As filed with the Securities and Exchange Commission on November 4, 2024
Registration No. 333-[•]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Acuren Corporation
(Exact Name of Registrant as Specified in Its Charter)
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The British Virgin Islands*
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7389
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66-1076867
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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Acuren Corporation
14434 Medical Complex Drive, Suite 100
Tomball, Texas 77377
(800) 218-7450
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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Michael Grigsby
c/o Acuren Corporation
14434 Medical Complex Drive, Suite 100
Tomball, Texas 77377
(800) 218-7450
(Name, address, including zip code, and telephone number, including area code, of agent for service)
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Copy to:
Flora R. Perez, Esq.
Brian J. Gavsie, Esq.
Laurie Green, Esq.
Greenberg Traurig, P.A.
401 East Las Olas Boulevard, Suite 2000
Fort Lauderdale, FL 33301
Phone: (954) 765-0500
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Approximate date of commencement of proposed sale to the public: The domestication described herein will be effective on, or as soon as practicable after, the date that this registration statement is declared effective.
If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box ☐
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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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 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED November 4, 2024
PROSPECTUS
ACUREN CORPORATION
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136,252,434 Shares of Common Stock
18,264,876 Warrants
1,000,000 Shares of Series A Preferred Stock
DOMESTICATION IN DELAWARE
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Our board of directors (the “Board of Directors”) has unanimously approved a proposal to change our jurisdiction of incorporation by discontinuing from the British Virgin Islands and becoming domesticated as a corporation incorporated under the laws of the State of Delaware (the “Domestication”). This prospectus relates to (i) the shares of our common stock, warrants and Series A Preferred Stock into which our outstanding ordinary shares, warrants and Founder Preferred Shares will be converted as a result of the Domestication and (ii) the shares of our common stock into which our outstanding Founder Preferred Shares are convertible, for which our outstanding warrants are exercisable, and into which options and restricted stock units may vest and settle following the Domestication. Acuren Corporation is incorporated with limited liability under the laws of the British Virgin Islands under the BVI Business Companies Act, 2004, as amended (the “BVI Companies Act”). To effect the Domestication, we will file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware and file a notice of continuance out of the British Virgin Islands with the British Virgin Islands Registrar of Corporate Affairs (we refer to the British Virgin Islands entity prior to the domestication as “Acuren BVI”), under which we will be domesticated as a Delaware corporation (we refer to the domesticated Delaware entity as “Acuren Delaware”). Acuren Delaware will be deemed to be the same legal entity as Acuren BVI. On the effective date of the Domestication, each of our currently issued and outstanding (i) ordinary shares will automatically convert, by operation of law, on a one-for-one basis, into shares of Acuren Delaware common stock, par value $0.0001 per share (“Acuren Delaware common stock”), (ii) warrants will automatically convert, on a one-for-one basis, into warrants exercisable for shares of Acuren Delaware common stock (iii) Founder Preferred Shares will automatically convert, by operation of law, on a one-for-one basis, into shares of Series A Preferred Stock and (iv) options exercisable for Acuren BVI ordinary shares shall become exercisable for shares of Acuren Delaware common stock. In addition, all outstanding restricted stock units which vest and settle into Acuren BVI ordinary shares will ultimately settle into shares of Acuren Delaware common stock. Under British Virgin Islands law and our current governing documents, we do not need shareholder approval of the Domestication, and our shareholders do not have statutory dissenters’ rights of appraisal as a result of the Domestication.
We are not asking you for a proxy, and you are requested not to send us a proxy. No shareholder action is required to effect the Domestication. See “The Domestication — No Vote or Dissenters’ Rights of Appraisal in the Domestication.”
In connection with the Domestication, we intend to apply to list our common stock on the New York Stock Exchange (the “NYSE”) under the ticker symbol “TIC”. Although we intend to apply to list our common stock on the NYSE in connection with the Domestication, the Domestication is not contingent on the listing of our common stock on the NYSE. We do not intend to list our warrants or Series A Preferred Stock on any national securities exchange or other principal U.S. market.
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Investing in our common stock involves risks. See “Risk Factors” beginning on page 10 of this prospectus.
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We are an “emerging growth company” as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and may elect to do so in future filings. See “Prospectus Summary — Emerging Growth Company.”
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus will not be filed with the British Virgin Islands Registrar of Corporate Affairs. Neither the British Virgin Islands Financial Services Commission nor the British Virgin Islands Registrar of Corporate Affairs accepts any responsibility for Acuren Delaware’s financial soundness or the correctness of any of the statements made or opinions expressed in this prospectus.
Prospectus dated , 2024
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ABOUT THIS PROSPECTUS
No person has been authorized to give any information or make any representation concerning us or the Domestication (other than as contained in this prospectus) and, if any such other information or representation is given or made, you should not rely on it as having been authorized by us. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.
Terms Used in This Prospectus
Unless the context otherwise requires, in this prospectus, the term(s) (1) “the Company,” “we,” “us” and “our” refer to Acuren Corporation (formerly known as Admiral Acquisition Limited) and its consolidated subsidiaries as it currently exists under British Virgin Islands law and will continue under Delaware law after the Domestication, (2) “Acuren BVI” and “Acuren Delaware” refer to the Company prior to and after the Domestication, respectively, and (3) “ASP Acuren” refers to ASP Acuren Holdings, Inc. and its consolidated subsidiaries prior to its acquisition by the Company on July 30, 2024 (the “Acuren Acquisition” or the “Transaction”). All references in this prospectus to the “Predecessor” refer to ASP Acuren for all periods prior to its acquisition by the Company and all references to “Successor” refer to the Company for all periods.
Presentation of Financial and Other Information
In this prospectus, references to “$”, “US$” and “U.S. Dollars” are to the lawful currency of the United States of America. In connection with the Acuren Acquisition, we changed our fiscal year end from November 30 to December 31.
Unaudited Pro Forma Financial Information
Following the Acuren Acquisition, which was consummated on July 30, 2024, ASP Acuren is considered to be our Predecessor under applicable SEC rules and regulations. As a result, we have included in this prospectus unaudited pro forma financial information based on the historical financial statements of Admiral and ASP Acuren, combined and adjusted to give effect to the Acuren Acquisition as if it had occurred as of January 1, 2023 for the income statement data and as of June 30, 2024 for the balance sheet data. The unaudited pro forma combined consolidated financial information has been prepared in accordance with the basis of preparation described in “Unaudited Pro Forma Financial Information — Notes to Unaudited Pro Forma Condensed Combined Financial Information.”
Trademarks and Trade Names
This prospectus contains some of our trademarks and trade names. All other trademarks or trade names of any other company appearing in this prospectus belong to their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
Industry and Market Data
This prospectus includes industry data and forecasts that we obtained from industry publications and surveys, public filings and internal company sources. Statements as to our ranking, market position and market estimates are based on independent industry publications, third-party forecasts, management’s estimates and assumptions about our markets and our internal research. Our internal estimates are based upon our understanding of industry and market conditions, and such information has not been verified by any independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are subject to uncertainty and risk due to a variety of factors, including those discussed under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus contains “forward-looking statements”. These forward-looking statements are based on beliefs and assumptions as of the date such statements are made and are subject to risks and uncertainties. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including “expect,” “anticipate,” “project,” “will,” “should,” “believe,” “intend,” “plan,” “estimate,” “potential,” “target,” “would,” and similar expressions, although not all forward-looking statements contain these identifying terms.
These forward-looking statements are based on our current expectations and assumptions and on information currently available to management and include, among others, statements regarding, as of the date such statements are made:
• our beliefs and expectations regarding our business strategies and competitive strengths, and our ability to maintain and advance our market share and position, grow our business organically and through acquisitions, and capitalize on customer demand;
• our beliefs regarding competition, our relative market positioning and the competitive factors in the industries we serve;
• our beliefs regarding our regional, decentralized operating model and differentiated leadership culture;
• our beliefs regarding our acquisition platform and ability to execute on and successfully integrate strategic acquisitions;
• our beliefs regarding the recurring and repeat nature of our business;
• our expectations regarding industry trends and their impact on our business, and our ability to capitalize on the opportunities presented in the markets we serve;
• our intent to continue to grow our business, both organically and through acquisitions, and our beliefs regarding the impact of our business strategies on our growth;
• our plans and beliefs with respect to our leadership development platform;
• our beliefs regarding our customer relationships and plans to grow existing business and expand service offerings;
• our beliefs regarding the sufficiency of our properties and facilities;
• our expectations regarding labor matters;
• our beliefs regarding the adequacy of our insurance coverage;
• our expectations regarding the increased costs and burdens of being a public company;
• our expectations regarding the cost of compliance with laws and regulations;
• our expectations and beliefs regarding accounting and tax matters;
• our beliefs regarding the sufficiency of our current sources of liquidity to fund our future liquidity requirements, our expectations regarding the types of future liquidity requirements and our expectations regarding the availability of future sources of liquidity; and
• our beliefs regarding the benefits of the Domestication.
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These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including those described in “Risk Factors.” In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Important factors that may materially affect the forward-looking statements include the following:
• economic conditions affecting the industries we serve, including the construction industry and the energy sector, as well as general economic conditions;
• adverse developments in the credit markets that could adversely affect funding of construction projects;
• the ability and willingness of customers to invest in infrastructure projects;
• a decline in demand for our services or for the products and services of our customers;
• the fact that our revenues are derived primarily from contracts with durations of less than six months and the risk that customers will not renew or enter into new contracts;
• our ability to successfully acquire other businesses, successfully integrate acquired businesses into our operations and manage the risks and potential liabilities associated with those acquisitions;
• the impact of our regional, decentralized business model on our ability to execute on our business strategies and operate our business successfully;
• our ability to compete successfully in the industries and markets we serve;
• our ability to properly manage and accurately estimate costs associated with specific customer projects, in particular for arrangements with fixed price terms;
• increases in the cost, or reductions in the supply, of the materials we use in our business and for which we bear the risk of such increases;
• our relationship with our employees, a large portion of which are covered by collective bargaining arrangements, and our ability to effectively manage and utilize our workforce;
• the inherently dangerous nature of the services we provide and the risks of potential liability;
• the impact of customer consolidation;
• the loss of the services of key senior management personnel and the availability of skilled personnel;
• the seasonality of our business and the impact of weather conditions;
• the variability of our operating results between periods and the resulting difficulty in forecasting future operating results;
• litigation that results from our business, including costs related to any damages we may be required to pay as a result of product liability claims brought against our customers;
• our ability to remediate any material weaknesses;
• the impact of health, safety and environmental laws and regulations, and the costs associated with compliance with such laws and regulations;
• our substantial level of indebtedness and the effect of restrictions on our operations set forth in the documents that govern such indebtedness; and
• our compliance with certain financial maintenance covenants in the documents governing our indebtedness and the effect on our liquidity of any failure to comply with such covenants.
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The factors identified above are believed to be important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Other factors not discussed herein could also have a material adverse effect on us. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. These forward-looking statements speak only as of the date of this prospectus. We assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, except as required by applicable law.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this prospectus and hereafter in our other SEC filings and public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.
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SUMMARY
This summary provides an overview of selected information regarding our business and operations on a consolidated basis, including the operations of ASP Acuren which we acquired on July 30, 2024. Because this is only a summary, it may not contain all of the information that may be important to you in understanding the Domestication. You should carefully read this entire prospectus, including the section entitled “Risk Factors.”
Overview
We were incorporated on December 15, 2022 with limited liability under the laws of the British Virgin Islands under the BVI Companies Act under the name Admiral Acquisition Limited (“Admiral”). We were created for the purpose of acquiring a target company or business. On May 22, 2023, we raised gross proceeds of (i) approximately $539.5 million in connection with our initial public offering of Acuren BVI ordinary shares (with matching warrants (“Warrants”)) on the London Stock Exchange (“LSE”) at a price of $10.00 per Acuren BVI ordinary share, and (ii) a further $10.5 million through the subscription of a class of shares referred to as founder preferred shares (“Founder Preferred Shares”) (with Warrants being issued to subscribers of Founder Preferred Shares on the basis of one Warrant per Founder Preferred Share) at a price of $10.50 per Founder Preferred Share. Each Warrant entitles the holder to one-fourth of an ordinary share, exercisable in multiples of four Warrants at $11.50 per whole ordinary share.
On July 30, 2024, we completed our acquisition of ASP Acuren, a market leading provider of critical asset integrity services, and we changed our name to Acuren Corporation.
The consideration paid at closing for the Acuren Acquisition was approximately $1.88 billion in cash. We funded the consideration paid with a combination of $568.0 million cash on hand, a $775.0 million senior loan facility and an aggregate of $675.0 million of proceeds from the issuance of Acuren BVI ordinary shares to investors (the “PIPE Financing”) and proceeds from an early warrant exercise financing (the “Warrant Financing”). Following the closing of the Acuren Acquisition, we had 121,412,515 Acuren BVI ordinary shares and 1,000,000 Founder Preferred Shares issued and outstanding.
The Acuren BVI ordinary shares began trading on the LSE on May 22, 2023. Due to the completion of the Acuren Acquisition, trading on the LSE was suspended on July 30, 2024, and the listing was cancelled on August 19, 2024.
In connection with the Domestication, we intend to apply to list our common stock on the NYSE under the ticker symbol “TIC”. Although we intend to apply to list our common stock on the NYSE in connection with the Domestication, the Domestication is not contingent on the listing of our common stock on the NYSE. We do not intend to list our warrants or Series A Preferred Stock on any national securities exchange or other principal U.S. market.
Our principal executive offices are located at 14434 Medical Complex Drive, Suite 100, Tomball, TX 77377, our telephone number is (800) 218-7450 and we maintain a website with the address www.acuren.com. Our website is not incorporated by reference into this registration statement.
Our Business
We are a leading provider of critical asset integrity services. We operate primarily in North America serving a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. We provide these essential and often compliance-mandated (often at customer locations) services in the industrial space and are focused on the recuring maintenance needs of our customers.
The work we do fits in the service category referred to as Testing, Inspection and Certification (TIC). These activities include several Nondestructive Testing (“NDT”) techniques such as radiography, ultrasonic testing, magnetic particle inspection, penetrant testing, and visual inspection. NDT activities include inspection and evaluation of industrial equipment through various technology-enabled methods to ensure asset integrity, avoid costly accidents and comply with regulatory requirements without destroying the asset or component. Given the amount of activity required at heights in the industrial space, we provide market leading Rope Access Technician
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(“RAT”) solutions to reach difficult areas without scaffolding. The work on ropes at heights extends beyond inspection and testing to include industrial trades such as insulation, coatings and blasting, welding, pipe fitting, hoisting and rigging, and electrical services. We offer these trades in a niche way where RAT solutions are optimal (cost efficient and/or schedule enhancing) and where we can provide quality services without compromising safety. Our TIC service also includes support from consulting engineers with in-lab destructive testing capabilities. Our highly specialized materials engineers support failure investigation, material selection, corrosion engineering, welding engineering, fracture mechanics, destructive testing, and chemical analysis.
We are headquartered in Tomball, Texas and operate from approximately 119 service centers and approximately 22 engineering and lab facilities. We operate in two geographical segments, the U.S. and Canada, and also have limited operations located in the United Kingdom. As of September 18, 2024, we had 6,265 employees, approximately 5,000 of whom are engineers and technicians. We have recurring revenue and repeat business from our diversified long-standing customers across a variety of end markets. We believe the essential nature of our work provides stable and predictable cash flows. Organic growth is enhanced as assets and infrastructure age, requiring additional investment to ensure compliance and safe operation. Our engineers and technicians play an important role in the life extension of industrial assets. Contractual arrangements and master service agreements have terms ranging from a few days to five years. Substantially all of our revenue is derived from services contracted on a time and materials basis.
The Acuren Acquisition
On May 21, 2024, Admiral, ASP Acuren, AAL Merger Sub, Inc. (the “Merger Sub”) and ASP Acuren Investco LP (in its capacity as the representative of all the stockholders of ASP Acuren, the “Stockholders”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, at the closing of the Acuren Acquisition on July 30, 2024, Merger Sub merged with ASP Acuren resulting in ASP Acuren becoming a wholly owned subsidiary of Admiral (the “Merger”). Jefferies LLC acted as lead financial advisor and lead capital markets advisor in connection with the Merger and is an advisor with respect to certain matters relating to the registration of securities.
Acuren Acquisition Financing
The consideration paid at closing for the Acuren Acquisition was approximately $1.88 billion in cash. We funded the consideration paid with a combination of $568.0 million cash on hand, a $775.0 million senior loan facility and an aggregate of approximately $675.0 million of proceeds from the PIPE Financing and the Warrant Financing. Following the closing of the Acuren Acquisition, we had 121,412,515 Acuren BVI ordinary shares and 1,000,000 Founder Preferred Shares issued and outstanding. Jefferies LLC acted as lead placement agent in connection with the placement of ordinary shares in the PIPE Financing, which shares, upon exchange for shares of common stock following the domestication, are being registered hereby for resale. Jefferies Finance LLC acted as joint lead arranger for the senior loan facility.
The Domestication
We intend to change our jurisdiction of incorporation from the British Virgin Islands to the State of Delaware. We will affect the Domestication by filing with the Secretary of State of the State of Delaware a certificate of corporate domestication and a certificate of incorporation, and by filing with the British Virgin Islands Registrar of Corporate Affairs a notice of continuation out of the British Virgin Islands and certified copies of the certificates filed in Delaware. Acuren Delaware will be deemed to be the same legal entity as Acuren BVI. The Domestication and the Acuren Delaware certificate of incorporation of Acuren Delaware were approved by our Board of Directors. No action of our shareholders is required to effect the Domestication. We anticipate that the Domestication will become effective shortly after the effectiveness of the registration statement of which this prospectus forms a part (we refer to this date as the “Effective Time”). See “Description of Capital Stock; Comparison of Rights — Effective Time.” Acuren BVI has not received (and is not required by British Virgin Islands law to receive) approval of a plan of arrangement in the British Virgin Islands, and no plan of arrangement is contemplated. For more information about the Domestication, see the section entitled “The Domestication.”
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Comparison of Shareholder Rights
The Domestication will change our jurisdiction of incorporation from the British Virgin Islands to the State of Delaware. While we are currently governed by the BVI Companies Act, upon Domestication, we will be governed by the General Corporation Law of the State of Delaware (the “DGCL”). There are differences between British Virgin Islands corporate law and Delaware corporate law. In addition, in connection with the Domestication, we will be governed by a newly adopted certificate of incorporation and bylaws of Acuren Delaware, which are different from our current organizational documents. For a more detailed description of how the new organizational documents and Delaware law may differ from our current organizational documents and British Virgin Islands law, please see “Description of Capital Stock; Comparison of Rights — Comparison of Rights” below. Our business, assets and liabilities on a consolidated basis, as well as our executive officers, principal business locations and fiscal year, will not change as a result of the Domestication.
The most significant differences between our current organizational documents and British Virgin Islands law and the new organizational documents and Delaware law are as follows:
• Delaware law requires that all amendments to the Acuren Delaware certificate of incorporation (other than a certificate of designation setting forth a copy of the resolution of the Acuren Delaware Board of Directors fixing the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of the shares of one or more new series of preferred stock of Acuren Delaware, a change in Acuren Delaware’s name, a deletion of certain ministerial matters such as the name of our incorporator or a subdivision of shares and proportionate increase in authorized shares at a time when we have only one class of stock) must be approved by the Board of Directors and by the stockholders, while amendments to the Amended and Restated Memorandum and Articles of Association of Acuren BVI may be made solely by resolutions of the directors (in limited circumstances) or by the holders of ordinary shares;
• The Acuren Delaware certificate of incorporation will provide that we are required to pay any “Annual Dividend Amount” in shares of Acuren Delaware common stock, while the Amended and Restated Memorandum and Articles of Association of Acuren BVI provides that any “Annual Dividend Amount” is payable in the form of either Acuren BVI ordinary shares or cash, at our sole option;
• The Acuren Delaware certificate of incorporation will prohibit the common stockholders of Acuren Delaware from acting by written consent, while the Acuren BVI Amended and Restated Memorandum and Articles of Association permit shareholder action by written consent;
• The Acuren Delaware certificate of incorporation and bylaws will not permit the stockholders of Acuren Delaware to call meetings of stockholders under any circumstances, while the shareholders holding 30% of the voting rights in respect of the matter for which the meeting is called may require the directors to call a meeting of shareholders of Acuren BVI;
• Under Delaware law, only the stockholders may remove directors, while under British Virgin Islands law and the Acuren BVI Amended and Restated Memorandum and Articles of Association, a director may be removed by a resolution of directors;
• Under the Acuren Delaware certificate of incorporation and bylaws, subject to the rights of any series of preferred stock, vacancies and unfilled directorships will be filled solely by the remaining directors, while under the Acuren BVI Amended and Restated Memorandum and Articles of Association vacancies may be filled by either the directors or the shareholders;
• Under Delaware law, directors may not act by proxy, while under British Virgin Islands law, directors may appoint another director or person to vote in his or her place, exercise his or her other rights as director, and perform his or her duties as director;
• Under Delaware law, a sale of all or substantially all of the assets of Acuren Delaware (other than under certain circumstances related to the sale of assets securing a mortgage or pledged to a secured party) requires stockholder approval, while the Acuren BVI Amended and Restated Memorandum and Articles of Association eliminate the shareholder vote otherwise required by the British Virgin Islands laws for a sale of more than 50% of the assets of Acuren BVI; and
• Under Delaware law, “business combinations” with “interested stockholders” (as those terms are defined in the DGCL) are prohibited for a certain period of time absent certain requirements, while British Virgin Islands law provides no similar prohibition.
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Share Conversion
Acuren BVI is currently authorized to issue an unlimited number of no par value shares which may be either ordinary shares or Founder Preferred Shares. As of October 21, 2024, there were 121,476,215 ordinary shares of Acuren BVI issued and outstanding, and 1,000,000 Founder Preferred Shares issued and outstanding, which are convertible into ordinary shares on a one-for-one basis. In addition, as of October 21, 2024, there were issued and outstanding (i) 18,264,876 Warrants exercisable to purchase approximately 4,566,219 Acuren BVI ordinary shares (with each four Warrants entitling the holder to subscribe for one ordinary share) at an exercise price of $11.50 per whole ordinary share, (ii) 125,000 options to purchase Acuren BVI ordinary shares at an exercise price of $11.50 on a one-for-one basis, all of which are fully vested and (iii) 1,585,000 unvested restricted stock units which vest and settle into Acuren BVI ordinary shares, on a one-for-one basis, based on the vesting schedule applicable to the restricted stock unit awards. See “Description of Capital Stock; Comparison of Rights — Shares Reserved for Future Issuances.”
In connection with the Domestication, each ordinary share of Acuren BVI that is issued and outstanding immediately prior to the Effective Time will automatically convert into one share of common stock of Acuren Delaware. Similarly, outstanding options, Warrants, restricted stock units and other rights to acquire Acuren BVI ordinary shares will become options, Warrants, restricted stock units or rights to acquire shares of common stock of Acuren Delaware. It will not be necessary for shareholders of Acuren BVI who currently hold share certificates to exchange their existing share certificates for certificates of shares of common stock of Acuren Delaware in connection with the Domestication. Similarly, holders of Acuren BVI warrant certificates will not have to exchange their existing warrant certificates for new warrant certificates exercisable into Acuren Delaware common stock. See “The Domestication — Domestication Share Conversion” below.
In connection with the Domestication, each Founder Preferred Share that is issued and outstanding immediately prior to the Effective Time will be converted into one share of Series A Preferred Stock of Acuren Delaware. The Series A Preferred Stock will be convertible into shares of Acuren Delaware common stock on a one-for-one basis at any time at the option of the holder and will be automatically converted into shares of Acuren Delaware common stock (subject to certain adjustments in certain circumstances either as the directors may determine or otherwise as determined in accordance with the terms of the Series A Preferred Stock) upon the earlier of (i) immediately following the Change of Control Dividend Date (as defined below) and (ii) the last day of the tenth full financial year following the consummation of the Acuren Acquisition, being December 31, 2034. The Annual Dividend Amount required to be paid on the Series A Preferred Stock must be paid in shares of common stock of Acuren Delaware. Accordingly, Acuren Delaware may issue additional shares of Acuren Delaware common stock as a dividend on the Series A Preferred Stock. See “Description of Capital Stock; Comparison of Rights — Series A Preferred Stock.”
Reasons for the Domestication
Our Board of Directors believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware and that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. Our Board of Directors further believes that there are several reasons why the Domestication is in the best interests of Company and its shareholders, including (1) the prominence, predictability and flexibility afforded by Delaware law, (2) the well-established principles of corporate governance in Delaware judicial precedent and (3) our increased ability to attract and retain qualified directors. See “The Domestication — Background and Reasons for the Domestication” below for further detail.
Material U.S. Federal Income Tax Consequences
See “Material U.S. Federal Income Tax Consequences” for important information regarding U.S. federal income tax consequences relating to (1) the Domestication and (2) the ownership and disposition of Acuren Delaware common stock.
No Vote or Dissenters Rights of Appraisal in the Domestication
Under British Virgin Islands law and the Amended and Restated Memorandum and Articles of Association of Acuren BVI, we do not need shareholder approval of the Domestication, and our shareholders do not have statutory dissenters’ rights of appraisal or any other appraisal rights as a result of the Domestication. See “The Domestication — No Vote or Dissenters’ Rights of Appraisal in the Domestication.”
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Summary Risk Factors
An investment in our common stock will involve risks and uncertainties, including those highlighted in the section entitled “Risk Factors” beginning on page 10 of this prospectus. These risk factors represent challenges that we face in connection with the successful implementation of our strategy and growth of our business:
Risks Related to Our Business and Industry
• Our revenues are heavily dependent on certain industries.
• Demand for our services is related to global oil supply, existing oil and gas refining sites and other factors.
• We operate in competitive markets and if we cannot compete, our business and results of operations could be materially and adversely affected.
• Serious safety incidents may result from use of RAT solutions.
• Our ongoing investments in new client markets involve significant risks.
• Our unionized workforce and related obligations could adversely affect our operations.
• We cannot assure that we will be successful in hiring or retaining members of a skilled technical workforce.
• We cannot assure that we will be successful in maintaining or renewing our contracts with our clients.
• Our business’ success depends on our ability to adopt new, and expand our current, asset integrity solutions.
• Earnings for future periods may be impacted by impairment charges for goodwill and intangible assets.
• The loss or unavailability of any of our executive officers or key personnel could materially affect us.
• Our business strategy of acquiring companies and making investments that complement our existing businesses could be unsuccessful.
• We may experience inflationary pressures in our operating costs and cost overruns on our projects.
• We are and may become subject to periodic litigation.
• Our insurance coverage will not fully indemnify us against certain claims or losses.
• Demand for our business could be materially affected by governmental regulation.
• Hedging against interest rate exposure may adversely affect our earnings, limit our gains or result in losses.
• Currency translation risk may have a material impact on our results of operations.
• Natural disasters, industrial accidents, epidemics, war and acts of terrorism, and other adverse weather conditions could disrupt our business.
Risks Related to Regulation
• Our failure to comply with the requirements and regulations of the International Traffic and Arms Regulation and the Occupational Safety and Health Administration could affect our financial condition and results of operations.
• Unsatisfactory safety performance may subject us to penalties and negatively impact our business.
• If our intellectual property rights are unenforceable or become obsolete, or if new intellectual property rights held by a third party become the only or preferred way to perform services we offer, our competitive position could be adversely impacted.
• Our business depends upon the maintenance of our proprietary technologies and information.
• Our operations and properties are subject to extensive environmental, health and safety regulations.
• Interruptions in the proper functioning of our information systems, including as a result of a cybersecurity incident, could adversely affect our business.
• Our business is subject to risks arising from climate change.
Risks Related to our Finances and Indebtedness
• Our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities.
• Our New Credit Facility includes limitations on our operations.
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• We may incur substantial additional indebtedness, which could further exacerbate the risks that we may face.
• We may need additional capital in the future and may not be able to access it on favorable terms, or at all.
• Our financial results are based, in part, upon estimates and assumptions that may differ from actual results.
• We will incur increased operating costs if we successfully register our securities and list on the NYSE.
• If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately and timely.
• If we are unable to remediate the material weaknesses in our internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price.
• We are an emerging growth company and will take advantage of reduced reporting requirements.
Risks Related to the Acuren Acquisition
• The due diligence in connection with the Acuren Acquisition may not have revealed all considerations or liabilities of ASP Acuren.
• Warranty protection in connection with the Acuren Acquisition may be limited.
• The unaudited pro forma condensed combined financial information may not be indicative of our actual financial position.
Risks Related to Ownership of our Securities
• We may be required to issue additional shares of Acuren Delaware common stock pursuant to the terms of the Series A Preferred Stock, which could result in dilution to existing stockholders.
• An active trading market for the Acuren Delaware common stock may not develop.
• Our current directors will allocate their time to other businesses leading to potential conflicts of interest.
• We do not currently intend to pay dividends on the Acuren Delaware common stock.
• You may not be able to realize returns on your investment in our securities within a reasonable period.
• We may issue additional series of preferred stock and the terms of such preferred stock may reduce the value of our existing securities.
• There is no guarantee that the Warrants will be in the money at the time they are exercisable, and, if the Warrants are exercised, we will be required to issue additional shares of Acuren Delaware common stock.
• The Warrants may be mandatorily redeemed at a time that may be disadvantageous to the holder.
Risks Related to the Domestication to Delaware
• Upon effectiveness of the Domestication to Delaware, your rights will arise under Delaware law and our Acuren Delaware certificate of incorporation and bylaws.
• Currently, we are governed by British Virgin Islands law, but, following the completion of the Domestication, we will be governed by Delaware law, which has anti-takeover implications.
• Anti-takeover provisions could delay or discourage a merger, tender offer, or assumption of control not approved that some shareholders may consider favorable.
Risks Related to Taxation
• Changes in tax law and practice may reduce any net returns for investors.
• Our non-U.S. Holders may be subject to withholding taxes on distributions.
• The Domestication may require a shareholder to recognize taxable income.
• We will be treated as a U.S. corporation for U.S. tax purposes.
• There can be no assurance that we will be able to make tax-efficient returns for stockholders.
• The change in our tax domicile to the U.S. may result in adverse tax consequences for holders of the Acuren BVI Ordinary Shares or Warrants.
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Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
Further, Section 102(b) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act are required to comply with the new or revised financial accounting standards). The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected to opt out of such extended transition period. As a result, we will adopt new or revised accounting standards on the same timeline as other public companies, and we will not be able to revoke such election. This may make comparison of our financial statements with certain other public companies that are taking advantage of the extended transition period difficult or impossible because of the potential differences in accounting standards used.
We could be an emerging growth company for up to four years from the end of our most recently completed fiscal year, although we may lose such status earlier, depending on the occurrence of certain events, including when we have generated total annual gross revenue of at least $1.235 billion or when we are deemed to be a “large accelerated filer” under the Exchange Act, which means that the market value of our common stock that is held by non-affiliates exceeds $700 million as of December 31st of the prior year, or when we have issued more than $1.0 billion in nonconvertible debt securities during the prior three-year period.
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Summary Condensed Financial Information of Acuren Corporation
The following table presents summary historical condensed financial information of Acuren Corporation prior to the completion of the Acuren Acquisition as of the dates and for each of the periods indicated. The summary historical condensed financial information as of and for the period ended December 31, 2023 and the six months ended June 30, 2024 has been derived from the audited and unaudited condensed financial statements of Acuren Corporation, respectively (prior to its completion of the Acuren Acquisition) included elsewhere in this prospectus.
Acuren Corporation’s historical results are not necessarily indicative of future results and should be read in conjunction with “Acuren Corporation Management’s Discussion and Analysis of Financial Condition and Results of Operation” and “Unaudited Pro Forma Condensed Combined Financial Information”, as well as the condensed financial statements and notes thereto included elsewhere in this prospectus.
|
($ in thousands except per share data)
|
|
As of and for the
Six Months Ended
June 30,
2024
|
|
As of and for the
Year Ended
December 31,
2023
|
|
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
$
|
(1,099
|
)
|
|
$
|
(1,425
|
)
|
|
Investment income
|
|
|
16,472
|
|
|
|
12,358
|
|
|
Transaction costs
|
|
|
(2,819
|
)
|
|
|
—
|
|
|
Change in fair value of derivative instruments
|
|
|
(19,877
|
)
|
|
|
—
|
|
|
Unrealized gain (loss) on marketable securities at fair value
|
|
|
(1,851
|
)
|
|
|
5,536
|
|
|
Net income (loss)
|
|
$
|
(9,174
|
)
|
|
$
|
16,469
|
|
| |
|
|
|
|
|
|
|
|
|
Weighted average Ordinary Shares outstanding, basic and diluted
|
|
|
53,975,000
|
|
|
|
53,975,000
|
|
|
Weighted average Founder Preferred Shares outstanding, basic and
diluted
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
Earnings per Ordinary Share and Founder Preferred Shares
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.17
|
)
|
|
$
|
0.30
|
|
|
Diluted
|
|
$
|
(0.17
|
)
|
|
$
|
0.30
|
|
| |
|
|
|
|
|
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
567,088
|
|
|
$
|
555,839
|
|
|
Total liabilities
|
|
|
2,366
|
|
|
|
95
|
|
|
Total equity
|
|
|
564,722
|
|
|
|
555,744
|
|
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Summary Condensed Financial Information of ASP Acuren
The following table presents summary historical consolidated financial information of ASP Acuren and its consolidated subsidiaries prior to the completion of the Acuren Acquisition as of the dates and for each of the periods indicated. The summary historical financial information as of and for the period ended December 31, 2023 and the six months ended June 30, 2024 has been derived from the audited and unaudited consolidated financial statements of ASP Acuren, respectively (prior to its completion of the Acuren Acquisition), included elsewhere in this prospectus.
ASP Acuren’s historical results are not necessarily indicative of future results and should be read in conjunction with “ASP Acuren Management’s Discussion and Analysis of Financial Condition and Results of Operation” and “Unaudited Pro Forma Condensed Combined Financial Information”, as well as the consolidated financial statements and notes thereto included elsewhere in this prospectus.
|
($ in thousands except per share data)
|
|
As of and for the
Six Months Ended
June 30,
2024
|
|
As of and for the
Year Ended
December 31,
2023(1)
|
|
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
$
|
532,354
|
|
|
$
|
1,050,057
|
|
|
Cost of revenue
|
|
|
395,887
|
|
|
|
810,534
|
|
|
Gross profit
|
|
|
136,467
|
|
|
|
239,523
|
|
|
Selling, general and administrative expenses
|
|
|
102,724
|
|
|
|
185,022
|
|
|
Income from operations
|
|
|
33,743
|
|
|
|
54,501
|
|
|
Interest expense, net
|
|
|
33,551
|
|
|
|
60,022
|
|
|
Other expense (income), net
|
|
|
(286
|
)
|
|
|
(1,241
|
)
|
|
Income (loss) before provision for income taxes
|
|
|
478
|
|
|
|
(4,280
|
)
|
|
Provision for income taxes
|
|
|
7,199
|
|
|
|
2,009
|
|
|
Net loss
|
|
$
|
(6,721
|
)
|
|
$
|
(6,289
|
)
|
| |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used in computing basic and diluted loss per share
|
|
|
5,024,802
|
|
|
|
5,024,802
|
|
|
Net loss per share applicable to ordinary shareholders – basic and diluted
|
|
$
|
(1.34
|
)
|
|
$
|
(1.25
|
)
|
| |
|
|
|
|
|
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
1,279,007
|
|
|
|
1,262,615
|
|
|
Total long-term debt, net of current
|
|
|
683,528
|
|
|
|
668,031
|
|
|
Total equity
|
|
|
380,136
|
|
|
|
381,999
|
|
| |
|
|
|
|
|
|
|
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(8,754
|
)
|
|
$
|
95,809
|
|
|
Net cash used in investing activities
|
|
|
(56,627
|
)
|
|
|
(26,534
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
8,750
|
|
|
|
(49,176
|
)
|
|
Net change in cash and cash equivalents
|
|
|
(56,265
|
)
|
|
|
24,476
|
|
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RISK FACTORS
Any investment in our securities involves a number of risks and uncertainties, including the risks described below. If any of the following risks actually occur, our business, financial condition and results of operations could be materially affected. As a result, the trading price of our shares could decline, perhaps significantly, and you could lose all or part of your investment. The risks discussed below are not the only ones we face. Additional risks that are currently unknown to us or that we currently consider to be immaterial may also impair our business or adversely affect our financial condition or results of operations. The risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Risks Related to Our Business and Industry
Our revenues are heavily dependent on certain industries.
Sales of our services are dependent on clients in certain industries, particularly certain industrial sectors such as manufacturing, chemical plants, mining, refinery, oilsands, infrastructure and aerospace and automotive. As we have experienced in the past, and as we expect to occur in the future, downturns characterized by diminished demand for services in these industries as well as potential changes due to consolidation or changes in client businesses or governmental regulations, could have a material impact on our results of operations, financial position or cash flows. Additionally, certain industries and clients have employees represented by unions and could be subject to temporary work stoppages which could impact our activity level.
Demand for our services is related to global oil supply, existing oil and gas refining sites and other factors which impact our clients’ current and future spending levels.
Our customers in the oil and gas industries account for a substantial portion of our historical revenues. Global oil and gas supply and demand are impacted by several factors including global economic conditions, geopolitical events and conflicts (such as the ongoing military conflict between Russia and Ukraine and the conflict in the Middle East between Hamas and Israel and other geopolitical issues impacting global trade), widespread public health crises, epidemics and pandemics, and domestic and global inflationary pressures which may reduce the availability of liquidity and credit and, in many cases, reduce demand for our clients’ products. Disruptions or volatility in these markets could also adversely affect our clients’ decisions to fund ongoing maintenance and capital projects, resulting in contract cancellations or suspensions, delays, repurposing of infrastructure, and infrastructure closures. These factors may also adversely affect our ability to collect payment for work that we have previously performed. Such disruptions have, and could in the future, materially and adversely impact our business, results of operations, financial position, credit capacity or cash flows.
