Lenders shall have the ability to waive, amend, supplement or modify the financial covenant set forth in Section 6.11 (including any defined terms as they relate thereto) without the consent or approval of any other Lender.

 

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(f) Notwithstanding the foregoing, no Lender consent is required to effect any amendment or supplement to any First Lien Intercreditor Agreement or any Second Lien Intercreditor Agreement or other intercreditor agreement or arrangement permitted under this Agreement that is for the purpose of adding the holders of any Indebtedness as expressly contemplated by the terms of such First Lien Intercreditor Agreement, such Second Lien Intercreditor Agreement or such other intercreditor agreement or arrangement permitted under this Agreement, as applicable, so long as the Administrative Agent consents to such amendment or supplement to any First Lien Intercreditor Agreement or any Second Lien Intercreditor Agreement or other intercreditor agreement or arrangement permitted under this Agreement that is for the purpose of adding the holders of any Indebtedness as expressly contemplated by the terms of such First Lien Intercreditor Agreement, such Second Lien Intercreditor Agreement or such other intercreditor agreement or arrangement permitted under this Agreement (it being understood that any such amendment or supplement may make such other changes to the applicable intercreditor agreement as, in the good faith determination of the Administrative Agent, are required to effectuate the foregoing and provided that such other changes are not adverse, in any material respect, to the interests of the Lenders); provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document without the prior written consent of the Administrative Agent or the Collateral Agent (as applicable).

 

(g) Notwithstanding the foregoing, Holdings, the Borrower and the Administrative Agent may, on or before the fifth Business Day after the Syndication Date, amend or modify this Agreement or any other Loan Document to effect a Syndication Amendment without the consent or approval of any other Lender.

 

SECTION 9.03 Expenses; Indemnity; Damage Waiver.

 

(a) The Borrower shall pay, whether or not the Closing Date occurs, (i) all reasonable and documented and invoiced out-of-pocket costs and expenses incurred by the Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners and their respective Affiliates (without duplication) (limited, in the case of legal fees and expenses, to, the reasonable, documented and invoiced fees, disbursements and other charges of White & Case LLP and to the extent reasonably determined by the Administrative Agent to be necessary, one local counsel, one foreign counsel and one regulatory counsel in each applicable jurisdiction (which may include a single special counsel acting in multiple jurisdictions) and, in the case of an actual or potential conflict of interest where the Indemnitee affected by such conflict notifies the Borrower of the existence of such conflict and thereafter retains its own counsel, one additional conflicts counsel (and, to the extent reasonably determined by the Administrative Agent to be necessary, one additional conflicts local counsel, foreign counsel and regulatory counsel in each applicable jurisdiction) for the affected Indemnitees similarly situated and such other counsel retained with the Borrower’s consent (such consent not to be unreasonably withheld or delayed), in connection with the syndication of the credit facilities provided for herein, and the preparation, negotiation, execution, delivery and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (or proposed amendments, modifications or waivers of the provisions thereof), (ii) all reasonable and documented and invoiced out-of-pocket costs and expenses incurred by each Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and documented and invoiced out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, each Issuing Bank and each Lender, including the fees, disbursements and other charges of counsel for the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders, in connection with the enforcement, protection or preservation of any rights or remedies (A) in connection with the Loan Documents (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Laws), including its rights under this Section 9.03 or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket costs and expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided that such counsel shall be limited to one lead counsel and one local counsel in each applicable jurisdiction (exclusive of any reasonably necessary special counsel in each jurisdiction) (and, in the case of an actual or potential conflict of interest, where the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender affected by such conflict notifies the Borrower of the existence of such conflict and thereafter retains its own counsel, one additional conflicts counsel (and, to the extent reasonably determined by the Administrative Agent to be necessary, one additional conflicts local counsel, foreign counsel and regulatory counsel in each applicable jurisdiction)) and such other counsel as may be retained with the Borrower’s consent (such consent not to be unreasonably withheld or delayed).

 

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(b) The Borrower shall indemnify the Administrative Agent, the Collateral Agent, each Issuing Bank, each Lender, each Joint Lead Arrangers, each Joint Bookrunner, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and reasonable and documented and invoiced out-of-pocket fees and expenses (limited, in the case of (x) legal fees and expenses, to the reasonable, documented and invoiced fees, disbursements and other charges of one counsel for all Indemnitees and to the extent reasonably determined by the Administrative Agent to be necessary, one local counsel, one foreign counsel and one regulatory counsel in each relevant jurisdiction (and in the case of an actual or potential conflict of interest, where the Indemnitee affected by such conflict notifies the Borrower of the existence of such conflict and thereafter retains its own counsel, one additional conflicts counsel (and one additional conflicts local counsel, foreign counsel and regulatory counsel in each applicable jurisdiction)) for the affected Indemnitees similarly situated (which may include a single special counsel acting in multiple jurisdictions), incurred by or asserted against any Indemnitee by any third party or by the Borrower, Holdings or any Subsidiary arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any other agreement or instrument contemplated hereby or thereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated thereby or the syndication of the credit facilities provided for herein, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release or threat of Release of any Hazardous Material on, at, to or from any Mortgaged Property or any other property currently or formerly owned, leased or operated by Holdings, the Borrower or any Subsidiary, or any other Environmental Liability related in any way to Holdings, the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, Holdings or any Subsidiary or their Affiliates and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, costs or related expenses (w) resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or its Related Parties (as determined by a court of competent jurisdiction in a final and non-appealable judgment), (x) resulted from a material breach of the Loan Documents by such Indemnitee or its Related Parties (as determined by a court of competent jurisdiction in a final and non-appealable judgment) or (y) arise from disputes between or among Indemnitees (other than disputes involving claims against the Administrative Agent, Collateral Agent, any Joint Lead Arranger, any Joint Bookrunner or any Issuing Bank, in each case, in their respective capacities) that do not involve an act or omission by Holdings, the Borrower or any Subsidiary or Affiliate thereof.

 

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Collateral Agent, any Joint Lead Arranger, any Joint Bookrunner, any Lender or any Issuing Bank under paragraph (a) or (b) of this Section 9.03, each Lender severally agrees to pay to the Administrative Agent, the Collateral Agent, such Joint Lead Arranger, such Joint Bookrunner, such Lender or such Issuing Bank, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Collateral Agent, such Joint Lead Arranger, such Joint Bookrunner, such Lender or such Issuing Bank in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the aggregate Revolving Exposures, outstanding Term Loans and unused Commitments at such time. The obligations of the Lenders under this paragraph (c) are subject to the last sentence of Section 2.02(a) (which shall apply mutatis mutandis to the Lenders’ obligations under this paragraph (c)).

 

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(d) To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, or permit any of their Affiliates or Related Parties to assert, and each hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet) in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such direct or actual damages are determined by a court of competent jurisdiction by final, non-appealable judgment to have resulted from the gross negligence or willful misconduct of, or a material breach of the Loan Documents by, such Indemnitee or its Related Parties or (ii) on any theory of liability, for special, indirect, consequential, incidental, exemplary or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e) All amounts due under this Section 9.03 shall be payable not later than ten (10) Business Days after written demand therefor; provided, however, that any Indemnitee shall promptly refund an indemnification payment received hereunder to the extent that there is a final and non-appealable judicial determination by a court of competent jurisdiction that such Indemnitee was not entitled to indemnification with respect to such payment pursuant to this Section 9.03.

 

SECTION 9.04 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate or designee of any Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender, each Issuing Bank, the Swing Line Lender and the Administrative Agent (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), (ii) no assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Persons who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (ii) and (iii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 9.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate or designee of any Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section 9.04), the Indemnitees and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below and the respective limitations otherwise set forth in this Section 9.04, any Lender may assign to one or more Eligible Assignees (provided that, in the case of the Disqualified Lender prong of the definition of Eligible Assignee, only to the extent the list of Disqualified Lenders has been made available to all Lenders) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld, delayed or conditioned) of (A) the Borrower; provided that no consent of the Borrower shall be required for an assignment (x) by a Term Lender to any Lender or an Affiliate of any Lender or an Approved Fund, (y) by a Revolving Lender to another Revolving Lender or an Affiliate of a Revolving Lender or an Approved Fund or (z) to any Eligible Assignee (other than a Disqualified Lender) if an Event of Default has occurred and is continuing; provided further, that no assignee contemplated by the immediately preceding proviso shall be entitled to receive any greater payment under Section 2.15 or Section 2.17 than the applicable assignor would have been entitled to receive with respect to the assignment made to such assignee, unless the assignment to such assignee is made with the Borrower’s prior written consent (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described in such Sections resulting from Change in Law after the date of the respective assignment), (B) the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment of a Term Loan to (x) a Lender, an Affiliate of a Lender or an Approved Fund or (y) subject to Section 9.04(f), Holdings, the Borrower or any of its Subsidiaries and (C) solely in the case of Revolving Loans and Revolving Commitments, the Swing Line Lender and each Issuing Bank (not to be unreasonably withheld, delayed or conditioned); provided that, for the avoidance of doubt, no consent of the Swing Line Lender or any Issuing Bank shall be required for an assignment of all or any portion of a Term Loan or Term Commitment. Notwithstanding anything in this Section 9.04 to the contrary, if the Borrower has not given the Administrative Agent written notice of its objection to an assignment within ten (10) Business Days after written notice of such assignment, the Borrower shall be deemed to have consented to such assignment.

 

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(ii) Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date of the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall, in the case of Revolving Loans, not be less than $2,500,000 or, in the case of a Term Loan, $1,000,000, unless the Borrower and the Administrative Agent otherwise consent (in each case, such consent not to be unreasonably withheld or delayed); provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing, (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; provided that this clause (B) shall not be construed to prohibit assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans, (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption via an electronic settlement system acceptable to the Administrative Agent or, if previously agreed with the Administrative Agent, manually execute and deliver to the Administrative Agent an Assignment and Assumption, and, in each case, together with a processing and recordation fee of $3,500; provided that the Administrative Agent, in its sole discretion, may elect to waive or reduce such processing and recordation fee; provided further, that any such Assignment and Assumption shall include a representation by the assignee that the assignee is not a Disqualified Lender or an Affiliate of a Disqualified Lender (provided that, in the case of the Disqualified Lender prong of the definition of Eligible Assignee, only to the extent such list of Disqualified Lenders has been made available to all Lenders); provided further, that assignments made pursuant to Section 2.19(b) or Section 9.02(c) shall not require the signature of the assigning Lender to become effective and (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act, any tax forms required by Section 2.17(e) and an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain Material Non-Public Information about the Borrower, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

 

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(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this Section 9.04, from and after the date each Assignment and Assumption is recorded in the Register, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of (and subject to the obligations and limitations of) Sections 2.15, 2.16, 2.17 and 9.03 and to any fees payable hereunder that have accrued for such Lender’s account but have not yet been paid). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c)(i) of this Section 9.04.

 

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal and interest amounts of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and Holdings, the Borrower, the Administrative Agent, the Issuing Banks and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower, the Issuing Banks and any Lender (but, in the case of any Lender, only as to its own Commitments and Loans under this Agreement), at any reasonable time and from time to time upon reasonable prior written notice. Notwithstanding anything to the contrary contained herein, each Loan Party and the Lenders acknowledge and agree that in no event shall the Administrative Agent be obligated to ascertain, monitor or inquire as to whether any Person is a Disqualified Lender or a GSO Entity or have any liability with respect to or arising out of (x) any assignment or participation made to a Disqualified Lender or a GSO Entity or (y) any disclosure of confidential information by the Lenders to a Disqualified Lender or a GSO Entity.

 

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire and any tax forms required by Section 2.17(e) (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section 9.04 and any written consent to such assignment required by paragraph (b) of this Section 9.04, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

(vi) The words “execution,” “signed,” “signature” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act or any other similar state laws based on the Uniform Electronic Transactions Act.

 

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(c) (i) Any Lender may, without the consent of Holdings, the Borrower, the Administrative Agent or the Issuing Banks, sell participations to one or more banks or other Persons (other than to a Person that is not an Eligible Assignee (provided that, in the case of the Disqualified Lender prong of the definition of Eligible Assignee, only to the extent that the list of Disqualified Lenders has been available to all Lenders)) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) Holdings, the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and any other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement and any other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that directly and adversely affects such Participant. Subject to paragraph (c)(iii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the obligations and limitations thereof and Section 2.19, it being understood that any tax forms required by Section 2.17(e) shall be provided solely to the participating Lender) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 9.04. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.

 

(ii) Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”). The entries in the Participant Register shall be conclusive, absent manifest error, and the parties hereto shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. No Lender shall have any obligation to disclose all or any portion of its Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or other obligations under the Loan Documents) except to the extent that the relevant parties, acting reasonably and in good faith, determine that such disclosure is necessary in connection with a Tax audit or other proceeding to establish that any Loan or other obligation under the Loan Documents is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Section 1.163-5(b) of the United States Proposed Treasury Regulations (or any amended or successor version). For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(iii) A Participant shall not be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent (not to be unreasonably withheld or delayed).

 

(d) Any Lender may, without the consent of the Borrower or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other “central” bank, and this Section 9.04 shall not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

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(e) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, any Issuing Bank or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

(f) Any Lender may, at any time, assign all or a portion of its Term Loans (but not Revolving Loans or Revolving Commitments) to Holdings or any of its Subsidiaries, through (x) Dutch auctions or other offers to purchase open to all Lenders on a pro rata basis in accordance with procedures of the type described in Section 2.11(a)(ii) or other customary procedures acceptable to the Administrative Agent and/or (y) open market purchases on a non-pro rata basis, provided that (i) the Borrower shall not make any Borrowing of Revolving Loans or Swing Loans to fund such assignment, (ii) any Term Loans that are so assigned will be automatically and irrevocably cancelled and the aggregate principal amount of the tranches and installments of the relevant Term Loans then outstanding shall be reduced by an amount equal to the principal amount of such Term Loans, (iii) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (iv) each Lender making such assignment to Holdings or any of its Subsidiaries acknowledges and agrees that in connection with such assignment, (1) Holdings or its Subsidiaries then may have, and later may come into possession of Material Non-Public Information, (2) such Lender has independently and, without reliance on Holdings, any of its Subsidiaries, the Administrative Agent or any of their respective Affiliates, made its own analysis and determination to enter into such assignment notwithstanding such Lender’s lack of knowledge of the Material Non-Public Information and (3) none of Holdings, its Subsidiaries, the Administrative Agent, or any of their respective Affiliates shall have any liability to such Lender, and such Lender hereby waives and releases, to the extent permitted by Requirements of Law, any claims such Lender may have against Holdings, its Subsidiaries, the Administrative Agent, and their respective Affiliates, under applicable laws or otherwise, with respect to the nondisclosure of the Material Non-Public Information. Each Lender entering into such an assignment further acknowledges that the Material Non-Public Information may not be available to the Administrative Agent or the other Lenders.

 

(g) Notwithstanding the foregoing, no assignment may be made or participation sold to a Disqualified Lender (only to the extent such list of Disqualified Lenders has been made available to all Lenders) without the prior written consent of the Borrower; provided that, upon request by any Lender to the Administrative Agent, the Administrative Agent shall be permitted to disclose to such Lender the list of Disqualified Lenders and, in any event, the Administrative Agent shall be entitled to post such list to the Lenders generally; provided further, that inclusion on the list of Disqualified Lenders shall not apply retroactively to disqualify any Persons that have previously acquired an assignment or participation in the Loans or Commitments if such Person was not included on the list of Disqualified Lenders at the time of such assignment or participation. Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, if any Lender was a Disqualified Lender at the time of the assignment of any Loans or Commitments to such Lender, following written notice from the Borrower to such Lender and the Administrative Agent: (1) such Lender shall promptly assign all Loans and Commitments held by such Lender to an Eligible Assignee; provided that (A) the Administrative Agent shall not have any obligation to the Borrower, such Lender or any other Person to find such a replacement Lender, (B) the Borrower shall not have any obligation to such Disqualified Lender or any other Person to find such a replacement Lender or accept or consent to any such assignment to itself or any other Person subject to the Borrower’s consent in accordance with Section 9.04(b)(i) and (C) the assignment of such Loans and/or Commitments, as the case may be, shall be at the lesser of (x) par and (y) the amount that such Disqualified Lender paid to acquire such Loans and/or Commitments, in each case plus accrued and unpaid interest and fees; (2) such Lender shall not have any voting or approval rights under the Loan Documents and shall be excluded in determining whether all Lenders (or all Lenders of any Class), all affected Lenders (or all affected Lenders of any Class), a Majority in Interest of Lenders of any Class or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to this Section 9.02); provided that (x) the Commitment of any Disqualified Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that affects any Disqualified Lender adversely and in a manner that is disproportionate to other affected Lenders shall require the consent of such Disqualified Lender; and (3) no Disqualified Lender is entitled to receive information provided solely to Lenders by the Administrative Agent or any Lender or will be permitted to attend or participate in meetings attended solely by the Lenders and the Administrative Agent, other than the right to receive notices or Borrowings, notices or prepayments and other administrative notices in respect of its Loans or Commitments required to be delivered to Lenders pursuant to Article II.

 

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(h)    Notwithstanding anything to the contrary contained herein, in no event shall the GSO Entities (taken together) at any time hold outstanding Loans and unused Commitments hereunder (either directly or through a participation) in excess of 20% of the aggregate outstanding principal amount of all Loans and unused Commitments hereunder (the “GSO Entity Cap”), and each Assignment and Assumption and participation agreement to be entered into by a GSO Entity shall clearly identify the assignee or participant thereof as a GSO Entity and contain a representation and warranty by such GSO Entity that the aggregate outstanding principal amount of all Loans and unused Commitments held (either directly or through a participation) by all GSO Entities at such time (and after giving effect to such assignment and/or participation) does not exceed the GSO Entity Cap.

 

SECTION 9.05 Survival.

 

All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to any Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans and all other amounts payable hereunder, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. Notwithstanding the foregoing or anything else to the contrary set forth in this Agreement, in the event that, in connection with the refinancing or repayment in full of the credit facilities provided for herein, an Issuing Bank shall have provided to the Administrative Agent a written consent to the release of the Revolving Lenders from their obligations hereunder with respect to any Letter of Credit issued by such Issuing Bank (whether as a result of the obligations of the Borrower (and any other account party) in respect of such Letter of Credit having been collateralized in full by a deposit of cash with such Issuing Bank or being supported by a letter of credit that names such Issuing Bank as the beneficiary thereunder, or otherwise), then from and after such time such Letter of Credit shall cease to be a “Letter of Credit” outstanding hereunder for all purposes of this Agreement and the other Loan Documents, and the Revolving Lenders shall be deemed to have no participations in such Letter of Credit, and no obligations with respect thereto, under Section 2.05(e) or (f).

 

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SECTION 9.06 Counterparts; Integration; Effectiveness.

 

This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent or the syndication of the Loans and Commitments constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.07 Severability.

 

Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 9.07, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the Issuing Bank, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

SECTION 9.08 Right of Setoff.

 

If an Event of Default under Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing, each Lender and each Issuing Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or such Issuing Bank to or for the credit or the account of the Borrower or any other Loan Party (excluding, for the avoidance of doubt, any Settlement Assets except to effect Settlement Payments such Lender is obligated to make to a third party in respect of such Settlement Assets or as otherwise agreed in writing between the Borrower and such Lender) against any of and all the obligations of the Borrower or any other Loan Party then due and owing under this Agreement or the other Loan Documents held by such Lender or Issuing Bank, irrespective of whether or not such Lender or Issuing Bank shall have made any demand under this Agreement and although such obligations are owed to a branch or office of such Lender or Issuing Bank different from the branch or office holding such deposit or obligated on such Indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.22 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The applicable Lender and applicable Issuing Bank shall notify the Borrower and the Administrative Agent of such setoff and application; provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff and application under this Section. The rights of each Lender and each Issuing Bank under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or such Issuing Bank may have. Notwithstanding the foregoing, no amount set off from any Loan Party (other than the Borrower) shall be applied to any Excluded Swap Obligation of such Loan Party (other than the Borrower).

 

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SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.

 

(a) This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County, Borough of Manhattan and of the United States District Court of the Southern District of New York, Borough of Manhattan and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in any Loan Document shall affect any right that the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to any Loan Document against Holdings, the Borrower or any other Loan Party or their respective properties in the courts of any jurisdiction.

 

(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to any Loan Document in any court referred to in paragraph (b) of this Section 9.09. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in any Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10 WAIVER OF JURY TRIAL.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.

 

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SECTION 9.11 Headings.

 

Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

SECTION 9.12 Confidentiality.

 

Each of the Administrative Agent, each Issuing Bank and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and its and its Affiliates’ respective directors, officers, employees, trustees and agents, including accountants, legal counsel and other agents and advisors and any numbering, administration or settlement service providers (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and any failure of such Persons acting on behalf of the Administrative Agent, any Issuing Bank or the relevant Lender to comply with this Section 9.12 shall constitute a breach of this Section 9.12 by the Administrative Agent, such Issuing Bank or the relevant Lender, as applicable), (ii) to the extent requested by any regulatory authority or self-regulatory authority, required by applicable law or by any subpoena or similar legal process or in connection with the exercise of remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; provided that (x) solely to the extent permitted by law and other than in connection with routine audits and reviews by regulatory and self-regulatory authorities, each Lender and the Administrative Agent shall notify the Borrower as promptly as practicable of any such requested or required disclosure in connection with any legal or regulatory proceeding and (y) in the case of preceding clause (ii) only, each Lender and the Administrative Agent shall use commercially reasonable efforts to ensure that such Information is kept confidential in connection with the exercise of such remedies, and, provided further, that in no event shall any Lender or the Administrative Agent be obligated or required to return any materials furnished by (or on behalf of) Holdings, the Borrower or any Subsidiary of Holdings, (iii) to any other party to this Agreement, (iv) subject to an agreement containing confidentiality undertakings substantially similar to those of this Section 9.12, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (B) any actual or prospective counterparty (or its advisors) to any Swap Agreement or derivative transaction relating to any Loan Party or its Subsidiaries and its obligations under the Loan Documents or (C) any pledgee referred to in Section 9.04(d), (v) if required by any rating agency on a customary basis, (vi) to service providers providing administrative and ministerial services solely in connection with the syndication and administration of the Loan Documents and the facilities (e.g., identities of parties, maturity dates, interest rates, etc.) on a confidential basis, (vii) (x) to a Person that is an investor or prospective investor in a securitization or other financing, separate account or commingled fund so long such investor or prospective investor agrees that its access to information regarding the Loan Parties and the Loans and Commitments is solely for purposes of evaluating an investment in such securitization or other financing, separate account or commingled fund and who agrees to treat such information as confidential or (y) to a Person that is a trustee, collateral agent, collateral manager, servicer, noteholder, equityholder or secured party in a securitization in connection with the administration, servicing and evaluation of, and reporting on, the assets serving as collateral for such securitization, (viii) to the extent such Information (w) becomes publicly available other than as a result of a breach of this Section 9.12 or (x) becomes available to the Administrative Agent, any Issuing Bank, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than Holdings, the Borrower or any Subsidiary, which source is not known by the recipient of such information to be subject to a confidentiality obligation, (y) was independently developed by the Administrative Agent, any Issuing Bank, any Lender or any Affiliate thereof or (z) was available to the Administrative Agent, any Issuing Bank, any Lender or any Affiliate thereof on a non-confidential basis prior to its disclosure to any such Person, or (ix) with the Borrower’s prior written consent. For the purposes hereof, “Information” means all information received from or on behalf of Holdings or the Borrower relating to Holdings, the Borrower, any other Subsidiary or their business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by Holdings, the Borrower or any Subsidiary; provided that, in the case of information received from Holdings, the Borrower or any Subsidiary after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 9.12 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding the foregoing, no such information shall be disclosed to a Disqualified Lender that constitutes a Disqualified Lender at the time of such disclosure without the Borrower’s prior written consent.

 

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(a) EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN SECTION 9.12(a)) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING HOLDINGS, THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

(b) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT, WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT HOLDINGS, THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

SECTION 9.13 USA PATRIOT Act.

 

Each Lender that is subject to the USA PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the USA PATRIOT Act.

 

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SECTION 9.14 Release of Liens and Guarantees.

 

(a) A Subsidiary Loan Party shall automatically be released from its obligations under the Loan Documents, and all security interests created by the Security Documents in Collateral owned by such Subsidiary Loan Party shall be automatically released, upon the consummation of any transaction or designation permitted by this Agreement as a result of which such Subsidiary Loan Party ceases to be a Restricted Subsidiary (including pursuant to a permitted merger with a Subsidiary that is not a Loan Party or a designation as an Unrestricted Subsidiary). Upon any sale or other transfer by any Loan Party (other than to Holdings, the Borrower or any Subsidiary Loan Party) of any Collateral in a transaction permitted under this Agreement, or upon the effectiveness of any written consent to the release of the security interest created under any Security Document in any Collateral, the security interests in such Collateral created by the Security Documents shall be automatically released. Upon the release of Holdings or any Subsidiary Loan Party from its Guarantee in compliance with this Agreement, the security interest in any Collateral owned by Holdings or such Subsidiary created by the Security Documents shall be automatically released. Upon the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this Agreement, the security interest created by the Security Documents in the Equity Interests of such Subsidiary shall automatically be released. Upon termination of the aggregate Commitments and payment in full of all Secured Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (including as a result of obtaining the consent of the applicable Issuing Bank as described in Section 9.05 of this Agreement), all obligations under the Loan Documents and all security interests created by the Security Documents shall be automatically released. Without further written consent or authorization from Lenders or the Issuing Banks, the Administrative Agent and/or the Collateral Agent may execute any documents or instruments necessary to release or subordinate any Lien on any Collateral granted to or held by the Administrative Agent and/or the Collateral Agent under any Security Document to the holder of any Lien on such property that is a Permitted Encumbrance or is permitted pursuant clauses (iv), (viii), (xiii) and (xxiii) of Section 6.02. In connection with any termination or release pursuant to this Section 9.14, the Administrative Agent or the Collateral Agent, as the case may be, shall execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release so long as the Borrower or applicable Loan Party shall have provided the Administrative Agent or the Collateral Agent, as the case may be, such certifications or documents as the Administrative Agent or the Collateral Agent, as the case may be, shall reasonably request in order to demonstrate compliance with this Agreement.

 

(b) The Administrative Agent or the Collateral Agent, as the case may be, will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to release or subordinate its Lien on any property granted to or held by the Administrative Agent or the Collateral Agent, as the case may be, under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(iv), (viii) or (xiii).

 

(c) Each of the Lenders and Issuing Banks irrevocably authorizes the Administrative Agent or the Collateral Agent, as the case may be, to provide any release or evidence of release, termination or subordination contemplated by this Section 9.14. Upon request by the Administrative Agent or the Collateral Agent, as the case may be, at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority or the Collateral Agent’s authority, as the case may be, to release or subordinate its interest in particular types or items of property, or to release any Loan Party from its obligations under any Loan Document, in each case in accordance with the terms of the Loan Documents and this Section 9.14.

 

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SECTION 9.15 No Advisory or Fiduciary Responsibility.

 

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Borrower and Holdings acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks, the Lenders and their respective Affiliates are arm’s-length commercial transactions between the Borrower, Holdings and their respective Affiliates, on the one hand, and the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Issuing Banks and the Lenders on the other hand, (B) each of the Borrower and Holdings has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Borrower and Holdings is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks, the Lenders and their respective Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary for the Borrower, Holdings, any of their respective Affiliates or any other Person and (B) none of the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks, the Lenders and their respective Affiliates has any obligation to the Borrower, Holdings or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, Holdings and their respective Affiliates, and none of the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks and the Lenders has any obligation to disclose any of such interests to the Borrower, Holdings or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrower and Holdings and their respective Affiliates hereby waives and releases any claims that it may have against the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, the Joint Bookrunners, the Swing Line Lender, the Issuing Banks and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

SECTION 9.16 Interest Rate Limitation.

 

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the obligations hereunder.

 

SECTION 9.17 Intercreditor Agreements. Each of the Lenders and the other Secured Parties (a) agrees that it will be bound by and will take no actions contrary to the provisions of each Intercreditor Agreement and (b) authorizes and instructs the Administrative Agent and/or the Collateral Agent to enter into any Intercreditor Agreement (including any and all amendments, amendments and restatements, modifications, supplements and acknowledgements thereto permitted hereby from time to time) approved by the Administrative Agent and/or the Collateral Agent on behalf of such Person, and by its acceptance of the benefits of the Security Documents, hereby acknowledges and agrees to be bound by such provisions. In the event of a conflict or any inconsistency between the terms of any Intercreditor Agreement and the Security Documents, the terms of such Intercreditor Agreement shall prevail.

 

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SECTION 9.18 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto to any Lender that is an EEA Financial Institution; and

 

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i) a reduction in full or in part or cancellation of any such liability;

 

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

SECTION 9.19 Acknowledgment and Assumption of the New Borrower

 

(a) From and as of the consummation of the Merger, the New Borrower hereby assumes the Loan Document Obligations of the Initial Borrower under this Agreement and each other Loan Document and agrees and acknowledges that, for the benefit of Administrative Agent, the Collateral Agent, the Lenders and the Issuing Banks, as evidenced by the signature to this Agreement, upon the consummation of the Merger:

 

(i) it shall be and is the Borrower under this Agreement, the applicable Notes, the Fee Letter and the other Loan Documents (or it is the successor to the Initial Borrower under all of the foregoing in any other capacity to which the Initial Borrower is a party thereto) with the same force and effect as if originally named therein as the “Borrower” (or any other capacity in which the Initial Borrower is party thereto), the effect of which shall be, without limitation, that (A) each reference to the “Borrower” in this Agreement and the other Loan Documents (or any other capacity in which the Initial Borrower is party thereto) shall be deemed to include it and (B) it shall be bound by all of the terms and provisions of this Agreement and the other Loan Documents and hereby shall be deemed to have assumed all of the obligations, liabilities and indebtedness of its predecessor thereunder; and

 

(ii) the New Borrower, as borrower, debtor, grantor, mortgagor, pledgor, guarantor or assignor, or in any other similar capacities in which such Person grants Liens or security interests in its assets and other property or otherwise acts as an accommodation party or guarantor, as the case may be, in any case under the Loan Documents, from and after the Merger hereby (i) ratifies and confirms all of the payment, performance and observance obligations and liabilities, whether contingent or otherwise, under the Loan Documents, and (ii) ratifies and confirms the grant of security under the Security Documents and confirms and agrees that such Liens and security interests secure all of the Secured Obligations.

 

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(b) The New Borrower agrees and acknowledges that Section 9.19(a) shall not constitute a novation of any of the Loan Document Obligations.

 

SECTION 9.20 Acknowledgement Regarding Any Supported QFC. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for hedging agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

 

(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

 

(b) As used in this Section 9.20, the following terms have the following meanings:

 

BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

 

Covered Entity” means any of the following:

 

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

  ATLAS TC HOLDINGS LLC, as Holdings
   
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Chief Executive Officer and President
   
  ATLAS TC BUYER LLC, as Initial Borrower
   
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Chief Executive Officer and President
   
  ATLAS INTERMEDIATE HOLDINGS LLC (immediately following consummation of, and after giving effect to, the Merger), as New Borrower
   
  By: /s/ L. Joe Boyer
  Name:   L. Joe Boyer
  Title: Chief Executive Officer

 

 

 

 

  MACQUARIE CAPITAL FUNDING LLC, as Administrative Agent, Swing Line Lender, Lender and an Issuing Bank
   
  By: /s/ Ayesha Farooqi
  Name:   Ayesha Farooqi
  Title: Authorized Signatory
   
  By: /s/ Michael Barrish
  Name: Michael Barrish
  Title: Authorized Signatory
   
  NATIXIS, NEW YORK BRANCH, as Lender and an Issuing Bank
   
  By: /s/ Chris Dorsett
  Name: Chris Dorsett
  Title: Managing Director
   
  By: /s/ Robin Gruner
  Name: Robin Gruner
  Title: Vice President

 

 

 

 

 

Exhibit 10.4

 

DIRECTOR NOMINATION AGREEMENT

 

This Director Nomination Agreement (this “Agreement”), dated as of February 14, 2020 (the “Effective Time”), is entered into by and among Atlas Technical Consultants, Inc., a Delaware corporation (the “Company”), and Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“BCP” or “Atlas Seller”). Each of the Company and BCP may be referred to herein as a “Party” and collectively as the “Parties”. Except as otherwise indicated, capitalized terms used but not defined herein shall have the meanings set forth in Section 4 of this Agreement.

 

RECITALS

 

WHEREAS, pursuant to that certain Unit Purchase Agreement, dated as of August 12, 2019 (as amended, the “Purchase Agreement”), by and among the Company, Atlas TC Holdings LLC, Atlas TC Buyer LLC, Atlas Seller, and Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), the Atlas Seller received shares of the Company’s Class B Common Stock; and

 

WHEREAS, in connection with the Purchase Agreement, the Parties wish to set forth their understandings with respect to certain director nomination rights of the Company following the Effective Time.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Section 1. Board of Directors.

 

(a) Subject to the terms and conditions of this Agreement, from and after the Effective Time and until a Termination Event (as defined below) shall have occurred, BCP shall have the right to designate such number of persons to be appointed or nominated, as the case may be (including any successor, each, a “Nominee”), for election to the board of directors of the Company (the “Board”) as provided in Section 1(c) in connection with the annual or special meeting of stockholders of the Company, as the case may be, in which members of the Board are to be elected (each, a “Meeting”), by giving written notice to the Company not later than ten days after receiving notice of the date of such Meeting provided to BCP; provided, however, that the initial Board shall be elected or appointed as set forth in Section 1(b).

 

(b) The Company shall take all necessary actions within its control, including but not limited to calling a meeting of the Board or executing an action by unanimous written consent of the Board, such that, as of the Effective Time: (i) the size of the Board shall be set at nine members; and (ii) the following persons, including the five BCP Directors (Brian Ferraioli, R. Foster Duncan, Jeff Jenkins, George P. Bevan and Leonard Lemoine), shall form the composition of the Board to be either elected by the Company’s stockholders at the Meeting held to approve the business combination transactions or appointed to the Board as of the Effective Time: (A) L. Joe Boyer, Joe Reece and Brian Ferraioli shall be Class I Directors with terms ending at the Company’s 2020 Annual Meeting; (B) R. Foster Duncan, Jeff Jenkins and Daniel G. Weiss shall be Class II Directors with terms ending at the Company’s 2021 Annual Meeting; and (C) George P. Bevan, Leonard Lemoine and Stephen M. Kadenacy shall be Class III Directors with terms ending at the Company’s 2022 Annual Meeting.

 

 

 

 

(c) Subject to the terms and conditions of this Agreement, from and after the Effective Time and until a Termination Event shall have occurred, the Company shall, as promptly as practicable, take all necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and the stockholders and recommending, supporting and soliciting proxies), so that:

 

(i) for so long as BCP (together with its Affiliates) Beneficially Owns shares of Common Stock representing at least 50% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors, BCP shall have the right to nominate at least a majority of all directors of the Board;

 

(ii) for so long as BCP (together with its Affiliates) Beneficially Owns shares of Common Stock representing less than 50% and equal to or greater than 35% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors, BCP shall have the right to nominate a number of Nominees equal to three (less the number of BCP Directors who are not up for election);

 

(iii) for so long as BCP (together with its Affiliates) Beneficially Owns shares of Common Stock representing less than 35% and equal to or greater than 15% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors, BCP shall have the right to nominate a number of Nominees equal to two (less the number of BCP Directors who are not up for election);

 

(iv) for so long as BCP (together with its Affiliates) Beneficially Owns shares of Common Stock representing less than 15% and equal to or greater than five percent of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors, BCP shall have the right to nominate a number of Nominees equal to one (less the number of BCP Directors who are not up for election); and

 

(v) the Board shall include the then sitting Chief Executive Officer of the Company as a Director.

 

provided, however, that, if at any time the number of shares of Common Stock that BCP (together with its Affiliates) Beneficially Owns is reduced to a percentage of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors that would entitle BCP to nominate a lesser number of Nominees than the number of Directors serving on the Board at such time that were BCP Nominees, BCP shall identify such excess Director or Directors who are BCP Directors and who shall be required to immediately offer their resignation from the Board for consideration by the Board (acting without any of the BCP Nominees then on the Board).

 

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(d) During the time that BCP shall have the right to nominate a number of Nominees that is equal to two or three pursuant to Sections 1(c)(iii) or (c)(ii), respectively, the Company shall, in connection with the nomination of such second or third Nominee, as the case may be, set the size of the Board to seven or eight, respectively; provided, however, that if at any time BCP no longer Beneficially Owns shares of Common Stock representing equal to or greater than 35% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors as required under Section 1(c)(ii) but does Beneficially Own shares of Common Stock representing equal to or greater than 15% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors as required under Section 1(c)(iii), the size of the Board shall be reduced by one director such that the size of the Board is set at seven members. During the time that BCP shall have the right to nominate a majority of all the directors of the Board pursuant to Section 1(c)(i), the Company shall increase the size of the Board to the minimum number necessary to permit the nomination of such number of Nominees as will constitute a majority of the Board; provided, however, that if at any time BCP no longer Beneficially Owns shares of Common Stock representing at least 50% of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors as required under Section 1(c)(i), the Company shall set the size of the Board to seven or eight in accordance with Sections 1(c)(iii) or (c)(ii), as applicable at such time; provided further that any vacancy on the Board as a result of the resignation of any BCP Director required hereunder as a result of a decrease in ownership shall be filled by an independent Director who (a) is not affiliated with BCP or any other Director of the Board, (b) has been nominated by the nominating committee of the Board and (c) has been approved by a majority of the directors of the Board (after giving effect to the resignation of such BCP Director(s)) acting without the Chief Executive Officer in his capacity as a director of the Board. If the first four such candidates presented are not approved by such a majority of the directors of the Board, then such vacancy shall be filled by an independent Director who (x) is not affiliated with BCP or any other Director of the Board, (y) has been nominated by the nominating committee of the Board and (z) has been approved by a majority of the directors of the Board (after giving effect to the resignation of such BCP Director(s)). For the avoidance of doubt, no member of the Board that is not a Nominee of BCP shall be required to resign from the Board to permit the nomination or election of a Nominee of BCP. Notwithstanding the foregoing, if the Board does not accept the resignation of a BCP Nominee who is a BCP Director tendered in accordance with Section 1(c), the size of the Board shall not be reduced. The size of the Board shall not be increased after the date hereof without the consent of (i) BCP, so long as BCP maintains the right to nominate at least a majority of all directors of the Board pursuant to this Agreement, and (ii) the majority of the directors of the Board acting without any of the BCP Directors then on the Board.

 

(e) The Company shall take all actions necessary to ensure that: (i) the applicable Nominees are included in the Board’s slate of nominees to the stockholders of the Company for each election of Directors and recommended by the Board at any meeting of stockholders called for the purpose of electing directors; and (ii) each applicable Nominee up for election is included in the proxy statement prepared by management of the Company in connection with the Company’s solicitation of proxies or consents in favor of the foregoing for every meeting of the stockholders of the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written resolution of the stockholders of the Company or the Board with respect to the election of members of the Board.

 

(f) If a vacancy occurs because of the death, disability, disqualification, resignation or removal of a BCP Director or for any other reason, BCP shall be entitled to designate such person’s successor, and the Company shall, within ten days of such designation, take all necessary actions within its control such that such vacancy shall be filled with such successor Nominee, it being understood that any such successor designee shall serve the remainder of the term of the Director whom such designee replaces. Notwithstanding anything to the contrary, the director position for such BCP Director shall not be filled pending such designation and appointment, unless BCP fails to designate such replacement for more than 15 days, after which the Company may appoint an interim successor Director (an “Interim Director”) until BCP makes such designation. With respect to any Interim Director appointed pursuant to this Section 1(f), as a condition to such Interim Director’s appointment to the Board, the Company shall cause such Interim Director to deliver to the Company an irrevocable resignation letter pursuant to which such Interim Director shall resign from the Board and all applicable committees thereof effective within 10 days upon the designation of a BCP Director to replace such Interim Director at any time following the date of such Interim Director’s appointment to the Board.

 

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(g) If a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for any other reason, BCP shall be entitled to designate promptly another Nominee and the Company shall take all necessary actions within its control such that the director position for which such Nominee was nominated shall not be filled pending such designation or the size of the Board shall be increased by one and such vacancy shall be filled with such successor Nominee within ten days of such designation. Notwithstanding anything to the contrary, the director position for which such Nominee was nominated shall not be filled pending such designation and appointment, unless BCP fails to designate such Nominee for more than 15 days, after which the Company may appoint an Interim Director who may serve as a director if duly elected until BCP makes such designation. With respect to any Interim Director appointed pursuant to this Section 1(g), as a condition to such Interim Director’s appointment to the Board, the Company shall cause such Interim Director to deliver to the Company an irrevocable resignation letter pursuant to which such Interim Director shall resign from the Board and all applicable committees thereof effective within 10 days upon the designation of a BCP Director to replace such Interim Director at any time following the date of such Interim Director’s appointment to the Board.

 

(h) BCP Directors that are not employees or affiliates of BCP shall be entitled to compensation consistent with the compensation received by other non-employee Directors, including any fees and equity awards. In addition, the Company shall pay the reasonable, documented out-of-pocket expenses incurred by each BCP Director in connection with his or her services provided to or on behalf of the Company, including attending meetings (including committee meetings) or events attended on behalf of the Company at the Company’s request.

 

(i) In accordance with the Company’s Organizational Documents, the Board may from time to time by resolution establish and maintain one or more committees of the Board, each committee to consist of one or more Directors. The Company shall notify BCP in writing of any new committee of the Board to be established at least 15 days prior to the effective establishment of such committee. If requested by BCP, the Company shall take all necessary steps within its control to cause at least one BCP Director (selected by BCP) to be appointed as a member of each committee of the Board unless such designation would violate any legal restriction on such committee’s composition or the rules and regulations of any applicable exchange on which the Company’s securities may be listed (subject in each case to any applicable exceptions).

 

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(j) The Company shall (i) purchase directors’ and officers’ liability insurance in an amount and pursuant to terms determined by the Board to be reasonable and customary and (ii) for so long as any Director to the Board nominated pursuant to the terms of this Agreement serves as a Director of the Company, maintain such coverage with respect to such Directors; provided, that upon removal or resignation of such Director for any reason, the Company shall take all actions reasonably necessary to extend such directors’ and officers’ liability insurance coverage for a period of not less than six years from any such event in respect of any act or omission occurring at or prior to such event.

 

(k) For so long as any BCP Director serves as a Director of the Company, the Company shall not amend, alter or repeal any right to indemnification or exculpation covering or benefiting any Director nominated pursuant to this Agreement as and to the extent consistent with applicable Law, including but not limited to any such rights to indemnification or exculpation in the Company’s Organizational Documents (except to the extent such amendment or alteration permits the Company to provide broader indemnification or exculpation rights, in the aggregate and on an individual basis, on a retroactive basis, than permitted prior thereto).

 

(l) Notwithstanding anything herein to the contrary, if BCP has the right to designate one or more Nominees and either has not exercised such right or such Nominee has not been elected as a BCP Director (in each case, such that there are no BCP Directors on the Board), then BCP may elect at such time in its sole discretion to designate one Board observer (regardless of how many rights to designate Nominees BCP may have) (the “Board Observer”) to attend and participate in all meetings of the Board or any committees thereof in a non-voting capacity by the giving of written notice to the Company of such election (“Observation Election”). In connection therewith, the Company shall simultaneously give such Board Observer copies of all notices, consents, minutes and other materials, financial or otherwise, which the Company provides to the Board; provided, however, that if the Board Observer does not, upon the written request of the Company, before attending any meetings of the Board, execute and deliver to the Company an agreement to abide by all Company policies applicable to members of the Board and a confidentiality agreement reasonably acceptable to the Company, the Board Observer may be excluded from access to any material or meeting or portion thereof if the Board determines in good faith, upon advice of counsel, that such exclusion is reasonably necessary to protect highly confidential proprietary information of the Company or confidential proprietary information of third parties that the Company is required to hold in confidence, or for other similar reasons. BCP may revoke any such Observation Election at any time upon written notice to the Company after which BCP shall be entitled to designate a replacement Board Observer; provided, further, that the Board Observer shall not share any such information if the Company informs the Board Observer that such sharing could be reasonably expected to compromise or otherwise adversely affect the Company’s and/or its affiliates’ ability to assert any attorney-client privilege or similar rights.

 

(m) The Company acknowledges and agrees that the BCP Directors may share any information concerning the Company and its subsidiaries received by them, from or on behalf of the Company or its designated representatives, with BCP and its designated representatives; provided, however, that BCP and its designated representatives shall be required to execute and deliver to the Company an agreement to abide by all Company policies applicable to members of the Board and a confidentiality agreement reasonably acceptable to the Company to protect highly confidential proprietary information of the Company or confidential proprietary information of third parties that the Company is required to hold in confidence, or for other similar reasons; provided, further, that the BCP Directors shall not share any such information if the Company informs the BCP Directors that such sharing could be reasonably expected to compromise or otherwise adversely affect the Company’s and/or its affiliates’ ability to assert any attorney-client privilege or similar rights.

 

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(n) At least 50% of the Nominees must qualify at all times as “independent” pursuant to the applicable listing standards of the Approved Stock Exchange and the U.S. Securities and Exchange Commission.

 

(o) If the Chief Executive Officer of the Company is serving as a Director and shall cease to be the Chief Executive Officer of the Company for any reason, the Company shall take all actions necessary to remove such Director from the Board as soon as reasonably practicable.

 

(p) For the avoidance of doubt, a reduction in the percentage of Common Stock Beneficially Owned by BCP and its Affiliates that occurs following a vacancy resulting from a Nominee who is a BCP Director ceasing to serve as a Director for any reason shall not impact BCP’s right to fill such vacancy. In addition, BCP shall not be obligated to designate all (or any) of the directors it is entitled to designate pursuant to this Agreement and the failure to do so shall not constitute a waiver of its rights hereunder.

 

Section 2. Actions Requiring Special Approval. Without the prior approval of BCP, from and after the Effective Time and at any time prior to a Termination Event, the Company shall not take or omit to take, as applicable, or agree to take or omit to take, as applicable, directly or indirectly, any action to increase or decrease the size of the Board other than as provided in Section 1 hereof or to make a change to the classes on which the Directors serve.

 

Section 3. Restrictions on Transfer of Common Stock.

 

(a) Other than in connection with the Purchase Agreement and the transactions contemplated thereby or in accordance with Section 3(c), the members of the management team of Atlas Intermediate shall not Transfer shares of Common Stock or warrants to purchase shares of Common Stock Beneficially Owned or otherwise held by them prior to the termination of the Initial Lock Up Period. The period during which the Transfer of Common Stock or warrants to purchase shares of Common Stock shall be restricted in accordance with this Section 3(a) shall be referred to as the “Lock Up Period.”

 

(b) BCP and the Company acknowledge and agree that, notwithstanding anything to the contrary herein, the shares of Common Stock and warrants to purchase shares of Common Stock, in each case, held or Beneficially Owned by BCP shall remain subject to the restrictions on Transfer under applicable securities Laws of any state, federal or foreign entity and the rules and regulations promulgated thereunder.

 

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(c) Notwithstanding anything to the contrary in this Section 3, Transfers of shares of Common Stock or warrants to purchase shares of Common Stock are permitted (i) to Permitted Transferees who shall (A) be subject to the restrictions in this Section 3 as if they were the original holders of such shares and (B) promptly Transfer such shares back to the transferor if they cease to be a Permitted Transferee for any reason prior to the date such shares become freely Transferable in accordance herewith; (ii) in the case of an individual, by a gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an Affiliate of such person or to a charitable organization; (iii) in the case of an individual, by virtue of Laws of descent and distribution upon death of the individual; or (iv) in the case of an individual, pursuant to a qualified domestic relations order; provided, however, that these Transferees must become a party to this Agreement by executing and delivering such documents as may be necessary to make such Transferee a party hereto.

 

(d) The restrictions on Transfer set forth in Section 3 shall automatically terminate upon the occurrence of a Change of Control during the Lock Up Period.

 

Section 4. Definitions.

 

Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise.

 

Agreement” has the meaning set forth in the preamble.

 

Annual Meeting” means any meeting of the stockholders of the Company held for the purpose of electing the Directors of the Company.

 

Approved Stock Exchange” means the Nasdaq, the New York Stock Exchange or any other national securities exchange on which any of the Common Stock of the Company is listed.

 

Atlas Seller” has the meaning set forth in the preamble.

 

Atlas Intermediate” has the meaning set forth in the preamble.

 

BCP” has the meaning set forth in the preamble.

 

BCP Director” means an individual elected or appointed to the Board that has been nominated or designated by BCP pursuant to this Agreement.

 

Beneficially Own” has the meaning ascribed to it in Section 13(d) of the Securities Exchange Act of 1934, as amended.

 

Board” has the meaning set forth in Section 1(a).

 

Board Observer” has the meaning set forth in Section 1(l).

 

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Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, are authorized or required by Law to close.

 

Change of Control” means a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.

 

Class I Director” has the meaning set forth in the Organizational Documents of the Company.

 

Class II Director” has the meaning set forth in the Organizational Documents of the Company.

 

Class III Director” has the meaning set forth in the Organizational Documents of the Company.

 

Class A Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.

 

Class B Common Stock” shall mean the Class B common stock, par value $0.0001 per share, of the Company.

 

Common Stock” shall mean the shares of Class A Common Stock and Class B Common Stock.

 

Common Stock Price” shall have the meaning set forth in the Purchase Agreement.

 

Company” has the meaning set forth in the preamble.

 

Director” means a member of the Board until such individual’s death, disability, disqualification, resignation or removal.

 

Effective Time” has the meaning set forth in the preamble.

 

Initial Lock Up Period” means the period commencing on the Effective Time and ending on the date that is six months following the Effective Time.

 

Law” has the meaning ascribed to it in the Purchase Agreement.

 

Lock Up Period” has the meaning set forth in Section 3(a).

 

Nominee” has the meaning set forth in Section 1(a).

 

Observation Election” has the meaning set forth in Section 1(l).

 

Organizational Documents” means the Company’s certificate of incorporation and bylaws, as in effect at the Effective Time, as the same may be amended from time to time.

 

Party” has the meaning set forth in the preamble.

 

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Permitted Transferee” means, with respect to any Person, (i) the direct or indirect partners, members, equity holders or other Affiliates of such Person, or (ii) any of such Person’s related investment funds or vehicles controlled or managed by such Person or Affiliate of such Person.

 

Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.

 

Proceeding” has the meaning ascribed to it in the Purchase Agreement.

 

Purchase Agreement” has the meaning set forth in the recitals.

 

Termination Event” has the meaning set forth in Section 18.

 

Transfer” means any sale, transfer, assignment or other disposition of (whether with or without consideration and whether voluntary or involuntary or by operation of Law) of Common Stock. “Transferable” and “Transferee” shall each have a correlative meaning.

 

Section 5. Assignment; Benefit of Parties. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors, legal representatives and assignees for the uses and purposes set forth and referred to herein. Notwithstanding the foregoing, the Company may not assign any of its rights or obligations hereunder without the prior written consent of BCP. Nothing herein contained shall confer or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement.

 

Section 6. Remedies. The Parties shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The Parties agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to other rights and remedies hereunder, the Parties shall be entitled to specific performance and/or injunctive or other equitable relief (without posting a bond or other security) from any court of Law or equity of competent jurisdiction in order to enforce or prevent any violation of the provisions of this Agreement.

 

Section 7. Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:

 

  (a) If to the Company:
     
      Atlas Technical Consultants, Inc.
      13215 Bee Cave Parkway
      Bldg. B, Suite 230
      Austin, Texas 78738
      Attention: L. Joseph Boyer
      Email: joe.boyer@atlastechnical.us
       
    with a copy (which shall not constitute notice) to:
       
      Winston & Strawn
      200 Park Avenue
      New York, NY 10166-4193
      Attention: Joel Rubinstein
        Jason Osborn
      Fax: (212) 294-5336
      Email: jrubinstein@winston.com
        josborn@winston.com
       
    with a copy (which shall not constitute notice) to:
     
      Kirkland & Ellis LLP
      609 Main Street
      Houston, Texas 77002
      Attention: William J. Benitez, P.C.
        Julian J. Seiguer, P.C.
      Fax: (713) 836-3601
      Email: wbenitez@kirkland.com
        julian.seiguer@kirkland.com

 

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  (b) If to the Atlas Holders or BCP:
     
      Atlas Technical Consultants Holdings LP
      13215 Bee Cave Parkway
      Bldg. B, Suite 230
      Austin, Texas 78738
      Attention: L. Joseph Boyer
      Email: joe.boyer@atlastechnical.us
       
    with a copy (which shall not constitute notice) to:
     
      c/o Bernhard Capital Partners
      400 Convention St., Suite 1010
      Baton Rouge, Louisiana 70802
      Attention: Mark Spender
      Christopher Dillon
      Lucie Kantrow
      Fax: (225) 454-6957
      Email: mark@bernhardcapital.com
        chris@bernhardcapital.com
        lucie@bernhardcapital.com

 

   

with a copy (which shall not constitute notice) to:

 

      Kirkland & Ellis LLP
      609 Main Street
      Houston, Texas 77002
      Attention: William J. Benitez, P.C.
        Julian J. Seiguer, P.C.
      Fax: (713) 836-3601
      Email: wbenitez@kirkland.com
        julian.seiguer@kirkland.com

 

Section 8. Adjustments. If, and as often as, there are any changes in the Common Stock by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or sale, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock as so changed.