We operate in competitive markets, and if we are unable to compete successfully, we could lose market share and revenues and our margins could decline.
We face strong competition from other asset integrity providers conducting NDT, RAT solutions and Engineering and Lab Testing. Some of our competitors have low overhead models and could underprice us in certain markets. Our competitors may offer asset integrity solutions at lower or less profitable rates than we do in order to attempt to gain market share. Smaller niche competitors with small customer bases could be aggressive in their pricing in order to retain customers. These competitive factors could reduce our market share, revenues and profits.
Serious safety incidents, including fatalities and other serious injuries may result from use of RAT solutions.
RAT is a new and innovative method of doing work at heights. This work is inherently dangerous, and the risk of death or serious injury is high. A fatality or series of serious safety incidents could result in litigation, increased regulation, negative publicity, loss of customer contracts or the inability to bid for certain customer contracts. Any of which would have a material adverse impact on our business, results of operations, financial position or cash flows.
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Our ongoing investments in new client markets involve significant risks, could disrupt our current operations and may not produce the long-term benefits that we expect.
Our ability to compete successfully in new client markets depends on our ability to continue to deliver innovative, relevant and useful services to our clients in a timely manner. As a result, we have invested, and expect to continue to invest, resources in broadening our ability to provide NDT services to new end-markets and growing our RAT solutions across foundational markets, which is currently not widely used in our client markets. Such investments may not prioritize short-term financial results and may involve significant risks and uncertainties, including encountering new, well-established competitors. We may fail to generate sufficient revenue, operating margin or other value to justify our investments in such new client markets, thereby harming our business, results of operations, financial position and cash flows.
If we are not able to implement commercially competitive services in a timely manner in response to changes in the market, client requirements, competitive pressures and technology trends, our business and results of operations could be materially and adversely affected.
Competition can place downward pressure on our prices and profitability. Our share of the market for our services is characterized by continual technological developments to provide better and more cost-effective services. If we are not able to implement commercially competitive services and products in a timely manner in response to changes in the market, client requirements, competitive pressures, inflationary pressures and technology trends, our business and results of operations could be materially and adversely affected. Likewise, if our proprietary technologies, equipment, facilities, or work processes become obsolete, we may no longer be competitive, and our business and results of operations could be materially and adversely affected.
Our unionized workforce and related obligations could adversely affect our operations.
As of December 31, 2023, approximately 60% of our employees in Canada were covered by collective bargaining agreements. Certain of our unionized employees have participated in strikes and work stoppages in the past, and we cannot be certain that strikes or work stoppages will not occur in the future. Strikes or work stoppages could adversely impact relationships with our customers and could cause us to lose business and experience a decline in revenues. Our ability to complete future acquisitions also could be adversely affected because of our union status for a variety of reasons. For instance, our union agreements may be incompatible with the union agreements of a business we want to acquire, and some businesses may not want to become affiliated with a union-based company. Further, certain of our customers require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized, which could negatively affect our business, financial condition, results of operations and cash flows.
No assurances can be made that we will be successful in hiring or retaining members of a skilled technical workforce.
We have a skilled technical workforce and an industry recognized technician training program that prepares new employees as well as further trains our existing employees. The competition for these individuals is intense. The failure to retain these individuals, or failure to attract new employees, could adversely affect our ability to perform our obligations on our clients’ projects or maintenance and consequently could negatively impact our ability to meet the demand for our products and services. In addition, we may be forced to increase compensation and other incentives to hire and retain employees.
Many of the sites at which our employees work are inherently dangerous workplaces. If we fail to maintain a safe work environment, we may incur losses and lose business.
The services we provide could incur quality of execution issues that may be caused by our workforce personnel and/or components that we purchase from other manufacturers or suppliers. If the quality of our services does not meet our clients’ expectations or satisfaction, then our sales and operating earnings, and, ultimately, our reputation, could be negatively impacted. Additionally, our workers are subject to the normal hazards associated with providing services at industrial facilities. Even with proper safety precautions, these hazards can lead to personal injury, loss of life, destruction of property, plant and equipment, lower employee morale and environmental damage. While we are intensely focused on maintaining a strong safety environment and minimizing the risk of accidents, there can be
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no assurance that these efforts will be effective. Poor safety performance may limit or eliminate potential revenue streams, including from many of our largest clients, and may materially increase our operating costs, including increasing our required insurance deductibles, self-insured retention and insurance premium costs.
If our employees are injured at the workplace, we could incur costs for the injuries and lost productivity. In addition, many of our customers, particularly in the oil and gas and chemical industries, require their inspectors and other contractors working at their facilities to have good safety records because of the inherent danger at these sites. Safety records are impacted by the number and amount of workplace incidents involving a contractor’s employees. As a result, if our safety record is not within the levels required by our customers, or compares unfavorably to our competitors, we could lose business, be prevented from working at certain facilities or suffer other adverse consequences, all of which could negatively impact our business, revenues, reputation and profitability.
The success of our businesses depends, in part, on our ability to adopt new asset integrity solutions, increase the functionality of our current offerings, expand into adjacent and developing service categories and meet the needs and demands of our customers.
The market for asset integrity solutions could be impacted by technological change, uncertain product lifecycles, shifts in customer demands and evolving industry standards and regulations. If we fail to execute effective business strategies or fail to successfully develop and market new asset integrity solutions that comply with present or emerging industry regulations and technology standards, our competitive standing and results could suffer. Also, new regulations or technology standards could increase our cost of doing business.
We believe our future success will depend, in part, on our ability to continue to expand our NDT and RAT offerings into existing and new end markets while at the same time exploring potential acquisition opportunities that would enable us to participate in new, competitive and broader asset integrity solutions. Many traditional NDT and inspection services are subject to price competition by our competitors, and our customers are typically sensitive to price. Accordingly, the need to demonstrate our value-added services is becoming more important.
No assurances can be made that we will be successful in maintaining or renewing our contracts with our clients.
A significant portion of our contracts and agreements with clients may be terminated by either party on short notice. Although we actively pursue the renewal of our contracts, we cannot assure that we will be able to renew these contracts or that the terms of the renewed contracts will be as favorable as the existing contracts. If we are unable to renew or replace these contracts, or if we renew on less favorable terms, we may suffer a material reduction in revenue and earnings.
Earnings for future periods may be impacted by impairment charges for goodwill and intangible assets.
We carry a significant amount of goodwill and identifiable intangible assets on our consolidated balance sheets. Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We will assess the goodwill for impairment each year, and more frequently if circumstances suggest an impairment may have occurred. We may determine in the future that a significant impairment has occurred in the value of our unamortized intangible assets or fixed assets, which could require us to write off a portion of our assets and could adversely affect our financial condition or our reported results of operations.
The loss or unavailability of any of our executive officers or other key personnel could have a material adverse effect on our business.
We depend greatly on the efforts of our executive officers and other key employees to manage and exercise leadership over our operations. The loss or unavailability of any of our executive officers or other key employees could have a material adverse effect on our business operations. We have entered into agreements with our executive officers and other key employees that contain non-compete provisions to mitigate this risk. We are currently litigating to enforce our rights against certain former employees under these agreements, which litigation is time-consuming and expensive and may ultimately be ineffective. Furthermore, the law governing non-compete agreements and other forms of restrictive covenants could vary from state to state. Additionally, the Federal Trade Commission (“FTC”) issued a final rule on April 23, 2024, to prohibit employers from imposing non-compete clauses on certain classes of workers. The FTC’s rule would require employers to rescind existing non-compete
12
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clauses with non-senior executive workers and actively inform their employees that the contracts are no longer in effect. As a result, we may be unable to enforce our non-compete provisions, potentially resulting in negative impacts to our business.
Our business strategy includes acquiring companies and making investments that complement our existing businesses. These acquisitions and investments could be unsuccessful or consume significant resources, which could adversely affect our operating results.
We expect to continue to analyze and evaluate the acquisition of strategic businesses, product lines or technologies with the potential to strengthen our industry position or enhance our existing offerings. We cannot assure you that we will identify or successfully complete transactions with suitable acquisition candidates in the future. Nor can we assure you that completed acquisitions will be successful.
Acquisitions and investments may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, consolidated financial condition, results of operations and cash flows. Acquisitions involve numerous other risks, including:
• diversion of management’s time and attention from daily operations;
• difficulties integrating acquired businesses, technologies and personnel into our business;
• inability to obtain required regulatory approvals and/or required financing on favorable terms;
• potential loss of key employees, key contractual relationships, or key customers of acquired companies or from our existing businesses; and
• assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.
Under certain circumstances, it may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations. Moreover, we may be unable to obtain the strategic or operational benefits that are expected from our acquisitions. Any acquisitions or investments may ultimately harm our business or consolidated financial condition, as such acquisitions may not be successful and may ultimately result in impairment charges.
We may experience inflationary pressures in our operating costs and cost overruns on our projects.
Most of our clients are serviced under contracts where we charge the client based on time and materials. Under such contracts, prices are established in part on cost of materials and scheduling estimates, which are based on a number of assumptions, including assumptions about future economic conditions, prices and availability of subcontractors, materials and other exigencies of our services. Our profitability for these contracts depends heavily on our ability to make accurate estimates and include guaranteed price increases in the contract in anticipation of increased material costs, if any. Inaccurate estimates, or changes in other circumstances, such as, cost of raw materials, trade disputes and tariffs, currency fluctuations, inflation pressures or our suppliers’ or subcontractors’ inability to perform could result in substantial losses, as such changes adversely affect the revenues and profitability recognized on each project. Current and future inflationary volatility driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies as well as geopolitical conflicts such as the ongoing military conflict between Russia and Ukraine and the conflict in the Middle East between Hamas and Israel and other geopolitical issues impacting global trade could further impact our ability to make accurate estimates, which could have an adverse impact on our business, cash flows and profitability.
Events such as natural disasters, industrial accidents, epidemics, pandemics, war and acts of terrorism, and adverse weather conditions could disrupt our business or the business of our customers, which could significantly harm our operations, financial results and cash flow.
Our operations and those of our customers are susceptible to the occurrence of catastrophic events outside our control, which may include events like epidemics, pandemics and other health crises, severe weather conditions, industrial accidents, and acts of war and terrorism, to name a few. We continue to actively monitor the conflict in the Middle East between Israel and Hamas, and the war between Russia and Ukraine and the sanctions imposed upon Russia in order to assess impacts to our customers and our operations. At this time, we do not believe there is
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a material impact on our operations, however the future impact of the conflict, and additional sanctions imposed, are uncertain. Any such events could cause a serious business disruption that reduces our customers’ need or interest in purchasing our asset integrity solutions. In the past, such events have resulted in order cancellations and delays because customer equipment, facilities or operations have been damaged, or are not then operational or available. In addition, our results can be adversely impacted by severe winter weather conditions, which can result in lost workdays and temporary closures of customer facilities or outdoor projects. In addition, these events could disrupt commodity prices or financial markets or have other negative macroeconomic impacts which could harm our business.
We are and may become subject to periodic litigation which may adversely affect our business and financial performance.
We are subject to various lawsuits, administrative proceedings and claims that arise in the ordinary course of business. We could be party to class and collective actions, along with other complex legal disputes, which could materially impact our business by requiring, among other things, unanticipated management attention, significant attorney fees and settlement spend, or operational adjustments implemented in response to a settlement, court order or to mitigate future exposure.
We may have litigation in a variety of matters, some matters may be unpredictable or unanticipated, and the frequency and severity of litigation could increase. Because lawsuits are inherently unpredictable, assessing contingencies is highly subjective and requires judgements about future events. A judgement that is not covered by insurance or that is significantly in excess of our insurance coverage could materially adversely affect our financial condition or results of operations.
Our insurance coverage will not fully indemnify us against certain claims or losses. Further, our insurance has limits and exclusions and not all losses or claims are insured.
We perform services in hazardous environments on or around high-pressure, high temperature systems, and our employees are exposed to a number of hazards, including exposure to hazardous materials, explosion hazards and fire hazards. Incidents that occur at these large industrial facilities or systems, regardless of fault, may be catastrophic and adversely impact our employees and third parties by causing serious personal injury, loss of life, damage to property or the environment, and interruption of operations. We maintain certain insurance coverage against these risks and other risks associated with our business. Our contracts typically require us to name a client as an additional insured under our insurance policies and indemnify our clients for injury, damage or loss arising out of and in proportion to our negligence in the performance of our services and provide for warranties for materials and workmanship. We maintain a $1.5 million aggregated self-insured retention for professional indemnity coverage. This insurance may not protect us against liability for certain events, including events involving fraud, willful misconduct or gross negligence. We cannot assure you that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur. Moreover, in the future, due to evolving market conditions, our higher risk profile due to the nature of our operations and claims history, and expected impact on pricing, we cannot assure that we will be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any future damages caused by our products or services that are not covered by insurance or that are in excess of policy limits could have a material adverse effect on our results of operations, financial position or cash flows.
We are, and may become, subject to periodic regulatory proceedings, including Fair Labor Standards Act (“FLSA”) and state wage and hour class action lawsuits, which may adversely affect our business and financial performance.
Pending and future wage and hour litigation, including claims relating to the Fair Labor Standards Act, analogous state laws, or other state wage and hour laws could result in significant attorney fees and settlement costs. Resolution of non-litigated alleged wage and hour violations could also negatively impact our performance. The potential settlement of, or awards of damages for, such claims also could materially impact our financial performance as could operational adjustments implemented in response to a settlement, court order or in an effort to mitigate future exposure. Additionally, an increased volume of alleged statutory violations or matters referred to an agency for potential resolution could result in significant attorney fees and settlement costs that could, in the aggregate, materially impact our financial performance.
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Demand for our businesses can be materially affected by governmental regulation.
Our customers operate in regulated industries and are subject to regulations that can change frequently and without notice. The adoption of new laws or regulations, or changes to the enforcement or interpretation of existing laws or regulations, could cause our customers to reduce spending on the services that we provide, which could adversely affect our revenues, results of operations, and liquidity. Delays in implementing anticipated regulations or reversals of previously adopted regulations could adversely affect demand for our services.
Hedging against interest rate exposure may adversely affect our earnings, limit our gains or result in losses.
We have entered into, and may continue to enter into, interest rate swap agreements and other interest rate and foreign currency hedging strategies. Our hedging activity will vary in scope based on the level of interest rates and other changing market conditions. Interest rate hedging may fail to protect or could adversely affect us because, among other things:
• interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates;
• available interest rate hedging products may not correspond directly with the risk for which protection is sought;
• the duration of the hedge may not match the duration of the related liability or asset;
• the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;
• the party owing money in the hedging transaction may default on our obligation to pay; and
• we may purchase a hedge that turns out not to be necessary, is ineffective or produces an unintended result, i.e., a hedge that is out of the money.
Any hedging activity we engage in may adversely affect our earnings or result in losses. Therefore, while we may enter into such transactions to seek to reduce interest rate risks, unanticipated changes in interest rates, may result in poorer overall investment performance than if we had not engaged in any such hedging transactions.
Currency translation risks may have a material impact on our results of operations.
We have operations outside of the United States, primarily in Canada. The majority of our foreign operations utilize the local currency as their functional currency. Foreign currency transaction gains and losses are included in earnings. Foreign currency transaction exposure arises primarily from the transfer of foreign currency from one subsidiary to another within the group and to foreign currency-denominated trade receivables. Unrealized currency translation gains and losses are recorded on the balance sheet upon translation of the foreign operations’ functional currency to the reporting currency. Because our financial statements are denominated in U.S. dollars, changes in currency exchange rates between the U.S. dollar and the currencies used by our international operations may have an impact on our earnings. We may enter into derivative financial instruments such as forward exchange contracts to reduce the effect of fluctuations in exchange rates on certain third-party sales transactions denominated in non-functional currencies. Currency fluctuations may affect our financial performance in the future, and we cannot predict the impact of future exchange rate fluctuations on our results of operations.
Risks Related to Regulation
Our failure to comply with the requirements of the International Traffic and Arms Regulations (ITAR) could have a material effect on our financial condition and results of operations.
We may, from time to time, receive technical data from third parties and/or test commodities subject to the International Traffic in Arms Regulations (“ITAR”), which is administered by the U.S. Department of State. Some of our services are subject to the ITAR, and we are required to maintain ITAR compliant policies and procedures. If we fail to comply with the requirements of the ITAR, resulting in a loss of ITAR Registration, then some of our customers may choose a different supplier for NDT services.
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Our failure to comply with the regulations of OSHA, and other state and local agencies that oversee safety and transportation compliance could reduce our revenue, profitability and liquidity.
The Occupational Safety and Health Act of 1970, as amended, establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various recordkeeping, disclosure and procedural requirements. Various standards, including standards for notices of hazards and safety in excavation and demolition work, may apply to our operations. We incur capital and operating expenditures and other costs in the ordinary course of business in complying with OSHA and other state and local laws and regulations, and could incur penalties and fines in the future, including, in extreme cases, criminal sanctions.
While we invest substantial resources in occupational health and safety programs, the various industries in which we provide asset integrity solutions involve a high degree of operational risk, and there can be no assurance that we will avoid significant liability. Although we have taken what we believe to be appropriate precautions, we have had employee injuries in the past, and our employees may suffer additional injuries or fatalities in the future. Serious accidents of this nature may subject us to substantial penalties, civil litigation or criminal prosecution. Personal injury claims for damages, including for bodily injury or loss of life, could result in substantial costs and liabilities, which could materially and adversely affect our financial condition, results of operations or cash flows. In addition, if our safety record were to deteriorate, or if we suffered substantial penalties or criminal prosecution for violation of health and safety regulations, customers could cancel existing contracts and not award future business to us, which could materially adversely affect our liquidity, cash flows and results of operations. If we were not able to successfully resolve such issues, our ability to service our customers could be damaged, which could lead to a material adverse effect on our results of operations, cash flows and liquidity.
Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.
Our business is subject to operational hazards due to the nature of services that we provide and the conditions in which we operate, including electricity, fires, explosions, mechanical failures and weather-related incidents. NDT and RAT projects undertaken by us expose our employees to electrical lines, pipelines carrying potentially explosive or toxic materials, heavy equipment, transportation accidents, adverse weather conditions and the risk of damage to equipment and property. These hazards, among others, can cause personal injuries and loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations and large damage claims which could, in some cases, substantially exceed the amount we charge for the associated services. Our safety processes and procedures are monitored by various agencies and ratings bureaus. The occurrence of accidents in the course of our business could result in significant liabilities, employee turnover, increase the costs of our projects or harm our ability to perform under our contracts or enter into new customer contracts, all of which could materially adversely affect our profitability and our financial condition.
We are subject to many laws and regulations in the jurisdictions in which we operate, and changes to such laws and regulations may result in additional costs and impact our operations.
We are committed to upholding the highest standards of corporate governance and legal compliance. We are subject to many laws and regulations in the jurisdictions in which we operate. In the future, following the Domestication, we expect to be subject to various laws and regulations that apply specifically to U.S. public companies. These include the rules and regulations of any exchange on which our securities are then listed, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the various regulations, standards and guidance put forth by the U.S. Securities and Exchange Commission (“SEC”) and other governmental agencies to implement those laws. Compliance with these laws and regulations will increase our legal and financial compliance costs and make some of our activities more difficult, time-consuming or costly. For example, the Securities Exchange Act of 1934, as amended, will require us, among other things, to file annual, quarterly, and current reports with respect to our business and operating results. These additional requirements will impose significant additional costs on us and may divert management’s attention and affect our ability to attract and retain qualified board members. New laws, rules and regulations, or changes to existing laws or their interpretations, could create added legal and financial costs and uncertainty for us. In addition, our United Kingdom and Canadian operations are subject to laws and regulations that are in some cases different from those of the United Sates, including labor laws such as the U.K. Bribery Act, the Modern Slavery Act and laws and regulations governing
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information collected from employees, customers and others, specifically the General Data Protection Regulation. Our efforts to comply with evolving laws, regulations and reporting standards may increase our general and administrative expenses, divert management time and attention or limit our operational flexibility, all of which could have a material adverse effect on our financial position and results of operations.
If our intellectual property rights are unenforceable or become obsolete, or if new intellectual property rights held by a third party become the only or preferred way to perform services we offer, our competitive position could be adversely impacted.
We utilize a variety of intellectual property rights while performing our services. We view our portfolio of proprietary energized services tools and techniques and other process and design technologies as our competitive strengths, which we believe differentiate our service offerings. We may not be able to successfully preserve these intellectual property rights in the future, and these rights could be invalidated, circumvented or challenged. If we are unable to protect and maintain our intellectual property rights, or if intellectual property challenges or infringement proceedings succeed against us, our ability to differentiate our service offerings could be reduced. Further, if our intellectual property rights or work processes become obsolete, we may not be able to differentiate our service offerings and some of our competitors may be able to offer more attractive services to our customers, which could materially and adversely affect our business, financial condition, results of operations and cash flows. We may also license certain technologies from third parties, and there is a risk that our relationships with such licensors may terminate or expire or may be interrupted or harmed.
Our business depends upon the maintenance of our proprietary technologies and information.
We depend on the maintenance of our operating systems, some of which are bespoke. Many of our technologies and information, including trade secrets and internally developed and utilized operating software, are not subject to patent protection. We regularly enter into confidentiality agreements with our key employees, clients, potential clients and other third parties and limit access to and distribution of our trade secrets and other sensitive information. However, these measures may not be adequate to prevent misappropriation of our technologies or to assure that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies. In addition, the laws of other countries in which we operate may not protect our proprietary rights to the same extent as the laws of the United States. We are also subject to the risk of adverse claims and litigation alleging infringement of intellectual property rights.
Our operations and properties are subject to extensive environmental, health and safety regulations.
We are subject to a variety of U.S. federal, state, local and international laws and regulations relating to the environment and worker health and safety, among other things. These laws and regulations are complex, change frequently, are becoming increasingly stringent, and can impose substantial sanctions for violations or require operational changes that may limit our services. We must conform our operations to comply with applicable regulatory requirements and adapt to changes in such requirements in all locations in which we operate. These requirements can be expected to increase the overall costs of providing our services over time. Some of our services involve handling or monitoring highly regulated materials, including radiation sources or hazardous wastes. Environmental laws and regulations generally impose limitations and standards for the characterization, handling, disposal, discharge or emission of regulated materials and require us to obtain permits and comply with various other requirements. The improper characterization, handling, or disposal of regulated materials or any other failure by us to comply with increasingly complex and strictly-enforced federal, state, local, and international environmental, health and safety laws and regulations or associated permits could subject us to the assessment of administrative, civil and/or criminal penalties, the imposition of investigatory or remedial obligations or capital expenditure requirements, or the issuance of injunctions that could restrict or prevent our ability to operate our business and complete contracted services. A defect in our services or faulty workmanship could result in an environmental liability if, as a result of the defect or faulty workmanship, a contaminant is released into the environment. In addition, the modification or interpretation of existing environmental, health and safety laws or regulations, the more vigorous enforcement of existing laws or regulations, or the adoption of new laws or regulations may also negatively impact industries in which our clients operate, which in turn could have a negative impact on us.
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Interruptions in the proper functioning of our information systems could disrupt operations and cause increases in costs and/or decreases in revenues.
The proper functioning of our information systems is critical to the successful operation of our business. Although our information systems are protected through physical and software safeguards, our information systems are still vulnerable to natural disasters, power losses, telecommunication failures and other problems. If critical information systems fail or are otherwise unavailable, our business operations could be adversely affected.
We are subject to privacy and data security/protection laws in the jurisdictions in which we operate and may be exposed to substantial costs and liabilities associated with such laws and regulations.
The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent imposition of new and changing requirements. Compliance with changes in privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes, which could have a material adverse effect on our financial condition and results of operations. In addition, the payment of potentially significant fines or penalties in the event of a breach or other privacy and information security laws, as well as the negative publicity associated with such a breach, could damage our reputation and adversely impact demand for our services and client relationships.
In the event of a cybersecurity incident, we could experience operational interruptions, incur substantial additional costs, become subject to legal or regulatory proceedings or suffer damage to our reputation.
In addition to the disruptions that may occur from interruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks pose a risk to our information technology systems and the systems that we design and install. We have established security policies, processes and defenses designed to help identify and protect against intentional and unintentional misappropriation or corruption of our information technology systems, disruption of our operations or the secure operation of the systems we install. Despite these efforts, our information technology systems may be damaged, disrupted or shut down due to attacks by unauthorized access, malicious software, computer viruses, undetected intrusion, hardware failures or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate. These breaches or intrusions could lead to business interruption, exposure of proprietary or confidential information, data corruption, damage to our reputation, exposure to legal and regulatory proceedings and other costs. Such events could have a material adverse impact on our financial condition, results of operations and cash flows. In addition, we could be adversely affected if any of our significant customers or suppliers experience any similar events that disrupt their business operations or damage their reputation. We maintain monitoring practices and protections of our information technology to reduce these risks and test our systems on an ongoing basis for potential threats. There can be no assurance, however, that our efforts will prevent the risk of a security breach of our databases or systems that could adversely affect our business.
Our business is subject to risks arising from climate change, including climate change legislation or regulations restricting emissions of “greenhouse gases,” changes in consumer preferences and technology and physical impacts of climate change, all of which could have a negative impact on our business and results of operations.
There has been an increased focus in the last several years on climate change in response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment. As a result, there have been a variety of regulatory developments, proposals or requirements and legislative initiatives that have been introduced in the United States. and other parts of the world that are focused on restricting the emission of greenhouse gases and enhancing greenhouse gas emissions disclosure requirements, including the SEC’s proposed rule on climate change disclosure, increased fuel efficiency standards, carbon taxes or cap and trade systems, restrictive permitting and incentives for renewable energy. The adoption of new or more stringent legislation or regulatory programs limiting greenhouse gas emissions from clients, particularly those in refining and petrochemical industries, for whom we provide asset integrity services, or reducing the demand for those clients’ products, could in turn affect demand for our products and services. Additionally, some of our clients are modifying their plants and facilities and may adopt new technology in efforts to better align their operations and products with energy transition issues, but there is no assurance that such modified facilities or technological advancements will require the same level of services and products that we currently provide.
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Scientists have concluded that increasing greenhouse gas concentrations in the atmosphere may produce physical effects of climate change, such as increased severity and frequency of storms, droughts, floods and other climate events. Such climate events have the potential to adversely affect our operations or those of our clients or suppliers, including by delaying our ability to provide asset integrity services because a customer is forced to postpone service due to weather, disrupting our supply chain and causing our suppliers to incur significant costs in responding to such impacts, which in turn could have a negative effect on us, including by adversely impacting our results of operations, financial condition and cash flows. Such events, if increasing in their severity and frequency, may also adversely affect our ability to insure against the risks associated with such events, thus leading to greater financial risk for us in the conduct of our operations against the backdrop of such events.
Risks Related to our Finances and Indebtedness
The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities. In addition, our debt level may limit our future financial and operating flexibility.
We have approximately $775.0 million outstanding under our New Credit Facility (as defined below). In addition, we have capital lease obligations outstanding of $29.4 million. We have approximately $187.0 million of liquidity available, including cash and cash equivalents and available borrowing capacity under our $75.0 million revolving credit facility, subject to continued covenant compliance.
The amount of our current or future indebtedness could have significant effects on our operations, including, among other things:
• a significant portion of our cash flow will be dedicated to the payment of principal and interest on our indebtedness and may not be available for other purposes, including the payment of distributions on our common stock and capital expenditures;
• credit rating agencies may view our debt level negatively;
• covenants contained in our existing debt arrangements will require us to continue to meet financial tests that may adversely affect our flexibility in planning for and reacting to changes in our business;
• Our ability to obtain additional financing for working capital, capital expenditures, acquisitions and general partnership purposes may be limited;
• We may be at a competitive disadvantage relative to similar companies that have less debt; and
• We may be more vulnerable to adverse economic and industry conditions as a result of our significant debt level.
The $775.0 million term loan and $75.0 million revolving credit facility that we entered into on July 30, 2024 (together, the “New Credit Facility”) prohibits distributions on, or purchases or redemptions of, securities if any default or event of default is continuing. In addition, the New Credit Facility contains various covenants limiting our ability to, among other things, incur indebtedness if certain financial ratios are not maintained, grant liens, engage in transactions with affiliates, enter into sale-leaseback transactions, and sell substantially all of our assets or enter into a merger or consolidation. The New Credit Facility also treats a change of control as an event of default and also requires us to maintain a certain debt coverage ratio.
Our ability to access capital markets to raise capital on favorable terms will be affected by our debt level, our operating and financial performance, the amount of our current maturities and debt maturing in the next several years, and by prevailing credit market conditions. Moreover, if lenders or any future credit rating agency downgrade our credit rating, then we could experience increases in our borrowing costs, face difficulty accessing capital markets or incurring additional indebtedness or suffer a reduction in the market price of our common stock. If we are unable to access the capital markets on favorable terms at the time a debt obligation becomes due in the future. The price and terms upon which we might receive such extensions or additional bank credit, if at all, could be more onerous than those contained in existing debt agreements. Any such arrangements could, in turn, increase the risk that our leverage may adversely affect our future financial and operating flexibility and thereby impact our ability to pay cash distributions at expected rates.
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We maintain the New Credit Facility with a syndicate of financial institutions which include certain covenants and limitations on our operations.
We and certain of our direct and indirect subsidiaries are parties to the New Credit Facility. The New Credit Facility is secured by a first priority lien over substantially all of our assets, including a pledge of 100% of the capital stock of our U.S. and Canadian subsidiaries, and is guaranteed by our U.S. and Canadian subsidiaries.
We are required to comply with specified financial and operating covenants and to make scheduled repayments under the New Credit Facility, which may limit our ability to operate our business. Our failure to comply with any of these covenants or to meet any payment obligations under the New Credit Facility could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable. We might not have sufficient working capital or liquidity to satisfy any repayment obligations in the event of an acceleration of those obligations. In addition, if we are not in compliance with the financial and operating covenants at the time that we wish to borrow funds, we will be unable to borrow funds.
We may incur substantial additional indebtedness, which could further exacerbate the risks that we may face going forward.
Subject to the restrictions in the New Credit Facility, we may incur substantial additional indebtedness (including secured indebtedness). Although the New Credit Facility contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to waiver and a number of significant qualifications and exceptions, and indebtedness incurred in compliance with these restrictions could be substantial.
Any material increase in our level of indebtedness may have several important effects on our future operations, including, without limitation:
• we would have additional cash requirements in order to support the payment of interest on our outstanding indebtedness;
• increases in our outstanding indebtedness and leverage would increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; and
• depending on the levels of our outstanding indebtedness, our ability to obtain additional financing for working capital, capital expenditures and general purposes could be limited.
Interest payments for borrowings on the New Credit Facility are based on floating rates. As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes.
Rising interest rates also could limit our ability to refinance existing indebtedness when it matures and increase interest costs on any indebtedness that is refinanced. We may from time to time enter into agreements such as floating-to-fixed interest rate swaps, caps, floors and other hedging contracts in order to fully or partially hedge against the cash flow effects of changes in interest rates for floating rate debt. These agreements expose us to the risk that other parties to the agreements will not perform or that the agreements will be unenforceable.
We may need additional capital in the future for working capital, capital expenditures or acquisitions, and we may not be able to access capital on favorable terms, or at all, which would impair our ability to operate our business or achieve our growth objectives.
Our ability to generate cash is essential for the funding of our operations and the servicing of our debt. If existing cash balances together with the borrowing capacity under our credit facilities were not sufficient to make future investments, make acquisitions or provide needed working capital, we may require financing from other sources. Our ability to obtain such additional financing in the future will depend on a number of factors including prevailing capital market conditions, conditions in our industry, and our operating results. These factors may affect our ability to arrange additional financing on terms that are acceptable to us. If additional funds were not available on acceptable terms, we may not be able to make future investments, take advantage of acquisitions or pursue other opportunities.
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Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. In addition, changes in accounting principles may cause unexpected fluctuations in our reported financial information.
In preparing our consolidated financial statements in conformity with U.S. GAAP, our management makes a number of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. These estimates and assumptions must be made because certain information used in the preparation of our consolidated financial statements is either dependent on future events or cannot be calculated with a high degree of precision from data available. In some cases, these estimates are particularly uncertain, and we must exercise significant judgment. Actual results could differ materially from the estimates and assumptions that we use, which could have a material adverse effect on our results of operations, cash flows and liquidity.
In addition, accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. GAAP could have a significant effect on our reported financial results. Additionally, the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls. We cannot predict the effect of future changes to accounting principles, which could have a significant effect on our reported financial results and/or our results of operations, cash flows and liquidity.
If we successfully list on the NYSE and register under the Exchange Act, we will incur increased operating costs, and management will devote substantial time to related compliance initiatives.
Following the Domestication, we will be subject to the reporting requirements under the Exchange Act and expect to list the Acuren Delaware common stock on the NYSE. If the listing is successful, as a U.S. public company, we will be subject to legal, accounting and other expenses to comply with applicable regulatory requirements. As a result, our back-office operations will substantially increase, and we will incur significantly higher legal, accounting and other expenses relating to compliance with public company requirements than the ASP Acuren incurred prior to the Transaction. In order to satisfy reporting requirements with the NYSE, we will incur additional legal, accounting, insurance and other expenses, including costs associated with U.S. public company reporting requirements, the U.S. Sarbanes-Oxley Act of 2002 and the U.S. Dodd Frank Wall Street Reform and Consumer Protection Act and related rules implemented by the Securities and Exchange Commission and NYSE. Our management and other personnel will need to devote a substantial amount of time to these compliance requirements and initiatives, which will increase our operating expenses. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. We will need to dedicate internal resources, potentially engage outside consultants and develop a detailed work plan to assess and document the adequacy and effectiveness of our compliance program.
If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately and timely, which could harm our business and adversely affect the value of our business.
Subsequent to the listing of securities on the NYSE, as a U.S. publicly-listed company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations and the listing standards of the NYSE. Accordingly, we will be required to establish and maintain internal controls over financial reporting and disclosure controls and procedures and to comply with other requirements. Even when such controls are implemented, management will not be able to guarantee that our internal controls and disclosure controls and procedures will prevent all possible errors. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our business have been detected. These inherent limitations include the possibility that judgments in decision-making can be faulty and subject to simple error or mistake. Furthermore, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any system of controls may not succeed in achieving our stated goals under all potential future conditions. Over time, measures of control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
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We identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price.
In connection with our preparation of our consolidated financial statements for the years ended December 31, 2023 and 2022, we identified material weaknesses in our internal control over financial reporting. Any failure to maintain effective internal control over financial reporting or remediate material weaknesses could adversely affect us.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Subsequent to the listing our securities on the NYSE, as a U.S. publicly-listed company, we will be required to design and maintain adequate internal control over financial reporting in order to comply with the SEC’s rules and regulations. Prior to the Domestication, we and our independent registered public accounting firm were not required to and did not perform an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 and 2022. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. We cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.
As indicated above, we recently identified material weaknesses in our internal control over financial reporting and concluded that we had not designed and maintained an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient complement of resources with (i) an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls. This material weakness contributed to the following additional material weaknesses:
• we did not design and maintain effective controls related to the period-end financial reporting process, including designing and maintaining formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures; further, we did not design and maintain controls over the preparation and review of account reconciliations and journal entries, including maintaining appropriate segregation of duties.
These material weaknesses resulted in immaterial audit adjustments to the consolidated financial statements in the following financial statement line items: Accounts receivable; Accounts payable; Accrued expenses and other current liabilities; Lease obligations; Service revenue; Cost of revenue; Selling, general and administrative expenses; and Interest expense. Additionally, these material weaknesses could result in a misstatement of substantially all of the Company’s accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
• we did not design and maintain effective information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain:
• User access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel;
• Program change management controls to ensure that information technology program and data changes are identified, tested, authorized, and implemented appropriately;
• Computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored; and
• Program development controls to ensure that new software development is tested, authorized and implemented appropriately.
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These IT deficiencies did not result in a material misstatement to the financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
Management is in the process of developing a remediation plan for the material weaknesses that have been identified. The material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. We will monitor the effectiveness of our remediation plans and will make changes management determines to be appropriate.
If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to us will make our securities less attractive to investors.
We qualify as an “emerging growth company” as defined in the JOBS Act. As such, we may take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following the fifth anniversary of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Shares that are held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides, however, that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected to opt out of such extended transition period. As a result, we will adopt new or revised accounting standards on the same timeline as other public companies, and we will not be able to revoke such election.
We cannot predict if investors will find our securities less attractive because of our status as an emerging growth company and reliance on related exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and our stock price may be more volatile.
Risks Related to the Acuren Acquisition
The due diligence in connection with the Acuren Acquisition may not have revealed all relevant considerations or liabilities of ASP Acuren which could have a material adverse effect on our financial condition or results of operations.
The due diligence undertaken in connection with the Acuren Acquisition may not have revealed all relevant facts that may be necessary to evaluate such acquisition, including the determination of the price, or to formulate a business strategy, particularly with respect to recent acquisitions completed by ASP Acuren. Furthermore, the
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information provided during due diligence may have been incomplete, inadequate or inaccurate. As part of the due diligence process, we made subjective judgments regarding the results of operations, financial condition and prospects of ASP Acuren. If the due diligence investigation failed to correctly identify material issues and liabilities that may be present in ASP Acuren, or if we considered such material risks to be commercially acceptable relative to the opportunity, we may subsequently incur substantial impairment charges or other losses. In addition, we may be subject to significant, previously undisclosed liabilities relating to the acquired businesses that were not identified during due diligence and which could contribute to poor operational performance, undermine any attempt to restructure the acquired companies or businesses in line with our business plan and have a material adverse effect on our business, results of operations, financial condition, cash flows, liquidity and/or prospects.
Warranty protection in connection with the Acuren Acquisition may be limited.
No assurance can be given as to the nature of the warranty protection provided to us. The representations and warranties contained in the Merger Agreement did not survive the closing of the Transaction. We therefore have limited recourse against the ASP Acuren stockholders and, consequently, may not be able to recover certain losses suffered as a result of entering into the Transaction. In addition, although we have purchased a representations and warranties insurance policy (the “Policy”) and four layers of excess representations and warranties insurance coverage (the “Excess Policies” and together with the Policy, the “Policies”) to insure against breaches of certain representations and warranties, the Policy is limited to a face amount equal to $25.0 million and subject to an initial retention amount of approximately $9.25 million. Under the Policies, we will not be able to recover losses attributable to breaches of representations and warranties that are excluded from the Policy (including, for example, any breach which any deal team member had actual knowledge of prior to inception of the Policy). Accordingly, the Policy may not be sufficient to fully compensate us for losses attributable to breaches of representations and warranties by the ASP Acuren stockholders.
The unaudited pro forma condensed combined financial information included in this prospectus may not be indicative of what our actual financial position or results of operations would have been.
The unaudited pro forma condensed consolidated combined financial information contained in this prospectus is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Acuren Acquisition been completed on the dates indicated or what our results of operation or financial position will be in the future. See “Unaudited Pro Forma Condensed Combined Financial Information” in the financial statements included elsewhere in this prospectus.
Risks Related to Ownership of our Securities.
We may be required to issue additional shares of Acuren Delaware common stock pursuant to the terms of the Series A Preferred Stock which would dilute the holdings of investors.
There are currently 1,000,000 Founder Preferred Shares outstanding. We may be required to issue additional Acuren Delaware common stock pursuant to the terms of the Series A Preferred Stock which would dilute the holdings of investors.
The Series A Preferred Stock will be convertible into shares of Acuren Delaware common stock on a one-for-one basis at any time at the option of the holder and will be automatically converted into shares of Acuren Delaware common stock (subject to certain adjustments in certain circumstances either as the directors may determine or otherwise as determined in accordance with the terms of the Series A Preferred Stock) upon the earlier of (i) immediately following the Change of Control Dividend Date and (ii) the last day of the tenth full financial year following the consummation of the Acuren Acquisition, being December 31, 2034. In addition, once the Average Price (as defined below) (subject to adjustment in accordance with our articles of association (the “Articles”)) for any ten consecutive trading days is at least $11.50, the holders of the Series A Preferred Stock will be entitled to receive in aggregate the Annual Dividend Amount (as defined below) in respect of each Dividend Period (as defined below), payable in shares of Acuren Delaware common stock. The Annual Dividend Amount will be paid on the relevant payment date by the issue of such number of shares of Acuren Delaware common stock as is equal to the Annual Dividend Amount (as defined below) divided by the Dividend Price (as defined below).
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In the first Dividend Period in which such dividend becomes payable, the Annual Dividend Amount will be equal in value to (i) 20% of the increase in the value of one share of Acuren Delaware common stock, such increase being calculated as the difference between $10.00 and the Dividend Price, multiplied by (ii) the Series A Preferred Stock Equivalent (as defined below). In subsequent years, the Annual Dividend Amount will be calculated based on the appreciated Dividend Price compared to the highest Dividend Price previously used in calculating the Annual Dividend Amount.
In the event of (i) an acquisition of control by any person or party (or by any group of persons or parties who are acting in concert) whether by merger, consolidation or otherwise or (ii) any sale, lease or exchange of all or substantially all of our property and assets, including its goodwill and its corporate franchises (a “Change of Control”), the holders of the Series A Preferred Stock will be entitled to receive, in the aggregate, a one-time dividend, equal to the Change of Control Dividend Amount payable in Acuren Delaware common stock. The “Change of Control Dividend Amount” will be equal to the aggregate amount determined by adding together each Annual Dividend Amount that would have been payable for each Dividend Period (or part thereof) occurring during a Change of Control Dividend Period assuming, among other things, a Dividend Price for each Dividend Period (or part thereof) in the Change of Control Dividend Period equal to the Change of Control Price increasing by eight percent (8%) per annum (compounded annually) for each such Dividend Period (or part thereof).
The precise number of shares of Acuren Delaware common stock that may be required to be issued pursuant to the terms of the Series A Preferred Stock cannot be ascertained at this time as a result of dividends that may be payable in Acuren Delaware common stock.
The issue of shares of Acuren Delaware common stock in connection with the payment of the Annual Dividend Amount or Change of Control Dividend Amount will reduce (by the applicable proportion) the percentage stockholdings of those stockholders holding Acuren Delaware common stock prior to such issuance. This does not take into account any dilution which may occur as a result of any other issuance of Acuren Delaware common stock pursuant to the other terms of the Series A Preferred Stock and assumes that there is no adjustment (pursuant to the constitute documents) to the rate at which the Series A Preferred Stock convert into Acuren Delaware common stock.
The issuance of Acuren Delaware common stock pursuant to the terms of the Series A Preferred Stock may reduce any net return derived from holding Acuren Delaware common stock compared to any such net return that might otherwise have been derived had we not issued Acuren Delaware common stock in connection with the payment of the Annual Dividend Amount or upon the conversion of the Series A Preferred Stock.
An active, liquid, and orderly trading market for the Acuren Delaware common stock may not develop, which would adversely affect the liquidity and price of our securities.
If we are listed on the NYSE following consummation of the Domestication, an active public market for our Acuren Delaware common stock may not develop. If an active market does not develop, investors may experience difficulty selling their shares of Acuren Delaware common stock. Additionally, following completion of a listing on the NYSE, the price of the shares of the Acuren Delaware common stock may vary significantly due to one or more potential business combinations and general market or economic conditions and may fall below the purchase price. Investors should not expect that they will necessarily be able to realize their investment within a period that they would regard as reasonable. Accordingly, the Acuren Delaware common stock may not be suitable for short-term investment.
Our current directors will allocate their time to other businesses, leading to potential conflicts of interest in their determination as to how much time to allocate to our affairs.
None of the current directors are required to commit their full time or any specified amount of time to our affairs, which could create a conflict of interest when allocating their time between our operations and their other commitments. If the directors’ other business affairs require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to operate the business. In addition, Sir Martin Franklin, Mr. Robert A.E. Franklin, Mr. James E. Lillie and certain other individuals affiliated with Mariposa Acquisition IX, LLC (the “Founder Entity”, and such individuals, the
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“Founders”), our directors or one or more of their affiliates may provide services to our business. However, there is no formal agreement between us and such entities with respect to the provision of such services or the commitment of any specified amount of time to our business. We cannot provide any assurance that these conflicts will be resolved in our favor. In addition, although the directors must act in our best interests and owe certain fiduciary duties to us, they are not (or will not be) necessarily obligated under Delaware law to present us with business opportunities.
We cannot confirm that our Founders or any of our directors will not become involved in one or more other business opportunities that could present conflicts of interest in respect of the time they allocate to our business. In addition, our conflict of interest procedures may require or allow our Founders, directors and officers and certain of their affiliates to present certain acquisition opportunities to other companies before they present them to us.
We do not currently intend to pay dividends on the Acuren Delaware common stock, consequently, your ability to achieve a return on your investment will depend on appreciation of the value of the Acuren Delaware common stock.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not intend to declare or pay any dividends on the Acuren Delaware common stock in the foreseeable future. Moreover, the terms of the New Credit Facility may restrict our ability to pay dividends on the Acuren Delaware common stock, and any additional debt we may incur in the future may include similar restrictions. As a result, and for the foreseeable future, stockholders must rely on sales of their Acuren Delaware common stock after price appreciation as the only way to realize any future gains on their investment.
You may not be able to realize returns on your investment in our securities within a period that you would consider to be reasonable.
Investments in our securities may be relatively illiquid. There may be a limited number of investors and this factor, together with the number of shares of Acuren Delaware common stock and Warrants outstanding, may contribute both to infrequent trading in our securities and to volatile market price movements. Investors should not expect that they will necessarily be able to realize their investment in our securities within a period that they would regard as reasonable. Accordingly, the Acuren Delaware common stock and Warrants may not be suitable for short-term investment. Even if an active trading market develops, the market price for the shares of Acuren Delaware common stock may fall below the price at which they were purchased.
We may issue additional series of preferred stock in the future, and the terms of such preferred stock may reduce the value of our existing securities.
The Acuren Delaware certificate of incorporation will authorize us to issue up to 5,000,000 shares of preferred stock, par value $0.0001 per share, of the Company. As of October 21, 2024, after giving pro forma effect to the Domestication, we had outstanding 1,000,000 shares of Series A Preferred Stock. We may issue additional shares or series of preferred stock in the future, and the terms of such preferred stock may reduce the value of the shares of Acuren Delaware common stock, shares of Series A Preferred Stock and Warrants.
The Board of Directors will be authorized to create and issue one or more additional series of preferred stock, and, with respect to each series, to fix the number of shares constituting the series and the designation of such series, the powers (including voting powers), if any, of the shares of such series and the preferences and relative, participating, optional, special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the shares of such series, in each case without stockholder approval. If we create and issue one or more additional series of preferred stock, it could affect your rights or reduce the value of your investment in our securities. The Board of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could dilute the voting power of the holders of our Acuren Delaware common stock, and which could have certain anti-takeover effects.
We will be required to issue additional shares of Acuren Delaware common stock upon the exercise of the Warrants and/or our option and vesting of restricted stock units, which may dilute your interests in the Acuren Delaware common stock.
The terms of the Warrants provide for the issuance of Acuren Delaware common stock upon any exercise of the Warrants. Each Warrant entitles the holder to one-fourth of a share of Acuren Delaware common stock at $11.50 per whole Acuren Delaware common stock (subject to adjustment in accordance with the terms and conditions of
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the Warrant). Based on the number of Warrants outstanding as of October 21, 2024, after giving pro forma effect to the Domestication, the maximum remaining number of shares of Acuren Delaware common stock that we may be required to issue pursuant to the terms of the Warrants, subject to adjustment in accordance with the terms and conditions of the Warrant Instrument, is 4,566,219. The exercise of the Warrants will result in dilution of the value of a stockholder’s interest in our Acuren Delaware common stock if the value of a shares of Acuren Delaware common stock exceeds the exercise price payable on the exercise of a Warrant at the relevant time.
In addition, as of October 21, 2024, after giving pro forma effect to the Domestication, we had outstanding options to acquire 125,000 shares of Acuren Delaware common stock (all of which were vested) and 1,585,000 restricted stock units which may vest and settle into Acuren Delaware common stock. The exercise of such options and vesting of such restricted stock units will result in a dilution of the value of a stockholder’s interests in our Acuren Delaware common stock.
The potential for the issuance of additional Acuren Delaware common stock pursuant to exercise of the Warrants or the options and vesting of the restricted stock units could have an adverse effect on the market price of the Acuren Delaware common stock. See “Description of Capital Stock — Warrants”.
There is no guarantee that the Warrants will be in the money at a time when they are exercisable, and they may expire worthless. In addition, the terms of the Warrants may be amended without the consent of all holders.
The exercise price for the Warrants is $11.50 per share (subject to adjustment in accordance with the terms of the Warrant and related agreements). There is no guarantee that the Warrants will be in the money at a time when they are exercisable, and as such, the Warrants may expire worthless.
In addition, the Warrant provides that we may amend the terms of the Warrants in a manner adverse to a holder if holders of at least 75% of the then outstanding Warrants approve of such amendment. Although our ability to amend the terms of the Warrants with the consent of holders of at least 75% of the then outstanding Warrants will be unlimited, examples of such amendments could include amendments to, among other things, increase the exercise price of the Warrants, shorten the exercise period or decrease the number of Acuren Delaware common stock purchasable upon exercise of a Warrant. See “Description of Capital Stock — Warrants”.
The Warrants may be mandatorily redeemed prior to their exercise at a time that is disadvantageous to holders, thereby making the Warrants worthless.
The Warrants are subject to mandatory redemption at $0.01 per Warrant if at any time the average price per shares of Acuren Delaware common stock equals or exceeds $18.00 (subject to any prior adjustment in accordance with the terms and conditions set out in the Warrant) for a period of ten consecutive trading days. See “Description of Capital Stock –– Warrants”.
Mandatory redemption of the outstanding Warrants could force holders of Warrants:
• to exercise their Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so;
• to sell their Warrants at the then-current market price when they might otherwise wish to hold their Warrants; or
• to accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of their Warrants.
Risks Related to the Domestication to Delaware
Currently, your rights as a shareholder arise under British Virgin Islands law as well as the Articles. Upon effectiveness of the Domestication to Delaware, your rights will arise under Delaware law and the Acuren Delaware certificate of incorporation and bylaws.
Upon effectiveness of the Domestication to Delaware, the rights of our Acuren Delaware stockholders will arise under our Acuren Delaware certificate of incorporation and bylaws as well as Delaware law. Those new organizational documents will contain, and Delaware law contains, provisions that differ in some respects from those
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in our current organizational documents and British Virgin Islands law and, therefore, some of your rights as an Acuren Delaware stockholder immediately following the Domestication to Delaware could differ from the rights you currently possess as an Acuren BVI shareholder.
Currently, we are governed by British Virgin Islands law, but, following the completion of the Domestication, we will be governed by Delaware law, which has anti-takeover implications.
Following the Domestication, our organizational documents will change, and our organizational documents will be governed by Delaware law. The application of Delaware law may have the effect of deterring hostile takeover attempts or a change in control. Section 203 of the DGCL restricts certain “business combinations” with “interested stockholders” for three years following the date that a person becomes an interested stockholder unless: (i) the “business combination” or the transaction which caused the person or entity to become an interested stockholder is approved by such company’s board of directors prior to such business combination or transactions; (ii) upon the completion of the transaction in which the person or entity becomes an “interested stockholder,” such interested stockholder holds at least 85% of the voting stock of such company not including (x) shares held by officers and directors and (y) shares held by employee benefit plans under certain circumstances; or (iii) at or after the time the person or entity becomes an “interested stockholder,” the “business combination” is approved by such company’s board of directors and holders of at least 66 2/3% of the outstanding voting stock, excluding shares held by such interested stockholder. A Delaware corporation may elect not to be governed by Section 203 of the DGCL. We do not expect to make such an election.
Anti-takeover provisions in our organizational documents and under Delaware law could delay, discourage or prevent takeover attempts or changes in our management that stockholders may consider favorable.
The certificate of incorporation and bylaws of Acuren Delaware, to be effective upon the Domestication, will contain provisions that could have the effect of delaying, discouraging or preventing takeover attempts or changes in our management without the consent of our Board of Directors. These provisions include:
• no cumulative voting in the election of directors, which may limit the ability of minority stockholders to elect director candidates;
• the exclusive right of our Board of Directors to elect a director to fill a vacancy on the Board of Directors resulting from an increase in the authorized number of directors, or from death, resignation, disqualification, removal or other cause (subject to the rights of the holders of Founder Preferred Shares), which prevents stockholders from being able to fill vacancies on our Board of Directors;
• a prohibition on stockholder action by written consent (subject to exceptions for action by holders of Founder Preferred Shares), which forces stockholder action to be taken at an annual or special meeting of our stockholders;
• the ability of our Board of Directors to issue preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
• the requirement that a special meeting of stockholders may be called only by (i) any chairman of the Board of Directors, (ii) the chief executive officer, or (iii) the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
• advance notice procedures that stockholders must comply with in order to nominate candidates for election to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us;
• limitations on the liability of, and the provision of indemnification to, our directors and officers; and
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• absent our written consent to an alternative forum, the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, in the event that the Court of Chancery lacks jurisdiction over such action or proceeding, another state or federal court located within the State of Delaware and, in the case of actions arising under the Securities Act, the federal district courts of the United States of America, for certain actions against us.
In addition, effective upon the Domestication, we and our organizational documents will be governed by Delaware law. The application of Delaware law to us may have the effect of deterring hostile takeover attempts or a change in control. In particular, Section 203 of the DGCL imposes certain restrictions on “business combinations” (defined to include mergers, asset sales and other transactions) between us and “interested stockholders” (defined to include persons who “own” (defined broadly to include agreements, arrangements and understandings regarding stock) 15% or more of our voting stock and their affiliates). Any provision of the certificate of incorporation and bylaws of Acuren Delaware or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their securities and could also affect the price that some investors are willing to pay for our securities.
Risks Related to Taxation
Changes in tax law and practice may reduce any net returns for investors.
The tax treatment of our stockholders, including any special purpose vehicle that we may establish and any company which we may acquire are all subject to changes in tax laws or practices in the U.S. or any other relevant jurisdiction. Any change may reduce any net return derived by our stockholders from an investment in the Acuren Delaware common stock.
Our non-U.S. Holders may be subject to withholding taxes on distributions.
Following the Domestication, dividends paid to a non-U.S. shareholder will be treated as U.S. source income and will be subject to U.S. withholding tax at a rate of 30%, subject to reduction in the case of a stockholder who is a qualified resident of a country which has a tax treaty with the U.S. and provides adequate documentation (generally Form W-8BEN or Form W-8BEN-E) evidencing their right to tax treaty benefits.
The Domestication may require a stockholder to recognize taxable income.
The change in our tax domicile or other aspects of the Domestication may require a stockholder to recognize taxable income, profit or gain in the jurisdiction in which the stockholder is a tax resident. We do not anticipate making any cash distributions to stockholders to fund such taxes.
We will be treated as a U.S. corporation for U.S. tax purposes and will generally be taxable on our worldwide income.
Following the Domestication, we will be taxable as a U.S. corporation. A U.S. corporation generally is taxable on its worldwide income, subject to an exemption for certain foreign-source dividends paid by foreign subsidiaries.
There can be no assurance that we will be able to make returns for shareholders in a tax-efficient manner.
We structured the Transaction and our holding of ASP Acuren in what it believes to be a fiscally efficient manner. We have made certain assumptions regarding taxation. However, if these assumptions are not correct, taxes may be imposed in excess of taxes that were anticipated. This could reduce the amount of post-tax returns. Any change in laws or tax authority practices could also adversely affect any post-tax returns to investors. In addition, we may incur costs in taking steps to mitigate any such adverse effect on the post-tax returns to investors.
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The change in our tax domicile to the United States may result in adverse tax consequences for Holders of the Ordinary Shares and Warrants.
As discussed more fully under “Material U.S. Federal Income Tax Consequences,” and based on, and subject to, the assumptions, qualifications and limitations set forth in the opinion included as Exhibit 8.1 hereto, it is the opinion of Greenberg Traurig that the Domestication should qualify as a reorganization under Section 368(a)(1)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). In such a transaction, the holders of the Acuren BVI Ordinary Shares, which was previously incorporated in the BVI, are deemed to exchange their Acuren BVI Ordinary Shares for shares of Acuren Delaware common stock. Assuming such qualification, and subject to the PFIC rules discussed below and under “Material U.S. Federal Income Tax Consequences,” U.S. Holders (as defined therein) will be subject to Section 367(b) of the Code as described below.
A U.S. Holder whose Acuren BVI Ordinary Shares have a fair market value of less than $50,000 on the date of the Domestication and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of our shares entitled to vote and less than 10% of the total value of all classes of our shares will not recognize any gain or loss and will not be required to include any part of our earnings in income.
A U.S. Holder who owns (actually or constructively) Acuren BVI Ordinary Shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of our shares entitled to vote and less than 10% of the total value of all classes of our shares on the date of the Domestication, must generally recognize gain (but not loss) with respect to the shares of Acuren Delaware common stock deemed received in the Domestication, even if such U.S. Holder continues to hold our shares and has not received any cash as a result of the Domestication. As an alternative to recognizing gain, however, such U.S. Holder may elect to include in income the “all earnings and profits amount,” as the term is defined in Treasury Regulation Section 1.367(b)-2(d), attributable to such holder’s Acuren BVI Ordinary Shares. The income so included pursuant to this election generally is treated as dividend income.
If a U.S. Holder owns (actually or constructively) Acuren BVI Ordinary Shares with 10% or more of the total combined voting power of all classes of our shares entitled to vote or 10% or more of the total value of all classes of our shares on the date of the Domestication, such U.S. Holder will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to our Acuren BVI Ordinary Shares. A U.S. Holder’s ownership of Warrants will be taken into account in determining whether such U.S. Holder owns 10% or more of the total combined voting power of all classes of our shares or 10% or more of the total value of our shares. Complex attribution rules apply in determining whether a U.S. Holder owns 10% or more of the total combined voting power of all classes of our shares or 10% or more of the total value of our shares for these purposes.
Even if the Domestication qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, if we were a passive foreign investment company (“PFIC”) at any time during a U.S. Holder’s holding period of Acuren BVI Ordinary Shares or Warrants, such U.S. Holder may be required to recognize gain in connection with the Domestication and may be subject to complex rules applicable to a shareholder of a PFIC. Our PFIC status for our current taxable year is uncertain, as described more fully under “Material U.S. Federal Income Tax Consequences.” The determination of whether a non-U.S. corporation is a PFIC is primarily factual and there is little administrative or judicial authority on which to rely to make a determination.
The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisors regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see the section entitled “Material U.S. Federal Income Tax Consequences.”
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MARKET AND DIVIDEND INFORMATION
Ordinary Shares
The Acuren BVI ordinary shares began trading on the LSE on May 22, 2023. Due to the completion of the Acuren Acquisition, trading on the LSE was suspended on July 30, 2024, and the listing was cancelled on August 19, 2024.
In connection with the initial public offering on May 22, 2023, we issued 53,975,000 of our Acuren BVI ordinary shares. As of October 21, 2024, we had 121,476,215 Acuren BVI ordinary shares outstanding and 683 record holders of our Acuren BVI ordinary shares. We have not declared or paid any dividends on our Acuren BVI ordinary shares in the past two fiscal years and have no current plans to pay dividends on our Acuren BVI ordinary shares or Acuren Delaware common stock. In connection with the Domestication, we intend to apply to list our Acuren Delaware common stock on the NYSE under the ticker symbol “TIC”. Although we intend to apply to list our common stock on the NYSE in connection with the Domestication, the Domestication is not contingent on the listing of our common stock on the NYSE. We do not intend to list our warrants or Series A Preferred Stock on any national securities exchange or other principal U.S. market.
Warrants
On May 22, 2023, an aggregate of 54,975,000 Warrants were issued (with each four Warrants entitling the holder to subscribe for one ordinary share) pursuant to a warrant instrument executed by the Company and were exercisable to purchase an aggregate of 13,743,750 Acuren BVI ordinary shares. On July 30, 2024, we completed the Warrant Financing, in which an aggregate of 36,710,124 Warrants were exercised at a reduced exercise price of $10.00 for an aggregate of 9,177,531 Acuren BVI ordinary shares.
As of October 21, 2024, there were 18,264,876 Warrants outstanding exercisable for approximately 4,566,219 Acuren BVI ordinary shares. As of October 21, 2024, we had 3 record holders of our Warrants.
The Warrants began trading on the LSE on May 22, 2023. Due to the completion of the Acuren Acquisition, trading on the LSE was suspended on July 30, 2024, and the listing was cancelled on August 19, 2024.
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THE DOMESTICATION
General
We will effect the Domestication by filing with the Secretary of State of the State of Delaware a certificate of corporate domestication and a certificate of incorporation of Acuren Delaware, and by filing with the British Virgin Islands Registrar of Corporate Affairs a notice of continuance out of the British Virgin Islands and certified copies of the certificates filed in Delaware. The Domestication and the Acuren Delaware certificate of incorporation were approved by our Board of Directors, and no action of our shareholders is required to effect the Domestication. Under Delaware law, the Domestication is deemed effective upon the filing of the certificate of corporate domestication and the Acuren Delaware certificate of incorporation with the Secretary of State of the State of Delaware. In addition, we must file with the British Virgin Islands Registrar of Corporate Affairs a notice of continuance out of the British Virgin Islands and if the British Virgin Islands Registrar of Corporate Affairs is satisfied that the requirements of the BVI Companies Act have been satisfied with respect to the Domestication, it will issue a certificate of discontinuance and, at that time, we shall cease to be registered as a company in the British Virgin Islands and will continue as the same legal entity incorporated in Delaware. We intend to file the certificate of continuance with the British Virgin Islands Registrar of Corporate Affairs on the day certified copies of the certificates are issued by the Secretary of State of the State of Delaware. Acuren BVI has not received and is not required by British Virgin Islands law to receive, approval of a plan of arrangement in the British Virgin Islands, and no plan of arrangement is contemplated.
In connection with the Domestication, Acuren Delaware’s Board of Directors will adopt bylaws, which, together with the Acuren Delaware certificate of incorporation filed with the Secretary of State of the State of Delaware, will be the organizational documents of Acuren Delaware from and after the Domestication.
Background and Reasons for the Domestication
Our Board of Directors approved the Domestication from the British Virgin Islands to the State of Delaware in connection with the registration of the shares of Acuren Delaware common stock with the SEC. Our Board of Directors believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware and that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. Our Board of Directors further believes that there are several reasons why the Domestication is in the best interests of Company and its shareholders. As explained in more detail below, these reasons can be summarized as follows:
• Prominence, Predictability, and Flexibility of Delaware Law. For many years Delaware has followed a policy of encouraging incorporation in its state and, in furtherance of that policy, has been a leader in adopting, construing, and implementing comprehensive, flexible corporate laws responsive to the legal and business needs of corporations organized under its laws. Many corporations have chosen Delaware initially as a state of incorporation or have subsequently changed corporate domicile to Delaware. Because of Delaware’s prominence as the state of incorporation for many major corporations, both the legislature and courts in Delaware have demonstrated the ability and a willingness to act quickly and effectively to meet changing business needs. The DGCL is frequently revised and updated to accommodate changing legal and business needs and is more comprehensive, widely used and interpreted than other state corporate laws. This favorable corporate and regulatory environment is attractive to businesses such as ours.
• Well-Established Principles of Corporate Governance. There is substantial judicial precedent in the Delaware courts as to the legal principles applicable to measures that may be taken by a corporation and to the conduct of a company’s board of directors, such as under the business judgment rule and other standards. Because the judicial system is based largely on legal precedents, the abundance of Delaware case law provides clarity and predictability to many areas of corporate law. We believe, such clarity would be advantageous to Acuren Delaware, our Board of Directors and management to make corporate decisions and take corporate actions with greater assurance as to the validity and consequences of those decisions and actions. Further, investors and securities professionals are generally more familiar with Delaware corporations, and the laws governing such corporations, increasing their level of comfort with Delaware corporations relative to other jurisdictions. The Delaware courts have developed considerable
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expertise in dealing with corporate issues, and a substantial body of case law has developed construing Delaware law and establishing public policies with respect to corporate legal affairs. Moreover, Delaware’s vast body of law on the fiduciary duties of directors provides appropriate protection for Acuren Delaware’s stockholders from possible abuses by directors and officers.
• Increased Ability to Attract and Retain Qualified Directors. The Domestication from the British Virgin Islands to Delaware is attractive to directors, officers, and stockholders alike. Our reincorporation in Delaware may make Acuren Delaware more attractive to future candidates for our Board of Directors, because many such candidates are already familiar with Delaware corporate law from their past business experience. To date, we have been successful in retaining our directors and officers, however, directors of public companies are exposed to significant potential liability. Thus, candidates’ familiarity and comfort with Delaware laws — especially those relating to director indemnification (as discussed below) — draw such qualified candidates to Delaware corporations. Our Board of Directors therefore believes that providing the benefits afforded directors by Delaware law will enable Acuren Delaware to compete more effectively with other public companies in the recruitment of talented and experienced directors and officers. Moreover, Delaware’s vast body of law on the fiduciary duties of directors provides appropriate protection for our stockholders from possible abuses by directors and officers. The frequency of claims and litigation pursued against directors and officers has greatly expanded the risks facing directors and officers of corporations in carrying out their respective duties. The amount of time and money required to respond to such claims and to defend such litigation can be substantial. While both British Virgin Islands and Delaware law permit a corporation to include a provision in its governing documents to reduce or eliminate the monetary liability of directors for breaches of fiduciary duty in certain circumstances, we believe that, in general, Delaware law is more developed and provides more guidance than British Virgin Islands law on matters regarding a company’s ability to limit director liability. As a result, we believe that the corporate environment afforded by Delaware will enable the surviving corporation to compete more effectively with other public companies in attracting and retaining new directors.
Effects of the Domestication
The BVI Companies Act permits a British Virgin Islands company to discontinue from the British Virgin Islands and continue in an appointed jurisdiction (which includes Delaware) as if it had been incorporated under the laws of that other jurisdiction. The BVI Companies Act and our memorandum and articles of association authorize our Board of Directors to continue Acuren BVI in a jurisdiction outside of the British Virgin Islands (in this case, Delaware) without a shareholder vote. Consequently, we are not asking for your vote or soliciting proxies with respect to the Domestication. The BVI Companies Act does not provide shareholders with statutory rights of appraisal in relation to a discontinuance under the BVI Companies Act.
Section 388 of the DGCL provides that an entity organized in a country outside the United States may become domesticated as a corporation in Delaware by the filing with the Secretary of State of the State of Delaware of a certificate of incorporation and a certificate of corporate domestication stating, among other things, that the domestication has been approved as provided in the document, instrument or other writing, as the case may be, governing the internal offers of the non-United States entity and the conduct of its business or applicable non-Delaware law, as appropriate. Section 388 of the DGCL provides that prior to the effectiveness of a certificate of corporate domestication with the Secretary of State of the State of Delaware, the domestication and the Acuren Delaware certificate of incorporation to be filed with the Secretary of State of the State of Delaware must be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the non-United States entity and the conduct of its business or by applicable non-Delaware law, as appropriate. Section 388 of the DGCL does not provide any other approval requirements for a domestication. The DGCL does not provide stockholders with statutory rights of appraisal in connection with a domestication under Section 388 of the DGCL.
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Under Section 184 of the BVI Companies Act, Acuren BVI will cease to be a company incorporated under the BVI Companies Act and will continue as the same legal entity incorporated under the laws of Delaware. Similarly, Section 388 of the DGCL provides that, upon domesticating in Delaware:
• Acuren Delaware will be deemed to be the same entity as Acuren BVI, and the domestication will constitute a continuation of the existence of Acuren BVI in the form of Acuren Delaware;
• all rights, privileges and powers, as well as all property, of Acuren BVI will remain vested in Acuren Delaware;
• all debts, liabilities and duties of Acuren BVI will remain attached to Acuren Delaware and may be enforced against Acuren Delaware to the same extent as if originally incurred by it; and
• unless otherwise agreed to or otherwise required under applicable British Virgin Islands law, the domestication will not be deemed a dissolution of Acuren BVI.
No Change in Business, Locations, Fiscal Year or Employee Plans
The Domestication will effect a change in our jurisdiction of incorporation, and other changes of a legal nature, including changes in our organizational documents, which are described in this prospectus. Because there is no change in our legal entity, the business, assets and liabilities of the Company and its subsidiaries on a consolidated basis, as well as our principal locations and fiscal year, will be the same upon effectiveness of the Domestication as they are prior to the Domestication.
Upon effectiveness of the Domestication, all of our obligations will continue as outstanding and enforceable obligations of Acuren Delaware.
All Acuren BVI employee benefit plans and agreements will be continued by Acuren Delaware.
Our Management and Our Board of Directors
Our executive officers will be the executive officers of Acuren Delaware immediately following the effectiveness of the Domestication. Our current executive officers are Talman B. Pizzey, President and Chief Executive Officer, Michael Grigsby, Chief Financial Officer, Lourinda “Rindi” St. John, Chief Human Resources Officer, and Fiona E. Sutherland, General Counsel.
Our directors before the effectiveness of the Domestication will be the directors of Acuren Delaware immediately following the effectiveness of the Domestication. The composition of our Board of Directors changed upon the consummation of the Acuren Acquisition. Our current directors are Sir Martin E. Franklin, Robert A. E. Franklin, Rory Cullinan, Talman B. Pizzey, Peter Hochfelder, Antoinette C. Bush, Elizabeth Meloy Hepding and James E. Lillie. Sir Martin and Mr. Franklin are our Co-Chairmen. Upon the consummation of the Acuren Acquisition, Thomas V. Milroy and Melanie Stack stepped down from our Board of Directors and Messrs. Hochfelder, Lillie and Pizzey and Mses. Bush and Hepding joined our Board of Directors. See “Management and Corporate Governance — Board of Directors.”
Domestication Share Conversion
In connection with the Domestication, our currently issued and outstanding Acuren BVI ordinary shares will automatically convert, on a one-for-one basis, into shares of Acuren Delaware common stock. Consequently, at the Effective Time, each holder of an Acuren BVI ordinary share will instead hold a share of Acuren Delaware common stock representing the same proportional equity interest in Acuren Delaware as that shareholder held in Acuren BVI immediately prior to the Effective Time. The number of shares of Acuren Delaware common stock outstanding immediately after the Effective Time will be the same as the number of ordinary shares of Acuren BVI outstanding immediately prior to the Effective Time.
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It is not necessary for shareholders of Acuren BVI to exchange their existing share certificates for share certificates of Acuren Delaware in connection with the Domestication. A shareholder who currently holds any of our Acuren BVI ordinary share certificates will receive a new Acuren Delaware common stock certificate upon request pursuant to Section 158 of the DGCL or upon any future transaction in Acuren Delaware common stock that requires the transfer agent to issue stock certificates in exchange for existing share certificates. Until surrendered and exchanged, each certificate evidencing Acuren BVI ordinary shares will be deemed for all purposes of the Company to evidence the identical number of shares of Acuren Delaware common stock.
Similarly, outstanding options and Warrants to acquire, and restricted stock units that settle into, Acuren BVI ordinary shares will be converted into options or Warrants to acquire, or restricted stock units that settle into, shares of Acuren Delaware common stock. Acuren Delaware will not issue new options or Warrants to acquire, or restricted stock units that settle into, Acuren Delaware common stock until such future transaction that requires the issuance of options or Warrants to acquire, or restricted stock units that settle into, Acuren Delaware common stock in exchange for existing options or Warrants to acquire, or restricted stock units that settle into, Acuren BVI ordinary shares. After the effectiveness of the Domestication and until surrendered and exchanged, each option or warrant to acquire, or restricted stock unit that settles into, a portion of Acuren BVI ordinary shares will be deemed for all purposes of the Company to evidence an option or warrant to acquire, or restricted stock unit that settles into, the identical portion of shares of Acuren Delaware common stock.
Comparison of Shareholder Rights
The Domestication will change our jurisdiction of incorporation from the British Virgin Islands to the State of Delaware. While we are currently governed by the BVI Companies Act, upon Domestication, we will be governed by the DGCL. There are differences between British Virgin Islands corporate law and Delaware corporate law. In addition, in connection with the Domestication, we will be governed by a newly adopted Acuren Delaware certificate of incorporation and bylaws, which are different from our current organizational documents. For a more detailed description of how the new organizational documents and Delaware law may differ from our current organizational documents and British Virgin Islands law, please see “Description of Capital Stock; Comparison of Rights — Comparison of Rights” below. Our business, assets and liabilities on a consolidated basis, as well as our executive officers, principal business locations and fiscal year, will not change as a result of the Domestication.
The most significant differences between our current organizational documents and British Virgin Islands law and the new organizational documents and Delaware law are as follows:
• Delaware law requires that all amendments to the Acuren Delaware certificate of incorporation (other than a certificate of designation setting forth a copy of the resolution of the Acuren Delaware Board of Directors fixing the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of the shares of one or more new series of preferred stock of Acuren Delaware, a change in Acuren Delaware’s name, a deletion of certain ministerial matters such as the name of our incorporator or a subdivision of shares and proportionate increase in authorized shares at a time when we have only one class of stock) must be approved by the Board of Directors and by the stockholders, while amendments to the Amended and Restated Memorandum and Articles of Association of Acuren BVI may be made solely by resolutions of the directors (in limited circumstances) or by the holders of ordinary shares;
• The Acuren Delaware certificate of incorporation will provide that we are required to pay any “Annual Dividend Amount” in shares of Acuren Delaware common stock, while the Amended and Restated Memorandum and Articles of Association of Acuren BVI provides that any “Annual Dividend Amount” is payable in the form of either Acuren BVI ordinary shares or cash, at our sole option;
• The Acuren Delaware certificate of incorporation will prohibit the common stockholders of Acuren Delaware from acting by written consent, while the Acuren BVI Amended and Restated Memorandum and Articles of Association permit shareholder action by written consent;
• The Acuren Delaware certificate of incorporation and bylaws will not permit the stockholders of Acuren Delaware to call meetings of stockholders under any circumstances, while the shareholders holding 30% of the voting rights in respect of the matter for which the meeting is called may require the directors to call a meeting of shareholders of Acuren BVI;
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• Under Delaware law, only the stockholders may remove directors, while under British Virgin Islands law and the Acuren BVI Amended and Restated Memorandum and Articles of Association, a director may be removed by a resolution of directors;
• Under the Acuren Delaware certificate of incorporation and bylaws, subject to the rights of any series of preferred stock, vacancies and unfilled directorships will be filled solely by the remaining directors, while under the Acuren BVI Amended and Restated Memorandum and Articles of Association vacancies may be filled by either the directors or the shareholders;
• Under Delaware law, directors may not act by proxy, while under British Virgin Islands law, directors may appoint another director or person to vote in his or her place, exercise his or her other rights as director, and perform his or her duties as director;
• Under Delaware law, a sale of all or substantially all of the assets of Acuren Delaware (other than under certain circumstances related to the sale of assets securing a mortgage or pledged to a secured party) requires stockholder approval, while the Acuren BVI Amended and Restated Memorandum and Articles of Association eliminate the shareholder vote otherwise required by the British Virgin Islands laws for a sale of more than 50% of the assets of Acuren BVI; and
• Under Delaware law, “business combinations” with “interested stockholders” (as those terms are defined in the DGCL) are prohibited for a certain period of time absent certain requirements, while British Virgin Islands law provides no similar prohibition.
No Vote or Dissenters’ Rights of Appraisal in the Domestication
Under the BVI Companies Act and our memorandum and articles of association, shareholder approval of the Domestication is not required, and our shareholders do not have statutory rights of appraisal or any other appraisal rights of their shares as a result of the Domestication. Nor does Delaware law provide for any such rights. We are not asking you for a proxy and you are requested not to send us a proxy. No shareholder vote or action is required to effect the Domestication.
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ACUREN CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of Acuren’s financial condition and results of operations for year ended December 31, 2023 and for the six months ended June 30, 2024 and 2023.
Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. This discussion should be read in conjunction with “Prospectus Summary — Summary Consolidated Financial Information,” “Selected Consolidated Financial Information,” “ASP Acuren Management Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements included elsewhere in this prospectus.
The following financial information has been extracted from the audited consolidated financial statements of Acuren Corporation included in this prospectus. In this section, “we,” us,” “our” and “Acuren” refer to Acuren Corporation.
Overview
On July 30, 2024, we completed our acquisition of ASP Acuren, a leading provider of NDT, and related engineering and lab testing, maintenance and installation services. ASP Acuren operates substantially in North America. ASP Acuren serves several industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. ASP Acuren provides these essential and often compliance-mandated asset integrity management services in the industrial space with a focus on maintenance relative to new construction.
We were incorporated with limited liability under the laws of the British Virgin Islands under the BVI Companies Act on December 15, 2022 under the name Admiral Acquisition Limited. We were formed for the purpose of acquiring a target company or business. On May 22, 2023, we raised gross proceeds of approximately $550 million in connection with our initial public offering in the United Kingdom, and our Acuren BVI ordinary shares and Warrants were listed on the LSE. Prior to our initial public offering in May 2023, we had only one share of preferred stock issued and outstanding and otherwise had no assets, liabilities, capital or equity. We changed our name to Acuren Corporation in connection with the closing of the Acuren Acquisition.
In connection with the Domestication, we intend to apply to list our Acuren Delaware common stock on the NYSE. Due to the completion of the Acuren Acquisition, trading on the LSE was suspended on July 30, 2024, and the listing was cancelled on August 19, 2024. Although we intend to apply to list our common stock on the NYSE in connection with the Domestication, the Domestication is not contingent on the listing of our common stock on the NYSE. We do not intend to list our warrants or Series A Preferred Stock on any national securities exchange or other principal U.S. market.
Prior to the Acuren Acquisition, we had no revenue or other operations other than the active solicitation of a target business with which to complete a business combination. We generated non-operating income in the form of unrealized and realized gains on marketable securities and interest income on cash and cash equivalents. During that time, we had losses as a result of administrative costs and diligence costs related to actively soliciting target businesses, including transaction, financing and diligence costs related to the Acuren Acquisition and the New Credit Facility (as discussed below). We relied upon the proceeds from the initial public offering to fund our limited acquisition-related operations prior to the closing of the Acuren Acquisition.
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Recent Developments
Acuren Acquisition
On July 30, 2024, we completed the acquisition of ASP Acuren, a market leading provider of asset integrity management solutions. The consideration paid at closing for the Acuren Acquisition was approximately $1.88 billion in cash. We funded the consideration paid with a combination of $568.0 million cash on hand, a $775.0 million senior loan facility and an aggregate of $675.0 million of proceeds from the PIPE Financing and the Warrant Financing. The Warrant Financing was an offer to permit holders of our Warrants to early exercise all of their outstanding Warrants at a reduced exercise price of $10.00 per whole Acuren BVI ordinary share.
Credit Facilities
In connection with the closing of the Acuren Acquisition, on July 30, 2024, we entered into the New Credit Facility by and among AAL Delaware Holdco, Inc., our wholly-owned subsidiary, as the initial borrower, ASP Acuren Holdings, Inc., as a borrower, and any other subsidiaries of Acuren Corporation from time to time party thereto as borrowers, the “Borrowers”), the guarantors from time to time party thereto, the lenders from time to time party thereto, and Jefferies Finance LLC, as administrative agent and as collateral agent (the “Credit Agreement”), pursuant to which we incurred a $775.0 million seven-year senior secured term loan (the “Term Loan”) under the senior secured term loan facility (the “Term Loan Facility”), which was used to fund a part of the cash portion of the purchase price in the Acuren Acquisition. The Credit Agreement also provides for a $75.0 million five-year senior secured revolving credit facility (the “Revolving Credit Facility,” and together with the Term Loan Facility, the “New Credit Facility”). See “— Liquidity and Capital Resources — Credit Facilities” for more information regarding the New Credit Facility.
Initial Public Offering
In connection with the May 22, 2023 initial public offering and listing on the LSE, the Founder Entity purchased 1,000,000 preferred shares, no par value, for $10.5 million (the “Founder Preferred Shares”). The holders of Founder Preferred Shares will receive a dividend based on the appreciation of the market price of Acuren BVI ordinary shares outstanding on November 30, 2024 (which includes any Acuren BVI ordinary shares issued pursuant to the exercise of warrants but excludes any ordinary shares issued to shareholders or other beneficial owners of ASP Acuren in connection with the Acuren Acquisition). See “Description of Capital Stock; Comparison of Rights — Authorized Share Capital — Preferred Stock — Dividends” for a description of the calculation of the annual dividend amount. Dividends are paid for the term the Founder Preferred Shares are outstanding. The Founder Preferred Shares will be automatically converted into Acuren BVI ordinary shares on a one-for-one basis (subject to certain adjustments in certain circumstances either as the directors may determine or otherwise as determined in accordance with the terms thereof) upon the earlier of (i) immediately following the Change of Control Dividend Date and (ii) the last day of the tenth full financial year following the consummation of the Acuren Acquisition, being December 31, 2034. Each Founder Preferred Share is convertible into one Acuren BVI ordinary share at the option of the holder and votes with the Acuren BVI ordinary shares as a single class. In the event of a Change of Control, the holders of the Founder Preferred Shares will be entitled to receive, in the aggregate, a one-time dividend equal to the Change of Control Dividend Amount, payable in Acuren Delaware common stock.
In connection with the initial public offering on May 22, 2023, we issued 53,950,000 Acuren BVI ordinary shares, no par value, for gross proceeds of approximately $539.5 million. In addition, on May 22, 2023, we issued an aggregate of 25,000 Acuren BVI ordinary shares to our non-founder directors for $10.00 per share. Each Acuren BVI ordinary share has voting rights and winding-up rights.
Each of the 1,000,000 Founder Preferred Shares, 53,950,000 Acuren BVI ordinary shares issued in connection with the initial public offering as well as the 25,000 Acuren BVI ordinary shares issued to the non-founder directors was issued with a warrant (54,975,000 Warrants in aggregate), entitling the holder of each Acuren BVI warrant to purchase 1/4 of an Acuren BVI ordinary share with a strike price of $11.50 per whole Acuren BVI ordinary share.
Each warrant is exercisable until three (3) years from the date of the Acuren Acquisition, unless mandatorily redeemed by us. The Warrants are mandatorily redeemable by us at a price of $0.01 per warrant should the average market price of an Acuren BVI ordinary share exceed $18.00 for ten (10) consecutive trading days. On July 30,
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2024, we completed the Warrant Financing, and an aggregate of 36,710,124 Warrants were exercised at a reduced exercise price of $10.00 for an aggregate of 9,177,531 Acuren BVI ordinary shares. As of October 21, 2024, there were 18,264,876 Warrants outstanding exercisable for an aggregate of 4,566,219 Acuren BVI ordinary share. See “Note 9 to the Financial Statements — Subsequent Events.”
Results of Operations
Our entire activity from inception to the closing of the Acuren Acquisition and the New Credit Facility in July 2024 has been limited to the evaluation of business combination candidates and the issuance of stock-based compensation to our non-employee directors.
|
|
|
Six Months Ended
June 30,
|
|
($ in millions except per share data)
|
|
2024
|
|
2023
|
|
Statement of Operations data:
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
$
|
(1.1
|
)
|
|
$
|
(0.4
|
)
|
|
Investment income
|
|
|
16.5
|
|
|
|
0.6
|
|
|
Unrealized (loss) gain on marketable securities
|
|
|
(1.9
|
)
|
|
|
2.5
|
|
|
Transaction costs
|
|
|
(2.8
|
)
|
|
|
—
|
|
|
Change in fair value of derivative instruments
|
|
|
(19.9
|
)
|
|
|
—
|
|
|
Net income (loss)
|
|
$
|
(9.2
|
)
|
|
$
|
2.7
|
|
|
Weighted average Ordinary Shares used in computing basic and diluted loss per share
|
|
|
54.0
|
|
|
|
54.0
|
|
|
Weighted average Founder Preferred Shares used in computing basic and diluted loss per share
|
|
|
1.0
|
|
|
|
1.0
|
|
|
Net income (loss) per Ordinary Share and Founder Preferred Share – basic and diluted
|
|
$
|
(0.17
|
)
|
|
$
|
0.05
|
|
For the six months ended June 30, 2024, our general and administrative expenses were $1.1 million including administrative expenses and expenses related to reviewing acquisition opportunities. Our investment income was $16.5 million related primarily to interest accrued on bonds. Our change in fair value of derivative instruments of $19.9 million was related to the contingent forward contracts to purchase our Ordinary Shares at $10.00 per share and warrants with commitment to exercise at $10.00 per whole Ordinary Shares, in each case, contingent on the close of the Acuren Acquisition.
We had no operations or activity prior to our initial public offering in May 2023. Therefore, there are no expenses or income for the period from inception to May 22, 2023. For the period from May 22, 2023 to June 30, 2023, our general and administrative expenses were $0.4 million including administrative expenses and expenses related to reviewing acquisition opportunities. Our unrealized gain on marketable securities of $2.5 million related primarily to our investment in short term treasury bills.
|
($ in millions except per share data)
|
|
As of and
for the
Year Ended
December 31,
2023
|
|
Statement of Operations data:
|
|
|
|
|
|
General and administrative expenses
|
|
|
(1.4
|
)
|
|
Investment income
|
|
|
12.4
|
|
|
Unrealized gain on marketable securities at fair value
|
|
|
5.5
|
|
|
Net income
|
|
$
|
16.5
|
|
|
Weighted average Ordinary Shares outstanding, basic and diluted
|
|
|
54.0
|
|
|
Weighted average Founder Preferred Shares outstanding, basic and diluted
loss per share
|
|
|
1.0
|
|
|
Earnings per Ordinary Share and Founder Preferred Share, basic and diluted
|
|
$
|
0.3
|
|
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For the year ended December 31, 2023, our general and administrative expenses were $1.4 million including administrative expenses and expenses related to reviewing acquisition opportunities. Our investment income and unrealized gain on marketable securities combined was $17.9 million related primarily to our investment in short term treasury bills. From December 15, 2022 (inception) through December 31, 2022, we had only one share of preferred stock issued and outstanding and otherwise had no assets, liabilities, capital or equity.
Liquidity and Capital Resources
Overview
Prior to the Acuren Acquisition, our sources of cash were primarily the net proceeds of our initial public offering. We used this cash to fund ongoing costs and expenses, the costs and expenses incurred in connection with seeking to identify and effect our initial acquisition, and to fund the Acuren Acquisition.
Acuren’s principal liquidity requirements are for working capital and general corporate purposes, including capital expenditures and debt service, as well as to execute and integrate strategic acquisitions. We believe that borrowings under our New Credit Facility, together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements over the next twelve months.
Credit Facilities
Our Credit Agreement provides for (1) a term loan facility, pursuant to which we incurred a $775.0 million Term Loan, which we used to fund a portion of the cash purchase price in the Acuren Acquisition and (2) a $75.0 million Revolving Credit Facility of which up to $20.0 million can be used for the issuance of letters of credit. As of July 30, 2024, we had $775.0 million of indebtedness outstanding under the Term Loan and $5.1 million outstanding under the Revolving Credit Facility comprised of $5.1 million in stand-by letters of credit.
The interest rate applicable to the Term Loan is, at our option, either (1) a base rate plus an applicable margin equal to 2.50% or (2) a secured overnight financing rate (adjusted for statutory reserves) plus an applicable margin equal to 3.50%. At the option of the Borrower, the interest period for the Term Loan may be one, three, or six months or twelve months if agreed to by all applicable term loan lenders. Interest on the Term Loan is payable at the end of each interest period except that, if the interest period exceeds three months, interest is payable every three months. Principal payments on the Term Loan will commence on December 31, 2024 and will be made in quarterly installments on the last day of each fiscal quarter in an amount equal to 0.25% of the initial aggregate principal amount of the Term Loan. The Term Loan matures on July 30, 2031. We may prepay the Term Loan in whole or in part at any time without penalty, except that any prepayment in connection with a repricing transaction within six months of July 30, 2024 will be subject to 1% prepayment premium. Additionally, subject to certain exceptions, the Term Loan Facility may be subject to mandatory prepayments using (i) proceeds from non-ordinary course asset dispositions, (ii) proceeds from certain incurrences of debt or (iii) commencing in 2026, a portion of our annual excess cash flows based upon certain leverage ratios.
The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (1) a base rate plus an applicable margin equal to 2.50% or (2) a secured overnight financing rate (adjusted for statutory reserves) plus an applicable margin equal to 3.50%. The unused portion of the Revolving Credit Facility is subject to a commitment fee of 0.375% or 0.50% based on our first lien net leverage ratio. We are also required to pay (i) letters of credit fees on the amounts of outstanding letters of credit plus a fronting fee to the issuing lender and (ii) administration fees. Amounts drawn under each letter of credit bear interest at a rate of 3.50% per annum. Funds available under the Revolving Credit Facility may be used for general corporate purposes. The Revolving Credit Facility matures on July 30, 2029.
The Credit Agreement also permits the Borrower, without the consent of the other lenders, to request that one or more lenders provide the Borrower with increases in the Revolving Credit Facility or additional term loans up to such amounts based upon certain financial covenants and leverage ratios and subject to compliance with customary conditions set forth in the Credit Agreement including compliance, on a pro forma basis, with the financial
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covenants and ratios set forth therein and, with respect to any additional term loan, an increase in the margin on existing term loans to the extent required by the terms of the Credit Agreement. Upon the Borrower’s request, each lender may decide, in its sole discretion, whether to increase all or a portion of its Revolving Credit Facility commitment or whether to provide the Borrower with additional term loans.
The Credit Agreement contains certain customary negative operating covenants (certain of which are not applicable depending on our net leverage ratios), customary restrictive covenants and other customary provisions relating to events of default, including non-payment of principal, interest or fees, breach of covenants, misrepresentations, insolvency proceedings, cross default to other indebtedness of the Borrowers and its subsidiaries in excess of $40.0 million or judgments from creditors of such amount, change of control, and certain events relating to ERISA plans.
Obligations under the New Credit Facility are guaranteed on a senior secured basis, jointly and severally, by Acuren Corporation and substantially all of its U.S. and Canadian subsidiaries. Amounts borrowed under the New Credit Facility are secured on a first priority basis by a perfected security interest in substantially all of the present and future property (subject to certain exceptions) of the Borrower and each guarantor.
We are required to be in compliance with the covenants contained in our New Credit Facility.
Cash Flows
Net Cash Provided by Operating Activities
Net cash provided by operating activities of $13.5 million for the six months ended June 30, 2024 included primarily investment income offset by cash administrative expenses. The only operating activities during this period related to the administration of the Company and the investment of the cash on hand and the change in fair value of derivative instruments.
Net cash provided by operating activities of $0.4 million for the six months ended June 30, 2023 included primarily unrealized gains on marketable securities.
Net cash provided by operating activities of $10.9 million for the year ended December 31, 2023 included primarily investment income offset by cash administrative expenses. The only operating activities during the year related to the administration of the Company and the investment of the cash on hand. There were no operations during the year ended December 31, 2022.
Net Cash Used in Investing Activities
Net cash used in investing activities during the six months ended June 30, 2024 of $9.5 million consisted of investments in treasury bills offset by maturities of treasury bill investments.
Net cash used in investing activities for the six months ended June 30, 2023 of $536.2 million consisted of investments in treasury bills offset by cash administrative expenses.
Net cash used in investing activities during the year ended December 31, 2023 of $547.8 million consisted of investments in treasury bills offset by maturities of treasury bill investments. There were no investing activities during the period ended December 31, 2022.
Net cash Provided by Financing Activities
There was no cash provided by financing activities for the six months ended June 30, 2024.
Net cash provided by financing activities for the six months ended June 30, 2023 of $539.5 million consisted of the proceeds from the initial public offering and the issuance of the Founder Preferred Shares offset by costs associated with the offering.
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Table of Contents
Net cash provided by financing activities during the year ended December 31, 2023 of $539.0 million consisted of the proceeds from the initial public offering and the issuance of the Founder Preferred Shares offset by costs associated with the offering.
Contractual Obligations and Commitments
The company did not have any contractual obligations or commitments as of June 30, 2024 and December 31, 2023.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreement involving assets.
Recently Issued Accounting Pronouncements
For a discussion of recently issued accounting Pronouncements, see Note 2 — Summary of Significant Accounting Policies.
Critical Accounting Estimates
We have no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2 — Summary of Significant Accounting Policies to our financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.
Qualitative and Quantitative Disclosures About Market Risk
Historically, we were not subject to any material market or interest rate risk. Following the consummation of our initial public offering, the net proceeds of our initial public offering have been invested in short-term U.S. government treasury securities. Due to the short-term nature of these investments, we believe there was no associated material exposure to interest rate risk.
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Table of Contents
ASP ACUREN MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of ASP Acuren’s financial condition and results of operations for the years ended December 31, 2023, and 2022 and the six months ended June 30, 2024. This discussion should be read in conjunction with the information contained in the audited and unaudited ASP Acuren consolidated financial statements and the notes related thereto included in this prospectus. In this section, “we,” us,” “our” and “ASP Acuren” refer to ASP Acuren Holdings, Inc.
Overview
We are a leading provider of critical asset integrity services. We operate primarily in North America serving a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. We provide these essential and often compliance-mandated (often at customer locations) services in the industrial space and are focused on the recuring maintenance needs of our customers.
The work we do fits in the service category referred to as Testing, Inspection and Certification (TIC). These activities include several Nondestructive Testing (NDT) techniques such as radiography, ultrasonic testing, magnetic particle inspection, penetrant testing, and visual inspection. NDT activities include inspection and evaluation of industrial equipment through various technology-enabled methods to ensure asset integrity, avoid costly accidents and comply with regulatory requirements without destroying the asset or component. Given the amount of activity required at heights in the industrial space, we provide market leading RAT solutions to reach difficult areas without scaffolding. The work on ropes at heights extends beyond inspection and testing to include industrial trades such as insulation, coatings and blasting, welding, pipe fitting, hoisting and rigging, and electrical services. We offer these trades in a niche way where RAT solutions are optimal (cost efficient and/or schedule enhancing) and where we can provide quality services without compromising safety. Our TIC service also includes support from consulting engineers with in-lab destructive testing capabilities. Our highly specialized materials engineers support failure investigation, material selection, corrosion engineering, welding engineering, fracture mechanics, destructive testing, and chemical analysis.
We are headquartered in Tomball, Texas and operate from approximately 119 service centers and approximately 22 engineering and lab facilities. We operate in two geographical segments, the U.S. and Canada, and also have limited operations located in the United Kingdom. As of September 18, 2024, we had 6,265 employees, approximately 5,000 of whom are direct, billable engineers and technicians. We have recurring revenue and repeat business from our diversified long-standing customers across a variety of end markets. We believe the essential nature of our work provides stable and predictable cash flows. Organic growth is enhanced as assets and infrastructure age, requiring additional investment to ensure compliance and safe operation. Our engineers and technicians play an important role in the life extension of industrial assets. Contractual arrangements and master service agreements have terms ranging from a few days to five years. Substantially all of our revenue is derived from services contracted on a time and materials basis.
Certain Factors and Trends Affecting ASP Acuren Results of Operations
Summary of Acquisitions
On April 15, 2024, ASP Acuren acquired all of the outstanding stock of Advance Coating Solutions, Inc. (“Advance”), a Canadian company, for $2.0 million, net of cash acquired. Advance specializes in corrosion prevention and remediation solutions, across a wide range of end markets including mining, refining and processing, storage, and pipelines. We have not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
On April 2, 2024, ASP Acuren acquired all of the outstanding stock of ADV Integrity, Inc. (“ADV”), a company located in Magnolia, Texas, for $16.4 million, net of cash acquired. ADV is a provider of engineering, materials testing and analysis, and technology development. We have not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
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Table of Contents
On January 30, 2024, ASP Acuren acquired all of the outstanding stock of TriQuest Nondestructive Testing Corp. (“TriQuest”), a Canadian company, for $29.3 million, net of cash acquired. TriQuest provides a wide range of services including conventional and advanced NDT methods and visual inspection services, based in western Canada. We have not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
On November 14, 2022, ASP Acuren purchased all the issued and outstanding stock of GBOG Holding Corporation, a U.S. company, and indirectly acquired 100% of the outstanding stock of its subsidiary, Versa Integrity Group, Inc. (collectively, “Versa”) for consideration of $39.9 million, which is net of cash acquired of $3.4 million included on Versa’s balance sheet prior to closing. The acquisition was funded by borrowing against ASP Acuren’s short-term revolver facility. Versa delivers NDT, mechanical integrity, and advanced services primarily across the southern region of the United States and is included in the United States segment since the date of the acquisition.
During the periods ended December 31, 2023 and 2022, ASP Acuren completed two other business acquisitions. The aggregate purchase price of these other acquisitions was $11.7 million, which is net of cash acquired, and was allocated to assets acquired and liabilities assumed at their estimated fair values.
Economic, Industry and Market Factors
We have observed some impact from inflationary pressure particularly during the 2023 and the first half of 2024. Over the reporting periods we have been able to stabilize margin with a combination of cost management and price initiatives. There has been no direct effect on our business from the Russian-Ukrainian or the Israeli-Palestinian wars. These conflicts may have an impact on certain end markets, results of operations or liquidity or in other ways which we cannot yet determine.
Effect of Seasonality and Cyclical Nature of Business
Our revenue and results of operations can be subject to seasonal and other variations. These variations are influenced by weather, customer spending patterns, bidding seasons, project schedules, holidays, and the timing of outages and non-recurring projects. Typically, our revenue is lowest at the beginning of the year and during the winter months in North America because of persistent cold, snowy, or wet conditions. Revenue is generally higher during the spring and fall months, due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate. In the fourth quarter, many projects tend to be completed by customers seeking to spend their capital budgets before the end of the year, which generally has a positive effect on revenue. However, the holiday season and inclement weather can cause delays, which can reduce revenue and related costs on affected projects.
Additionally, the industries we serve can be cyclical. Fluctuations in end-user demand within those industries, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large construction and installation projects can create fluctuations in revenue.
Description of Key Financial Statement Line Items
Service revenue
Services revenue is generated from ASP Acuren’s engineers, scientists, technologists, technicians, and specialized craft trades performing inspections, testing, and related services for customers both in the field and in our laboratories. Services revenue is recognized by ASP Acuren as services are performed for the customer. The vast majority of ASP Acuren billing is on a time and materials basis.
Cost of revenue
Cost of revenue consists primarily of direct labor. Cost of revenue also includes materials and indirect costs, such as supplies, tools, and depreciation of equipment related to contract performance. In addition, we incur travel, per diem, and hotel costs. Labor costs are recognized as labor hours are incurred in delivering services.
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Table of Contents
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of executive and administrative employee compensation, acquisition related earnout and incentive costs, information systems and technology costs, share-based compensation, rent expense, and management consulting services.
Results of Operations
Six months ended June 30, 2024, compared to the six months ended June 30, 2023
The following is a comparison of our results of operations for the six months ended June 30, 2024, to the six months ended June 30, 2023 (in thousands):
|
|
|
Six Months Ended June 30,(1)
|
|
Increase
(Decrease)
|
|
%
Change
|
| |
|
2024
|
|
2023
|
|
|
Service revenue
|
|
$
|
532,354
|
|
|
$
|
514,388
|
|
|
$
|
17,966
|
|
|
3.5
|
%
|
|
Cost of revenue
|
|
|
395,887
|
|
|
|
398,004
|
|
|
|
(2,117
|
)
|
|
-0.5
|
%
|
|
Gross profit
|
|
|
136,467
|
|
|
|
116,384
|
|
|
|
20,083
|
|
|
17.3
|
%
|
|
Selling, general and administrative expenses
|
|
|
102,724
|
|
|
|
87,797
|
|
|
|
14,927
|
|
|
17.0
|
%
|
|
Income from operations
|
|
|
33,743
|
|
|
|
28,587
|
|
|
|
5,156
|
|
|
18.0
|
%
|
|
Interest expense, net
|
|
|
33,551
|
|
|
|
23,643
|
|
|
|
9,908
|
|
|
41.9
|
%
|
|
Other expense (income), net
|
|
|
(286
|
)
|
|
|
62
|
|
|
|
(348
|
)
|
|
-561.3
|
%
|
|
Income before provision for (benefit from) income taxes
|
|
|
478
|
|
|
|
4,882
|
|
|
|
(4,404
|
)
|
|
-90.2
|
%
|
|
Provision for (benefit from) income taxes
|
|
|
7,199
|
|
|
|
(2,293
|
)
|
|
|
9,492
|
|
|
-414.0
|
%
|
|
Net income (loss)
|
|
$
|
(6,721
|
)
|
|
$
|
7,175
|
|
|
$
|
(13,896
|
)
|
|
-193.7
|
%
|
Revenues
Service revenue increased $18.0 million, or 3.5%, compared to the prior year period. This increase in service revenue was driven primarily by organic sales growth of approximately $10.5 million, or 2.0%, driven by increases in transaction volumes with recurring customers and new sales in target markets. Additionally, ASP Acuren had net sales growth of approximately $7.5 million directly related to the 2024 acquisitions.
Gross profit
The following table presents gross profit and gross profit margin (gross profit as a percentage of service revenues) for the six months ended June 30, 2024, and 2023 (in thousands):
|
|
|
Six Months ended June 30,
|
| |
|
2024
|
|
2023
|
|
Cost of revenue
|
|
$
|
395,887
|
|
|
$
|
398,004
|
|
|
Gross profit
|
|
|
136,467
|
|
|
|
116,384
|
|
|
Gross profit margin
|
|
|
25.6
|
%
|
|
|
22.6
|
%
|
ASP Acuren’s gross profit for the six months ended June 30, 2024, was $136.5 million, a $20.1 million, or 17.3%, increase compared to gross profit of $116.4 million for the six months ended June 30, 2023. The gross profit increase from six months ended June 2023 to June 2024 was primarily attributable to pricing increases and standardization combined with technician utilization improvements. Additionally, ASP Acuren had gross profit growth of approximately $3.8 million directly related to acquisitions.
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Table of Contents
Selling, general and administrative expenses
The following table presents selling, general and administrative expenses (“SG&A expenses”) and operating margin (SG&A expenses as a percentage of service revenues) for the six months ended June 30, 2024, and 2023 (in thousands):
|
|
|
Six Months ended June 30,
|
| |
|
2024
|
|
2023
|
|
SG&A expenses
|
|
$
|
102,724
|
|
|
$
|
87,797
|
|
|
SG&A expenses as a percentage of revenue (%)
|
|
|
19.3
|
%
|
|
|
17.1
|
%
|
|
Operating margin (%)
|
|
|
6.3
|
%
|
|
|
5.6
|
%
|
Acuren’s SG&A expenses for the six months ended June 30, 2024, were $102.7 million, a $14.9 million increase compared to SG&A expenses of $87.8 million for the six months ended June 30, 2023. SG&A expenses as a percentage of revenues were 19.3% and 17.1% for the six months ended June 30, 2024, and 2023, respectively. The increase in SG&A expenses was driven by increases in salary and benefit expenses combined with increases in rent and facility costs.
Interest expense, net
Interest expense, net increased $9.9 million, or 41.9 %, from the prior year period. This increase in the six months ended June 2024 is due to new borrowings for working capital purposes and to fund acquisitions under our Credit Agreement in addition to a higher interest rate environment when compared against prior year period.
Provision for income taxes
Provision for income taxes increased $9.5 million from the prior year period. This increase was primarily driven by the increase in the effective tax rate for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. Significant items increasing the effective tax rate include non-deductible meals and entertainment, the foreign rate differential, and other permanent differences.
Operating Segment Results
Six months ended June 30, 2024, compared to the six months ended June 30, 2023
|
|
|
Service Revenue
|
|
Gross Profit
|
| |
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
| |
|
2024
|
|
2023
|
|
Increase
(Decrease)
|
|
%
Change
|
|
2024
|
|
2023
|
|
Increase
(Decrease)
|
|
%
Change
|
|
United States
|
|
$
|
308,927
|
|
|
$
|
308,693
|
|
|
$
|
234
|
|
|
0
|
%
|
|
$
|
81,075
|
|
$
|
71,588
|
|
$
|
9,487
|
|
13
|
%
|
|
Canada
|
|
|
224,191
|
|
|
|
206,246
|
|
|
|
17,945
|
|
|
9
|
%
|
|
|
55,392
|
|
|
44,796
|
|
|
10,596
|
|
24
|
%
|
|
Corporate and Eliminations
|
|
|
(764
|
)
|
|
|
(551
|
)
|
|
|
(213
|
)
|
|
39
|
%
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
| |
|
$
|
532,354
|
|
|
$
|
514,388
|
|
|
$
|
17,966
|
|
|
3
|
%
|
|
$
|
136,467
|
|
$
|
116,384
|
|
$
|
20,083
|
|
17
|
%
|
United States
United States service revenue for the six months ended June 30, 2024, was $308.9 million compared to $308.7 million during the same period in the prior year. Acquisitions contributed approximately $2.8 million in new service revenue.
Segment gross profit margin for the six months ended June 30, 2024 and 2023 was approximately 26.2% and 23.2%, respectively. The increase was primarily driven by improved project margins resulting primarily from pricing initiatives implemented in 2023. Acquisitions represented approximately $1.7 million in gross profit growth.
Canada
Canada service revenue for the six months ended June 30, 2024, was $224.2 million compared to $206.2 million during the same period in the prior year. The growth in service revenue was driven primarily by increased customer outage/turn around activity. Acquisitions contributed approximately $4.7 million in new service revenue.
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Table of Contents
Segment gross profit margin for the six months ended June 30, 2024 and 2023 was approximately 24.7% and 21.7%, respectively. The increase was primarily driven by stronger volume combined with pricing initiatives. Acquisitions represented approximately $2.1 million in gross profit growth.
Reconciliation of GAAP to Non-GAAP Financial Measures
EBITDA, as defined by us, excludes interest charges, income tax expense (benefit), and depreciation and amortization. We believe this non-GAAP financial measure is useful to both management and investors in their analysis of our financial position and results of operations. EBITDA is a meaningful measure of performance which is commonly used by industry analysts, investors, lenders, and rating agencies to analyze operating performance in our industry, perform analytical comparisons, benchmark performance between periods, and measure our performance against externally communicated targets.
The following table sets forth the reconciliation of Net income (loss) and EBITDA to its most comparable GAAP financial measure on a consolidated basis:
EBITDA for the six months ended June 30, 2024, and 2023, respectively:
|
|
|
Six Months Ended June 30,
|
|
EBITDA:
|
|
2024
|
|
2023
|
|
Net income (loss)
|
|
$
|
(6,721
|
)
|
|
$
|
7,175
|
|
|
Provision for (benefit from) income taxes
|
|
|
7,199
|
|
|
|
(2,293
|
)
|
|
Interest expense, net
|
|
|
33,551
|
|
|
|
23,643
|
|
|
Depreciation and amortization
|
|
|
38,763
|
|
|
|
47,946
|
|
|
EBITDA
|
|
$
|
72,792
|
|
|
$
|
76,471
|
|
Year Ended December 31, 2023, Compared to Year Ended December 31, 2022
The following is a comparison of our results of operations for the year ended December 31, 2023, to the year ended December 31, 2022 (in thousands):
|
|
|
Years Ended December 31,(1)
|
|
Increase
(Decrease)
|
|
%
Change
|
| |
|
2023
|
|
2022
|
|
|
Service revenue
|
|
$
|
1,050,057
|
|
|
$
|
928,326
|
|
|
$
|
121,731
|
|
|
13.1
|
%
|
|
Cost of revenue
|
|
|
810,534
|
|
|
|
725,375
|
|
|
|
85,159
|
|
|
11.7
|
%
|
|
Gross profit
|
|
|
239,523
|
|
|
|
202,951
|
|
|
|
36,572
|
|
|
18.0
|
%
|
|
Selling, general and administrative expenses
|
|
|
185,022
|
|
|
|
168,229
|
|
|
|
16,793
|
|
|
10.0
|
%
|
|
Income from operations
|
|
|
54,501
|
|
|
|
34,722
|
|
|
|
19,779
|
|
|
57.0
|
%
|
|
Interest expense, net
|
|
|
60,022
|
|
|
|
24,159
|
|
|
|
35,863
|
|
|
148.4
|
%
|
|
Other expense (income), net
|
|
|
(1,241
|
)
|
|
|
(385
|
)
|
|
|
(856
|
)
|
|
222.3
|
%
|
|
Gain on bargain purchase
|
|
|
—
|
|
|
|
(12,503
|
)
|
|
|
12,503
|
|
|
-100.0
|
%
|
|
Income before provision for income taxes
|
|
|
(4,280
|
)
|
|
|
23,451
|
|
|
|
(27,131
|
)
|
|
-118.3
|
%
|
|
Provision for income taxes
|
|
|
2,009
|
|
|
|
3,408
|
|
|
|
(1,399
|
)
|
|
-41.1
|
%
|
|
Net income (loss)
|
|
$
|
(6,289
|
)
|
|
$
|
20,043
|
|
|
$
|
(26,332
|
)
|
|
-131.4
|
%
|
Revenues
Service revenue increased $121.7 million, or 13.1%, compared to the prior year period. This increase in service revenue was driven primarily by net sales growth of $74.2 million directly related to the Versa acquisition in November 2022. Additionally, ASP Acuren had organic sales growth of $47.5 million, or 5.1%, driven by increases in transaction volumes with recurring customers and new sales in target markets.
47
Table of Contents
Cost of revenue and Gross profit
The following table presents gross profit and gross profit margin (gross profit as a percentage of service revenues) for the years ended December 31, 2023, and 2022 (in thousands):
|
|
|
Years Ended December 31,(1)
|
| |
|
2023
|
|
2022
|
|
Cost of revenue
|
|
$
|
810,534
|
|
|
$
|
725,375
|
|
|
Gross profit
|
|
|
239,523
|
|
|
|
202,951
|
|
|
Gross profit margin
|
|
|
22.8
|
%
|
|
|
21.9
|
%
|
ASP Acuren’s gross profit for the year ended December 31, 2023, was $239.5 million, a $36.6 million, or 18.0%, increase compared to gross profit of $203.0 million for the year ended December 31, 2022. The gross profit increase from 2022 to 2023 was primarily attributable to indirect cost synergies gained in the Versa acquisition, combined with utilization improvements and pricing standardization.
Selling, general and administrative expenses
The following table presents selling, general and administrative expenses (“SG&A expenses”) and operating margin (SG&A expenses as a percentage of service revenues) for the years ended December 31, 2023, and 2022 (in thousands):
|
|
|
Years Ended December 31,(1)
|
| |
|
2023
|
|
2022
|
|
SG&A expenses
|
|
$
|
185,022
|
|
|
$
|
168,229
|
|
|
SG&A expenses as a percentage of revenue (%)
|
|
|
17.6
|
%
|
|
|
18.1
|
%
|
|
Operating margin (%)
|
|
|
5.2
|
%
|
|
|
3.7
|
%
|
ASP Acuren’s SG&A expenses for the year ended December 31, 2023, were $185.0 million, a $16.8 million increase compared to SG&A expenses of $168.2 million for the year ended December 31, 2022. SG&A expenses as a percentage of revenues were 17.6% and 18.1% for 2023 and 2022, respectively. The increase in SG&A expenses was in line with the overall increase in revenue. Specifically, the increase was driven by increases in salary and benefit expenses associated with the Versa acquisition.
Interest expense, net
Interest expense, net increased $35.9 million, or 148.4%, from the prior year period. This increase in 2023 is due to new borrowings under our Credit Agreement and a higher interest rate environment when compared against prior year.
Other expense (income), net
Other expense (income), net is comprised primarily of net gains from insurance claims, government subsidies, and other income or expense items that are not part of the normal operations. Other expense (income), net decreased $0.9 million or 222.3% from the prior year period.
Gain on bargain purchase
Gain on bargain purchase decreased by $12.5 million or 100% from the prior year period. This decrease is due to the bargain purchase gain from the Versa acquisition recognized in November 2022.
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Table of Contents
Provision for income taxes
Provision for income taxes decreased $1.4 million or 41.1% from the prior year period. This decrease was primarily driven by the decrease in the effective tax rate year over year. Significant items decreasing the effective tax rate from the expected federal tax rate of 21% in 2023 include non-deductible meals and entertainment, the foreign rate differential, and other permanent differences. Significant items decreasing the effective tax rate from the expected federal tax rate of 21% in 2022 include the bargain purchase gain related to the acquisition of Versa, the state tax provision net of federal benefit, and the foreign rate differential.
Operating Segment Results
|
|
|
Service Revenue
|
|
Gross Profit(1)
|
| |
|
Year Ended December 31,
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Increase
(Decrease)
|
|
%
Change
|
|
2023
|
|
2022
|
|
Increase
(Decrease)
|
|
%
Change
|
|
United States
|
|
$
|
643,847
|
|
|
$
|
516,055
|
|
|
$
|
127,792
|
|
|
25
|
%
|
|
$
|
144,883
|
|
$
|
112,592
|
|
$
|
32,291
|
|
29
|
%
|
|
Canada
|
|
|
409,150
|
|
|
|
416,042
|
|
|
|
(6,892
|
)
|
|
-2
|
%
|
|
|
94,640
|
|
|
90,359
|
|
|
4,281
|
|
5
|
%
|
|
Corporate and Eliminations
|
|
|
(2,940
|
)
|
|
|
(3,771
|
)
|
|
|
831
|
|
|
-22
|
%
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
| |
|
$
|
1,050,057
|
|
|
$
|
928,326
|
|
|
$
|
121,731
|
|
|
13
|
%
|
|
$
|
239,523
|
|
$
|
202,951
|
|
$
|
36,572
|
|
18
|
%
|
United States
United States service revenue for the year ended December 31, 2023 was $643.8 million compared to $516.1 million during the same period in the prior year. The increase in service revenue was driven primarily by net sales growth of $74.2 million directly related to the Versa acquisition in November 2022. The increase is also due to continued organic growth in our target markets from higher transaction volume and strategic pricing initiatives.