 

Section 9. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

 

Section 10. No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person or entity other than the Parties and their respective successors and assigns any remedy or claim under or by reason of this Agreement or any terms, covenants or conditions hereof, and all of the terms, covenants, conditions, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the Parties and their respective successors and assigns.

 

Section 11. Further Assurances. Each of the Parties hereby agrees that it will hereafter execute and deliver any further document, agreement, instruments of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof.

 

Section 12. Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the Party who executed the same, but all of such counterparts shall constitute the same agreement.

 

Section 13. Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.

 

Section 14. Jurisdiction; WAIVER OF TRIAL BY JURY. Any Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court, and agrees not to bring any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Proceeding brought pursuant to this Section 14. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

 

 

Section 15. Entire Agreement. This Agreement, together with the Purchase Agreement, the agreements referenced herein and the other agreements entered into in connection with the consummation of the transactions contemplated by the Purchase Agreement, constitute the entire agreement among the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective subsidiaries relating to the transactions contemplated hereby.

 

Section 16. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, the remaining provisions of this Agreement shall be reformed, construed and enforced to the fullest extent permitted by Law and to the extent necessary to give effect to the intent of the Parties.

 

Section 17. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Parties unless such modification is approved in writing by the Parties. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

Section 18. Termination. Notwithstanding anything to the contrary contained herein, if BCP (together with its Affiliates and permitted assignees) ceases to Beneficially Own or otherwise directly or indirectly hold shares of Common Stock representing at least five (5%) of the voting power of all shares of the Company’s capital stock entitled to vote generally in the election of directors (“Termination Event”), then this Agreement shall expire and terminate automatically; provided, however, that Sections 1(h), (j), (k) and (l), Sections 3 through 10, Sections 13 through 17, this Section 18 and Section 19 shall survive the termination of this Agreement.

 

Section 19. Enforcement. Each of the Parties covenant and agree that the disinterested Directors of the Board have the right to enforce, waive or take any other action with respect to this Agreement on behalf of the Company.

 

* * * * *

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Time.

 

  Company:
   
  ATLAS TECHNICAL CONSULTANTS, INC.
     
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

Signature Page to Director Nomination Agreement

 

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  BCP:
   
  ATLAS TECHNICAL CONSULTANTS HOLDINGS LP
   
  By: Atlas Technical Consultants Holdings GP LLC
  Its: General Partner
     
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

Signature Page to Director Nomination Agreement

 

 

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Exhibit 10.5

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made as of February 14, 2020 by and among Atlas Technical Consultants, Inc., a Delaware corporation (f/k/a Boxwood Merger Corp., a Delaware corporation) (the “Company”), Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“Atlas Holdings”), and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement (together with Atlas Holdings, each a “Holder” and, collectively, the “Holders”).

 

RECITALS

 

WHEREAS, this Agreement is made and entered into in connection with the closing of the transactions (the “Transactions”) contemplated by that certain Unit Purchase Agreement, dated as of August 12, 2019 (as amended, the “Purchase Agreement”), by and among the Company, Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Operating”), and Atlas Holdings;

 

WHEREAS, prior to the closing of the Transactions, Atlas Holdings owned beneficially and of record all of the issued and outstanding limited liability company interests of Atlas Operating (the “Common Units”);

 

WHEREAS, pursuant to the Purchase Agreement, the Company purchased from Atlas Holdings the Purchased Units (as defined below), in exchange for cash and the issuance by the Company to Atlas Holdings of shares of the Company’s Class B Common Stock (as defined below);

 

WHEREAS, in connection with the closing of the Transactions, the Company, Atlas Operating and Atlas Holdings entered into that certain amended and restated limited liability company agreement of Atlas Operating (such agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “LLC Agreement”);

 

WHEREAS, in connection with the closing of the Transactions, Atlas Operating has provided the holders of Class B Common Stock with a redemption right pursuant to which such holders may redeem their Class B Common Stock along with a proportionate number of Common Units for shares of Class A Common Stock (as defined below) on the terms set forth in the LLC Agreement; and

 

WHEREAS, pursuant to the Purchase Agreement, the Company agreed to register for resale under the Securities Act the shares of Class A Common Stock that may be issued to the Holders and their permitted transferees pursuant to the LLC Agreement;

 

WHEREAS, the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

 

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Article I.
DEFINITIONS

 

Section 1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.

 

Agreement” shall have the meaning given in the Preamble.

 

Blackout Period” shall have the meaning given in Section 3.4(b).

 

Business Day” shall mean any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.

 

Class A Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.

 

Class B Common Stock” shall mean the Class B common stock, par value $0.0001 per share, of the Company.

 

Closing Date” shall have the meaning given in the Purchase Agreement.

 

Commission” shall mean the Securities and Exchange Commission.

 

Common Units” shall have the meaning given in the Preamble.

 

Company” shall have the meaning given in the Preamble.

 

Demanding Holder” shall have the meaning given in Section 2.2(a).

 

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Effectiveness Deadline” shall have the meaning given in Section 2.1.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

Form S-3” shall have the meaning given in Section 2.4.

 

Founder Holders” shall mean “Holders” as defined in the Founder Registration Rights Agreement.

 

Founder Registrable Securities” shall mean “Registrable Securities” as defined in the Founder Registration Rights Agreement.

 

Founder Registration Rights Agreement” shall mean that certain Registration Rights Agreement, dated as of November 15, 2018, by and between the Company, Boxwood Merger Sponsor LLC, a Delaware limited liability company, and the other parties thereto.

 

GSO Holder Registrable Securities” shall mean “Registrable Securities” as defined in the GSO Registration Rights Agreement.

 

GSO Holders” shall mean “Holders” as defined in the GSO Registration Rights Agreement.

 

GSO Registration Rights Agreement” shall mean that certain Registration Rights Agreement, dated as of February 14, 2020, by and among the Company, GSO Capital Opportunities Fund III LP and the other parties thereto.

 

Holders” shall have the meaning given in the Preamble.

 

Initial Shelf” shall have the meaning given in Section 2.1.

 

LLC Agreement” shall have the meaning given in the Recitals.

 

Maximum Number of Securities” shall have the meaning given in Section 2.2(b).

 

Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they were made not misleading.

 

Piggyback Registration” shall have the meaning given in Section 2.3.

 

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

Purchase Agreement” shall have the meaning given in the Recitals.

 

Purchased Units” shall have the meaning given in the Purchase Agreement.

 

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Registrable Security” shall mean (a) any shares of Class A Common Stock issued or issuable by the Company in connection with the redemption by Atlas Operating of Common Units owned by any Holder in accordance with the terms of the LLC Agreement, and (b) any other equity security of the Company issued or issuable to any Holder with respect to any such share of Class A Common Stock or Class B Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

 

Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

a) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Class A Common Stock is then listed;

 

b) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

c) printing, messenger, telephone and delivery expenses;

 

d) reasonable fees and disbursements of counsel for the Company;

 

e) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration (including the expenses of any special audit and “comfort letters” required by or incident to such performance); and

 

f) reasonable fees and expenses of one legal counsel selected by the Demanding Holders in connection with an Underwritten Offering.

 

Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

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Replacement S-3 Shelf” shall have the meaning given in Section 2.1.

 

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

Suspension Period” shall have the meaning given in Section 3.4(a).

 

Transactions” shall have the meaning given in the Recitals.

 

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

Underwritten Offering” shall mean an offering in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

Article II.
REGISTRATIONS

 

Section 2.1 Registration Statement. The Company shall, as soon as practicable after the Closing Date, but in any event within 30 days after the Closing Date, file a Registration Statement under the Securities Act to permit the public resale of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this Section 2.1 and shall use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (a) 60 days (or 90 days if the Commission notifies the Company that it will “review” the Registration Statement) after the Closing Date and (b) the tenth Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Registration Statement filed with the Commission pursuant to this Section 2.1 shall be on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities, covering such Registrable Securities, and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. If the initial Registration Statement (the “Initial Shelf”) filed by the Company pursuant to this Section 2.1 is on Form S-1, upon the Company becoming eligible to register the Registrable Securities for resale by the Holders on Form S-3, the Company shall use its reasonable best efforts to amend the Initial Shelf to a Registration Statement on Form S-3 or file a Registration Statement on Form S-3 in substitution of the Initial Shelf (the “Replacement S-3 Shelf”) and cause the Replacement S-3 Shelf to be declared effective as soon as practicable thereafter. A Registration Statement filed pursuant to this Section 2.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.1 to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. If at any time a Registration Statement filed pursuant to this Section 2.1 is not effective or is not otherwise available for the resale of all the Registrable Securities held by the Holders, the majority of the Holders, Atlas Technical Consultants SPV, LLC (“ATC SPV”) or Arrow Environmental SPV, LLC (together with ATC SPV, “BCP”) may demand registration under the Securities Act of all or part of their Registrable Securities at any time and from time to time, and the Company shall use its reasonable best efforts to file with the Commission following receipt of any such demand one or more Registration Statements with respect to all such Registrable Securities and to cause such Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. As soon as practicable following the effective date of a Registration Statement filed pursuant to this Section 2.1, but in any event within three Business Days of such date, the Company shall notify the Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement filed pursuant to this Section 2.1 (including any documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any Prospectus contained in such Registration Statement, in the light of the circumstances under which such statement is made).

 

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Section 2.2 Underwritten Offering.

 

(a) In the event that any Holder elects to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering of all or part of such Registrable Securities that are registered by such Registration Statement, then the Company shall, upon the written demand of BCP or its designee (any such Holder, a “Demanding Holder”), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of equity securities with the managing Underwriter or Underwriters selected by the Demanding Holder in consultation with the Company, and shall take all such other reasonable actions as are requested by the managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities. In addition, the Company shall give prompt written notice to each other Holder regarding such proposed Underwritten Offering, and such notice shall offer such Holders the opportunity to include in the Underwritten Offering such number of Registrable Securities as each such Holder may request. Each such Holder shall make such request in writing to the Company within five Business Days after the receipt of any such notice from the Company, which request shall specify the number of Registrable Securities intended to be disposed of by such Holder. Each Holder proposing to distribute its Registrable Securities through an Underwritten Offering pursuant to this Section 2.2 shall enter into an underwriting agreement with the underwriters, which underwriting agreement shall contain such representations, covenants, indemnities (subject to Article IV) and other rights and obligations as are customary in underwritten offerings of equity securities; provided, however, that no such Holder shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law.

 

(b) If the managing Underwriter or Underwriters in an Underwritten Offering, in good faith, advises the Company and the Demanding Holder that the dollar amount or number of Registrable Securities that the Demanding Holder desires to sell, taken together with all other shares of Class A Common Stock or other equity securities that the Company or any other Holder desires to sell and the shares of Class A Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows:

 

(i) first, the Registrable Securities of the Demanding Holders pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering that can be sold without exceeding the Maximum Number of Securities;

 

(ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), pro rata to (A) Registrable Securities of other Holders who have elected to participate in the Underwritten Offering pursuant to Section 2.2(a), (B) GSO Holder Registrable Securities of GSO Holders exercising their rights to register their GSO Holder Registrable Securities pursuant to the GSO Registration Rights Agreement and (C) Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities;

 

(iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) or clause (ii), to shares of Class A Common Stock held by persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons, which collectively can be sold without exceeding the Maximum Number of Securities; and

 

(iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) , clause (ii), or clause (iii), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities.

 

(c) A Demanding Holder shall have the right to withdraw all or any portion of its Registrable Securities included in an Underwritten Offering pursuant to this Section 2.2 for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters of its intention to withdraw from such Underwritten Offering prior to the pricing of such Underwritten Offering and such withdrawn amount shall no longer be considered an Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Offering prior to its withdrawal under this Section 2.2(c).

 

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Section 2.3 Piggyback Registration.

 

(a) If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to an Underwritten Offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.2 hereof) on a form that would permit registration of Registrable Securities, other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) on Form S-4, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five days after receipt of such written notice (in the case of an “overnight” or “bought” offering, such requests must be made by the Holders within three Business Days after the delivery of any such notice by the Company) (such Registration a “Piggyback Registration”); provided, however, that if the Company has been advised in writing by the managing Underwriter(s) that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Class A Common Stock in the Underwritten Offering, then (1) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), the Company shall not be required to offer such opportunity to the Holders or (2) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.3(b). Subject to Section 2.3(b), the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this Section 2.3 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

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(b) If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Class A Common Stock that the Company desires to sell, taken together with (i) the shares of Class A Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Sections 2.2 and 2.3, and (iii) the shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(i) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), pro rata to (1) the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof; (2) GSO Holder Registrable Securities of GSO Holders exercising their rights to register their GSO Holder Registrable Securities pursuant to the GSO Registration Rights Agreement; and (3) the Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities, and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

(ii) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), pro rata to (1) the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof; (2) GSO Holder Registrable Securities of GSO Holders exercising their rights to register their GSO Holder Registrable Securities pursuant to the GSO Registration Rights Agreement; and (3) the Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), shares of Class A Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.

 

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(c) Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention to withdraw from such Piggyback Registration prior to the pricing of such Underwritten Offering. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.3.

 

(d) For purposes of clarity, any Registration effected pursuant to Section 2.3 hereof shall not be counted as a Registration effected under Section 2.2 hereof.

 

Section 2.4 Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than 12 days after the Company’s initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if a Form S-3 is not available for such offering.

 

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Article III.
COMPANY PROCEDURES

 

Section 3.1 General Procedures. The Company shall use its reasonable best efforts to effect the Registration of Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as practicable:

 

(a) subject to Section 2.1, prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective pursuant to the terms of this Agreement until all of such Registrable Securities have been disposed of (if earlier);

 

(b) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all of such Registrable Securities have been disposed of (if earlier) in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

 

(c) prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and to one legal counsel selected by the Holders, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel selected by such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;

 

(d) prior to any public offering of Registrable Securities, use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

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(e) use its commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

 

(f) provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

 

(g) advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

(h) at least five days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities or its counsel;

 

(i) notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;

 

(j) permit a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

(k) obtain a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request;

 

(l) on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated as of such date, of counsel representing the Company for the purposes of such Registration, addressed to the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as are customarily included in such opinions and negative assurance letters;

 

(m) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, on terms agreed to by the Company with the managing Underwriter of such offering;

 

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(n) make available to its security holders, as soon as reasonably practicable, an earnings statement (which need not be audited) covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);

 

(o) if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $25,000,000, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and

 

(p) otherwise, in good faith, take such customary actions necessary to effect the registration of such Registrable Securities contemplated hereby.

 

Section 3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders and the Company that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.

 

Section 3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in the underwriting agreement for such Underwritten Offering and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting agreement.

 

Section 3.4 Suspension of Sales; Adverse Disclosure.

 

(a) Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed (any such period, a “Suspension Period”).

 

(b) If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration (including in connection with an Underwritten Offering) at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, then the Company may, upon giving prompt written notice to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement (including in connection with an Underwritten Offering) for the shortest period of time, but in no event more than 30 days, determined in good faith by the Company to be necessary for such purpose (any such period, a “Blackout Period”). In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.

 

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(c) The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4. Notwithstanding anything to the contrary in this Section 3.4, in no event shall any Suspension Period or any Blackout Period continue for more than 90 days in the aggregate during any 365-day period.

 

Section 3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to:

 

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144, at all times from and after the Closing Date until there are no Registrable Securities outstanding;

 

(b) file timely (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 Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings (the delivery of which will be satisfied by the Company’s filing of such reports on the Commission’s EDGAR system); and

 

(c) The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Class A Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

Section 3.6 Removal of Legend. In connection with a sale of Registrable Securities by a Holder in reliance on Rule 144, the Holder or its broker shall deliver to the transfer agent and the Company a broker representation letter providing to the transfer agent and the Company any information the Company deems necessary to determine that the sale of the Registrable Securities is made in compliance with Rule 144. Upon receipt of such representation letter, the Company shall promptly direct its transfer agent to remove the notation of a restrictive legend in the Holder’s certificate or the book entry account maintained by the transfer agent, and the Company shall bear all costs associated therewith. At such time as the Registrable Securities have been sold pursuant to an effective registration statement under the Securities Act, if the book entry account or certificate for such Registrable Securities still bears any notation of restrictive legend, the Company agrees, upon request of the Holder or permitted assignee, to take all steps necessary to promptly effect the removal of any restrictive legend from the Registrable Securities, and the Company shall bear all costs associated therewith, regardless of whether the request is made in connection with a sale or otherwise, so long as the Holder or its permitted assigns provide to the Company any information the Company deems reasonably necessary to determine that the legend is no longer required under the Securities Act or applicable state laws.

 

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Article IV.
INDEMNIFICATION AND CONTRIBUTION

 

Section 4.1 Indemnification.

 

(a) The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

 

(b) In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.

 

(c) Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

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(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

(e) If the indemnification provided under this Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 4.1(e) shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Section 4.1(a), Section 4.1(b) and Section 4.1(c) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1(e) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.1(e) from any person who was not guilty of such fraudulent misrepresentation.

 

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Article V.
MISCELLANEOUS

 

Section 5.1 Notices. All notices, demands, requests, instructions, claims, consents, waivers and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment), received by fax or email (with hard copy to follow) prior to 5:00 p.m. Central Time on a Business Day or delivery by reputable overnight express courier (charges prepaid) or (b) three days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing, notices, demands and communications to Atlas Holdings, a Holder or the Company shall be sent to the addresses indicated below:

 

Notices to Atlas Holdings or a Holder:

 

Atlas Technical Consultants Holding LP

c/o Bernhard Capital Partners

400 Convention St., Suite 1010

Baton Rouge, Louisiana 70802

Attention: Mark Spender

Christopher Dillon

Lucie Kantrow

Fax: (225) 454-6957

Email: mark@bernhardcapital.com

chris@bernhardcapital.com

lucie@bernhardcapital.com

 

with copies to (which shall not constitute notice):

 

Kirkland & Ellis LLP

609 Main Street

Houston, Texas 77002

Attention: William J. Benitez, P.C.

    Julian J. Seiguer, P.C.
Fax: (713) 836-3601
Email: william.benitez@kirkland.com

    julian.seiguer@kirkland.com

Notices to the Company

 

 

Atlas Technical Consultants, Inc.

13215 Bee Cave Parkway

Bldg. B, Suite 230

Austin, Texas 78738

Attention: L. Joseph Boyer

Email: joe.boyer@atlastechnical.us

with a copy to (which shall not constitute notice):

 

Winston & Strawn

200 Park Avenue

New York, New York 10166-4193

Attention: Joel Rubinstein

Jason Osborn

Fax: (212) 294-5336

Email: jrubinstein@winston.com josborn@winston.com

 

and

 

Kirkland & Ellis LLP

609 Main Street

Houston, Texas 77002

Attention: William J. Benitez, P.C.

    Julian J. Seiguer, P.C.
Fax: (713) 836-3601
Email: william.benitez@kirkland.com             julian.seiguer@kirkland.com

 

 

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Section 5.2 Assignment; No Third Party Beneficiaries.

 

(a) This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

(b) This Agreement and the rights, duties and obligations of the Holders of Registrable Securities hereunder may be freely assigned or delegated by such Holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder.

 

(c) This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders.

 

(d) This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and this Section 5.2, except that the Founder Holders, severally and not jointly, shall be express third party beneficiaries of Section 2.2(b)(ii) and Section 2.3(b).

 

(e) No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii) the written agreement of the assignee, in the form attached hereto as Exhibit A, to be bound by the terms and provisions of this Agreement. Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.

 

Section 5.3 Counterparts. This Agreement and agreements, certificates, instruments and documents entered into in connection herewith may be executed and delivered in one or more counterparts and by fax or email, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No party hereto shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each party hereto forever waives any such defense.

 

Section 5.4 Governing Law. The law of the State of Delaware shall govern (a) all claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware. Each party to this Agreement hereby IRREVOCABLY waives all rights to trial by jury in any action, suit or Proceeding brought to resolve any dispute between or among any of the parties (whether arising in contract, tort or otherwise) arising out of, connected with, related or incidental to this Agreement, the transactions contemplated hereby and/or the relationships established among the parties hereunder. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties hereto submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any action or proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the action or proceeding shall be heard and determined in any such court and agrees not to bring any proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 5.4, however, shall affect the right of any party hereunder to serve legal process in any other manner permitted by law or at equity. Each party hereto agrees that a final judgment in any proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

 

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Section 5.5 Specific Performance. Each party hereto recognizes and affirms that in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached, money damages would be inadequate (and therefore the non-breaching party would have no adequate remedy at law) and the non-breaching party would be irreparably damaged. Accordingly, each party hereto agrees that each other party hereof shall be entitled to specific performance, an injunction or other equitable relief (without posting of bond or other security or needing to prove irreparable harm) to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any proceeding, in addition to any other remedy to which such person may be entitled.

 

Section 5.6 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

 

Section 5.7 Interpretation. The headings and captions used in this Agreement have been inserted for convenience of reference only and do not modify, define or limit any of the terms or provisions hereof.

 

Section 5.8 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.

 

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Section 5.9 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

Section 5.10 Other Registration Rights. The Company represents and warrants that no person, other than (a) a Holder of Registrable Securities and (b) the Founder Holders, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions among the parties and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.

 

Section 5.11 Term. This Agreement shall terminate upon the date as of which no Holders (or permitted assignees under Section 5.2) hold any Registrable Securities. The provisions of Section 3.5 and Article IV shall survive any termination.

 

Section 5.12 Limitation on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of BCP, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which (a) are equivalent to or more favorable than the registration rights granted to the Holders hereunder, or (b) would reduce the amount of Registrable Securities the holders can include in any registration filed pursuant to Section 2.1, Section 2.2, Section 2.3 or Section 2.4 hereof, unless such rights are subordinate to those of the Holders.

 

Section 5.13 In-Kind Distributions. If any Holder seeks to effectuate an in-kind distribution of all or part of its Registrable Securities to its direct or indirect equityholders, the Company will, subject to applicable lockups, work with such Holders and the Company’s transfer agent to facilitate such in-kind distribution in the manner reasonably requested by such Holder.

 

Section 5.14 No Recourse. Notwithstanding any provision of this Agreement to the contrary, in no event shall any party hereto or any of its respective affiliates or its or their representatives (a) seek to enforce this Agreement or any documents or instruments delivered in connection with this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any current or future director, officer, employee, general or limited partner, member or equityholder of Atlas Holdings, the Company and each Holder and, in each case, any of their respective affiliates or representatives in connection with this Agreement and (b) have any recourse under this Agreement or any documents or instruments delivered in connection with this Agreement against, any current or future director, officer, employee, general or limited partner, member or equityholder of Atlas Holdings, the Company and each Holder and, in each case, any of their respective affiliates or representatives in connection with this Agreement, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law. It is expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of Atlas Holdings, the Company or any Holder or any current or future member of or any current or future director, officer, employee, partner, member or equityholder of Atlas Holdings, the Company or any Holder or, in each case, of any affiliate or assignee thereof, as such for any obligation of any party hereto under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

Section 5.15 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, upon the written request by the Company, each Holder shall execute and deliver any additional documents and instruments and perform any additional acts that may be reasonably necessary to effectuate and perform the provisions of this Agreement and the transactions contemplated hereby.

 

*   *   *   *   *

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed as of the date first written above.

 

  COMPANY:
   
  ATLAS TECHNICAL CONSULTANTS, INC.
   
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

Signature Page to Registration Rights Agreement

 

 

 

 

  HOLDERS:  
   
  ATLAS TECHNICAL CONSULTANTS HOLDINGS LP  
     
  By: Atlas Technical Consultants Holdings GP LLC  
  Its: General Partner  
     
  By: /s/ L. Joe Boyer  
  Name: L. Joe Boyer  
  Title: Chief Executive Officer

 

Signature Page to Registration Rights Agreement

 

 

 

 

EXHIBIT A

 

JOINDER

 

Joinder

 

The undersigned is executing and delivering this Joinder pursuant to the Registration Rights Agreement, dated as of __________________ (as the same may hereafter be amended, the “Registration Rights Agreement”), among Atlas Technical Consultants, Inc., a Delaware corporation (the “Company”), and the other person named as parties therein.

 

By executing and delivering this Joinder to the Company, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Registration Rights Agreement as a Holder in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s ________________ number of shares of _____________________ shall be included as Registrable Securities under the Registration Rights Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder as of the ___ day of ____________, ____.

 

  Signature of Stockholder
     
  Print Name of Stockholder
     
  Address: _______________________________
    _______________________________

 

 

Agreed and Accepted as of:  
_____________________.  
   
ATLAS TECHNICAL CONSULTANTS, INC.  
   
   
By: _______________________________  
Its: _______________________________  

 

Exhibit A to Registration Rights Agreement

 

 

Exhibit 10.6

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made as of February 14, 2020 by and among Boxwood Merger Corp., a Delaware corporation (the “Company”), GSO Capital Opportunities Fund III LP, a Delaware limited partnership (“GSO”), and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement (together with GSO, each a “Holder” and, collectively, the “Holders”).

 

RECITALS

 

WHEREAS, this Agreement is made and entered into in connection with the closing of the transactions (the “Transactions”) contemplated by that certain Unit Purchase Agreement, dated as of August 12, 2019 (as amended, the “Purchase Agreement”), by and among the Company, Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Operating”), Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“Atlas”), Atlas TC Holdings LLC, a Delaware limited liability company (“Holdings”), and Atlas TC Buyer LLC, a Delaware limited liability company;

 

WHEREAS, in connection with the closing of the Transactions, the Company and GSO entered into that certain Subscription Agreement, dated as of the date hereof (the “Subscription Agreement”) pursuant to which GSO has agreed, subject to the terms and conditions thereof, to purchase from the Company shares of Class A Common Stock;

 

WHEREAS, pursuant to the Subscription Agreement, the Company has agreed to register for resale under the Securities Act the shares of Class A Common Stock that may be issued to the Holders and their permitted transferees, as well as certain other shares of Class A Common Stock; and

 

WHEREAS, the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Article I.
DEFINITIONS

 

Section 1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.

 

 

 

 

Agreement” shall have the meaning given in the Preamble.

 

Atlas Holders” shall mean “Holders” as defined in the Atlas Registration Rights Agreement.

 

Atlas Holders Registrable Securities” shall mean “Registrable Securities” as defined in the Atlas Registration Rights Agreement.

 

Atlas Registration Rights Agreement” shall mean that certain Registration Rights Agreement, dated as of February 14, 2020, by and among the Company, Atlas and the other parties thereto.

 

Blackout Period” shall have the meaning given in Section 3.4(b).

 

Business Day” shall mean any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.

 

Class A Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.

 

Class F Common Stock” shall mean the Class F common stock, par value $0.0001 per share, of the Company.

 

Closing Date” shall have the meaning given in the Purchase Agreement.

 

Commission” shall mean the Securities and Exchange Commission.

 

Company” shall have the meaning given in the Preamble.

 

Demanding Holder” shall have the meaning given in Section 2.2(a).

 

Effectiveness Deadline” shall have the meaning given in Section 2.1.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

Form S-3” shall have the meaning given in Section 2.4.

 

Founder Holders” shall mean “Holders” as defined in the Founder Registration Rights Agreement.

 

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Founder Registrable Securities” shall mean “Registrable Securities” as defined in the Founder Registration Rights Agreement.

 

Founder Registration Rights Agreement” shall mean that certain Registration Rights Agreement, dated as of November 15, 2018, by and between the Company, Boxwood Sponsor LLC, a Delaware limited liability company, and the other parties thereto.

 

Holders” shall have the meaning given in the Preamble.

 

Initial Shelf” shall have the meaning given in Section 2.1.

 

Maximum Number of Securities” shall have the meaning given in Section 2.2(b).

 

Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they were made not misleading.

 

Piggyback Registration” shall have the meaning given in Section 2.3.

 

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

Purchase Agreement” shall have the meaning given in the Recitals.

 

Registrable Security” shall mean (a) any shares of Class A Common Stock issued or issuable by the Company to GSO, (b) any shares of Class A Common Stock (whether converted from Class F Common Stock or otherwise) transferred to GSO pursuant to the Letter Agreement dated of even date herewith between Boxwood Sponsor LLC and GSO and (c) any other equity security of the Company issued or issuable to any Holder with respect to any such share of Class A Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

 

Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

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Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

a) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Class A Common Stock is then listed;

 

b) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

c) printing, messenger, telephone and delivery expenses;

 

d) reasonable fees and disbursements of counsel for the Company;

 

e) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration (including the expenses of any special audit and “comfort letters” required by or incident to such performance); and

 

f) reasonable fees and expenses of one legal counsel selected by the Demanding Holders in connection with an Underwritten Offering.

 

Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

Replacement S-3 Shelf” shall have the meaning given in Section 2.1.

 

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

Suspension Period” shall have the meaning given in Section 3.4(a).

 

Transactions” shall have the meaning given in the Recitals.

 

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

Underwritten Offering” shall mean an offering in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

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Article II.
REGISTRATIONS

 

Section 2.1 Registration Statement. The Company shall, as soon as practicable after the Closing Date, but in any event within 30 days after the Closing Date, file a Registration Statement under the Securities Act to permit the public resale of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this Section 2.1 and shall use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (a) 60 days (or 90 days if the Commission notifies the Company that it will “review” the Registration Statement) after the Closing Date and (b) the tenth Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Registration Statement filed with the Commission pursuant to this Section 2.1 shall be on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities, covering such Registrable Securities, and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. If the initial Registration Statement (the “Initial Shelf”) filed by the Company pursuant to this Section 2.1 is on Form S-1, upon the Company becoming eligible to register the Registrable Securities for resale by the Holders on Form S-3, the Company shall use its reasonable best efforts to amend the Initial Shelf to a Registration Statement on Form S-3 or file a Registration Statement on Form S-3 in substitution of the Initial Shelf (the “Replacement S-3 Shelf”) and cause the Replacement S-3 Shelf to be declared effective as soon as practicable thereafter. A Registration Statement filed pursuant to this Section 2.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.1 to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. If at any time a Registration Statement filed pursuant to this Section 2.1 is not effective or is not otherwise available for the resale of all the Registrable Securities held by the Holders, the majority of the Holders or GSO may demand registration under the Securities Act of all or part of their Registrable Securities at any time and from time to time, and the Company shall use its reasonable best efforts to file with the Commission following receipt of any such demand one or more Registration Statements with respect to all such Registrable Securities and to cause such Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. As soon as practicable following the effective date of a Registration Statement filed pursuant to this Section 2.1, but in any event within three Business Days of such date, the Company shall notify the Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement filed pursuant to this Section 2.1 (including any documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any Prospectus contained in such Registration Statement, in the light of the circumstances under which such statement is made).

 

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Section 2.2 Underwritten Offering.

 

(a) In the event that any Holder elects to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering of all or part of such Registrable Securities that are registered by such Registration Statement, then the Company shall, upon the written demand of GSO or its designee (any such Holder, a “Demanding Holder”), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of equity securities with the managing Underwriter or Underwriters selected by the Demanding Holder in consultation with the Company, and shall take all such other reasonable actions as are requested by the managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities. In addition, the Company shall give prompt written notice to each other Holder regarding such proposed Underwritten Offering, and such notice shall offer such Holders the opportunity to include in the Underwritten Offering such number of Registrable Securities as each such Holder may request. Each such Holder shall make such request in writing to the Company within five Business Days after the receipt of any such notice from the Company, which request shall specify the number of Registrable Securities intended to be disposed of by such Holder. Each Holder proposing to distribute its Registrable Securities through an Underwritten Offering pursuant to this Section 2.2 shall enter into an underwriting agreement with the underwriters, which underwriting agreement shall contain such representations, covenants, indemnities (subject to Article IV) and other rights and obligations as are customary in underwritten offerings of equity securities; provided, however, that no such Holder shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law. In no event shall the Company be obligated to effect more than two Underwritten Offerings upon demand by GSO hereunder.

 

(b) If the managing Underwriter or Underwriters in an Underwritten Offering, in good faith, advises the Company and the Demanding Holder that the dollar amount or number of Registrable Securities that the Demanding Holder desires to sell, taken together with all other shares of Class A Common Stock or other equity securities that the Company or any other Holder desires to sell and the shares of Class A Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows:

 

(i) first, the Registrable Securities of the Demanding Holders pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering that can be sold without exceeding the Maximum Number of Securities;

 

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(ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), pro rata to (A) Registrable Securities of other Holders who have elected to participate in the Underwritten Offering pursuant to Section 2.2(a), (B) Atlas Holder Registrable Securities of Atlas Holders exercising their rights to register their Atlas Holder Registrable Securities pursuant to the Atlas Registration Rights Agreement, and (C) Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities;

 

(iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) or clause (ii), to shares of Class A Common Stock held by persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons, which collectively can be sold without exceeding the Maximum Number of Securities; and

 

(iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) , clause (ii), or clause (iii), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities.

 

(c) A Demanding Holder shall have the right to withdraw all or any portion of its Registrable Securities included in an Underwritten Offering pursuant to this Section 2.2 for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters of its intention to withdraw from such Underwritten Offering prior to the pricing of such Underwritten Offering and such withdrawn amount shall no longer be considered an Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Offering prior to its withdrawal under this Section 2.2(c).

 

Section 2.3 Piggyback Registration.

 

(a) If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to an Underwritten Offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.2 hereof) on a form that would permit registration of Registrable Securities, other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) on Form S-4, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five days after receipt of such written notice (in the case of an “overnight” or “bought” offering, such requests must be made by the Holders within three Business Days after the delivery of any such notice by the Company) (such Registration, a “Piggyback Registration”); provided, however, that if the Company has been advised in writing by the managing Underwriter(s) that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Class A Common Stock in the Underwritten Offering, then (1) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), the Company shall not be required to offer such opportunity to the Holders or (2) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.3(b). Subject to Section 2.3(b), the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this Section 2.3 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

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(b) If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Class A Common Stock that the Company desires to sell, taken together with (i) the shares of Class A Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Sections 2.2 and 2.3, and (iii) the shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(i) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), pro rata to (1) the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof; (2) Atlas Holder Registrable Securities of Atlas Holders exercising their rights to register their Atlas Holder Registrable Securities pursuant to the Atlas Registration Rights Agreement; and (3) the Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities, and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

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(ii) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), pro rata to (1) the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof; (2) Atlas Holder Registrable Securities of Atlas Holders exercising their rights to register their Atlas Holder Registrable Securities pursuant to the Atlas Registration Rights Agreement; and (3) the Founder Registrable Securities of Founder Holders exercising their rights to register their Founder Registrable Securities pursuant to the Founder Registration Rights Agreement, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), shares of Class A Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.

 

(c) Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention to withdraw from such Piggyback Registration prior to the pricing of such Underwritten Offering. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.3.

 

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(d) For purposes of clarity, any Registration effected pursuant to Section 2.3 hereof shall not be counted as a Registration effected under Section 2.2 hereof.

 

Section 2.4 Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than 12 days after the Company’s initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if a Form S-3 is not available for such offering.

 

Article III.
COMPANY PROCEDURES

 

Section 3.1 General Procedures. The Company shall use its reasonable best efforts to effect the Registration of Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as practicable:

 

(a) subject to Section 2.1, prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective pursuant to the terms of this Agreement until all of such Registrable Securities have been disposed of (if earlier);

 

(b) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all of such Registrable Securities have been disposed of (if earlier) in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

 

(c) prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and to one legal counsel selected by the Holders, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel selected by such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;

 

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(d) prior to any public offering of Registrable Securities, use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

(e) use its commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

 

(f) provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

 

(g) advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

(h) at least five days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities or its counsel;

 

(i) notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;

 

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(j) permit a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

(k) obtain a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request;

 

(l) on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated as of such date, of counsel representing the Company for the purposes of such Registration, addressed to the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as are customarily included in such opinions and negative assurance letters;

 

(m) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, on terms agreed to by the Company with the managing Underwriter of such offering;

 

(n) make available to its security holders, as soon as reasonably practicable, an earnings statement (which need not be audited) covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);

 

(o) if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $20,000,000, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and

 

(p) otherwise, in good faith, take such customary actions necessary to effect the registration of such Registrable Securities contemplated hereby.

 

Section 3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders and the Company that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.

 

Section 3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in the underwriting agreement for such Underwritten Offering and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting agreement.

 

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Section 3.4 Suspension of Sales; Adverse Disclosure.

 

(a) Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed (any such period, a “Suspension Period”).

 

(b) If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration (including in connection with an Underwritten Offering) at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, then the Company may, upon giving prompt written notice to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement (including in connection with an Underwritten Offering) for the shortest period of time, but in no event more than 30 days, determined in good faith by the Company to be necessary for such purpose (any such period, a “Blackout Period”). In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.

 

(c) The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4. Notwithstanding anything to the contrary in this Section 3.4, in no event shall any Suspension Period or any Blackout Period continue for more than 90 days in the aggregate during any 365-day period.

 

Section 3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to:

 

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144, at all times from and after the Closing Date until there are no Registrable Securities outstanding;

 

(b) file timely (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 Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings (the delivery of which will be satisfied by the Company’s filing of such reports on the Commission’s EDGAR system); and

 

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(c) The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Class A Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

Section 3.6 Removal of Legend. In connection with a sale of Registrable Securities by a Holder in reliance on Rule 144, the Holder or its broker shall deliver to the transfer agent and the Company a broker representation letter providing to the transfer agent and the Company any information the Company deems necessary to determine that the sale of the Registrable Securities is made in compliance with Rule 144. Upon receipt of such representation letter, the Company shall promptly direct its transfer agent to remove the notation of a restrictive legend in the Holder’s certificate or the book entry account maintained by the transfer agent, and the Company shall bear all costs associated therewith. At such time as the Registrable Securities have been sold pursuant to an effective registration statement under the Securities Act, if the book entry account or certificate for such Registrable Securities still bears any notation of restrictive legend, the Company agrees, upon request of the Holder or permitted assignee, to take all steps necessary to promptly effect the removal of any restrictive legend from the Registrable Securities, and the Company shall bear all costs associated therewith, regardless of whether the request is made in connection with a sale or otherwise, so long as the Holder or its permitted assigns provide to the Company any information the Company deems reasonably necessary to determine that the legend is no longer required under the Securities Act or applicable state laws.

 

Article IV.
INDEMNIFICATION AND CONTRIBUTION

 

Section 4.1 Indemnification.

 

(a) The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

 

(b) In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.

 

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(c) Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

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(e) If the indemnification provided under this Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 4.1(e) shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Section 4.1(a), Section 4.1(b) and Section 4.1(c) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1(e) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.1(e) from any person who was not guilty of such fraudulent misrepresentation.

 

Article V.
MISCELLANEOUS

 

Section 5.1 Notices. All notices, demands, requests, instructions, claims, consents, waivers and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment), received by fax or email (with hard copy to follow) prior to 5:00 p.m. Central Time on a Business Day or delivery by reputable overnight express courier (charges prepaid) or (b) three days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing, notices, demands and communications to GSO, a Holder or the Company shall be sent to the addresses indicated below:

 

Notices to GSO or a Holder:

 

GSO Capital Partners LP

345 Park Avenue, 31st Floor

New York, NY 10154

Attention: Robert Petrini; Marisa J. Beeney

Email: robert.petrini@gsocap.com;

marisa.beeney@gsocap.com

 

with copies to (which shall not constitute notice):

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention: William H. Gump

Email: wgump@willkie.com

Notices to the Company

 

Boxwood Merger Corp.

8801 Calera Drive

Austin, Texas 78735
Attention: Steve Kadenacy
Email: sk@boxwoodmc.com

 

with a copy to (which shall not constitute notice):

 

Winston & Strawn

200 Park Avenue

New York, New York 10166-4193

Attention: Joel Rubinstein

Jason Osborn

Fax: (212) 294-5336

Email: jrubinstein@winston.com

josborn@winston.com

 

 

 

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Section 5.2 Assignment; No Third Party Beneficiaries.

 

(a) This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

(b) This Agreement and the rights, duties and obligations of the Holders of Registrable Securities hereunder may be freely assigned or delegated by such Holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder.

 

(c) This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders.

 

(d) This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and this Section 5.2, except that the Founder Holders, severally and not jointly, shall be express third party beneficiaries of Section 2.2(b)(ii) and Section 2.3(b).

 

(e) No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii) the written agreement of the assignee, in the form attached hereto as Exhibit A, to be bound by the terms and provisions of this Agreement. Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.

 

Section 5.3 Counterparts. This Agreement and agreements, certificates, instruments and documents entered into in connection herewith may be executed and delivered in one or more counterparts and by fax or email, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No party hereto shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a contract and each party hereto forever waives any such defense.

 

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Section 5.4 Governing Law. The law of the State of Delaware shall govern (a) all claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware. Each party to this Agreement hereby IRREVOCABLY waives all rights to trial by jury in any action, suit or Proceeding brought to resolve any dispute between or among any of the parties (whether arising in contract, tort or otherwise) arising out of, connected with, related or incidental to this Agreement, the transactions contemplated hereby and/or the relationships established among the parties hereunder. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the parties hereto submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any action or proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the action or proceeding shall be heard and determined in any such court and agrees not to bring any proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 5.4, however, shall affect the right of any party hereunder to serve legal process in any other manner permitted by law or at equity. Each party hereto agrees that a final judgment in any proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

 

Section 5.5 Specific Performance. Each party hereto recognizes and affirms that in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached, money damages would be inadequate (and therefore the non-breaching party would have no adequate remedy at law) and the non-breaching party would be irreparably damaged. Accordingly, each party hereto agrees that each other party hereof shall be entitled to specific performance, an injunction or other equitable relief (without posting of bond or other security or needing to prove irreparable harm) to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any proceeding, in addition to any other remedy to which such person may be entitled.

 

Section 5.6 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

 

18

 

 

Section 5.7 Interpretation. The headings and captions used in this Agreement have been inserted for convenience of reference only and do not modify, define or limit any of the terms or provisions hereof.

 

Section 5.8 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.

 

Section 5.9 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

Section 5.10 Other Registration Rights. The Company represents and warrants that no person, other than (a) a Holder of Registrable Securities, (b) the Founder Holders and (c) the Atlas Holders, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions among the parties and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.

 

Section 5.11 Term. This Agreement shall terminate upon the date as of which no Holders (or permitted assignees under Section 5.2) hold any Registrable Securities. The provisions of Section 3.5 and Article IV shall survive any termination.

 

Section 5.12 Limitation on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of GSO, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which (a) are more favorable than the registration rights granted to the Holders hereunder, or (b) would reduce the amount of Registrable Securities the holders can include in any registration filed pursuant to Section 2.1, Section 2.2, Section 2.3 or Section 2.4 hereof, unless such rights are pari passu with or subordinate to those of the Holders.

 

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Section 5.13 In-Kind Distributions. If any Holder seeks to effectuate an in-kind distribution of all or part of its Registrable Securities to its direct or indirect equityholders, the Company will, subject to applicable lockups, work with such Holders and the Company’s transfer agent to facilitate such in-kind distribution in the manner reasonably requested by such Holder.

 

Section 5.14 No Recourse. Notwithstanding any provision of this Agreement to the contrary, in no event shall any party hereto or any of its respective affiliates or its or their representatives (a) seek to enforce this Agreement or any documents or instruments delivered in connection with this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any current or future director, officer, employee, general or limited partner, member or equityholder of GSO, the Company and each Holder and, in each case, any of their respective affiliates or representatives in connection with this Agreement and (b) have any recourse under this Agreement or any documents or instruments delivered in connection with this Agreement against, any current or future director, officer, employee, general or limited partner, member or equityholder of GSO, the Company and each Holder and, in each case, any of their respective affiliates or representatives in connection with this Agreement, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law. It is expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of GSO, the Company or any Holder or any current or future member of or any current or future director, officer, employee, partner, member or equityholder of GSO, the Company or any Holder or, in each case, of any affiliate or assignee thereof, as such for any obligation of any party hereto under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

Section 5.15 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, upon the written request by the Company, each Holder shall execute and deliver any additional documents and instruments and perform any additional acts that may be reasonably necessary to effectuate and perform the provisions of this Agreement and the transactions contemplated hereby.

 

*    *      *    *    *

 

20

 

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed as of the date first written above.

 

  COMPANY:
     
  BOXWOOD MERGER CORP.
     
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Chief Executive Officer
     
  HOLDERS:
     
  GSO CAPITAL OPPORTUNITIES FUND III LP
  By: GSO Capital Opportunities Associates III LLC, its general partner
     
  By: /s/ Marisa J. Beeney
  Name:  Marisa J. Beeney
  Title: Authorized Signatory

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

EXHIBIT A

 

JOINDER

 

Joinder

 

The undersigned is executing and delivering this Joinder pursuant to the Registration Rights Agreement, dated as of __________________ (as the same may hereafter be amended, the “Registration Rights Agreement”), among Boxwood Merger Corp., a Delaware corporation (the “Company”), and the other person named as parties therein.

 

By executing and delivering this Joinder to the Company, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Registration Rights Agreement as a Holder in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s ________________ number of shares of _____________________ shall be included as Registrable Securities under the Registration Rights Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder as of the ___ day of ____________, ____.

 

  _______________________________________
  Signature of Stockholder
     
  Print Name of Stockholder
     
  Address: _______________________________
    _______________________________
    _______________________________

 

Agreed and Accepted as of:  
_____________________.  
   
   

BOXWOOD MERGER CORP.

 
   
By: _____      __________________________  
Its: _______________________________  

 

 

 

[Signature Page to Registration Rights Agreement]

 

 

 

Exhibit 10.7

 

VOTING AGREEMENT

 

This Voting Agreement (this “Agreement”), dated as of February 14, 2020 (the “Effective Time”), is entered into by and among Atlas Technical Consultants, Inc., a Delaware corporation (the “Company”), and Boxwood Sponsor LLC, a Delaware limited liability company (the “Sponsor”). Each of the Company and the Sponsor may be referred to herein as a “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, pursuant to that certain Director Nomination Agreement (the “Director Nomination Agreement”), dated as of as of the Effective Time, by and among the Company and Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“BCP”), the Company agreed to provide BCP with the right to nominate to the Company’s board of directors (the “Board”) certain BCP Nominees (such term and other terms used but not defined hereto having the meanings set forth in the Director Nomination Agreement); and

 

WHEREAS, in connection therewith, the Parties wish to set forth in this Agreement their agreements with respect to the voting by the Sponsor of its shares of Common Stock in favor of the Nominees following the Effective Time on the terms and subject to the conditions set forth herein;

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Section 1. Covenant to Vote. Subject to the terms and conditions of this Agreement and the Director Nomination Agreement, from and after the Effective Time and until a Termination Event under the Director Nomination Agreement or any other termination of the Director Nomination Agreement shall have occurred, the Sponsor agrees that it shall vote all of its shares of Common Stock in favor of each BCP Nominee for election to the Board and who has been recommended by the Board for such appointment or nomination at every meeting of the stockholders of the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written resolution of the stockholders of the Company or the Board with respect to the election of members of the Board.

 

Section 2. Assignment; Benefit of Parties. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors, legal representatives and assignees for the uses and purposes set forth and referred to herein. Notwithstanding the foregoing, the Sponsor may not assign any of its rights or obligations hereunder without the prior written consent of the Company. Nothing herein contained shall confer or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement.

 

 

 

 

Section 3. Remedies. The Parties shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The Parties agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to other rights and remedies hereunder, the Parties shall be entitled to specific performance and/or injunctive or other equitable relief (without posting a bond or other security) from any court of Law or equity of competent jurisdiction in order to enforce or prevent any violation of the provisions of this Agreement.

 

Section 4. Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:

 

  (a) If to the Sponsor:
     
      Boxwood Sponsor LLC
      8801 Calera Drive
      Austin, Texas 78735
      Attention:  Steve Kadenacy
      E-mail:  sk@boxwoodmc.com
       
  (b) If to the Company:
     
      Atlas Technical Consultants, Inc.
       
      13215 Bee Cave Parkway
      Bldg. B, Suite 230
      Austin, Texas 78738
      Attention: L. Joseph Boyer
      Email: joe.boyer@atlastechnical.us

 

Section 5. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

 

Section 6. No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person or entity other than the Parties and their respective successors and assigns any remedy or claim under or by reason of this Agreement or any terms, covenants or conditions hereof, and all of the terms, covenants, conditions, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the Parties and their respective successors and assigns.

 

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Section 7. Further Assurances. Each of the Parties hereby agrees that it will hereafter execute and deliver any further document, agreement, instruments of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof.

 

Section 8. Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the Party who executed the same, but all of such counterparts shall constitute the same agreement.

 

Section 9. Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.

 

Section 10. Jurisdiction; WAIVER OF TRIAL BY JURY. Any Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court, and agrees not to bring any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Proceeding brought pursuant to this Section 10. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 11. Entire Agreement. This Agreement, together with the Director Nomination Agreement, the Purchase Agreement, the agreements referenced herein and the other agreements entered into in connection with the consummation of the transactions contemplated by the Director Nomination Agreement and the Purchase Agreement, constitute the entire agreement among the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective subsidiaries relating to the transactions contemplated hereby.

 

Section 12. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, the remaining provisions of this Agreement shall be reformed, construed and enforced to the fullest extent permitted by Law and to the extent necessary to give effect to the intent of the Parties.

 

Section 13. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Parties unless such modification is approved in writing by the Parties and, in the case of the Company, approved by the unanimous vote of the members of the Board who are not affiliated with Sponsors or BCP. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

Section 14. Termination. Notwithstanding anything to the contrary contained herein, this Agreement shall immediately and without further action by any of the Parties, automatically terminate upon the termination of, or the occurrence of a Termination Event under, the Director Nomination Agreement.

 

*   *   *   *   *

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Time.

 

  Sponsor:
     
  BOXWOOD SPONSOR LLC
     
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Manager

 

[Signature Page to Voting Agreement]

 

 

 

 

  Company:
   
  ATLAS TECHNICAL CONSULTANTS, INC.
     
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

[Signature Page to Voting Agreement]

 

 

 

Exhibit 10.8

 

LOCK-UP AGREEMENT

 

This Lock-Up Agreement (this “Agreement”), dated as of February 14, 2020 (the “Effective Time”), is entered into by and among Atlas Technical Consultants, Inc., a Delaware corporation (the “Company”), and Boxwood Sponsor LLC, a Delaware limited liability company (the “Sponsor”). Each of the Company and the Sponsor may be referred to herein as a “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, pursuant to that certain Unit Purchase Agreement, dated as of August 12, 2019 (as amended, the “Purchase Agreement”), by and among the Company, Atlas TC Holdings LLC, Atlas TC Buyer LLC, Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“Atlas Seller”), and Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), the Company is acquiring all of the limited liability company interest in Atlas Intermediate; and

 

WHEREAS, it is a condition to closing under the Purchase Agreement that the Sponsor enter into this Agreement which provides for restrictions on the Transfer of its shares of Common Stock on the terms and subject to the conditions set forth herein;

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

Section 1. Restrictions on Transfer of Common Stock.

 

(a) Except as otherwise provided for herein, Sponsor shall not, prior to the end of the Lock Up Period, Transfer shares of Common Stock or warrants to purchase shares of Common Stock Beneficially Owned or otherwise held by it.

 

(b) Sponsor and the Company acknowledge and agree that:

 

(i) notwithstanding anything to the contrary herein, the shares of Common Stock and warrants to purchase shares of Common Stock, in each case, held or Beneficially Owned by Sponsor shall remain subject to the restrictions on Transfer under applicable securities Laws of any state, federal or foreign entity and the rules and regulations promulgated thereunder; and

 

(ii) each certificate evidencing any shares of Common Stock or warrants to purchase shares of Common Stock held by Sponsor and each certificate issued in exchange for or upon the Transfer of any shares of Common Stock or warrants to purchase shares of Common Stock held by Sponsor (unless such shares are not or are no longer subject to the restrictions on Transfer set forth in this Section 1) shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

 

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF FEBRUARY 14, 2020, AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND CERTAIN OF THE COMPANY’S SHAREHOLDERS, AS AMENDED. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

The Company shall imprint such legend on certificates evidencing such Common Stock and such warrants to purchase shares of Common Stock. The legend set forth above shall be removed from the certificates evidencing any shares of Common Stock that are not or are no longer subject to the restrictions on Transfer set forth in this Section 1.

 

(c) Any purported Transfer of shares of Common Stock or warrants to purchase shares of Common Stock held by Sponsor in violation of this Agreement shall be null and void, and the Company shall refuse to recognize any such Transfer for any purpose.

 

(d) Notwithstanding anything to the contrary in this Section 1 Transfers of shares of Common Stock or warrants to purchase shares of Common Stock by Sponsor are permitted (i) to Permitted Transferees who shall (A) be subject to the restrictions in this Section 1 as if they were the original holders of such shares and (B) promptly Transfer such shares back to Sponsor if they cease to be a Permitted Transferee for any reason prior to the date such shares become freely Transferable in accordance herewith; (ii) in the case of an individual, by a gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an Affiliate of such person or to a charitable organization; (iii) in the case of an individual, by virtue of Laws of descent and distribution upon death of the individual; or (iv) in the case of an individual, pursuant to a qualified domestic relations order; provided, however, that these Transferees must become a party to this Agreement by executing and delivering such documents as may be necessary to make such Transferee a party hereto.