Segment gross profit margin for 2023 and 2022 was approximately 22.5% and 21.8%, respectively. The increase was primarily driven by stronger volume combined with improved project margins resulting primarily from pricing initiatives implemented in 2023.
Canada
Canada service revenue for the year ended December 31, 2023 was $409.2 million compared to $416.0 million during the same period in the prior year. The decrease was driven by a decline in volume during the year ended December 31, 2023.
Segment gross profit margin for 2023 and 2022 was approximately 23.1% and 21.7%, respectively. The increase was primarily driven by utilization improvements and pricing standardization.
Reconciliation of GAAP to Non-GAAP Financial Measures
EBITDA, as defined by us, excludes interest charges, income tax expense (benefit), and depreciation and amortization. We believe this non-GAAP financial measure is useful to both management and investors in their analysis of our financial position and results of operations. EBITDA is a meaningful measure of performance which is commonly used by industry analysts, investors, lenders, and rating agencies to analyze operating performance in our industry, perform analytical comparisons, benchmark performance between periods, and measure our performance against externally communicated targets.
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Table of Contents
The following table sets forth the reconciliation of Net income (loss) and EBITDA to its most comparable GAAP financial measurements on a consolidated basis:
|
EBITDA:
|
|
Years Ended December 31,
|
|
2023
|
|
2022
|
|
Net income (loss)
|
|
$
|
(6,289
|
)
|
|
$
|
20,043
|
|
Provision for income taxes
|
|
|
2,009
|
|
|
|
3,408
|
|
Interest expense, net
|
|
|
60,022
|
|
|
|
24,159
|
|
Depreciation and amortization
|
|
|
94,818
|
|
|
|
86,436
|
|
EBITDA
|
|
$
|
150,560
|
|
|
$
|
134,046
|
Liquidity and Capital Resources
Overview
Overall, ASP Acuren believes that available cash and cash equivalents, cash flows generated from future operations, access to capital markets, and availability under its then existing revolving credit facility were adequate to support the cash needs of ASP Acuren for the periods presented. ASP Acuren’s uses of available cash, borrowing capacity, cash flows from operations and financing arrangements were to invest in capital expenditures to support its growth, repay debt maturities as they became due, and complete its integration activities. ASP Acuren’s principal liquidity requirements were for working capital and general corporate purposes, including capital expenditures and debt service, as well as to execute and integrate strategic acquisitions.
Capital Resources
ASP Acuren entered into a credit agreement on December 20, 2019 (“Prior Credit Agreement”). The Prior Credit Agreement provided for a term loan of $430.0 million and a revolving credit facility of $75.0 million. On January 23, 2020, the Prior Credit Agreement was amended, increasing the term loan to $445.0 million. On November 19, 2021, the Prior Credit Agreement was amended, increasing the term loan to $545.0 million under the term loan. On August 15, 2023, the Prior Credit Agreement was amended, increasing the term loan to $715.0 million. The revolving credit facility matures on October 23, 2026, and the term loan matures January 23, 2027. As a result of the Acuren Acquisition on July 30, 2024, the Prior Credit Agreement was paid in full.
Cash Flows
The following table summarizes net cash flows with respect to ASP Acuren’s operating, investing, and financing activities for the periods indicated:
|
|
|
Six Months ended June 30,
|
|
Cash flows provided by (used in):
|
|
2024
|
|
2023
|
|
Operating activities
|
|
$
|
(8,754
|
)
|
|
$
|
(1,737
|
)
|
|
Investing activities
|
|
|
(56,627
|
)
|
|
|
(8,829
|
)
|
|
Financing activities
|
|
|
8,750
|
|
|
|
(32,764
|
)
|
|
Effect of exchange rate on cash
|
|
|
366
|
|
|
|
6,178
|
|
|
Net change in cash and cash equivalents
|
|
$
|
(56,265
|
)
|
|
$
|
(37,152
|
)
|
|
|
|
Year Ended December 31,
|
|
Cash flows provided by (used in):
|
|
2023
|
|
2022
|
|
Operating activities
|
|
$
|
95,809
|
|
|
$
|
39,980
|
|
|
Investing activities
|
|
|
(26,534
|
)
|
|
|
(67,672
|
)
|
|
Financing activities
|
|
|
(49,176
|
)
|
|
|
35,965
|
|
|
Effect of exchange rate on cash
|
|
|
4,377
|
|
|
|
(5,625
|
)
|
|
Net change in cash and cash equivalents
|
|
$
|
24,476
|
|
|
$
|
2,648
|
|
50
Table of Contents
Cash flows attributable to our operating activities
For the six months ended June 30, 2024, net cash used in operating activities was $8.8 million, a decrease of $7.1 million compared to cash used in operating activities of $1.7 million in the six months ended June 30, 2023 period. The change in cash used in operating activities was primarily driven by the decrease in Net income (loss) of $13.9 million and decreases in depreciation and amortization.
For the year ended December 31, 2023, net cash provided by operating activities was $95.8 million, an improvement of 140% compared to cash provided by operating activities of $40.0 million in the 2022 period. Our net cash provided by operating activities was driven by positive working capital changes of $43.6 million, primarily due to the $39.7 million change in Accounts receivable during 2022, which was driven by increased revenue in 2022 and timing of collections.
Cash flows attributable to our investing activities
For the six months ended June 30, 2024, net cash used in investing activities was $56.6 million, consisting of capital expenditures of $11.3 million and $46.3 million due to acquisition of businesses.
For the six months ended June 30, 2023, net cash used in investing activities was $8.8 million, consisting primarily of $9.5 million of capital expenditures.
For the year ended December 31, 2023, net cash used in investing activities was $26.5 million, primarily consisting primarily of capital expenditures of $22.1 million and $6.0 million due to acquisition of businesses.
For the year ended December 31, 2022, net cash used in investing activities was $67.7 million, consisting primarily of $23.1 million of capital expenditures and $45.6 million due to acquisition of businesses.
Cash flows attributable to our financing activities
For the six months ended June 30, 2024, net cash provided by financing activities was $8.8 million, consisting primarily of borrowings under our Credit Agreement Facility of $30.0 million offset by repayments of long-term debt of $16.3 million and principal payments on finance lease obligations of $4.9 million.
For the six months ended June 30, 2023, net cash used in financing activities was $32.8 million, consisting primarily of repayments of long-term debt of $52.7 million and principal payments of finance lease obligations of $5.0 million, offset by net borrowings under our Credit Agreement Facility of $25.0 million.
For the year ended December 31, 2023, net cash used in financing activities was $49.2 million, consisting primarily of distribution to stockholders of $150.0 million, repayments on the revolving line of credit of $81.4 million and $9.9 million of lease obligations, offset by borrowings of $195.0 million.
For the year ended December 31, 2022, net cash provided by financing activities was $36.0 million, consisting primarily of net borrowings under our Credit agreement Facility of $50.0 million, offset by repayments of long-term debt of $5.8 million and principal payments of finance lease obligations of $7.4 million.
Effect of exchange rate changes on cash and cash equivalents
For the six months ended June 30, 2024, and 2023, the effect of foreign exchange rate changes on cash was positive $0.4 million and positive $6.2 million, respectively. The impact of exchange rates on cash and cash equivalents is primarily attributable to fluctuations in U.S. Dollar exchange rate against the Canadian Dollar.
For the years ended December 31, 2023, and 2022, the effect of foreign exchange rate changes on cash was positive $4.4 million and negative $5.6 million, respectively. The impact of exchange rates on cash and cash equivalents is primarily attributable to fluctuations in the U.S. Dollar exchange rate against the Canadian Dollar.
Off-Balance Sheet Arrangements
During the six months ended June 30, 2024 and 2023 and for the years ended December 31, 2023 and 2022, ASP Acuren did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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Table of Contents
Recently Issued Accounting Pronouncements
See Note 1, Summary of Significant Accounting Policies and Practices, of ASP Acuren’s consolidated financial statements for disclosures regarding recently issued accounting pronouncements and the critical accounting policies related to our business.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires ASP Acuren management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the ASP Acuren’s consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. ASP Acuren has identified the following as its critical accounting policies:
Revenue Recognition from Contracts with customers
The majority of ASP Acuren’s revenues are derived from providing services on a time and material basis and are short-term in nature. Payments are generally due within 45 days of services unless otherwise noted. There are no warranties, refunds, or other similar obligations.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. ASP Acuren provides highly integrated and bundled inspection services to its customers. Some contracts have multiple performance obligations, most commonly due to the contract providing for a combination of inspection, engineering or industrial services.
For contracts with multiple performance obligations, ASP Acuren allocates the contract’s transaction price to each performance obligation utilizing several different pricing scenarios and is able to discreetly price out each individual component based on its nature and relation to the overall performance obligation.
Contract modifications are not routine in the performance of contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the services that are provided. In most instances, contract modifications reflect either additions or subtractions to previously identified performance obligations and therefore are not considered distinct.
Performance obligations are satisfied over time as work progresses. Revenue is recognized over time based on time and material incurred to date which best portrays the transfer of control to the customer. ASP Acuren expects any significant remaining performance obligations to be satisfied within one year.
Business Combinations
ASP Acuren accounts for its business combinations under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of the respective acquisition’s future performance and related cash flows, selection of a discount rate and economic lives, and use of Level 3 measurements. While ASP Acuren uses the best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive Income (Loss).
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Table of Contents
Goodwill and Other Intangible Assets
Goodwill represents the excess of purchase price of acquired businesses over the fair value of the underlying net tangible and intangible assets acquired. ASP Acuren evaluates the impairment of its goodwill annually or more frequently when events or changes in circumstances indicate that goodwill may be impaired. Goodwill is required to be evaluated for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete financial information is available. ASP Acuren has two reporting units, United States and Canada, which align with ASP Acuren’s reportable segments.
ASP Acuren first assesses qualitatively, step zero, whether it is necessary to perform step one of the annual impairment tests. An entity is required to perform step one if the entity concludes that it is more likely than not that a reporting unit’s fair value is below its carrying amount (that is, a likelihood of more than fifty percent). When step one indicates that the reporting unit’s carrying value exceeds its fair value, an impairment will be recorded in the period the goodwill is determined to be impaired.
ASP Acuren can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test, and then resume the qualitative assessment in any subsequent period. Qualitative indicators that may trigger the need for annual or interim quantitative impairment testing include, among other things, deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or an expectation of selling or disposing of a portion of a reporting unit. Additionally, a significant change in business climate, a loss of a significant customer, increased competition, a sustained decrease in share price, or a decrease in estimated fair value below book value may trigger the need for interim impairment testing of goodwill associated with one or more reporting units.
Any goodwill impairment is limited to the total amount of goodwill allocated to that reporting unit. The income tax effect associated with an impairment of tax-deductible goodwill is also considered in the measurement of the goodwill impairment. Any goodwill impairment is limited to the total amount of goodwill allocated to that reporting unit. During the years ended December 31, 2023 and 2022, ASP Acuren performed a qualitative analysis. There were no impairment charges in 2023 or 2022. No indications of impairment were identified during six months ended June 30, 2024, and 2023.
ASP Acuren considers the income and market approaches when estimating the fair values of reporting units which requires significant judgement in evaluating economic and industry trends, estimated future cash flows, discount rates, and other factors.
Intangible assets consisting of customer relationships, technology, tradenames, and noncompete agreements, have been recorded based on their fair value at the date of acquisition and are amortized over their economic useful lives which range from 1 to 15 years. Amortization on other intangibles assets is included within Selling, general and administrative expenses.
Valuation of Long-Lived Assets
Long-lived assets, such as property, plant and equipment and purchased identifiable intangible assets that are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of an asset is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No indications of impairment were identified during six months ended June 30, 2024, and 2023 or during the years ended December 31, 2023 and 2022.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured at the enacted income tax rates expected to apply in the taxable year that the asset or liability is expected to be recovered or settled.
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Table of Contents
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of a deferred income tax asset will not be realized. Valuation allowances are provided when management believes, after estimating future taxable income, considering feasible income tax planning opportunities and weighing all facts and circumstances that certain deferred tax assets are not recoverable. ASP Acuren evaluates its tax contingencies and recognizes a liability when it believes it is more-likely-than-not that a liability exists.
ASP Acuren recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.
The Company records interest expenses and penalties on uncertain tax liabilities in the provision for income taxes.
Qualitative and Quantitative Disclosures About Market Risk
ASP Acuren’s future income, cash flows and fair values relevant to financial instruments are dependent upon market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.
Concentration of Credit Risk
Balance sheet items that are subject to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable. We are exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent that account balances exceed federally insured limits. Risk is managed by dealing only with highly rated U.S., UK, and Canadian institutions and we do not believe that we are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
As of and for the six months ended June 30, 2024 and 2023 and as of and for the years ended December 31, 2023 and 2022, no individual customer represented more than 10% of consolidated sales or accounts receivable, and no individual vendor represented more than 10% of purchases or accounts payable.
Interest Rate Risk
ASP Acuren’s debt financing agreement contains floating rate obligations and as a result interest rate changes impact our earnings and cash flows, assuming other factors are held constant. As more fully described in Note 12 — Financial Instruments of ASP Acuren’s consolidated financial statements, we enter into interest rate derivative contracts to manage interest rate risk associated with our long-term debt obligations and to mitigate the negative impact of interest rate fluctuations on our earnings and cash flows.
Foreign Currency Risk
ASP Acuren has foreign operations in Canada and the United Kingdom. Revenue generated from foreign operations represented approximately 42% and 39% of ASP Acuren’s total revenue for the six months ended June 30, 2024 and December 31, 2023, respectively. Substantially all of this revenue was generated from operations in Canada. Revenue and expense related to ASP Acuren’s foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact that fluctuations in exchange rates would have on net income (loss). ASP Acuren is subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies. Such transactions were not material to their operations in the first half of 2024 and fiscal year 2023. Translation gains or losses, which are recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheet, result from translation of the assets and liabilities of ASP Acuren’s foreign subsidiaries into U.S. dollars. For the six months ended June 30, 2024 foreign currency translation losses totaled $12.8 million. For the year ended December 31, 2023 foreign currency translation gains totaled $11.2 million. For the six months ended June 30, 2024, a 10% movement, favorable or unfavorable, in the average U.S. Dollar exchange rates would cause a change in adjusted income from operations of approximately $0.6 million. For the year ended December 31, 2023, a 10% movement, favorable or unfavorable, in the average U.S. Dollar exchange rates would cause a change in income from operations of approximately $2.5 million. We do not currently enter into forward exchange contracts to hedge exposures denominated in foreign currencies.
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Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial information presents the combination of the historical financial information of Acuren Corporation (formerly known as Admiral Acquisition Limited, “Admiral”) and ASP Acuren Holdings, Inc. (“ASP Acuren”), adjusted to give effect to the Acuren Acquisition as defined and summarized below. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.
The unaudited condensed combined balance sheet as of June 30, 2024 combines the historical balance sheets of Admiral and ASP Acuren on a pro forma basis as if the Acuren Acquisition had been consummated on June 30, 2024. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 and the six months ended June 30, 2024 combine the historical statement of operations of Admiral and the historical statement of operations and comprehensive income (loss) of ASP Acuren on a pro forma basis as if the Acuren Acquisition had been consummated on January 1, 2023.
On July 30, 2024, pursuant to the Merger Agreement, Admiral acquired all outstanding equity of ASP Acuren (the “Acuren Acquisition”). The Acuren Acquisition occurred through a merger of Merger Sub, a wholly owned subsidiary of Admiral, with and into ASP Acuren, with ASP Acuren being the surviving corporation. On completion of the Acuren Acquisition, Admiral changed its name to Acuren Corporation (the “Company”). In connection with the closing of the Acuren Acquisition (the “Closing”), Admiral changed its fiscal year end to December 31 following the closing of the Admiral Acquisition. Admiral intends to change its jurisdiction of incorporation from the British Virgin Islands to the State of Delaware.
Following the Acuren Acquisition, the financial statements will present ASP Acuren as the “Predecessor” for all periods prior to the Closing and Acuren Corporation (with ASP Acuren as a wholly owned subsidiary) as the “Successor” for the periods including and after the Closing in accordance with U.S. GAAP and pursuant to the accounting rules and regulations of the SEC.
The Acuren Acquisition was funded with $2.0 billion of cash from a combination of the following sources:
(i) Admiral’s existing cash of approximately $568.0 million;
(ii) equity proceeds of approximately $582.6 million (the “PIPE Financing”) from the issuance of 58.3 million ordinary shares of Admiral at $10.00 per ordinary share;
(iii) gross borrowings of $775.0 million under a term loan facility; and
(iv) approximately $91.8 million in proceeds from the exercise of 36.7 million outstanding Admiral warrants in exchange for 9.2 million ordinary shares at $10.00 per ordinary share (the “Warrant Financing”).
In addition, at the closing of the Acuren Acquisition, the Company entered into a $75.0 million revolving credit facility (the “Revolving Credit Facility”) which was not drawn upon at Closing.
The unaudited pro forma condensed combined financial information is preliminary. It is being furnished solely for informational purposes and it is not necessarily indicative of the combined results of operations that might have been achieved for the periods indicated, nor is it necessarily indicative of the future results of the Company.
The Acuren Acquisition will be accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which will establish a new basis of accounting for all of ASP Acuren’s identifiable assets acquired and liabilities assumed at fair value as of the date control is obtained. The pro forma adjustments and allocation of purchase price are preliminary and are based on management’s current estimates of the fair value of the assets to be acquired and liabilities to be assumed and are based on all currently available information. The areas of the purchase price allocation that are not yet finalized are primarily related to the valuation of: (i) property and equipment; (ii) intangible assets; (iii) lease-related assets and liabilities; and (iv) pre-acquisition commitments and contingencies. Additionally, the purchase price allocation is provisional for income tax-related matters and a final determination of purchase consideration. Management’s estimates of the fair values reflected in the unaudited pro forma condensed combined financial information are subject to change and may differ materially from actual adjustments, which will be based on the final determination of fair values and useful lives.
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Table of Contents
A final determination of fair value will be finalized after giving consideration to relevant information. Any final adjustments may change the allocation of purchase price and could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed combined financial information presented herein. Amounts preliminarily allocated to intangible assets and their associated estimated useful lives may change significantly, which could result in a material increase or decrease in amortization of these intangible assets. Estimates related to the determination of fair value and useful lives of other assets acquired may also change, which could affect the fair value assigned to the other assets and result in a material increase or decrease in depreciation or amortization expense.
The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements of ASP Acuren and Admiral and the accompanying notes, as well as the sections entitled “The Domestication” and “Risk Factors” included elsewhere in this prospectus.
The estimated income tax rate applied to the pro forma adjustments is 24%, the expected statutory rate, and all other tax amounts are stated at their historical amounts. Historical income taxes do not reflect the amounts that would have resulted had Admiral and ASP Acuren filed consolidated income tax returns during the periods presented.
The following unaudited pro forma condensed combined financial information is provided for illustrative purposes only and is based on currently available information and assumptions that management believes are reasonable. The Company’s actual consolidated financial position and consolidated results of operations after the Acuren Acquisition will differ, perhaps significantly, from the pro forma amounts reflected herein due to a variety of factors, including access to additional information, changes in value not currently identified and changes in operating results of Admiral and ASP Acuren following the date of the unaudited pro forma condensed combined financial information.
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Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of June 30, 2024
(in thousands, except share and per share amounts)
|
(dollars in thousands)
|
|
For the period ended June 30, 2024
|
|
Admiral
|
|
ASP
Acuren
|
|
Acquisition
Pro Forma
Adjustments
|
|
Notes
|
|
Financing
Pro Forma
Adjustments
|
|
Notes
|
|
Acuren
Corporation
Pro Forma
Combined
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,036
|
|
$
|
30,796
|
|
|
$
|
(1,187,729
|
)
|
|
a
|
|
$
|
(700,509
|
)
|
|
i
|
|
$
|
97,819
|
| |
|
|
|
|
|
|
|
|
|
(37,900
|
)
|
|
b
|
|
|
754,127
|
|
|
j
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
91,775
|
|
|
c
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
580,192
|
|
|
d
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
561,031
|
|
|
e
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
—
|
|
|
280,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
280,616
|
|
Marketable securities at fair value
|
|
|
561,031
|
|
|
—
|
|
|
|
(561,031
|
)
|
|
e
|
|
|
|
|
|
|
|
|
—
|
|
Prepaid expenses and other current assets
|
|
|
21
|
|
|
19,346
|
|
|
|
4,204
|
|
|
b
|
|
|
|
|
|
|
|
|
23,571
|
|
Total current assets
|
|
|
567,088
|
|
|
330,758
|
|
|
|
(549,458
|
)
|
|
|
|
|
53,618
|
|
|
|
|
|
402,006
|
|
Property and equipment, net
|
|
|
—
|
|
|
115,756
|
|
|
|
81,652
|
|
|
a
|
|
|
|
|
|
|
|
|
197,408
|
|
Operating lease right-of-use assets, net
|
|
|
—
|
|
|
25,079
|
|
|
|
2,451
|
|
|
a
|
|
|
|
|
|
|
|
|
27,530
|
|
Goodwill
|
|
|
—
|
|
|
528,182
|
|
|
|
359,847
|
|
|
a
|
|
|
|
|
|
|
|
|
888,029
|
|
Intangibles assets, net
|
|
|
—
|
|
|
262,915
|
|
|
|
521,085
|
|
|
a
|
|
|
|
|
|
|
|
|
784,000
|
|
Deferred income taxes
|
|
|
—
|
|
|
2,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,368
|
|
Other assets
|
|
|
—
|
|
|
13,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,949
|
|
Total assets
|
|
|
567,088
|
|
|
1,279,007
|
|
|
|
415,577
|
|
|
|
|
|
53,618
|
|
|
|
|
|
2,315,290
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
—
|
|
|
18,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,412
|
|
Accrued expenses and other
current liabilities
|
|
|
641
|
|
|
71,102
|
|
|
|
|
|
|
|
|
|
(576
|
)
|
|
i
|
|
|
71,167
|
|
Derivative liability
|
|
|
1,725
|
|
|
—
|
|
|
|
(1,186
|
)
|
|
d
|
|
|
|
|
|
|
|
|
—
|
| |
|
|
|
|
|
|
|
|
|
(539
|
)
|
|
c
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
—
|
|
|
7,280
|
|
|
|
|
|
|
|
|
|
(7,280
|
)
|
|
i
|
|
|
—
|
|
Current portion of lease obligations
|
|
|
—
|
|
|
17,119
|
|
|
|
(1,713
|
)
|
|
a
|
|
|
|
|
|
|
|
|
15,406
|
|
Total current liabilities
|
|
|
2,366
|
|
|
113,913
|
|
|
|
(3,438
|
)
|
|
|
|
|
(7,856
|
)
|
|
|
|
|
104,985
|
|
Long-term debt, net of current
|
|
|
—
|
|
|
683,528
|
|
|
|
|
|
|
|
|
|
(683,528
|
)
|
|
i
|
|
|
754,127
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
754,127
|
|
|
j
|
|
|
|
|
Non-current lease obligations
|
|
|
—
|
|
|
40,148
|
|
|
|
(654
|
)
|
|
a
|
|
|
|
|
|
|
|
|
39,494
|
|
Deferred income tax liability
|
|
|
—
|
|
|
38,961
|
|
|
|
158,039
|
|
|
a
|
|
|
|
|
|
|
|
|
197,000
|
|
Other liabilities
|
|
|
—
|
|
|
22,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,321
|
|
Total liabilities
|
|
|
2,366
|
|
|
898,871
|
|
|
|
153,947
|
|
|
|
|
|
62,743
|
|
|
|
|
|
1,117,927
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; 5,700,000 shares issued and 5,024,802 shares outstanding
|
|
|
—
|
|
|
50
|
|
|
|
(50
|
)
|
|
f
|
|
|
|
|
|
|
|
|
—
|
|
Treasury stock, 7,769 common shares at cost
|
|
|
—
|
|
|
(1,029
|
)
|
|
|
1,029
|
|
|
f
|
|
|
|
|
|
|
|
|
|
|
Founder Preferred Shares, no par value; unlimited authorized shares; 1,000,000 shares issued and outstanding as of June 30, 2024
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
g
|
|
|
|
|
|
|
|
|
—
|
|
Ordinary Shares, no par value; unlimited authorized shares; 53,975,000 shares issued and outstanding as of June 30, 2024
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
h
|
|
|
|
|
|
|
|
|
—
|
|
Series A Preferred Shares, $0.0001 par value
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
g
|
|
|
|
|
|
|
|
|
—
|
|
Common stock, $0.0001 par value
|
|
|
—
|
|
|
—
|
|
|
|
5
|
|
|
h
|
|
|
|
|
|
|
|
|
12
|
| |
|
|
|
|
|
|
|
|
|
1
|
|
|
c
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
6
|
|
|
d
|
|
|
|
|
|
|
|
|
|
57
Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET — (Continued)
As of June 30, 2024
(in thousands, except share and per share amounts)
|
(dollars in thousands)
|
|
For the period ended June 30, 2024
|
|
Admiral
|
|
ASP
Acuren
|
|
Acquisition
Pro Forma
Adjustments
|
|
Notes
|
|
Financing
Pro Forma
Adjustments
|
|
Notes
|
|
Acuren
Corporation
Pro Forma
Combined
|
|
Additional paid-in capital
|
|
|
557,427
|
|
|
384,023
|
|
|
|
—
|
|
|
a
|
|
|
|
|
|
|
|
|
1,231,107
|
|
| |
|
|
|
|
|
|
|
|
|
(384,023
|
)
|
|
f
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
h
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
92,313
|
|
|
c
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
581,372
|
|
|
d
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated earnings (deficit)
|
|
|
7,295
|
|
|
10,726
|
|
|
|
1,770
|
|
|
a
|
|
|
(9,125
|
)
|
|
i
|
|
|
(33,756
|
)
|
| |
|
|
|
|
|
|
|
|
|
(33,696
|
)
|
|
b
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(10,726
|
)
|
|
f
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
—
|
|
|
(13,634
|
)
|
|
|
13,634
|
|
|
f
|
|
|
|
|
|
|
|
|
—
|
|
|
Total stockholders’ equity
|
|
|
564,722
|
|
|
380,136
|
|
|
|
261,630
|
|
|
|
|
|
(9,125
|
)
|
|
|
|
|
1,197,363
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
567,088
|
|
$
|
1,279,007
|
|
|
$
|
415,577
|
|
|
|
|
$
|
53,618
|
|
|
|
|
$
|
2,315,290
|
|
See accompanying notes to unaudited pro forma consolidated financial information.
58
Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2024
(in thousands, except share and per share amounts)
|
|
|
For the six months ended June 30, 2024
|
|
(dollars in thousands)
|
|
Admiral
|
|
ASP Acuren
|
|
Acquisition
Pro Forma
Adjustments
|
|
Notes
|
|
Financing
Pro Forma
Adjustments
|
|
Notes
|
|
Acuren
Corporation
Pro Forma
Combined
|
|
Service revenue
|
|
$
|
—
|
|
|
$
|
532,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
532,354
|
|
|
Cost of revenue
|
|
|
—
|
|
|
|
395,887
|
|
|
|
9,699
|
|
|
aa
|
|
|
|
|
|
|
|
|
405,586
|
|
|
Gross profit
|
|
|
—
|
|
|
|
136,467
|
|
|
|
(9,699
|
)
|
|
|
|
|
—
|
|
|
|
|
|
126,768
|
|
|
Selling, general and administrative
expenses
|
|
|
1,099
|
|
|
|
102,724
|
|
|
|
19,170
|
|
|
bb
|
|
|
|
|
|
|
|
|
122,292
|
|
| |
|
|
|
|
|
|
|
|
|
|
(701
|
)
|
|
cc
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
|
(1,099
|
)
|
|
|
33,743
|
|
|
|
(28,168
|
)
|
|
|
|
|
—
|
|
|
|
|
|
4,476
|
|
|
Interest expense, net
|
|
|
—
|
|
|
|
33,551
|
|
|
|
|
|
|
|
|
|
889
|
|
|
ff
|
|
|
34,440
|
|
|
Investment income
|
|
|
(16,472
|
)
|
|
|
—
|
|
|
|
16,472
|
|
|
dd
|
|
|
|
|
|
|
|
|
—
|
|
|
Unrealized gain on marketable securities at fair value
|
|
|
1,851
|
|
|
|
—
|
|
|
|
(1,851
|
)
|
|
dd
|
|
|
|
|
|
|
|
|
—
|
|
|
Transaction costs
|
|
|
2,819
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,819
|
|
|
Change in fair value of derivative
instruments
|
|
|
19,877
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,877
|
|
|
Other income, net
|
|
|
—
|
|
|
|
(286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(286
|
)
|
|
(Loss) income before provision for income taxes
|
|
|
(9,174
|
)
|
|
|
478
|
|
|
|
(42,789
|
)
|
|
|
|
|
(889
|
)
|
|
|
|
|
(52,374
|
)
|
|
Income tax expense (benefit)
|
|
|
—
|
|
|
|
7,199
|
|
|
|
(6,760
|
)
|
|
ee
|
|
|
(214
|
)
|
|
ee
|
|
|
225
|
|
|
Net loss
|
|
$
|
(9,174
|
)
|
|
$
|
(6,721
|
)
|
|
$
|
(36,029
|
)
|
|
|
|
$
|
(675
|
)
|
|
|
|
$
|
(52,599
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares and Founder Preferred Shares – basic and diluted
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and Series A Preferred Shares – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.43
|
)
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares – basic and diluted
|
|
|
53,975,000
|
|
|
|
|
|
|
|
67,437,515
|
|
|
gg
|
|
|
|
|
|
|
|
|
|
|
|
Founder Preferred Shares – basic and diluted
|
|
|
1,000,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,412,515
|
|
|
Series A Preferred Shares – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
See accompanying notes to unaudited pro forma consolidated financial information.
59
Table of Contents
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2023
(in thousands, except share and per share amounts)
|
|
|
For the year ended December 31, 2023
|
|
(dollars in thousands)
|
|
Admiral
|
|
ASP
Acuren
|
|
Acquisition
Pro Forma
Adjustments
|
|
Notes
|
|
Financing
Pro Forma
Adjustments
|
|
Notes
|
|
Acuren
Corporation
Pro Forma
Combined
|
|
Service revenue
|
|
$
|
—
|
|
|
$
|
1,050,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,050,057
|
|
|
Cost of revenue
|
|
|
—
|
|
|
|
810,534
|
|
|
|
19,400
|
|
|
aa
|
|
|
|
|
|
|
|
|
829,934
|
|
|
Gross profit
|
|
|
—
|
|
|
|
239,523
|
|
|
|
(19,400
|
)
|
|
|
|
|
—
|
|
|
|
|
|
220,123
|
|
|
Selling, general and administrative expenses
|
|
|
1,425
|
|
|
|
185,022
|
|
|
|
39,027
|
|
|
bb
|
|
|
|
|
|
|
|
|
289,699
|
|
| |
|
|
|
|
|
|
|
|
|
|
(1,431
|
)
|
|
cc
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
62,260
|
|
|
hh
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
3,396
|
|
|
ii
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
|
(1,425
|
)
|
|
|
54,501
|
|
|
|
(122,652
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(69,576
|
)
|
|
Interest expense, net
|
|
|
—
|
|
|
|
60,022
|
|
|
|
|
|
|
|
|
|
9,186
|
|
|
ff
|
|
|
69,208
|
|
|
Investment income
|
|
|
(12,358
|
)
|
|
|
—
|
|
|
|
12,358
|
|
|
dd
|
|
|
|
|
|
|
|
|
—
|
|
|
Unrealized gain on marketable securities at fair value
|
|
|
(5,536
|
)
|
|
|
—
|
|
|
|
5,536
|
|
|
dd
|
|
|
|
|
|
|
|
|
—
|
|
|
Transaction costs
|
|
|
—
|
|
|
|
—
|
|
|
|
33,696
|
|
|
jj
|
|
|
|
|
|
|
|
|
33,696
|
|
|
Other income, net
|
|
|
—
|
|
|
|
(1,241
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,241
|
)
|
|
Income (loss) before provision for income taxes
|
|
|
16,469
|
|
|
|
(4,280
|
)
|
|
|
(174,242
|
)
|
|
|
|
|
(9,186
|
)
|
|
|
|
|
(171,239
|
)
|
|
Income tax expense (benefit)
|
|
|
—
|
|
|
|
2,009
|
|
|
|
(16,498
|
)
|
|
ee
|
|
|
(2,204
|
)
|
|
ee
|
|
|
(16,693
|
)
|
|
Net income (loss)
|
|
$
|
16,469
|
|
|
$
|
(6,289
|
)
|
|
$
|
(157,744
|
)
|
|
|
|
$
|
(6,982
|
)
|
|
|
|
$
|
(154,546
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares and Founder Preferred Shares – basic and diluted
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and Series A Preferred Shares – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1.26
|
)
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares – basic and diluted
|
|
|
53,975,000
|
|
|
|
|
|
|
|
67,437,515
|
|
|
gg
|
|
|
|
|
|
|
|
|
|
|
|
Founder Preferred Shares – basic and diluted
|
|
|
1,000,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,412,515
|
|
|
Series A Preferred Shares – basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
See accompanying notes to unaudited pro forma consolidated financial information.
60
Table of Contents
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note 1. Description of the Transaction
On July 30, 2024, Admiral acquired ASP Acuren. The consideration paid at closing for the Acuren Acquisition was approximately $2.0 billion in cash, including the settlement of approximately $701.0 million of ASP Acuren’s historical indebtedness and the payment of transaction-related expenses. Admiral funded the consideration paid with a combination of cash on hand of $568.0 million, a new term loan facility of $775.0 million, approximately $582.6 million in proceeds from the Private Placement, and approximately $91.8 million of proceeds from an early warrant exercise financing.
Admiral intends to change its jurisdiction of incorporation from the British Virgin Islands to the State of Delaware. As essentially all of Admiral’s income is eliminated in the adjustments to the unaudited pro forma condensed combined financial information, the domestication is not expected to have any material tax or other impact on the unaudited pro forma condensed combined financial information.
Note 2. Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and presents the pro forma results of operations of the combined company based on the historical financial statements of Admiral and ASP Acuren after giving effect to the Acuren Acquisition and the other adjustments described in these notes.
The unaudited pro forma condensed combined balance sheet as of June 30, 2024 combines the unaudited historical balance sheets of Admiral and ASP Acuren as of June 30, 2024 on a pro forma basis as if the Acuren Acquisition had been consummated on June 30, 2024. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 combines the audited historical statement of operations of Admiral and the audited historical statement of operations and comprehensive income (loss) of ASP Acuren for the year ended December 31, 2023 on a pro forma basis as if the Acuren Acquisition had been consummated on January 1, 2023.
The Acuren Acquisition will be accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, which will establish a new basis of accounting for all of ASP Acuren’s identifiable assets acquired and liabilities assumed at fair value as of the date control is obtained. Accordingly, the cost to acquire such interests will be allocated to the underlying net assets of ASP Acuren in proportion to their respective fair values. Admiral is considered the acquirer for financial reporting purposes. Accordingly, the consideration allocated to ASP Acuren’s assets and liabilities will be based upon their estimated preliminary fair values at the effective time of the Acuren Acquisition. The amount of the consideration in excess of the estimated preliminary fair values of ASP Acuren’s assets and liabilities will be recorded as goodwill in the consolidated balance sheet after the completion of the Acuren Acquisition. As of the date of this prospectus, the Company has not completed the detailed valuation work necessary to arrive at the required final determinations of the fair value of ASP Acuren’s assets and liabilities and the related allocation of purchase price. The purchase price allocation is expected to be finalized no later than the quarter ending September 30, 2025.
The areas of the purchase price allocation that are not yet finalized are primarily related to the valuation of: (i) property and equipment; (ii) intangible assets; (iii) lease-related assets and liabilities; and (iv) pre-acquisition commitments and contingencies. Additionally, the purchase price allocation is provisional for income tax-related matters and a final determination of purchase consideration. Accordingly, the unaudited pro forma purchase price allocation is preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The preliminary unaudited pro forma purchase price allocation has been made solely for the purpose of preparing the unaudited pro forma condensed combined financial information.
Increases or decreases in the final fair values of relevant balance sheet amounts will result in adjustments to balance sheet and/or statement of operations until the purchase price allocation is finalized. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation included in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information does not reflect any potential divestitures that may be undertaken after the consummation of the Acuren Acquisition, or any cost savings, operating synergies or enhanced revenue opportunities that may be achieved as a result of the Acuren Acquisition, the costs to integrate the operations of Admiral and ASP Acuren, or the costs necessary to achieve such cost savings, operating synergies and enhanced revenues.
61
Table of Contents
Note 3. Preliminary Purchase Consideration and Purchase Price Allocation
Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. The purchase price allocation is preliminary and based on estimates of the fair value as of June 30, 2024 as well as the estimated purchase consideration that will be subject to final purchase price adjustments in accordance with the terms of the Merger Agreement.
The Company has made certain adjustments to the historical book values of the assets and liabilities of ASP Acuren to reflect preliminary estimates of fair value necessary to prepare the unaudited pro forma condensed combined financial information, with the excess of the purchase price over the fair value of the net assets recorded as goodwill. Upon final completion of the fair value assessment and purchase price consideration, the ultimate purchase price allocation may differ from the preliminary assessment outlined below.
The estimated consideration included in this unaudited pro forma financial information is preliminary and does not include final agreed upon purchase price adjustments related to the closing balance sheet. However, the initial contractual purchase price of $1.85 billion was adjusted for certain preliminary changes in net working capital adjustments and debt-like items to derive the below consideration of $1.88 billion. The following table summarizes the components of the preliminary purchase price, assuming the Acuren Acquisition had closed on June 30, 2024:
|
|
|
Estimated
Consideration
(in thousands)
|
|
Cash consideration
|
|
$
|
1,876,883
|
|
Equity consideration
|
|
|
4,000
|
|
Total estimated consideration
|
|
$
|
1,880,883
|
The following table represents a preliminary allocation of the estimated total consideration to ASP Acuren’s assets and liabilities in the Acuren Acquisition based on the preliminary estimate of their respective fair values:
|
|
|
Preliminary
Estimated
Amount
(in thousands)
|
|
Estimated consideration
|
|
$
|
1,880,883
|
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
30,796
|
|
|
Accounts receivables
|
|
|
280,616
|
|
|
Prepaid and other current assets
|
|
|
19,346
|
|
|
Property, plant and equipment
|
|
|
197,408
|
|
|
Lease assets
|
|
|
27,530
|
|
|
Intangible assets
|
|
|
784,000
|
|
|
Deferred tax asset
|
|
|
2,368
|
|
|
Other assets
|
|
|
13,949
|
|
|
Accounts payable
|
|
|
(18,412
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(70,526
|
)
|
|
Deferred tax liability
|
|
|
(197,000
|
)
|
|
Lease obligations
|
|
|
(54,900
|
)
|
|
Other liabilities
|
|
|
(22,321
|
)
|
|
Total identifiable net assets
|
|
|
992,854
|
|
|
Goodwill
|
|
$
|
888,029
|
|
| |
|
|
|
|
The preliminary unaudited pro forma purchase price allocation has been made solely for the purposes of preparing the unaudited pro forma condensed combined financial information. Estimates of fair value of ASP Acuren’s assets and liabilities are based on discussions with ASP Acuren management, due diligence review in connection with the Acuren Acquisition, and other currently available information. The analysis was performed at an aggregate level and was based on estimates that are reflective of market participant assumptions.
62
Table of Contents
Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The adjustments included in the unaudited pro forma condensed combined balance sheet are as follows:
a. Reflects the purchase consideration payable to the sellers and equity holders of ASP Acuren upon Closing, which includes $4.0 million of equity consideration that was funded through the PIPE financing as discussed in adjustment d, as well as the purchase accounting adjustments made to ASP Acuren’s historical numbers discussed in Note 3, including:
• The recognition of the estimated fair value of acquired identifiable intangible assets based on a preliminary intangible asset appraisal performed in connection with the preliminary allocation of the purchase price.
• The recognition of the estimated fair value of acquired property and equipment based on a preliminary property and equipment appraisal performed in connection with the preliminary allocation of the purchase price.
• The recognition of the estimated goodwill based on the preliminary allocation of the purchase price.
• The recognition of deferred tax liabilities related to the fair value adjustments.
b. Reflects the settlement of Admiral transaction costs that have been incurred or are expected to be incurred in connection with the Acuren Acquisition that have not yet been recognized in the historical periods. This is a non-recurring item. This entry includes the accumulated earnings impact for transaction costs expected to be expensed (refer to adjustment jj) and recognition of a $4.2 million prepaid expense balance related to insurance policies that will be expensed in future periods. Further, as part of the Acuren Acquisition, $11.9 million in seller-related transaction costs will be recognized upon the closing of the Acuren Acquisition as they relate to success-based fees which are contingent upon such closing. These expenses have not been included as an adjustment for pro forma purposes.
c. Reflects the gross cash proceeds of $91.8 million, and reversal of Admiral derivative liability of $0.5 million associated with the exercise of 36.7 million outstanding Admiral warrants into 9.2 million ordinary shares of Admiral at $10.0 per share in connection with the Warrant Financing.
d. Reflects proceeds of $582.6 million from the issuance of 58.3 million ordinary shares of Admiral at $10.0 per share in connection with the PIPE financing, net of $2.4 million in issuance costs, and reversal of Admiral’s derivative liability of $1.2 million associated with these contingent forward contracts. Of the proceeds associated with the PIPE financing, $4.0 million relates to the equity portion of the total estimated consideration.
e. Reflects the liquidation of Admiral’s historical marketable securities of $561.0 million into cash and cash equivalents which are used to fund the Acuren Acquisition.
f. Reflects the removal of the historical equity of ASP Acuren as a result of the Acuren Acquisition.
g. Reflects the conversion, on a one-for-one basis, of Admiral’s historical Founder Preferred Shares into shares of Series A Preferred Stock (par value $0.0001).
h. Reflects the conversion, on a one-for-one basis, of Admiral’s historical ordinary shares into Acuren Delaware common stock (par value of $0.0001).
i. Represents the cash payment of $700.5 million consisting of $699.9 million of principal and $0.6 million of accrued interest related to existing ASP Acuren debt upon consummation of the Acuren Acquisition. This adjustment includes the write-off of $9.1 million of related unamortized deferred financing costs and the recognition of an estimated loss on debt extinguishment recorded in accumulated earnings.
63
Table of Contents
j. Reflects gross proceeds of $775.0 million from Senior Secured Term Facility pursuant to the New Credit Facility, less $20.9 million of debt issuance costs incurred to obtain the New Credit Facility.
The adjustments included in the unaudited pro forma condensed combined statement of operations are as follows:
aa. Represents additional depreciation expense associated with the preliminary estimated increase in fair value of ASP Acuren’s property and equipment using the weighted-average depreciable lives in the following table:
|
|
|
Preliminary
Estimated
Increase
in Fair Value
(in thousands)
|
|
Estimated
Weighted-
Average
Depreciable
Lives
(in years)
|
|
Estimated
Additional
Depreciation
Expense
For Year Ended
December 31,
2023
(in thousands)
|
|
Estimated
Additional
Depreciation
Expense
For Six Months
Ended June 30,
2024
(in thousands)
|
|
Machinery and equipment
|
|
$
|
44,371
|
|
6
|
|
$
|
11,020
|
|
$
|
5,510
|
|
Vehicles
|
|
|
22,313
|
|
3
|
|
|
7,438
|
|
|
3,719
|
|
Buildings
|
|
|
6,023
|
|
22
|
|
|
274
|
|
|
137
|
|
Leasehold improvements
|
|
|
4,263
|
|
7
|
|
|
578
|
|
|
289
|
|
Computer and office equipment
|
|
|
269
|
|
3
|
|
|
90
|
|
|
44
|
|
Total
|
|
$
|
77,239
|
|
|
|
$
|
19,400
|
|
$
|
9,699
|
bb. Reflects the recognition of additional amortization expense associated with the preliminary estimated fair value of ASP Acuren’s intangible assets net of the removal of historical amortization related to intangible assets from previous acquisitions using the weighted-average useful lives in the following table:
|
|
|
Preliminary
Estimated Fair
Value
(in thousands)
|
|
Estimated
Weighted-
Average Useful
Lives
(in years)
|
|
Estimated
Amortization
Expense
For Year Ended
December 31,
2023
(in thousands)
|
|
Estimated
Amortization
Expense
For Six Months
Ended
June 30, 2024
(in thousands)
|
|
Customer Relationships
|
|
$
|
520,000
|
|
14
|
|
$
|
37,143
|
|
|
$
|
18,571
|
|
|
Technology
|
|
|
150,000
|
|
5
|
|
|
30,000
|
|
|
|
15,000
|
|
|
Trademark
|
|
|
114,000
|
|
10
|
|
|
11,300
|
|
|
|
5,650
|
|
|
Total
|
|
|
784,000
|
|
|
|
|
78,443
|
|
|
|
39,221
|
|
|
Less: historical amortization
|
|
|
|
|
|
|
|
(39,416
|
)
|
|
|
(20,051
|
)
|
|
Pro forma adjustment
|
|
|
|
|
|
|
$
|
39,027
|
|
|
$
|
19,170
|
|
cc. Reflects the net impact of the elimination of the historical management consulting fees, consisting of $3.4 million and $1.7 million during year ending December 31, 2023 and six month ending June 30, 2024, respectively, paid by ASP Acuren to American Securities, LLC which would not have been incurred had the Acuren Acquisition been consummated on January 1, 2023. Also reflects the new management consulting fees, consisting of $2.0 million and $1.0 million during year ending December 31, 2023 and six month ending June 30, 2024, respectively, that would have been paid to Mariposa Capital, LLC had the Acuren Acquisition been consummated on January 1, 2023.
dd. Reflects the elimination of Admiral’s investment earnings and interest income attributable to investments made prior to the Acuren Acquisition that would not have been earned if the Acuren Acquisition had been consummated on January 1, 2023, as these investments will be liquidated and the resulting cash on hand will be used to fund the Acuren Acquisition.
ee. Reflects the adjustment to the Company’s income tax expense resulting from impact of the acquisition-related pro forma adjustments expected to be subject to income tax for the year ended December 31, 2023 and the period ended June 30, 2024. The estimated combined U.S. federal and state statutory income tax rate applied to these pro forma adjustments is 24% for the year ended December 31, 2023 and for the period ended June 30, 2024.
64
Table of Contents
ff. Reflects interest expense on the Senior Secured Term Facility of $775.0 million, including the estimated amortization of debt issuance costs, less the removal of historical interest expense related to the payoff of ASP Acuren’s historical debt balance. The pro forma balance sheet additionally reflects a reduction to accumulated earnings of $9.1 million and the corresponding write-off of unamortized deferred financing costs that occurred on the closing of the Acuren Acquisition. Such amount has not been reflected in the unaudited pro forma condensed combined statement of operations as the loss on extinguishment is non-recurring and relates to the predecessor reporting period occurring after June 30, 2024.
The pro forma adjustment to record interest expense assumes the notes were entered into on January 1, 2023 and were outstanding for the entire year ended December 31, 2023 and period ended June 30, 2024. The initial interest rates assumed for purposes of preparing this pro forma financial information is 4.82% based on the Secured Overnight Financing Rate (the “SOFR rate”) plus a margin of 3.5%.
The Company did not draw against the Revolving Credit Facility (other than the issuance of standby letters of credit) upon Closing. Pro forma interest expense includes a 0.5% annual commitment fee on the unused portion of the Revolving Credit Facility. Total expected debt issuance costs of $20.9 million will be amortized using the effective interest method over the 7-year term of the debt. The following adjustments have been recorded to interest expense:
|
|
|
Year Ended
December 31,
2023
(in thousands)
|
|
Six Months
Ended June 30,
2024
(in thousands)
|
|
Estimated interest expense – Term Facility
|
|
|
64,237
|
|
|
|
31,877
|
|
|
Commitment fee – Revolving Facility
|
|
|
375
|
|
|
|
188
|
|
|
Amortization of debt issuance costs
|
|
|
3,073
|
|
|
|
1,521
|
|
|
Total pro forma interest expense
|
|
$
|
67,685
|
|
|
$
|
33,586
|
|
|
Less: historical interest
|
|
|
(58,499
|
)
|
|
|
(32,697
|
)
|
|
Pro forma adjustment
|
|
$
|
9,186
|
|
|
$
|
889
|
|
As the interest rate is variable, actual interest expense may differ from the amounts assumed in the pro forma financial statements. A 1/8 of a percent point increase or decrease in the final interest rates on the Term Facility would result in a change in interest expense of approximately $1.0 million and $0.5 million for the year ended December 31, 2023 and the period ended June 30, 2024, respectively.
gg. The unaudited pro forma weighted average number of basic and diluted shares outstanding are calculated using Admiral’s historical weighted average shares outstanding for the year ended December 31, 2023 and for the period ended June 30, 2024, plus the issuance of additional shares in connection with the Acuren Acquisition. The number of Admiral ordinary shares issued is as follows:
|
|
|
Basic and
Diluted
|
|
Issuance of Admiral ordinary shares – Private Placement1
|
|
58,259,984
|
|
Issuance of Admiral ordinary shares – Warrant Financing2
|
|
9,177,531
|
|
Pro forma adjustment
|
|
67,437,515
|
Immediately upon close of the Acuren Acquisition, all Admiral ordinary shares convert, on a one-for-one basis, into Acuren Delaware common stock (par value of $0.0001). and all Admiral Founder Preferred Shares convert, on a one-for-one basis, into shares of Series A Preferred Stock (par value $0.0001) — refer to adjustments g and h.
As the Acuren Acquisition is reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted earnings per share assumes that the shares issuable relating to the Acuren Acquisition were outstanding since January 1, 2023. As the unaudited
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pro forma condensed combined statement of operations is in a net loss position, any potentially dilutive instruments would be anti-dilutive and thus these instruments have been excluded from the computation. Admiral’s Founder Preferred Shares represent a class of ordinary shares and share in losses with holders of ordinary shares. The Company has applied the two-class method by allocating losses among holders of the ordinary shares and Founder Preferred Shares on a pro rata basis for the purpose of calculating pro forma basic and diluted net loss per share.
hh. Reflects the share-based compensation expense related to the fair value of the dividend on Admiral’s Founder Preferred Shares. The Founder Preferred Shares are entitled to an annual dividend after the completion of an acquisition. The right to the dividend was triggered upon Closing of the Acuren Acquisition and the related share-based compensation expense was recognized.
ii. Reflects the adjustment to record share-based compensation expense for existing ASP Acuren stock option awards at the close of the transaction. This adjustment consists of $3.4 million in compensation expense for the amount of cash payment in excess of the acquisition-date fair value of the ASP Acuren stock options with market conditions for the US Tranche C stock options that were removed and were immediately cash settled at the close of the transaction. This is a non-recurring item.
Further, as part of the Acuren Acquisition, $27.8 million in compensation expense will be recognized in the pre-acquisition period, as a result of ASP Acuren stock options meeting existing service and/or performance vesting conditions as well as modification made to stock options of a member of the board of directors at ASP Acuren. This expense will not be reflected as a pro forma adjustment as it is not an expense of Admiral.
jj. Reflects the expense recognized for buyer transaction costs that have been incurred or are expected to be incurred in connection with the Acuren Acquisition that have not yet been recognized in the historical periods. This is a non-recurring item.
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BUSINESS
In this section, “we,” us,” and “our” refer to Acuren Corporation.
History
We were incorporated in 2022 under the laws of the British Virgin Islands for the purpose of acquiring a target company or business. On July 30, 2024, we acquired ASP Acuren, a market leading provider of asset integrity solutions and industrial specialty services, and we changed our name to Acuren Corporation. ASP Acuren was founded in 1991 as an inspection company in Longview, Texas. For the year ended December 31, 2023, ASP Acuren generated approximately $1.05 billion of revenue.
Our Business
We are a leading provider of critical asset integrity services. We operate primarily in North America serving a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. We provide these essential and often compliance-mandated (often at customer locations) services in the industrial space and are focused on the recuring maintenance needs of our customers.
The work we do fits in the service category referred to as Testing, Inspection and Certification (TIC). These activities include several Nondestructive Testing (NDT) techniques such as radiography, ultrasonic testing, magnetic particle inspection, penetrant testing, and visual inspection. NDT activities include inspection and evaluation of industrial equipment through various technology-enabled methods to ensure asset integrity, avoid costly accidents and comply with regulatory requirements without destroying the asset or component. Given the amount of activity required at heights in the industrial space, we provide market leading RAT solutions to reach difficult areas without scaffolding. The work on ropes at heights extends beyond inspection and testing to include industrial trades such as insulation, coatings and blasting, welding, pipe fitting, hoisting and rigging, and electrical services. We offer these trades in a niche way where RAT solutions are optimal (cost efficient and/or schedule enhancing) and where we can provide quality services without compromising safety. Our TIC service also includes support from consulting engineers with in-lab destructive testing capabilities. Our highly specialized materials engineers support failure investigation, material selection, corrosion engineering, welding engineering, fracture mechanics, destructive testing, and chemical analysis.
We are headquartered in Tomball, Texas and operate from approximately 119 service centers and approximately 22 engineering and lab facilities. We operate in two geographical segments, the U.S. and Canada, and also have limited operations located in the United Kingdom. As of September 18, 2024, we had 6,265 employees, approximately 5,000 of whom are engineers and technicians. We have recurring revenue and repeat business from our diversified long-standing customers across a variety of end markets. We believe the essential nature of our work provides stable and predictable cash flows. Organic growth is enhanced as assets and infrastructure age, requiring additional investment to ensure compliance and safe operation. Our engineers and technicians play an important role in the life extension of industrial assets. Contractual arrangements and master service agreements have terms ranging from a few days to five years. Substantially all of our revenue is derived from services contracted on a time and materials basis.
Our principal executive offices are located at 14434 Medical Complex Drive, Suite 100, Tomball, TX 77377, our telephone number is (800) 218-7450 and we maintain a website with the address www.acuren.com. Our website is not incorporated by reference into this registration statement.
Our Industry
General
Asset integrity plays a crucial role in assuring the protection and reliability of critical infrastructure. As an asset integrity solutions provider, we seek to maximize the uptime and safety of critical infrastructure, by helping customers to detect, locate, mitigate, and prevent damages such as corrosion, cracks, leaks, manufacturing flaws and other concerns that could lead to failure and adversely impact normal operations.
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NDT is a prominent solution in the asset integrity industry due to its ability to detect defects without compromising the structural integrity of the materials or equipment being inspected. Traditionally, the supply of NDT services has been provided by many relatively small vendors that offer a narrow array of services in a more localized geographic region. A trend has emerged for customers to increasingly engage with larger service providers capable of a broader spectrum of tech enabled services plus the ability to staff outages that require a significant number of resources.
Due to these trends, those vendors offering integrated solutions, scalable operations, skilled personnel and a global footprint are expected to have a distinct competitive advantage. Moreover, this scale advantage allows sharing of resources across multiple offices to service customers and optimize utilization.
Key Trends of the Asset Integrity Industry
We believe that the following represent key dynamics of the asset protection industry and that the market available to us will continue to grow as these macro-market trends continue to develop:
Digital Transformation of Asset Protection. Plants in the industrial space are recognizing the need to evolve their traditional, paper-based mechanical integrity programs in favor of digitized solutions. The rise of big data intelligence, and our data analytical solutions offerings, provide our customers with actionable insights from raw asset integrity data. The growing digitization of asset integrity information provides opportunities for contractors with a wide range of expertise and integrated data platforms to provide customers with analytical solutions to help customers maximize uptime while controlling costs.
Extending the Useful Life of Aging Infrastructure. Due to the prohibitive costs and challenges of building new infrastructure, many companies have chosen to extend the useful life of existing assets, resulting in the significant and increased utilization of existing infrastructure in our target markets. Because aging infrastructure requires more frequent inspection and maintenance relative to new infrastructure, companies and public authorities continue to utilize asset protection providers to ensure their aging infrastructure assets continue to operate effectively. We provide an essential service in the entire life cycle of an asset with increasing attention and importance in life extension engineering.
Outsourcing of Non-Core Activities and Technical Resource Constraints. Due to the increasing sophistication and automation of NDT programs, increasing governmental regulation and a decreasing supply of skilled professionals, companies are increasingly outsourcing NDT to third-party providers with advanced solution portfolios, engineering expertise and trained workforces. Many of these field service technicians exhibit specialized skills so customers rely on service providers that can supply the right mix of craft at the right time.
Increasing Use of Advanced Materials. Customers in various target markets –– particularly aerospace and defense –– are increasingly utilizing advanced materials, such as composites and other unique technologies in their assets. These materials often cannot be tested using traditional NDT techniques. We believe that demand for more advanced testing and assessment solutions will increase as the utilization of these advanced materials increases during the design, manufacturing, operating and quality control phases. Newer industries, such as wind power, use materials that do not have a long history of proven resilience with a higher instance of early life failure or systemic flaws which require additional inspections.
Meeting Safety Regulations. Owners and operators of industrial facilities, particularly those with pressurized equipment, face strict government regulations and more stringent process safety enforcement standards. Failure to meet these standards can result in significant financial liabilities, increased scrutiny by government and industry regulators, higher insurance premiums and tarnished corporate brand value. As a result, these owners and operators are seeking highly reliable asset integrity suppliers with a track record of assisting customers in meeting increasingly stringent regulations. Our customers require support in devising mechanical integrity programs that meet regulatory compliance standards and enable enhanced safety and uptime at their facilities.
Expanding Pipeline Integrity Regulations. The United States Pipeline & Hazardous Materials Safety Administration’s “Mega Rule” adopted in October 2019 expands pipeline integrity regulations on more than 500,000 miles of pipelines that carry natural gas, oil and other hazardous materials throughout the United States. Some of these requirements will take operators decades to fulfill. These regulations require inspection and integrity data records throughout a pipeline’s lifetime to be reliable, traceable, verifiable, and complete, increasing the demand for integrated inspection, engineering, monitoring, and data management and analysis solutions.
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Our Competitive Strengths
We believe the following competitive strengths contribute to our being a leading provider of asset integrity solutions and will allow us to further capitalize on growth opportunities in the industries in which we operate:
Comprehensive Provider for Asset Integrity Solutions. We believe we have one of the most comprehensive and broad asset integrity service offerings, which positions us to be a leading provider for our customers’ asset integrity requirements. Particularly, our ability to conduct services without outsourcing repair work to third parties provides our customers with efficient solutions, fast turnout and minimal shutdown time. In addition, our engineers are able to support our customers with expertise in materials selection, fitness for purpose calculations, failure analysis, reliability plans, mechanical testing, chemical analysis, and life extension services.
Technician Availability and Expertise Across Markets. We believe that our technicians provide us with a competitive advantage because of their expertise and industry-specific knowledge. Not only do our technicians consistently provide quality and timely services, but their industry-specific expertise allows them to support our customers with programs specifically tailored to the industry in which they operate. We also have a deep network of qualified technicians with the ability to embed teams at our customers’ sites and ramp up our testing services as needed to meet surge demand during turnarounds.
Long-Standing Trusted Provider to a Diversified and Growing Customer Base. We have become a trusted partner to a large and growing customer base across numerous markets through our proven, decades-long track record of quality and safety. Our customers include some of the largest and most well-recognized firms in the oil and gas, chemicals, power generation and transmission and aerospace and defense industries.
Technological Research and Development. The TIC industry continues to move towards more advanced, automated solutions, requiring service providers to find safer and more cost-efficient inspection techniques. We believe that we remain ahead of the technological curve by connecting our practical industry expertise with suppliers of equipment and technology. Some of the advanced inspection technologies developed by our advanced inspectors and subject matter experts (SME) are used to provide advanced solutions for challenging requirements like heights, high temperatures, complex materials, and unusual geometries.
Experienced Management Team. Our management team has a track record of asset protection organizational leadership — they are focused on quality services delivered in a timely, safe and cost-effective manner. These individuals also have successfully driven operational growth organically and through acquisitions.
Our Growth Strategy
By executing a multi-faceted growth strategy, we believe that we are positioned to maintain and grow our competitive advantage in the asset integrity management industry and achieve significant market expansion.
Market Growth Alignment. We aim to grow in alignment with the asset integrity management market, which we believe is projected to grow at a compound annual growth rate of approximately 5% from 2023 to 2030.
Increasing Wallet Share. We are focused on deepening relationships within our existing customer base. We believe we have a proven track record of increasing our share of provided services to our existing customers with customers expected to increase their usage of our services in the coming years.
Acquisition of New Customers and Sites. We expect to continue to increase our customer and site footprint by securing new business at a rate that outpaces market growth.
Expansion of TIC services. We plan to continue to broaden our TIC services by enhancing our core NDT capabilities and expanding our advanced inspection technology and capabilities. We also plan to further penetrate our RAT activities by disrupting scaffold use in a number of end markets.
Mergers and Acquisitions. Building on our history of successful acquisitions, including companies such as Versa Integrity Group, Inc., Premium Inspections & Testing Group, Suspendum Rope Access Inc., Complete Wind Corporation, and Anamet, Inc., we plan to continue pursuing merger and acquisition opportunities to facilitate growth.
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We are focused on sourcing merger and acquisition targets. We review many potential strategic opportunities and typically complete a small number of “tuck in” acquisitions each year. These are generally funded by free cash flow generated from operations. We focus our efforts on companies within our space, with some consideration to acquisitions to expand into complimentary businesses or offer additional capabilities, provided they are compatible with our culture (safety, quality). We evaluate potential merger and acquisition opportunities primarily based on the anticipated growth the transaction would provide, the purchase price, our ability to integrate and operate the acquired business and our ability to scale any complimentary businesses or new capabilities through our network. Potential transactions must be accretive to stockholders. While we expect to continue to execute on this strategy, we do not have binding agreements or commitments for any material acquisitions at this time.
Our Clients
Our highly diversified and long tenured client based operates in a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. Our largest clients are under long-term master servicing agreements.
Generally, clients are billed on a time and materials basis, although a small portion of work may be performed at unit rates or on a fixed-price contract. Services are usually performed pursuant to purchase orders issued under written client agreements. While most purchase orders provide for the performance of a single job, some provide for services to be performed on a run-and-maintain basis. Substantially all our agreements and contracts may be terminated by either party on short notice. The agreements generally specify the range of services to be performed and the hourly rates for labor, supplies and equipment. While many contracts cover specific plants or locations, we also enter multiple-site regional or national contracts that cover multiple plants or locations.
Sources and Availability of Raw Materials
We provide skilled labor and in general we do not manufacture or sell products. Our technicians use equipment that is readily available from several suppliers. We also use consumables such as film, penetrant, and polishing media. We have long relationships and preferred pricing and terms with many industrial suppliers of equipment and consumables. Shortages of equipment, consumables and vehicles have occurred, but such shortages have been rare and short term.
Intellectual Property
Our success depends, in part, on our ability to maintain and protect our proprietary technology and to conduct our business without infringing on the proprietary rights of others. We utilize a combination of intellectual property safeguards, including patents, copyrights, trademarks and trade secrets, as well as employee and third-party confidentiality agreements, to protect our intellectual property. Our trademarks and service marks provide us and our solutions with a certain amount of brand recognition in our markets. We do not consider any single patent, trademark or service mark material to our financial condition or results of operations.
Seasonality and Cyclicality
Our revenue and results of operations can be subject to seasonal and other variations. These variations are influenced by weather, customer spending patterns, bidding seasons, project schedules, holidays, and the timing of outages and non-recurring projects. Typically, our revenue is lowest at the beginning of the year and during the winter months in North America because of persistent cold, snowy, or wet conditions. Revenue is generally higher during the spring and fall months, due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate. In the fourth quarter, many projects tend to be completed by customers seeking to spend their capital budgets before the end of the year, which generally has a positive effect on revenue. However, the holiday season and inclement weather can cause delays, which can reduce revenue and related costs on affected projects.
Additionally, the industries we serve can be cyclical. Fluctuations in end-user demand within those industries, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large construction and installation projects can create fluctuations in revenue.
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Competitive Environment
We operate in industries that are highly competitive and fragmented. There are relatively few barriers to entry in many of the industries in which we operate, and as a result, any organization with adequate financial resources and access to technical expertise could become a competitor. We compete with a number of companies, ranging from small, owner-operated businesses operating in narrow geographic regions to large companies with national scale and significant financial, technical, and marketing resources. The national or regional firms that compete with us include (i) with respect to our NDT activities, Mistras Group, Inc., TEAM, Inc., SGS SA, Applus Services S.A., Intertek Group plc, IRIS NDT, PROtech Lab Corp. and Pro-Surve Tech Services, LLC, (ii) with respect to our RAT activities, Mistras Group, Inc., TEAM, Inc., Global Rope Access Inc., Apache Industrial Services, Inc. and Industrial Access, Inc. and, (iii) with respect to our engineering support, Intertek Group plc, Mistras Group, Inc., IRIS NDT, and SGS SA.
We compete based on a variety of factors, including price, service, technical expertise and experience, quality, safety performance, response time and reputation for customer service. A portion of our revenue is derived from agreements with customers and price is often an important factor in the bid process for such work. However, we believe our customers also consider a variety of other factors, including those described above, when selecting a service provider, and we believe that our technical capabilities, broad geographic reach and skilled labor force enable us to be competitive.
Government Regulation and Environmental Matters
A significant portion of our business activities is subject to foreign, federal, state and local laws and regulations. These regulations are administered by various foreign, federal, state and local health and safety and environmental agencies and authorities, including OSHA of the U.S. Department of Labor and the EPA. Failure to comply with these laws and regulations may involve civil and criminal liability. From time to time, we are also subject to a wide range of reporting requirements, certifications and compliance as prescribed by various federal and state governmental agencies. Expenditures relating to such regulations are made in the normal course of our business and are neither material nor place us at any competitive disadvantage. We do not currently expect that compliance with such laws and regulations will require us to make material expenditures. We believe we have all required licenses to conduct our business activities and are in substantial compliance with applicable regulatory requirements. If we fail to comply with applicable regulations, we could be subject to substantial fines or revocation of our operating licenses.
We are subject to various national, state, and local labor and employment laws and regulations which govern minimum wage and hour requirements, overtime, working conditions, mandatory benefits, health and social insurance, statutory notice periods and other employment-related matters, duties and obligations. Additionally, a large portion of our business uses labor that is provided under collective bargaining agreements or is subject to works council processes. As such, we are subject to national and local laws and regulations related to unionized labor and collective bargaining. As of December 31, 2023, approximately 60% of our Canada employees were covered by collective bargaining agreements.
We also are subject to various environmental laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, liabilities can be imposed for cleanup of properties, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. The presence of contamination from such substances or wastes could interfere with ongoing operations or adversely affect our business. In addition, we could be held liable for significant penalties and damages under certain environmental laws and regulations. Our contracts with customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services. From time to time, we may incur costs and obligations related to environmental compliance and/or remediation matters.
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Human Capital
Employees
As of September 18, 2024, we had 6,265 (5,497 permanent and 768 temporary) employees of which 3,229 (3,182 permanent and 47 temporary) employees are located in the United States, and 3,036 (2,315 permanent and 721 temporary) employees are located in Canada. Of our 6,265 employees, 1,181 employees were represented by unions and were subject to various collective bargaining agreements. Certain of our unionized employees have participated in strikes and work stoppages in the past, and we cannot be certain that strikes or work stoppages will not occur in the future.
Health, Safety and Training
We believe excellent health and safety performance is no accident. It requires focus, accountability and most importantly deliberate action from management. We have developed safety management systems that include established procedures and policies focused on reducing risk, managing incidents, monitoring and measuring of key performance indicators and a focus on continuous improvement. We believe we have created a safety culture which exceeds industry standards and focuses on the behaviors that keep our employees and the public safe with the belief that all accidents are preventable. We utilize the International Oil and Gas Producers life safety rules as these life safety rules are the best-in-class standards for all types of industry. Our safety programs are fully integrated within all operations across our company and meet all applicable government regulations and industry specific standards. Our employees receive a full suite of training tailored to employee needs and the training exceeds industry minimum standards for each type of work.
Properties
We lease our corporate headquarters in Tomball, Texas, United States and we own and lease other facilities throughout the United States, Canada and the United Kingdom where we conduct business. Our facilities include offices, warehouses, storage, maintenance shops, engineering labs and training and educational facilities. As of July 30, 2024, we owned six facilities and leased 134 facilities. We believe that our existing facilities are sufficient for our current needs.
Legal Proceedings
We are subject to certain claims and lawsuits arising in the normal course of business. We maintain various insurance coverages to minimize financial risk associated with these claims. We have estimated and provided accruals for probable losses and related legal fees associated with certain litigation in our consolidated financial statements. While we cannot predict the outcome of these proceedings, we believe any liability arising from these matters individually and in the aggregate will not have a material effect on our operating results, cash flows or consolidated financial condition, after giving effect to provisions already recorded.
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MANAGEMENT AND CORPORATE GOVERNANCE
Board of Directors
Upon consummation of the Domestication, the bylaws of Acuren Delaware will permit our Board of Directors to set the size of the Board of Directors at not less than one director. Our Board of Directors currently consists of eight directors. For the size and scope of our business and operations, we believe a board of approximately this size is appropriate as it is small enough to allow for effective communication among the members but large enough so that we get a diverse set of perspectives and experiences around our board room. The Acuren Delaware bylaws will provide that, in uncontested elections, directors will be elected by a majority of the votes cast, and in contested elections, directors will be elected by a plurality of the votes cast.
Upon consummation of the Domestication, each director on our Board of Directors will serve a one-year term or until their successor has been duly elected and qualified, subject to their earlier death, resignation, disqualification or removal. Pursuant to the DGCL and our bylaws, in general, any vacancies on our Board of Directors resulting from death, retirement, resignation, disqualification, removal or other cause may be filled only by an affirmative vote of a majority of the remaining directors then in office, although less than a quorum, or by a sole remaining director. Our current directors are as follows:
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Name
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Age
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Sir Martin E. Franklin*
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60
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Robert A.E. Franklin*
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33
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Antoinette C. Bush
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67
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Rory Cullinan†
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65
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Elizabeth Meloy Hepding
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47
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Peter A. Hochfelder
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62
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James E. Lillie
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63
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Talman B. Pizzey
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59
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Upon the consummation of the Acuren Acquisition, Thomas V. Milroy and Melanie Stack resigned from our Board of Directors and Messrs. Hochfelder, Lillie and Pizzey and Ms. Bush and Ms. Hepding joined our Board of Directors.
We believe that each of our directors possesses the experience, skills and qualities to fully perform his or her duties as a director and contribute to our success. Our directors were nominated because we believe each is of high ethical character, highly accomplished in his or her field with superior credentials and recognition, has a reputation, both personal and professional, that is consistent with our image and reputation, has the ability to exercise sound business judgment, and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Our directors as a group complement each other and each of their respective experiences, skills and qualities so that collectively the Board operates in an effective, collegial and responsive manner. Each director’s principal occupation and other pertinent information about particular experience, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director, appears on the following pages.
Sir Martin E. Franklin is a co-founder of Admiral and has served as a director since our inception in December 2022. Sir Martin also has served as a director of APi Group Corporation since September 2017 and as Co-Chair of APi Group Corporation since October 2019. Sir Martin is the founder and Chief Executive Officer of Mariposa Capital, LLC, and Chairman and controlling shareholder of Sweet Oak, a diversified platform for brand consumable products, which includes Royal Oak Enterprises, LLC, which Sir Martin has been the controlling shareholder of since July 2016, and Whole Earth Brands. Sir Martin is also founder and Executive Chairman of Element Solutions Inc, a specialty chemicals company, and has served as a director since its inception in April 2013, co-founder and co-chairman of Nomad Foods Limited, a leading European frozen food company, and has served as a director since its inception in April 2014. Sir Martin was the co-founder and Chairman of Jarden Corporation (“Jarden”) from 2001 until April 2016 when Jarden merged with Newell Brands Inc (“Newell”) serving also as its CEO from 2001 to 2011 and its Executive Chairman from 2011-2016. Prior to founding Jarden
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in 2001, between 1992 and 2000, Sir Martin served as the Chairman and/or Chief Executive Officer of three public companies: Benson Eyecare Corporation, an optical products and services company; Lumen Technologies, Inc., a holding company that designed, manufactured and marketed lighting products; and Bollé Inc., a holding company that designed, manufactured and marketed sunglasses, goggles and helmets worldwide.
We believe Sir Martin’s qualifications to serve on our Board of Directors include his leadership, extensive experience as a member of other corporate boards and his knowledge of public companies.
Robert A.E. Franklin is a co-founder of Admiral and has served as a director since our inception in December 2022. Mr. Franklin currently serves on the Board of Sweet Oak, a diversified platform for brand consumable products, which includes Royal Oak Enterprises, LLC and Whole Earth Brands, and was a director of Double Diamond Distillery LLC from June 2017 to December 2021. Prior to joining Mariposa Capital in November 2016, he served as an investment associate at TOMS Capital, a New York-based family office, from September 2014 to September 2016 and an investment banking analyst at Barclays Capital, focusing on technology, media and telecommunications from June 2013 to August 2014. Mr. Franklin received a B.A. in communications from the University of Pennsylvania.
We believe Mr. Franklin’s qualifications to serve on our Board of Directors include investment experience and his prior board experience.
Antoinette C. Bush has served as one of our directors since July 2024. Ms. Bush also is currently a Senior Advisor to News Corp and, from 2013 to 2022, Ms. Bush served as the Executive Vice President and Global Head of Government Affairs for News Corp. Ms. Bush has also served as a director of Ares Management Corporation since 2019. Prior to joining News Corp, Ms. Bush was a partner at Skadden, Arps, Slate, Meagher, & Flom LLP. Ms. Bush served as Executive Vice President of Northpoint Technology Ltd from 2001 to 2003 where she led legal and regulatory strategy. Ms. Bush also served as Senior Counsel to the Communications Subcommittee of the U.S. Senate Committee on Commerce, Science, and Transportation where she worked on numerous bills, including the landmark Cable Act of 1992. Ms. Bush currently chairs the board of directors of The HistoryMakers. Ms. Bush also previously served on the board of directors of Radius Global Infrastructure, Inc. (f/k/a Digital Landscape Group, Inc.) from 2020 to 2023. Ms. Bush received her B.A. from Wellesley College and her J.D. from Northwestern University Pritzker School of Law.
We believe Ms. Bush’s qualifications to serve on our Board of Directors include her board experience and her legal experience.
Rory Cullinan has served as one of our directors since our inception in December 2022. Mr. Cullinan currently serves on the board of directors of Cervecera CCU Chile Limitada and Embotelladoras Chilenas Unidas S.A. and on the advisory board of Delancey Real Estate Asset Management Limited, to which he was appointed in 2007. From September 2017 to October 2019, Mr. Cullinan also served on the board of J2 Acquisition Limited (the vehicle that became APi Group Corporation). From August 2009 until March 2015, Mr. Cullinan was an executive officer of various companies within the Royal Bank of Scotland Group, during which time he was Chief Executive Officer of both the Non-Core Division and Asset Protection Scheme and the Capital Resolution Group, and subsequently Executive Chairman of the Corporate and Institutional Banking (“CIB”) and Capital Resolution Group. Whilst Executive Chairman of the CIB and Capital Resolution Group, Mr. Cullinan led the $3 billion IPO of Citizens Financial Group, Inc. From August 2007 until 2009, Mr. Cullinan was a board member of the Renaissance Group, during which the Renaissance Group established the then largest private equity fund in Russia for $600 million. Mr. Cullinan has previously served as an executive director of the Royal Bank of Scotland Group plc from 2001 until 2005. He was the Head of Financial Services at Permira Advisors LLC from 2005 until 2006.
We believe Mr. Cullinan’s qualifications to serve on our Board of Directors include his executive and board experience.