 

(e) The restrictions on Transfer set forth in Section 1(a) shall automatically terminate upon the occurrence of a Change of Control during the Lock Up Period.

 

Section 2. Definitions.

 

Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise.

 

Agreement” has the meaning set forth in the preamble.

 

Atlas Seller” has the meaning set forth in the recitals.

 

Atlas Intermediate” has the meaning set forth in the recitals.

 

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BCP” means collectively Atlas Technical Consultants SPV, LLC, a Delaware limited liability company (“ATC SPV”) and Arrow Environmental SPV, LLC, a Delaware limited liability company.

 

Beneficially Own” has the meaning ascribed to it in Section 13(d) of the Securities Exchange Act of 1934, as amended.

 

Change of Control” means a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.

 

Class A Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.

 

Class B Common Stock” shall mean the Class B common stock, par value $0.0001 per share, of the Company.

 

Common Stock” shall mean the shares of Class A Common Stock and Class B Common Stock.

 

Company” has the meaning set forth in the preamble.

 

Director” means a member of the Board until such individual’s death, disability, disqualification, resignation or removal.

 

Effective Time” has the meaning set forth in the preamble.

 

Law” has the meaning ascribed to it in the Purchase Agreement.

 

Lock Up Period” means the period commencing on the Effective Time and ending on the earlier of (a) the date that is twelve months following the Effective Time or (b) if BCP Transfers either (i) Common Stock Beneficially Owned or otherwise held by BCP resulting in gross proceeds to BCP equal to at least $50,000,000 or (ii) all shares of Common Stock Beneficially Owned or otherwise held by BCP which were subject to an initial six (6) month restriction on Transfer, if the proceeds received from the Transfer of such shares of Common Stock is less than $50,000,000, the date on which the reported sales price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30 trading day period.

 

Party” has the meaning set forth in the preamble.

 

Permitted Transferee” means, with respect to any Person, (i) the direct or indirect partners, members, equity holders or other Affiliates of such Person, or (ii) any of such Person’s related investment funds or vehicles controlled or managed by such Person or Affiliate of such Person.

 

Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.

 

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Proceeding” has the meaning ascribed to it in the Purchase Agreement.

 

Purchase Agreement” has the meaning set forth in the recitals.

 

Termination Event” has the meaning set forth in Section 15.

 

Transfer” means any sale, transfer, assignment or other disposition of (whether with or without consideration and whether voluntary or involuntary or by operation of Law) of Common Stock. “Transferable” and “Transferee” shall each have a correlative meaning.

 

Section 3. Assignment; Benefit of Parties. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors, legal representatives and assignees for the uses and purposes set forth and referred to herein. Notwithstanding the foregoing, the Sponsor may not assign any of its rights or obligations hereunder without the prior written consent of the Company. Nothing herein contained shall confer or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement.

 

Section 4. Remedies. The Parties shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The Parties agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to other rights and remedies hereunder, the Parties shall be entitled to specific performance and/or injunctive or other equitable relief (without posting a bond or other security) from any court of Law or equity of competent jurisdiction in order to enforce or prevent any violation of the provisions of this Agreement.

 

Section 5. Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:

 

  (a) If to the Sponsor:
     
      Boxwood Sponsor LLC
      8801 Calera Drive
      Austin, Texas 78735
      Attention:  Steve Kadenacy
      E-mail:  sk@boxwoodmc.com

 

  (b) If to the Company:
     
      Atlas Technical Consultants, Inc.
      13215 Bee Cave Parkway
      Bldg. B, Suite 230
      Austin, Texas 78738
      Attention: L. Joseph Boyer
      Email: joe.boyer@atlastechnical.us

 

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Section 6. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

 

Section 7. No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person or entity other than the Parties and their respective successors and assigns any remedy or claim under or by reason of this Agreement or any terms, covenants or conditions hereof, and all of the terms, covenants, conditions, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the Parties and their respective successors and assigns.

 

Section 8. Further Assurances. Each of the Parties hereby agrees that it will hereafter execute and deliver any further document, agreement, instruments of assignment, transfer or conveyance as may be necessary or desirable to effectuate the purposes hereof.

 

Section 9. Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the Party who executed the same, but all of such counterparts shall constitute the same agreement.

 

Section 10. Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.

 

Section 11. Jurisdiction; WAIVER OF TRIAL BY JURY. Any Proceeding based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court, and agrees not to bring any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Proceeding brought pursuant to this Section 11. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

5

 

 

Section 12. Entire Agreement. This Agreement, together with the Purchase Agreement, the agreements referenced herein and the other agreements entered into in connection with the consummation of the transactions contemplated by the Director Nomination Agreement and the Purchase Agreement, constitute the entire agreement among the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective subsidiaries relating to the transactions contemplated hereby.

 

Section 13. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, the remaining provisions of this Agreement shall be reformed, construed and enforced to the fullest extent permitted by Law and to the extent necessary to give effect to the intent of the Parties.

 

Section 14. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Parties unless such modification is approved in writing by the Parties and, in the case of the Company, approved by the unanimous vote of the members of the Board who are not affiliated with Sponsors or BCP. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

Section 15. Termination. Notwithstanding anything to the contrary contained herein, this Agreement shall immediately and without further action by any of the Parties, automatically terminate upon the termination of, or the occurrence of a Termination Event under, the Director Nomination Agreement.

 

*   *   *   *   *

 

6

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Time.

 

  Sponsor:
   
  BOXWOOD SPONSOR LLC
     
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Manager

 

[Signature Page to Lock-Up Agreement]

 

 

 

 

  Company:
   
  ATLAS TECHNICAL CONSULTANTS, INC.
     
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

 

[Signature Page to Lock-Up Agreement]

 

 

Exhibit 10.9

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

ATLAS TC HOLDINGS LLC

 

DATED AS OF FEBRUARY 14, 2020

 

THE LIMITED LIABILITY COMPANY INTERESTS IN ATLAS TC HOLDINGS LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF ANY STATE, OR ANY OTHER APPLICABLE SECURITIES LAWS, AND HAVE BEEN OR ARE BEING ISSUED IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

 

Table of Contents

 

        Page
         
Article I DEFINITIONS     2
Section 1.1   Definitions     2
Section 1.2   Interpretive Provisions     27
           
Article II ORGANIZATION OF THE LIMITED LIABILITY COMPANY     28
Section 2.1   Formation     28
Section 2.2   Filing     28
Section 2.3   Name     28
Section 2.4   Registered Office: Registered Agent     28
Section 2.5   Principal Place of Business     28
Section 2.6   Purpose: Powers     28
Section 2.7   Term     29
Section 2.8   Intent     29
           
Article III CLOSING TRANSACTIONS     29
Section 3.1   Purchase Agreement Transactions     29
           
Article IV OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS     29
Section 4.1   Authorized Units; General Provisions with Respect to Units     29
Section 4.2   Voting Rights     32
Section 4.3   Capital Contributions: Unit Ownership     32
Section 4.4   Capital Accounts     33
Section 4.5   Other Matters     33
Section 4.6   Redemption of Common Units     33
Section 4.7   Representations and Warranties of the Members     39
Section 4.8   Preferred Units     40
           
Article V ALLOCATIONS OF PROFITS AND LOSSES     56
Section 5.1   Profits and Losses     55
Section 5.2   Special Allocations     57
Section 5.3   Allocations for Tax Purposes in General     60
Section 5.4   Other Allocation Rules     60
           
Article VI DISTRIBUTIONS     61
Section 6.1   Distributions     61
Section 6.2   Tax-Related Distributions     62
Section 6.3   Distribution Upon Withdrawal     62
           
Article VII MANAGEMENT     63
Section 7.1   Managing Member Rights; Fiduciary Duties     63
Section 7.2   Officers     63
Section 7.3   Warranted Reliance by Officers on Others     64
Section 7.4   Indemnification.     64

 

i 

 

 

Table of Contents (cont'd)

 

        Page
         
Section 7.5   Resignation or Termination of Managing Member     67
Section 7.6   No Inconsistent Obligations     67
Section 7.7   Reclassification Events of PubCo     67
Section 7.8   Certain Costs and Expenses     67
           
Article VIII ROLE OF MEMBERS     68
Section 8.1   Rights or Powers     68
Section 8.2   Voting     68
Section 8.3   Various Capacities     69
Section 8.4   Investment Opportunities     69
Section 8.5   Use of Names     70
           
Article IX TRANSFERS OF INTERESTS     70
Section 9.1   Restrictions on Transfer     70
Section 9.2   Notice of Transfer     71
Section 9.3   Transferee Members     72
Section 9.4   Legend     72
           
Article X ACCOUNTING     73
Section 10.1   Books of Account     73
Section 10.2   Tax Elections     73
Section 10.3   Tax Returns; Information     73
Section 10.4   Company Representative     73
Section 10.5   Withholding Tax Payments and Obligations     74
Section 10.6   Tax Treatment of Cash Quarterly Preferred Distributions     74
           
Article XI DISSOLUTION     75
Section 11.1   Liquidating Events     75
Section 11.2   Bankruptcy     75
Section 11.3   Procedure     76
Section 11.4   Rights of Members     77
Section 11.5   Notices of Dissolution     77
Section 11.6   Reasonable Time for Winding Up     77
Section 11.7   No Deficit Restoration     77
           
Article XII GENERAL     77
Section 12.1   Amendments; Waivers     77
Section 12.2   Further Assurances     78
Section 12.3   Successors and Assigns     78
Section 12.4   Entire Agreement     78
Section 12.5   Rights of Members Independent     79
Section 12.6   Governing Law     79
Section 12.7   Jurisdiction and Venue     79
Section 12.8   Headings     79
Section 12.9   Counterparts     79
Section 12.10   Notices     80
Section 12.11   Representation by Counsel; Interpretation     81
Section 12.12   Severability     81
Section 12.13   Expenses     82
Section 12.14   Waiver of Jury Trial     82
Section 12.15   No Third Party Beneficiaries     82
Section 12.16   No Recourse     82

 

ii 

 

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

ATLAS TC HOLDINGS LLC

 

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as amended, supplemented or restated from time to time, this “Agreement”) of Atlas TC Holdings LLC, a Delaware limited liability company (the “Company”), is entered into as of February 14, 2020, by and among Atlas Technical Consultants, Inc., a Delaware corporation (“PubCo”), and each other Person who is or at any time becomes a Member (each, a “Party” and collectively, the “Parties”) in accordance with the terms of this Agreement and the Act. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Section 1.1.

RECITALS

 

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed in the office of the Secretary of State of the State of Delaware on July 30, 2019, and was originally governed by the Limited Liability Company Agreement of the Company, dated as of July 30, 2019 (the “Existing LLC Agreement”);

 

WHEREAS, prior to giving effect to the transactions contemplated by the Purchase Agreement and the Subscription Agreement (each as defined below), the Company was wholly owned by PubCo;

 

WHEREAS, on August 19, 2019, the Company, PubCo and Atlas Technical Consultants Holdings LP, a Delaware limited partnership (“Atlas”) entered into that certain Unit Purchase Agreement (as amended, modified or supplemented from time to time, the “Purchase Agreement”), pursuant to which, among other things, Atlas transferred 100% of the Interests in Atlas Intermediate Holdings LLC to Atlas TC Buyer LLC, a wholly owned subsidiary of the Company (Buyer”), in exchange for $395,470,111.91, 23,902,989 shares of Class B Common Stock and 23,902,989 Common Units;

 

WHEREAS, on February 14, 2020, the Company, and GSO COF III AIV-2 LP (“GSO”) entered into that certain Subscription Agreement (as amended, modified or supplemented from time to time, the “Subscription Agreement”), pursuant to which, among other things, GSO agreed to contribute $141,840,000 to the Company in exchange for 145,000 Preferred Units;

 

WHEREAS, as of the Effective Time, Atlas and PubCo are the sole Members of the Company;

 

WHEREAS, the Members desire to amend and restate the Existing LLC Agreement as of the Effective Time to reflect (a) the consummation of the transactions contemplated by the Purchase Agreement and the Subscription Agreement, (b) PubCo’s designation as the sole managing Member of the Company (in its capacity as managing Member as applicable, the “Managing Member”), and (c) the rights and obligations of the Members that are enumerated and agreed upon in the terms of this Agreement effective as of the Effective Time;

 

1 

 

 

WHEREAS, each Common Unit (other than any Common Unit held by PubCo and its wholly owned Subsidiaries) may be redeemed, at the election of the holder of such Common Unit (together with the surrender and delivery by such holder of one share of Class B Common Stock), for one share of Class A Common Stock in accordance with the terms and conditions of this Agreement; and

 

WHEREAS, this Agreement shall supersede the Existing LLC Agreement in its entirety as of the date hereof.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

 

Article I
DEFINITIONS

 

Section 1.1 Definitions. As used in this Agreement and the Schedules and Exhibits attached to this Agreement, the following definitions shall apply:

 

Acquired EBITDA” means, with respect to any Acquired Entity or Business (a “Pro Forma Entity”) for any period, as the amount for such period of Consolidated EBITDA of such Pro Forma Entity (determined as if references to the Company and its Subsidiaries in the definition of “Consolidated EBITDA” were references to such Pro Forma Entity and its Subsidiaries), all as determined on a consolidated basis for such Pro Forma Entity.

 

Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

 

Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity.

 

Adjusted Basis” has the meaning given such term in Section 1011 of the Code.

 

Adjusted Capital Account Deficit” means the deficit balance, if any, in such Member’s Capital Account at the end of any Fiscal Year or other taxable period, with the following adjustments:

 

(a) credit to such Capital Account any amount that such Member is obligated to restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Company Minimum Gain and Member Minimum Gain; and

 

(b) debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

2 

 

 

This definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

Affiliate” means, when used with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person in question. For purposes of this Agreement, (i) no Member shall be deemed to be an Affiliate of any other Member, (ii) no Member (other than the Managing Member) shall be deemed to be an Affiliate of the Company or any Subsidiary of the Company and (iii) other than for purposes of Sections 4.8(j), 7.4, 8.4 and 12.16 hereof, The Blackstone Group Inc. and all private equity funds, portfolio companies, parallel investment entities, and alternative investment entities owned, managed, advised, sub-advised or controlled by The Blackstone Group Inc. (other than GSO Capital Partners LP and all private equity funds, parallel investment entities, and alternative investment entities owned, managed, advised, sub-advised or controlled by GSO Capital Partners LP) shall not be considered or otherwise deemed to be an “Affiliate” of GSO.

 

Agreement” is defined in the preamble to this Agreement.

 

All-In Yield” means, as to any Indebtedness, the effective yield on such Indebtedness and consistent with generally accepted financial practices, taking into account the applicable interest rate margins, any interest rate floors (the effect of which floors shall be determined in a manner set forth in the proviso below), any amendment to the relevant interest rate margins and interest rate floors prior to the applicable date of determination, or similar devices and all customary fees, including upfront or similar fees or original issue discount (amortized over the shorter of (a) the remaining weighted average life to maturity of such Indebtedness and (b) the four years following the date of incurrence thereof) payable generally to lenders or other institutions providing such Indebtedness, but excluding any arrangement, syndication, commitment, structuring, ticking or other similar fees payable in connection therewith that are not generally shared with the relevant Lenders or other holders of such Indebtedness; provided that with respect to any Indebtedness that includes a “LIBOR floor” or “Base Rate floor,” (i) to the extent that the LIBO rate or alternate base rate (or the equivalent applicable terms) (without giving effect to any floors in such definitions), as applicable, on the date that the All-In Yield is being calculated is less than such floor, the amount of such difference shall be deemed added to the interest rate margin for such Indebtedness for the purpose of calculating the All-In Yield and (ii) to the extent that the LIBO rate or alternate base rate (or the equivalent applicable terms) (without giving effect to any floors in such definitions), as applicable, on the date that the All-In Yield is being calculated is greater than such floor, then the floor shall be disregarded in calculating the All-In Yield.

 

Atlas” is defined in the recitals to this Agreement.

 

beneficially own” and “beneficial owner” shall be as defined in Rule 13d-3 of the rules promulgated under the Exchange Act.

 

Bipartisan Budget Act” means Title XI of the Bipartisan Budget Act of 2015, as may be amended from time to time (or any corresponding provisions of succeeding law), and any related provisions of law, including court decisions, regulations and administrative guidance.

 

3 

 

 

Board” means the board of directors of PubCo.

 

Borrower” means Atlas Intermediate Holdings LLC and any successor entity thereto.

 

Business Day” means each day of the week except Saturdays, Sundays and days on which banking institutions are authorized by law to close in New York, New York or Houston, Texas.

 

Business Opportunities Exempt Party” is defined in Section 8.4.

 

Call Election Notice” is defined in Section 4.6(f).

 

Call Right” is defined in Section 4.6(f).

 

Capital Account” means, with respect to any Member, the capital account maintained for such Member in accordance with Section 4.4.

 

Capital Contribution” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than cash) contributed to the Company by such Member. Any reference to the Capital Contribution of a Member will include any Capital Contributions made by a predecessor holder of such Member’s Units to the extent that such Capital Contribution was made in respect of Units Transferred to such Member.

 

Capitalized Leases” means all leases that have been, in accordance with GAAP as in effect on December 31, 2018, recorded as capitalized leases; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability in accordance with GAAP.

 

Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and its Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrower and its Subsidiaries.

 

Cash Election” is defined in Section 4.6(a)(iv) and shall also include PubCo’s election to purchase Common Units for cash pursuant to an exercise of its Call Right set forth in Section 4.6(f).

 

Cash Election Amount” means with respect to a particular Redemption for which a Cash Election has been made, (i) if the Class A Common Stock trades on a National Securities Exchange or automated or electronic quotation system, an amount of cash equal to the product of (A) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (B) the average of the volume-weighted closing price for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system, as applicable, on which the Class A Common Stock trades, as reported by Bloomberg, L.P. or its successor, for each of the ten consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the Redemption Notice Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock; and (ii) if the Class A Common Stock is not then traded on a U.S. securities exchange or automated or electronic quotation system, as applicable, an amount of cash equal to the product of (A) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (B) the Fair Market Value of one share of Class A Common Stock that would be obtained in an arms-length transaction between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller.

 

4 

 

 

Cash Election Notice” is defined in Section 4.6(a)(iv).

 

Class A Common Stock” means, as applicable, (a) the Class A Common Stock, par value $0.0001 per share, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that become payable in consideration for the Class A Common Stock or into which the Class A Common Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

Class B Common Stock” means, as applicable, (a) the Class B Common Stock, par value $0.0001 per share, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that become payable in consideration for the Class B Common Stock or into which the Class B Common Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

Closing Date Capital Account Balance” means, with respect to any Member, the positive Capital Account balance of such Member as of the date hereof as determined in accordance with Code Section 704(b) and after giving effect to the transactions contemplated by the Purchase Agreement and the Subscription Agreement, the amount or deemed value of which is set forth on the books and records of the Company.

 

Code” means the United States Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

 

Commission” means the U.S. Securities and Exchange Commission, including any governmental body or agency succeeding to the functions thereof.

 

Commitment Letter” means those certain commitment and fee letters dated August 12, 2019 delivered to PubCo by Macquarie Capital (USA) Inc., Macquarie Capital Funding LLC and Natixis, New York Branch, each as amended on January 23, 2020.

 

Common Unitholder” means a Member that holds Common Units.

 

Common Units” means the common units of limited liability company interests issued hereunder and shall also include any Equity Security of the Company issued in respect of or in exchange for Common Units, whether by way of dividend or other distribution, split, recapitalization, merger, rollup transaction, consolidation, conversion or reorganization.

 

Company” is defined in the preamble to this Agreement.

 

5 

 

 

Company Minimum Gain” has the meaning of “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). It is further understood that Company Minimum Gain shall be determined in a manner consistent with the rules of Treasury Regulations Section 1.704-2(b)(2), including the requirement that if the adjusted Gross Asset Value of property subject to one or more Nonrecourse Liabilities differs from its adjusted tax basis, Company Minimum Gain shall be determined with reference to such Gross Asset Value.

 

Company Representative” has the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations or other administrative or judicial pronouncements promulgated thereunder.

 

Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, plus:

 

(a) without duplication and to the extent already deducted (and not added back or excluded) in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

 

(i) total interest expense and, to the extent not reflected in such total interest expense, the sum of (A) premium payments, debt discount, fees, charges and related expenses incurred in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets plus (B) the portion of rent expense with respect to such period under Capitalized Leases that is treated as interest expense in accordance with GAAP plus (C) the implied interest component of synthetic leases with respect to such period plus (D) any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations or such derivative instruments plus (E) bank and letter of credit fees and costs of surety bonds in connection with financing activities, plus (F) amortization or write-off of deferred financing fees, debt issuance costs, debt discount or premium, terminated hedging obligations and other commissions, financing fees and expenses and, adjusted, to the extent included, to exclude any refunds or similar credits received in connection with the purchasing or procurement of goods or services under any purchasing card or similar program;

 

(ii) provision for taxes based on income, profits or capital, including federal, provincial, territorial, foreign, state, local, franchise, excise, and similar taxes and foreign withholding paid or accrued during such period (including in respect of repatriated funds) including penalties and interest related to such taxes or arising from any tax examinations (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto);

 

(iii) Non-Cash Charges;

 

(iv) extraordinary expenses, losses or charges (as defined in GAAP prior to the effectiveness of FASB ASU 2015-01);

 

6 

 

 

(v) unusual or non-recurring expenses, losses or charges (including any unusual or non-recurring operating expenses, losses or charges directly attributable to the implementation of cost savings initiatives), severance, relocation costs, integration and facilities’ opening costs and other business optimization expenses and operating improvements (including related to new product introductions), systems development and establishment costs, recruiting fees, signing costs, retention or completion bonuses, transition costs, costs related to closure/consolidation of facilities, internal costs in respect of strategic initiatives and curtailments or modifications to pension and post-retirement employee benefit plans (including any settlement of pension liabilities), contract terminations and professional and consulting fees incurred in connection with any of the foregoing;

 

(vi) restructuring charges, accruals or reserves (including restructuring and integration costs related to acquisitions and adjustments to existing reserves), whether or not classified as restructuring expense on the consolidated financial statements;

 

(vii) the amount of any non-controlling interest consisting of income attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary;

 

(viii) (A) the amount of non-management board of directors fees, indemnities and related expenses paid or accrued in such period to (or on behalf of) the Company (or any direct or indirect parent thereof) and (B) the amount of expenses relating to payments made to option holders of the Company or any of its direct or indirect parent companies in connection with, or as a result of, any distribution being made to shareholders of such Person or its direct or indirect parent companies, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted in the Loan Documents (as defined in the Credit Agreement as in effect on the date hereof);

 

(ix) losses, expenses or charges (including all fees and expenses or charges relating thereto) (A) from abandoned, closed, disposed or discontinued operations and any losses on disposal of abandoned, closed or discontinued operations (but if such operations are classified as discontinued due to the fact that they are subject to an agreement to dispose of such operations, only when and to the extent such operations are actually disposed of) and (B) attributable to business dispositions or asset dispositions (other than in the ordinary course of business), as reasonably determined in good faith by a Financial Officer;

 

(x) any non-cash loss attributable to the mark to market movement in the valuation of any Equity Securities, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging but only to the extent the cash impact resulting from such loss has not been realized);

 

(xi) any loss relating to amounts paid in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income for such period;

 

7 

 

 

(xii) any costs or expenses incurred by the Borrower or any of its Subsidiaries pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, any severance agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are non-cash or otherwise funded with cash proceeds contributed to the capital of the Company or Net Proceeds of an issuance of Equity Securities of the Company, in each case, which have been contributed to the Borrower;

 

(xiii) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of FASB Accounting Standards Codification 715, and any other items of a similar nature;

 

(xiv) charges, losses, lost profits, expenses (including litigation expenses, fee and charges) or write-offs to the extent indemnified or insured by a third party, including expenses or losses covered by indemnification provisions or by any insurance provider in connection with the Transactions, a Permitted Acquisition or any other acquisition or Investment, Disposition or any Casualty Event, in each case, to the extent that coverage has not been denied and so long as such amounts are actually reimbursed in cash within one (1) year after the related amount is first added to Consolidated EBITDA pursuant to this clause (a)(xiv) (and if not so reimbursed within one (1) year, such amount shall be deducted from Consolidated EBITDA during the next measurement period);

 

(xv) expenses incurred during such period in connection with earn-out and other deferred payments in connection with any acquisitions constituting an Investment permitted under the Credit Agreement or herein, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such earn-out or other deferred payments exceeds the liability booked by the applicable Person therefor; and

 

(xvi) to the extent that any of the expenses referred to in clause (ii) of the last sentence of the definition of Consolidated Net Income would have been added back to Consolidated EBITDA pursuant to any of the foregoing clauses of this definition had such expenses been incurred directly by the Borrower, the amount of such expenses; plus

 

(b)  without duplication, the amount of “run rate” cost savings, operating expense reductions and synergies related to the Transactions or any Specified Transaction, any restructuring, cost saving initiative or other initiative projected by the Borrower in good faith to be realized as a result of actions either taken or with respect to which substantial steps have been taken or that are expected to be taken, in each case on or prior to the date that is twenty-four (24) months after the date hereof (in the case of the Transactions) or such Specified Transaction or the implementation of such restructuring, cost saving or other initiative, as the case may be (which cost savings, operating expense reductions and synergies shall be added to Consolidated EBITDA until fully realized and calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of the relevant period), net of the amount of actual benefits realized from such actions; provided that (A) such cost savings, operating expense reductions and synergies are reasonably identifiable and factually supportable and (B) no cost savings, operating expense reductions or synergies shall be added pursuant to this clause (b) to the extent duplicative of any expenses or charges relating to such cost savings, operating expense reductions, other operating improvements or synergies that are included in clauses (a)(v) and (a)(vi) above or in the definitions of Pro Forma Adjustment and Pro Forma Basis (it being understood and agreed that “run rate” shall mean the full recurring benefit that is associated with any action taken); provided, however, the aggregate amounts increasing Consolidated EBITDA pursuant to this clause (b) and the similar adjustments pursuant to the definition of Pro Forma Adjustment and the proviso to the definition of Pro Forma Basis shall not exceed 20% of Consolidated EBITDA for the relevant period (calculated prior to giving effect to any such increase); plus

 

8 

 

 

(c) without duplication, any other adjustments and add-backs reflected in the calculation of Consolidated EBITDA in the Model (as defined in the Credit Agreement as in effect on the date hereof) to the extent such adjustments continue to be applicable during the period in which Consolidated EBITDA is being calculated, in each case applied in good faith by the Borrower; less

 

(d) without duplication and to the extent included in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

 

(i) extraordinary gains (as defined in GAAP prior to the effectiveness of FASB ASU 2015-01) and unusual or non-recurring gains;

 

(ii) non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income or Consolidated EBITDA in any prior period) and other items of non-cash income;

 

(iii) gains or other income (A) from abandoned, closed, disposed or discontinued operations and any gains or other income on disposal of abandoned, closed or discontinued operations (but if such operations are classified as discontinued due to the fact that they are subject to an agreement to dispose of such operations, only when and to the extent such operations are actually disposed of) and (B) attributable to business dispositions or asset dispositions (other than in the ordinary course of business), as reasonably determined in good faith by a Financial Officer;

 

(iv) any non-cash gain attributable to the mark to market movement in the valuation of any Equity Securities, and hedging obligations or other derivative instruments (in each case, including pursuant to Financial Accounting Standards Codification No. 815—Derivatives and Hedging but only to the extent the cash impact resulting from such gain has not been realized);

 

(v) any gain relating to amounts received in cash prior to the stated settlement date of any hedging obligation that has been reflected in Consolidated Net Income in such period;

 

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(vi) gains during period in connection with earn-outs and other deferred payments in connection with any acquisitions constituting an Investment permitted under the Credit Agreement or herein, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such earn-outs or other deferred payments is less than the liability booked by the applicable Person therefor; and

 

(vii) the amount of any non-controlling interest consisting of loss attributable to non-controlling interests of third parties in any Non-Wholly Owned Subsidiary; plus

 

(e) without duplication, any cash income from investments recorded using the equity method of accounting or the cost method of accounting, to the extent not included in arriving at Consolidated Net Income, except to the extent such income was attributable to income that would be deducted pursuant to clause (d) above if it were income of the Borrower or its Subsidiaries; minus

 

(f) without duplication, any losses from investments recorded using the equity method of accounting or the cost method of accounting, to the extent not deducted in arriving at Consolidated Net Income, except to the extent such loss was attributable to losses that would be added back pursuant to clauses (a) and (b) above if it were a loss of the Borrower or a Subsidiary; plus

 

(g) without duplication, an amount, with respect to investments recorded using the equity method of accounting or the cost method of accounting, equal to the amount attributable to each such investment that would be added to Consolidated EBITDA pursuant to clauses (a) and (b) above if instead attributable to the Borrower or a Subsidiary of the Borrower, pro-rated according to the Borrower’s or its applicable Subsidiary’s percentage ownership in such investment; minus

 

(h) without duplication, an amount, with respect to investments recorded using the equity method of accounting or the cost method of accounting, equal to the amount attributable to each such investment that would be deducted from Consolidated EBITDA pursuant to clause (c) above if instead attributable to the Borrower or a Subsidiary of the Borrower, pro-rated according to the Borrower’s or its applicable Subsidiary’s percentage ownership in such investment, in each case, as determined on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP; plus

 

(i) without duplication, the aggregate amount of credits received as a result of treatment of cash rent payments pursuant to GAAP;

 

in each case, as determined on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP; provided that:

 

(I) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of assets or liabilities (including the net loss or gain resulting from hedging agreements for currency exchange risk and revaluations of intercompany balances),

 

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(II) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of Financial Accounting Standards Codification No. 815—Derivatives and Hedging,

 

(III) there shall be included in determining Consolidated EBITDA for any period, without duplication, to the extent not included in Consolidated Net Income, the Acquired EBITDA of any Person, property, business or asset or attributable to any Person, property, business or asset acquired by the Borrower or any Subsidiary during such period to the extent not subsequently sold, transferred or otherwise disposed of (but not including the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired) (each such Person, property, business or asset acquired, including pursuant to the Transactions or pursuant to a transaction consummated prior to the date hereof, and not subsequently so disposed of, an “Acquired Entity or Business”), in each case based on the Acquired EBITDA of such Pro Forma Entity for such period (including the portion thereof occurring prior to such acquisition or conversion) determined on a historical Pro Forma Basis;

 

(IV) there shall be, to the extent included in Consolidated Net Income, excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset sold, transferred or otherwise disposed of, closed or classified as discontinued operations in accordance with GAAP (other than (x) if so classified on the basis that it is being held for sale unless such sale has actually occurred during such period and (y) for periods prior to the applicable sale, transfer or other disposition) by the Borrower or any Subsidiary during such period (each such Person, property, business or asset so sold, transferred or otherwise disposed of, closed or classified, a “Sold Entity or Business”), in each case based on the Disposed EBITDA of such Sold Entity or Business for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closure or classification) determined on a historical Pro Forma Basis; and

 

(V) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA any expense (or income) as a result of adjustments recorded to contingent consideration liabilities relating to the Transactions or any Permitted Acquisition (or other similar Investment permitted hereunder).

 

Notwithstanding the foregoing, Consolidated EBITDA shall be deemed to equal (a) $12,984,000 for the fiscal quarter ended March 31, 2019, (b) $19,506,000 for the fiscal quarter ended June 30, 2019, (c) $22,134,000 for the fiscal quarter ended September 30, 2019 and (d) $18,282,000 for the fiscal quarter ended December 31, 2019 (it being understood that such amounts are subject to adjustments, as and to the extent otherwise contemplated in the Credit Agreement or herein, in connection with any Pro Forma Adjustment or any calculation on a Pro Forma Basis (other than as a result of the Long Engineering Acquisition if consummated within ten (10) Business Days after the date hereof)); provided that (x) such amounts of Consolidated EBITDA for any such fiscal quarter shall be adjusted to include, without duplication, any cost savings that would otherwise be included pursuant to clause (b) of this definition (other than as a result of the Transactions or the Long Engineering Acquisition if consummated within ten (10) Business Days after the date hereof) and (y) in the event that the Long Engineering Acquisition has not been consummated within ten (10) Business Days after the date hereof, the above referenced amounts in preceding clauses (a), (b), (c) and (d) shall be $12,141,000, $18,538,000, $20,924,000 and $17,703,000, respectively.

 

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Consolidated Net Income” means, for any period, the net income (loss) of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding (to the extent otherwise included therein), without duplication,

 

(a) the cumulative effect of a change in accounting principles during such period,

 

(b) any Transaction Costs incurred during such period,

 

(c) any fees and expenses (including any transaction or retention bonus or similar payment) incurred during such period, or any amortization thereof for such period, in connection with any acquisition, non-recurring costs to acquire equipment to the extent not capitalized in accordance with GAAP, Investment, recapitalization, asset disposition, non-competition agreement, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of or waiver or consent relating to any debt instrument (in each case, including any such transaction consummated prior to the date hereof and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful (including, for the avoidance of doubt, the effects of expensing all transaction-related expenses in accordance with FASB Accounting Standards Codification 805 and gains or losses associated with FASB Accounting Standards Codification 460),

 

(d) any income (loss) (and all fees and expenses or charges relating thereto) for such period attributable to the early extinguishment of Indebtedness, hedging agreements or other derivative instruments,

 

(e) accruals and reserves that are established or adjusted as a result of the Transactions or any Permitted Acquisition or other similar Investment not prohibited under the Credit Agreement or herein in accordance with GAAP (including any adjustment of estimated payouts on earn-outs) or changes as a result of the adoption or modification of accounting policies during such period,

 

(f) stock-based award compensation expenses,

 

(g) any income (loss) attributable to deferred compensation plans or trusts,

 

(h) any income (loss) from Investments recorded using the equity method,

 

(i) the amount of any expense required to be recorded as compensation expense related to contingent transaction consideration,

 

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(j) any unrealized or realized gain or loss due solely to fluctuations in currency values and the related tax effects, determined in accordance with GAAP, and

 

(k) the net income of any Person that is not a Subsidiary of the Borrower or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions paid in cash (or to the extent converted into cash) to the Borrower or a Subsidiary thereof in respect of such period.

 

There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in such period. There shall be excluded from Consolidated Net Income for any period the effects from applying acquisition method accounting, including applying acquisition method accounting to inventory, property and equipment, loans and leases, software and other intangible assets and deferred revenue (including deferred costs related thereto and deferred rent) required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and its Subsidiaries), as a result of the Transactions, any acquisition or Investment consummated prior to the date hereof and any Permitted Acquisitions (or other Investment not prohibited hereunder) or the amortization or write-off of any amounts thereof.

 

In addition, (i) to the extent not already included in Consolidated Net Income, Consolidated Net Income shall include the amount of proceeds received in cash from business interruption insurance and (ii) Consolidated Net Income shall be reduced (to the extent not already reduced hereby) by the amount of payments to or on behalf of the Company or any direct or indirect parent thereof pursuant to Section 6.07(a)(vi) of the Credit Agreement as in effect on the date hereof (other than sub-clauses (D) and (G) thereof) or Section 6.04(l) of the Credit Agreement as in effect on the date hereof in lieu thereof, in each case, to the extent that such amounts otherwise would have reduced Consolidated Net Income if such amounts were a direct expense of the Borrower.

 

Consolidated Total Indebtedness” means, as of any date of determination, (a) the aggregate amount of Indebtedness of the Company and its Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of the acquisition method accounting in connection with the Transactions or any Permitted Acquisition (or other similar Investment not prohibited hereunder)) consisting only of Indebtedness for borrowed money, drawn but unreimbursed obligations under letters of credit or similar instruments, obligations in respect of Capitalized Leases, purchase money Indebtedness, debt obligations evidenced by bonds, promissory notes, debentures, indentures, credit agreements or similar instruments and any guarantees of the foregoing minus (b) the aggregate amount of cash and Permitted Investments (in each case, free and clear of all Liens, other than Liens permitted pursuant to Section 6.02 of the Credit Agreement as in effect on the date hereof), excluding cash and Permitted Investments (as defined in the Credit Agreement as in effect on the date hereof) (x) that are listed as “restricted” on the consolidated balance sheet of the Company and its Subsidiaries as of such date unless “restricted” solely in favor of the Credit Agreement and in respect of other secured Indebtedness subject to the terms of an Intercreditor Agreement (as defined in the Credit Agreement as in effect on the date hereof) or (y) representing $10,500,000 of proceeds of Initial Terms Loans that are deposited and maintained in the segregated restricted account of the Borrower referred to in Section 5.10 of the Credit Agreement as in effect on the date hereof.

 

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Contract” means any written agreement, contract, lease, sublease, license, sublicense, obligation, promise or undertaking.

 

control” means the possession, directly or indirectly, through one or more intermediaries, of the following: (a) in the case of a corporation, more than 50% of the outstanding voting securities thereof, (b) in the case of a limited liability company, partnership, limited partnership or joint venture, the right to more than 50% of the distributions therefrom (including liquidating distributions), (c) in the case of a trust or estate, more than 50% of the beneficial interest therein, (d) in the case of any other entity, more than 50% of the economic or beneficial interest therein or (e) in the case of any entity, the power or authority, through ownership of voting securities, by contract or otherwise, to direct the management, activities or policies of the entity.

 

Credit Agreement” means the Credit Agreement, dated as of February 14, 2020, among the Company, Buyer, as the initial borrower, the Borrower, as the new borrower, the lenders and issuing banks thereto from time to time, and Macquarie Capital Funding, LLC, as administrative agent and as collateral agent, as amended, amended and restated, supplemented, extended, restructured or otherwise modified from time to time, together with any credit agreement, loan agreement, note agreement or similar document replacing or refinancing such Credit Agreement.

 

Credit Agreement Flex Rights” means the “First Lien Flex Provisions” provided for in the Commitment Letter as in effect on the date hereof.

 

Debt Securities” means, with respect to PubCo, any and all debt instruments or debt securities that are not convertible or exchangeable into Equity Securities of PubCo.

 

Depreciation” means, for each Fiscal Year or other taxable period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year or other taxable period, except that (a) with respect to any such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Fiscal Year or other taxable period shall be the amount of book basis recovered for such Fiscal Year or other taxable period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (b) with respect to any other such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes at the beginning of such Fiscal Year or other taxable period. Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year or other taxable period bears to such beginning Adjusted Basis; provided, however, that if the Adjusted Basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year or other taxable period is zero, Depreciation with respect to such asset shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member.

 

DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time (or any corresponding provisions of succeeding law).

 

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Discount” is defined in Section 4.6(b)(ii).

 

Disposed EBITDA” means, with respect to any Sold Entity or Business for any period through (but not after) the date of such disposition or designation, the amount for such period of Consolidated EBITDA of such Sold Entity or Business (determined as if references to the Company and its Subsidiaries in the definition of the term “Consolidated EBITDA” (and in the component financial definitions used therein) were references to such Sold Entity or Business and its Subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business.

 

Disqualified Transferee” means (i) those Persons identified by the Company to the Preferred Unitholders in writing prior to the date hereof as being a “Disqualified Transferee” and (ii) those Persons identified by the Company to any Preferred Unitholder in writing as competitors of PubCo, the Borrower, the Company or their respective Subsidiaries, which designation shall become effective as to such Preferred Unitholder three (3) Business Days after delivery of each such written designation to such Preferred Unitholder, but which shall not apply retroactively to disqualify any Persons that have previously acquired Preferred Units; provided that the term “Disqualified Transferee” shall exclude any Person that the Company shall have designated as no longer being a “Disqualified Transferee” by written notice delivered to the Preferred Unitholders from time to time. Such list of Disqualified Transferees shall be available for inspection upon request by any Preferred Unitholder.

 

Effective Time” means 12:01 a.m. Central Standard Time on the date hereof.

 

Equity Securities” means (a) with respect to a partnership, limited liability company or similar Person, any and all units, interests, rights to purchase, warrants, options or other equivalents of, or other ownership interests in, any such Person as well as debt or equity instruments convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect to a corporation, any and all shares, interests, participation or other equivalents (however designated) of corporate stock, including all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing.

 

ERISA” means the Employee Retirement Security Act of 1974, as amended.

 

Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Existing LLC Agreement” is defined in the recitals to this Agreement.

 

Fair Market Value” means the fair market value of any property as determined in Good Faith by the Managing Member after taking into account such factors as the Managing Member shall deem appropriate.

 

Federal Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, and all rules and regulations promulgated thereunder.

 

Final Company Redemption Notice” is defined in Section 4.8(e)(iii).

 

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Financial Officer” means the chief financial officer, principal accounting officer, treasurer or corporate controller of the Company, the Managing Member or PubCo.

 

Fiscal Year” means the fiscal year of the Company, which shall end on December 31 of each calendar year unless, for U.S. federal income tax purposes, another fiscal year is required. The Company shall have the same fiscal year for U.S. federal income tax purposes and for accounting purposes.

 

GAAP” means U.S. generally accepted accounting principles at the time.

 

Good Faith” means a Person having acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to a criminal proceeding, having had no reasonable cause to believe such Person’s conduct was unlawful.

 

Governmental Entity” means any federal, national, supranational, state, provincial, local, foreign or other government, governmental, stock exchange, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

Gross Asset Value” means, with respect to any asset, the asset’s Adjusted Basis for U.S. federal income tax purposes, except as follows:

 

(a) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset as of the date of such contribution;

 

(b) the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times: (i) the acquisition of an Interest (or additional Interest) in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution to the Company; (ii) the grant of an Interest (other than a de minimis Interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a member capacity, or by a new Member acting in a member capacity or in anticipation of becoming a Member of the Company; (iii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an Interest in the Company; (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g)(1); (v) the acquisition of an Interest in the Company by any new or existing Member upon the exercise of a noncompensatory option in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); or (vi) any other event to the extent determined by the Managing Member to be permitted and necessary or appropriate to properly reflect Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(g); provided, however, that adjustments pursuant to clauses (i), (ii), (iii) and (v) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any noncompensatory options are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(vi), the Company shall adjust the Gross Asset Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);

 

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(c) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross Fair Market Value of such asset on the date of such distribution;

 

(d) the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the Adjusted Basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subsection (f) in the definition of “Profits” or “Losses” below or Section 5.2(j); provided, however, that the Gross Asset Value of a Company asset shall not be adjusted pursuant to this subsection to the extent the Managing Member determines that an adjustment pursuant to subsection (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d); and

 

(e) if the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subsections (a), (b) or (d) of this definition of Gross Asset Value, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits, Losses and other items allocated pursuant to Article V.

 

GSO” is defined in the recitals to this Agreement.

 

Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (x) trade accounts payable in the ordinary course of business, (y) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid after being due and payable and (z) expenses accrued in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (as defined in the Credit Agreement as in effect on the date hereof) on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees (as defined in the Credit Agreement as in effect on the date hereof) by such Person of Indebtedness of others, (g) all Capital Lease Obligations (as defined in the Credit Agreement as in effect on the date hereof) of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty (or similar instruments) and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; provided that the term “Indebtedness” shall not include (i) deferred or prepaid revenue, (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty, indemnity or other unperformed obligations of the seller, (iii) any obligations attributable to the exercise of appraisal rights and the settlement of any claims or actions (whether actual, contingent or potential) with respect thereto, (iv) Indebtedness of any Person that is a direct or indirect parent of the Company appearing on the balance sheet of the Company or the Borrower, or solely by reason of push down accounting under GAAP, in each case, so long as none of the Company, the Borrower or any Subsidiary thereof shall have any liability in respect of any such Indebtedness, (v) any non-compete or consulting obligations incurred in connection with a Permitted Acquisition (as defined in the Credit Agreement as in effect on the date hereof) or similar investment, (vi) any reimbursement obligations under pre-paid contracts entered into with clients in the ordinary course of business and (vii) for the avoidance of doubt, any Qualified Equity Interests (as defined in the Credit Agreement as in effect on the date hereof) issued by the Company or the Borrower. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the fair market value of the property encumbered thereby as determined by such Person in good faith. The amount of any Indebtedness that is issued at a discount to its initial principal amount shall be calculated based on the initial stated principal amount thereof without giving effect to such discount.

 

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Interest” means the entire interest of a Member in the Company, including the Units and all of such Member’s rights, powers and privileges under this Agreement and the Act.

 

Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

 

Liability” means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due, regardless of when asserted.

 

Liquidating Event” is defined in Section 11.1.

Long Engineering Acquisition” means the acquisition by the Borrower or a Subsidiary thereof of all of the outstanding Equity Securities of Long Engineering, Inc. pursuant to the terms and conditions of the Equity Purchase Agreement, dated as of November 20, 2019, by and among Atlas Technical Consultants, LLC, Long Engineering, Inc., Long Eng Holdings, Inc. and the other parties thereto.

 

Management Investors” means the members of the Board, officers and employees of the Company, the Borrower and/or their respective Subsidiaries who are (directly or indirectly through one or more investment vehicles) investors in the Company (or any direct or indirect parent thereof).

 

Managing Member” is defined in the recitals to this Agreement.

 

Material Adverse Effect” means a material adverse effect on the business, financial condition or results of operations, in each case, of the Company and its Subsidiaries (taken as a whole).

 

Member” means any Person that executes this Agreement as a Member, and any other Person admitted to the Company as an additional or substituted Member, that has not made a disposition of such Person’s entire Interest.

 

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Member Minimum Gain” has the meaning ascribed to “partner nonrecourse debt minimum gain” set forth in Treasury Regulations Section 1.704-2(i). It is further understood that the determination of Member Minimum Gain and the net increase or decrease in Member Minimum Gain shall be made in the same manner as required for such determination of Company Minimum Gain under Treasury Regulations Sections 1.704-2(d) and 1.704-2(g)(3).

 

Member Nonrecourse Debt” has the meaning of “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Deductions” has the meaning of “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

National Securities Exchange” means an exchange registered with the Commission under the Exchange Act.

 

Non-Cash Charges” means (a) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets (including goodwill), long-lived assets and investments in debt and equity securities or as a result of a change in law or regulation, in each case pursuant to GAAP, and the amortization of intangibles pursuant to GAAP (which, without limiting the foregoing, shall include any impairment charges resulting from the application of FASB Statements No. 142 and 144 and the amortization of intangibles arising pursuant to No. 141), (b) all losses from investments recorded using the equity method, (c) all Non-Cash Compensation Expenses, (d) the non-cash impact of acquisition method accounting, (e) depreciation and amortization (including, without limitation, as they relate to acquisition accounting, amortization of deferred financing fees or costs, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pension and other post-employment benefits) and (f) other non-cash charges (including non-cash charges related to deferred rent) (provided, in each case, that if any non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period, and excluding amortization of a prepaid cash item that was paid in a prior period).

 

Non-Cash Compensation Expense” means any non-cash expenses and costs that result from the issuance of stock-based awards, partnership interest-based awards and similar incentive based compensation awards or arrangements.

 

Non-Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person other than a Wholly Owned Subsidiary.

 

Nonrecourse Deductions” has the meaning assigned to that term in Treasury Regulations Section 1.704-2(b).

 

Nonrecourse Liability” is defined in Treasury Regulations Section 1.704-2(b)(3).

 

Officer” means each Person appointed as an officer of the Company pursuant to and in accordance with the provisions of Section 7.2 and listed on Exhibit B attached hereto.

 

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Partial Accrual Election” is defined in Section 4.8(b)(ii).

 

Permitted Acquisition” has the meaning ascribed to such term in the Credit Agreement as in effect on the date hereof.

 

Permitted Holders” means (a) the Management Investors and (c) Bernhard Capital Partners Management LP and its controlled investment Affiliates (other than any portfolio companies); provided that, for purposes of the definition of Preferred Change of Control, any voting Equity Securities held by the Management Investors in the Company or any direct or direct parent company thereof in excess of 20% of the aggregate voting Equity Securities in the Company or any direct or indirect parent company thereof shall be disregarded for purposes of determining the respective thresholds in the definition of Preferred Change of Control.

 

Permitted Indebtedness” means any (A) Indebtedness permitted under clauses (ii)1, (iii), (iv), (v), (vi), (x), (xi), (xiii), (xvii), (xviii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii) and (xxix) of Section 6.01(a) of the Credit Agreement as in effect on the date hereof; provided, that to the extent any such clause contains a dollar amount limitation or a percentage limitation such limitation shall be deemed to be increased by 20% for purposes of the amount or percentage that is permitted hereunder (for example, a dollar limitation of $100 and a percentage limitation of 20% would be increased to $120 and 24% for purposes of determining the applicable limitation under this Agreement), (B) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and is not paid after being due and payable and (C) Indebtedness consisting of indemnification obligations, obligations in respect of purchase price adjustments, incentive non-competes or other similar arrangements (but excluding non-contingent deferred purchase price consideration) incurred or assumed in connection with any Permitted Acquisition (as defined in the Credit Agreement as in effect on the date hereof), any other similar investment or any Disposition in an amount not to exceed in any Fiscal Year the greater of $7,000,000 and 10.00% of Consolidated EBITDA for the most recently ended Test Period; provided, that any such obligations shall only count for purposes of calculating such amount and percentage to the extent such obligation becomes a liability on the balance sheet of the Company or any of its Subsidiaries in accordance with GAAP. Notwithstanding the foregoing, Permitted Indebtedness shall not include: (1) with respect to any Permitted Indebtedness incurred in reliance on clause (xiii) of Section 6.01(a) of the Credit Agreement as in effect on the date hereof, Indebtedness in excess of the greater of $5,000,000 and 7.50% of Consolidated EBITDA for the most recently ended Test Period as of such time; (2) with respect to any Permitted Indebtedness incurred in reliance on clause (xxvii) of Section 6.01(a) of the Credit Agreement as in effect on the date hereof, Indebtedness in excess of the amounts permitted under Section 4.8(c)(ix) of this Agreement; (3) with respect to any Permitted Indebtedness incurred in reliance on clause (xxviii) of Section 6.01(a) of the Credit Agreement as in effect on the date hereof, Indebtedness in excess of that permitted under Section 6.05(f) of the Credit Agreement as in effect on the date hereof; and (4) with respect to any Permitted Indebtedness incurred in reliance on clause (xxix) of Section 6.01(a) of the Credit Agreement as in effect on the date hereof, any such premiums, interest, fees, expenses, charges and additional or contingent interest on such obligations unless it would be reasonable and customary to impose on such obligations in the ordinary course of business.

 

 

1 NTD: Subject to review ofschedule.

 

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Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

Plan Asset Regulations” means the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.

 

Preferred Change of Control” means (a) the failure of the Company to directly own all of the Equity Securities of the Borrower, (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group, other than the Permitted Holders (directly or indirectly, including through one or more holding companies), of Equity Securities representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Securities in the Company, or (c) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group, other than the Permitted Holders (directly or indirectly, including through one or more holding companies), of Equity Securities representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Securities in PubCo. For purposes of this definition, (i) “beneficial ownership” shall be as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act and (ii) the phrase “Person or group” is within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person or “group” and its subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan. For the avoidance of doubt, any of the foregoing terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement as in effect on the date hereof.

 

Preferred Distribution Amount” means, with respect to any Quarter ending on or after March 31, 2020, an amount per Preferred Unit equal to the Preferred Liquidation Preference, multiplied by the Preferred Distribution Rate per annum (calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed) for such Quarter; provided, however, for purposes of determining the Preferred Distribution Amount for the Quarter ending March 31, 2020, such Quarter shall be deemed to commence on the date hereof and end on, and include, March 31, 2020 but calculated on the basis of a 366-day year as set forth above.

 

Preferred Distribution Payment Date” is defined in Section 4.8(b)(i).

 

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Preferred Distribution Rate” means 11.25% per annum, as may be adjusted as set forth in Section 4.8(b)(ii).

 

Preferred Liquidation Preference” means, as of any date of determination, with respect to each Preferred Unit an amount equal to $1,000 plus any accrued and unpaid amounts added thereto as a result of a Partial Accrual Election made in accordance with Section 4.8(b)(ii).

 

Preferred Partial Period Distributions” means, with respect to a redemption of a Preferred Unit, an amount equal to the Preferred Distribution Amount multiplied by a fraction, the numerator of which is the number of days elapsed in the Quarter in which such redemption occurs and the denominator of which is the actual number of days in such Quarter.

 

Preferred Quarterly Distribution” is defined in Section 4.8(b)(i).

 

Preferred Redemption Date” is defined in Section 4.8(d)(ii).

 

Preferred Redemption Price” means an amount per Preferred Unit equal to:

 

(i) if such Preferred Unit is redeemed on or prior to February 13, 2022, the sum of (A) the present values at such Preferred Redemption Date of (I) 3.00% of the sum of such Unit’s Preferred Liquidation Preference plus the Preferred Partial Period Distributions and (II) each scheduled payment of distributions to be made on such Preferred Unit on or after such Preferred Redemption Date through (and including) the date that is two years after the date hereof (assuming for purposes of this clause (II) that a Partial Accrual Election is made in respect of any Preferred Quarterly Distributions that begin at any time after the applicable Preferred Redemption Date and prior to the date that is two years from the date hereof, for proportionately the same number of Preferred Quarterly Distributions and in the same pattern as the number and pattern of Preferred Quarterly Distributions for which a Partial Accrual Election was made in respect of Preferred Quarterly Distributions that begin any time on or after the date hereof and on or prior to the applicable Preferred Redemption Date), in each case, discounted to the Preferred Redemption Date on a quarterly basis (calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed) at the Treasury Rate as of such Preferred Redemption Date plus 50 basis points, plus (B) such Unit’s Preferred Liquidation Preference plus (C) the Preferred Partial Period Distributions;

 

(ii) if such Preferred Unit is redeemed on or after February 14, 2022 and prior to February 13, 2023, the product of (a) the sum of (I) such Unit’s Preferred Liquidation Preference plus (II) the Preferred Partial Period Distributions multiplied by (b) 1.03; and

 

(iii) if such Preferred Unit is redeemed on or after February 13, 2023, the Preferred Liquidation Preference plus the Preferred Partial Period Distributions.

 

Preferred Required Unitholders means the Preferred Unitholders holding at least a majority of the outstanding Preferred Units in the aggregate.

 

Preferred Unitholder” means a Member that holds Preferred Units.

 

Preferred Unitholder Redemption Notice” is defined in Section 4.8(e)(ii).

 

Preferred Unitholder Redemption Right” is defined in Section 4.8(e)(i).

 

Preferred Units” is defined in Section 4.8.

 

Prime Rate” means, on any date of determination, a rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.

 

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Pro Forma Adjustment” means, for any Test Period, any adjustment to Consolidated EBITDA made in accordance with clauses (III) and (IV) to the proviso of the definition of Consolidated EBITDA.

 

Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” mean, with respect to compliance with any test, financial ratio or covenant hereunder required by the terms hereof or of the Credit Agreement as in effect on the date hereof to be made on a Pro Forma Basis, that (a) to the extent applicable, the Pro Forma Adjustment shall have been made and (b) all Specified Transactions and the following transactions in connection therewith that have been made during the applicable period of measurement or subsequent to such period and prior to or simultaneously with the event for which the calculation is made shall be deemed to have occurred as of the first day of the applicable period of measurement in such test, financial ratio or covenant: (i) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (A) in the case of a Disposition of all or substantially all Equity Securities in any Subsidiary of the Borrower or any division, product line, or facility used for operations of the Borrower or any of its Subsidiaries, shall be excluded and (B) in the case of a Permitted Acquisition or investment described in the definition of “Specified Transaction,” shall be included, (ii) any retirement of Indebtedness, and (iii) any Indebtedness incurred or assumed by the Borrower or any of its Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate that is or would be in effect with respect to such Indebtedness as at the relevant date of determination and interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period; provided that, without limiting the application of the Pro Forma Adjustment pursuant to clause (a) above, the foregoing pro forma adjustments may be applied to any such test or covenant solely to the extent that such adjustments are consistent with (and subject to any limitations set forth in) the definition of Consolidated EBITDA (including, without limitation, the provisos in clause (b) of the definition thereof) and give effect to operating expense reductions that are (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on the Company, the Borrower or any of its Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of Pro Forma Adjustment, provided further that all pro forma adjustments made pursuant to this definition (including the Pro Forma Adjustment) with respect to the Transactions shall be consistent in character and amount with the adjustments reflected in the Pro Forma Financial Statements (as defined in the Credit Agreement as in effect on the date hereof).

 

Proceeding” is defined in Section 7.4(a).

 

Profits” or “Losses” means, for each Fiscal Year or other taxable period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(a) any income or gain of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

 

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(b) any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, shall be subtracted from such taxable income or loss;

 

(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant to subsection (b) or (c) of the definition of Gross Asset Value above, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the Company asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the Company asset) from the disposition of such asset and shall, except to the extent allocated pursuant to Section 5.2, be taken into account for purposes of computing Profits or Losses;

 

(d) gain or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed with reference to the Gross Asset Value of the asset disposed of notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

 

(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation;

 

(f) to the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

 

(g) any items of income, gain, loss or deduction which are specifically allocated pursuant to the provisions of Section 5.2 shall not be taken into account in computing Profits or Losses for any taxable year, but such items available to be specially allocated pursuant to Section 5.2 will be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above.

 

Property” means all real and personal property owned by the Company from time to time, including both tangible and intangible property.

 

PubCo” is defined in the preamble to this Agreement.

 

PubCo Common Stock” means all classes and series of common stock of PubCo, including the Class A Common Stock and the Class B Common Stock.

 

Purchase Agreement” is defined in the recitals to this Agreement.

 

Quarter” means a fiscal quarter of the Company.

 

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Reclassification Event” means any of the following: (a) any reclassification or recapitalization of PubCo Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination or any transaction subject to Section 4.1(g)), (b) any merger, consolidation or other combination involving PubCo or (c) any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of PubCo to any other Person, in each of clauses (a), (b) or (c), as a result of which holders of PubCo Common Stock shall be entitled to receive cash, securities or other property in exchange for their shares of PubCo Common Stock.

 

Record Date” means the date established by the Managing Member or otherwise in accordance with this Agreement for determining the identity of the Preferred Unitholders entitled to receive any distribution.

 

Redeeming Member” is defined in Section 4.6(a)(i).

 

Redemption” is defined in Section 4.6(a)(i).

 

Redemption Date” means (a) the later of (i) the date that is five Business Days after the Redemption Notice Date and (ii) if the Company or PubCo has made a valid Cash Election with respect to the relevant Redemption, the first Business Day on which the Company or PubCo has available funds to pay the Cash Election Amount, which in no event shall be more than ten Business Days after the Redemption Notice Date, or (b) such later date (i) specified in the Redemption Notice or (ii) on which a contingency described in Section 4.6(a)(ii)(C) that is specified in the Redemption Notice is satisfied.

 

Redemption Notice” is defined in Section 4.6(a)(ii).

 

Redemption Notice Date” is defined in Section 4.6(a)(ii).

 

Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among PubCo and the other parties thereto (together with any other parties that become a party thereto from time to time upon execution of a joinder in accordance with the terms thereof by any successor or assign to any party to such Agreement).

 

Regulatory Allocations” is defined in Section 5.2(k).

 

Restricted Payment” means (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Securities in the Company, the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Securities in the Company, the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Securities in the Company, the Borrower or any Subsidiary and (ii) any payment of any fee or similar amount to any holder of Equity Securities of the Company, the Borrower or any Subsidiary in its capacity as such in connection with any amendment, modification, waiver, consent or similar action on, or with respect to, any such Equity Securities or any documentation governing the same.

 

Retraction Notice” is defined in Section 4.6(b)(i).

 

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Revolving Commitment” shall have the meaning ascribed to such term in the Credit Agreement as in effect on the date hereof.

 

Securities Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Specified Transaction” means, with respect to any period, any investment, sale, transfer or other disposition of assets, incurrence or repayment of Indebtedness, Restricted Payment, subsidiary designation or other event that by the terms hereof or of the Loan Documents (as defined in the Credit Agreement as in effect on the date hereof) requires “Pro Forma Compliance” with a test or covenant hereunder or requires such test or covenant to be calculated on a Pro Forma Basis.

 

Subscription Agreement” is defined in the recitals to this Agreement.

 

Subsidiary” means, with respect to any specified Person, any other Person with respect to which such specified Person (a) has, directly or indirectly, the power, through the ownership of securities or otherwise, to elect a majority of directors or similar managing body or (b) beneficially owns, directly or indirectly, a majority of such Person’s Equity Securities.

 

Tax Distribution Date” means any date that is two Business Days prior to (a) the date on which estimated federal income tax payments are required to be made by calendar year corporate taxpayers and (b) the due date for federal income tax returns of corporate calendar year taxpayers (without regard to extensions).

 

Test Period” means, at any date of determination, the period of four (4) consecutive fiscal quarters of the Borrower then last ended as of such time for which financial statements have been delivered (or were required to have been delivered) pursuant to the Credit Agreement as in effect on the date hereof; provided that for any date of determination before the delivery of the first financial statements pursuant to the Credit Agreement, the Test Period shall be the period of four (4) consecutive fiscal quarters of the Borrower ended as of December 31, 2019.

 

Total Net Leverage Ratio” means, as of any date of determination, the ratio, on a Pro Forma Basis, of (a) Consolidated Total Indebtedness as of such date to (b) Consolidated EBITDA for the most recently completed Test Period.

 

Trading Day” means a day on which the Nasdaq Global Market or such other principal United States securities exchange on which the Class A Common Stock is listed or admitted to trading and is open for the transaction of business (unless such trading shall have been suspended for the entire day).

 

Transaction Costs” means all fees, costs and expenses incurred or payable by the Company, the Borrower or any Subsidiary in connection with the Transactions.

 

Transactions” has the meaning ascribed to such term in the Credit Agreement as in effect on the date hereof.

 

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Transfer” means, when used as a noun, any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of law or otherwise), transfer, sale, pledge or hypothecation or other disposition and, when used as a verb, voluntarily or involuntarily, directly or indirectly (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor or any Person that controls the Transferor, by operation of law or otherwise), to transfer, sell, pledge or hypothecate or otherwise dispose of. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

 

Transfer Agent” is defined in Section 4.6(a)(iii).

 

Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 that has become publicly available at least two Business Days prior to such date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to February 13, 2022; provided, however, that if the period from the redemption date to February 13, 2022 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

Treasury Regulations” means pronouncements, as amended from time to time, or their successor pronouncements, which clarify, interpret and apply the provisions of the Code, and which are designated as “Treasury Regulations” by the United States Department of the Treasury.

 

Uniform Commercial Code” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of Delaware.

 

Units” means the Common Units, Preferred Units and any other Equity Security of the Company.

 

Section 1.2 Interpretive Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

(a) the terms defined in Section 1.1 are applicable to the singular as well as the plural forms of such terms;

 

(b) all accounting terms not otherwise defined herein have the meanings assigned under GAAP;

 

(c) all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars;

 

(d) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

 

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(e) whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”;

 

(f) “or” is not exclusive;

 

(g) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms; and

 

(h) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

Article II
ORGANIZATION OF THE LIMITED LIABILITY COMPANY

 

Section 2.1 Formation. The Company has been formed as a limited liability company subject to the provisions of the Act upon the terms, provisions and conditions set forth in this Agreement.

 

Section 2.2 Filing. The Company’s Certificate of Formation has been filed with the Secretary of State of the State of Delaware in accordance with the Act. The Members shall execute such further documents (including amendments to such Certificate of Formation) and take such further action as is appropriate to comply with the requirements of Law for the operation of a limited liability company in all states and counties where the Company may conduct its business.

 

Section 2.3 Name. The name of the Company is “Atlas TC Holdings LLC” and all business of the Company shall be conducted in such name or, in the discretion of the Managing Member, under any other name.

 

Section 2.4 Registered Office: Registered Agent. The location of the registered office of the Company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, or at such other place as the Managing Member from time to time may select. The name and address for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, New Castle County, Wilmington, Delaware 19801, or such other qualified Person as the Managing Member may designate from time to time and its business address.

 

Section 2.5 Principal Place of Business. The principal place of business of the Company shall be located in such place as is determined by the Managing Member from time to time.

 

Section 2.6 Purpose: Powers. The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act. The Company shall have the power and authority to take any and all actions and engage in any and all activities necessary, appropriate, desirable, advisable, ancillary or incidental to the accomplishment of the foregoing purpose.

 

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Section 2.7 Term. The term of the Company commenced on the date of filing of the Certificate of Formation of the Company with the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue indefinitely. The Company may be dissolved and its affairs wound up only in accordance with Article XI.

 

Section 2.8 Intent. It is the intent of the Members that the Company be operated in a manner consistent with its treatment as a “partnership” for U.S. federal and applicable state and local income tax purposes. Neither the Company nor any Member shall take any action inconsistent with the express intent of the parties hereto as set forth in this Section 2.8.

 

Article III
CLOSING TRANSACTIONS

 

Section 3.1 Purchase Agreement Transactions.

 

(a) Pursuant to the terms of the Purchase Agreement, at the Effective Time, Atlas transferred 100% of the Interests of the Company to Buyer in exchange for $395,470,111.91, 23,902,989 shares of Class B Common Stock and 23,902,989 Common Units. The total number of Common Units and shares of Class B Common Stock held by Atlas and PubCo immediately following the consummation of the transactions contemplated by this Section 3.1 is set forth on Exhibit A hereto.

(b) PubCo shall take all actions necessary to cause the stock records of the Class B Common Stock to be held on the books and records of the Transfer Agent.

 

Article IV
OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

 

Section 4.1 Authorized Units; General Provisions with Respect to Units.

 

(a) Subject to the provisions of this Agreement, the Company shall be authorized to issue from time to time such number of Common Units, Preferred Units and such other Equity Securities as the Managing Member shall determine in accordance with Section 4.3. Each authorized Unit may be issued pursuant to such agreements as the Managing Member shall approve, including pursuant to options and warrants. The Company may reissue any Units that have been repurchased or acquired by the Company; provided, that any such issuance, and the admission of any Person as a Member in connection therewith, is otherwise made in accordance with the provisions of this Agreement.

 

(b) Each outstanding Common Unit shall be identical (except as provided in Section 4.3).

 

(c) Initially, the Units will be uncertificated. If the Managing Member determines that it is in the interest of the Company to issue certificates representing the Units, certificates will be issued and the Units will be represented by those certificates, and this Agreement shall be amended as the Managing Member shall determine necessary or desirable to reflect the issuance of certificated Units for purposes of the Uniform Commercial Code. Nothing contained in this Section 4.1(c) shall be deemed to authorize or permit any Member to Transfer its Units except as otherwise permitted under this Agreement.

 

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(d) The total number and type of Units issued and outstanding and held by the Members is set forth on Exhibit A (as amended from time to time in accordance with the terms of this Agreement) as of the date set forth therein.

 

(e) If, at any time after the Effective Time, PubCo issues a share of its Class A Common Stock or any other Equity Security of PubCo (other than shares of Class B Common Stock), (i) the Company shall concurrently issue to PubCo one Common Unit (if PubCo issues a share of Class A Common Stock), or such other Equity Security of the Company (if PubCo issues Equity Securities other than Class A Common Stock) corresponding to the Equity Securities issued by PubCo, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo to be issued and (ii) PubCo shall concurrently contribute to the Company the net proceeds or other property received by PubCo, if any, for such share of Class A Common Stock or other Equity Security; provided, however, that if PubCo issues any shares of Class A Common Stock in order to acquire or fund the acquisition from a Member (other than PubCo) of a number of Common Units (and shares of Class B Common Stock) equal to the number of shares of Class A Common Stock so issued, then the Company shall not issue any new Common Units in connection therewith and, where such shares of Class A Common Stock have been issued for cash to fund an acquisition, PubCo shall not be required to transfer such net proceeds to the Company, and such net proceeds shall instead be transferred to such Member as consideration for such acquisition. Notwithstanding the foregoing, this Section 4.1(e) shall not apply to the issuance and distribution to holders of shares of PubCo Common Stock of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholders rights plan (and upon any redemption of Common Units for Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right under such plan), or to the issuance under PubCo’s employee benefit plans of any warrants, options, stock appreciation right, restricted stock, restricted stock units, performance-based award or other rights to acquire Equity Securities of PubCo or rights or property that may be converted into or settled in Equity Securities of PubCo, but shall in each of the foregoing cases apply to the issuance of Equity Securities of PubCo in connection with the exercise or settlement of such rights, warrants, options, stock appreciation right, restricted stock, restricted stock units, performance-based award or other rights or property. Except pursuant to Section 4.6, (x) the Company may not issue any additional Units to PubCo or any of its Subsidiaries unless substantially simultaneously therewith PubCo or such Subsidiary issues or sells an equal number of newly-issued shares of Class A Common Stock to another Person and contributes the net proceeds therefrom to the Company, and (y) the Company may not issue any other Equity Securities of the Company to PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary issues or sells, to another Person, an equal number of newly-issued shares of a new class or series of Equity Securities of PubCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company and contributes the net proceeds therefrom to the Company. If at any time PubCo or any of its Subsidiaries (other than the Company and its Subsidiaries) issues Debt Securities, PubCo or such Subsidiary shall transfer to the Company (in a manner to be determined by the Managing Member in its reasonable discretion) the proceeds received by PubCo or such Subsidiary, as applicable, in exchange for such Debt Securities in a manner that directly or indirectly burdens the Company with the repayment of the Debt Securities. In the event any Equity Security outstanding at PubCo is exercised or otherwise converted and, as a result, any shares of Class A Common Stock or other Equity Securities of PubCo are issued, (i) the corresponding Equity Security outstanding at the Company shall be similarly exercised or otherwise converted, as applicable, and an equivalent number of Units or other Equity Securities of the Company shall be issued to PubCo as contemplated by the first sentence of this Section 4.1(e), and (ii) PubCo shall concurrently contribute to the Company the net proceeds received by PubCo from any such exercise.

 

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(f) PubCo or any of its Subsidiaries may not redeem, repurchase or otherwise acquire (i) any shares of Class A Common Stock (including upon forfeiture of any unvested shares of Class A Common Stock) unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Common Units for the same price per security or (ii) any other Equity Securities of PubCo, unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo for the same price per security. The Company may not redeem, repurchase or otherwise acquire (x) except pursuant to Section 4.6, any Common Units from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires an equal number of shares of Class A Common Stock for the same price per security from holders thereof, or (y) any other Equity Securities of the Company from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of PubCo of a corresponding class or series with substantially the same rights to dividends and distributions (including distribution upon liquidation) and other economic rights as those of such Equity Securities of PubCo. Notwithstanding the foregoing, to the extent that any consideration payable by PubCo in connection with the redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of PubCo or any of its Subsidiaries consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant other than those issued under PubCo’s employee benefit plans), then the redemption or repurchase of the corresponding Units or other Equity Securities of the Company shall be effectuated in an equivalent manner.

 

(g) The Company shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Common Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding PubCo Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities. PubCo shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding PubCo Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

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Section 4.2 Voting Rights. No Member has any voting right except with respect to those matters specifically reserved for a Member vote under the Act and for matters expressly requiring the approval of Members under this Agreement. Except as otherwise required by the Act, each Unit will entitle the holder thereof to one vote on all matters to be voted on by the Members. Except as otherwise expressly provided in this Agreement, the holders of Units having voting rights will vote together as a single class on all matters to be approved by the Members.

 

Section 4.3 Capital Contributions: Unit Ownership.

 

(a) Capital Contributions. Except as otherwise set forth in Section 4.1(e), no Member shall be required to make additional Capital Contributions.

 

(b) Issuance of Additional Units or Interests. Except as otherwise expressly provided in this Agreement, the Managing Member shall have the right (subject to the limitations of Section 4.8(c)), in its sole discretion, to authorize and cause the Company to issue on such terms (including price) as may be determined by the Managing Member (i) subject to the limitations of Section 4.1, additional Units or other Equity Securities in the Company (including creating preferred interests or other classes or series of interests having such rights, preferences and privileges as determined by the Managing Member in its sole discretion, which rights, preferences and privileges may be senior to the Common Units) and (ii) obligations, evidences of Indebtedness or other securities or interests convertible or exchangeable for Common Units or other Equity Securities in the Company; provided, that, at any time following the date hereof, in each case the Company shall not issue Equity Securities in the Company to any Person unless such Person shall have executed a counterpart to this Agreement and all other documents, agreements or instruments deemed necessary or desirable in the discretion of the Managing Member. Upon such issuance and execution, such Person shall be admitted as a Member of the Company. In that event, the Managing Member shall amend Exhibit A to reflect such additional issuances. Subject to Section 12.1, the Managing Member is hereby authorized to amend this Agreement to set forth the designations, preferences, rights, powers and duties of such additional Units or other Equity Securities in the Company, or such other amendments that the Managing Member determines to be otherwise necessary or appropriate in connection with the creation, authorization or issuance of, any class or series of Units or other Equity Securities in the Company pursuant to this Section 4.3(b); provided, that notwithstanding the foregoing, the Managing Member shall have the right to amend this Agreement as set forth in this sentence without the approval of any other Person (including any Member) and notwithstanding any other provision of this Agreement (including Section 12.1) if such amendment is necessary, and then only to the extent necessary, in order to consummate any offering of shares of PubCo Common Stock or other Equity Securities of PubCo; provided, that the designations, preferences, rights, powers and duties of any such additional Units or other Equity Securities of the Company as set forth in such amendment are substantially similar to those applicable to such shares of PubCo Common Stock or other Equity Securities of PubCo.

 

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Section 4.4 Capital Accounts. A Capital Account shall be maintained for each Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such regulations, the other provisions of this Agreement. Each Member’s Capital Account balance as of the date hereof shall be equal to the amount of its respective Closing Date Capital Account Balance set forth on the books and records of the Company and in accordance with Code Section 704(b). Thereafter, each Member’s Capital Account shall be (a) increased by (i) allocations to such Member of Profits pursuant to Section 5.1 and any other items of income or gain allocated to such Member pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities assumed by the Company and any Liabilities to which the asset is subject) contributed to the Company by such Member, and (iii) any other increases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv), and (b) decreased by (i) allocations to such Member of Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Member pursuant to the provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed by the Member and any Liabilities to which the asset is subject) distributed to such Member, and (iii) any other decreases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv). In the event of a Transfer of Common Units made in accordance with this Agreement (including a deemed Transfer for U.S. federal income tax purposes as described in Section 4.6(a)(v)), the Capital Account of the Transferor that is attributable to the Transferred Units shall carry over to the Transferee Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(l).

 

Section 4.5 Other Matters.

 

(a) No Member shall demand or receive a return on or of its Capital Contributions or withdraw from the Company without the consent of the Managing Member. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash.

 

(b) No Member shall receive any interest, salary, compensation, draw or reimbursement with respect to its Capital Contributions or its Capital Account, or for services rendered or expenses incurred on behalf of the Company or otherwise in its capacity as a Member, except as otherwise provided in Section 4.8(h), Section 7.8 or as otherwise contemplated by this Agreement.

 

(c) The Liability of each Member shall be limited as set forth in the Act and other applicable Law and, except as expressly set forth in this Agreement or required by Law, no Member (or any of its Affiliates) shall be personally liable, whether to the Company, any of the other Members, the creditors of the Company, or any other third party, for any debt or Liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company.

 

(d) Except as otherwise required by the Act, a Member shall not be required to restore a deficit balance in such Member’s Capital Account, to lend any funds to the Company or, except as otherwise set forth herein, to make any additional contributions or payments to the Company.

 

(e) The Company shall not be obligated to repay any Capital Contributions of any Member.

 

Section 4.6 Redemption of Common Units.

 

(a) Redemption.

 

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(i) Upon the terms and subject to the conditions set forth in this Section 4.6, Bernhard Capital Partners Management LP and its Affiliates shall, and after August 13, 2020, each of the other Members (other than PubCo and its wholly-owned Subsidiaries) (each, a “Redeeming Member”) shall, be entitled to cause the Company to redeem all or a portion of such Member’s Common Units (together with the surrender and delivery of the same number of shares of Class B Common Stock) for either (x) the delivery by the Company of a number of shares of Class A Common Stock equal to the number of Common Units surrendered (a “Redemption”) or (y) at the Company’s election made in accordance with Section 4.6(a)(iv), the delivery by the Company of cash equal to the Cash Election Amount calculated with respect to such Redemption. Absent the prior written consent of the Managing Member, with respect to each Redemption, a Redeeming Member shall be:

 

(A) required to redeem at least a number of Common Units equal to the lesser of (x) 1,000 Common Units and (y) all of the Common Units then held by such Redeeming Member; provided, that a Redeeming Member shall be permitted to effect a Redemption of Common Units at least as frequently as once per calendar quarter; and

 

(B) Upon the Redemption of all of a Member’s Common Units, such Member shall, for the avoidance of doubt, cease to be a Member of the Company.

 

(ii) In order to exercise the Redemption right under Section 4.6(a)(i), the Redeeming Member shall provide written notice (the “Redemption Notice”) to the Company, with a copy to PubCo (the date of delivery of such Redemption Notice, the “Redemption Notice Date”), stating:

 

(A) the number of Common Units (together with the surrender and delivery of an equal number of shares of Class B Common Stock) the Redeeming Member elects to have the Company redeem;

 

(B) if the shares of Class A Common Stock to be received are to be issued other than in the name of the Redeeming Member, the name(s) of the Person(s) in whose name or on whose order the shares of Class A Common Stock are to be issued;

 

(C) whether the exercise of the Redemption right is to be contingent (including as to timing) upon the closing of (i) an underwritten offering of the shares of Class A Common Stock for which the Common Units will be redeemed, (ii) any announced merger, consolidation or (iii) other transaction or event to which PubCo is a party in which the shares of Class A Common Stock would be exchanged or converted or become exchangeable for or convertible into cash or other securities or property; and

 

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(D) if the Redeeming Member requires the Redemption to take place on a specific Business Day, such Business Day; provided, that, any such specified Business Day shall not be earlier than the date that would otherwise apply pursuant to clause (a) of the definition of Redemption Date.

 

(iii) If the Common Units to be redeemed (or the shares of Class B Common Stock to be transferred and surrendered) by the Redeeming Member are represented by a certificate or certificates, prior to the Redemption Date, the Redeeming Member shall also present and surrender such certificate or certificates representing such Common Units (or shares of Class B Common Stock) during normal business hours at the principal executive offices of the Company, or if any agent for the registration or transfer of Class A Common Stock is then duly appointed and acting (the “Transfer Agent”), at the office of the Transfer Agent. If required by the Managing Member or the Transfer Agent, the Redeeming Member shall also deliver, prior to the Redemption Date, instruments of transfer, in forms reasonably satisfactory to the Managing Member and the Transfer Agent, duly executed by the Redeeming Member or the Redeeming Member’s duly authorized representative.

 

(iv) Upon receipt of a Redemption Notice, the Company shall be entitled to elect (a “Cash Election”) to settle the Redemption by delivering to the Redeeming Member, in lieu of the applicable number of shares of Class A Common Stock that would be received in such Redemption, an amount of cash equal to the Cash Election Amount for such Redemption. In order to make a Cash Election with respect to a Redemption, the Company must provide written notice of such election (a “Cash Election Notice”) to the Redeeming Member (with a copy to PubCo) prior to 5:00 p.m., Texas time, on the third Business Day after the Redemption Notice Date. If the Company fails to provide such written notice prior to such time, it shall not be entitled to make a Cash Election with respect to such Redemption.

 

(v) For U.S. federal and applicable state and local income tax purposes, each of the Redeeming Member, the Company and PubCo, as the case may be, agree to treat each Redemption and, in the event PubCo exercises its Call Right, each transaction between the Redeeming Member and PubCo as a result of such exercise of its Call Right, as a sale of the Redeeming Member’s Common Units (together with the same number of shares of Class B Common Stock) to PubCo in exchange for shares of Class A Common Stock or cash, as applicable.

 

(b) Redemption Procedures.

 

(i) Subject to the satisfaction of any contingency described in Section 4.6(a)(ii)(C) or (D) that is specified in the relevant Redemption Notice, the Redemption shall be completed on the Redemption Date; provided, that if a valid Cash Election has not been made, the Redeeming Member may, at any time prior to the Redemption Date, revoke its Redemption Notice by giving written notice (the “Retraction Notice”) to the Company (with a copy to PubCo); provided, however, that in no event may the Redeeming Member deliver a Retraction Notice later than two Business Days prior to the applicable Redemption Date. The timely delivery of a Retraction Notice shall terminate all of the Redeeming Member’s, the Company’s and PubCo’s rights and obligations arising from the retracted Redemption Notice.

 

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(ii) Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 4.6(b)(i) or PubCo has elected its Call Right pursuant to Section 4.6(f), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date) (A) the Redeeming Member shall transfer and surrender the Common Units to be redeemed (and a corresponding number of shares of Class B Common Stock) to the Company, in each case free and clear of all liens and encumbrances, (B) PubCo shall contribute to the Company the consideration the Redeeming Member is entitled to receive under Section 4.6(a)(i) or Section 4.6(a)(iv), as applicable, and as described in Section 4.1(e), the Company shall issue to PubCo a number of Common Units or other Equity Securities of the Company as consideration for such contribution, (C) the Company shall (x) cancel the redeemed Common Units, (y) transfer to the Redeeming Member the consideration the Redeeming Member is entitled to receive under Section 4.6(a)(i) or Section 4.6(a)(iv), as applicable, and (z) if the Common Units are certificated, issue to the Redeeming Member a certificate for a number of Common Units equal to the difference (if any) between the number of Common Units evidenced by the certificate surrendered by the Redeeming Member pursuant to Section 4.6(b)(ii)(A) and the number of redeemed Common Units and (D) PubCo shall cancel the surrendered shares of Class B Common Stock. Notwithstanding any other provisions of this Agreement to the contrary, in the event that the Company makes a valid Cash Election, PubCo shall only be obligated to contribute to the Company an amount in cash equal to the net proceeds (after deduction of any underwriters’ discounts or commissions and brokers’ fees or commissions (including, for the avoidance of doubt, any deferred discounts or commissions and brokers’ fees or commissions payable in connection with or as a result of such public offering) (such difference, the “Discount”)) from the sale by PubCo of a number of shares of Class A Common Stock equal to the number of Common Units and Class B Common Stock to be redeemed with such cash or from the sale of other PubCo Equity Securities used to fund the Cash Election Amount; provided, that PubCo’s Capital Account shall be increased by an amount equal to any such Discounts relating to such sale of shares of Class A Common Stock or other PubCo Equity Securities in accordance with Section 7.8; provided, further, that the contribution of such net proceeds shall in no event affect the Redeeming Member’s right to receive the Cash Election Amount.

 

(c) Splits, Distributions and Reclassifications. If (i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the shares of Class A Common Stock are converted or changed into another security, securities or other property (other than as a result of a subdivision or combination or any transaction subject to Section 4.1(g)), or (ii) PubCo, by dividend or otherwise, distributes to all holders of the shares of Class A Common Stock evidences of its Indebtedness or assets, including securities (including shares of Class A Common Stock and any rights, options or warrants to all holders of the shares of Class A Common Stock to subscribe for, to purchase or to otherwise acquire shares of Class A Common Stock, or other securities or rights convertible into, or exchangeable or exercisable for, shares of Class A Common Stock) but excluding any cash dividend or distribution as well as any such distribution of Indebtedness or assets received by PubCo from the Company in respect of the Common Units, then upon any subsequent Redemption, in addition to the shares of Class A Common Stock or the Cash Election Amount, as applicable, each Member shall be entitled to receive the amount of such security, securities or other property that such Member would have received if such Redemption had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization, other similar transaction, dividend or other distribution, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the shares of Class A Common Stock are converted or changed into another security, securities or other property, or any dividend or distribution (other than an excluded dividend or distribution, as described above), this Section 4.6 shall continue to be applicable, mutatis mutandis, with respect to such security or other property. This Agreement shall apply to the Common Units held by the Members and their Transferees as of the date hereof, as well as any Common Units hereafter acquired by a Member and his or her or its Transferees.

 

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(d) PubCo Covenants. PubCo shall at all times keep available, solely for the purpose of issuance upon a Redemption, out of its authorized but unissued shares of Class A Common Stock, such number of shares of Class A Common Stock that shall be issuable upon the Redemption of all outstanding Common Units (other than those Common Units held by PubCo or any Subsidiary of PubCo); provided, that nothing contained herein shall be construed to preclude PubCo from satisfying its obligations with respect to a Redemption by delivery of cash pursuant to a Cash Election or shares of Class A Common Stock that are held in the treasury of PubCo. PubCo covenants that all shares of Class A Common Stock that shall be issued upon a Redemption shall, upon issuance thereof, be validly issued, fully paid and non-assessable. In addition, for so long as the shares of Class A Common Stock are listed on a National Securities Exchange, PubCo shall use its reasonable best efforts to cause all shares of Class A Common Stock issued upon a Redemption to be listed on such National Securities Exchange at the time of such issuance. For purposes of this Section 4.6(d), references to the “Class A Common Stock” shall be deemed to include any Equity Securities issued or issuable as a result of any reclassification, combination, subdivision or similar of the Class A Common Stock.

 

(e) Redemption Taxes. The issuance of shares of Class A Common Stock upon a Redemption shall be made without charge to the Redeeming Member for any stamp or other similar tax in respect of such issuance; provided, however, that if any such shares of Class A Common Stock are to be issued in a name other than that of the Redeeming Member, then the Person or Persons in whose name the shares are to be issued shall pay to PubCo the amount of any tax that may be payable in respect of any Transfer involved in such issuance or shall establish to the satisfaction of PubCo that such tax has been paid or is not payable.

 

(f) PubCo Call Rights.

 

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(i) Notwithstanding anything to the contrary in this Section 4.6, a Redeeming Member shall be deemed to have offered to sell its Common Units as described in the Redemption Notice to PubCo, and PubCo may, in its sole discretion, by delivery of a notice in accordance with, and subject to the terms of, this Section 4.6(f) (a “Call Election Notice”), elect to purchase directly and acquire such Common Units (together with the surrender and delivery of the same number of shares of Class B Common Stock) on the Redemption Date by paying to the Redeeming Member (or, on the Redeeming Member’s written order and Section 4.6(e), its designee) that number of shares of Class A Common Stock the Redeeming Member (or its designee) would otherwise receive pursuant to Section 4.6(a)(i) or, at PubCo’s election, an amount of cash equal to the Cash Election Amount of such shares of Class A Common Stock (the “Call Right”), whereupon PubCo shall acquire the Common Units offered for redemption by the Redeeming Member (together with the surrender and delivery of the same number of shares of Class B Common Stock to PubCo for cancellation). PubCo shall be treated for all purposes of this Agreement as the owner of such Common Units; provided, that if PubCo funds the Cash Election Amount other than through the issuance of shares of Class A Common Stock, such Common Units will be reclassified into another Equity Security of the Company if the Managing Member determines such reclassification is necessary.

 

(ii) PubCo may, at any time prior to the Redemption Date, in its sole discretion deliver a Call Election Notice to the Company and the Redeeming Member setting forth its election to exercise its Call Right. A Call Election Notice may be revoked by PubCo at any time; provided, that any such revocation does not prejudice the ability of the parties to consummate a Redemption on the Redemption Date. Except as otherwise provided by this Section 4.6(f), an exercise of the Call Right shall be consummated pursuant to the same timeframe and in the same manner as the relevant Redemption would have been consummated if PubCo had not delivered a Call Election Notice.

 

(g) Distribution Rights. No Redemption shall impair the right of the Redeeming Member to receive any distributions payable on the Common Units redeemed pursuant to such Redemption in respect of a record date that occurs prior to the Redemption Date for such Redemption. For the avoidance of doubt, no Redeeming Member, or a Person designated by a Redeeming Member to receive shares of Class A Common Stock, shall be entitled to receive, with respect to such record date, distributions or dividends both on Common Units redeemed by the Company from such Redeeming Member and on shares of Class A Common Stock received by such Redeeming Member, or other Person so designated, if applicable, in such Redemption.

 

(h) PubCo Membership. Any Common Units acquired by the Company under this Section 4.6 and Transferred by the Company to PubCo shall remain outstanding and shall not be cancelled as a result of their acquisition by the Company. Notwithstanding any other provision of this Agreement, PubCo shall continue as a Member of the Company with respect to any Common Units or other Equity Securities in the Company it receives under this Agreement (including under this Section 4.6 in connection with any Redemption).

 

(i) Redemption Restrictions. The Managing Member may impose additional limitations and restrictions on Redemptions (including limiting Redemptions or creating priority procedures for Redemptions), to the extent it determines, in Good Faith, such limitations and restrictions to be necessary or appropriate to avoid undue risk that the Company may be classified as a “publicly traded partnership” within the meaning of Section 7704 of the Code.

 

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(j) Tax Certificates. In connection with any Redemption, the Redeeming Member shall deliver to PubCo or the Company, as applicable, a certificate, dated as of the date of the Redemption and sworn under penalties of perjury, in a form reasonably acceptable to PubCo or the Company, as applicable, certifying as to such Redeeming Member’s taxpayer identification number and that such Redeeming Member is a not a foreign person for purposes of Section 1445 and Section 1446(f) of the Code.

 

(k) Representations and Warranties. In connection with any Redemption or exercise of a Call Right, upon the acceptance of the Class A Common Stock or an amount of cash equal to the Cash Election Amount, the Redeeming Member shall represent and warrant that the Redeeming Member is the owner of the number of Common Units the Redeeming Member is electing to have the Company redeem and that such Common Units are not subject to any liens or restrictions to transfer the shares (other than restrictions imposed by this Agreement and PubCo’s Second Amended and Restated Certificate of Incorporation).

 

Section 4.7 Representations and Warranties of the Members. Unless otherwise set forth in an agreement between the Company and a Member, each Member severally (and not jointly) represents and warrants to the Company and each other Member as of the date of such Member’s admittance to the Company that (i) to the extent it is not a natural person, it is duly formed, validly existing and in good standing under the Laws of the jurisdiction of its formation, and if required by Law is duly qualified to conduct business and is in good standing in the jurisdiction of its principal place of business (if not formed in such jurisdiction); (ii) to the extent it is not a natural person, it has full corporate, limited liability company, partnership, trust or other applicable power and authority to execute and deliver this Agreement and to perform its obligations hereunder and all necessary actions by the board of directors, shareholders, managers, members, partners, trustees, beneficiaries or other Persons necessary for the due authorization, execution, delivery and performance of this Agreement by that Member have been duly taken; (iii) it has duly executed and delivered this Agreement, and this Agreement is enforceable against such Member in accordance with its terms, subject to bankruptcy, moratorium, insolvency and other Laws generally affecting creditors’ rights and general principles of equity (whether applied in a proceeding in a court of law or equity); (iv) its authorization, execution, delivery, and performance of this Agreement does not breach or conflict with or constitute a default under (A) such Member’s charter or other governing documents to the extent it is not a natural person or (B) any material obligation under any other material agreement or arrangement to which that Member is a party or by which it is bound; and (v) it: (A) has been furnished with such information about the Company and the Interest as that Member has requested, (B) has made its own independent inquiry and investigation into, and based thereon has formed an independent judgment concerning, the Company and such Member’s Interest herein, (C) has adequate means of providing for its current needs and possible contingencies, is able to bear the economic risks of this investment and has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such loss should occur, (D) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (E) is, or is controlled by, an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D, promulgated under the Securities Act, and (F) understands and agrees that its Interest shall not be sold, pledged, hypothecated or otherwise Transferred except in accordance with the terms of this Agreement and pursuant to an effective registration statement under the Securities Act or an applicable exemption from registration and/or qualification under the Securities Act and applicable state securities Laws.

 

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Section 4.8 Preferred Units.

 

(a) General. There is hereby created a class of Units designated as “Series A Preferred Units” (such Units the “Preferred Units”), with the designations, preferences and relative participating, optional or other special rights, privileges, powers, duties and obligations as are set forth in this Agreement. A total of 145,000 Preferred Units shall be issued by the Company on February 13, 2020 pursuant to the terms and conditions of the Subscription Agreement. Each Preferred Unit shall constitute a “security” within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

 

(b) Rights of Preferred Units.

 

(i) Commencing with the Quarter ending on March 31, 2020 and continuing through the applicable Preferred Redemption Date, each Preferred Unitholder as of an applicable Record Date for each Quarter shall be entitled to receive, in respect of each Preferred Unit held by such Preferred Unitholder, out of funds legally available therefor, cumulative distributions in cash (subject to clause (b)(ii) below) in respect of such Quarter equal to the Preferred Distribution Amount for such Quarter (the “Preferred Quarterly Distribution”). Each Preferred Quarterly Distribution shall be payable quarterly in arrears at the last day of each Quarter or, if such last day is not a Business Day, the next succeeding Business Day (each such payment date, a “Preferred Distribution Payment Date”).

 

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(ii) Notwithstanding anything to the contrary in Section 4.8(b)(i), the Company may, at the sole discretion of the Managing Member acting at the direction of the Board, with respect to any Preferred Distribution Amount in respect of any Quarter, elect in any such Quarter (a “Partial Accrual Election”) to (A) pay in cash an amount equal to the Preferred Quarterly Distribution, calculated as if the Preferred Distribution Amount was equal to 1.25% and (B) add an amount equal to 1.8125% of the applicable Preferred Liquidation Preference to the Preferred Liquidation Preference in lieu of paying the Preferred Quarterly Distribution in such Quarter.  If the Company is not permitted to pay or declare in its entirety a Preferred Distribution Amount in respect of any Quarter because of a limitation under the Credit Agreement and such cash payment has not been made by the Company within 5 Business Days after receipt of notice thereof by a Preferred Unitholder, then an amount equal to the cash amount that would have been payable if the Preferred Distribution Amount was equal to 3.5625% shall be added to the Preferred Liquidation Preference in lieu of paying the Preferred Quarterly Distribution in such Quarter and each of the following Quarters until a Preferred Quarterly Distribution is paid in full in cash (excluding the portion of such Preferred Quarterly Distribution described in clause (B) of the immediately preceding sentence which may be payable in any given Quarter if a Partial Accrual Election was made in such Quarter). Notwithstanding anything in this Agreement to the contrary, the Company shall not be permitted to, and shall not, declare or make, any distributions, redemptions or repurchases in respect of any Common Units (other than as set forth in Section 4.6 and Section 6.2) until all Preferred Quarterly Distributions in respect of all prior Quarters are paid in full or added to the Preferred Liquidation Preference in accordance with this Section 4.8(b)(ii). Notwithstanding the foregoing, if the Company, the Borrower or any of their respective Subsidiaries directly or indirectly amend, restate, amend and restate, supplement or otherwise modify the Credit Agreement in a manner which increases the All-In Yield applicable to the Term Loans or the Revolving Loan (each as defined in the Credit Agreement as in effect on the date hereof) in a manner that would result in an increase of the All-In Yield thereon (as determined as of the date of such modification) by more than 100 basis points per annum (after taking into account any increases resulting from the exercise of the Credit Agreement Flex Rights), then the Preferred Distribution Rate applicable to the Preferred Units shall increase by the amount of such increase in the All-In Yield in excess of 100 basis point per annum so long as such modification to the All-In Yield remains in effect; provided that the following shall not be considered in determining the amount of increase to the All-In Yield: (x) increases resulting from the accrual of interest at the default rate by no more than 2.00% per annum and (y) fluctuations in underlying rate indices. For the avoidance of doubt and notwithstanding anything to the contrary contained herein, the Company will not be required to pay (and shall not be in default of any payment of) any cash dividends on the Preferred Units otherwise provided for herein if such payment is not permitted when required to be made as a result of any limitations or restrictions set forth in the Credit Agreement (to the extent such limitation or restriction is not created in violation hereof).

 

(c) Protective Provisions. For so long as the Preferred Units remain outstanding, the Company will not, and will cause its Subsidiaries not to take the following actions, directly or indirectly, including by amendment, merger, consolidation or otherwise, without the prior written consent of the Preferred Required Unitholders:

 

(i) alter or change any right, preference, privilege or power of (or restriction for the benefit of) the Preferred Units;

 

(ii) (A) amend, amend and restate, supplement, alter, change or otherwise modify the Credit Agreement (including any agreement governing any Indebtedness refinancing the Indebtedness evidenced thereby (a “Replacement Financing Agreement”)) in a manner that (1) extends the final maturity of the Credit Agreement (including any Replacement Financing Agreement) beyond February 13, 2028, (2) makes more restrictive the Restricted Payments provisions set forth Sections 6.07(a)(vii) or (xiii) of the Credit Agreement as in effect on the date hereof or any similar provision of any Replacement Financing Agreement (other than any changes permitted to be made pursuant to the Credit Agreement Flex Rights); or (3) increases the All-In Yield applicable to the Term Loans (as defined in the Credit Agreement as in effect on the date hereof) or the Revolving Loan (as defined in the Credit Agreement as in effect on the date hereof) (or any Replacement Financing Agreement) in a manner that would result in the All-In Yield thereon to exceed by more than 3.00% per annum the All-In Yield on the Term Loans or the Revolving Loans, as applicable (after taking into account any increases resulting from the exercise of the Credit Agreement Flex Rights), in each case as in effect on the date hereof (excluding, however, (x) increases resulting from the accrual of interest at the default rate by no more than 2.00% per annum, (y) fluctuations in underlying rate indices and (z) any rate increases effected at a time when the Total Net Leverage Ratio (as defined in the Credit Agreement as in effect on the date hereof) is no greater than the Total Net Leverage Ratio applicable to the Restricted Payments exception set forth in Section 6.07(a)(xiii) of the Credit Agreement as in effect on the date hereof) or (B) request or agree to a waiver of any default under the Credit Agreement (including any Replacement Financing Agreement) as a result of (1) any restatement of the audited financial statements to the extent such restatement demonstrates that there has been Material Adverse Effect or (2) any failure to deliver audited financial statements not subject to a “going concern” qualification (other than a “going concern” statement, explanatory note or like qualification or exception resulting solely from (A) an upcoming maturity date of any Indebtedness occurring within one year from the time such opinion is delivered or (B) any actual failure to satisfy a financial maintenance covenant or any potential inability to satisfy a financial maintenance covenant on a future date or in a future period) to the extent that such “going concern” qualification evidences that there has been a Material Adverse Effect; provided that the Company and its Subsidiaries may not enter into any Replacement Financing Agreement the effect of which would be to implement modifications to the Credit Agreement that would otherwise be restricted by this clause (ii);

 

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(iii) issue or create (by merger, reclassification or otherwise) any equity securities that are senior to or pari passu with the Preferred Units, including equity or equity-like securities (unless such issuance would be used to redeem 100% of the Preferred Units and pay 100% of the Preferred Liquidation Preference (in each case, subject to the Preferred Redemption Price)); provided that the foregoing shall not restrict the Company and its Subsidiaries from forming wholly-owned subsidiaries;

 

(iv) increase or decrease the number of authorized Preferred Units;

 

(v) incur additional Indebtedness (other than (i) Permitted Indebtedness, (ii) Indebtedness under the Credit Agreement or any Replacement Financing Agreement in an aggregate principal amount at any time outstanding not to exceed the sum of (A) the aggregate principal amount of term loans incurred thereunder on the date hereof (as reduced by any repayments or prepayments of principal of term loans after the date hereof other than through a permitted refinancing of term loans that does not increase the principal amount thereof from that aggregate amount outstanding immediately prior thereto) and (B) the aggregate amount of the Revolving Commitments under the Credit Agreement as in effect on the date hereof and (iii) drawdowns of any Revolving Commitments permitted by the Borrower or its Subsidiaries under the Credit Agreement up to the amount of such Revolving Commitments as in effect on the date hereof), to the extent the incurrence of such additional Indebtedness which may be incurred, in whole or in part, under the Credit Agreement (or any Replacement Financing Agreement) that would result in the Total Net Leverage Ratio (on a Pro Forma Basis) exceeding 3.50:1.00 at the time of the incurrence thereof (which shall assume that the full amount of any new revolving credit facility or increase in the amount of any revolving credit facility being established at such time is fully drawn and with all proceeds from any Indebtedness not being netted from Indebtedness in calculating the numerator of the Total Net Leverage Ratio);

 

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(vi) redeem or repurchase any Units for cash that are junior to the Preferred Units, including Common Units (but excluding cashless redemptions or conversion of units);

 

(vii) sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (A) (1) transactions between or among the Company or any Subsidiary or any entity that becomes a Subsidiary as a result of such transaction to the extent such transactions are not prohibited hereunder and (2) transactions (or series of related transactions) involving aggregate payment or consideration of less than $6,000,000, (B) on terms substantially as favorable to the Company or such Subsidiary as would be obtainable by such Person at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, (C) the consummation of the Transactions and the payment of Transaction Costs, (D) issuances of Equity Securities to the extent not prohibited hereunder, (E) employment and severance arrangements between the Company and its Subsidiaries and their respective officers and employees in the ordinary course of business or otherwise in connection with the Transactions, (F) the payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the board of directors, officers and employees of the Company (or any direct or indirect parent thereof), the Borrower and the Subsidiaries in the ordinary course of business to the extent directly attributable to the ownership or operation of the Company and its Subsidiaries (provided that any such payments to any direct or indirect parent of the Company may only be made if otherwise permitted by Section 6.07(a)(vi) of the Credit Agreement as in effect on the date hereof), (G) transactions pursuant to permitted agreements in existence or contemplated on the date hereof and set forth on Schedule 6.08 of the Credit Agreement as in effect on the date hereof or any amendment thereto to the extent such an amendment is not adverse to the Lenders (as defined in the Credit Agreement as in effect on the date hereof) in any material respect, (H) Restricted Payments permitted under Section 6.07 of the Credit Agreement as in effect on the date hereof and loans and advances in lieu thereof pursuant to Section 6.04(l) of the Credit Agreement as in effect on the date hereof, (I) reasonable payments to or from, and transactions with, any joint venture in the ordinary course of business and (J) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and which are fair to the Company and its Subsidiaries, in the reasonable determination of the Company or the Borrower, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

 

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(viii) (A) sell, transfer, lease or otherwise dispose of any asset, including any Equity Security owned by it (including any disposition of property pursuant to a Division/Series Transaction (as defined in the Credit Agreement as in effect on the date hereof)) or (B) permit any Subsidiary to issue any additional Equity Security in such Subsidiary (other than (x) issuing directors’ qualifying shares and nominal shares issued to foreign nationals to the extent required by applicable Requirements of Law (as defined in the Credit Agreement as in effect on the date hereof) and (y) issuing Equity Securities to the Borrower or a Subsidiary or in the case of a Subsidiary that is not a Subsidiary Loan Party (as defined in the Credit Agreement as in effect on the date hereof), joint venture partners in compliance with Section 6.01(b) or 6.04(c) of the Credit Agreement as in effect on the date hereof, as applicable) (each, a “Disposition” and the term “Dispose” as a verb has the corresponding meaning), except:

 

(1) Dispositions of obsolete, damaged, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful, or economically practicable to maintain, in the conduct of the business of the Company and its Subsidiaries (including allowing any registration or application for registration of any Intellectual Property (as defined in the Credit Agreement as in effect on the date hereof) that is no longer used or useful, or economically practicable to maintain, to lapse, go abandoned, or be invalidated);

 

(2) Dispositions of inventory and other assets (including settlement assets) in the ordinary course of business;

 

(3) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) an amount equal to Net Proceeds (as defined in the Credit Agreement as in effect on the date hereof) of such Disposition are promptly applied to the purchase price of such replacement property;

 

(4) Dispositions of property to the Company or a Subsidiary;

 

(5) (A) Dispositions to the extent constituting an Investment (as defined in the Credit Agreement as in effect on the date hereof), (B) Dispositions to the extent constituting a Lien (as defined in the Credit Agreement as in effect on the date hereof), (C) Dispositions permitted by Section 6.03 of the Credit Agreement as in effect on the date hereof and (D) Restricted Payments permitted by Section 6.07 of the Credit Agreement as in effect on the date hereof; provided that, for purposes of the foregoing, all such defined terms and section cross-references shall be to such term or section of the Credit Agreement as in effect on the date hereof (or any similar provision in any Replacement Financing Agreement);

 

(6) Dispositions of property pursuant to sale-leaseback transactions permitted by Section 6.06 of the Credit Agreement as in effect on the date hereof;

 

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(7) Dispositions of Permitted Investments (as defined in the Credit Agreement as in effect on the date hereof) or other cash equivalents for cash;

 

(8) Dispositions or forgiveness of accounts receivable in the ordinary course of business in connection with the collection or compromise thereof (including sales to factors or other third parties) and not as part of any financing transactions;

 

(9) leases, subleases, service agreements, product sales, licenses or sublicenses, in each case that do not materially interfere with the business of the Company and its Subsidiaries, taken as a whole;

 

(10) non-exclusive licenses or sublicenses of Intellectual Property in the ordinary course of business;

 

(11) transfers of property subject to Casualty Events (as defined in the Credit Agreement as in effect on the date hereof);

 

(12) so long as no Default or Event of Default (each as defined in the Credit Agreement as in effect on the date hereof) shall have occurred and be continuing or would result therefrom, Dispositions of property to Persons other than the Company, the Borrower or its Subsidiaries (including the sale or issuance of Equity Securities of a Subsidiary) for fair market value (as reasonably determined by a Responsible Officer (as defined in the Credit Agreement as in effect on the date hereof) of the Company or the Borrower in good faith) not otherwise permitted hereunder; provided that, with respect to any Disposition (or series of related Dispositions) pursuant to this subclause (12) for a purchase price in excess of the greater of $8,760,000 and 12% of Consolidated EBITDA for the most recently ended Test Period after giving Pro Forma Effect to such Disposition, the Company or any Subsidiary shall receive not less than 75% of such consideration in the form of cash or Permitted Investments (as defined in the Credit Agreement as in effect on the date hereof); provided, however, that solely for the purposes of this subclause (12), (A) any liabilities (as shown on the most recent balance sheet of the Company or such Subsidiary or in the footnotes thereto) of the Company or such Subsidiary, other than liabilities that are by their terms subordinated in right of payment to the Loan Document Obligations (as defined in the Credit Agreement as in effect on the date hereof), that are assumed by the transferee with respect to the applicable Disposition and for which the Company and all of the Subsidiaries shall have been validly released by all applicable creditors in writing, shall be deemed to be cash, (B) any securities, notes or other obligations or assets received by the Company or such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash or Permitted Investments (to the extent of the cash or Permitted Investments received) within one hundred and eighty (180) days following the closing of the applicable Disposition shall be deemed to be cash, (C) Indebtedness of any Subsidiary that ceases to be a Subsidiary as a result of such Disposition (other than intercompany debt owed to the Company or its Subsidiaries), to the extent that the Company and all of the Subsidiaries (to the extent previously liable thereunder) are released from any guarantee of payment of the principal amount of such Indebtedness in connection with such Disposition, shall be deemed to be cash, (D) any Designated Non-Cash Consideration (as defined in the Credit Agreement as in effect on the date hereof) received by the Company or such Subsidiary in respect of such Disposition having an aggregate fair market value (as reasonably determined by a Responsible Officer of the Company or the Borrower in good faith), taken together with all other Designated Non-Cash Consideration received pursuant to this clause (l) that is at that time outstanding, not in excess of $6,000,000 at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value (as determined in good faith by the Company or the Borrower) of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be cash, and (E) the Net Proceeds of such Disposition shall be applied and/or reinvested as (and to the extent) required by Section 2.11(c) of the Credit Agreement as in effect on the date hereof;

 

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(13) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(14) Dispositions of any assets (including Equity Securities) (A) acquired in connection with any Permitted Acquisition (as defined in the Credit Agreement as in effect on the date hereof) or other similar permitted Investment permitted hereunder, which assets are not used or useful to the core or principal business of the Company and its Subsidiaries and (B) made to obtain the approval of any applicable antitrust authority in connection with a Permitted Acquisition or other similar permitted Investment; provided that the Net Proceeds of such Dispositions shall be applied and/or reinvested as (and to the extent) required by Section 2.11(c) of the Credit Agreement as in effect on the date hereof;

 

(15) transfers of condemned property as a result of the exercise of “eminent domain” or other similar powers to the respective Governmental Authority (as defined in the Credit Agreement as in effect on the date hereof) or agency that has condemned the same (whether by deed in lieu of condemnation or otherwise), and transfers of property arising from foreclosure or similar action or that have been subject to a casualty to the respective insurer of such real property as part of an insurance settlement; and

 

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(16) any Disposition of the Equity Securities of any Subsidiary.