Elizabeth Meloy Hepding has served as one of our directors since July 2024 and has served as the senior vice president of strategy and corporate development at Ingersoll Rand Inc. (NYSE: IR) since July 2021. Prior to that, Ms. Hepding served as vice president, corporate development at PurposeBuilt Brands, Inc. from September 2019 to July 2021. Prior to joining PurposeBuilt Brands, Ms. Hepding was senior vice president, strategy and corporate development at Essendant Inc. from August 2016 until April 2019 and served in various senior roles at
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Essendant Inc. from April 2013. Ms. Hepding began her career in investment banking, spending more than a decade in the industry, primarily at UBS Investment Bank where she held roles of increasing responsibility. Ms. Hepding received her MBA from the University of Chicago Booth School of Business and her B.A. in economics from Washington & Lee University.
We believe Ms. Hepding’s qualifications to serve on our Board of Directors include her finance background and experience in corporate strategy.
Peter A. Hochfelder has served as one of our directors since July 2024. Mr. Hochfelder also currently acts as a private investor in various industries. Mr. Hochfelder was a co-founder and Managing Member of Brahman Management, L.L.C., a New York City based private investment partnership, until his retirement in 2016. Previously, Mr. Hochfelder served on the board of Jarden Corporation, a consumer products company, from 2015 to 2016. Mr. Hochfelder is also involved in and committed to many philanthropic organizations, including serving on the Board of Directors of HELP USA, Brothers for Life and Community-Police Relations Foundation.
We believe Mr. Hochfelder’s qualifications to serve on our Board of Directors include his investment and board experience.
James E. Lillie is a co-founder of Admiral and has served as one of our directors since July 2024. Mr. Lillie has also served as a director of APi Group Corporation since September 2017 and as Co-Chair since October 2019. Previously, he served as Jarden’s Chief Executive Officer from June 2011 until Jarden’s business combination with Newell in 2016. From 2003 to 2011, Mr. Lillie served as Jarden’s Chief Operating Officer and President (from 2004). From 2000 to 2003, Mr. Lillie served as Executive Vice President of Operations at Moore Corporation, Limited. From 1999 to 2000, Mr. Lillie served as Executive Vice President of Operations at Walter Industries, Inc., a Kohlberg, Kravis, Roberts & Company (“KKR”) portfolio company. From 1990 to 1999, Mr. Lillie held a succession of senior level management positions across a variety of disciplines including human resources, manufacturing, finance and operations at World Color, Inc., another KKR portfolio company. Since June 2015, Mr. Lillie has served on the board of directors of Nomad Foods Limited and served on the board of directors of Tiffany & Co. from February 2017 until January 2021.
We believe Mr. Lillie’s qualifications to serve on our Board of Directors include his operational experience and board experience.
Talman B. Pizzey is our Chief Executive Officer and has served as a director of ours since July 2024. Mr. Pizzey has served as the Chief Executive Officer of ASP Acuren and its affiliated companies since December 2019. Prior to his tenure as Chief Executive Officer, Mr. Pizzey was the Chief Operating Officer for ASP Acuren’s Canadian businesses since 2005. Mr. Pizzey has a bachelor’s degree in metallurgical engineering and an MBA, both from the University of Alberta.
We believe Mr. Pizzey’s qualifications to serve on our Board of Directors include his leadership skills and his experience in the safety and compliance industry.
Corporate Governance
Corporate Governance Guidelines
Our Board of Directors is responsible for overseeing the management of our company. The Board of Directors has adopted Corporate Governance Guidelines (“Governance Guidelines”) which set forth our governance principles relating to, among other things:
• director independence;
• director responsibilities;
• mandatory retirement age for independent directors at 75;
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• board structure and meetings; and
• the performance evaluation of our Board of Directors.
Our Governance Guidelines will be available in the Investor Relations section of our website at www.acuren.com.
Director Independence
Our Board of Directors reviews the independence of the current and potential members of the Board of Directors in accordance with independence requirements set forth in the NYSE rules and applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). During its review, the Board of Directors considers transactions and relationships between each director and potential directors, as well as any member of his or her immediate family, and the Company and its affiliates, including those related-party transactions contemplated by Item 404(a) of Regulation S-K under the Exchange Act. The Board of Directors must affirmatively determine that the director has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company, that, in the opinion of the Board of Directors, would interfere with the exercise of the director’s independent judgment in carrying out the responsibilities of a director. The purpose of this review is to determine whether any such relationships or transactions exist that are inconsistent with a determination that the director is independent. Our Board of Directors has determined that all directors except Sir Martin, Mr. Franklin and Mr. Pizzey are “independent” as such term is defined by NYSE rules, our corporate governance guidelines and the federal securities laws.
Board Committees
Our Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Copies of these committee charters setting forth the responsibilities of each committee are available in the Investor Relations section of our website at www.acuren.com, and such information is also available in print to any stockholder who requests it through our Investor Relations department. The committees will periodically review their respective charters and recommend any needed revisions to the Board of Directors. The following is a summary of the composition of each committee:
|
Name
|
|
Audit Committee
|
|
Compensation Committee
|
|
Nominating and Corporate
Governance Committee
|
|
Antoinette C. Bush
|
|
|
|
P
|
|
P
|
|
Rory Cullinan
|
|
P*
|
|
|
|
|
|
Elizabeth Meloy Hepding
|
|
P
|
|
|
|
P
|
|
Peter A. Hochfelder
|
|
P
|
|
P*
|
|
|
|
James E. Lillie
|
|
|
|
P
|
|
P*
|
Audit Committee
The Board of Directors has adopted a written Audit Committee Charter that governs the responsibilities of the Audit Committee. The Audit Committee is responsible for, among other things:
• overseeing preparation of our financial statements, the financial reporting process and our compliance with legal and regulatory matters;
• appointing and overseeing the work of our independent auditor;
• preapproving all auditing services and permitted non-auditing services to be performed for us by our independent auditor and approving the fees associated with such work;
• approving the scope of the annual audit;
• reviewing interim and year-end financial statements;
• overseeing our cybersecurity and information technology risks, controls and procedures;
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• overseeing our internal audit function, if any, reviewing any significant reports to management arising from such internal audit function and reporting to the Board of Directors; and
• approving the audit committee report required to be included in our annual proxy statement.
The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel for this purpose where appropriate. Pursuant to the Audit Committee Charter, the Audit Committee reviews and pre-approves all audit and non-audit services performed by our independent accountant.
The Board of Directors has reviewed the background, experience, and independence of the Audit Committee members and based on this review, has determined that each member of the Audit Committee:
• meets the independence requirements of the NYSE governance standards;
• meets the enhanced independence standards for audit committee members required by the SEC; and
• is financially literate, knowledgeable and qualified to review financial statements.
In addition, the Board of Directors has determined that each of Mr. Cullinan and Mr. Hochfelder qualify as an “audit committee financial expert” under the SEC regulations.
Compensation Committee
The Board of Directors has adopted a written Compensation Committee Charter that governs the responsibilities of the Compensation Committee. The Compensation Committee is responsible for, among other things:
• assisting the Board of Directors in developing and evaluating potential candidates for executive positions;
• reviewing and approving corporate goals and objectives with respect to compensation for the Chief Executive Officer (“CEO”), evaluating the CEO’s performance and recommending to the Board of Directors, the CEO’s compensation based on such evaluation;
• determining the compensation of other non-CEO executive officers and all equity awards to such executive officers and other employees;
• reviewing on a periodic basis compensation and benefits paid to directors and recommending such compensation to the Board of Directors for approval;
• reviewing and approving our equity-based compensation plans and incentive compensation plans, including reviewing and approving the target performance benchmarks, if any, and range of aggregate value of our annual incentive program for senior management; and
• approving the compensation committee report on executive compensation required to be included in our annual proxy statement.
The Board of Directors has reviewed the background, experience and independence of the Compensation Committee members and based on this review, has determined that each member of the Compensation Committee:
• meets the independence requirements of the NYSE governance standards;
• is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act; and
• meets the enhanced independence standards for Compensation Committee members established by the SEC.
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Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee who presently serve on the Compensation Committee has interlocking relationships as defined by the SEC or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related party transactions.
Nominating and Corporate Governance Committee
The Board of Directors has adopted a written Nominating and Corporate Governance Committee Charter that governs the responsibilities of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for, among other things:
• assisting our Board of Directors in identifying prospective director nominees and recommending nominees for each annual meeting of shareholders to our Board of Directors;
• leading the search for individuals qualified to become members of the Board of Directors and selecting director nominees to be presented for stockholder approval at our annual meetings;
• reviewing the Board of Directors’ committee structure and recommending to the Board of Directors for approval directors to serve as members of each committee;
• developing and recommending to the Board of Directors for approval a set of corporate governance guidelines and generally advising the Board of Directors on corporate governance matters;
• reviewing such corporate governance guidelines on a periodic basis and recommending changes as necessary; and
• reviewing director nominations submitted by stockholders.
The Nominating and Corporate Governance Committee may, when it deems appropriate, delegate certain of its responsibilities to one or more Nominating and Corporate Governance Committee members or subcommittees. In making nominations, the Nominating and Corporate Governance Committee is required to submit candidates who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who shall be most effective, in conjunction with the other nominees to the Board of Directors, in collectively serving the long-term interests of the stockholders. In evaluating nominees, the Nominating and Corporate Governance Committee is required to take into consideration the following attributes, which are desirable for a member of the Board of Directors: leadership, independence, interpersonal skills, financial acumen, business experiences, industry knowledge and diversity of viewpoints.
The Board of Directors has reviewed the background, experience and independence of the Nominating and Corporate Governance Committee members and based on this review, has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements of the NYSE governance standards and SEC rules and regulations.
Code of Business Conduct and Ethics
Our Board of Directors has adopted a written Code of Conduct (“Code of Conduct”) that establishes the standards of ethical conduct applicable to all our directors, officers, and employees. In addition, our Board of Directors has adopted a written Code of Ethics for Senior Financial Officers (“Code of Ethics”) applicable to our CEO and senior financial officers. Copies of our Code of Conduct and Code of Ethics will be publicly available in the Investor Relations section of our website at www.acuren.com. Any waiver of our Code of Ethics with respect to our chief executive officer, chief financial officer, controller or persons performing similar functions or waiver of our Code of Conduct with respect to our directors or executive officers may only be authorized by our Board of Directors and will be disclosed on our website as promptly as practicable, as may be required under applicable SEC and NYSE rules.
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Director Compensation Policy
From May 2023 until July 2024, we paid our non-founder directors an annual fee of $75,000 and our then-chairman, Rory Cullinan, an annual fee of $100,000. For 2023, each such director elected to receive his or her annual fee in the form of Acuren BVI ordinary shares. In connection with the initial public offering, Mr. Cullinan was granted a five-year option to acquire 50,000 Acuren BVI ordinary shares and our other then-non-founder directors were each granted a five-year option to acquire 37,500 Acuren BVI ordinary shares pursuant to option deeds, all at an exercise price of $11.50 per Acuren BVI ordinary share (subject to adjustment in accordance with their respective option deeds).
In connection with the completion of the Acuren Acquisition, we adopted the following non-employee director compensation policy:
• Annual Retainer. Each non-employee director is entitled to an annual cash fee of $50,000. Our lead independent director is entitled to an additional $20,000 annual cash fee.
• Committee Fees. Members of any of our Committees are entitled to an additional annual cash fee of $2,500. Each of the chairs of our Committees is entitled to an additional $7,500 annual cash fee.
• Annual Equity Award. Each non-employee director will be granted annually a number of restricted stock units equal to $100,000 at the date of issue. The restricted stock units will vest and settle into shares of Acuren Delaware common stock on the one-year anniversary of the date of grant.
Non-employee directors with more than one year of service are expected to directly own at least 1,000 shares of our Acuren BVI ordinary shares. In addition, all of our directors are entitled to be reimbursed by the Company for reasonable expenses incurred by them in the course of their directors’ duties relating to the Company.
Messrs. Cullinan, Hochfelder, and Lillie and Ms. Bush and Ms. Hepding will be paid compensation for their respective services on our Board of Directors. Sir Martin and Mr. Franklin will not receive any additional compensation for services as a director. In addition, Mr. Pizzey, who serves as our Chief Executive Officer, is not entitled to receive any additional compensation for his services as a director. Mr. Pizzey served on the board of directors of ASP Acuren but did not receive compensation for his service as a director.
Director Compensation of Admiral
The table below sets forth the non-employee director compensation of Admiral for the year ended December 31, 2023. Sir Martin, Mr. Franklin and Mr. Cullinan are the only directors of Admiral who will continue to serve as directors on the board of directors of Acuren Corporation following the Domestication.
|
Name
|
|
Fees Earned
or Paid in
Cash ($)(1)
|
|
Stock
Awards
($)(2)
|
|
Total ($)
|
|
Sir Martin E. Franklin(3)
|
|
—
|
|
—
|
|
—
|
|
Robert A.E. Franklin(3)
|
|
—
|
|
—
|
|
—
|
|
Rory Cullinan
|
|
100,000
|
|
82,350
|
|
182,350
|
Executive Officers
Set forth below is certain information relating to our current executive officers. Biographical information with respect to Mr. Pizzey is set forth above under “— Board of Directors”.
|
Name
|
|
Age
|
|
Title
|
|
Talman B. Pizzey
|
|
59
|
|
President and Chief Executive Officer
|
|
Michael Grigsby
|
|
50
|
|
Chief Financial Officer
|
|
Lourinda St. John
|
|
54
|
|
Chief Human Resources Officer
|
|
Fiona E. Sutherland
|
|
46
|
|
General Counsel
|
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Michael Grigsby has served as ASP Acuren’s Chief Financial Officer since August 2020 and as our Chief Financial Officer since the closing of the Acuren Acquisition. Prior to August 2020, Mr. Grigsby was the Americas Chief Financial Officer for Intertek, a global testing, inspection, certification and compliance company. Prior to his tenure at Intertek, Mr. Grigsby served as a divisional Chief Financial Officer at Stanley Black and Decker and IBM. Mr. Grigsby holds a B.A. in economics from Tulane University and an MBA from the Yale School of Management.
Lourinda St. John has served as ASP Acuren’s Chief Human Resources Officer since February 2023 and as our Chief Human Resources Officer since the closing of the Acuren Acquisition. Prior to her tenure at ASP Acuren, from January 2015 to February 2023, Mrs. St. John served as the Senior Director of Human Resources at Verso Corporation (now Billerud), a manufacturer of pulp, paper and wood products. Mrs. St. John earned her master’s degree from Villanova University and received her B.A. in business from Baylor University.
Fiona E. Sutherland has served as ASP Acuren’s General Counsel since August 2019 and as our General Counsel since the closing of the Acuren Acquisition. Ms. Sutherland earned her B.Comm and LL.B (JD) both from the University of Alberta with Distinction. Prior to joining Acuren, Ms. Sutherland was employed at Enbridge Inc. where she held various positions including Sr. Manager SCM Sustainability, Sr. Manager SCM Major Projects and Corporate Counsel. Ms. Sutherland started her legal career at Miller Thomson LLP as a litigator and prior to becoming a lawyer she worked at Imperial Oil Ltd. (ExxonMobil) in Supply Chain.
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EXECUTIVE COMPENSATION
Introduction
As an “emerging growth company,” we are permitted to and rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have included compensation information for our principal executive officer and the two most highly compensated executive officers (each an “NEO” and collectively, the “NEOs”) who will continue as our executive officers following the Domestication and have not included a compensation discussion and analysis of our executive compensation programs or tabular compensation information other than the Summary Compensation Table and the Outstanding Equity Awards table. For fiscal year ended December 31, 2023, ASP Acuren’s NEOs and their positions were as follows:
• Talman Pizzey, President and Chief Executive Officer
• Michael Grigsby, Chief Financial Officer
• Lourinda St. John, Chief Human Resources Officer
We did not have any executive officers prior to the completion of the Acuren Acquisition.
Summary Compensation Table for Fiscal 2023
The following table summarizes the compensation to our NEOs while they were employed by ASP Acuren for the fiscal year ended December 31, 2023. The ASP Acuren board of directors and management were responsible for all decisions regarding compensation prior to the closing of the Acuren Acquisition, and the Company’s Board of Directors and management are responsible for all decisions regarding compensation following the closing of the Acuren Acquisition.
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Option
Awards
($)(1)
|
|
Non-Equity
Incentive Plan
Compensation
($)(2)
|
|
All Other
Compensation
($)(3)
|
|
Total
($)
|
|
Talman Pizzey(4)
|
|
2023
|
|
$
|
533,611
|
|
|
$
|
0
|
|
$
|
0
|
|
|
$
|
647,499
|
|
$
|
8,890
|
|
$
|
1,190,000
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Grigsby
|
|
2023
|
|
$
|
382,212
|
|
|
$
|
0
|
|
$
|
0
|
|
|
$
|
343,300
|
|
$
|
8,669
|
|
$
|
734,181
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lourinda St. John
|
|
2023
|
|
$
|
211,538
|
(5)
|
|
$
|
0
|
|
$
|
937,464
|
(6)
|
|
$
|
105,821
|
|
$
|
9,621
|
|
$
|
1,264,444
|
|
Chief Human Resources Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrative Disclosure to Summary Compensation Table
In 2023, the NEOs’ executive compensation program was comprised of (1) base salary, (2) an annual short term incentive award and (3) other compensation, each as more fully discussed in the Summary Compensation Table and below. Under ASP Acuren’s short-term incentive program, the NEOs were entitled to receive a cash incentive
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ranging from 40 to 130% of their base salary, based on ASP Acuren’s EBITDA growth in 2023. Amounts earned by the NEOs under ASP Acuren’s 2023 short-term incentive program are set forth above in the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table for Fiscal 2023”.
In 2019, Mr. Pizzey was awarded 112,875 stock options of ASP Acuren. The stock options had an exercise price of $70.15. The stock options were granted in Tranche A, Tranche B and Tranche C. Tranche A vests at 20% annually and Tranche B and Tranche C options vest at time of sale based on achieving a certain level of multiple of invested capital, subject to Mr. Pizzey’s continued employment. The stock options had an expiration date of December 20, 2029.
In 2020, Mr. Grigsby was awarded 36,373 stock options of ASP Acuren. The stock options had an exercise price of (i) $88.06 for Tranche A options and (ii) $70.15 for Tranche B and Tranche C options. The stock options were granted in Tranche A, Tranche B and Tranche C. Tranche A vests at 20% annually and Tranche B and Tranche C options vest at time of sale based on achieving a certain level of multiple of invested capital, subject to Mr. Grigsby’s continued employment. The stock options had an expiration date of August 17, 2030.
In 2023, Mrs. St. John was awarded 13,187 stock options of ASP Acuren. The stock options had an exercise price of $141.62. The stock options were granted in Tranche A and Tranche B. Tranche A vests at 20% annually and Tranche B vests at time of sale based on achieving a certain level of multiple of invested capital, subject to Ms. St. John’s continued employment. The stock options had an expiration date of March 13, 2033.
In 2023, in connection with a one-time cash dividend to all common stockholders of ASP Acuren and in order to provide an equitable benefit to unvested U.S. option holders, ASP Acuren paid a one-time cash advance of $29.85 per Tranche A vested option and reduced the exercise price of all unvested stock options in Tranche A, Tranche B and Tranche C by $29.85 per option. For the vested U.S. based Tranche A options, the Company calculated a “blended” strike price, based on the weighted average of (1) the old strike price applicable to vested shares and (2) the new, reduced strike price applicable to unvested shares. For the holders based in Canada, the strike price on all vested and unvested stock options (Tranche A, Tranche B and Tranche C) was reduced in an amount equal to the dividend paid on common shares as no cash advance was paid.
Prior to the closing of the Acuren Acquisition, Mr. Pizzey, Mr. Grigsby and Ms. St. John exercised their stock options and received 112,875, 36,373 and 13,187 shares of ASP Acuren, respectively, which shares were exchanged for cash in connection with the closing of the Acuren Acquisition.
Outstanding Equity Awards at Fiscal 2023 Year End
The following table provides information concerning outstanding unexercised stock options of ASP Acuren held by each of our NEOs as of December 31, 2023.
|
|
|
Option Awards(1)
|
|
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)(2)
|
|
Option
Expiration
Date
|
|
Talman Pizzey
|
|
December 20, 2019
|
|
50,167
|
|
62,709
|
|
112,876
|
|
$
|
70.15
|
|
December 20, 2029
|
|
Michael Grigsby
|
|
August 17, 2020
|
|
12,173
|
|
8,116
|
|
20,289
|
|
$
|
88.06
|
|
August 17, 2030
|
|
Michael Grigsby
|
|
August 17, 2020
|
|
0
|
|
16,084
|
|
16,084
|
|
$
|
70.15
|
|
August 17, 2030
|
|
Lourinda St. John
|
|
March 13, 2023
|
|
0
|
|
13,187
|
|
13,187
|
|
$
|
141.62
|
|
March 13, 2033
|
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2024 Employment Arrangements
Mr. Pizzey
In connection with the Acuren Acquisition, we entered into an Employment Agreement with Mr. Pizzey, dated September 19, 2024 (the “Pizzey Employment Agreement”), pursuant to which he will be entitled to (i) an annual base salary of CAD $947,810, (ii) an annual cash incentive with a target opportunity equal to 100% of his annual base salary, (iii) an annual long-term equity incentive award having a grant date value of not less than $2.2 million and (iv) participate in our employee benefits plans.
In addition, if we terminate Mr. Pizzey’s employment without cause or if Mr. Pizzey terminates his employment for good reason, Mr. Pizzey would be entitled to receive (i) his base salary for two years from the date of termination, (ii) an amount equal to two times his target annual bonus, payable in equal installments over a 12-month period, (iii) his pro-rata annual bonus for the year in which the termination occurs, (iv) any earned and accrued but unpaid base salary up to the date of termination, (v) any unpaid annual bonus with respect to any completed fiscal year, (vi) accrued but unused PTO, (vii) his vested employee benefits and (viii) continued COBRA benefits for 24 months following the date of termination. Mr. Pizzey would not be entitled to any unearned salary, bonus or other benefits if we were to terminate his employment for cause or if Mr. Pizzey were to terminate his employment voluntarily without good reason. Mr. Pizzey also agreed to non-competition, confidentiality and non-solicitation covenants.
Mr. Grigsby
We do not have an employment agreement with Mr. Grigsby, however, pursuant to the terms of his offer letter dated July 16, 2020, Mr. Grigsby will be entitled to (i) an annual base salary of $375,000 (which was increased to $450,000 for 2024 based on an annual performance review), (ii) an annual cash incentive with a target opportunity equal to 75% of his annual base salary (which was increased to 100% of his annual base salary for 2024 based on an annual performance review) and (iii) participate in our employee benefits plans.
Ms. St. John
We do not have an employment agreement with Ms. St. John, however, pursuant to the terms of her offer letter dated February 10, 2023, Ms. Johns will be entitled to (i) an annual base salary of $250,000 (which was increased to $275,000 for 2024 based on an annual performance review), (ii) an annual cash incentive with a target opportunity equal to 40% of her annual base salary and (iii) participate in our employee benefits plans.
2024 Equity Incentive Compensation Plan
Effective as of July 30, 2024, our Board of Directors approved the Acuren Corporation 2024 Equity Incentive Plan, hereinafter referred to as our “2024 Plan.” The purpose of our 2024 Plan is to assist our Company and its subsidiaries and other designated affiliates, which we refer to as “Related Entities”, in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers, directors, consultants and other persons who provide services to our Company or its Related Entities, by enabling such persons to acquire or increase a proprietary interest in our Company in order to strengthen the mutuality of interests between such persons and our shareholders, and providing such persons with long term performance incentives to expend their maximum efforts in the creation of shareholder value.
Administration. Our 2024 Plan is to be administered by a committee designated by our Board of Directors consisting of not less than two directors, hereinafter referred to as the “Plan Committee”; provided, however, that except as otherwise expressly provided in the 2024 Plan, our Board of Directors may exercise any power or authority granted to the Plan Committee under our 2024 Plan. The Plan Committee will consist solely of independent directors, each of whom is intended to be, to the extent required by Rule 16b-3 under the Exchange Act, a non-employee director.
Subject to the terms of our 2024 Plan, the Plan Committee is authorized to select eligible persons to receive awards, determine the type, number and other terms and conditions of, and all other matters relating to, awards, prescribe award agreements (which need not be identical for each participant), and the rules and regulations for the administration of the 2024 Plan, construe and interpret the 2024 Plan and award agreements, and correct defects, supply omissions or reconcile inconsistencies therein, and make all other decisions and determinations as the Plan Committee may deem necessary or advisable for the administration of our 2024 Plan.
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Eligibility. The persons eligible to receive awards under our 2024 Plan are the officers, directors, employees, consultants and other persons who provide services to our Company or any Related Entity.
Types of Awards. Our 2024 Plan provides for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, bonus stock and awards in lieu of cash compensation, other stock-based awards and performance awards. Performance awards may be based on the achievement of certain business or personal criteria or goals, as determined by the Plan Committee.
Shares Available for Awards; Annual Per-Person Limitations. The total number of shares of our Company that may be subject to the granting of awards under our 2024 Plan is currently 18,500,000 shares. In addition, the number of shares available under our 2024 Plan will automatically increase on January 1st of each year for a period of up to ten years, commencing on January 1, 2025, in an amount equal to the lesser of (i) five percent (5%) of the total number of shares outstanding on such January 1 or (ii) such smaller number of shares as is determined by the Board of Directors (which may be zero).
The foregoing limit shall be increased by the number of shares with respect to which awards granted under our 2024 Plan are forfeited, expire or otherwise terminate without issuance of shares, or that are settled for cash or otherwise do not result in the issuance of shares. In addition, shares withheld from an award to satisfy the exercise price and/or any tax withholdings shall be added back to the share pool for further award grants. Awards issued in substitution for awards previously granted by a company acquired by our Company or a Related Entity, or with which our Company or any Related Entity combines, do not reduce the limit on grants of awards under our 2024 Plan. Awards issued in substitution for incentive stock options shall reduce the total number of ordinary shares available under our 2024 Plan.
The Plan Committee is authorized to adjust outstanding awards (including adjustments to exercise prices of options and other affected terms of awards) in the event that a dividend or other distribution (whether in cash, shares or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the ordinary shares so that an adjustment is appropriate. The Plan Committee is also authorized to adjust performance conditions and other terms of awards in response to these kinds of events or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations, or business conditions.
Pursuant to the 2024 Plan, upon a change in control in which (a) the Company is not the surviving entity or (b) the successor company or its parent does not assume or substitute any award, (i) any options or stock appreciation rights shall immediately become vested and exercisable, (ii) any time based restrictions, deferral of settlement and forfeiture conditions applicable to any restricted stock, restricted stock units or other stock-based awards shall lapse and (iii) any performance goals and conditions may, at the Plan Committee’s discretion, be deemed to have been earned and payable on actual achievement through the consummation of the change in control or at target performance.
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RELATED PARTY TRANSACTIONS
Since January 1, 2021 through the date of this prospectus, we have not entered into any related party transactions other than as set forth below.
Admiral
Placing Agreement
On May 17, 2023, we entered into a Placing Agreement (the “Placing Agreement”) with the Founders and the Founder Entity, Jefferies International Limited, Jefferies GmbH and UBS AG London Branch (together, the “Placing Agents”), in connection with our May 2023 initial public offering, pursuant to which the Placing Agents procured subscribers for Acuren BVI ordinary shares (with matching Warrants), other than the ordinary shares that were subscribed for by the Founder Entity. Under the Placing Agreement, each of our then directors and the Founder Entity agreed that they would not, without the prior written consent of the Placing Agents, offer, sell, contract to sell, pledge or otherwise dispose of any Acuren BVI ordinary shares or Warrants (or any preferred shares in the case of Founder Entity) which they held directly or indirectly in Admiral, for a period commencing on the date of the Placing Agreement and ending one year after the closing of the Acuren Acquisition (subject to certain customary exceptions).
Insider Letter Agreement
In connection our initial public offering, we entered into a letter agreement (the “Insider Letter”) with our Founders and the Founder Entity who hold the Founder Preferred Shares, pursuant to which they agreed, among other things that they would not, without our prior written consent, offer, sell, contract to sell, pledge or otherwise dispose of any Founder Preferred Shares (excluding any ordinary shares received in respect of their Annual Dividend Amount received thereon from time to time), for a period of five years commencing on the date of the Placing Agreement and ending five years after the closing of the Acuren Acquisition (subject to certain customary exceptions).
Registration Rights
Pursuant to the Insider Letter, we have also agreed to provide the Founders and Founder Entity with certain registration rights that require us to provide them with such information and assistance following the Acuren Acquisition, subject to the restrictions described in the paragraph above and customary exceptions, as they may reasonably request to enable it to effect a disposition of all or part of their ordinary shares or Warrants, including, without limitation, the preparation, qualification and approval of a prospectus in respect of such Acuren BVI ordinary shares or Warrants.
In connection with the Acuren Acquisition, certain entities managed by Viking Global Investors LP (“Viking”), certain entities affiliated with Permian Investment Partners LP (“Permian”) and an entity managed by Progeny 3, Inc. (“Progeny”), each of which beneficially own more than 5% of the Company’s issued and outstanding shares, irrevocably committed to purchase Acuren BVI ordinary shares in the PIPE Financing. In addition, in connection with the Warrant Financing, each of the Founder Entity, Viking, Permian and Progeny irrevocably committed to exercise their respective Warrants.
In exchange for such commitments, we agreed, among other things, that when requested by written notice (delivered not earlier than three months following the Acuren Acquisition), we would use commercially reasonable efforts to promptly enter into a customary registration rights agreement with such entity, which agreement would provide for customary registration rights (subject to customary exceptions) with respect to the ordinary shares, or any other equity interests later acquired by such entity in exchange for the ordinary shares in connection with a recapitalization, redomiciliation or similar transaction. See “Description of Capital Stock; Comparison of Rights — Registration Rights” for a description of the registration rights agreement.
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Additional Stock Issuances to Our Founder Entity, Certain 5% Holders, Certain Directors and Executive Officers
On July 30, 2024, in connection with the closing of the Warrant Financing we issued and sold at $10.00 per share (1) 2,487,500 Acuren BVI ordinary shares to the Founder Entity, (2) 2,500,000 Acuren BVI ordinary shares to Viking, (3) 2,500,000 Acuren BVI ordinary shares to Progeny, (4) 250,000 Acuren BVI ordinary shares to Permian and (5) 2,500 Acuren BVI ordinary shares to Mr. Cullinan, one of our directors.
On July 30, 2024, in connection with the closing of the PIPE Financing, we issued and sold at $10.00 per share (1) 21,860,000 Acuren BVI ordinary shares to Viking, (2) 2,500,000 Acuren BVI ordinary shares to Progeny, (3) 7,440,000 Acuren BVI ordinary shares to the Founder Entity, (4) 6,700,000 Acuren BVI ordinary shares to Permian and (5) 400,000 Acuren BVI ordinary shares to Mr. Pizzey, a director and our Chief Executive Officer.
Consulting Services Agreement
On July 30, 2024, the Company entered into a Consulting Services Agreement with Mariposa Capital, LLC, an affiliate of Sir Martin. Under this agreement, Mariposa Capital, LLC agreed to provide certain services, including corporate development and consulting services, consulting services with respect to mergers and acquisitions, investor relations services, strategic planning consulting services, capital expenditure allocation consulting services, strategic treasury consulting services and such other services relating to the Company as may from time to time be mutually agreed. In connection with these services, Mariposa Capital, LLC is entitled to receive an annual fee equal to $2.0 million, payable in quarterly installments. The initial term of this agreement will terminate on July 30, 2025 and will be automatically renewed for successive one-year terms unless either party notifies the other party in writing of its intention not to renew this agreement no later than 90 days prior to the expiration of the term. This agreement may only be terminated by the Company upon a vote of a majority of our directors. In the event that this agreement is terminated by the Company, the effective date of the termination will be six months following the expiration of the initial term or a renewal term, as the case may be.
ASP Acuren
In 2023, ASP Acuren was a party to an agreement with American Securities, LLC, a former related party, for management consulting services, acquisition planning services, strategic planning and project management. ASP Acuren began paying management fees pursuant to this agreement in 2020, but such payments were suspended in 2024.
Policy Concerning Related Party Transactions
The Board of Directors has determined that the Audit Committee is best suited to review and approve or ratify transactions with related persons, in accordance with the policy set forth in the Audit Committee Charter. Such review will apply to any transaction or series of related transactions or any material amendment to any such transaction involving a related person and the Company or any subsidiary of the Company. For purposes of the policy, “related persons” will consist of executive officers, directors, director nominees, any stockholder beneficially owning more than 5% of the issued and outstanding common stock, and immediate family members of any such persons. In reviewing related person transactions, the Audit Committee will take into account all factors that it deems appropriate, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. No member of the Audit Committee will be permitted to participate in any review, consideration or approval of any related person transaction in which the director or any of his immediate family member is the related person.
ASP Acuren did not have any policy with respect to related party transactions.
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SECURITY OWNERSHIP
The following table sets forth certain information regarding (1) all shareholders known by us to be the beneficial owners of more than 5% of our issued and outstanding ordinary shares and (2) each director, each NEO and all directors and executive officers as a group, together with the approximate percentages of issued and outstanding Acuren BVI ordinary shares owned by each of them. Percentages are calculated based upon shares issued and outstanding plus shares which the holder has the right to acquire under share options, Warrants or Founder Preferred Shares exercisable for or convertible into ordinary shares within 60 days. Unless otherwise indicated, amounts are as of October 21, 2024 and each of the shareholders has sole voting and investment power with respect to the ordinary shares beneficially owned, subject to community property laws where applicable. As of October 21, 2024, we had 121,476,215 ordinary shares and 1,000,000 Founder Preferred Shares issued and outstanding.
Unless otherwise indicated, the address of each person named in the table below is c/o ASP Acuren, Inc., 14434 Medical Complex Drive, Suite 100, Tomball, TX 77377.
|
|
|
Ordinary shares beneficially
owned
|
| |
|
Number
|
|
%
|
|
Beneficial Owner
|
|
|
|
|
|
|
|
More than 5% Shareholders:
|
|
|
|
|
|
|
|
Mariposa Acquisition IX, LLC(1)
|
|
19,877,500
|
(2)
|
|
16.4
|
%
|
|
Entities managed by Viking Global Investors LP
|
|
34,360,000
|
(3)(4)
|
|
28.3
|
%
|
|
P3-EQ, LLC
|
|
15,000,000
|
(5)
|
|
12.3
|
%
|
|
Entities managed by Permian Investment Partners LP
|
|
8,012,000
|
(6)
|
|
6.6
|
%
|
| |
|
|
|
|
|
|
|
Named Executive Officers and Directors:
|
|
|
|
|
|
|
|
Sir Martin E. Franklin
|
|
19,877,500
|
(2)
|
|
16.4
|
%
|
|
Robert A.E. Franklin
|
|
—
|
(7)
|
|
—
|
|
|
Rory Cullinan
|
|
62,500
|
(8)
|
|
*
|
|
|
Peter A. Hochfelder
|
|
—
|
|
|
—
|
|
|
Toni Bush
|
|
—
|
|
|
—
|
|
|
Elizabeth Meloy Hepding
|
|
—
|
|
|
—
|
|
|
James E. Lillie
|
|
—
|
(9)
|
|
—
|
|
|
Talman Pizzey
|
|
400,000
|
|
|
*
|
|
|
Michael Grigsby
|
|
—
|
|
|
—
|
|
|
Lourinda St. John
|
|
—
|
|
|
—
|
|
|
Fiona Sutherland
|
|
—
|
|
|
—
|
|
|
All executive officers and directors as a group (11 persons)
|
|
20,340,000
|
(10)
|
|
16.7
|
%
|
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DESCRIPTION OF CAPITAL STOCK; COMPARISON OF RIGHTS
The following description of the Acuren Delaware capital stock (common and preferred) reflects our capital stock as it will exist from and after the effectiveness of the Domestication, as governed by the Acuren Delaware bylaws and Delaware law. We also identify the material differences between the current rights of shareholders of Acuren BVI, a BVI limited liability entity, and the rights that the stockholders of Acuren Delaware will have once the Company is a Delaware corporation. These descriptions are a summary only. We urge you to read the forms of the Acuren Delaware certificate of incorporation and bylaws of Acuren Delaware in their entirety, which are attached as Appendix B and Appendix C, respectively, to this prospectus.
General
We currently are a company incorporated with limited liability under the laws of the British Virgin Islands and are registered with the Registrar of Corporate Affairs of the British Virgin Islands under registration number 1955622. We were incorporated in the British Virgin Islands on December 15, 2022 under the name Admiral Acquisition Limited, and we changed our name to Acuren Corporation in connection with the Acuren Acquisition.
Authorized Share Capital
Until the effectiveness of the Domestication, Acuren Corporation will not exist as a Delaware entity and therefore will not have any Delaware capital stock. Upon effectiveness of the Domestication, Acuren Delaware’s authorized capital stock will consist of 500,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share, of which 1,000,000 will be designated Series A Preferred Stock.
As of October 21, 2024, Acuren BVI had 121,476,215 ordinary shares issued and outstanding, and 1,000,000 Founder Preferred Shares issued and outstanding.
As of October 21, 2024, Acuren BVI had reserved 1,695,000 restricted share units of its unlimited authorized Acuren BVI ordinary shares for issuance under its existing share-based compensation and other benefit plans, subject to increase in accordance with the terms of such plans, and upon effectiveness of the Domestication, Acuren Delaware will reserve a similar number of its authorized shares of common stock for such issuances.