 

(ix) make any Restricted Payments by the Company, except:

 

(1) [Reserved];

 

(2) the Company, the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Securities of such Person and, in the case of the Company, subject to the limitations set forth in this Agreement;

 

(3) cashless redemption or conversion of Equity Securities of the Company in exchange for common stock of PubCo;

 

(4) payments made or expected to be made by the Company, the Borrower or any Subsidiary in respect of withholding or similar taxes payable upon exercise, vesting or settlement of Equity Securities (other than the Preferred Units) by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Securities deemed to occur upon exercise of stock options or warrants if such Equity Securities represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;

 

(5) (A) to redeem, acquire, retire or repurchase shares of its Equity Securities through open market purchases or (B) to redeem, acquire, retire, repurchase or settle its Equity Securities (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Securities) or to service Indebtedness incurred by the Company to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Securities (or make Restricted Payments to allow any of the Company’s direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Securities or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Securities), in each case in respect of this clause (B), held directly or indirectly by current or former officers, managers, consultants, members of the board of directors, employees or independent contractors (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of the Company (or any direct or indirect parent thereof), the Borrower or any of its Subsidiaries, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount after the date hereof, together with (in the case of either preceding clause (A) or (B)) the aggregate amount of loans and advances to the Company (or any direct or indirect parent thereof) made pursuant to Section 6.04(l) of the Credit Agreement as in effect on the date hereof in lieu of Restricted Payments permitted by this Section 4.8(c)(ix)(5), not to exceed (x) solely with respect to the preceding clause (A), $1,000,000 in the aggregate, and (y) collectively for the preceding clauses (A) and (B), $1,000,000 in any calendar year and $5,000,000 in the aggregate; provided that, any such Restricted Payments made in reliance on the foregoing shall be subject in all respects to the Total Net Leverage Ratio test applicable to Restricted Payments made pursuant to Section 6.07(a)(xiii) of the Credit Agreement as in effect on the date hereof; provided further that such Restricted Payment may only be made in reliance on Section 6.07(a)(v) of the Credit Agreement as in effect on the date hereof;

 

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(6) the Borrower and each Subsidiary may make Restricted Payments to the Company or any other Subsidiary (provided that, in the case of any such Restricted Payment by a Subsidiary that is not a Wholly Owned Subsidiary (as defined in the Credit Agreement as in effect on the date hereof) of the Company, such Restricted Payment is made to the Company, any Subsidiary and to each other owner of Equity Securities of such Subsidiary pro rata based on their relative ownership interests of the relevant class of Equity Securities of such Subsidiary), including:

 

a. cash distributions from the Borrower to the Company distributed solely for the purpose of funding, without duplication, (i) payments by the Company in respect of taxes directly payable by the Company, including any franchise or similar taxes directly payable by the Company and (ii) distributions pursuant to Section 6.2;

 

b. the proceeds of which shall be used by the Company to pay (or to make Restricted Payments to allow any direct or indirect parent of the Company to pay) (1) its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses payable to third parties) that are reasonable and customary and incurred in the ordinary course of business and otherwise directly attributable to the operations of the Company and its Subsidiaries, (2) any reasonable and customary indemnification claims made by members of the board of directors or officers, employees, directors, managers, consultants or independent contractors of the Company (or any parent thereof) directly attributable to the ownership or operations of the Company, the Borrower and its Subsidiaries and (3) amounts that would otherwise be permitted to be paid pursuant to Section 6.08(iii) of the Credit Agreement as in effect on the date hereof;

 

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c. to finance any Investment made by the Company;

 

d. the proceeds of which shall be used to pay (or to make Restricted Payments to allow the Company to pay) fees and expenses related to any equity or debt offering not prohibited hereunder; and

 

e. the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of the Company or any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are directly attributable to the operations of the Company, the Borrower and its Subsidiaries.

 

(7) redemptions in whole or in part of any of its Equity Securities for another class of its Equity Securities or with proceeds from substantially concurrent equity contributions or issuances of new Equity Securities; provided that such new Equity Securities are otherwise not prohibited from being issued hereunder;

 

(8) the Company may (and the Borrower may make Restricted Payments to the Company to enable the Company to) (a) pay cash in lieu of fractional Equity Securities in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion; and

 

(9) the Company may make distributions pursuant to Section 6.2;

 

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(x) amend the organizational documents of the Company in a manner adverse to the Preferred Unitholders;

 

(xi) engage in an internal corporate reorganization that would have an adverse effect, in any material respect, on the Preferred Unitholders;

 

(xii) fail to obtain, preserve, renew and keep in full force and effect the Company’s legal existence;

 

(xiii) fail to keep and maintain all tangible property material to the conduct of its business in good working order and condition (subject to casualty, condemnation and ordinary wear and tear), except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or

 

(xiv) fail to maintain, with insurance companies that the Company and the Borrower believe (in the good faith judgment of the management of the Company and the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed, insurance in at least such amounts (after giving effect to any self-insurance which the Company and the Borrower believe (in the good faith judgment of management of the Company and the Borrower) is reasonable and prudent in light of the size and nature of its business) and against at least such risks (and with such risk retentions) as the Company and the Borrower believe (in the good faith judgment or the management of the Company and the Borrower) are reasonable and prudent in light of the size and nature of its business.

 

(d) Optional Redemptions by the Company.

 

(i) Upon five  Business Days prior written notice (each, a “Company Preferred Redemption Notice”), the Company may (at the direction of the Board) redeem any or all of the Preferred Units, at any time for a cash amount per Preferred Unit equal to the then applicable Preferred Redemption Price.

 

(ii) On and after any date fixed for redemption (each a “Preferred Redemption Date”), distributions will cease to accrue on the Preferred Units called for redemption, such Preferred Units shall no longer be deemed to be outstanding and all rights of the holders of such units as holders of Preferred Units shall cease except the right to receive the cash deliverable upon such redemption, without interest from the Preferred Redemption Date. Each Company Preferred Redemption Notice will be irrevocable and will be provided by the Company not less than five (5) Business Days prior to the Preferred Redemption Date, addressed to the Preferred Unitholders to be redeemed at their respective addresses as they appear on the books and records of the Company. No defect therein shall affect the validity of the proceedings for the redemption of any Preferred Units. In addition to any information required by applicable law, any Company Preferred Redemption Notice shall state: (A) the Preferred Redemption Date; (B) the Preferred Redemption Price; and (C) whether all or less than all of the outstanding Preferred Units are to be redeemed, the aggregate amount of Preferred Units to be redeemed and, if less than all Preferred Units held by such Preferred Unitholder are to be redeemed, the number of Preferred Units that will be redeemed. The Company Preferred Redemption Notice may also require delivery of certificates representing the Preferred Units to be redeemed, if any, together with certification as to the ownership of such Preferred Units. Upon the redemption of Preferred Units pursuant to this Section 4.8(d)(ii) and the payment in full by the Company of the Preferred Redemption Price for each redeemed Preferred Unit, all rights of a Preferred Unitholder with respect to the redeemed Preferred Units shall cease, and such redeemed Preferred Units shall cease to be outstanding for all purposes of this Agreement.

 

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(iii) If the Company defaults in the payment of the Preferred Redemption Price by failing to pay such price by the Preferred Redemption Date specified in the applicable Company Preferred Redemption Notice, then the Preferred Units that were called for redemption shall remain outstanding and continue to accumulate the Preferred Distribution Amount and have all other rights, preferences and privileges of Preferred Units.

 

(iv) Upon any redemption of Preferred Units pursuant to this Section 4.8(d), on the Preferred Redemption Date the Company shall pay the Preferred Redemption Price to the applicable Preferred Unitholders by wire transfer of immediately available funds to an account specified by each such Preferred Unitholder in writing to the Company as requested in the applicable Company Preferred Redemption Notice.

 

(v) Except as provided in Section 4.8(e) of this Agreement, no Preferred Unitholder shall have the right to require the Company to redeem any Preferred Units.

 

(e) Preferred Unitholder Optional Redemption.

 

(i) Beginning on February 13, 2028, the Preferred Unitholders shall have the right to cause the Company to redeem all, but not less than all, of the outstanding Preferred Units (the “Preferred Unitholder Redemption Right”) for cash in an aggregate amount equal to the number of outstanding Preferred Units so redeemed multiplied by the Preferred Redemption Price.

 

(ii) The Preferred Required Unitholders may exercise the Preferred Unitholder Redemption Right at any time after February 13, 2028 by delivering to the Company a written notice of redemption (the “Preferred Unitholder Redemption Notice”).

 

(iii) Within five Business Days of a receipt of a Preferred Unitholder Redemption Notice, the Company shall deliver a notice (the “Final Company Redemption Notice”) that states (A) the Preferred Redemption Date (which shall be no later than the fifth Business Day following the delivery of the Final Company Redemption Notice) and (B) the place where any Preferred Units to be redeemed that are in certificated form are to be redeemed and shall be presented and surrendered for payment in cash therefor.  

 

(iv) The Company shall pay to the Preferred Unitholders cash sufficient to redeem each of the outstanding Preferred Units as to which the Company has delivered a Final Company Redemption Notice in accordance with Section 4.8(e)(iii) on the Preferred Redemption Date. If a Final Company Redemption Notice shall have been given, then from and after the Preferred Redemption Date, unless the Company defaults in providing to the Preferred Unitholders cash for each of the Preferred Units to be redeemed sufficient for such redemption at the time and place specified for payment pursuant to the Final Company Redemption Notice, (A) all dividends on the Preferred Units shall cease to accrue, (B) all Preferred Units shall be deemed no longer outstanding and (C) all other rights with respect to the Preferred Units, including the rights, if any, to receive notices, will terminate, except only the rights of Preferred Unitholders thereof to receive the cash consideration for each of their Preferred Units to be redeemed. If the Company defaults in providing to the Preferred Unitholders cash for the Preferred Units to be redeemed as set forth in the Final Company Redemption Notice, then the Preferred Units shall remain outstanding and continue to accumulate the Preferred Distribution Amount and have all other rights, preferences and privileges of Preferred Units. Notwithstanding any Final Company Redemption Notice, there shall be no redemption of any Preferred Units called for redemption until funds sufficient to pay the full consideration with respect to each such Preferred Unit shall have been paid to the Preferred Unitholders.

 

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(f) Mandatory Redemption.

 

(i) Upon written request from the Preferred Required Unitholders as a result of the occurrence of any of the following events (each a “Mandatory Redemption Event”), the Company shall, subject to the limitations set forth in clause (iv) below, redeem all, but not less than all, of the outstanding Preferred Units for cash in an aggregate amount equal to the number of outstanding Preferred Units so redeemed multiplied by the Preferred Redemption Price:

 

(A) a Preferred Change of Control;

 

(B) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (1) liquidation, court protection, reorganization or other relief in respect of the Company or the Borrower or its debts, or of a material part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (2) the appointment of a receiver, trustee, custodian, examiner, sequestrator, conservator or similar official for the Company or the Borrower or for a material part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(C) the Company or the Borrower shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, court protection, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 4.8(f)(i)(B), (iii) apply for or consent to the appointment of a receiver, trustee, examiner, custodian, sequestrator, conservator or similar official for the Company or the Borrower or for a material part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding or (v) make a general assignment for the benefit of creditors;

 

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(D) an acceleration of all of the obligations under the Credit Agreement or any other Indebtedness for borrowed money of the Company or its Subsidiaries in a principal amount equal to or greater than $12,000,000;

 

(E) failure to pay the distributions required by Section 4.8(b), which such failure has not been cured within five Business Days after written notice by the Preferred Required Unitholders to the Company;

 

(F) a breach of Section 4.8(c), which breach shall not have been cured (if curable) within five Business Days;

 

(G) a final, non-appealable and enforceable judgment for the payment of money by a court of competent jurisdiction against the Company or its Subsidiaries in an amount equal to or greater than $12,000,000 that is not paid or reimbursable by insurance; or

 

(H) any material provision of this Agreement or the Subscription Agreement shall for any reason not be (or asserted in writing by PubCo, the Company or any of their Subsidiaries not to be) a legal, valid and binding obligation of any party hereto or thereto other than as expressly permitted hereunder or thereunder.

 

(ii) Within five Business Days of a receipt of a Preferred Unitholder Redemption Notice resulting from a Mandatory Redemption Event, the Company shall deliver a Final Company Redemption Notice that states (A) the Preferred Redemption Date (which shall be no later than the fifth Business Day following the delivery of the Final Company Redemption Notice) and (B) the place where any Preferred Units to be redeemed that are in certificated form are to be redeemed and shall be presented and surrendered for payment in cash therefor.  

 

(iii) The Company shall pay to the Preferred Unitholders cash sufficient to redeem each of the outstanding Preferred Units as to which the Company has delivered a Final Company Redemption Notice in accordance with Section 4.8(e)(ii) on the Preferred Redemption Date. If a Final Company Redemption Notice shall have been given, then from and after the Preferred Redemption Date, unless the Company defaults in providing to the Preferred Unitholders cash for each of the Preferred Units to be redeemed sufficient for such redemption at the time and place specified for payment pursuant to the Final Company Redemption Notice, (A) all dividends on the Preferred Units shall cease to accrue, (B) all Preferred Units shall be deemed no longer outstanding and (C) all other rights with respect to the Preferred Units, including the rights, if any, to receive notices, will terminate, except only the rights of Preferred Unitholders thereof to receive the cash consideration for each of their Preferred Units to be redeemed. If the Company defaults in providing to the Preferred Unitholders cash for the Preferred Units to be redeemed as set forth in the Final Company Redemption Notice, then the Preferred Units shall remain outstanding and continue to accumulate the Preferred Distribution Amount and have all other rights, preferences and privileges of Preferred Units. Notwithstanding any Final Company Redemption Notice, there shall be no redemption of any Preferred Units called for redemption until funds sufficient to pay the full consideration with respect to each such Preferred Unit shall have been paid to the Preferred Unitholders.

 

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(iv) For the avoidance of doubt and notwithstanding anything to the contrary contained herein, (x) the Company shall not be required to redeem any Preferred Units as a result of any Mandatory Redemption Event (other than pursuant to Section 4.8(f)(i)(A) hereof but only to the extent that all of the obligations (other than contingent obligations for which no claim has been made) under the Credit Agreement have been repaid in full in cash in accordance with their terms in connection with such Preferred Change of Control) (and shall not be in default of any provision hereof), or deliver any Final Company Redemption Notice as a result thereof, and (y) no Preferred Unitholder shall be permitted to deliver any Redemption Notice as a result of any Mandatory Redemption Event (and any such Redemption Notice so delivered shall not be effective), in each case, to the extent that the Company would not be permitted to redeem any Preferred Units at such time as a result of any Mandatory Redemption Event or otherwise due to the limitations and restrictions set forth in the Credit Agreement as in effect on the date hereof (but not any Replacement Financing Agreement unless the limitations on Restricted Payments therein are not more adverse to the Preferred Unitholders in the aggregate than to those set forth in the Credit Agreement as in effect on the date hereof).

 

(g) Board Observer. The Preferred Required Unitholders shall have the right to invite one natural person (an “Observer”) to attend and participate in meetings of the Board and any committees thereof (and any board of managers of the Company or any Subsidiary of the Company or similar body, if established) in a nonvoting observer capacity. The Managing Member shall provide a reasonable opportunity for the Observer to participate in any such meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. The Observer shall not have any right to vote on any matter presented to the Board or any committee thereof and shall, prior to attending any meeting of the Board, execute and deliver to the Board an agreement to abide by all policies applicable to members of the Board and a confidentiality agreement reasonably acceptable to the Board. The Company shall provide to the Observer (i) notice of the time and place of any such meeting in the same manner and at the same time as notice is sent to the members of the Board or such committee, as the case may be, (ii) if the Observer cannot attend a meeting in person, electronic means of attending such meeting remotely including by telephone conference call or other similar means and (iii) all notices, minutes, consents, materials and other information, including monthly management reports, operational performance metrics and other financial and performance information, delivered to the members of the Board or committee thereof in their capacity as such at the same time and in the same manner as provided to such members. Notwithstanding the foregoing, the Company reserves the right to exclude the Observer from access to any material or meeting or portion thereof if (A) the Company has been advised by counsel in writing that such exclusion is reasonably necessary to preserve the attorney-client privilege or attorney work product privilege or (B) the Company has received written advice of outside counsel that if such Observer obtained such information it would result in a conflict of interest. Notwithstanding the foregoing, the Company shall (i) use reasonable best efforts to avoid or mitigate any such exclusion and (ii) inform the Observer of the general nature of the subject matter discussed and explain the Board’s rationale for the discussion to exclude the Observer. The Company and its Subsidiaries shall reimburse all reasonable and documented fees, out-of-pocket costs and out-of-pocket expenses of the Observer associated with the execution of the Observer’s role and attendance at such meetings including travel, meals and accommodations.

 

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(h) Expenses. The Company shall pay, within 15 days after written demand therefor, GSO’s reasonable and documented fees, out-of-pocket costs and out-of-pocket expenses (including, without limitation, the reasonable and documented fees and out-of-pocket expenses of any outside counsel to GSO) arising in connection with the administration or enforcement of GSO’s rights under this Agreement and any amendment or waiver with respect to this Agreement.

 

(i) Termination. In the case of redemption of all of the Preferred Units, this Section 4.8 and Sections 5.2(h) and (i) shall automatically terminate and be of no further force and effect at such time as no Preferred Units remain outstanding.

 

(j) For so long as GSO together with its Affiliates own at least the Qualifying Ownership Interest, the Company will permit GSO and its Affiliates to visit and inspect, once within any twelve month period (except if a Mandatory Redemption Event has occurred or an Event of Default under and as defined in the Credit Agreement as in effect on the date hereof has occurred, in which event the Company will permit GSO and its Affiliates to visit and inspect without limitation), at their expense, the properties of the Company and its Subsidiaries, to examine the books and records and to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the principal officers of the Company, all upon reasonable notice and at such reasonable times as GSO and its Affiliates may reasonably request. Any investigation pursuant to this Section 4.8(j) shall be conducted during normal business hours and in such manner as not to interfere unreasonably with the conduct of the business of the Company, and nothing herein shall require the Company or any Subsidiary to disclose any information to the extent (i) prohibited by applicable law or regulation, (ii) that the Company reasonably believes such information to be competitively sensitive proprietary information (except to the extent GSO and its Affiliates provide assurances reasonably acceptable to the Company that such information shall not be used by GSO and its Affiliates to compete with the Company and its Subsidiaries), or (iii) that such disclosure would reasonably be expected to cause a violation of any agreement to which the Company or any Subsidiary is a party or would cause a risk of a loss of attorney-client privilege to the Company or any Subsidiary. The Company shall use commercially reasonable efforts to make appropriate substitute disclosure arrangements under circumstances where any of the restrictions in the foregoing clauses apply, and shall provide, to the extent feasible, a simple description of any information withheld on the basis of the foregoing restrictions. “Qualifying Ownership Interest” means 25% of the Preferred Units.

 

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(k) Affirmative Covenants.

 

(i) To the extent the Long Engineering Acquisition does not close within 10 Business Days after the date hereof, the Initial Term Loans (as defined in the Credit Agreement as in effect on the date hereof) will be prepaid by $10.5 million on the 11th Business Day after the date hereof.

 

(ii) For so long as the Preferred Units remain outstanding, the Company and the Borrower shall exercise any reclassification rights, with respect to Restricted Payments incurrence-based basket exceptions under Section 6.07 of the Credit Agreement as in effect on the date hereof, to reclassify any Restricted Payments made in reliance on any dollar basket to reliance on an incurrence-based basket, if and whenever permitted.

 

(iii) For so long as the Preferred Units remain outstanding, the Company shall promptly provide to the Preferred Unitholders written notice of the occurrence of any Mandatory Redemption Event pursuant to Section 4.8(f) hereof.

 

(iv) For so long as the Preferred Units remain outstanding, any Restricted Payments made by the Company pursuant to Sections 6.07(a)(vii) or 6.07(a)(xiii) of the Credit Agreement shall be made first pursuant to Section 6.07(a)(xiii), second pursuant to Section 6.07(a)(vii)(B) and third pursuant to Section 6.07(a)(vii)(A), in each case to the fullest extent permitted under such provisions. For purposes of this paragraph, all references to the Credit Agreement are deemed to be references to the Credit Agreement as in effect on the date hereof.

 

Article V
ALLOCATIONS OF PROFITS AND LOSSES

 

Section 5.1 Profits and Losses. After giving effect to the allocations under Section 5.2 and subject to Section 5.4, Profits and Losses (and, to the extent determined by the Managing Member to be necessary and appropriate to achieve the resulting Capital Account balances described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Profits and Losses) for each Fiscal Year or other taxable period shall be allocated among the Members during such Fiscal Year or other taxable period in a manner such that, after giving effect to all distributions through the end of such Fiscal Year or other taxable period (including any taxable periods ending on a Preferred Redemption Date), the Capital Account balance of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the amount such Member would receive pursuant to Section 11.3(b) if all assets of the Company on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all liabilities of the Company were satisfied in cash in accordance with their terms (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with Section 11.3(b), to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Member is treated as obligated to contribute to the Company, computed immediately after the hypothetical sale of assets. For the avoidance of doubt, any Preferred Units being redeemed on any Preferred Redemption Date shall be treated as outstanding as of the last day of the taxable period ending on such date for purposes of this Section 5.1.

 

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Section 5.2 Special Allocations.

 

(a) Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Members on a pro rata basis in accordance with the number of Units owned by each Member. The amount of Nonrecourse Deductions for a Fiscal Year or other taxable period shall equal the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during that Fiscal Year or other taxable period over the aggregate amount of any distributions during that Fiscal Year or other taxable period of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain, determined in accordance with the provisions of Treasury Regulations Section 1.704-2(d).

 

(b) Any Member Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Member who bears economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss for such Member Nonrecourse Debt, the Member Nonrecourse Deductions attributable to such Member Nonrecourse Debt shall be allocated among the Members according to the ratio in which they bear the economic risk of loss. This Section 5.2(b) is intended to comply with the provisions of Treasury Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

 

(c) Notwithstanding any other provision of this Agreement to the contrary, if there is a net decrease in Company Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Company Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(c)), each Member shall be specially allocated items of Company income and gain for such Fiscal Year or other taxable period in an amount equal to such Member’s share of the net decrease in Company Minimum Gain during such year (as determined pursuant to Treasury Regulations Section 1.704-2(g)(2)). This section is intended to constitute a minimum gain chargeback under Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

(d) Notwithstanding any other provision of this Agreement except Section 5.2(c), if there is a net decrease in Member Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Member Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(d)), each Member shall be specially allocated items of Company income and gain for such year in an amount equal to such Member’s share of the net decrease in Member Minimum Gain (as determined pursuant to Treasury Regulations Section 1.704-2(i)(4)). This section is intended to constitute a partner nonrecourse debt minimum gain chargeback under Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

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(e) Notwithstanding any provision hereof to the contrary except Section 5.2(a) and Section 5.2(b), no Losses or other items of loss or expense shall be allocated to any Member to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) at the end of such Fiscal Year or other taxable period. All Losses and other items of loss and expense in excess of the limitation set forth in this Section 5.2(e) shall be allocated to the Members who do not have an Adjusted Capital Account Deficit in proportion to their relative positive Capital Accounts but only to the extent that such Losses and other items of loss and expense do not cause any such Member to have an Adjusted Capital Account Deficit.

 

(f) Notwithstanding any provision hereof to the contrary except Section 5.2(c) and Section 5.2(d), in the event any Member unexpectedly receives any adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of income and gain (consisting of a pro rata portion of each item of income, including gross income, and gain for the Fiscal Year or other taxable period) shall be specially allocated to such Member in an amount and manner sufficient to eliminate any Adjusted Capital Account Deficit of that Member as quickly as possible; provided, that an allocation pursuant to this Section 5.2(f) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 5.1 and Section 5.2 have been tentatively made as if this Section 5.2(f) were not in this Agreement. This Section 5.2(f) is intended to constitute a qualified income offset under Treasury Regulations Section 1.704-1(b)(2)(ii) and shall be interpreted consistently therewith.

 

(g) If any Member has a deficit balance in its Capital Account at the end of any Fiscal Year or other taxable period that is in excess of the sum of (i) the amount that such Member is obligated to restore and (ii) the amount that the Member is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulations Sections 1.704-2(g)(1) and (i)(5), that Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.2(g) shall be made only if and to the extent that such Member would have a deficit balance in its Capital Account in excess of such sum after all other allocations provided for in Section 5.1 and Section 5.2 have been made as if Section 5.2(f) and this Section 5.2(g) were not in this Agreement.

 

(h) If any Preferred Units are redeemed pursuant to this Agreement and the Capital Account with respect to each such Preferred Unit does not equal the Preferred Redemption Price, then items of gross income, gain, loss and deduction will be allocated to the Preferred Unitholders whose Units are being redeemed, pro rata, in a manner such that, to the extent possible, the Capital Account balance with respect to each such Preferred Unit equals the Preferred Redemption Price.  If, after making such allocations, the Capital Account balance with respect to each such Preferred Unit does not equal the Preferred Redemption Price, then (i) to the extent the Preferred Redemption Price exceeds such Capital Account balance, the Company will be deemed to make a guaranteed payment (within the meaning of Code Section 707(c)) to the Preferred Unitholders whose Preferred Units are being redeemed in an aggregate amount equal to the amount of such excess for each Preferred Unit being redeemed and the deduction with respect to the deemed guaranteed payments will be allocated 100% to the Common Unitholders on a pro rata basis, or (ii) to the extent such Capital Account balance exceeds the Preferred Redemption Price, the Company will be deemed to make a guaranteed payment to the Common Unitholders on a pro rata basis, in an aggregate amount equal to the amount of such excess for each Preferred Unit being redeemed, and the deduction with respect to the deemed guaranteed payments will be allocated 100% to the Preferred Unitholders, on a pro rata basis.

 

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(i) If upon the liquidation of the Company, the Capital Account with respect to each Preferred Unit does not equal the Preferred Redemption Price, then items of gross income, gain, loss and deduction will be allocated to the Preferred Unitholders on a pro rata basis, in a manner such that, to the extent possible, the Capital Account balance with respect to each such Preferred Unit equals the Preferred Redemption Price.  If, after making such allocations, the Capital Account balance with respect to each such Preferred Unit does not equal the Preferred Redemption Price, then (i) to the extent the Preferred Redemption Price exceeds such Capital Account balance, the Company will make a guaranteed payment (within the meaning of Code Section 707(c)) to the Preferred Unitholders on a pro rata basis, in an aggregate amount equal to the amount of such excess for each Preferred Unit, and the deduction with respect to the guaranteed payments will be allocated 100% to the Common Unitholders on a pro rata basis, or (ii) to the extent such Capital Account balance exceeds the Preferred Redemption Price, the Company will make a guaranteed payment to the Common Unitholders on a pro rata basis, in an aggregate amount equal to the amount of such excess for each Preferred Unit, and the deduction with respect to the guaranteed payments will be allocated 100% to the Preferred Unitholders on a pro rata basis.

 

(j) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution to any Member in complete liquidation of such Member’s Interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such item of gain or loss shall be allocated to the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) if such section applies or to the Member to whom such distribution was made if Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

(k) The allocations set forth in Sections 5.2(a) through 5.2(g) and Section 5.2(j) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Regulatory Allocations (and anticipated future Regulatory Allocations) shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocation of other items and the Regulatory Allocations to each Member should be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. This Section 5.2(k) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith.

 

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Section 5.3 Allocations for Tax Purposes in General.

 

(a) Except as otherwise provided in this Section 5.3, each item of income, gain, loss and deduction of the Company for U.S. federal income tax purposes shall be allocated among the Members in the same manner as such item is allocated under Sections 5.1 and 5.2.

 

(b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder (including the Treasury Regulations applying the principles of Code Section 704(c) to changes in Gross Asset Values), items of income, gain, loss and deduction with respect to any Company property having a Gross Asset Value that differs from such property’s adjusted U.S. federal income tax basis shall, solely for U.S. federal income tax purposes, be allocated among the Members to account for any such difference using (i) the “traditional method,” under Treasury Regulations Section 1.704-3(b) with respect to any property deemed to be contributed by Atlas to the Company and (ii) any method or methods determined by the Managing Member to be appropriate and in accordance with the applicable Treasury Regulations with respect to any other Company property.

 

(c) Any (i) recapture of depreciation or any other item of deduction shall be allocated, in accordance with Treasury Regulations Sections 1.1245-1(e) and 1.1254-5, to the Members who received the benefit of such deductions and (ii) recapture of credits shall be allocated to the Members in accordance with applicable Law.

 

(d) Allocations pursuant to this Section 5.3 are solely for purposes of U.S. federal, state and local income taxes and shall not affect or in any way be taken into account in computing any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement.

 

(e) If, as a result of an exercise of a noncompensatory option to acquire an interest in the Company, a Capital Account reallocation is required under Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3), the Company shall make corrective allocations pursuant to Treasury Regulations Section 1.704-1(b)(4)(x).

 

(f) Any adjustment to the adjusted tax basis of Company property pursuant to Code Section 743(b) resulting from a transfer of a Company Interest shall be handled in accordance with Treasury Regulations section 1.743-1(j).

 

Section 5.4 Other Allocation Rules.

 

(a) The Members are aware of the income tax consequences of the allocations made by this Article V and the economic impact of the allocations on the amounts receivable by them under this Agreement. The Members hereby agree to be bound by the provisions of this Article V in reporting their share of Company income and loss for U.S. federal and applicable state and local income tax purposes.

 

(b) The provisions regarding the establishment and maintenance for each Member of a Capital Account as provided by Section 4.4 and the allocations set forth in Sections 5.1, 5.2 and 5.3 are intended to comply with the Treasury Regulations and to reflect the intended economic entitlement of the Members. If the Managing Member determines that the application of the provisions in Sections 4.4, 5.1, 5.2 or 5.3 would result in non-compliance with the Treasury Regulations or would be inconsistent with the intended economic entitlement of the Members, the Managing Member is authorized to make any appropriate adjustments to such provisions to the extent permitted by applicable Law.

 

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(c) All items of income, gain, loss, deduction and credit allocable to an interest in the Company that may have been Transferred shall be allocated between the Transferor and the Transferee based on the portion of the Fiscal Year or other taxable period during which each was recognized as the owner of such interest, without regard to the results of Company operations during any particular portion of that year and without regard to whether cash distributions were made to the Transferor or the Transferee during that year; provided, however, that this allocation must be made in accordance with a method determined by the Managing Member and permissible under Code Section 706 and the Treasury Regulations thereunder.

 

(d) The Members’ proportionate shares of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury Regulations Section 1.752-3(a)(3), shall be allocated to the Members on a pro rata basis in accordance with the number of Units owned by each Member.

 

(e) To the extent any amount is treated as a guaranteed payment (within the meaning of Code Section 707(c)) pursuant to Section 10.6 hereof, the deduction with respect to such guaranteed payment will be allocated 100% to the Common Unitholders on a pro rata basis.

 

Article VI
DISTRIBUTIONS

 

Section 6.1 Distributions.

 

(a) Distributions. To the extent permitted by applicable Law and hereunder, and except as otherwise provided in Section 11.3, distributions to Members may be declared by the Managing Member out of funds legally available therefor in such amounts and on such terms (including the payment dates of such distributions) as the Managing Member shall determine (in its sole discretion in accordance with the fiduciary duties set forth in Section 7.1(b)) using such record date as the Managing Member may designate; provided that, so long as the Preferred Units remain outstanding, such distributions shall only be declared at the end of a Quarter so long as there remain funds legally available therefor after the cash payments required to be paid pursuant to Section 4.8(b) are made in such Quarter. Any such distribution shall be made to the Members as of the close of business on such record date on a pro rata basis (except that, for the avoidance of doubt, repurchases or redemptions made in accordance with Section 4.1(f) or payments made in accordance with Sections 7.4 or 7.8 need not be on a pro rata basis), in accordance with the number of Units owned by each Member as of the close of business on such record date; provided, however, that the Managing Member shall have the obligation to make distributions as set forth in Sections 6.2 and 11.3(b)(iii); and provided, further, that, notwithstanding any other provision herein to the contrary, no distributions shall be made to any Member to the extent such distribution would render the Company insolvent or violate the Act. For purposes of the foregoing sentence, insolvency means the inability of the Company to meet its payment obligations when due. Promptly following the designation of a record date and the declaration of a distribution pursuant to this Section 6.1, the Managing Member shall give notice to each Member of the record date, the amount and the terms of the distribution and the payment date thereof. For the avoidance of doubt, distributions to the holders of Preferred Units shall be made pursuant to Section 4.8(b) and not this Section 6.1.

 

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(b) Successors. For purposes of determining the amount of distributions, each Member shall be treated as having made the Capital Contributions and as having received the distributions made to or received by its predecessors in respect of any of such Member’s Units.

 

(c) Distributions In-Kind. Except as otherwise provided in this Agreement, any distributions may be made in cash or in kind, or partly in cash and partly in kind, as determined by the Managing Member. In the event of any distribution of (i) property in kind or (ii) both cash and property in kind, each Member shall be distributed its proportionate share of any such cash so distributed and its proportionate share of any such property so distributed in kind (based on the Fair Market Value of such property). To the extent that the Company distributes property in-kind to the Members, the Company shall be treated as making a distribution equal to the Fair Market Value of such property for purposes of Section 6.1(a) and such property shall be treated as if it were sold for an amount equal to its Fair Market Value. Any resulting gain or loss shall be allocated to the Member’s Capital Accounts in accordance with Section 5.1 and Section 5.2.

 

Section 6.2 Tax-Related Distributions. On each Tax Distribution Date, the Company will, subject to the availability of funds and any restrictions contained in any agreement to which the Company is bound (including the Credit Agreement), (a) make distributions to the holders of Common Units pro rata in proportion to their respective number of Common Units in an amount sufficient to cause PubCo to receive a distribution equal to the sum of all of PubCo’s federal, state, local and non-U.S. tax liabilities during such Quarter or other taxable period to which the tax-related distribution under this Section 6.2 relates solely as a result of allocations of income and gain pursuant to Section 5.3(a) hereof, and taking into account all losses, depreciation, amortization and other tax assets available to reduce any such liabilities and (b) make distributions to the holders of Preferred Units pro rata in proportion to their respective number of Preferred Units in an amount sufficient to cause the Preferred Unitholders to receive a distribution equal to the sum of all of such Preferred Unitholder’s federal, state, local and non-U.S. tax liabilities attributable to its Preferred Units during the Quarter or other taxable period to which the tax-related distribution under this Section 6.2 relates (to the extent the cash distributions made under Section 4.8(b) were less than the amount of such tax liabilities). Any distributions made under Section 6.2(b) shall be treated as an advance against any future distributions to be made pursuant to this Agreement. Notwithstanding the foregoing, no Restricted Payments pursuant to this Section 6.2 shall be made pursuant to Sections 6.07(a)(vii) or (xiii) of the Credit Agreement as in effect on the date hereof (or any similar provision of any Replacement Financing Agreement).

 

Section 6.3 Distribution Upon Withdrawal. No withdrawing Member shall be entitled to receive any distribution or the value of such Member’s Interest in the Company as a result of withdrawal from the Company prior to the liquidation of the Company, except as specifically provided in this Agreement.

 

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Article VII
MANAGEMENT

 

Section 7.1 Managing Member Rights; Fiduciary Duties.

 

(a) PubCo shall be the sole Managing Member of the Company. Except as otherwise required by Law or expressly provided for in this Agreement, (i) the Managing Member shall have full and complete charge of all affairs of the Company, (ii) the management and control of the Company’s business activities and operations shall rest exclusively with the Managing Member, and the Managing Member shall make all decisions regarding the business, activities and operations of the Company (including the incurrence of costs and expenses) in its sole discretion without the consent of any other Member and (iii) the Members, other than the Managing Member (in their capacity as such), shall not participate in the control, management, direction or operation of the activities or affairs of the Company and shall have no power to act for or bind the Company.

 

(b) In connection with the performance of its duties as the Managing Member of the Company, except as otherwise set forth herein, the Managing Member acknowledges that it will owe to the Members the same fiduciary duties as it would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Members were stockholders of such corporation. The Members acknowledge that the Managing Member will take action through the Board, and that the members of the Board will owe comparable fiduciary duties to the stockholders of the Managing Member.

 

Section 7.2 Officers.

 

(a) The Managing Member may appoint, employ or otherwise contract with any Person for the transaction of the business of the Company or the performance of services for or on behalf of the Company, and the Managing Member may delegate to any such Persons such authority to act on behalf of the Company as the Managing Member may from time to time deem appropriate.

 

(b) The Officers of the Company as of the date hereof are set forth on Exhibit B attached hereto.

 

(c) Except as otherwise set forth herein, the Chief Executive Officer will be responsible for the general and active management of the business of the Company and its Subsidiaries and will see that all orders of the Managing Member are carried into effect. The Chief Executive Officer will report to the Managing Member and have the general powers and duties of management usually vested in the office of chief executive officer of a corporation organized under the DGCL, subject to the terms of this Agreement, and will have such other powers and duties as may be prescribed by the Managing Member or this Agreement. The Chief Executive Officer will have the power to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Company, except where required or permitted by Law to be otherwise signed and executed, and except where the signing and execution thereof will be expressly delegated by the Managing Member to some other Officer or agent of the Company.

 

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(d) Except as set forth herein, the Managing Member may appoint Officers at any time, and the Officers may include one or more vice presidents, a secretary, one or more assistant secretaries, a chief financial officer, a general counsel, a treasurer, one or more assistant treasurers, a chief operating officer, an executive chairman, and any other officers that the Managing Member deems appropriate. Except as set forth herein, the Officers will serve at the pleasure of the Managing Member, subject to all rights, if any, of such Officer under any contract of employment. Any individual may hold any number of offices, and an Officer may, but need not, be a Member of the Company. The Officers will exercise such powers and perform such duties as specified in this Agreement or as determined from time to time by the Managing Member.

 

(e) Subject to this Agreement and to the rights, if any, of an Officer under a contract of employment, any Officer may be removed, either with or without cause, by the Managing Member. Any Officer may resign at any time by giving written notice to the Managing Member. Any resignation will take effect at the date of the receipt of that notice or at any later time specified in that notice and, unless otherwise specified in that notice, the acceptance of the resignation will not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the Officer is a party. A vacancy in any office because of death, resignation, removal, disqualification or any other cause will be filled in the manner prescribed in this Agreement for regular appointments to that office.

 

(f) The Officers, in the performance of their duties as such, shall owe to the Company and the Members duties of loyalty and due care of the type owed by the officers of a corporation to such corporation and its shareholders under the DGCL.

 

Section 7.3 Warranted Reliance by Officers on Others. In exercising their authority and performing their duties under this Agreement, the Officers shall be entitled to rely on information, opinions, reports, or statements of the following Persons or groups unless they have actual knowledge concerning the matter in question that would cause such reliance to be unwarranted:

 

(a) one or more employees or other agents of the Company or subordinates whom the Officer reasonably believes to be reliable and competent in the matters presented; and

 

(b) any attorney, public accountant, or other Person as to matters which the Officer reasonably believes to be within such Person’s professional or expert competence.

 

Section 7.4 Indemnification.

 

(a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she is or was a director or an officer of the Company or is or was serving at the request of the Company as a director, board observer, officer, employee or agent of another company or of an Affiliate of the Company, or a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, board observer, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified by the Company to the fullest extent permitted or required by the Act and any other applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, Liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith (“Indemnifiable Losses”); provided, however, that, except as provided in Section 7.4(d) with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee pursuant to this Section 7.4 in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

 

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(b) Right to Advancement of Expenses. The right to indemnification conferred in Section 7.4(a) shall include the right to advancement by the Company of any and all expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an “Advancement of Expenses”); provided, however, that, if the Act so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to an employee benefit plan) shall be made pursuant to this Section 7.4(b) only upon delivery to the Company of an undertaking (an “Undertaking”), by or on behalf of such Indemnitee, to repay, without interest, all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 7.4(b). An Indemnitee’s right to an Advancement of Expenses pursuant to this Section 7.4(b) is not subject to the satisfaction of any standard of conduct and is not conditioned upon any prior determination that Indemnitee is entitled to indemnification under Section 7.4(a) with respect to the related Proceeding or the absence of any prior determination to the contrary.

 

(c) Contract Rights. The rights to indemnification and to the Advancement of Expenses conferred in Sections 7.4(a) and (b) shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, board observer, officer, employee or agent and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

(d) Right of Indemnitee to Bring Suit. If a claim under Sections 7.4(a) or (b) is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to the fullest extent permitted or required by the Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader reimbursements of prosecution or defense expenses than such law permitted the Company to provide prior to such amendment), to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses, without interest, upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Act. Neither the failure of the Company (including its Managing Member or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Act, nor an actual determination by the Company (including the Managing Member or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses hereunder pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, shall be on the Company.

 

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(e) Appearance as a Witness. Notwithstanding any other provision of this Section 7.4, the Company shall pay or reimburse expenses incurred by any Person entitled to be indemnified pursuant to this Section 7.4 in connection with such Person’s appearance as a witness or other participation in a Proceeding at a time when he is not a named defendant or respondent in the Proceeding.

 

(f) Nonexclusivity of Rights. The rights to indemnification and the Advancement of Expenses conferred in this Section 7.4 shall not be exclusive of any other right which a Person may have or hereafter acquire under any statute, this Agreement, any agreement, any vote of stockholders or disinterested directors or otherwise. Nothing contained in this Section 7.4 shall limit or otherwise affect any such other right or the Company’s power to confer any such other right.

 

(g) No Duplication of Payments. The Company shall not be liable under this Section 7.4 to make any payment to an Indemnitee in respect of any Indemnifiable Losses to the extent that the Indemnitee has otherwise actually received payment (net of any expenses incurred in connection therewith and any repayment by the Indemnitee made with respect thereto) under any insurance policy or from any other source in respect of such Indemnifiable Losses.

 

(h) Maintenance of Insurance or Other Financial Arrangements. In compliance with applicable Law, the Company (with the approval of the Managing Member) may purchase and maintain insurance or make other financial arrangements on behalf of any Person who is or was a Member, employee or agent of the Company, or at the request of the Company, is or was serving as a manager, director, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, for any Liability asserted against such Person and Liability and expenses incurred by such Person in such Person’s capacity as such, or arising out of such Person’s status as such, whether or not the Company has the authority to indemnify such Person against such expense, Liability or loss under the Act.

 

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Section 7.5 Resignation or Termination of Managing Member. PubCo shall not, by any means, resign as, cease to be or be replaced as Managing Member except in compliance with this Section 7.5. No termination or replacement of PubCo as Managing Member shall be effective unless proper provision is made, in compliance with this Agreement, so that the obligations of PubCo, its successor (if applicable) and any new Managing Member and the rights of all Members under this Agreement and applicable Law remain in full force and effect. No appointment of a Person other than PubCo (or its successor, as applicable) as Managing Member shall be effective unless PubCo (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against PubCo (or its successor, as applicable) and the new Managing Member (as applicable), to cause (a) PubCo to comply with all PubCo’s obligations under this Agreement (including its obligations under Section 4.6) other than those that must necessarily be taken in its capacity as Managing Member and (b) the new Managing Member to comply with all the Managing Member’s obligations under this Agreement.

 

Section 7.6 No Inconsistent Obligations. The Managing Member represents that it does not have any contracts, other agreements, duties or obligations that are inconsistent with its duties and obligations (whether or not in its capacity as Managing Member) under this Agreement and covenants that, except as permitted by Section 7.1, it will not enter into any contracts or other agreements or undertake or acquire any other duties or obligations that are inconsistent with such duties and obligations.

 

Section 7.7 Reclassification Events of PubCo. If a Reclassification Event occurs, the Managing Member or its successor, as the case may be, shall, as and to the extent necessary, amend this Agreement in compliance with Section 12.1, and enter into any necessary supplementary or additional agreements, to ensure that, following the effective date of the Reclassification Event: (i) the redemption rights of holders of Units set forth in Section 4.6 provide that each Unit (together with the surrender and delivery of one share of Class B Common Stock) is redeemable for the same amount and same type of property, securities or cash (or combination thereof) that one share of Class A Common Stock becomes exchangeable for or converted into as a result of the Reclassification Event and (ii) PubCo or the successor to PubCo, as applicable, is obligated to deliver such property, securities or cash upon such redemption. PubCo shall not consummate or agree to consummate any Reclassification Event unless the successor Person, if any, becomes obligated to comply with the obligations of PubCo (in whatever capacity) under this Agreement.

 

Section 7.8 Certain Costs and Expenses. The Company shall (i) pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the activities of the Company and (ii) upon the determination of the Managing Member (acting in its sole discretion in accordance with the fiduciary duties set forth in Section 7.1(b)), reimburse the Managing Member for any costs, fees or expenses incurred by it in connection with serving as the Managing Member. To the extent that the Managing Member determines in its sole discretion that such expenses are related to the business and affairs of the Managing Member that are conducted through the Company and/or its Subsidiaries (including expenses that relate to the business and affairs of the Company and/or its Subsidiaries and that also relate to other activities of the Managing Member), the Managing Member may cause the Company to pay or bear all expenses of the Managing Member, including, without limitation, costs of securities offerings not borne directly by Members, board of directors compensation and meeting costs, costs of periodic reports to its stockholders, litigation costs and damages arising from litigation, accounting and legal costs; provided, that the Company shall not pay or bear any income tax obligations of the Managing Member. In the event that (i) shares of Class A Common Stock or other Equity Securities of PubCo were sold to underwriters in any public offering after the Effective Time, in each case, at a price per share that is lower than the price per share for which such shares of Class A Common Stock or other Equity Securities of PubCo are sold to the public in such public offering after taking into account any Discount and (ii) the proceeds from such public offering are used to fund the Cash Election Amount for any redeemed Units or otherwise contributed to the Company, the Company shall reimburse the Managing Member for such Discount by treating such Discount as an additional Capital Contribution made by the Managing Member to the Company, issuing Units in respect of such deemed Capital Contribution in accordance with Section 4.6(b)(ii), and increasing the Managing Member’s Capital Account by the amount of such Discount. For the avoidance of doubt, any payments made to or on behalf of the Managing Member pursuant to this Section 7.8 shall not be treated as a distribution pursuant to Section 6.1(a) but shall instead be treated as a cost or an expense of the Company.

 

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Article VIII
ROLE OF MEMBERS

 

Section 8.1 Rights or Powers. Other than the Managing Member, the Members, acting in their capacity as Members, shall not have any right or power to take part in the management or control of the Company or its business and affairs, or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. Any Member, its Affiliates and its and their employees, stockholders, agents, directors or officers may also be an employee or be retained as an agent of the Company. Except as specifically provided herein, a Member (other than the Managing Member) shall not, in its capacity as a Member, take part in the operation, management or control of the Company’s business, transact any business in the Company’s name or have the power to sign documents for or otherwise bind the Company.

 

Section 8.2 Voting.

 

(a) Meetings of the Members may be called by the Managing Member. Such request shall state the location of the meeting and the nature of the business to be transacted at the meeting. Written notice of any such meeting shall be given to all Members not less than two (2) Business Days and not more than 30 days prior to the date of such meeting. Members may vote in person, by proxy or by telephone at any meeting of the Members and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required under this Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in this Section 8.2. Except as otherwise expressly provided in this Agreement, the affirmative vote of the Members holding a majority of the outstanding Units shall constitute the act of the Members; provided, that no shares of Class B Common Stock may be Transferred unless a corresponding number of Units are Transferred therewith in accordance with this Agreement.

 

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(b) Each Member may authorize any Person or Persons to act for it by proxy on all matters in which such Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by such Member or its attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it.

 

(c) Each meeting of Members shall be conducted by an Officer designated by the Managing Member or such other individual Person as the Managing Member deems appropriate.

 

(d) Any action required or permitted to be taken by the Members may be taken without a meeting if the requisite Members whose approval is necessary consent thereto in writing.

 

Section 8.3 Various Capacities. The Members acknowledge and agree that the Members or their Affiliates will from time to time act in various capacities, including as a Member or Company Representative.

 

Section 8.4 Investment Opportunities. To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to any Member (other than Members who are directors, officers, employees or other services providers of the Company, PubCo or any of their respective subsidiaries), any of their respective affiliates (other than the Company, the Managing Member or any of their respective subsidiaries), or any of their respective officers, directors, agents, shareholders, members, and partners (each, a “Business Opportunities Exempt Party”). The Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to any Business Opportunities Exempt Party. No Business Opportunities Exempt Party who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company or any of its subsidiaries shall have any duty to communicate or offer such opportunity to the Company. No amendment or repeal of this Section 8.4 shall apply to or have any effect on the liability or alleged liability of any Business Opportunities Exempt Party for or with respect to any opportunities of which any such Business Opportunities Exempt Party becomes aware prior to such amendment or repeal. Any Person purchasing or otherwise acquiring any interest in any Units shall be deemed to have notice of and consented to the provisions of this Section 8.4. Neither the alteration, amendment or repeal of this Section 8.4, nor the adoption of any provision of this Agreement inconsistent with this Section 8.4, shall eliminate or reduce the effect of this Section 8.4 in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Section 8.4, would accrue or arise, prior to such alteration, amendment, repeal or adoption. Notwithstanding anything to the contrary set forth in this Agreement, except as otherwise required by law, neither Bernhard Capital Partners Management LP nor any of its Affiliates (including one or more associated investment funds or portfolio companies) nor any of their respective directors, officers, managers, members, equityholders or employees other than those that serve on the board of directors of PubCo (each, an “Excluded Person”) shall have any duty (contractual or otherwise) to communicate or present any corporate opportunities (“Excluded Opportunities”) to the Company, PubCo or any of their respective subsidiaries, Affiliates or equityholders, and the Company and each of the Members, on its own behalf and on behalf of their respective Affiliates and equityholders, hereby irrevocably waive any right to require any Excluded Person to act in a manner inconsistent with the provisions of this Section 8.4. Furthermore, none of the Company or its subsidiaries or any Member will acquire or be entitled to any interest or participation in any Excluded Opportunities as a result of the participation therein by an Excluded Person.

 

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Section 8.5 Use of Names. Except as otherwise required by applicable law, each of the Company and Members agrees that, without the consent of GSO, such Person will not, and will cause its Affiliates not to, make reference to or use, in writing, the names of “GSO”, “Blackstone” or any of their respective Affiliates in connection with the interest of such Person in the Company or otherwise without the prior written consent of GSO.

 

Article IX
TRANSFERS OF INTERESTS

 

Section 9.1 Restrictions on Transfer.

 

(a) Except as provided in Section 4.6, no Member shall Transfer all or any portion of its Interest without the Managing Member’s prior written consent, which consent shall be granted or withheld in the Managing Member’s sole discretion. If, notwithstanding the provisions of this Section 9.1(a), all or any portion of a Member’s Interests are Transferred in violation of this Section 9.1(a), involuntarily, by operation of law or otherwise, then without limiting any other rights and remedies available to the other parties under this Agreement or otherwise, the Transferee of such Interest (or portion thereof) shall not be admitted to the Company as a Member nor be entitled to any rights as a Member hereunder, and the Transferor will continue to be bound by all obligations hereunder, unless and until the Managing Member consents in writing to such admission, which consent shall be granted or withheld in the Managing Member’s sole discretion. Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(a) shall, to the fullest extent permitted by law, be null and void and of no force or effect whatsoever. For the avoidance of doubt, the restrictions on Transfer contained in this Article IX (other than those set forth in Sections 9.1(b), 9.2 and 9.3) shall not apply to the Transfer of any capital stock of the Managing Member; provided, that no shares of Class B Common Stock may be Transferred unless a corresponding number of Units are Transferred therewith in accordance with this Agreement. Notwithstanding the foregoing, but subject to any other restrictions on Transfers set forth in this Agreement, (i) Atlas may distribute a number of Common Units (and corresponding shares of Class B Common Stock) to its limited partners (including Atlas Technical Consultants Management LLC) and to Bernhard Capital Partners Management LP and its Affiliates in accordance with the provisions of Bernhard Capital Partners Management LP’s limited partnership agreement and Atlas Technical Consultants Management LLC may distribute the Common Units (and corresponding shares of Class B Common Stock) it receives in such distribution to its members; provided, that any Member that is an entity may elect to make an in-kind distribution of all or any portion of its Interests to its members, partners or stockholders, as applicable, in each case in accordance with the terms of its operating agreement; (ii) GSO may Transfer (A) any number of Units to its Affiliates and (B) Preferred Units to any Person who is not an Affiliate of GSO so long as any such Transferee will hold at least five percent (5%) of the outstanding Preferred Units; provided, that, in each case, (x) for so long as GSO and its Affiliates continue to hold at least 50% of the outstanding Preferred Units (unless a default in payment distributions on the Preferred Units pursuant to Section 4.8(b) hereof or the bankruptcy or insolvency of the Company or Atlas has occurred), GSO may not Transfer any Preferred Units to a Disqualified Transferee and (y) such Transfer would not cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision; and (iii) [Bernhard Capital Partners Management LP] and its Affiliates shall be permitted to Transfer all or any portion of their respective Interests to any Person so long as such Transfer would not cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision.

 

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(b) In addition to any other restrictions on Transfer contained herein, including the provisions of this Article IX, in no event may any Transfer or assignment of Interests by any Member be made (i) to any Person who lacks the legal right, power or capacity to own Interests; (ii) if such Transfer would (A) be considered to be effected on or through an “established securities market” or a “secondary market” or the substantial equivalent thereof as such terms are used in Treasury Regulations Section 1.7704-1, (B) result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), or (C) cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision or to be taxed as a corporation pursuant to the Code or successor of the Code; (iii) if such Transfer would cause the Company to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3 (14) of ERISA) or a “disqualified person” (as defined in Section 4975(e)(2) of the Code); (iv) if such Transfer would, in the opinion of counsel to the Company, cause any portion of the assets of the Company to constitute assets of any employee benefit plan pursuant to the Plan Asset Regulations or otherwise cause the Company to be subject to regulation under ERISA; (v) if such Transfer requires the registration of such Interests or any Equity Securities issued upon any exchange of such Interests, pursuant to any applicable U.S. federal or state securities Laws; or (vi) if such Transfer subjects the Company to regulation under the Investment Company Act or the Investment Advisors Act of 1940, each as amended (or any succeeding law). Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(b) shall be null and void and of no force or effect whatsoever.

 

(c) The Company shall use commercially reasonable efforts to assist any holder of Preferred Units in any Transfer of Preferred Units permitted hereunder without registration under the Securities Act by providing customary information and access (i) in connection with any such holder’s marketing efforts or any potential transferee’s due diligence and financing arrangements and (ii) in order to comply with applicable securities Laws.

 

Section 9.2 Notice of Transfer. Other than in connection with Transfers made pursuant to Section 4.6, each Member shall, after complying with the provisions of this Agreement, but in any event no later than three Business Days following any Transfer of Interests, give written notice to the Company of such Transfer. Each such notice shall describe the manner and circumstances of the Transfer.

 

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Section 9.3 Transferee Members. A Transferee of Interests pursuant to this Article IX shall have the right to become a Member only if (i) the requirements of this Article IX are met, (ii) such Transferee executes an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement and assuming all of the Transferor’s then existing and future Liabilities arising under or relating to this Agreement, (iii) such Transferee represents that the Transfer was made in accordance with all applicable securities Laws, (iv) the Transferor or Transferee shall have reimbursed the Company for all reasonable expenses (including attorneys’ fees and expenses) of any Transfer or proposed Transfer of a Member’s Interest, whether or not consummated and (v) if such Transferee or his or her spouse is a resident of a community property jurisdiction, then such Transferee’s spouse shall also execute an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement to the extent of his or her community property or quasi-community property interest, if any, in such Member’s Interest. Unless agreed to in writing by the Managing Member, the admission of a Member shall not result in the release of the Transferor from any Liability that the Transferor may have to each remaining Member or to the Company under this Agreement or any other Contract between the Managing Member, the Company or any of its Subsidiaries, on the one hand, and such Transferor or any of its Affiliates, on the other hand. Written notice of the admission of a Member shall be sent promptly by the Company to each remaining Member. Notwithstanding anything to the contrary in this Section 9.3, and except as otherwise provided in this Agreement, following a Transfer by one or more Members (or a transferee of the type described in this sentence) to a Transferee of all or substantially all of their Interests, such transferee shall succeed to all of the rights of such Member(s) under this Agreement.

 

Section 9.4 Legend. Each certificate representing a Unit, if any, will be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

 

THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.

 

THE TRANSFER AND VOTING OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ATLAS TC HOLDINGS LLC, DATED AS OF FEBRUARY 13, 2020, AMONG THE MEMBERS LISTED THEREIN, AS IT MAY BE AMENDED, SUPPLEMENTED AND/OR RESTATED FROM TIME TO TIME, (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY AND SHALL BE PROVIDED FREE OF CHARGE TO ANY MEMBER MAKING A REQUEST THEREFOR) AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED.”

 

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Article X
ACCOUNTING

 

Section 10.1 Books of Account. The Company shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and correct entries shall be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP, and shall set aside on its books all such proper accruals and reserves as shall be required under GAAP.

 

Section 10.2 Tax Elections.

 

(a) The Company and any eligible Subsidiary shall make an election (or continue a previously made election) pursuant to Section 754 of the Code for the taxable year of the Company that includes the date hereof, shall not thereafter revoke such election and shall make a new election pursuant to Section 754 of the Code to the extent necessary following any “termination” of the Company or the Subsidiary, as applicable, under Section 708 of the Code. In addition, the Company shall make the following elections on the appropriate forms or tax returns:

 

(i) to adopt the calendar year as the Company’s Fiscal Year, if permitted under the Code;

 

(ii) to adopt the accrual method of accounting for U.S. federal income tax purposes;

 

(iii) to elect to amortize the organizational expenses of the Company as permitted by Section 709(b) of the Code; and

 

(iv) except as otherwise provided in this Agreement, any other election the Managing Member may deem appropriate and in the best interests of the Company.

 

Section 10.3 Tax Returns; Information. The Company Representative shall arrange for the preparation and timely filing of all income and other tax and informational returns of the Company. The Company Representative shall furnish to each Member a copy of each approved return and statement, together with any schedules or other information which each Member may require in connection with such Member’s own tax affairs as soon as practicable (but in no event more than ninety days after the end of each Fiscal Year). The Members agree to take all actions reasonably requested by the Company or the Company Representative to comply with the Bipartisan Budget Act, including where applicable, filing amended returns as provided in Sections 6225 or 6226 of the Code and providing confirmation thereof to the Company Representative, or to otherwise allow the Company or Company Representative to avoid or reduce any. To the fullest extent allowable by law, and except with respect to the information described in the first sentence of this Section 10.3, each Member (other than the Managing Member) hereby waives all rights to any information that it may otherwise obtain pursuant to Section 18-505 of the Act.

 

Section 10.4 Company Representative. The Managing Member is specially authorized and appointed to act as the Company Representative. The Company Representative may retain, at the Company’s expense, such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling its obligations as Company Representative.

 

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Section 10.5 Withholding Tax Payments and Obligations.

 

(a) Upon providing reasonable advance written notice of its intention to withhold and giving a Member a reasonable opportunity to demonstrate that withholding may not be required or, alternatively, that withholding at a lesser tax rate may be permissible, the Company and its Subsidiaries may withhold from payments, distributions, allocations or portions thereof if it is required to do so by any applicable rule, regulation or law, and each Member hereby authorizes the Company and its Subsidiaries to withhold or pay on behalf of or with respect to such Member any amount of taxes that the Managing Member determines, in Good Faith, that the Company or any of its Subsidiaries is required to withhold or pay with respect to any amount distributable or allocable to such Member pursuant to this Agreement.

 

(b) To the extent that any tax is paid by (or withheld from amounts payable to) the Company or any of its Subsidiaries and the Managing Member determines, in Good Faith, that such tax relates to one or more specific Members (including any tax payable by the Company or any of its Subsidiaries pursuant to Section 6225 of the Code with respect to items of income, gain, loss deduction or credit allocable or attributable to such Member), such tax shall be treated as an amount of taxes withheld or paid with respect to such Member pursuant to this Section 10.5.

 

(c) For all purposes under this Agreement, any amounts withheld or paid with respect to a Member pursuant to this Section 10.5 shall be treated as if distributed to such Member at the time such withholding or payment is made. Further, to the extent that the cumulative amount of such withholding or payment for any period exceeds the distributions to which such Member is entitled for such period, the amount of such excess shall be considered a loan from the Company to such Member, with interest accruing at the Prime Rate in effect from time to time, compounded annually. The Managing Member may, in its discretion, either demand payment of the principal and accrued interest on such demand loan at any time (which payment shall not be deemed a Capital Contribution for purposes of this Agreement), and enforce payment thereof by legal process, or may withhold from one or more distributions to a Member amounts sufficient to satisfy such Member’s obligations under any such demand loan.

 

(d) Neither the Company nor the Managing Member shall be liable for any excess taxes withheld in respect of any Member, and, in the event of over withholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Governmental Entity.

 

(e) Notwithstanding any other provision of this Agreement, (i) any Person who ceases to be a Member shall be treated as a Member for purposes of this Section 10.5 and (ii) the obligations of a Member pursuant to this Section 10.5 shall survive indefinitely with respect to any taxes withheld or paid by the Company that relate to the period during which such Person was actually a Member, regardless of whether such taxes are assessed, withheld or otherwise paid during such period.

 

Section 10.6 Tax Treatment of Cash Quarterly Preferred Distributions. The amount of any Preferred Quarterly Distribution actually paid in cash to any Preferred Unitholder pursuant to Section 4.8(b) hereof shall be treated for tax purposes as a guaranteed payment (within the meaning of Code Section 707(c)) to such Preferred Unitholder.

 

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Article XI
DISSOLUTION

 

Section 11.1 Liquidating Events. The Company shall dissolve and commence winding up and liquidating upon the first to occur of the following (each, a “Liquidating Event”):

 

(a) the sale of all or substantially all of the assets of the Company;

 

(b) the determination of the Managing Member to dissolve the Company;

 

(c) the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act; and

 

(d) the entry of a decree of judicial dissolution under Section 18‒802 of the Act.

 

The Members hereby agree that the Company shall not dissolve prior to the occurrence of a Liquidating Event and that no Member shall seek a dissolution of the Company, under Section 18-802 of the Act or otherwise, other than based on the matters set forth in subsections (a) and (b) above. In the event of a dissolution pursuant to Section 11.1(b), the relative economic rights of each class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable with respect to distributions made to Members pursuant to Section 11.3 in connection with such dissolution, taking into consideration tax and other legal constraints that may adversely affect one or more parties to such dissolution and subject to compliance with applicable laws and regulations, unless, with respect to any class of Units, holders of a majority of the Units of such class consent in writing to a treatment other than as described above.

 

Section 11.2 Bankruptcy. For purposes of this Agreement, the “bankruptcy” of a Member shall mean the occurrence of any of the following: (a) (i) any Governmental Entity shall take possession of any substantial part of the property of that Member or shall assume control over the affairs or operations thereof (ii) or a receiver or trustee shall be appointed, or a writ, order, attachment or garnishment shall be issued with respect to any substantial part thereof, and such possession, assumption of control, appointment, writ or order shall continue for a period of 90 consecutive days, (b) a Member shall (i) admit in writing of its inability to pay its debts when due, or make an assignment for the benefit of creditors, (ii) apply for or consent to the appointment of any receiver, trustee or similar officer or for all or any substantial part of its property or (iii) institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debts, dissolution, liquidation, or similar proceeding under the Laws of any jurisdiction or (c) a receiver, trustee or similar officer shall be appointed for such Member or with respect to all or any substantial part of its property without the application or consent of that Member, and such appointment shall continue undischarged or unstayed for a period of 90 consecutive days or any bankruptcy, insolvency, reorganization, arrangements, readjustment of debt, dissolution, liquidation or similar proceedings shall be instituted (by petition, application or otherwise) against that Member and shall remain undismissed for a period of 90 consecutive days.

 

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Section 11.3 Procedure.

 

(a) In the event of the dissolution of the Company for any reason, the Members shall commence to wind up the affairs of the Company and to liquidate the Company’s investments; provided, that if a Member is in bankruptcy or dissolved, the Managing Member shall commence to wind up the affairs of the Company and, subject to Section 11.4(a), the Managing Member shall have full right and unlimited discretion to determine in Good Faith the time, manner and terms of any sale or sales of the Property or other assets pursuant to such liquidation, having due regard to the activity and condition of the relevant market and general financial and economic conditions. The Members shall continue to share profits and losses during the period of liquidation in the same manner and proportion as though the Company had not dissolved. The Company shall engage in no further business except as may be necessary, in the reasonable discretion of the Managing Member, to preserve the value of the Company’s assets during the period of dissolution and liquidation.

 

(b) Following the allocation of all Profits and Losses as provided in Article V, the proceeds of the liquidation and any other funds of the Company shall be distributed in the following order of priority:

 

(i) First, to set up such cash reserves which the Managing Member reasonably deems necessary for contingent, conditional or unmatured Liabilities or future payments described in Section 11.3(b) (which reserves when they become unnecessary shall be distributed in accordance with the provisions of subsection (iii), below);

 

(ii) Second, to the payment of all expenses of liquidation and discharge of all of the Company’s debts and Liabilities to creditors (whether third parties or, to the fullest extent permitted by law, Members), in the order of priority as provided by Law, except any obligations to the Members in respect of their Capital Accounts or liabilities under 18-601 or 18-604 of the Act;

 

(iii) Third, to pay the Preferred Redemption Price on each Preferred Unit; and

 

(iv) Fourth, the balance to the Common Unitholders, pro rata in proportion to their respective ownership of Common Units.

 

(c) Except as provided in Section 11.4(a), no Member shall have any right to demand or receive property other than cash upon dissolution and termination of the Company.

 

(d) Upon the completion of the liquidation of the Company and the distribution of all Company funds, the Company shall terminate and the Managing Member shall have the authority to execute and record a certificate of cancellation of the Company, as well as any and all other documents required to effectuate the dissolution and termination of the Company.

 

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Section 11.4 Rights of Members.

 

(a) Each Member irrevocably waives any right that it may have to maintain an action for partition with respect to the property of the Company.

 

(b) Except as otherwise provided in this Agreement, (i) each Member shall look solely to the assets of the Company for the return of its Capital Contributions, and (ii) no Member shall have priority over any other Member as to the return of its Capital Contributions, distributions or allocations.

 

Section 11.5 Notices of Dissolution. In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 11.1, result in a dissolution of the Company, the Company shall, within 30 days thereafter, (a) provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Managing Member), and (b) comply, in a timely manner, with all filing and notice requirements under the Act or any other applicable Law.

 

Section 11.6 Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets in order to minimize any losses that might otherwise result from such winding up.

 

Section 11.7 No Deficit Restoration. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Company assets.

 

Article XII
GENERAL

 

Section 12.1 Amendments; Waivers.

 

(a) The terms and provisions of this Agreement may be waived, modified or amended (including by means of merger, consolidation or other business combination to which the Company is a party) only with both (y) the approval of the Managing Member and (z) except for any amendment pursuant to Section 7.7, if, at such time, Atlas beneficially owns any Units, the approval of Bernhard Capital Partners Management LP; provided, that no waiver, modification or amendment shall be effective until after written notice is provided to the Members that the requisite consent has been obtained for such waiver, modification or amendment, and, for the avoidance of doubt, any Member, including any Member not providing written consent, shall have the right to file a Redemption Notice prior to the effectiveness of such waiver, modification or amendment; provided, further, that no amendment to this Agreement may:

 

(i) modify the limited liability of any Member, or increase the liabilities or obligations of any Member, in each case, without the prior written consent of each such affected Member;

 

(ii) except as provided in the provisos in the last sentence of Section 4.3, alter or change any rights, preferences or privileges of any Interests in a manner that is different or prejudicial relative to any other Interests, without the prior written approval of a majority in interest of the Members holding the Interests affected in such a different or prejudicial manner; or

 

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(iii) alter or change any rights, preferences or privileges of the Preferred Units in a manner adverse to the Preferred Unitholders, without the prior written approval of the Preferred Required Unitholders.

 

(b) So long as the Preferred Units remain outstanding, the approval of all of the Preferred Unitholders shall be required to amend this Agreement if such amendment would:

 

(i) reduce the Preferred Distribution Amount or change the form or timing of payment of distributions on the Preferred Units; or

 

(ii) defer the date from which distributions on the Preferred Units will accrue, cancel any accrued and unpaid distributions on the Preferred Units or any interest accrued thereon (including any Preferred Partial Period Distributions), or change the seniority rights of the Preferred Unitholders as to the payment of distributions, including with respect to Section 11.3 hereof, in relation to the holders of any other class of Units; or

 

(iii) extend the dates set forth in Sections 4.8(f)(i) and (ii).

 

(c) Notwithstanding the foregoing subsection (a), but subject to the limitations of subsection (b), the Managing Member, acting alone, may amend this Agreement, including Exhibit A, (i) to reflect the admission of new Members, Transfers of Interests, the issuance of additional Units or Equity Securities, as provided by the terms of this Agreement, and, subject to Section 12.1(a), subdivisions or combinations of Units made in compliance with Section 4.1(g) and (ii) as necessary, and solely to the extent necessary, in the reasonable advice of legal counsel or a qualified tax advisor (including any nationally recognized accounting firm) to the Company, to avoid the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code.

 

(d) No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided.

 

Section 12.2 Further Assurances. Each Party agrees that it will from time to time, upon the reasonable request of another Party, execute such documents and instruments and take such further action as may be required to accomplish the purposes of this Agreement.

 

Section 12.3 Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon the parties and their respective successors and assigns, but shall inure to the benefit of and be enforceable by the successors and assigns of any Member only to the extent that they are permitted successors and assigns pursuant to the terms hereof. No party may assign its rights hereunder except as herein expressly permitted.

 

Section 12.4 Entire Agreement. This Agreement, together with all Exhibits and Schedules hereto and all other agreements referenced therein and herein, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein and therein.

 

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Section 12.5 Rights of Members Independent. The rights available to the Members under this Agreement and at Law shall be deemed to be several and not dependent on each other and each such right accordingly shall be construed as complete in itself and not by reference to any other such right. Any one or more and/or any combination of such rights may be exercised by a Member and/or the Company from time to time and no such exercise shall exhaust the rights or preclude another Member from exercising any one or more of such rights or combination thereof from time to time thereafter or simultaneously.

 

Section 12.6 Governing Law. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted by any Party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and performed in such State and without regard to conflicts of law doctrines, except to the extent that certain matters are preempted by federal Law.

 

Section 12.7 Jurisdiction and Venue. The parties hereto hereby agree and consent to be subject to the jurisdiction of any federal court of the District of Delaware or the Delaware Court of Chancery over any Action arising out of or in connection with this Agreement. The parties hereto irrevocably waive the defense of an inconvenient forum to the maintenance of any such Action. Each of the parties hereto further irrevocably consents, to the fullest extent permitted by law, to the service of process out of any of the aforementioned courts in any such Action by the mailing of copies thereof by registered mail, postage prepaid, to such Party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail. Nothing in this Section 12.7 shall affect the right of any Party hereto to serve legal process in any other manner permitted by law.

 

Section 12.8 Headings. The descriptive headings of the Articles, Sections and subsections of this Agreement are for convenience only and do not constitute a part of this Agreement.

 

Section 12.9 Counterparts. This Agreement and any amendment hereto or any other agreement (or document) delivered pursuant hereto may be executed in one or more counterparts and by different parties in separate counterparts. All of such counterparts shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise provided therein) when one or more counterparts have been signed by each Party and delivered to the other Party. Any signature hereto delivered by a Party by facsimile or other means of electronic transmission shall be deemed an original signature hereto.

 

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Section 12.10 Notices. Any notice, request, demand or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile, by telecommunications mechanism or electronically or (c) mailed by certified or registered mail, postage prepaid, receipt requested as follows:

 

If to the Company or the Managing Member, addressed to it at:

 

Atlas TC Holdings LLC

13215 Bee Cave Parkway

Bldg. A, Suite 260

Austin, Texas 78738

Attention: L. Joseph Boyer

Email: joe.boyer@atlastechnical.us

 

and

 

Boxwood Merger Corp

8801 Calera Drive

Austin, Texas 78735
Attention: Steve Kadenacy
Email: sk@boxwoodmc.com

 

With copies (which shall not constitute notice) to:

 

Kirkland & Ellis, LLP
609 Main Street, Suite 4700
Houston, TX 77002

Fax: (713) 836-3601
Email: wbenitez@kirkland.com
  julian.seiguer@kirkland.com
Attention: William J. Benitez, P.C.
  Julian J. Seiguer, P.C.

 

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and

 

Winston & Strawn

200 Park Avenue

New York, New York 10166-4193 

Fax: (212) 294-5336
Email: jrubinstein@winston.com
  josborn@winston.com
Attention: Joel Rubinstein
  Jason Osborn

 

and

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Fax: (212) 728-9270
Email: wgump@willkie.com
  vokasmaa@ willkie.com
Attention: William H. Gump
  Viktor Okasmaa

 

or to such other address or to such other Person as either Party shall have last designated by such notice to the other parties. Each such notice or other communication shall be effective (i) if given by telecommunication or electronically, when transmitted to the applicable number or electronic mail address so specified in (or pursuant to) this Section 12.10 and an appropriate answerback is received or, if transmitted after 5:00 p.m. Texas time on a Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the jurisdiction to which such notice is sent following the date three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt.

 

Section 12.11 Representation by Counsel; Interpretation. The Parties acknowledge that each Party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived.

 

Section 12.12 Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this Agreement, to the extent permitted by Law shall remain in full force and effect; provided, that the essential terms and conditions of this Agreement for all parties remain valid, binding and enforceable.

 

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Section 12.13 Expenses. Except as otherwise provided in this Agreement, each Party shall bear its own expenses in connection with the transactions contemplated by this Agreement.

 

Section 12.14 Waiver of Jury Trial. EACH OF THE COMPANY, THE MEMBERS, THE MANAGING MEMBER AND ANY INDEMNITEES SEEKING REMEDIES HEREUNDER, HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY MEMBER OR INDEMNITEE, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

 

Section 12.15 No Third Party Beneficiaries. Except as expressly provided in Sections 7.4 and 10.2, nothing in this Agreement, express or implied, is intended to confer upon any Party, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under this Agreement or otherwise create any third party beneficiary hereto.

 

Section 12.16 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement (except in the case of the immediately succeeding sentence) or any document, agreement, or instrument delivered contemporaneously herewith, and notwithstanding the fact that any Party may be a partnership or limited liability company, each Party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledges that no Persons other than the Parties shall have any obligation hereunder and that it has no rights of recovery hereunder against, and no recourse hereunder or under any documents, agreements, or instruments delivered contemporaneously herewith or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative or employee of any Party (or any of their successor or permitted assignees), against any former, current, or future general or limited partner, manager, stockholder or member of any Party (or any of their successors or permitted assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, stockholder, manager or member of any of the foregoing, but in each case not including the Parties (each, but excluding for the avoidance of doubt, the Parties, a “Party Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such party against the Party Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, or otherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any Party Affiliate, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, under any documents or instruments delivered contemporaneously herewith, in respect of any oral representations made or alleged to be made in connection herewith or therewith, or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, such obligations or their creation. Notwithstanding the foregoing, a Party Affiliate may have obligations under any documents, agreements or instruments delivered contemporaneously herewith or otherwise contemplated by this Agreement if such Party Affiliate is a party to such document, agreement, agreement or instrument. Except to the extent otherwise expressly set forth in, and subject in all cases to the terms and conditions of and limitations herein, this Agreement may only be enforced against, and any claim or cause of action of any kind based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the Persons that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. Each Party Affiliate is expressly intended as a third party beneficiary of this Section 12.16.

 

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Amended and Restated Limited Liability Company Agreement to be executed as of the day and year first above written.

 

  COMPANY:
   
  ATLAS TC HOLDINGS LLC
     
  By: /s/ Stephen M. Kadenacy
  Name:   Stephen M. Kadenacy
  Title: Chief Executive Officer
     
  MANAGING MEMBER:
   
  BOXWOOD MERGER CORP.
     
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Chief Executive Officer
     
  MEMBERS:
   
  ATLAS TECHNICAL CONSULTANTS HOLDINGS LP
     
  By: Atlas Technical Consultants Holdings GP LLC
  Its: General Partner
     
  By: /s/ L. Joe Boyer
  Name: L. Joe Boyer
  Title: Chief Executive Officer

 

Signature Page to Amended and Restated Limited Liability Company Agreement of Atlas TC Holdings LLC

 

83 

 

 

  GSO COF III AIV-2 LP
 

By: GSO Capital Opportunities Associates III LLC,

its general partner

     
  By: /s/ Marisa J. Beeney
  Name:     Marisa J. Beeney
  Title: Authorized Signatory

 

Signature Page to Amended and Restated Limited Liability Company Agreement of Atlas TC Holdings LLC

 

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EXHIBIT A

 

Members   Number of Shares of Class B  Common Stock Owned     Number of Common Units Owned     Number of Preferred Units Owned  
Boxwood Merger Corp.     -       5,827,342       -  
Atlas Technical Consultants Holdings LP     23,902,889       23,902,889       -  
GSO COF III AIV-2 LP             2,200,000       145,000  

 

Signature Page to Amended and Restated Limited Liability Company Agreement of Atlas TC Holdings LLC

 

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EXHIBIT B

 

Officer Listing

 

86

 

Exhibit 10.10

 

RESTRICTIVE COVENANT AGREEMENT

 

THIS RESTRICTIVE COVENANT AGREEMENT (this “Agreement”) is made as of February 14, 2020, by and between Atlas TC Holdings LLC, a Delaware limited liability company (“Holdings”), Atlas Technical Consultants SPV, LLC, a Delaware limited liability company (“ATC SPV”) and Arrow Environmental SPV, LLC, a Delaware limited liability company (together with ATC SPV, “BCP”).

 

RECITALS:

 

A. Reference herein is made to that certain Unit Purchase Agreement, dated as of August 12, 2019 (as amended, restated or otherwise modified from time to time, the “Purchase Agreement”), by and among Boxwood Merger Corp., a Delaware corporation (“Parent”), Holdings, Atlas TC Buyer LLC, a Delaware limited liability company (“Buyer”), Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas”, and together with its Subsidiaries, the “Company”), and Atlas Technical Consultants Holdings LP, a Delaware limited partnership and subsidiary of BCP (“Seller”), pursuant to which Buyer is purchasing certain issued and outstanding equity interests of Atlas from Seller (the “Transaction”). Capitalized terms not expressly defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement.

 

B. BCP acknowledges and agrees that (i) this Agreement is being entered into as part of the consummation of the Purchase Agreement and the Transaction, (ii) the covenants and agreements set forth in this Agreement are a material inducement to, and a condition precedent of, the Buyer Group consummating the Transaction, (iii) BCP shall receive substantial benefits by the consummation of the Transaction (including specifically its portion of the proceeds received by Seller in connection with the Transaction) and (iv) the Buyer Group and their Affiliates would not obtain the benefit of the bargain set forth in the Purchase Agreement as specifically negotiated by the parties thereto (including specifically the full benefit of the acquisition of the Purchased Units of Atlas by Buyer) if BCP breached the provisions of this Agreement.

 

C. BCP further acknowledges and agrees that, as of the date of the Transaction, it directly or indirectly owns an equity interest in Seller and, pursuant to the Transaction, Seller is selling the Purchased Units to Buyer. BCP acknowledges and understands that the following covenants and obligations placed upon it are necessary and appropriate to protect the value of the goodwill, confidential and proprietary information and trade secrets being acquired by Buyer.

 

D. BCP also acknowledges that prior to the Transaction, BCP may have been provided access to the Company’s Proprietary Information. Therefore, BCP agrees that it is fair and reasonable for the Company to enter into this Agreement with BCP to protect itself from the risk of misappropriation of Proprietary Information. For purposes of this Agreement, the term “Proprietary Information” means information of the Company acquired by BCP or its Affiliates (other than the Company) prior to the Closing Date (i) that is designated as “confidential” by the Company, or (ii) that the Company expressly indicates, prior to the Closing, through its policies, procedures, or other instructions should not be disclosed to anyone outside each such organization. Notwithstanding anything to the contrary contained in this Agreement, Proprietary Information shall not include information that (a) is or, other than as a result of BCP’s disclosure in breach of this Agreement, later becomes generally available to the public, (b) to the knowledge of BCP, is properly obtained by BCP or its Affiliates from an independent source under no obligation of confidentiality with respect to such information owed to Buyer or the Company, (c) is information already in BCP’s possession that is not solely related or otherwise unique to the Company or (d) is information developed by, or on behalf of, BCP or its Affiliates, without reference to or the use of Proprietary Information. Proprietary Information may be provided in any form, including electronic, oral, visual, or written form, whether or not it is marked as being confidential. Proprietary Information need not be a trade secret or know-how to be protected under this Agreement. By way of illustration, but not limitation, Proprietary Information may include any confidential information of the Company as of the Closing about the business, methods, business plans, operations, products, processes, and services of the Company or any Customer thereof. Proprietary Information may also include, without limitation, confidentially held information of the Company as of the Closing pertaining to: (i) the identities of the Company’s actual Customers, as well as the names, addresses, phone numbers and e-mail addresses of contact persons and/or decision-makers employed by Customers; (ii) the volume of business and the nature of the business relationship between Buyer or the Company and their Customers; (iii) the pricing of the Company’s products, services and technology, including any deviations from its standard pricing for particular Customers, as well as the financing methods employed by and arrangements with existing or prospective Customers; (iv) information regarding the Company’s employees, including their identities, skills, talents, knowledge, experience, compensation, and preferences; (v) business plans and strategies, marketing and sales plans and strategies, revenue, expense and profit projections, industry analyses, and any proposed or actual implemented technology changes; (vi) information about financial results and business condition; (vii) computer programs, software, source code, and program designs developed by or for the Company and/or tailored to their needs by their employees, independent contractors, consultants or vendors; and (viii) all technology developed, enhanced, produced, employed, and/or distributed by the Company. Proprietary Information includes trade secrets and know-how.

 

 

 

 

E. BCP also agrees that the Company has developed, over a period of time, and will continue to develop, goodwill between itself and its Customers. BCP further acknowledges that this goodwill is a valuable asset belonging solely to the Company, and the Company’s successors and/or assigns. For purposes of this Agreement, the term "Customer" means any individual, proprietorship, partnership, corporation, association, or other entity that has purchased or acquired products or services from, the Company during the 12 month period prior to the Closing.

 

F. BCP agrees that, as part of its or its Affiliates ownership of the Company, BCP is familiar with the compensation and benefits, capabilities, experiences and skills of a number of the Company’s employees. All such information may constitute Proprietary Information.

 

AGREEMENT:

 

NOW THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, including the Proprietary Information that BCP acquired as a result of BCP’s position with, and ownership interest in, the Company, the receipt and sufficiency of which are hereby acknowledged, it is agreed:

 

1. Restrictive Covenants.

 

As an inducement for Parent, Holdings and Buyer to enter into the Purchase Agreement, for the protection of the goodwill of the Company, and as additional consideration for the consideration to be paid under the Purchase Agreement, the parties hereto agree as follows:

 

(a) Ancillary to the enforceable promises set forth herein, BCP agrees that for a period of two years from and after the Closing Date, BCP shall not, and shall cause its Affiliates not to, directly or indirectly:

 

(i) induce or attempt to induce any of the persons set forth on Schedule 1 hereto (each, an “Executive” and, collectively, the “Executives”) or other executive officer of the Company (as of the Closing) to leave the employ of the Company; provided, however, that notwithstanding the promises and covenants within this Section 1(a)(i), BCP shall not be precluded from (A) engaging in general solicitations or advertising for personnel, including advertisements and searches conducted by a headhunter agency, provided that such solicitation, advertising or searches are not specifically directed at any such employees of the Company; and (B) subject to Section 1(a)(ii), hiring any such person who contacts BCP or its Affiliates in response to solicitations or advertising under the foregoing clause (A);

 

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(ii) hire any Executive who was employed by the Company at any time during the 12 month period prior to the Closing; or

 

(iii) induce or attempt to induce any Person that is, to BCP’s knowledge, a Customer, supplier or material business relation of the Company (including any Person that, to BCP’s knowledge, was a Customer, supplier or other material business relation of the Company at any time during the 12 month period immediately prior to the Closing) to cease doing business with the Company.

 

(b) From and after the date hereof, each party hereto agrees that it will not, and will direct its Affiliates not to, knowingly make, publish or communicate to any Person any oral or written statement that disparages or places the other party hereto in respect thereof in a false light, except in connection with a legal proceeding, legal process or if such party is otherwise required by Law to cooperate with, or is responding to a request from, a Governmental Entity or self-regulatory authority; provided, however, that nothing in this Section 1(b) shall prohibit any of the parties hereto or their Affiliates or any parties to the Purchase Agreement or any of the agreements entered into in connection therewith from defending against claims, or enforcing their rights, under this Agreement, the Purchase Agreement or any of the other agreements entered in connection therewith.

 

(c) From and after the date hereof, except to the extent consented to by Parent, Holdings, Buyer or the Company, BCP shall keep confidential (except as may be disclosed to its Affiliates, directors, officers, partners, employees, agents, consultants, financing sources, investors (including direct and indirect limited partners or investors), vehicles, managed accounts, attorneys, accountants, financial advisors or other representatives (collectively, “Representatives”)) and not use or disclose, and shall direct its Representatives to keep confidential and to not use or disclose, any and all Proprietary Information relating directly to the Company that remains in BCP’s possession after the Closing. The foregoing will not preclude BCP and its Representatives from (i) disclosing such Proprietary Information without liability hereunder if compelled or requested to disclose the same by legal, judicial or administrative process or by other requirements of Law (including, without limitation, by oral questions, interrogatories, requests for information or documents in legal, administrative, arbitration or other formal proceedings, subpoena, civil investigative demand or other similar process, including but not limited to an audit or examination by a regulator, bank examiner or self-regulatory organization) (subject to the following sentence), (ii) discussing or using such Proprietary Information if the same hereafter is publically available (other than as a result of a breach of this Section 1(c)); (iii) discussing or using such Proprietary Information to the extent such information is acquired or made available to BCP or its Representatives by a Person that is not, to BCP’s reasonable belief, subject to an obligation of confidentiality to the Company or any Person (other than BCP and its Representatives) with respect to such information; or (iv) using such Proprietary Information in connection with its ownership of Equity Interests of the Buyer Group. If BCP or its Affiliates or their Representatives is requested or required (by oral questions, interrogatories, requests for information or documents in legal, administrative, arbitration or other formal proceedings, subpoena, civil investigative demand or other similar process, including but not limited to an audit or examination by a regulator, bank examiner or self-regulatory organization) to disclose any such Proprietary Information, BCP shall, to the extent legally permissible, promptly notify Buyer Group of any such request or requirement so that Buyer Group may seek a protective order or other appropriate remedy (in each case, at Buyer Group’s sole expense) and/or waive compliance with the provisions of this Section 1(c). If based on the advice of counsel and in the absence of a protective order or other remedy, BCP is required to disclose such information, BCP, without any liability hereunder, may disclose that portion of such information that it believes in good faith it is legally required to disclose. Notwithstanding anything to the contrary contained herein, BCP shall not be required to give any notice and shall have no liability hereunder to the extent BCP or its Representatives is requested or required to disclose Proprietary Information to the applicable regulatory or self-regulatory authorities having supervisory jurisdiction over BCP or its Representatives, as applicable, during the course of any regulatory audit or examination. BCP shall be liable to the Company for the breach of this Section 1(c) by any of its Representatives.

 

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(d) Notwithstanding anything herein to the contrary, nothing in this Section 1 shall in any way limit the activities of any Affiliate (including portfolio companies) of BCP or its Affiliates (or any investment funds, vehicles or companies managed by Seller or its Affiliates) who are not in receipt of or otherwise provided any Proprietary Information; provided, however, that the foregoing shall not apply to the extent any Affiliate (including portfolio companies) of BCP or its Affiliates is acting at the specific instruction of a Person in possession of Proprietary Information who is using such Proprietary Information in making such instruction. For avoidance of doubt, no such Affiliate shall be deemed to be “in receipt or otherwise provided any Proprietary Information” solely as a result of a Representative of BCP or its Affiliates (or any investment funds, vehicles or companies managed by BCP or its Affiliates) who is in possession of Proprietary Information also being an officer, director or other agent of such portfolio company.

 

2. Remedies.

 

In the event of a breach of any covenant set forth in Section 1 of this Agreement, the non-breaching party may be entitled to have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the non-breaching party at law or in equity:

 

(a) the right and remedy to have the provisions of Section 1 specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of such provisions may cause irreparable injury to the non-breaching party and that money damages may not provide an adequate remedy to the non-breaching party; and

 

(b) the right to seek damages resulting from a breach of the provisions of Section 1; and

 

(c) the right to immediate injunctive relief, either by temporary or permanent injunction to prevent such a breach.

 

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3. Tolling of Restriction.

 

If BCP is found to have violated any of the provisions of Section 1, BCP agrees that the restrictive period of each covenant so violated shall be extended by a period of time equal to the period of such violation by BCP. It is the intent of this paragraph that the running of the restrictive period of any covenant shall be tolled during any period of violation of such covenants so that the Company may obtain the full and reasonable protection for which it contracted and so that BCP may not profit by any breach of such covenants.

 

4. Successors and Assigns; Third Party Beneficiaries.

 

This Agreement will be binding upon the parties hereto and will inure to the benefit of the parties hereto and their successors and permitted assigns. The parties hereto expressly agree that Buyer is an intended third party beneficiary of this Agreement.

 

5. Governing Law; Jurisdiction; Venue.

 

The Laws of the State of Delaware shall govern (a) all claims or matters related to or arising from this Agreement and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. Each party to this Agreement hereby IRREVOCABLY waives all rights to trial by jury in any action, suit or Proceeding brought to resolve any dispute between or among any of the parties (whether arising in contract, tort or otherwise) arising out of, connected with, related or incidental to this Agreement, the transactions contemplated hereby and/or the relationships established among the parties hereunder. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the Parties submits to the exclusive jurisdiction of a state or federal court sitting in the State of Delaware, County of New Castle. Nothing in this Section 4, however, shall affect the right of any party to serve legal process in any other manner permitted by Law or at equity. Each party hereto agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity.

 

6. Remedies.

 

In the event that BCP actually violates any of the provisions set forth herein, BCP acknowledges that Buyer will suffer immediate and irreparable harm which cannot be accurately calculated in monetary damages. Consequently, BCP acknowledges and agrees that in the event BCP actually violates any of the provisions set forth herein, in addition to any other remedy to which Buyer may be entitled, Buyer shall be entitled to immediate injunctive relief, either by temporary or permanent injunction, solely to the extent necessary to prevent such a violation and may seek any other legal or equitable relief to which it may be entitled. The parties hereto agree that the bond to be posted if any injunction is sought in connection with this Agreement shall not exceed $1,000.00. The pursuit of one remedy at any time will not be deemed an election of remedies or waiver of the right to pursue any other remedy.

 

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7. Severability.

 

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, such court of competent jurisdiction shall add as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

 

8. Counterparts; Electronic Delivery.

 

This Agreement may be executed and delivered in one or more counterparts and by fax or email, each of which shall be deemed an original and all of which shall be considered one and the same agreement. Neither party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of this Agreement and each party forever waives any such defense.

 

9. Section Headings; Construction.

 

The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

10. Assignment.

 

Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof may be assigned by any party without the prior written consent of the other party hereto.

 

11. Amendment and Waiver.

 

No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Atlas and BCP. No waiver of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the party against which such waiver is to be enforced. No waiver by any party hereto of any default, breach of representation or warranty or breach of covenant hereunder, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence.

 

12. Notices.

 

All notices, demands, requests, instructions, claims, consents, waivers and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment), received by fax or email (with hard copy to follow) prior to 5:00 p.m. Central Time on a Business Day or delivery by reputable overnight express courier (charges prepaid) or (b) three (3) days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing, notices, demands and communications to the Company shall be sent to the addresses indicated below:

 

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  If to the Company:
   
    Atlas Technical Consultants, Inc.
    13215 Bee Cave Parkway
    Bldg. B, Suite 230
    Austin, Texas 78738
    Attention: L. Joseph Boyer
    Email: joe.boyer@atlastechnical.us
     
    with a copy to:
     
    Kirkland & Ellis LLP
    609 Main Street
    Houston, Texas 77002
    Attn: William J. Benitez, P.C.
      Kyle M. Watson
    Fax: (713) 836-3601
    Email: william.benitez@kirkland.com
      kyle.watson@kirkland.com
     
  If to BCP:
   
    Atlas Technical Consultants SPV, LLC,
    Arrow Environmental SPV, LLC
    c/o Bernhard Capital Partners
    400 Convention St., Suite 1010
    Baton Rouge, Louisiana 70802
    Attn: Mark Spender
      Christopher Dillon
      Lucie Kantrow
    Fax: (225) 454-6957
    Email: mark@bernhardcapital.com
      chris@bernhardcapital.com
      lucie@bernhardcapital.com
     
    and
     
    Kirkland & Ellis LLP
    609 Main Street
    Houston, Texas 77002
    Attn: William J. Benitez, P.C.
      Kyle M. Watson
    Fax: (713) 836-3601
    Email: william.benitez@kirkland.com
      kyle.watson@kirkland.com

 

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13. Attorneys’ Fees; Costs.

 

Each party hereto will be responsible for its own expenses, fees and costs in connection with this Agreement or the enforcement of the terms hereto, including any attorneys’ fees incurred in enforcing or commencing to enforce the provisions of this Agreement.

 

14. Entire Agreement.

 

This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding between the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way. The parties have voluntarily agreed to define their rights, liabilities and obligations with respect to the transactions contemplated hereby exclusively in the express terms and provisions of this Agreement, and the parties expressly disclaim that they are owed any duties or are entitled to any remedies not expressly set forth in this Agreement. Furthermore, this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length negotiations neither party has any special relationship with another Person that would justify any expectation beyond that of an ordinary arm’s-length transaction.

 

[Remainder of this page is intentionally blank. Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned parties have executed and delivered this Agreement as of the date first written above.

 

  HOLDINGS
   
  ATLAS TC HOLDINGS LLC
   
  By: /s/ Stephen M. Kadenacy
  Name: Stephen M. Kadenacy
  Title: Chief Executive Officer

 

Signature Page to Restrictive Covenant Agreement

 

 

 

 

  BCP:
     
  ATLAS TECHNICAL CONSULTANTS SPV, LLC
     
  By: /s/ Chris Dillon
  Name: Chris Dillon
  Title: Authorized Person

 

Signature Page to Restrictive Covenant Agreement

 

 

 

 

 

ARROW ENVIRONMENTAL SPV, LLC
     
  By: /s/ Mark D. Spender
  Name: Mark D. Spender
  Title: Vice President

 

Signature Page to Restrictive Covenant Agreement

 

 

 

Schedule 1

 

Executives

 

1.

L. Joe Boyer
2. Walter Powell
3. Bobby Toups
4. Magshoud Tahmoressi
5. Gary Cappa
6. Buddy Gratton
7. Paul Grillo
8. Rob Comey
9. David Miller
10. Eric Steinmann
11. Jim Backman
12. Charlie Brice
13. David Cram
14. Brad Tanberg
15. Daniel King
16. Jeremy Presley
17. Jay Dorst
18. Jim Powers
19. Mike Ballard
20. John Kirshbaum
21. Bill Ulmer

 

 

Schedule 1 to Restrictive Covenant Agreement

 

 

Exhibit 10.11

 

ATLAS TECHNICAL CONSULTANTS, INC.

2019 OMNIBUS INCENTIVE PLAN

 

Section 1. General.

 

The name of the Plan is the Atlas Technical Consultants, Inc. 2019 Omnibus Incentive Plan (the “Plan”). The Plan intends to: (i) encourage the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives; (ii) give Participants an incentive for individual performance; (iii) promote teamwork among Participants; and (iv) give the Company an advantage in attracting and retaining key Employees, Directors, and Consultants. To accomplish such purposes, the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance-Based Awards (including performance-based Restricted Shares and Restricted Stock Units), Other Stock-Based Awards, Other Cash-Based Awards or any combination of the foregoing.

 

Section 2. Definitions.

 

For purposes of the Plan, the following terms shall be defined as set forth below:

 

(a) “Administrator” means the Board, or, if and to the extent the Board does not administer the Plan, the Committee appointed by the Board to administer the Plan in accordance with Section 3 of the Plan.

 

(b) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. An entity shall be deemed an Affiliate of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.

 

(c) “Automatic Exercise Date” means, with respect to an Option or a Stock Appreciation Right, the last business day of the applicable term of the Option pursuant to Section 7(d) or the Stock Appreciation Right pursuant to Section 8(g).

 

(d) “Award” means any Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Performance-Based Award, Other Stock-Based Award, or Other Cash-Based Award granted under the Plan.

 

(e) “Award Agreement” means any agreement, contract, or other instrument or document evidencing an Award. Evidence of an Award may be in written or electronic form, may be limited to notation on the books and records of the Company and, with the approval of the Administrator, need not be signed by a representative of the Company or a Participant. Any Shares that become deliverable to the Participant pursuant to the Plan may be issued in certificate form in the name of the Participant or in book-entry form in the name of the Participant.

 

(f) “Bylaws” means the bylaws of the Company, as may be amended and/or restated from time to time.

 

(g) “Beneficial Owner” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.

 

(h) “Board” means the Board of Directors of the Company.

 

(i) “Cause” shall have the meaning assigned to such term in any Company or Affiliate employment, severance, or similar agreement or Award Agreement with the Participant or, if no such agreement exists or the agreement does not define “Cause,” Cause means (i) any conduct, action or behavior by a Participant, whether or not in connection with the Participant’s employment, including, without limitation, the commission of any felony or a lesser crime involving dishonesty, fraud, misappropriation, theft, wrongful taking of property, embezzlement, bribery, forgery, extortion or other crime of moral turpitude, that has or may reasonably be expected to have a material adverse effect on the reputation or business of the Company, its Subsidiaries and Affiliates or which results in gain or personal enrichment of the Participant to the detriment of the Company, its Subsidiaries and Affiliates; (ii) a governmental authority has prohibited the Participant from working or being affiliated with the Company, its Subsidiaries and Affiliates or the business conducted thereby; (iii) the commission of any act by the Participant of gross negligence or malfeasance, or any willful violation of law, in each case, in connection with the Participant’s performance of his or her duties with the Company or any Affiliate thereof; (iv) performance of the Participant’s duties in an unsatisfactory manner after a written warning and a ten (10) day opportunity to cure or failure to observe material policies generally applicable to employees after a written warning and a ten (10) day opportunity to cure; (v) breach of the Participant’s duty of loyalty to the Company Group; (vi) the Participant’s chronic absenteeism; (vii) the Participant’s substance abuse, illegal drug use, or habitual insobriety; or (viii) the Participant’s violation of obligations of confidentiality to any third party in the course of providing services to the Company, its Subsidiaries and Affiliates.

 

 

 

 

(j) “Certificate of Incorporation” means the certificate of incorporation of the Company, as may be amended and/or restated from time to time.

 

(k) “Change in Capitalization” means any (i) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, (ii) extraordinary dividend (whether in the form of cash, Common Stock or other property), stock split or reverse stock split, (iii) combination or exchange of shares, (iv) other change in corporate structure, or (v) payment of any other distribution, which, in any such case, the Administrator determines, in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 of the Plan is appropriate.

 

(l) “Change in Control” shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred following the Effective Date:

 

(i) any Person, other than the Company or a trustee or other fiduciary holding securities under an employee benefit plan of the Company, becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below or any acquisition directly from the Company; or

 

(ii) the following individuals cease for any reason to constitute a majority of the number of Directors then serving on the Board: individuals who, during any period of two (2) consecutive years, constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the two (2) year period or whose appointment, election or nomination for election was previously so approved or recommended; or

 

(iii) there is consummated a merger or consolidation of the Company or any Affiliate thereof with any other corporation, other than a merger or consolidation (A) that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof) outstanding immediately after such merger or consolidation, and (B) immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board of the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or

 

(iv) the consummation of a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned directly or indirectly by stockholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (B) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.

 

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For each Award that constitutes deferred compensation under Code Section 409A, a Change in Control (where applicable) shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also constitute a “change in control event” under Code Section 409A.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

 

(m) “Change in Control Price” shall have the meaning set forth in Section 12 of the Plan.

 

(n) “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto. Any reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.

 

(o) “Committee” means any committee or subcommittee the Board may appoint to administer the Plan. Subject to the discretion of the Board, the Committee shall be composed entirely of individuals who meet the qualifications of a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on which the Common Stock is traded. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Company’s Certificate of Incorporation or Bylaws, or any charter establishing the Committee, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.

 

(p) “Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

(q) “Company” means Atlas Technical Consultants, Inc., a Delaware corporation (or any successor corporation, except as the term “Company” is used in the definition of “Change in Control” above).

 

(r) “Consultant” means any consultant or independent contractor of the Company or an Affiliate thereof, in each case, who is not an Employee, Executive Officer, or non-employee Director.

 

(s) “Disability” shall have the meaning assigned to such term in any individual employment, severance or similar agreement or Award Agreement with the Participant or, if no such agreement exists or the agreement does not define “Disability,” Disability means, with respect to any Participant, that such Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Employees of the Company or an Affiliate thereof.

 

(t) “Director” means any individual who is a member of the Board on or after the Effective Date.

 

(u) “Effective Date” shall have the meaning set forth in Section 19 of the Plan.

 

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(v) “Eligible Recipient” means: (i) an Employee; (ii) a non-employee Director; or (iii) a Consultant, in each case, who has been selected as an Eligible Recipient under the Plan by the Administrator. Notwithstanding the foregoing, to the extent required to avoid the imposition of additional taxes under Code Section 409A, “Eligible Recipient” means: (1) an Employee; (2) a non-employee Director; or (3) a Consultant, in each case, of the Company or any Affiliate thereof, who has been selected as an Eligible Recipient under the Plan by the Administrator.

 

(w) “Employee” shall mean an employee of the Company or an Affiliate thereof, as described in Treasury Regulation Section 1.421-1(h), including an Executive Officer or Director who is also treated as an employee.

 

(x) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

(y) “Executive Officer” means each Participant who is an executive officer (within the meaning of Rule 3b-7 under the Exchange Act) of the Company.

 

(z) “Exercise Price” means, with respect to any Award under which the holder may purchase Shares, the price per share at which a holder of such Award granted hereunder may purchase Shares issuable upon exercise of such Award.

 

(aa) “Fair Market Value” as of a particular date shall mean: (i) if the Common Stock is admitted to trading on a national securities exchange, the fair market value of a Share on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported; (ii) if the Shares are not then listed on a national securities exchange, the average of the highest reported bid and lowest reported asked prices for the Shares as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other quotation system for the last preceding date on which there was a sale of such stock; or (iii) if the Shares are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such Shares is not otherwise determinable, such value as determined by the Committee in good faith and in a manner not inconsistent with Code Section 409A.

 

(bb) “Free Standing Rights” shall have the meaning set forth in Section 8(a) of the Plan.

 

(cc) “Incentive Stock Option” means an Option that is intended to satisfy the requirements applicable to an “incentive stock option” described in Code Section 422.

 

(dd) “Nonqualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.

 

(ee) “Option” means an option to purchase Shares granted pursuant to Section 7 of the Plan.

 

(ff) “Other Cash-Based Award” means a cash Award granted to a Participant under Section 11 of the Plan, including cash awarded as a bonus or upon the attainment of Performance Goals or otherwise as permitted under the Plan.

 

(gg) “Other Stock-Based Award” means a right or other interest granted to a Participant under Section 11 of the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Class A Common Stock, including, but not limited to, unrestricted Shares or dividend equivalents, each of which may be subject to the attainment of Performance Goals or a period of continued employment or other terms or conditions as permitted under the Plan.

 

(hh) “Participant” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section 3 of the Plan, to receive grants of Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance-Based Awards, Other Stock-Based Awards, Other Cash-Based Awards or any combination of the foregoing, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be, solely with respect to any Awards outstanding at the date of the Eligible Recipient’s death.

 

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(ii) “Performance-Based Award” means any Award granted under the Plan that is subject to one or more performance goals. Any dividends or dividend equivalents payable or credited to a Participant with respect to any unvested Performance-Based Award shall be subject to the same performance goals as the Shares or units underlying the Performance-Based Award.

 

(jj) “Performance Goals” means performance goals based on one or more of the following criteria: (i) earnings before interest and taxes; (ii) earnings before interest, taxes, depreciation and amortization; (iii) net operating profit after tax; (iv) cash flow; (v) revenue; (vi) net revenues; (vii) sales; (viii) days sales outstanding; (ix) scrap rates; (x) income; (xi) net income; (xii) operating income; (xiii) net operating income; (xiv) operating margin; (xv) earnings; (xvi) earnings per share; (xvii) return on equity; (xviii) return on investment; (xix) return on capital; (xx) return on assets; (xxi) return on net assets; (xxii) total shareholder return; (xxiii) economic profit; (xxiv) market share; (xxv) appreciation in the fair market value, book value or other measure of value of the Company’s Common Stock; (xxvi) expense or cost control; (xxvii) working capital; (xxviii) volume or production; (xxix) new products; (xxx) customer satisfaction; (xxxi) brand development; (xxxii) employee retention or employee turnover; (xxxiii) employee satisfaction or engagement; (xxxiv) environmental, health or other safety goals; (xxxv) individual performance; (xxxvi) strategic objective milestones; (xxxvii) days inventory outstanding; and (xxxviii) any combination of, or as applicable, a specified increase or decrease in, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or an Affiliate thereof, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur).

 

(kk) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any Affiliate thereof, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Affiliate thereof, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(ll) “Related Rights” shall have the meaning set forth in Section 8(a) of the Plan.

 

(mm) “Restricted Shares” means an Award of Shares granted pursuant to Section 9 of the Plan subject to certain restrictions that lapse at the end of a specified period or periods or the attainment of certain Performance Goals.

 

(nn) “Restricted Stock Unit” means a notional account established pursuant to an Award granted to a Participant, as described in Section 10 of the Plan, that is (i) valued solely by reference to Shares, (ii) subject to restrictions specified in the Award Agreement, and (iii) payable in cash or in Shares (as specified in the Award Agreement). The Restricted Stock Units awarded to the Participant will vest according to the time-based criteria or Performance Goals criteria specified in the Award Agreement.

 

(oo) “Restricted Period” means the period of time determined by the Administrator during which an Award or a portion thereof is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.

 

(pp) “Retirement” means a termination of a Participant’s employment, other than for Cause and other than by reason of death or Disability, on or after the attainment of age 65.

 

(qq) “Rule 16b-3” shall have the meaning set forth in Section 3(a) of the Plan.

 

(rr) “Shares” means shares of Class A Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation or other reorganization) security.

 

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(ss) “Stock Appreciation Right” means the right pursuant to an Award granted under Section 8 of the Plan to receive an amount equal to the excess, if any, of (i) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of the Shares covered by such Award or such portion thereof, over (ii) the aggregate Exercise Price of such Award or such portion thereof.

 

(tt) “Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation, or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

 

Section 3. Administration.

 

(a) The Plan shall be administered by the Administrator and shall be administered in accordance with, to the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”).

 

(b) Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, without limitation:

 

(i) to select those Eligible Recipients who shall be Participants;

 

(ii) to determine whether and to what extent Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance-Based Awards, Other Stock-Based Awards, Other Cash-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;

 

(iii) to determine the number of Shares to be covered by each Award granted hereunder;

 

(iv) to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder, including, but not limited to, (A) the restrictions applicable to Restricted Shares and Restricted Stock Units and the conditions under which restrictions applicable to such Restricted Shares and Restricted Stock Units shall lapse, (B) the Performance Goals and periods applicable to Awards, if any, (C) the Exercise Price of each Award, (D) the vesting schedule applicable to each Award, (E) the number of Shares subject to each Award and (F) subject to the requirements of Code Section 409A (to the extent applicable), any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards;

 

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units or Other Stock-Based Awards, Other Cash-Based Awards or any combination of the foregoing granted hereunder;

 

(vi) to determine the Fair Market Value;

 

(vii) to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant’s employment for purposes of Awards granted under the Plan;

 

(viii) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable;

 

(ix) to reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan, any Award Agreement or other instrument or agreement relating to the Plan or an Award granted under the Plan; and

 

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(x) to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan.

 

(c) The Administrator shall have the right, from time to time, to delegate to one or more officers of the Company the authority of the Administrator to grant and determine the terms and conditions of Awards granted under the Plan, subject to the requirements of state law and such other limitations as the Administrator shall determine. In no event shall any such delegation of authority be permitted with respect to Awards to any members of the Board or to any Eligible Recipient who is subject to Rule 16b-3 under the Exchange Act or Section 162(m) of the Code. The Administrator shall also be permitted to delegate, to any appropriate officer or employee of the Company, responsibility for performing certain ministerial functions under the Plan. If the Administrator’s authority is delegated to officers or employees in accordance with the foregoing, all provisions of the Plan relating to the Administrator shall be interpreted in a manner consistent with the foregoing by treating any such reference as a reference to such officer or employee for such purpose. Any action undertaken in accordance with the Administrator’s delegation of authority hereunder shall have the same force and effect as if such action was undertaken directly by the Administrator and shall be deemed for all purposes of the Plan to have been taken by the Administrator.

 

(d) All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, including the Company and the Participants. No member of the Board or the Committee, or any officer or employee of the Company or any Affiliate thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company and of any Affiliate thereof acting on their behalf shall, to the maximum extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination or interpretation.

 

Section 4. Shares Reserved for Issuance Under the Plan.

 

(a) Subject to Section 5 of the Plan, the number of Shares that are reserved and available for issuance pursuant to Awards granted under the Plan is equal to ten percent (10%) of the outstanding shares of Class A Common Stock. The maximum number of Shares that may be issued pursuant to Options intended to be Incentive Stock Options is equal to ten percent (10%) of the outstanding shares of Class A Common Stock.

 

(b) Notwithstanding the foregoing, the maximum number of Shares subject to Awards granted during any fiscal year to any non-employee Director, when taken together with any cash fees paid to such non-employee Director during the fiscal year in respect of his or her service as a Director, shall not exceed $300,000 in total value (calculating the value of any such Awards based on the grant date Fair Market Value of such Awards for financial reporting purposes).

 

(c) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. Any Shares subject to an Award under the Plan that, after the Effective Date, are forfeited, canceled, settled or otherwise terminated without a distribution of Shares to a Participant will thereafter be deemed to be available for Awards. In applying the immediately preceding sentence, if (i) Shares otherwise issuable or issued in respect of, or as part of, any Award are withheld to cover taxes, such Shares shall be treated as having been issued under the Plan and shall not again be available for issuance under the Plan, (ii) Shares otherwise issuable or issued in respect of, or as part of, any Award of Options or Stock Appreciation Rights are withheld to cover the Exercise Price, such Shares shall be treated as having been issued under the Plan and shall not be available for issuance under the Plan, and (iii) any Stock-settled Stock Appreciation Rights are exercised, the aggregate number of Shares subject to such Stock Appreciation Rights shall be deemed issued under the Plan and shall not be available for issuance under the Plan.

 

(d) Substitute Awards shall not reduce the Shares authorized for grant under the Plan. In the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available Shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination.

 

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Section 5. Equitable Adjustments.

 

In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in (i) the aggregate number of Shares reserved for issuance under the Plan and the maximum number of Shares that may be subject to Awards granted to any Participant in any calendar or fiscal year, (ii) the kind, number and Exercise Price subject to outstanding Options and Stock Appreciation Rights granted under the Plan, provided, however, that any such substitution or adjustment with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code Section 409A, and (iii) the kind, number and purchase price of Shares subject to outstanding Restricted Shares or Other Stock-Based Awards granted under the Plan, in each case as may be determined by the Administrator, in its sole discretion; provided, however, that any fractional Shares resulting from the adjustment shall be eliminated. Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other property having an aggregate Fair Market Value of the Shares covered by such Award, reduced by the aggregate Exercise Price or purchase price thereof, if any. Notwithstanding anything contained in the Plan to the contrary, any adjustment with respect to an Incentive Stock Option due to an adjustment or substitution described in this Section 5 shall comply with the rules of Code Section 424(a), and in no event shall any adjustment be made which would render any Incentive Stock Option granted hereunder to be disqualified as an incentive stock option for purposes of Code Section 422. The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.

 

Section 6. Eligibility.

 

The Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from among Eligible Recipients.

 

Section 7. Options.

 

(a) General. The Committee may, in its sole discretion, grant Options to Participants. Solely with respect to Participants who are Employees, the Committee may grant Incentive Stock Options, Nonqualified Stock Options or a combination of both. With respect to all other Participants, the Committee may grant only Nonqualified Stock Options. Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, which Award Agreement shall specify whether the Option is an Incentive Stock Option or a Nonqualified Stock Option and shall set forth, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option granted thereunder. The provisions of each Option need not be the same with respect to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder. Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement. The prospective recipient of an Option shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date.

 

(b) Limits on Incentive Stock Options. If the Administrator grants Incentive Stock Options, then to the extent that the aggregate fair market value of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year (under all plans of the Company) exceeds $100,000, such Options will be treated as Nonqualified Stock Options to the extent required by Code Section 422.

 

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(c) Exercise Price. The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant; provided, however, that (i) in no event shall the Exercise Price of an Option be less than one hundred percent (100%) of the Fair Market Value of the Class A Common Stock on the date of grant, and (ii) no Incentive Stock Option granted to a ten percent (10%) stockholder of the Company’s Common Stock (within the meaning of Code Section 422(b)(6)) shall have an exercise price per share less than one-hundred ten percent (110%) of the Fair Market Value of a Share on such date.

 

(d) Option Term. The maximum term of each Option shall be fixed by the Administrator, but in no event shall (i) an Option be exercisable more than ten (10) years after the date such Option is granted, and (ii) an Incentive Stock Option granted to a ten percent (10%) stockholder of the Company’s Common Stock (within the meaning of Code Section 422(b)(6)) be exercisable more than five (5) years after the date such Option is granted. Each Option’s term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement. Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion, deems appropriate. Notwithstanding any contrary provision herein, if, on the date an outstanding Option would expire, the exercise of the Option, including by a “net exercise” or “cashless” exercise, would violate applicable securities laws or any insider trading policy maintained by the Company from time to time, the expiration date applicable to the Option will be extended, except to the extent such extension would violate Section 409A, to a date that is thirty (30) calendar days after the date the exercise of the Option would no longer violate applicable securities laws or any such insider trading policy.

 

(e) Exercisability. Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of pre-established Performance Goals, as shall be determined by the Administrator in the applicable Award Agreement. The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion. Notwithstanding anything to the contrary contained herein, an Option may not be exercised for a fraction of a share.

 

(f) Method of Exercise. Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator. As determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made (i) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Administrator and permitted by applicable law or (iv) any combination of the foregoing. In determining which methods a Participant may utilize to pay the Exercise Price, the Administrator may consider such factors as it determines are appropriate; provided, however, that with respect to Incentive Stock Options, all such discretionary determinations shall be made by the Administrator at the time of grant and specified in the Award Agreement.

 

(g) Rights as Stockholder. A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, has paid in full for such Shares and has satisfied the requirements of Section 15 of the Plan and the Shares have been issued to the Participant.

 

(h) Termination of Employment or Service.

 

(i) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate for any reason other than Cause, Retirement, Disability, or death, (A) Options granted to such Participant, to the extent that they are exercisable at the time of such termination, shall remain exercisable until the date that is ninety (90) days after such termination, on which date they shall expire, and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The ninety (90) day period described in this Section 7(h)(i) shall be extended to one (1) year after the date of such termination in the event of the Participant’s death during such ninety (90) day period. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

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(ii) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate on account of Retirement, Disability or the death of the Participant, (A) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date they shall expire and (B) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.

 

(iii) In the event of the termination of a Participant’s employment or service for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination.

 

(iv) For purposes of this Section 7(h), Options that are not exercisable solely due to a blackout period shall be considered exercisable.

 

(i) Other Change in Employment Status. An Option may be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status or service of a Participant, as evidenced in a Participant’s Award Agreement.

 

(j) Change in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Options shall be subject to Section 12 of the Plan.

 

(k) Automatic Exercise. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable Option outstanding on the Automatic Exercise Date with an Exercise Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Participant or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Administrator, payment of the Exercise Price of any such Option shall be made pursuant to Section 7(f) and the Company or any Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 15. Unless otherwise determined by the Administrator, this Section 7(k) shall not apply to an Option if the Participant’s employment or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Option with an Exercise Price per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise Date shall be exercised pursuant to this Section 7(k).

 

Section 8. Stock Appreciation Rights.

 

(a) General. Stock Appreciation Rights may be granted either alone (“Free Standing Rights”) or in conjunction with all or part of any Option granted under the Plan (“Related Rights”). Related Rights may be granted either at or after the time of the grant of such Option. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Stock Appreciation Rights shall be made, the number of Shares to be awarded, the price per Share, and all other conditions of Stock Appreciation Rights. Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates and any Stock Appreciation Right must be granted with an Exercise Price not less than the Fair Market Value of Class A Common Stock on the date of grant. The provisions of Stock Appreciation Rights need not be the same with respect to each Participant. Stock Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.

 

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(b) Awards; Rights as Stockholder. The prospective recipient of a Stock Appreciation Right shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Participants who are granted Stock Appreciation Rights shall have no rights as stockholders of the Company with respect to the grant or exercise of such rights.

 

(c) Exercisability.

 

(i) Stock Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.

 

(ii) Stock Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which they relate shall be exercisable in accordance with the provisions of Section 7 above and this Section 8 of the Plan.

 

(d) Payment Upon Exercise.

 

(i) Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares, determined using the Fair Market Value, equal in value to the excess of the Fair Market Value as of the date of exercise over the price per share specified in the Free Standing Right multiplied by the number of Shares in respect of which the Free Standing Right is being exercised.

 

(ii) A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares, determined using the Fair Market Value, equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option multiplied by the number of Shares in respect of which the Related Right is being exercised. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised.

 

(iii) Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Stock Appreciation Right in cash (or in any combination of Shares and cash).

 

(e) Rights as Stockholder. A Participant shall have no rights to dividends or any other rights of a stockholder with respect to the Shares subject to a Stock Appreciation Right until the Participant has given written notice of the exercise thereof, has satisfied the requirements of Section 15 of the Plan and the Shares have been issued to the Participant.

 

(f) Termination of Employment or Service.

 

(i) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Free Standing Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.

 

(ii) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Related Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the related Options.

 

(g) Term.

 

(i) The term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10) years after the date such right is granted.

 

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(ii) The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted.

 

(h) Change in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Stock Appreciation Rights shall be subject to Section 12 of the Plan.

 

(i) Automatic Exercise. Unless otherwise provided by the Administrator in an Award Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable Stock Appreciation Right outstanding on the Automatic Exercise Date with an Exercise Price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Participant or the Company be exercised on the Automatic Exercise Date. The Company or any Affiliate shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 15. Unless otherwise determined by the Administrator, this Section 8(i) shall not apply to a Stock Appreciation Right if the Participant’s employment or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation Right with an Exercise Price per Share that is equal to or greater the Fair Market Value per Share on the Automatic Exercise Date shall be exercised pursuant to this Section 8(i).

 

Section 9. Restricted Shares.

 

(a) General. Restricted Shares may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Restricted Shares shall be made; the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares; the Restricted Period, if any, applicable to Restricted Shares; the Performance Goals (if any) applicable to Restricted Shares; and all other conditions of the Restricted Shares. If the restrictions, Performance Goals and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares in accordance with the terms of the grant. The provisions of the Restricted Shares need not be the same with respect to each Participant.

 

(b) Awards and Certificates. The prospective recipient of Restricted Shares shall not have any rights with respect to any such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Except as otherwise provided in Section 9(c) of the Plan, (i) each Participant who is granted an award of Restricted Shares may, in the Company’s sole discretion, be issued a stock certificate in respect of such Restricted Shares; and (ii) any such certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to any such Award.

 

The Company may require that the stock certificates, if any, evidencing Restricted Shares granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any award of Restricted Shares, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award.

 

Notwithstanding anything in the Plan to the contrary, any Restricted Shares (whether before or after any vesting conditions have been satisfied) may, in the Company’s sole discretion, be issued in uncertificated form pursuant to the customary arrangements for issuing shares in such form.

 

(c) Restrictions and Conditions. The Restricted Shares granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or thereafter:

 

(i) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain Performance Goals, the Participant’s termination of employment or service as a non-employee Director or Consultant of the Company or an Affiliate thereof, or the Participant’s death or Disability.

 

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(ii) Except as provided in Section 16 of the Plan or in the Award Agreement, the Participant shall generally have the rights of a stockholder of the Company with respect to Restricted Shares during the Restricted Period. In the Administrator’s discretion and as provided in the applicable Award Agreement, a Participant may be entitled to dividends or dividend equivalents on an Award of Restricted Shares, which will be payable in accordance with the terms of such grant as determined by the Administrator. Certificates for Shares of unrestricted Class A Common Stock may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares, except as the Administrator, in its sole discretion, shall otherwise determine.

 

(iii) The rights of Participants granted Restricted Shares upon termination of employment or service as a non-employee Director or Consultant of the Company or an Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in the Award Agreement.

 

(d) Change in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Shares shall be subject to Section 12 of the Plan.

 

Section 10. Restricted Stock Units.

 

(a) General. Restricted Stock Units may be issued either alone or in addition to other Awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Restricted Stock Units shall be made; the number of Restricted Stock Units to be awarded; the Restricted Period, if any, applicable to Restricted Stock Units; the Performance Goals (if any) applicable to Restricted Stock Units; and all other conditions of the Restricted Stock Units. If the restrictions, Performance Goals and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Stock Units in accordance with the terms of the grant. The provisions of Restricted Stock Units need not be the same with respect to each Participant.

 

(b) Award Agreement. The prospective recipient of Restricted Stock Units shall not have any rights with respect to any such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date.

 

(c) Restrictions and Conditions. The Restricted Stock Units granted pursuant to this Section 10 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Code Section 409A, thereafter:

 

(i) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain Performance Goals, the Participant’s termination of employment or service as a non-employee Director or Consultant of the Company or an Affiliate thereof, or the Participant’s death or Disability.

 

(ii) Participants holding Restricted Stock Units shall have no voting rights. A Restricted Stock Unit may, at the Administrator’s discretion, carry with it a right to dividend equivalents. Such right would entitle the holder to be credited with an amount equal to all cash dividends paid on one Share while the Restricted Stock Unit is outstanding. The Administrator, in its discretion, may grant dividend equivalents from the date of grant or only after a Restricted Stock Unit is vested.

 

(iii) The rights of Participants granted Restricted Stock Units upon termination of employment or service as a non-employee Director or Consultant of the Company or an Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in the Award Agreement.

 

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(d) Settlement of Restricted Stock Units. Settlement of vested Restricted Stock Units shall be made to Participants in the form of Shares, unless the Administrator, in its sole discretion, provides for the payment of the Restricted Stock Units in cash (or partly in cash and partly in Shares) equal to the Fair Market Value of the Shares that would otherwise be distributed to the Participant.

 

(e) Rights as Stockholder. Except as provided in the Award Agreement in accordance with Section 10(c)(ii), a Participant shall have no rights to dividends or any other rights of a stockholder with respect to the Shares subject to Restricted Stock Units until the Participant has satisfied all conditions of the Award Agreement and the requirements of Section 15 of the Plan and the Shares have been issued to the Participant.

 

(f) Change in Control. Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Restricted Stock Units shall be subject to Section 12 of the Plan.

 

Section 11. Other Stock-Based or Cash-Based Awards.

 

(a) The Administrator is authorized to grant Awards to Participants in the form of Other Stock-Based Awards or Other Cash-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement. The Administrator shall determine the terms and conditions of such Awards, consistent with the terms of the Plan, at the date of grant or thereafter, including any Performance Goals and performance periods. Class A Common Stock or other securities or property delivered pursuant to an Award in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator shall determine, subject to any required corporate action.

 

(b) The prospective recipient of an Other Stock-Based Award or Other Cash-Based Award shall not have any rights with respect to such Award, unless and until such recipient has received an Award Agreement and, if required by the Administrator in the Award Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date.

 

(c) Notwithstanding anything herein to the contrary, upon a Change in Control, all outstanding Other Stock-Based Awards and Other Cash-Based Awards shall be subject to Section 12 of the Plan.

 

Section 12. Change in Control.

 

The Administrator may provide in the applicable Award Agreement that an Award will vest on an accelerated basis upon the Participant’s termination of employment or service in connection with a Change in Control or upon the occurrence of any other event that the Administrator may set forth in the Award Agreement. If the Company is a party to an agreement that is reasonably likely to result in a Change in Control, such agreement may provide for: (i) the continuation of any Award by the Company, if the Company is the surviving corporation; (ii) the assumption of any Award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards for any Award, provided, however, that any such substitution with respect to Options and Stock Appreciation Rights shall occur in accordance with the requirements of Code Section 409A; or (iv) settlement of any Award for the Change in Control Price (less, to the extent applicable, the per share exercise or grant price), or, if the per share exercise or grant price equals or exceeds the Change in Control Price or if the Administrator determines that Award cannot reasonably become vested pursuant to its terms, such Award shall terminate and be canceled without consideration. To the extent that Restricted Shares, Restricted Stock Units or other Awards settle in Shares in accordance with their terms upon a Change in Control, such Shares shall be entitled to receive as a result of the Change in Control transaction the same consideration as the Shares held by stockholders of the Company as a result of the Change in Control transaction. For purposes of this Section 12, “Change in Control Price” shall mean (A) the price per share of Class A Common Stock paid to stockholders of the Company in the Change in Control transaction, or (B) the Fair Market Value of a Share upon a Change in Control, as determined by the Administrator. To the extent that the consideration paid in any such Change in Control transaction consists all or in part of securities or other non-cash consideration, the value of such securities or other non-cash consideration shall be determined in good faith by the Administrator.

 

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Section 13. Amendment and Termination.

 

(a) The Board or the Committee may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s consent.

 

(b) Notwithstanding the foregoing, approval of the Company’s stockholders shall be obtained to increase the aggregate Share limit and annual Award limits described in Section 4.

 

(c) Subject to the terms and conditions of the Plan, the Administrator may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised).

 

(d) Notwithstanding the foregoing, no alteration, modification or termination of an Award will, without the prior written consent of the Participant, adversely alter or impair any rights or obligations under any Award already granted under the Plan.

 

Section 14. Unfunded Status of Plan.

 

The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made or Shares not yet transferred to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.

 

Section 15. Withholding Taxes.

 

Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for federal, state and/or local income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any federal, state, or local taxes of any kind, domestic or foreign, required by law or regulation to be withheld with respect to the Award. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an Award granted hereunder, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related federal, state and local taxes, domestic or foreign, to be withheld and applied to the tax obligations. With the approval of the Administrator, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery of Shares or by delivering already owned unrestricted shares of Class A Common Stock, in each case, having a value equal to the amount required to be withheld or such other greater amount up to the maximum statutory rate under applicable law, as applicable to such Participant, if such other greater amount would not result in adverse financial accounting treatment, as determined by the Administrator (including in connection with the effectiveness of FASB Accounting Standards Update 2016-09). Such Shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an Award. The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Option or other Award.

 

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Section 16. Non-United States Employees. 

 

Without amending the Plan, the Administrator may grant Awards to eligible persons residing in non-United States jurisdictions on such terms and conditions different from those specified in the Plan, including the terms of any award agreement or plan, adopted by the Company or any Affiliate thereof to comply with, or take advantage of favorable tax or other treatment available under, the laws of any non-United States jurisdiction, as may in the judgment of the Administrator be necessary or desirable to foster and promote achievement of the purposes of the Plan and, in furtherance of such purposes the Administrator may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

 

Section 17. Transfer of Awards.

 

No purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “Transfer”) by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator. Any purported Transfer of an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall be null and void ab initio, and shall not create any obligation or liability of the Company, and any person purportedly acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of such Shares. Unless otherwise determined by the Administrator in accordance with the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only by the Participant or, during any period during which the Participant is under a legal disability, by the Participant’s guardian or legal representative.

 

Section 18. Continued Employment.

 

The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company or an Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or an Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.

 

Section 19. Effective Date and Approval Date.

 

The Plan will be effective as of the date on which the Plan is approved by the Company’s stockholders (the “Effective Date”). The Plan will be unlimited in duration and, in the event of Plan termination, will remain in effect as long as any Shares awarded under it are outstanding and not fully vested; provided, however, that no Awards will be made under the Plan on or after the tenth anniversary of Effective Date.

 

Section 20. Code Section 409A.

 

The intent of the parties is that payments and benefits under the Plan comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required in order to avoid accelerated taxation and/or tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided upon a “separation from service” to a Participant who is a “specified employee” shall be paid on the first business day after the date that is six (6) months following the Participant’s separation from service (or upon the Participant’s death, if earlier). In addition, for purposes of the Plan, each amount to be paid or benefit to be provided to the Participant pursuant to the Plan, which constitute deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A. Nothing contained in the Plan or an Award Agreement shall be construed as a guarantee of any particular tax effect with respect to an Award. The Company does not guarantee that any Awards provided under the Plan will satisfy the provisions of Code Section 409A, and in no event will the Company be liable for any or all portion of any taxes, penalties, interest or other expenses that may be incurred by a Participant on account of any non-compliance with Code Section 409A.

 

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Section 21. Compensation Recovery Policy.

 

The Plan and all Awards issued hereunder shall be subject to any compensation recovery and/or recoupment policy adopted by the Company to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to comport with good corporate governance practices, as such policies may be amended from time to time.

 

Section 22. Governing Law.

 

The Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law of such state.

 

Section 23. Plan Document Controls.

 

The Plan and each Award Agreement constitute the entire agreement with respect to the subject matter hereof and thereof; provided that in the event of any inconsistency between the Plan and such Award Agreement, the terms and conditions of the Plan shall control.

 

 

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Exhibit 21.1

List of Subsidiaries

Subsidiaries

Name

Jurisdiction of Incorporation

Atlas TC Holdings LLC Delaware
Atlas Intermediate Holdings LLC Delaware
Atlas Technical Consultants Sole Member LLC Delaware
Atlas Technical Consultants LLC Delaware
ATC Sole Member LLC Delaware
Arrow Environmental Holdings GP LLC Delaware
Arrow Environmental Holdings LP Delaware
ATC Group Partners LLC Delaware
ATC Group Holdings LLC Delaware
ATC Group Services LLC Delaware
Sage ATC Environmental Holding LLC Delaware
Sage ATC Environmental Consulting LLC Delaware
Dexter ATC Field Services LLC Delaware

 

Exhibit 99.1

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the definitive proxy statement of Boxwood Merger Corp. filed with the Securities and Exchange Commission on November 12, 2019 (the “Proxy Statement”) and proxy statement supplement to the definitive proxy dated January 28, 2020 and filed with the Securities and Exchange Commission on January 28, 2020 (the “Supplement to Definitive Proxy”).

 

The following unaudited pro forma condensed combined financial statements of Boxwood present the combination of the financial information of Boxwood and Atlas Intermediate adjusted to give effect to the business combination and debt financing and the entry into the Commitment Letter, the Payment Letter, the Purchase Agreement Amendment, the Forfeiture Agreement and the Debt Amendment. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

 

Boxwood is a blank check company incorporated in Delaware on June 28, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses. Boxwood completed its initial public offering of units on November 20, 2018. Upon the closing of the initial public offering, $200 million ($10.00 per unit) from the net proceeds thereof was placed in a trust account and is invested in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations until the earlier of: (i) the completion of a business combination and (ii) the redemption of Boxwood’s public shares if Boxwood is unable to complete a business combination by November 20, 2020, subject to applicable law. As of September 30, 2019, there was approximately $203,524,618 held in the trust account.

 

Atlas Intermediate was incorporated on January 11, 2019 and is a holding company that conducts business indirectly through its wholly-owned subsidiaries. Atlas Intermediate is owned by the Seller, which is owned by BCP Energy Services Funds, which is controlled by Bernhard Capital Partners, a services-focused private equity management firm, and Atlas Technical Consultants Management, LLC. The primary wholly-owned indirect operating subsidiaries through which Atlas conducts business are Atlas Technical Consultants LLC and its subsidiaries (“Atlas LLC”) and ATC Group Partners LLC and its subsidiaries (“ATC LLC”). Atlas LLC’s structure has been in existence since October 17, 2017 while ATC LLC’s structure has been in existence since November 13, 2015. The entities were reorganized under Atlas Intermediate in January 2019. Through these subsidiaries, Atlas Intermediate provides public and private sector clients with comprehensive support in managing large-scale infrastructure improvement programs, including environmental and geotechnical engineering services, design, program development/management, environmental consulting services, industrial hygiene, construction materials testing, due diligence and environmental health and safety training, acquisition and project control services, as well as construction engineering and inspection and materials testing.

 

The following unaudited pro forma condensed combined balance sheet as of September 30, 2019 assumes that the business combination, equity financing, and debt financing occurred on September 30, 2019. The following unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 and for the nine months ended September 30, 2019 give pro forma effect to the business combination, equity financing, and debt financing as if they had been completed on January 1, 2018.

 

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what Boxwood’s financial condition or results of operations would have been had the business combination occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of Boxwood. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

 

 

 

This information has been developed from and should be read together with Boxwood’s and Atlas’ audited and unaudited financial statements and related notes, the sections titled “Boxwood’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Atlas’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in the Definitive Proxy Statement and included elsewhere in this Form 8-K.

  

The business combination is accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Pursuant to a reverse capitalization, Atlas Intermediate has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

Atlas Intermediate’s equity holders having a majority of the voting power (80%) of the combined company;
     
BCP or those associated with Atlas Intermediate have the right to nominate at least a majority of the seven initial members who will serve on the board of directors of the combined company;
     
Atlas Intermediate comprises the ongoing operations of the combined company;
     
Atlas Intermediate is the larger entity based on historical revenues and net income; and
     
Atlas Intermediate’s senior management comprising the senior management of the combined company.

 

Under this method of accounting, Boxwood will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination will be treated as the equivalent of Atlas Intermediate issuing stock for the net assets of Boxwood, accompanied by a recapitalization. The net assets of Boxwood will be stated at historical cost, with no goodwill or other intangible assets recorded. 

 

Description of the Business Combination

 

At the Closing, the combined company is organized in an “Up-C” structure in which the business of Atlas Intermediate is held by Holdings and continues to operate through the subsidiaries of Atlas Intermediate, and in which the Company’s only direct assets consist of Holdings Units and Holding’s only direct assets consist of its equity interests in Atlas Intermediate. At the Closing, the Company contributed cash and shares of Class B common stock to Holdings in exchange for Holdings Units.

 

At the Closing, Boxwood paid $620.6 million in cash and in equity in consideration for the acquisition of Atlas Intermediate. This amount was:

 

(i) increased by the amount of cash of Atlas Intermediate and its subsidiaries as of Closing;

   

(ii) increased by $3.6 million, which represented the difference between the net working capital of Atlas Intermediate and its subsidiaries as of Closing and a normalized level of working capital;

 

(iii) reduced by the amount of debt of Atlas Intermediate and its subsidiaries as of Closing; and

 

(iv) reduced by the amount of unpaid transaction expenses of Atlas Intermediate and its subsidiaries as of Closing.

 

The purchase price paid at Closing was based on an estimate of the amount of the foregoing adjustments and will be subject to a customary post-Closing true-up.

 

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Financing for the business combination and for related transaction expenses consisted of:

 

(i) $200 million of proceeds from Boxwood’s IPO on deposit in the trust account (plus any interest income accrued thereon since the IPO), net of any redemptions of Boxwood’s public shares in connection with the stockholder vote;

 

(ii) $321 million from committed new term loan and revolving credit facilities to be provided by Macquarie Funding and Natixis (of which $281 million was drawn at Close);

 

(iii) $221.6 million of rollover equity from BCP and Atlas Intermediate’s management;

 

(iv) $152.1 million, net of the 2.2% fee from the GSO Equity Financing; and

     

(v) $1.1 million additional class A common stock.

 

The following represents the aggregate consideration:

 

(in thousands)      
       
Net cash to the Seller (a)   $ 225,908  
Debt paydown and Seller expenses (a)     173,083  
Cash consideration   $ 398,990  
Rollover equity (BCP) (b)     139,502  
Rollover equity (Atlas Intermediate Management) (b)     82,128  
Total estimated consideration   $ 620,620  

 

(a) As shown, a portion of the total adjusted consideration was used to settle unpaid debt, unpaid pre-combination transaction costs and change in control payments.
(b) The rollover equity was issued to the Seller at $10 per share, which approximates its value at Close.

 

The following summarizes the pro forma common stock shares outstanding after giving effect to the business combination:

 

Ownership

 

    Shares     %  
Class A Shares held by SPAC shareholders     1,021,365       3 %
Class A Shares held by SPAC founders and Others (1)     2,605,977       9 %
Class A Shares issued to GSO PIPE (2)     2,200,000       8 %
Class B Shares issued as Rollover Equity to BCP     14,700,230       49 %
Class B Shares issued as Rollover Equity to Atlas Intermediate Management     9,212,759       31 %
Closing merger shares     29,740,330       100 %

 

(1) Reflects ending founders shares of 5.3 million less 1.2 million shares transferred to GSO as part of the Equity Financing, 1.8 million shares forfeited as part of the Purchase Agreement Amendment and an additional 0.3 million shares issued.
(2) Reflects the 1.0 million Class A common shares purchased plus 1.2 million founder Class A shares transferred as part of the Equity Financing.

 

The following unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2019, and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 are based on the historical financial statements of Boxwood and Atlas Intermediate. The unaudited pro forma adjustments are based on information currently available, assumptions, and estimates underlying the unaudited pro forma adjustments and are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2019

(in thousands)

 

    As of September 30, 2019                     As of September 30,
2019
 
    Boxwood
(Historical)
(US GAAP)
    Atlas Intermediate
(Historical)
(US GAAP)
    Combined     Pro Forma Adjustments         Pro Forma Combined  
    (in thousands)  
ASSETS                                  
Cash and cash equivalents   $ 190     $ 17,355     $ 17,545       (398,990 )   (A)     10,500  
                              (10,500 )   (B)        
                              (1,295 )   (C)        
                              (4,691 )   (C)        
                              (6,000 )   (D)        
                              204,598     (E)        
                              (194,150 )   (F)        
                              269,114     (G)        
                              (17,202 )   (H)        
                              152,070     (I)        
                              1     (Q)        
Accounts receivable, net     -       105,663       105,663       -           105,663  
Unbilled receivables     -       35,757       35,757       -           35,757  
Prepaid expense and other current assets     365       7,240       7,605       -           7,605  
Total current assets     555       166,015       166,570       (7,045 )         159,525  
Property and equipment, net     -       13,957       13,957       -           13,957  
Intangible assets, net     -       98,538       98,538       -           98,538  
Goodwill     -       80,352       80,352       -           80,352  
Marketable securities held in Trust Account     203,525       -       203,525       1,073     (E)     -  
                              (204,598 )   (E)        
Security deposit     -       -       -       -           -  
Other long-term assets     -       2,526       2,526       -           2,526  
Total assets   $ 204,080     $ 361,388     $ 565,468     $ (210,570 )       $ 354,898  
                                             
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY                                            
Accounts payable and accrued expenses   $ 194     $ 26,585     $ 26,779     $ 150     (J)   $ 26,929  
Accrued liabilities     -       13,053       13,053       (1,295 )   (C)   $ 11,758  
Current maturities of long-term debt     -       11,193       11,193       (10,500 )   (A), (B)   $ 2,810  
                              (1,748 )   (A), (B)        
                              1,055     (B)        
                              2,810     (G)        
Other current liabilities     -       12,873       12,873       -         $ 12,873  
Income taxes payable     497       -       497       -         $ 497  
Total current liabilities     691       63,704       64,395       (9,528 )         54,867  
Long-term debt, net of current maturities and loan costs     -       160,977       160,977       (160,673 )   (A), (B)     266,608  
                              266,304     (G)        
Deferred underwriting fees     7,000       -       7,000       (7,000 )   (D)     -  
Other long-term liabilities     -       3,389       3,389       -           3,389  
Total liabilities     7,691       228,070       235,761       89,103           324,864  
                                             
Commitments                                            
Common stock subject to possible redemption     191,389       -       191,389       (191,389 )   (K)     -  
Redeemable non-controlling interests     -       -       -       141,840     (I)     141,840  
                                             
Stockholders’ Equity                                            
Preferred stock     -       -       -       -           -  
Class A common stock     -       -       -       2     (K)     2  
                              1     (L)        
                              (2 )   (F)        
                              1     (I)        
                              -     (O)        
Class B common stock                             22     (A)     22  
Class F common stock     1       -       1       (1 )   (L)     -  
Additional paid in capital     2,936       -       2,936       (445,371 )   (A)     4,679  
                              221,608     (A)        
                              (2,167 )   (A)        
                              (1,055 )   (B)        
                              (4,691 )   (C)        
                              191,387     (K)        
                              1,000     (D)        
                              133,318     (M)        
                              2,063     (N)        
                              (194,148 )   (F)        
                              (2,330 )   (H)        
                              2,000     (H)        
                              10,229     (I)        
                              -     (O)        
                              89,899     (P)        
                              1     (Q)        
Retained earnings     2,063       -       2,063       (10,661 )   (A)     (26,610 )
                              1,073     (E)        
                              (150 )   (J)        
                              (2,063 )   (N)        
                              (14,872 )   (H)        
                              (2,000 )   (H)        
Members’ Capital     -       133,318       133,318       (133,318 )   (M)     -  
Total Shareholders’ Equity - Atlas Technical Consultant     5,000       133,318       138,318       (160,225 )         (21,907 )
Non-controlling interest     -       -       -       (89,899 )   (P)     (89,899 )
Total Stockholders’ Equity     5,000       133,318       138,318       (250,124 )         (111,806 )
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY   $ 204,080     $ 361,388     $ 565,468     $ (210,570 )       $ 354,898  

 

4

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in thousands, except share and per share data)

 

    For the Nine Months Ended
September 30, 2019
                    For the Nine Months Ended
September 30,
2019
 
    Boxwood
(Historical)
(US GAAP)
    Atlas Intermediate
(Historical)
(US GAAP)
    Combined     Pro Forma Adjustments         Pro Forma Combined  
    (in thousands, except share and per share data)  
Revenues   $ -     $ 358,033     $ 358,033     $ -         $ 358,033  
Cost of revenues     -       196,247       196,247     $ -           196,247  
Gross profit     -       161,786       161,786       -           161,786  
Operating expense (income), net     902       139,173       140,075       113     (AA)     134,854  
                              (5,334 )   (BB)        
Total operating expenses (income)     902       139,173       140,075       (5,221 )         134,854  
Operating income (loss)     (902 )     22,613       21,711       5,221           26,932  
Interest expense     -       8,027       8,027       7,149     (CC)     15,176  
Interest income     (3,231 )     -       (3,231 )     3,231     (DD)     -  
Other expense (income), net     -       718       718       -           718  
Income (loss) before provision for income taxes     2,329       13,868       16,197       (5,159 )         11,038  
Provision for income taxes (benefit)     553       114       667       2,968     (EE)     3,635  
Net income (loss) from continuing operations     1,776       13,754       15,530       (8,127 )         7,403  
Net income (loss) from continuing operations attributable to non-controlling interest     -       -       -       (2,942 )   (FF)     (2,942 )
Preferred unit distributions - Cash                             5,949     (GG)     5,949  
Preferred unit distributions - PIK                             8,626     (GG)     8,626  
Preferred unit issuance costs                             122     (GG)     122  
Net income (loss) from continuing operations attributable to class A shareholders   $ 1,776     $ 13,754     $ 15,530     $ (19,882 )       $ (4,352 )
                                             
Net Income (loss) per share - basic and diluted                                            
Net Income (loss)/Net Income (loss) from continuing operations per share Class A   $ (0.10 )                               $ (0.75 )
Weighted average shares outstanding - Class A     6,336,973                                   5,827,342  

 

5

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(in thousands, except share and per share data)

 

    For the Year Ended
December 31, 2018
                    For the Year Ended
December 31,
2018
 
    Boxwood
(Historical)
(US GAAP)
    Atlas Intermediate
(Historical)
(US GAAP)
    Combined     Pro Forma Adjustments         Pro Forma Combined  
    (in thousands, except share and per share data)  
Revenues   $ -     $ 426,439     $ 426,439     $ -         $ 426,439  
Cost of revenues     -       249,504       249,504       -           249,504  
Gross profit     -       176,935       176,935       -           176,935  
Operating expense (income), net     106       157,459       157,565       150     (AA)     157,715  
Total operating expenses (income)     106       157,459       157,565       150           157,715  
Operating income (loss)     (106 )     19,476       19,370       (150 )         19,220  
Interest expense     -       6,787       6,787       13,552     (CC)     20,339  
Interest income     (472 )     -       (472 )     472     (DD)     -  
Other expense (income), net     -       (96 )     (96 )     -           (96 )
Income (loss) before provision for income taxes     366       12,785       13,151       (14,174 )         (1,023 )
Provision for income taxes (benefit)     78       347       425       3,363     (EE)     3,788  
Net income (loss) from continuing operations     288       12,438       12,726       (17,537 )         (4,811 )
Net income (loss) from continuing operations attributable to non-controlling interest     -       -       -       (15,590 )   (FF)     (15,590 )
Preferred unit distributions - Cash                             7,450     (GG)     7,450  
Preferred unit distributions - PIK                             10,802     (GG)     10,802  
Preferred unit issuance costs                             116     (GG)     116  
Net income (loss) from continuing operations attributable to class A shareholders   $ 288     $ 12,438     $ 12,726     $ (20,315 )       $ (7,589 )
                                             
Net Income (loss) per share - basic and diluted                                            
Net Income (loss)/Net Income (loss) from continuing operations per share Class A   $ (0.01 )                               $ (1.30 )
Weighted average shares outstanding - Class A     6,240,480                                   5,827,342  

 

6

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

1. Basis of Presentation

 

The unaudited pro forma condensed combined financial information has been prepared in accordance with a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Boxwood was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination was treated as the equivalent of Atlas Intermediate issuing stock for the net assets of Boxwood, accompanied by a recapitalization. The net assets of Boxwood were stated at historical cost, with no goodwill or other intangible assets recorded.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2019 assumes that the business combination, equity financing, and debt financing occurred on September 30, 2019. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2019 and year ended December 31, 2018 give pro forma effect to the business combination, equity financing and debt financing as if they had been completed on January 1, 2018. These periods are presented on the basis of Atlas Intermediate being the accounting acquirer.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2019 has been prepared using, and should be read in conjunction with, the following:

 

the unaudited condensed balance sheet of Boxwood as of September 30, 2019, and the related notes, included elsewhere in this Form 8-K; and

 

the unaudited condensed consolidated and combined balance sheet of Atlas Intermediate Holdings LLC and ATC Group Partners LLC as of September 30, 2019 and the related notes, included elsewhere in this Form 8-K.

 

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2019 has been prepared using, and should be read in conjunction with, the following:

 

the unaudited condensed statement of operations of Boxwood for the nine months ended September 30, 2019 and the related notes, included elsewhere in this Form 8-K; and

 

the unaudited condensed consolidated and combined statement of operations of Atlas Intermediate Holdings LLC and ATC Group Partners LLC for the nine months ended September 30, 2019 and the related notes, included in elsewhere in this Form 8-K.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 has been prepared using, and should be read in conjunction with, the following:

 

the audited statement of operations of Boxwood for the year ended December 31, 2018 and the related notes, included in the Definitive Proxy Statement and incorporated herein by reference; and

 

the audited combined statement of operations of Atlas Intermediate Holdings LLC and ATC Group Partners LLC for the year ended December 31, 2018 and the related notes, included in the Definitive Proxy Statement and incorporated herein by reference.

 

Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.

 

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the business combination.

 

7

 

 

The pro forma adjustments reflecting the consummation of the business combination, equity financing, and debt financing are based on certain currently available information and certain assumptions and methodologies that Boxwood believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. Boxwood believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the business combination based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

 

The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the business combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-combination company. They should be read in conjunction with the historical financial statements and notes thereto of Boxwood and Atlas Intermediate.

 

2. Accounting Policies

 

Management is in the process of performing a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the Company. Based on its initial analysis, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.

 

3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the business combination and has been prepared for informational purposes only.

 

The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to events that are (1) directly attributable to the business combination, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the results of the post-combination company. Boxwood and Atlas Intermediate have not had any historical relationship prior to the business combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the post-combination company filed consolidated income tax returns during the periods presented.

 

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of Boxwood’s shares outstanding, assuming the business combination occurred on January 1, 2018.

 

8

 

 

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

 

The adjustments included in the unaudited pro forma condensed combined balance sheet as of September 30, 2019 are as follows:

 

(A) Reflects consideration of $399.0 million of cash and 22.6 million shares of Class B common stock, valued at $10.00 per share. Of the total consideration amount, $162.4 million was utilized to extinguish debt of Atlas Intermediate, $10.7 million was used to repay unpaid pre-combination transaction costs incurred by Atlas Intermediate as of closing, and $2.2 million was used to settle the amounts owed to certain Atlas executives for a change of control provision within their Class A Unit Award Agreements.

 

(B) Represents a true up of $1.1 million in debt to reflect the outstanding debt at close and Atlas Intermediate’s cash used to extinguish the remaining portion of outstanding debt not paid by Boxwood as described in Note (A) above.

 

(C) Represents payment of $1.3 million of Atlas Intermediate historical costs not included in consideration and $4.7 million for the remaining Atlas Intermediate cash so that Atlas Intermediate’s historical cash is zero at Close

   

(D) Reflects settlement of deferred underwriter fees incurred during Boxwood’s initial public offering due upon completion of the business combination. Of the $7.0 million owed, Boxwood and the underwriter agreed to reduce the amount by $1.0 million to $6.0 million at the Close.

   

(E) Reflects a true up of $1.1 million in cash and marketable securities held in the trust account to the current amount available at the Close and then the reclassification of the total $204.6 million of cash and marketable securities held in the trust account that was available to fund the business combination.

 

(F) Reflects the redemption of 18,978,635 Boxwood public shares for approximately $194.1 million allocated to common stock and additional paid-in capital using par value $0.0001 per share and at a redemption price of $10.23 per share.

 

(G) Reflects cash proceeds of $281.0 million net of $11.9 million of deferred financing costs from the issuance of new debt financing to fund the consideration as part of the business combination.

 

(H) Reflects the payment of $35.1 million and share settlement of $2.0 million of transaction costs in relation to the business combination. Transaction costs included: (a) $6.0 million of deferred underwriter’s fees incurred during Boxwood’s initial public offering described in note 2(C), (b) $11.9 million of deferred financing fees related to the new debt financing described in Note 2(F), and $19.2 million of other expenses related to GSO equity financing issuance costs, banking, legal, accounting, and advisory fees (a portion of which was share settled).

 

(I) Reflects the issuance of $141.9 million of preferred shares and $10.2 million of Class A common to GSO under the Equity Financing Commitment Letter. The issuance of the preferred shares is reflected as redeemable non-controlling interests.

 

(J) Reflects increase in annual compensation pursuant to a new employment agreement executed with a key executive in connection with the business combination.

 

(K) Reflects reclassification of $191.4 million of common stock subject to possible redemption to permanent equity.

 

(L) Reflects the conversion of Class F common stock to Class A common stock. At closing, all shares of Class F common stock converted into shares of Class A common stock.

 

(M) Represents the recapitalization of common stock of Atlas Intermediate.

 

(N) Reflects the reclassification of Boxwood’s historical retained earnings for the recapitalization.

 

(O) Reflects the forfeiture of 1.8 million Class A common stock for the Founders

     

(P) Reflects the 80% of interests related to the Class B stockholders.

     

(Q) Reflects the issuance of an additional $1.1 million of Class A common shares.

 

9

 

 

Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

 

The pro forma adjustments included in the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2018 and for the nine months ended September 30, 2019 are as follows:

 

(AA) Reflects increase in annual compensation pursuant to a new employment agreement executed with a key executive in connection with the business combination.

 

(BB) Reflects elimination of transaction related costs incurred and recorded by Atlas Intermediate.

 

(CC) Reflects the elimination of interest expense on the historical debt that is settled, and additional interest expense as a result of the debt financing, which was calculated based on the following:

 

    First Lien     First Lien  
(in thousands)   Term Facility     Revolving Facility  
             
             
Amount utilized   $ 281,000     $ -  
Stated Rate (1)     6.77 %     6.77 %
Term      7 Years        5 Years  
Effective Rate     7.32 %     N/A  

 

(1) The First Lien Term Facility and First Lien Revolving Facility accrue interest at a rate of LIBOR plus 4.75%. The stated interest rate noted above is based on 1 month LIBOR rates as of 9/30/2019 (2.02%). For the nine months ended September 30, 2019, an increase or decrease in the LIBOR rates of 0.125% would result in a change in interest expense of approximately $300,000. For the year ended 12/31/18, an increase or decrease in the LIBOR rates of 0.125% would result in a change in interest expense of approximately $300,000.
(2) The Debt Commitment Letter dated August 12, 2019 included a Second Lien Term Facility in the amount of $70,000,000. In the First Amendment to the Commitment Letter, the Second Lien Term Facility was terminated. However, the Second Lien Underwriting Fee of 1.5% is still due and payable for the unfunded portion of $70,000,000.

 

(DD) Elimination of interest income on the trust account.

   

(EE) Reflects adjustments to income tax expense as a result of the tax impact on the pro forma adjustments to income attributable to Class A stockholders at the estimated statutory tax rate of 26%. Income attributable to non-controlling interests is not subject to taxes.

 

(FF) Reflects the 80% of interests related to the Class B stockholders.

 

(GG) Reflects dividends payable to GSO in cash and PIK as well as the accretion of the 2.2% issuance discount on the preferred shares under the effective interest method, as outlined in the Equity Financing Commitment Letter, for the preferred shares reflected as redeemable non-controlling interests in the pro forma balance sheet.

 

4. Loss per Share

 

Represents the net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the business combination, assuming the shares were outstanding since January 1, 2018. As the business combination and related proposed equity transactions are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the business combination have been outstanding for the entire periods presented. The denominator for loss per share excludes the Class B common stock to be issued to Atlas Intermediate as part of consideration as the Class B common stock entitles its holder to one vote per share but no right to dividends, distributions, or other economic rights. Dividends and the accretion of the issuance discount for the preferred shares issued to GSO under the Equity Financing affect the numerator for the EPS calculation as shown in the pro forma income statement herein.

 

10

 

 

The unaudited pro forma condensed combined financial information has been prepared for the year ended December 31, 2018 and for the nine months ended September 30, 2019:

 

Boxwood

Earnings Per Share

9/30/2019

(dollars in thousands, except per share amounts)

 

    Nine Months Ended September 30, 2019     Year Ended
December 31,
2018
 
             
Pro forma net loss from continuing operations attributable to class A shareholders   $ (4,352 )   $ (7,589 )
               
Basic weighted average shares outstanding Class A     5,827,342       5,827,342  
                 
Net loss from continuing operations per share Class A - Basic and Diluted (1) (2)   $ (0.75 )   $ (1.30 )

 

(1) For the purposes of applying the if converted method for calculating diluted earnings per share, it was assumed that all outstanding warrants sold in Boxwood’s initial public offering and concurrent private placement to purchase 23,750,000 shares of Class A common stock are exchanged to Class A common stock. However, since this results in anti-dilution, the effect of such exchange was not included in calculation of diluted earnings per share.
(2) Class B common stock of the Company is newly-created, voting, and non-economic. Each share of Class B common stock entitles its holder to one vote per share but no right to dividends or distributions. Therefore, net loss per continuing operations per share is only calculated for Class A common stock.

 

 

11

 

Exhibit 99.2

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis should be read in conjunction with the financial statements and related notes incorporated into this Current Report on Form 8-K. This discussion contains “forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect its future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and incorporated by reference into this Current Report on Form 8-K, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements.

 

Overview

 

Headquartered in Austin, Texas, Atlas is a leading provider of professional and technical testing, inspection engineering and consulting services, offering solutions to public and private sector clients in the transportation, commercial, water, government, education and industrial markets. With approximately 140 offices located throughout the United States, Atlas provides a broad range of mission-critical technical services, helping its clients test, inspect, plan, design, certify and manage a wide variety of projects across diverse end markets.

 

Atlas acts as a trusted advisor to its clients, helping them design, engineer, inspect, manage and maintain civil and commercial infrastructure, servicing existing structures as well as helping to build new structures. However, Atlas does not perform any construction and does not take construction risk.

 

Atlas provides a broad range of mission-critical technical services, ranging from providing inspection services in small projects to managing significant aspects of large, multi-year projects. For the year ended December 31, 2018, Atlas:

 

performed more than 50,000 projects, with average revenue per project of less than $10,000; and

 

delivered more than 95% of our revenue under “time & material” and “cost-plus” contracts.

 

Atlas has long-term relationships with a diverse set of clients, providing a base of repeating clients, projects and revenues. Approximately 90% of Atlas’ revenues were derived from projects that have used its services at least twice in the three years ended December 31, 2018 and more than 95% of its revenues are generated from client relationships longer than 10 years, with greater than 25% of revenues generated from relationships longer than 30 years. Examples of such long-term customers include the Texas Department of Transportation, US Postal Service, Gwinnett County Georgia, New York City Housing Authority, San Francisco International Airport, Stanford University, Port of Oakland, United Rentals, Inc., The Coca-Cola Company and Apple Inc.

 

Atlas’ broad base of customers span a diverse set of end markets including transportation, commercial, water, government, education and industrial sectors. Atlas’ customers include government agencies, quasi-public entities, schools, hospitals, utilities, airports, as well as private sector clients across many industries.

 

Atlas’ services require a high degree of technical expertise, as its clients rely on it to provide testing, inspection and quality assurance services to ensure that structures are designed, engineered, built and maintained in accordance with building codes, regulations and the highest safety standards. As such, Atlas’ services are delivered by a highly-skilled, technical employee base that includes scientists, engineers, inspectors and other field experts. As of September 30, 2019, Atlas’ technical staff represented 2,534 out of its 3,350 employees. Atlas’ services are typically provided under contracts, some of which are long-term with long lead times between when contracts are signed and when its services are performed. As such, Atlas has a significant amount of contracted backlog, providing for a high degree of visibility with respect to revenues expected to be generated from such backlog. As of September 30, 2019, Atlas’ contracted backlog was estimated to be approximately $611 million. See “—Backlog” for additional information relating to Atlas’ backlog.

 

 

 

 

For the year ended December 31, 2018, Atlas recognized approximately $426 million of gross revenues (which does not include $24 million of revenues for the businesses acquired in 2018 prior to their dates of acquisition), $12 million of net income, and $52.6 million of Adjusted EBITDA (which does not take into account $7.5 million of pro forma cost synergies reflecting the impact of cost savings arising from the merger between Atlas and ATC in 2019 by eliminating duplicate costs including those relating to labor, rent, sourcing and information technology). For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to historical combined net income (loss), see “—Non-GAAP Financial Matters.

 

How We Evaluate Our Operations

 

We use a variety of financial and other information in monitoring the financial condition and operating performance of our business. Some of this information is financial information that is prepared in accordance with GAAP, while other information may be financial in nature and may not be prepared in accordance with GAAP. Historical information is periodically compared to budgets, as well as against industry-wide information. We use this information for planning and monitoring our business, as well as in determining management and employee compensation.

 

We evaluate our overall business performance based primarily on a combination of three financial metrics: revenue, backlog and Adjusted EBITDA. These are key measures used by our management team and board of directors to understand and evaluate our’ operational performance, to establish budgets and to develop short and long-term operational goals.

 

Revenue

 

Revenues for services are derived from billings under contracts (which are typically of short duration) that provide for specific time, material and equipment charges, or lump sum payments and are reported net of any taxes collected from customers. We recognize revenue as it is earned at estimated collectible amounts.

 

Revenue is recognized as services are performed and amounts are earned in accordance with the terms of a contract. We generally contract for services to customers based on either a fixed fee or hourly rates. In such contracts, our efforts, measured by time incurred, typically are provided in less than a year and represent the contractual milestones or output measure, which is the contractual earnings pattern. For contracts with fixed fees, we recognize revenues as amounts become billable in accordance with contract terms, provided the billable amounts are consistent with the services delivered and are earned. Expenses associated with performance of work may be reimbursed with a markup depending on contractual terms. Revenues include the markup, if any, earned on reimbursable expenses. Reimbursements include billings for travel and other out-of-pocket expenses and third-party costs, such as equipment rentals, materials, subcontractor costs and outside laboratories, which is included in cost of revenues in the accompanying combined statement of income.

 

Backlog

 

We analyze our backlog, which we define as fully awarded and contracted work or revenue we expect to realize for work completed, to evaluate operations and future revenue potential. Our contracted backlog includes revenue we expect to record in the future from signed contracts. In order to calculate backlog, we determine the amount for contracted projects that are fully funded, and then determine the respective revenues expected to be realized upon completion of work. We use backlog to evaluate company revenue growth as it typically follows growth in backlog.

 

Adjusted EBITDA

 

We view Adjusted EBITDA, which is a non-GAAP financial measure, as an important indicator of performance. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization, adjustments for certain one-time or non-recurring items and other adjustments. For more information on Adjusted EBITDA as well as a reconciliation to the most directly comparable GAAP measure, please see “—Non-GAAP Financial Measures.”

 

2

 

 

Components & Factors Affecting Atlas’ Results of Operations

 

Revenue

 

Atlas generates revenue primarily by providing infrastructure-based testing, inspection, certification, engineering, and compliance services to a wide range of public- and private-sector clients. Atlas’ revenue consists of both services provided by its employees and pass-through fees from subcontractors and other direct costs. Atlas generally utilizes a cost-to-cost approach in applying the percentage-of-completion method of revenue recognition. Under this approach, revenue is earned in proportion to total costs incurred, divided by total costs expected to be incurred.

 

Cost of Revenue

 

Cost of revenue reflects the cost of personnel (including fringe benefits and overhead expense) associated with revenue.

 

Operating Expense

 

Operating expense include corporate expenses, including personnel, occupancy, and administrative expenses, including depreciation and amortization.

 

Interest Expense

 

Interest expense consists of contractual interest expense on outstanding debt obligations, amortization of deferred financing costs and other related financing expenses.

 

Other Income (Expense)

 

Other income or expense reflects the gains or losses, including the costs and related accumulated depreciation recapture, resulting from the disposal of an asset when such asset is sold or retired.

 

Income Tax Expense

 

Income tax expense and Atlas’ effective tax rates can be affected by many factors, including changes in its mix of pre-tax losses/earnings, the effect of non-controlling interest in income of consolidated subsidiaries, its acquisition strategy, tax incentives and credits available to its, changes in judgment regarding the realizability of its deferred tax assets, changes in existing tax laws and its assessment of uncertain tax positions. Atlas’ tax returns are routinely audited by the taxing authorities and settlements of issues raised in these audits can also sometimes affect its effective tax rate.

 

Net Income From Continuing Operations

 

Net income from continuing operations reflects operating income for Atlas after taking into account costs and expenses for a given period, while excluding any gain or loss from discontinued operations.

 

Loss From Discontinued Operations

 

Loss from discontinued operations includes non-recurring gains or losses realized in connection with the disposition of an asset or component of the business that results in discontinued operations in for the section.

 

3

 

 

Results of Operations

 

The following table represents the selected results of operations for Atlas for the periods indicated.

 

    Three Months Ended September 30,     Nine Months Ended September 30,     Fiscal Year Ended
December 31,
 
    2019     2018     2019     2018     2018     2017     2016  
    ($ in thousands)  
Other Financial Data:                                                        
Revenue   $ 128,753     $ 109,719     $ 358,033     $ 314,136     $ 426,439     $ 278,141     $ 227,985  
Cost of revenue     (70,623 )     (63,098 )     (196,247 )     (182,566 )     (249,504 )     (163,787 )     (145,199 )
Operating expense     (47,068 )     (35,594 )     (139,173 )     (107,703 )     (157,459 )     (110,676 )     (83,901 )
Operating income/(loss)     11,062       11,027       22,613       23,867       19,476       3,678       (1,115 )
Interest expense     (2,493 )     (1,254 )     (8,027 )     (4,609 )     (6,787 )     (2,230 )     (1,089 )
Other income/(expense)     64       (184 )     (718 )     (5,939 )     96       117        
Income before income taxes     8,633       9,589       13,868       13,319       12,785       1,565       (2,204 )
Income tax expense     45       (153 )     (114 )     (223 )     347              
Net income from continuing operations     8,678       9,436       13,754       13,096       12,438       1,565       (2,204 )
Loss from discontinued operation                 (213 )     (643 )     (393 )     (2,568 )     (1,346 )
Net income   $ 8,678     $ 9,436     $ 13,541     $ 12,453     $ 12,045     $ (1,003 )   $ (3,550 )

 

Comparison of the three months ended September 30, 2019 to the three months ended September 30, 2018

 

Revenue

 

Revenue for the three months ended September 30, 2019 increased $19.1, or 17%, to $128.8 as compared to $109.7 for the corresponding period in 2018.

 

The increase in revenue for the three months ended September 30, 2019 was primarily attributable to the contribution from various acquisitions completed during 2018 as well as organic growth from our existing platform. The increase in revenue for 2019 was $7.9 for acquisitions closed during 2018. The growth in revenues was also attributable to new scope of work for an existing client and the expansion into new markets in Texas. 

 

Cost of Revenue

 

Cost of revenue for the three months ended September 30, 2019 increased $7.5, or 12%, to $70.6 as compared to $63.1 for the corresponding period in 2018. For the three months ended September 30, 2019, cost of revenue, as a percentage of revenue, decreased to 54.9% from 57.5% for the three months ended September 30, 2018.

 

The decrease in cost of revenue as a percentage of revenue for the three months ended September 30, 2019 was primarily due to a change in presentation of benefits expense relating to those employees servicing projects from cost of revenues to operating expenses for one of our acquired companies to conform with the existing platform. This represented 3.0% of our revenues for the three months ended September 30, 2019.

 

Operating Expense

 

Operating expense for the three months ended September 30, 2019 increased $11.5, or 32%, to $47.1 as compared to $35.6 for the corresponding period in 2018. For the three months ended September 30, 2019, operating expense, as a percentage of revenue, increased to 36.6% from 32.4% for the corresponding period in 2018.

 

4

 

 

The increase in operating expense for the three months ended September 30, 2019 was primarily attributable to the increase in revenues for the period as we incurred additional personnel related and vehicle costs associated with the direct labor hires required to support those additional revenues and the change in presentation of benefits associated with direct employees at one of our acquired companies to operating expense from cost of revenue. The presentation change represented 2.9% of our revenues for the three months ended September 30, 2019.

 

Interest Expense

 

Interest expense for the three months ended September 30, 2019 increased $1.2, or 99%, to $2.5 as compared to $1.3 for the corresponding period in 2018. The increase in interest expense is due to the increase in outstanding borrowings during the periods.

 

Other Income/(Expense)

 

Other income/(expense) for the three months ended September 30, 2019 increased $0.3, or 135%, to $0.1 as compared to ($0.2) for the corresponding period in 2018.

 

The increase in other income/(expense) for the three months ended September 30, 2019 was primarily due to gains of the sale of fixed assets versus $0.2 of legal and transaction related costs for the three months ended September 30, 2018.

 

Income Tax Benefit/(Expense)

 

Income tax expense for the three months ended September 30, 2019 was a benefit of $0.0 compared to income tax expense of ($0.2) for the corresponding period in 2018. The decrease in tax expense for the current period compared to the corresponding period in 2018 is due primarily to the operations in the Company’s C-Corp subsidiaries.

 

The Company is treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of the Company being passed through to the partners and members. As such, no recognition of federal or state income taxes for the Company or its subsidiaries has been provided for in the accompanying combined financial statements, except for margin taxes in the State of Texas and a few C-Corp entities under Atlas. The margin taxes are treated as income taxes, with an effective rate of 0.7%, based on the prior year’s Texas-sourced gross receipts. The effective rate of the C-Corp for the three months ended September 30, 2019 was 30%.

 

Loss From Discontinued Operations

 

Other loss from discontinued operations for the three months ended September 30, 2019 and 2018 was $0.0 during each reporting period.

 

Comparison of the nine months ended September 30, 2019 to the nine months ended September 30, 2018

 

Revenue

 

Revenue for the nine months ended September 30, 2019 increased $43.9, or 14%, to $358.0 as compared to $314.1 for the corresponding period in 2018.

 

The increase in revenue for the nine months ended September 30, 2019 was primarily attributable to the contribution from various acquisitions completed during 2018 as well as organic growth from our existing platform. The increase in revenue for 2019 was $22.4 for acquisitions closed during 2018. The growth in revenues was also attributable to new scope of work for an existing client and the expansion into new markets in Texas. 

 

Cost of Revenue

 

Cost of revenue for the nine months ended September 30, 2019 increased $13.6, or 7%, to $196.2 as compared to $182.6 for the corresponding period in 2018. For the nine months ended September 30, 2019, cost of revenue, as a percentage of revenue, decreased to 54.8% from 58.1% for the nine months ended September 30, 2018.

 

5

 

 

The decrease in cost of revenue as a percentage of revenue for the nine months ended September 30, 2019 was primarily due to a change in presentation of benefits expense relating to those employees servicing projects from cost of revenues to operating expenses for one of our acquired companies to conform with the existing platform. This represented 3% of our revenues for the nine months ended September 30, 2019.

 

Operating Expense

 

Operating expense for the nine months ended September 30, 2019 increased $31.5, or 29%, to $139.2 as compared to $107.7 for the corresponding period in 2018. For the nine months ended September 30, 2019, operating expense, as a percentage of revenue, increased to 38.9% from 34.3% for the corresponding period in 2018.

 

The increase in operating expense for the nine months ended September 30, 2019 was primarily attributable to the increase in revenues for the period as we incurred additional personnel related and vehicle costs associated with the direct labor hires required to support those additional revenues and the change in presentation of benefits associated with direct employees at one of our acquired companies to operating expense from cost of revenue. The presentation change represented 3% of our revenues for the nine months ended September 30, 2019.

 

Interest Expense

 

Interest expense for the nine months ended September 30, 2019 increased $3.4, or 74%, to $8.0 as compared to $4.6 for the corresponding period in 2018. The increase in interest expense is due to the increase in outstanding borrowings during the periods.

 

Other Expense

 

Other expense for the nine months ended September 30, 2019 decreased ($5.2), or (88%), to $0.7 as compared to $5.9 for the corresponding period in 2018.

 

The decrease in other expense for the nine months ended September 30, 2019 was primarily due to $4.0 of legal costs and a $1.0 write-off of a previously held investment during the nine months ended September 30, 2018.

 

Income Tax Expense

 

Income tax expense for the nine months ended September 30, 2019 was $0.1 compared to income tax expense of $0.2 for the corresponding period in 2018. The decrease in tax expense for the current period compared to the corresponding period in 2018 is due primarily to the operations in the Company’s C-Corp subsidiaries.

 

The Company is treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of the Company being passed through to the partners and members. As such, no recognition of federal or state income taxes for the Company or its subsidiaries has been provided for in the accompanying combined financial statements, except for margin taxes in the State of Texas and a few C-Corp entities under Atlas. The margin taxes are treated as income taxes, with an effective rate of 0.7%, based on the prior year’s Texas-sourced gross receipts. The effective rate of the C-Corp for the nine months ended September 30, 2019 was 30%.

 

Loss From Discontinued Operations

 

Other loss from discontinued operations for the nine months ended September 30, 2019 decreased ($0.4), or (67%), to $0.2 as compared to $0.6 for the corresponding prior year period.

 

The decrease in loss from discontinued operations for the nine months ended September 30, 2018 was primarily due to the wind down of the Company’s Power and Industrial (P&I) operation. The Company entered into a purchase agreement with a third party in December 2017, and the Company continued to have costs related to the exiting of the P&I operation.

 

6

 

 

Comparison of the year ended December 31, 2018 to the year ended December 31, 2017

 

Revenue

 

Revenue for the year ended December 31, 2018 increased $148.3, or 53%, to $426.4 as compared to $278.1 for the corresponding prior year period.

 

The increase in revenue for the year ended December 31, 2018 was primarily attributable to the contribution from various acquisitions completed in late 2017 as well as organic growth from our existing platform. The increase in revenue in 2018 compared to 2017 was the result of having a full year of operations in the entities acquired in late 2017 as well as acquisitions in late 2018 which accounted for $139.6 and $6.2, respectively, of the increase from 2017. The growth in revenues was also attributable to organic increases in revenue of $2.5.

 

Also contributing to the increase in net revenues for 2018 was an increased utilization of our billable employees.

 

Cost of Revenue

 

Cost of revenue for the year ended December 31, 2018 increased $85.7, or 52%, to $249.5 as compared to $163.8 million for the corresponding prior year period. For the year ended December 31, 2018, cost of revenue, as a percentage of revenue, remained flat at 59% compared to the year ended December 31, 2017.

 

Operating Expense

 

Operating expense for the year ended December 31, 2018 increased $46.8, or 42%, to $157.5 as compared to $110.7 for the corresponding prior year period. As a percentage of revenue, operating expense decreased to 37% for the year ended December 31, 2018 from 40% for the year ended December 31, 2017. Operating expenses for the year ended December 31, 2017 were higher due to the acquisitions in late 2017 resulting in higher legal and integration costs.

 

Interest Expense

 

Interest expense for the year ended December 31, 2018 increased $4.6, or 204%, to $6.8 as compared to $2.2 for the corresponding prior year period. The increase in interest expense is due to the increase in average outstanding borrowings for 2018 compared to the average outstanding borrowings during 2017.

 

Other Income

 

Other income for the year ended December 31, 2018 remained flat at $0.1, as compared to the corresponding prior year period.

 

Income Tax Expense

 

Income tax expense for the year ended December 31, 2018 was $0.3 million compared to income tax expense of $0.0 million for the year ended December 31, 2017.

 

Atlas is treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of Atlas being passed through to the partners and members. As such, no recognition of federal or state income taxes for Atlas or its subsidiaries have been provided for in the accompanying combined financial statements, except for margin taxes in the State of Texas and a few C-Corp entities under Atlas. The margin taxes are treated as income taxes, with an effective rate of 0.7%, based on the prior year’s Texas-sourced gross receipts. The effective rate of the C-Corp for the year ended December 31, 2018 was 30%.

 

Loss From Discontinued Operations

 

Other loss from discontinued operations for the year ended December 31, 2018 decreased $2.2, or 85%, to $0.4 as compared to $2.6 for the corresponding prior year period.

 

The decrease in loss from discontinued operations for the year ended December 31, 2018 was primarily due to the wind down of Atlas’ Power and Industrial (P&I) operation. Atlas entered into a purchase agreement with a third-party in December 2017, and the sale was completed during 2018 resulting in an immaterial gain.

 

7

 

 

Comparison of the year ended December 31, 2017 to the year ended December 31, 2016

 

Revenue

 

Revenue for the year ended December 31, 2017 increased $50.2, or 22%, to $278.1 as compared to $228.0 million for the corresponding prior year period.

 

The increase in revenue for the year ended December 31, 2017 was partly attributable to the acquisitions of companies during the fiscal year resulting in $25.5 additional revenue and partly attributable to overall growth in projects.

 

Cost of Revenue

 

Cost of revenue for the year ended December 31, 2017 increased $18.6, or 13%, to $163.8 as compared to $145.2 million for the corresponding prior year period. For the year ended December 31, 2017, cost of revenue, as a percentage of revenue, decreased to 59% from 64% in the year ended December 31, 2016.

 

The increase in cost of revenue for the year ended December 31, 2017 was primarily attributable to the above mentioned acquisitions during the year with the decrease in cost of revenue as a percentage of revenue the result of the mentioned acquired entities realizing better margins of 58% compared to the legacy Company.

 

Operating Expense

 

Operating expense for the year ended December 31, 2017 increased $26.8, or 32%, to $110.7 as compared to $83.9 for the corresponding prior year period. As a percentage of revenue, operating expense increased to 40%, as compared to 37% for the year ended December 31, 2016. Operating expenses for the year ended December 31, 2017 due to the acquisition costs incurred in late 2017 resulting in higher legal and integration costs when compared to the corresponding prior year period.

 

Interest Expense

 

Interest expense for the year ended December 31, 2017 increased $1.1, or 105%, to $2.2 as compared to $1.1 for the corresponding prior year period. The increase in interest expense for the year ended December 31, 2017 was primarily due to additional borrowings as a result of the acquisitions which took place during the year.

 

Other Income

 

Other income for the year ended December 31, 2017 increased $0.1, or 100%, to $0.1 as compared to $0.0 for the corresponding prior year period.

 

Income Tax Expense

 

Income tax expense for both the years ended December 31, 2017 and December 31, 2016 was $0.0 million. Atlas is treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of Atlas being passed through to the partners and members.

 

Loss From Discontinued Operations

 

Other loss from discontinued operations for the year ended December 31, 2017 increased $1.2, or 91%, to $2.6 as compared to $1.3 for the corresponding prior year period.

 

8

 

 

The increase in loss from discontinued operations for the year ended December 31, 2017 was primarily due to the wind down of Atlas’ P&I operations. See “Note 11 — Discontinued Operations” from the audited historical consolidated financial statements of Atlas Intermediate incorporated by reference into this Current Report on Form 8-K for further information.

 

Liquidity and Capital Resources

 

Our primary sources of liquidity and capital resources are our cash and cash equivalents balances, cash flow from operations, borrowing capacity under the credit agreement, dated as of February 11, 2020, among Holdings, Buyer, Atlas, the lenders and issuing banks from time to time party thereto, Macquarie Funding, Macquarie Capital and Natixis (the “Credit Agreement”) and access to financial markets. Our principal uses of cash are operating expenses, working capital requirements, capital expenditures, repayment of debt and acquisition expenditures. We believe our sources of liquidity, including cash flow from operations, existing cash and cash equivalents and borrowing capacity under our Credit Agreement will be sufficient to meet projected cash requirements for at least the next twelve months. We will monitor our capital requirements thereafter to ensure our needs are in line with available capital resources.

 

Cash Flows—Atlas

 

The following table sets forth the cash flows for Atlas for the periods indicated.

 

    Nine Months Ended September 30,     Fiscal Year Ended
December 31,
 
    2019     2018     2018     2017     2016  
Net cash provided by operating activities     (18,692 )     (27,900 )     36,916       7,874       (392 )
Net cash used in investing activities     (5,838 )     (8,510 )     (14,149 )     (168,571 )     (46,677 )
Net cash provided by (used in) financing activities     (1,988 )     (12,122 )     (26,875 )     170,945       43,332  
Net increase in cash and equivalents     (10,846 )     (7,268 )     (4,108 )     10,248       (3,737 )

  

Comparison of the nine months ended September 30, 2019 to the nine months ended September 30, 2018

 

Cash and Cash Equivalents.

 

At September 30, 2019 and 2018 Atlas had $17.4 and $17.9 of cash and cash equivalents, respectively.

 

Operating Activities

 

Cash flow from operating activities is primarily generated from operating income from our professional and technical testing, inspection engineering and consulting services.

 

Net cash provided by operating activities was $18.7 for the nine months ended September 30, 2019, compared to $27.9 for the nine months ended September 30, 2018. The decrease of ($9.2) was primarily due to the timing of working capital payments and receipts.

 

Investing Activities

 

Net cash used in investing activities was $5.8 for the nine months ended September 30, 2019, compared to $8.5 for the nine months ended September 30, 2018. The $2.7 decrease in cash used was primarily due to an acquisition in the previous period offset by higher capital expenditure to support our growth.

 

9

 

 

Financing Activities

 

Net cash used financing activities was $2.0 for the nine months ended September 30, 2019, compared to cash used by financing activities of $12.1 for the nine months ended September 30, 2018. The $10.1 decrease to net cash used in financing activities was primarily due to additional funds received through the debt financing offset by distributions to stockholders.

 

Comparison of the year ended December 31, 2018 to the year ended December 31, 2017

 

Cash and Cash Equivalents

 

At December 31, 2018 and 2017 Atlas had $6.5 million and $10.6 million of cash and cash equivalents, respectively.

 

Operating Activities

 

Net cash provided by operating activities was $36.9 million for the year ended December 31, 2018 compared to $7.9 million for the year ended December 31, 2017. The $29.0 million increase was primarily due to an increase in net income of $13.0 million and an increase in depreciation and amortization of $13.0 million which was a result of additional intangibles recorded as part of Atlas’ acquisitions in the period.

 

Investing Activities

 

Net cash used in investing activities was $14.1 million for the year ended December 31, 2018, compared to $168.6 for the year ended December 31, 2017. The $154.5 decrease was primarily due to fewer acquisitions in 2018 compared to 2017.

 

Financing Activities

 

Net cash used in financing activities was $26.9 million for the year ended December 31, 2018, compared to cash provided by financing activities of $170.9 for the year ended December 31, 2017. The $197.8 change was primarily due to the additional debt proceeds received during 2017 related to funding for acquisitions in 2017.

 

Comparison of the year ended December 31, 2017 to the year ended December 31, 2016

 

Cash and Cash Equivalents.

 

At December 31, 2017 and 2016 Atlas had $10.6 million and $0.4 million of cash and cash equivalents, respectively.

 

Operating Activities

 

Net cash provided by operating activities was $7.9 million for the year ended December 31, 2017 compared to net cash used in operating activities of $0.4 million for the year ended December 31, 2016. The $8.3 million change was primarily due to an increase in cash receipts from accounts receivables and accrued billings resulting from acquisitions made in 2017.

 

Investing Activities

 

Net cash used in investing activities was $168.6 million for the year ended December 31, 2017, compared to $46.7 for the year ended December 31, 2016. The $121.9 increase was primarily due to acquisitions in 2017.

 

10

 

 

Financing Activities

 

Net cash provided by financing activities was $170.9 million for the year ended December 31, 2017, compared to $43.3 for the year ended December 31, 2016. The $127.6 increase was primarily due to the additional debt proceeds received during 2017 related to funding for acquisitions in 2017.

 

Working Capital

 

Working capital, or current assets less current liabilities, increased $15.4, or 17.7%, to $102.3 at September 30, 2019 from $86.9 at December 31, 2018. This increase in working capital resulted from our increased revenues and continued emphasis on billing and collections metrics.

 

Obligations

 

In October 2017, concurrent with the closing of the acquisition of Moreland Altobelli Associates, Atlas obtained a bridge loan from Regions Bank in the amount of $42 million. In November 2017, concurrent with the closing of the acquisition of the Engineering Testing Services family of companies (“ETS”), Atlas entered into a credit agreement with a group led by Regions Bank providing a term loan of $95 million and a revolving credit facility of $30 million secured by the assets owned by Atlas (the “Atlas Loan Agreement”). Proceeds from the Atlas Loan Agreement were used to fund the acquisition of ETS, repayment of the bridge loan, and for a redemption of $15.2 million of initial equity contributions made by the initial members once overall leverage amounts were determined. The Atlas Loan Agreement provided for a scheduled maturity date in November 2022 and quarterly principal payments beginning in December 2017, with interest compounded based on the variable rate in effect.

 

ATC had a business loan agreement (the “ATC Loan Agreement”) which provided for a scheduled maturity date of January 29, 2020. The ATC Loan Agreement included a revolving credit facility of $45 million. Security for the loan was provided by a first-priority interest in substantially all of ATC’s assets and a promissory note. Borrowings under the ATC Loan Agreement bore interest at the one-month London Interbank Offered Rate (“LIBOR”) plus a margin based on the total leverage ratio as defined in the ATC Loan Agreement.

 

In March 2019, subsequent to the merger with ATC, the outstanding balances of the Atlas Loan Agreement and the ATC Loan Agreement were paid in full and the ATC Loan Agreement was terminated. The Atlas Loan Agreement was amended to provide for a term loan of $145 million and a revolving credit facility of $50 million, of which $31.8 million was funded at Closing (collectively, the “Atlas Credit Facility”). Proceeds of the Atlas Credit Facility were used to repay existing debt of $123.9 million and fund a stockholders distribution of $52.8 million made in April 2019. The Atlas Credit Facility requires quarterly principal payments of $2.719 million through March 31, 2023, and then $3.625 million until the final maturity in March 2024, and bears interest at an annual rate of LIBOR plus a margin ranging from 275 to 425 basis points determined by the Company’s Consolidated Leverage Ratio, as defined. For the interest payment made in the nine months ended September 30, 2019, the applicable margin was 375 basis points and the total interest rate was 6.125 %.

 

The following table summarizes Atlas’ contractual obligations and commercial commitments as of December 31, 2018.

 

          Less than     One to     Three to     More than  
Contractual Obligations and Commitments   Total     One Year     Three Years     Five Years     Five Years  
Revolving credit facility – term loan(1)   $ 185,146     $ 15,193     $ 37,471     $ 36,928     $ 95,554  
Capital lease obligations     1,172       249       504       419        
Operating lease obligations     24,855       8,012       10,455       5,788       600  
Purchase obligations     6,073       888       3,529       1,656        
Revolving credit facility – revolving loan(1)     42,309       1,543       3,448       2,732       34,586  
Total contractual obligations and commitments   $ 259,555     $ 25,885     $ 55,407     $ 47,523     $ 130,740  

 

 

(1) The two portions of the Atlas Loan Agreement, the revolving credit facility and the term loan, both bear interest at a variable rate, calculated as LIBOR plus a spread based on the company’s leverage ratio. The spread is a range from 2.25% to 4.25%, and leverage ratio is calculated as the company’s total outstanding debt under this agreement divided by the company’s estimated future EBITDA. Estimated future interest is included in the anticipated future payments.

 

11

 

 

Subsequent Events

 

The description of the Credit Facility in “The Business Combination—Related Agreements—Credit Facility” is incorporated by reference herein.

 

Off-Balance Sheet Arrangements

 

We are not a party to any off-balance sheet transactions.

 

Effect of Inflation

 

Based on the analysis of the periods presented, we believe that inflation has not had a material effect on our operating results. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.

 

Non-GAAP Financial Measures

 

Atlas Adjusted EBITDA

 

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net income before interest expense, income taxes, depreciation and amortization, adjustments for certain one-time or non-recurring items and other adjustments.

 

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of Atlas’ operating performance when compared to its peers, without regard to its financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of Adjusted EBITDA to net income, our most directly comparable financial measure calculated and presented in accordance with GAAP.

 

    Three Months Ended September 30,     Nine Months Ended September 30,     Fiscal Year  
    2019     2018     2019     2018     2018  
Net Income   $ 8,678     $ 9,436     $ 13,541     $ 12,453     $ 12,045  
Interest Expense     2,493       1,254       8,027       4,609       6,787  
Provision for income taxes     (45 )     153       114       223       347  
Depreciation and amortization   $ 5,069     $ 5,181     $ 15,603     $ 14,294     $ 20,042  
EBITDA   $ 16,195     $ 16,024     $ 37,285     $ 31,579     $ 39,221  
Pro forma EBITDA for acquired business prior to acquisition date(1)         $ 330           $ 485     $ 570  
Non-cash increase in fair value of earnout                             2,750  
Non-recurring expenses(2)     3,782       1,486       10,732       7,655       9,126  
Discontinued business lines(3)         $ 160     $ 213     $ 742     $ 892  
Adjusted EBITDA   $ 19,977     $ 17,990     $ 48,230     $ 40,461     $ 52,559  

 

 

(1) Includes the EBITDA of SCST (which was acquired by Atlas in November 2018) and Piedmont (which was acquired by Atlas in August 2018) for the period from January 1, 2018 until the dates of their respective acquisitions (or June 30, 2018 for the six months ended June 30, 2018). Had—a

 

(2) Includes transaction-related professional fees, previous owner expenses, startup expenses for new offices, non-cash equity-based compensation expense, a facility lease early termination fee, corporate entity formation and enterprise resource planning costs, a non-recurring contract loss and shutdown of telecom division costs.

 

(3) Reflects losses related to business lines sold off in 2018.

 

12

 

 

Critical Accounting Policies

 

Atlas

 

See Note 2, Summary of Significant Accounting Policies, in the notes to Atlas’ combined audited financial statements incorporated by reference into this Current Report on Form 8-K.

 

Recent Accounting Pronouncements

  

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed consolidated financial statements.

 

Quantitative and Qualitative Disclosures About Market Risk

 

Market risk is the risk of loss arising from adverse changes in market rates and prices. Currently, our market risks relate to potential changes in the fair value of our long-term debt due to fluctuations in applicable market interest rates. Going forward, our market risk exposure generally will be limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor does we utilize financial instruments or derivative instruments for trading purposes.

 

Interest Rate Risk

 

As of September 30, 2019, Atlas had $139.6 million of debt outstanding under the Atlas Loan Agreement term loan and $34.3 million of outstanding borrowings under the Atlas Loan Agreement revolving credit facility, with an interest rate of 6.313%. A 1.0% increase or decrease in the weighted average interest rate would increase or decrease interest expense by approximately $1.7 million per year assuming a consistent debt balance.

 

Credit Risk

 

While we are exposed to credit risk in the event of non-performance by counterparties, the majority of our customers are investment grade companies and we do not anticipate non-performance. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.

 

 

13

 

 

Exhibit 99.3

 

Atlas Intermediate Holdings LLC and ATC Group Partners LLC

 

CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (unaudited)

(amounts in thousands)

 

    September 30,   December 31,
    2019   2018
ASSETS        
Current assets:        
Cash and equivalents   $ 17,355     $ 6,509  
Accounts receivable, net     105,663       101,180  
Unbilled receivables, net     35,757       37,692  
Prepaid expenses     6,616       6,446  
Other current assets     624       453  
                 
Total current assets     166,015       152,280  
                 
Property and equipment, net     13,957       12,260  
Intangible assets, net     98,538       109,904  
Goodwill     80,352       80,352  
Other long-term assets     2,526       39  
                 
TOTAL ASSETS   $ 361,388     $ 354,835  
                 
LIABILITIES AND MEMBERS’ CAPITAL                
Current liabilities:                
Trade accounts payable   $ 26,585     $ 24,245  
Accrued liabilities     13,053       14,046  
Current maturities of long-term debt     11,193       5,682  
Other current liabilities     12,873       21,456  
                 
Total current liabilities     63,704       65,429  
                 
Long-term debt, net of current maturities and loan costs     160,977       112,362  
Other long-term liabilities     3,389       5,250  
                 
Total liabilities     228,070       183,041  
                 
COMMITMENTS AND CONTINGENCIES (NOTE 9)                
                 
MEMBERS’ CAPITAL     133,318       171,794  
                 
TOTAL LIABILITIES AND MEMBERS’ CAPITAL   $ 361,388     $ 354,835  

 

The accompanying notes are an integral part of these unaudited condensed consolidated and

combined financial statements.

 

1

 

 

Atlas Intermediate Holdings LLC and ATC Group Partners LLC

 

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (unaudited)

(amounts in thousands)

 

    Three months ended
September 30,
  Nine months ended
September 30,
    2019   2018   2019   2018
                 
Revenues   $ 128,753     $ 109,719     $ 358,033     $ 314,136  
                                 
Cost of revenues     (70,623 )     (63,098 )     (196,247 )     (182,566 )
Operating expenses     (47,068 )     (35,594 )     (139,173 )     (107,703 )
                                 
Operating income     11,062       11,027       22,613       23,867  
                                 
Interest expense     (2,493 )     (1,254 )     (8,027 )     (4,609 )
Other income/(expense)     64       (184 )     (718 )     (5,939 )
                                 
Income before income taxes     8,633       9,589       13,868       13,319  
Income tax benefit/(expense)     45       (153 )     (114 )     (223 )
                                 
Net income from continuing operations     8,678       9,436       13,754       13,096  
                                 
Loss from discontinued operations     -       -       (213 )     (643 )
                                 
Net income   $ 8,678     $ 9,436     $ 13,541     $ 12,453  

 

The accompanying notes are an integral part of these unaudited condensed consolidated and

combined financial statements.

 

2

 

 

Atlas Intermediate Holdings LLC and ATC Group Partners LLC

 

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF MEMBERS’ CAPITAL (unaudited)

(amounts in thousands)

 

Balance, December 31, 2017   $ 172,674  
Contributions     300  
Distributions     -  
Equity-based compensation     165  
Net income     12,453  
         
Balance, September 30, 2018   $ 185,592  
         
Balance, December 31, 2018   $ 171,794  
Contributions     -  
Distributions     (53,400 )
Equity-based compensation     1,383  
Net income     13,541  
         
Balance, September 30, 2019   $ 133,318  

 

The accompanying notes are an integral part of these unaudited condensed consolidated and

combined financial statements.

 

3

 

 

Atlas Intermediate Holdings LLC and ATC Group Partners LLC

 

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (unaudited)

(amounts in thousands)

 

    Nine months ended
September 30,
    2019   2018
         
Cash flows from operating activities:        
Net income   $ 13,541     $ 12,453  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     15,603       14,294  
Equity-based compensation expense     1,383       165  
Gain on sale of property and equipment     (76 )     (138 )
Write-off of deferred financing costs related to debt extinguishment     40       -  
Amortization of deferred financing costs     174       174  
Provision for bad debts     351       267  
Changes in assets & liabilities:                
(Increase) in accounts receivable     (4,834 )     (4,098 )
Decrease in unbilled receivables     1,935       2,279  
(Increase) decrease in prepaid expenses     (170 )     957  
(Increase) in other current assets     (171 )     (542 )
Decrease (increase) in trade accounts payable     2,340       (937 )
(Decrease) increase in accrued liabilities     (993 )     6,323  
(Decrease) in other current and long-term liabilities     (7,944 )     (2,796 )
(Increase) in other long-term assets     (2,487 )     (501 )
                 
Net cash provided by operating activities     18,692       27,900  
                 
Cash flows from investing activities:                
Purchases of property and equipment     (6,128 )     (4,619 )
Purchase of business, net of cash acquired     -       (4,300 )
Proceeds from disposal of property and equipment     270       409  
                 
Net cash (used in) investing activities     (5,858 )     (8,510 )
                 
Cash flows from financing activities:                
Proceeds from short-term debt     5,511       -  
Proceeds from long-term debt, net of loan acquisition costs     173,805       -  
Payment of loan acquisition costs     (1,274 )     -  
Repayments of long-term debt     (124,130 )     (12,122 )
Member distributions     (53,400 )     -  
Payment of contingent earn-out     (2,500 )     -  
Net cash provided by (used in) financing activities     (1,988 )     (12,122 )
                 
Net change in cash and equivalents     10,846       7,268  
                 
Cash and equivalents - beginning of period     6,509       10,617  
                 
Cash and equivalents - end of period   $ 17,355     $ 17,885  
                 
Supplemental cash flow information:                
Cash paid for interest   $ 6,880     $ 4,158  
                 
Cash paid for taxes   $ 1,472     $ 2,681  

 

The accompanying notes are an integral part of these unaudited condensed consolidated and

combined financial statements.

 

4

 

 

Atlas Intermediate Holdings LLC and ATC Group Partners LLC

 

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (unaudited)

 

As of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and 2018

(amounts in thousands, except share amounts)

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

Organization

 

The accompanying unaudited condensed consolidated and combined financial statements include the consolidated and combined accounts of Atlas Technical Consultants Holdings LP and subsidiaries (“Atlas”) and ATC Group Partners LLC and subsidiaries (“ATC”) collectively the “Company”. As of December 31, 2018, and for the three months and nine months ended September 30, 2018, Atlas and ATC have been presented on a combined historical cost basis as they are entities under common control. In January 2019, Atlas and ATC were merged through a series of transactions. The merger is considered a transfer of interest under common control and therefore the assets and liabilities of ATC were transferred into Atlas at their carrying value. As of and for the three and nine months ended September 30, 2019, Atlas and ATC have been presented on a consolidated basis. All intercompany balances and transactions among the consolidated and combined entities have been eliminated.

 

The Company has more than 140 offices in 40 states and more than 3,300 employees.

 

Atlas provides public and private sector clients with comprehensive support in managing large-scale infrastructure improvement programs including engineering, design, program development/management, acquisition and project control services, as well as construction engineering & inspection and materials testing. ATC is a national firm that provides technical and project management services. ATC provides environmental and geotechnical engineering services, environmental consulting services, industrial hygiene, construction materials testing, compliance services, analytical testing, due diligence and environmental health and safety training throughout the United States.

 

Basis of Presentation

 

The accompanying consolidated and combined financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Interim Financial Information

 

The accompanying unaudited condensed consolidated and combined financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited combined financial statements for the year ended December 31, 2018 and notes thereto.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated and combined financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair presentation of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the full year ending December 31, 2019.

 

5

 

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

NOTE 2 – ACCOUNTS RECEIVABLE AND UNBILLED RECEIVABLES

 

The Company records its trade accounts receivable and unbilled receivables at their face amounts less allowances. On a periodic basis, the Company monitors the trade accounts receivable and unbilled receivables from its customers for any collectability issues. The allowance for doubtful accounts is established based on reviews of individual customer accounts, recent loss experience, current economic conditions, and other pertinent factors. As of September 30, 2019 and December 31, 2018, the allowance for uncollectible trade accounts receivable was approximately $2,500 and $2,800, respectively, while the allowance for unbilled receivables was approximately $1,800 and $1,600, respectively. The allowances reflect the Company’s best estimate of collectability risks on outstanding receivables and unbilled services.

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable. These risks primarily relate to the concentration of our largest customers who are large, governmental customers and regional governmental customers. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

 

NOTE 3 – REVENUE RECOGNITION

 

Revenues for services are derived from billings under contracts (which are typically of short duration) that provide for specific time, material and equipment charges, or lump sum payments and are reported net of any taxes collected from customers. The Company recognizes revenue as it is earned at estimated collectible amounts.

 

Revenue is recognized as services are performed and amounts are earned in accordance with the terms of a contract. The Company generally contracts for services to customers based on either a fixed fee or hourly rates. In such contracts, the Company’s efforts, measured by time incurred, typically are provided in less than a year and represent the contractual milestones or output measure, which is the contractual earnings pattern. For contracts with fixed fees, the Company recognizes revenues as amounts become billable in accordance with contract terms, provided the billable amounts are consistent with the services delivered and are earned. Expenses associated with performance of work may be reimbursed with a markup depending on contractual terms. Revenues include the markup, if any, earned on reimbursable expenses. Reimbursements include billings for travel and other out-of-pocket expenses and third-party costs, such as equipment rentals, materials, subcontractor costs and outside laboratories, which is included in cost of revenues in the accompanying condensed consolidated and combined statements of operations. The following summarizes revenue net of reimbursable expenses for the three and nine months ended September 30, 2019 and 2018:

 

    Three months ended
September 30,
  Nine months ended
September 30,
    2019   2018   2019   2018
    (Consolidated)   (Combined)   (Consolidated)   (Combined)
Gross revenues   $ 128,753     $ 109,719     $ 358,033     $ 314,136  
Reimbursable expenses     27,914       30,368       73,485       87,087  
Revenue, net of reimbursable expenses   $ 100,839     $ 79,351     $ 284,548     $ 227,049  

 

Revenues recognized in excess of billings are recorded as unbilled receivables. Billings in excess of revenues are recorded as deferred revenues and included in other current liabilities until revenue recognition criteria are met. Customer prepayments are deferred and recognized over future periods as services are delivered or performed.

 

6

 

 

NOTE 4 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements, establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

 

The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:

 

Level 1 - Inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that management has the ability to access.

 

Level 2 – Inputs utilize data points that are observable for the asset or liability, directly or indirectly, such as quoted prices, interest rates and yield curves.

 

Level 3 - Inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

 

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

The Company has various financial instruments, including cash and equivalents, accounts receivable and payable, accrued liabilities, and long-term debt. The carrying value of the Company’s cash and equivalents, accounts receivable, and payable and accrued liabilities approximate their fair value due to their short-term nature. The Company believes that the aggregate fair values of its long-term debt approximates its carrying amounts as the associated interest rates are either reset on a frequent basis or reflect current market rates.

 

NOTE 5 – RECENT ACCOUNTING PRONOUNCEMENTS

 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230 to add or clarify guidance on the classification of certain specific types of cash receipts in the statement of cash flows with the intent of reducing diversity in practice. Updates relate to the following types of cash receipts: Debt prepayments of extinguishment cost, settlement of zero-coupon debt, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investees, and beneficial interests in securitization transactions. The Company adopted this ASU on January 1, 2019 and the adoption did not have a material effect on the Company’s results of operations, financial position, or cash flows.

  

In February 2016, FASB issued ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize, in the balance sheet, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset over the lease term. The amendments in this accounting standard update are to be applied using a modified retrospective approach and are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the requirements of ASU 2016-02 and its potential impact on its financial statements.

 

In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year. The objective of this ASU is to establish the principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The core principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 must be adopted using either a full retrospective method or a modified retrospective method. For the Company, this new standard is now effective for annual reporting periods beginning after December 15, 2018 and the Company intends to adopt this standard in the fourth quarter of 2019. The Company is still evaluating the potential impact from the adoption of this standard but does not expect it to have a significant impact on its financial statements.

 

7

 

 

NOTE 6 – PROPERTY AND EQUIPMENT, NET

 

The Company depreciates its assets on a straight-line basis over the assets’ useful lives, which range from 3 to 10 years. Property and equipment consist of the following:

 

    September 30, 2019   December 31, 2018   Average
life
             
Furniture and fixtures   $ 7,565     $ 14,350      3-5 years
Equipment and vehicles     38,616       22,955      3-10 years
Computers     6,828       4,444      3 years
Leasehold improvements     4,878       4,518      3-5 years
Less: Accumulated depreciation and amortization     (43,930 )     (34,007 )    
                     
    $ 13,957     $ 12,260      

 

Property and equipment under capital leases:

 

    September 30, 2019   December 31, 2018
Computer equipment   $ 1,162     $ 1,095  
Less accumulated depreciation     (449 )     (167 )
    $ 713     $ 928  

 

Capital leases for computer equipment have an average lease term of five years with minimum lease payments as follows:

 

Rest of 2019   $ 67  
2020     268  
2021     268  
2022     267  
2023     183  
Thereafter     4  
    $ 1,057  

 

Depreciation expense was approximately $4,200 and $4,100 nine months ended September 30, 2019 and September 30, 2018, respectively.

 

NOTE 7 – GOODWILL AND INTANGIBLES

 

The carrying amount, including changes therein, of goodwill was $80,352 at September 30, 2019 and December 31, 2018, and the Company did not recognize any impairments of goodwill in during the three and nine months ended September 30, 2019 or September 30, 2018.

 

8

 

 

Intangible assets at September 30, 2019 and December 31, 2018 consisted of the following:

 

    September 30, 2019   December 31, 2018    Remaining
    Gross   Accumulated   Net book   Gross   Accumulated   Net book   useful life
    amount   amortization   value   amount   amortization   value   (in years)
Definite life intangible assets:                            
Customer relationships   $ 110,931       (21,569 )   $ 89,362     $ 110,931     $ (14,056 )   $ 96,875       9.25  
Tradenames     17,092       (8,198 )     8,894       17,092       (4,487 )     12,605       2.25  
Non-competes     647       (365 )     282       647       (223 )     424       3.75  
                                                         
Total intangibles   $ 128,670     $ (30,132 )   $ 98,538     $ 128,670     $ (18,766 )   $ 109,904          

 

Amortization expense for the nine months ended September 30, 2019 and September 30, 2018 was approximately $11,400 and $10,200, respectively. Amortization of intangible assets for the next five years and thereafter is expected to be as follows:

 

Rest of 2019   $ 3,683  
2020     14,503  
2021     11,948  
2022     11,945  
2023     11,572  
Thereafter     44,887  
    $ 98,538  

 

NOTE 8 – LONG-TERM DEBT

 

In October 2017, concurrent with the closing of the acquisition of Moreland Altobelli Associates, Atlas obtained a bridge loan from Regions Bank in the amount of $42,000. In November 2017, concurrent with the closing of the acquisition of the Engineering Testing Services family of companies (“ETS”), Atlas entered into a credit agreement with a group led by Regions Bank providing a term loan of $95,000 and a revolving credit facility of $30,000 secured by the assets owned by Atlas (the “Atlas Loan Agreement”). Proceeds from the Atlas Loan Agreement were used to fund the acquisition of ETS, repayment of the bridge loan, and for a redemption of $15,200 of initial equity contributions made by the initial members once overall leverage amounts were determined. The Atlas Loan Agreement provided for a scheduled maturity date in November 2022 and quarterly principal payments beginning in December 2017, with interest compounded based on the variable rate in effect.

 

ATC had a business loan agreement (the “ATC Loan Agreement”) which provided for a scheduled maturity date of January 29, 2020. The ATC Loan Agreement included a revolving credit facility of $45,000. Security for the loan was provided by a first-priority interest in substantially all of ATC’s assets and a promissory note. Borrowings under the ATC Loan Agreement bore interest at the one-month London Interbank Offered Rate (“LIBOR”) plus a margin based on the total leverage ratio as defined in the ATC Loan Agreement.

 

In March 2019, subsequent to the merger with ATC, the outstanding balances of the Atlas Loan Agreement and the ATC Loan Agreement were paid in full and the ATC Loan Agreement was terminated. The Atlas Loan Agreement was amended to provide for a term loan of $145,000 and a revolving credit facility of $50,000, of which $31,800 was funded at closing (collectively, the “Atlas Credit Facility”). Proceeds of the Atlas Credit Facility were used to repay existing debt of $123,900 and fund a shareholder distribution of $52,800 made in April 2019. The Atlas Credit Facility requires quarterly principal payments of $2,719 through March 31, 2023, and then $3,625 until the final maturity in March 2024, and bears interest at an annual rate of LIBOR plus a margin ranging from 275 to 425 basis points determined by the Company’s Consolidated Leverage Ratio, as defined. For the interest payment made in September 2019, the applicable margin was 375 basis points and the total interest rate was 6.125%.

 

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Long-term debt consisted of the following at September 30, 2019 and December 31, 2018:

 

    September 30, 2019   December 31, 2018
         
Atlas credit facility - term loan   $ 139,562     $ 89,063  
Capital lease obligations     304       1,030  
Other loans - capital lease obligations     -       385  
Atlas credit facility - revolving loan     34,300       13,944  
Other line of credit     -       14,500  
                 
Subtotal     174,166       118,922  
                 
Less: Loan costs, net     (1,996 )     (878 )
                 
Less current maturities of long-term debt     (11,193 )     (5,682 )
                 
Long-term debt   $ 160,977     $ 112,362  

 

Atlas was in compliance with all applicable loan covenants as of September 30, 2019.

 

Aggregate long-term principal payments subsequent to September 30, 2019, are as follows:

 

Year ending:    
Remainder of 2019   $ 2,752  
2020     11,143  
2021     10,900  
2022     10,875  
2023     13,594  
Thereafter     124,902  
    $ 174,166  

 

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

The Company is subject to certain claims and lawsuits typically filed against engineering companies, alleging primarily professional errors or omissions. The Company carries professional liability insurance, subject to certain deductibles and policy limits, against such claims. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on its financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters.

 

NOTE 10 – EQUITY BASED COMPENSATION

 

During the first nine months of 2019, Atlas Parent granted service-based Class A units to certain members of Atlas management. As of January 1, 2019, 1,666 units were authorized and reserved for issuance with 974 of these units granted as of September 30, 2019. The Class A units granted provide for service-based vesting over a four-year period following the grant date, with one quarter of the number of shares vesting on each anniversary of the grant date. Compensation expense related to these grants for the nine months ended September 30, 2019 was approximately $1,383. Compensation expense related to these grants is expected to be approximately $1,805 for 2019. The grant date fair value per unit was determined using a prescribed waterfall distribution of proceeds from an assumed sale of the Company pursuant to the terms of the currently contemplated transaction with Boxwood Merger Corp.

 

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The following summarizes the activity of Class A unit awards during the nine months ended September 30, 2019:

 

    Number of unvested Class A units   Grant date fair value
Unvested Class A units as of December 31, 2018     378     $ 1,593  
Granted     974       10,524  
Vested     -       -  
Forfeited     -       -  
                 
Unvested Class A units as of September 30, 2019     1,352     $ 8,026  

 

NOTE 11 – RELATED-PARTY TRANSACTIONS

 

During the three and nine months ended September 30, 2019, the Company performed certain environmental consulting work for an affiliate of one of its principal owners or members and collected fees related to these services in the amounts of $1,900 and $2,500, respectively. The Company performed similar work during the three and nine months ended September 30, 2018 and collected fees related to these services in the amounts of $0 and $110, respectively.

 

NOTE 12 – DISCONTINUED OPERATIONS

 

In September 2017, ATC decided that it would wind down the operations of its Power and Industrial (P&I) operation by the end of 2017 due to the loss of one of P&I’s major customers. On December 27, 2017, ATC entered into an asset purchase agreement with a third party, which was the final step in finalizing the terms of the shutdown of the P&I service line. ATC completed the sale during 2018 which resulted in an immaterial gain. No other operations were discontinued from January 1, 2019 through September 30, 2019.

 

The P&I service line’s activity in the combined balance sheet and combined statement of cash flows were not material. The loss from discontinued operations presented in the combined statement of operations for the three and nine months ended September 30, 2019 and 2018 consisted of the following:

 

    Three months ended
September 30,
  Nine months ended
September 30,
    2019   2018   2019   2018
Revenues   $ -     $ -     $ -     $ 484  
Cost of revenues     -       -       (177 )     (654 )
Operating expenses     -       -       (36 )     (493 )
Operating loss     -       -       (213 )     (663 )
Depreciation and amortization                     -          
Gain on sale from discontinued operations     -       -       -       20  
Loss from discontinued operations   $ -     $ -     $ (213 )   $ (643 )

 

 

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