Acuren Delaware common stock
Voting. Except as otherwise required by applicable law or as provided by the Acuren Delaware certificate of incorporation, including matters required to be submitted solely to a vote of the holders of Series A Preferred Stock (or any other series of preferred stock of Acuren Delaware then outstanding), each holder of Acuren Delaware common stock will be entitled to one vote for each share of Acuren Delaware common stock owned of record on all matters submitted to a vote of stockholders of Acuren Delaware. Except as otherwise required by applicable law or as provided by the Acuren Delaware certificate of incorporation, including matters required to be submitted solely to a vote of the holders of Series A Preferred Stock (or any other series of preferred stock of Acuren Delaware then outstanding), holders of Acuren Delaware common stock (as well as holders of any series preferred stock then outstanding and entitled to vote together with the holders of Acuren Delaware common stock, including the Series A Preferred Stock) will vote together as a single class on all matters presented to the Acuren Delaware stockholders for their vote or approval, including the election of directors. There will be no cumulative voting rights with respect to the election of directors or any other matters submitted to a vote of the stockholders of Acuren Delaware.
Dividends and distributions. Subject to applicable law and the rights of the holders of Series A Preferred Stock and the rights, if any, of the holders of any other series of preferred stock of Acuren Delaware then outstanding, the holders of Acuren Delaware common stock will have the right to receive dividends and distributions, whether payable in cash or otherwise, as may be declared from time to time by the Acuren Delaware board of directors from amounts legally available therefor.
Liquidation, dissolution or winding up. Subject to applicable law and the rights, if any, of the holders of any series of preferred stock of Acuren Delaware then outstanding, including the Series A Preferred Stock, in the event of the liquidation, dissolution or winding-up of Acuren Delaware, holders of its common stock will be entitled to share ratably in proportion to the number of shares of common stock held by them in the assets of Acuren Delaware available for distribution after payment or reasonable provision for the payment of all creditors of Acuren Delaware.
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Redemption, conversion or preemptive rights. Holders of Acuren Delaware common stock will have no redemption rights, conversion rights or preemptive rights to subscribe to any or all additional issues of Acuren Delaware shares or securities convertible into Acuren Delaware capital stock.
Other provisions. There will be no redemption provisions or sinking fund provisions applicable to the common stock of Acuren Delaware.
The powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of Acuren Delaware common stock may be subject to the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of any series of preferred stock of Acuren Delaware, including the Series A Preferred Stock.
Shares Reserved for Future Issuances
Outstanding Warrants. As of October 21, 2024, there were 18,264,876 warrants outstanding, each warrant conferring the right to subscribe for one-fourth of an Acuren BVI Ordinary Share (the “ADMW Warrants”). The ADMW Warrants were issued pursuant to a Warrant Instrument executed by Admiral on May 16, 2023 (as supplemented, amended or amended and restated, the “ADMW Warrant Instrument”). Each ADMW Warrant entitles the registered holder (an “ADMW Warrantholder”) to subscribe for one-fourth of an Acuren BVI ordinary share upon exercise at a price of $11.50 per whole Acuren BVI ordinary share (subject to any prior adjustment in accordance with the terms and conditions set out in the ADMW Warrant Instrument and discussed below) at any time during the Subscription Period (defined below). Upon the effectiveness of the Domestication, the ADMW Warrants will be exercisable into the right to acquire the same fraction of a share of Acuren Delaware common stock.
Outstanding ADMW Warrants are exercisable until 5:00 p.m. London time on July 30, 2027 (provided that if such day is not a trading day, the trading day immediately following such day), unless earlier redeemed in accordance with the ADMW Warrant Instrument and as described below (the “Subscription Period”). Subject to any such prior adjustment, each ADMW Warrantholder will be required to hold and validly exercise four ADMW Warrants in order to receive one Acuren BVI ordinary share (prior to the effectiveness of the Domestication) or one share of Acuren Delaware common stock (after the effectiveness of the Domestication).
The ADMW Warrants are subject to mandatory redemption. The Company may call the ADMW Warrants for redemption:
• in whole but not in part,
• at a price of $0.01 per ADMW Warrant,
• upon not less than 20 days’ prior written notice of redemption to each ADMW Warrantholder,
• if, and only if, the “Average Price” (as defined in the ADMW Warrant Instrument) of the Acuren BVI ordinary shares (prior to the effectiveness of the Domestication) or shares of Acuren Delaware common stock (after the effectiveness of the Domestication) equals or exceeds $18.00 per share (subject to any prior adjustment in accordance with the terms and conditions set out in the ADMW Warrant Instrument) for any 10 consecutive trading days.
The right to exercise the ADMW Warrants will be forfeited unless the ADMW Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of one or more ADMW Warrants will have no further rights except to receive the redemption price for such holder’s ADMW Warrants upon surrender of such ADMW Warrants. The redemption criteria for the ADMW Warrants has been established at a price which is intended to provide ADMW Warrantholders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing price of Acuren BVI ordinary shares (prior to the effectiveness of the Domestication) or shares of Acuren Delaware common stock (after the effectiveness of the Domestication) and the exercise price of the ADMW Warrants so that if the share price declines as a result of the redemption call, the redemption will not be expected to cause the share price to drop below the exercise price of the ADMW Warrants.
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The exercise price and number of shares issuable on exercise of the ADMW Warrants may be adjusted in certain circumstances including in the event of a stock dividend or distribution, recapitalization, consolidation, combination or stock split. However, the ADMW Warrants will not be adjusted for issuances of shares at a price below the exercise price of the ADMW Warrants.
Subject to the terms and conditions of the ADMW Warrant Instrument, each of the ADMW Warrants will be transferable by an instrument of transfer in any usual or common form, or in any other form which may be approved by or on behalf of Acuren Delaware.
The ADMW Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration of the Subscription Period at the address of the Receiving Agent (as defined in the ADMW Warrant Instrument) designated for such purposes, with the subscription notice form on the reverse side of the warrant certificate properly completed and executed as indicated, accompanied by full payment of the exercise price in cleared funds for the number of whole shares being acquired with respect to the ADMW Warrants being exercised. The ADMW Warrantholders do not have the rights or privileges of holders of shares until they exercise their warrants and receive shares. After the issuance of Acuren BVI ordinary shares upon exercise of the ADMW Warrants prior to the effectiveness of the Domestication, each holder will be entitled to one vote for each whole Acuren BVI ordinary share held of record on all matters to be voted on by shareholders. After the issuance of shares of Acuren Delaware common stock upon exercise of the ADMW Warrants after the effectiveness of the Domestication, each holder will be entitled to one vote for each whole share of Acuren Delaware common stock held of record on all matters to be voted on by the holders of Acuren Delaware common stock.
No fractional shares will be issued upon exercise of the ADMW Warrants. Accordingly, no ADMW Warrants are exercisable unless a sufficient number of ADMW Warrants are exercised to equal a whole number of shares upon such exercise. In addition, no fraction of an ADMW Warrant will be issued or returned to the ADMW Warrantholder following exercise and any such fraction, determined after aggregation of all ADMW Warrants being exercised by such holder, will lapse and be cancelled.
Preferred Stock
Blank Check Preferred. Under the new Acuren Delaware certificate of incorporation, without stockholder approval, the Acuren Delaware board of directors will be authorized by resolution to create and issue one or more series of preferred stock of Acuren Delaware (in addition to the Series A Preferred Stock), and, with respect to each such series, to determine the number of shares constituting the series and the designations and the powers (including voting powers), preferences and rights, if any, which may include dividend rights, conversion or exchange rights, redemption rights and terms and liquidation preferences, and the qualifications, limitations and restrictions, if any, of the series. The Acuren Delaware board of directors may therefore create and issue one or more new series of preferred stock with voting power and preferences and rights that could be senior to and dilutive of rights, powers and preferences, if any, of the Acuren Delaware common stock and which could have certain anti-takeover effects. Before Acuren Delaware may issue any new series of preferred stock, its board of directors will be required to adopt resolutions creating and designating such series of preferred stock and certificate of designations setting forth a copy of such resolutions will be required to be executed, acknowledged and filed with the Secretary of State of the State of Delaware.
Series A Preferred Stock. Prior to the Domestication, Acuren BVI had 1,000,000 Founder Preferred Shares outstanding. In connection with the Domestication, each Founder Preferred Share will be converted into one share of Series A Preferred Stock. The designations and the powers, preferences and rights, and the qualifications, limitations and restrictions of the Series A Preferred Stock are set forth in the form of the new Acuren Delaware certificate of incorporation attached to this prospectus.
Dividends. Subject to applicable law and the rights, if any, of any series of preferred stock of Acuren Delaware then outstanding ranking senior to the Series A Preferred Stock as to dividends and on parity with the rights, if any, of any series of Acuren Delaware preferred stock then outstanding ranking on parity with the Series A Preferred Stock and, at any time on or after the consummation of the Acuren Acquisition, if the Average Price (as defined in the Acuren Delaware certificate of incorporation) per share of Acuren Delaware common stock (subject to adjustment in accordance with the Acuren Delaware certificate of incorporation) is $11.50 or more for any
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ten consecutive trading days, the holders of the Series A Preferred Stock will be entitled to receive, in respect of each Dividend Period (as defined below), in the aggregate, the “Annual Dividend Amount,” which is calculated as follows (the “Annual Dividend Amount”):
A X B, where:
A = an amount equal to 20% of the increase (if any) in the value of a share of Acuren Delaware common stock, such increase calculated as being the difference between (i) the Average Price (as defined in the Acuren Delaware certificate of incorporation) per share of Acuren Delaware common stock over the last ten consecutive trading days of the Dividend Period for such Dividend Period (the “Dividend Price”) and (ii) (x) if no Annual Dividend Amount has previously been paid, a price of $10.00 per share of Acuren Delaware common stock, or (y) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Period (subject to adjustment in accordance with the Acuren Delaware certificate of incorporation); and
B = such number of shares of Acuren Delaware common stock equal to the number of Acuren BVI ordinary shares (or, if applicable, shares of Acuren Delaware common stock) outstanding on November 30, 2024 (which includes any Acuren BVI ordinary shares (or, if applicable, shares of Acuren Delaware common stock) issued pursuant to the exercise of ADMW Warrants but excludes any Acuren BVI ordinary shares (or, if applicable, shares of Acuren Delaware common stock) issued to shareholders or other beneficial owners of ASP Acuren, Inc. in connection with the Acuren Acquisition, which such number of shares is subject to adjustment as provided in the Acuren Delaware certificate of incorporation) (the “Series A Preferred Dividend Equivalent”).
“Dividend Period” means Acuren Delaware’s financial year (which may be twelve months or any longer or shorter period) as determined by the Acuren Delaware board of directors, except that (i) in the event of Acuren Delaware’s dissolution, the relevant Dividend Period will end on the trading day immediately prior to the date of dissolution and (ii) in the event of the automatic conversion of shares of Series A Preferred Stock of Acuren Delaware into shares of common stock of Acuren Delaware, the relevant Dividend Period will end on the trading day immediately prior to the date of such automatic conversion.
The Annual Dividend Amount is payable in shares of Acuren Delaware common stock. Each Annual Dividend Amount will be divided between the holders of Series A Preferred Stock pro rata to the number of Series A Preferred Stock held by them on the last day of the relevant Dividend Period (the “Dividend Date”). Each holder of a share of Series A Preferred Stock will be entitled to receive such number of whole shares of Acuren Delaware common stock as is determined by dividing the pro rata amount of the Annual Dividend Amount to which such holders is entitled, by the relevant Dividend Price.
In the event of a Change of Control, the holders of the Series A Preferred Stock will be entitled to receive, in the aggregate, a one-time dividend, equal to the Change of Control Dividend Amount, payable in Acuren Delaware common stock, the Change of Control Dividend Amount being divided between the holders of the Series A Preferred Stock pro rata to the number of Series A Preferred Stock held by such holders immediately prior to the consummation of the Change of Control (the “Change of Control Dividend Date”). The Change of Control Dividend Amount shall be paid on the Change of Control Dividend Date by issuing to each holder of Series A Preferred Stock such number of shares of Acuren Delaware common stock as is equal to (i) the pro rata amount of the Change of Control Dividend Amount to which they are entitled, divided by the Change of Control Price (as defined below). For purposes of this calculation, (i) the “Change of Control Dividend Amount” means the aggregate amount determined by adding together each Annual Dividend Amount that would have been payable for each Dividend Period (or part thereof) occurring during the Change of Control Dividend Period assuming that (w) we do not enter into liquidation during such Change of Control Dividend Period, (x) the Series A Preferred Stock is not automatically converted into Acuren Delaware common stock during the Change of Control Dividend Period, (y) no Change of Control occurs during the Change of Control Dividend Period and (z) the Dividend Price means, for each Dividend Period (or part thereof) in the Change of Control Dividend Period, the amount equal to the Change of Control Price increasing by eight percent (8%) per annum (compounded annually) for each such Dividend Period (or part thereof), (ii) “Change of Control Dividend Period” means the period beginning on the date of the consummation of the Change of Control and ending on the last day of the tenth full financial year following the completion of the Acuren Acquisition, and (iii) “Change of Control Price” means either (x) the cash amount per share to be received by holders of Acuren Delaware common stock in connection with a Change of Control or (y) where the amount per share to be received by holders of Acuren Delaware common stock in connection with a Change of Control is in a form other than cash, the Average Price for the last ten consecutive trading days prior to the consummation of the Change of Control event.
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The precise number of Acuren Delaware common stock that may be required to be issued pursuant to the terms of the Series A Preferred Stock cannot be ascertained at this time.
The issue of Acuren Delaware common stock in connection with the payment of the Annual Dividend Amount or Change of Control Dividend Amount will reduce (by the applicable proportion) the percentage stockholdings of those stockholders holding Acuren Delaware common stock prior to such issuance not entitled to such dividends. This does not take into account any dilution which may occur as a result of any other issuance of Acuren Delaware common stock pursuant to the other terms of the Series A Preferred Stock or otherwise and assumes that there is no adjustment (pursuant to the constitute documents) to the rate at which the Series A Preferred Stock convert into Acuren Delaware common stock.
Subject to applicable law and the rights, if any, of any series of preferred stock of Acuren Delaware then outstanding ranking senior to the Series A Preferred Stock as to dividends and on parity with the common stock of Acuren Delaware and any series of preferred stock of Acuren Delaware ranking on parity with such common stock, the holders of the Series A Preferred Stock shall be entitled to receive when, as and if a dividend (other than a dividend paid in shares of the Corporation) is declared on the Acuren Delaware common stock by the Board of Directors (i) a dividend per share of Series A Preferred Stock equal to the product obtained by multiplying the number of shares of Acuren Delaware common stock into which such shares of Series A Preferred Stock could then be converted, by the dividend payable on each such share of common stock, and (ii) a dividend per share of Series A Preferred Stock equal to the amount determined by dividing an amount equal to 20% of the dividend which would be distributable on such number of shares of Acuren Delaware common stock equal to the Series A Preferred Dividend Equivalent, by the number of shares of Series A Preferred Stock outstanding.
Automatic Conversion. The Series A Preferred Stock will be automatically converted into shares of Acuren Delaware common stock on a one-for-one basis (subject to certain adjustments in accordance with the terms of the Series A Preferred Stock) upon the earlier of (i) immediately following the Change of Control Dividend Date and (ii) the last day of the tenth full financial year following the consummation of the Acuren Acquisition, being December 31, 2034 (the “Automatic Conversion”).
Optional Conversion. By notice in writing and surrender of the relevant certificate or certificates to Acuren Delaware, a holder of Series A Preferred Stock will be able to convert some or all of such holder’s Series A Preferred Stock into an equal number of shares of Acuren Delaware common stock (subject to adjustment in accordance with the Acuren Delaware certificate of incorporation) and, in such circumstances, the shares of Series A Preferred Stock that were subject to such notice will be converted into shares of Acuren Delaware common stock on the fifth trading day after receipt by Acuren Delaware of such written notice (the “Optional Conversion”). In the event of an Optional Conversion, no relevant portion of the Annual Dividend Amount will be payable in respect of those shares of Series A Preferred Stock that are converted into shares of Acuren Delaware common stock for the Dividend Period in which the date of the Optional Conversion occurs.
Liquidation. Upon the voluntary or involuntary liquidation, dissolution, or winding up of the Company (a “Liquidation”). each share of Series A Preferred Stock will be entitled to receive the amount that would have been received in respect of such share had it been converted into common stock.
Voting Rights. Each holder of Series A Preferred Stock will be entitled to one vote per share of Series A Preferred Stock on all matters submitted to a vote of stockholders of Acuren Delaware generally, voting together with holders of Acuren Delaware common stock as a single class. The holders of Series A Preferred Stock will also have the right to vote separately as a single class on any amendment to the Acuren Delaware certificate of incorporation, whether by merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise, that would adversely alter or change the powers, preferences or rights or the qualifications, limitations or restrictions of the Series A Preferred Stock and as provided by applicable Delaware law.
Exclusive Forum
Acuren Delaware’s certificate of incorporation and bylaws provide that unless we consent in writing to the selection of an alternative forum, the Delaware Court of Chancery will be the sole and exclusive forum for: (1) derivative actions or proceedings brought on behalf of us; (2) actions asserting a claim of fiduciary duty owed by any of our directors, officers, stockholders or employees to us or our stockholders; (3) civil actions to apply, enforce any provision of the Delaware general corporation law; (4) actions asserting a claim subject to the jurisdiction of the Delaware Court of
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Chancery; or (5) actions asserting a claim governed by the internal affairs doctrine; provided, however, that the foregoing would not apply to any causes of action arising under the Securities Act or the Exchange Act. If the Delaware Court of Chancery lacks jurisdiction over any of the foregoing actions or proceedings, the Acuren Delaware certificate of incorporation bylaws provide that the sole and exclusive forum for such actions or proceedings will be another state or federal court located in the State of Delaware, as long as such court has personal jurisdiction over the parties. In addition, the Acuren Delaware certificate of incorporation and bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act; provided, however, that the foregoing will not apply to any action asserting a claim under the Exchange Act.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, Acuren Delaware’s certificate of incorporation and bylaws provide that the federal district courts of the United States will have exclusive jurisdiction over any action asserting a cause of action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.
Section 27 of the Exchange Act creates exclusive United States federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As noted above, Acuren Delaware’s certificate of incorporation and bylaws provide that the choice of forum provision does not apply to any action asserting claims arising under the Exchange Act. Accordingly, actions by Acuren Delaware stockholders asserting claims arising under the Exchange Act or the rules and regulations thereunder must be brought in United States federal court.
Notwithstanding the forum provisions contained in Acuren Delaware’s certificate of incorporation and bylaws, stockholders will not be deemed to have waived Acuren Delaware’s compliance with the federal securities laws and the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of Acuren Delaware’s capital stock will be deemed to have notice of and consented to the forum selection provisions in Acuren Delaware’s certificate of incorporation and bylaws.
The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Acuren Delaware or its directors, officers, stockholders, or other employees, which may discourage such lawsuits against Acuren Delaware and its directors, officers, stockholders, and other employees. Alternatively, if a court were to find the choice of forum provisions contained in Acuren Delaware’s certificate of incorporation or bylaws to be inapplicable or unenforceable in an action, Acuren Delaware may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, results of operations, and financial condition.
Registration Rights
The Company has agreed to provide the Founders and Founder Entity with certain registration rights that require the Company to provide them with such information and assistance following the Acuren Acquisition, subject to the restrictions described in the paragraph above and customary exceptions, as they may reasonably request to enable it to effect a disposition of all or part of their Acuren BVI ordinary shares or warrants, including, without limitation, the preparation, qualification and approval of a prospectus in respect of such Acuren BVI ordinary shares or warrants.
In connection with the Acuren Acquisition, Viking, Permian and Progeny, each of which beneficially own more than 5% of the Company’s issued and outstanding shares, irrevocably committed to purchase Acuren BVI ordinary shares in the PIPE Financing. In addition, in connection with the Warrant Financing, each of the Founder Entity, Viking, Permian and Progeny irrevocably committed to exercise their respective Warrants. In exchange for such commitments, the Company agreed, among other things, that when requested by written notice (delivered not earlier than three months following the Acuren Acquisition), the Company would use commercially reasonable efforts to promptly enter into a customary registration rights agreement with such entity, which agreement would provide for customary registration rights (subject to customary exceptions) with respect to the Acuren BVI ordinary shares, or any other equity interests later acquired by such entity in exchange for the Acuren BVI ordinary shares in connection with a recapitalization, redomiciliation or similar transaction.
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Comparison of Rights
The rights of Acuren BVI’s shareholders are currently governed by the BVI Companies Act and Acuren BVI’s Amended and Restated Memorandum and Articles of Association (the “Acuren BVI Articles”). At the Effective Time, the shareholders of Acuren BVI ordinary shares will automatically receive shares of Acuren Delaware common stock. Accordingly, after the Domestication, the rights of the holders of Acuren Delaware common stock will be governed by Delaware law and Acuren Delaware’s certificate of incorporation and bylaws. The following discussion summarizes material differences between the current rights of holders of Acuren BVI ordinary shares under the BVI Companies Act and the Acuren BVI Articles and the rights of the holders of Acuren Delaware common stock under Delaware law and Acuren Delaware’s certificate of incorporation and bylaws.
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Provision
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Acuren BVI
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Acuren Delaware
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Authorized Capital
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Unlimited number of ordinary shares and Founder Preferred Shares, no par value per share.
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505,000,000 shares, divided into two classes in the following numbers thereof: 500,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of preferred stock, $0.0001 par value per share, of which shares of preferred stock, 1,000,000 shares will be designated as Series A Preferred Stock.
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Preferred (Preference) Shares
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The Acuren Delaware certificate of incorporation will empower the Acuren Delaware board of directors to, by resolution, create and issue one or more series of preferred stock and, with respect to such series, determine the number of shares constituting the series and the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of the series.
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Amendments to Organizational Documents (i.e., Acuren BVI Articles and Acuren Delaware certificate of incorporation and bylaws)
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Amendments to the Acuren BVI Articles may be made by resolution of the directors (in limited circumstances) or by the shareholders (holders of ordinary shares and Founder Preferred Shares), provided that in the case of amendment by directors such amendment may only be made where the directors, in their discretion (acting in good faith) determine such amendment to be necessary or desirable in connection with or resulting from the Acuren Acquisition (including at any time after the Acuren Acquisition was consummated), including in connection with admission to listing on the NYSE and provided such amendment doesn’t have a materially adverse effect on the rights attaching to any class of shares as set out in the Acuren BVI Articles, unless the shareholders of the affected class consent in accordance with the Acuren BVI Articles.
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Pursuant to Delaware law, amendments to the Acuren Delaware certificate of incorporation will be required to be approved by the Acuren Delaware board of directors and, if applicable, by the holders of at least a majority of the outstanding stock entitled to vote on the amendment, and, if applicable, by the holders of at least a majority of the outstanding stock of each class or series entitled to vote on the amendment as a separate class or series. The Acuren Delaware certificate of incorporation will require the prior vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, voting or consenting as a separate class, to amend the Acuren Delaware certificate of incorporation, whether by merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise, that would adversely alter or change the powers, preferences or rights or the qualifications, limitations or restrictions of the Series A Preferred Stock. As permitted by Delaware law, the Acuren Delaware certificate of
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Provision
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Acuren BVI
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Acuren Delaware
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incorporation will require the vote of the holders of sixty-six and two-thirds percent of the voting power of the outstanding stock entitled to vote to amend certain provisions of the Acuren Delaware certificate of incorporation relating to, among other things, (i) management of Acuren Delaware, (ii) removal of directors, (iii) the filling of director vacancies, (iv) number of directors, (v) stockholder amendments to the Acuren Delaware bylaws, (vi) the calling of a special meeting of stockholders, (vii) limitation on stockholder action by written consent, and (viii) exculpation of directors and officers.
As permitted (but not required) by Delaware law, the Acuren Delaware certificate of incorporation will confer upon the Acuren Delaware board of directors the power to amend the Acuren Delaware bylaws.
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Voting Rights
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Each ordinary share has one vote for each share. Each Founder Preferred Share has one vote for each share.
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Each share of Acuren Delaware common stock will be entitled to one vote for each share. Each share of Series A Preferred Stock will be entitled to one vote for each share.
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Directors are elected by a resolution of directors to fill a vacancy or appoint an additional director or by a vote of shareholders. See “— Directors — Election/Appointment” below for information regarding the Founder Entity’s right to nominate and have appointed up to three directors.
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The Acuren Delaware bylaws will provide that directors are elected by majority of the votes cast (rather than the plurality of votes otherwise provided by Delaware law), and in contested elections, by plurality of the votes cast. All other matters submitted to stockholders will be decided by the affirmative vote of a majority of the votes cast with respect to such matter unless otherwise specified by the Acuren Delaware certificate of incorporation or bylaws, Delaware law or the rules or regulations of an exchange upon which the securities of Acuren Delaware are listed.
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Redemption of Shares; Treasury Shares
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Shares may be repurchased as determined by the board subject to shareholder consent and the solvency restrictions of BVI law. There are no capital limitations in the BVI Companies Act.
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Pursuant to Delaware law, shares may be repurchased or otherwise acquired, subject to the surplus and solvency restrictions of Delaware law, and except that shares subject to redemption at the option of Acuren Delaware may not be repurchased at a price which exceeds the price at which they could then be redeemed.
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Acuren BVI may hold or sell treasury shares.
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Pursuant to Delaware law, Acuren Delaware may hold or sell treasury shares.
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Provision
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Acuren BVI
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Acuren Delaware
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Shareholder/Stockholder Written Consent
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Pursuant to British Virgin Islands law, any action required to be taken by meeting of shareholders may be taken without meeting if consent is in writing and is signed by a majority of the shareholders entitled to vote if permitted by the articles of association. The Acuren BVI Articles provide for such consent in writing.
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The Acuren Delaware certificate of incorporation will provide that, except for actions required or permitted to be taken at any meeting of the holders of the Series A Preferred Stock, no action that is required or permitted to be taken by stockholders at a meeting may be effected by written consent in lieu of a meeting.
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Notice Requirements for Shareholder/Stockholder Nominations and Other Proposals
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To bring a matter before a meeting or to nominate a candidate for director, 10 days’ written notice must be given by Acuren BVI to the shareholders.
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As permitted (but not required) by Delaware law, the Acuren Delaware bylaws will provide that, in general, to bring a matter before an annual meeting of stockholders or to nominate a candidate for election as a director, a stockholder must give notice of the proposed matter or nomination not less than 90 days and not more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. The Acuren Delaware bylaws will provide that in the event the date of the annual meeting of stockholders is more than 30 days before or more than 70 days after such anniversary date, such stockholder notice must be delivered not less than 90 days and not more than 120 days prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by Acuren Delaware.
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Meeting of Shareholders/
Stockholders — Notice
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BVI Companies Act permits as few as 7 days’ notice of meetings of shareholders to be provided to shareholders. Under the Acuren BVI Articles, not less than 10 days’ notice is required; no maximum limit.
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As required by Delaware law, the Acuren Delaware bylaws will require not less than 10 days’ nor more than 60 days’ notice of a meeting of stockholders to be provided to stockholders, unless Delaware law provides for a different period.
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Meeting of Shareholders/
Stockholders — Call of Meeting
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Meetings of shareholders may be called by the directors and shall be called by the directors upon requisition by shareholders holding 30 percent of the voting rights in respect of the matter for which the meeting is requested. Pursuant to the Acuren BVI Articles, a meeting of the shareholders may be called by shorter notice if shareholders holding at least 90% of total voting rights on all matters to be considered at the meeting have waived notice of the meeting.
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The Acuren Delaware bylaws will provide that annual meetings of stockholders are designated by the board of directors. The Acuren Delaware certificate of incorporation and bylaws will provide that special meetings of stockholders may be called only by the board of directors, any chairman of the board of directors or the chief executive officer.
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Provision
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Acuren BVI
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Acuren Delaware
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Meeting of Shareholders/
Stockholders — Quorum
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Pursuant to British Virgin Islands law, a quorum for a meeting of shareholders is as designated in the memorandum and articles of association. A quorum for a meeting of shareholders is designated in the Acuren BVI Articles as one shareholder. Meetings of shareholders may be adjourned for such time as directors determine.
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Pursuant to Delaware law, the certificate of incorporation or bylaws may specify the number of shares required to constitute a quorum at a meeting of stockholders, but in no event may a quorum consist of less than one-third of shares entitled to vote at a meeting of stockholders.
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Under the Acuren Delaware bylaws, the presence in person or by proxy of the holders of a majority in voting power of the outstanding shares of stock entitled to vote at meeting of stockholders will be required to constitute a quorum. Also under the Acuren Delaware bylaws, if a quorum is absent at a meeting of stockholders, the stockholders present, by a majority in voting power thereof, will be able to adjourn the meeting. The person presiding at a meeting of stockholders will also be able to adjourn a meeting of stockholders under the Acuren Delaware bylaws. Notice will not need to be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person or by proxy and vote at such adjourned meeting are (a) announced at the meeting from which the adjournment is taken, (b) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication, or (c) set forth in the notice of meeting. If the adjournment is for more than thirty days, however, a notice of the adjourned meeting will be required to be given to each stockholder of record entitled to vote at the meeting. If, after the adjournment, a new record date for the stockholders entitled to vote is fixed for the adjourned meeting, the Acuren Delaware board of directors will be required to fix a new record date for notice of the adjourned meeting and 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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Provision
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Acuren BVI
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Acuren Delaware
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Meeting of Shareholders/ Stockholders — Record Date
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The record date for determining the shareholders entitled to vote at a meeting of shareholders is as fixed by the directors.
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Pursuant to Delaware law, the record date for determining the stockholders entitled to notice of any meeting of stockholders will be as fixed by the board of directors, but may not precede the date on which the resolution fixing the record date is adopted by the board of directors and may not be more than 60 days nor less than 10 days before the date of such meeting of stockholders. If the board of directors so fixes a date, such date will also be the record date for determining the stockholders entitled to vote at such meeting unless the board of directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting will be the date for making such determination. If no record date is fixed by the board of directors, the record date for determining the stockholders entitled to notice of and to vote at a meeting of stockholders will be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
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Directors —
Election/Appointment
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Directors are elected by the shareholders as entitled by their terms, including the holders of ordinary shares. Directors may also appoint a director to fill vacancy or as an additional director.
In addition, pursuant to the Acuren BVI Articles, for so long as the initial holder holds 20% or more of the Founder Preferred Shares, such holder will be entitled to nominate, and the directors will be required to appoint, up to three persons as director, and such holder may cause any director so nominated to be removed and replaced.
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Directors of Acuren Delaware will be elected annually by the stockholders entitled to vote, including by the holders of Acuren Delaware common stock and the holders of Series A Preferred Stock (and any other series of preferred stock then outstanding and so entitled to vote), voting together as a single class.
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Directors — Term
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The term of Acuren BVI directors is fixed by resolution of shareholders or directors; if no term is fixed at appointment, the director serves indefinitely.
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Directors of Acuren Delaware will serve for annual terms.
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Directors — Removal
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Acuren BVI directors may be removed by resolution of the shareholders or a resolution of directors.
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Pursuant to Delaware law and the Acuren Delaware certificate of incorporation, except for removal without cause of any directors elected by the holders of any series of Preferred Stock then outstanding, directors may be removed by the stockholders, with or without cause, solely by the affirmative vote of the holders of at least a majority in voting power of the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class.
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Provision
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Acuren BVI
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Acuren Delaware
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Directors — Vacancy
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Vacancies and new directorships may be filled by a majority vote of shareholders or a majority of the directors, subject to the designation rights of the holder of Founder Preferred Share under the Acuren BVI Articles.
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Under Acuren Delaware’s certificate of incorporation and bylaws, subject to the rights of any series of preferred stock, vacancies and newly created directorships will be filled solely by majority of directors then in office although less than a quorum or the sole remaining director.
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Directors — Number
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Board must consist of at least one director. Maximum number of directors can be changed by amendment to the Acuren BVI Articles. The Acuren BVI Articles provide that there shall be not less than one director, with no maximum.
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Under Delaware law, the number of directors is fixed by or in the manner provided in the bylaws unless fixed by the certificate of incorporation and if fixed by the certificate of incorporation, the number may be changed only by amendment to the certificate of incorporation. The Acuren Delaware bylaws will provide that the number of directors (not less than one) will be determined by resolution of the Acuren Delaware board of directors. The Acuren Delaware certificate of incorporation will provide that, during any period when holders of Preferred Stock have a right to elect one or more directors, the total authorized number of directors shall be increased by such directors.
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Directors — Quorum and Vote Requirements
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A quorum of directors is as fixed by the directors with a minimum of two, except if there is only one director then a quorum will be one.
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As permitted by Delaware law, the Acuren Delaware bylaws will provide that the presence of the directors entitled to cast a majority of the votes of the whole Acuren Delaware board of directors constitutes a quorum.
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A resolution of directors may be effected at a meeting of the directors by the affirmative vote of a majority of the directors present at the meeting who voted except that where a director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority.
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Except where applicable law or the Acuren Delaware certificate of incorporation or bylaws otherwise provide, a majority of the votes cast by the directors present at a meeting at which there is a quorum will constitute action by the Acuren Delaware board of directors.
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Directors — Managing Director
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Provision for the board to select one or more officers to be managing director.
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Not applicable.
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Director — Alternates
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Directors may appoint another director or person to attend and vote in his place at any meeting of the directors and perform the duties and functions and exercise the rights of such appointing director.
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Under Delaware law, directors may not act by proxy.
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Table of Contents
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Provision
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Acuren BVI
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Acuren Delaware
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Directors and Officers — Fiduciary Duties
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In summary, under British Virgin Islands law, directors and officers owe the following fiduciary duties:
• Duty to act in good faith in what the directors believe to be in the best interests of the company as a whole;
• Duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
• Directors should not improperly fetter the exercise of future discretion;
• Duty to exercise powers fairly as between different groups of shareholders;
• Duty not to put himself in a position of conflict between their duty to the company and their personal interests; and
• Duty to exercise independent judgment.
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Under Delaware law:
• Directors and officers must act in good faith, with due care, and in the best interest of the corporation and all of its stockholders.
• Directors and officers must refrain from self-dealing, usurping corporate opportunities not renounced in accordance with Delaware law, and receiving improper personal benefits.
• Decisions made by independent and directors on an informed basis, in good faith and in the honest belief that the action was taken in the best interest of the corporation and all of its stockholders will be protected by the “business judgment rule.”
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In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as “a reasonably diligent person” having both:
• the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and
• the general knowledge, skill and experience that that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of his position. However, in some instances, a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles or alternatively by shareholder approval at general meetings.
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Director —
Indemnification; Indemnification Insurance
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A summary of indemnification of officers and directors under the BVI Companies Act and the Acuren BVI Articles is discussed below following this table of comparison.
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A summary of indemnification of officers and directors under Delaware law, the Acuren Delaware bylaws and director indemnification agreements is discussed below following this table of comparison.
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Table of Contents
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Provision
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Acuren BVI
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Acuren Delaware
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A British Virgin Islands company may purchase insurance in relation to any person who is or was a director or officer of the company, including a liquidator of the company.
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A Delaware corporation may purchase insurance in relation to any person who is or was a director or officer of the corporation.
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Sale of Assets
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Under the BVI Companies Act, the sale of more than 50% of the assets of the company not otherwise in the ordinary course of business requires approval by a majority of the ordinary shares at a meeting at which a quorum is present (a quorum being 50% of the votes of the outstanding voting shares), unless disapplied. The Acuren BVI Articles disapply this requirement.
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Pursuant to Delaware law, the sale of all or substantially all the assets of Acuren Delaware (other than under certain circumstances related to the sale of assets securing a mortgage or pledged to a secured party) requires approval by the Acuren Delaware board of directors and the stockholders holding at least a majority of the outstanding shares of stock entitled to vote thereon.
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Compulsory Acquisition
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Under the BVI Companies Act, subject to any limitations in a company’s memorandum and articles, shareholders holding 90% of the votes of the outstanding shares entitled to vote, and shareholders holding 90% of the votes of the outstanding shares of each class of shares entitled to vote, may give a written instruction to the company directing the company to redeem the shares held by the remaining shareholders.
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Under Delaware law, in a process known as a “short form” merger, a corporation that owns at least 90% of the outstanding shares of each class of voting stock of another corporation that, absent such law, would be entitled to vote on such merger, may either merge the other corporation into itself and assume all of its obligations or merge itself into the other corporation by executing, acknowledging and filing with the Secretary of State of the State of Delaware a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors authorizing such merger. If the parent corporation is a Delaware corporation that is not the surviving corporation, the merger also must be approved by a majority of the outstanding stock of the parent corporation entitled to vote thereon. If the parent corporation does not own all of the stock of the subsidiary corporation immediately prior to the merger, the minority stockholders of the subsidiary corporation party to the merger will have appraisal rights.
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Dissolution/Winding Up
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Under BVI law, a company may be wound up by resolution of directors in limited circumstances, including if permitted under the memorandum or articles, or by resolution of members. The Acuren BVI Articles permit winding up by resolution of directors where the company is a dormant company, or in connection with an acquisition (including the Acuren Acquisition).
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Under Delaware law, the dissolution of a corporation requires either (1) the approval of the board of directors and at least a majority of the outstanding stock entitled to vote thereon or (2) the approval of all of the stockholders entitled to vote thereon.
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Preferred Stock Dividend
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The Acuren BVI Articles provide that any Annual Dividend Amount may be payable in either Acuren BVI ordinary shares or cash, at the sole option of Acuren BVI.
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The Acuren Delaware certificate of incorporation provides that any Annual Dividend Amount is required to be paid in shares of Acuren Delaware common stock.
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Table of Contents
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Provision
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Acuren BVI
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Acuren Delaware
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Dissenters’/Appraisal Rights
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A stockholder may dissent and obtain fair value of shares in connection with certain mergers and consolidations.
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A stockholder may dissent and obtain fair value of shares in connection with certain mergers, consolidations, conversions, domestications, transfers, and continuances.
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Shareholders’/
Stockholders’ Derivative Actions
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|
Generally speaking, the company is the proper plaintiff in any action. Derivative actions brought by one or more of the registered shareholders may only be brought with the leave of the Supreme Court where the following circumstances apply:
• Those who control the company have refused a request by the shareholders to move the company to bring the action;
• Those who control the company have refused to do so for improper reasons such that they are perpetrating a “fraud on the minority” (this is a legal concept and is different to “fraud” in the sense of dishonesty);
• a company is acting or proposing to act illegally or beyond the scope of its authority;
• the act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which have actually been obtained; or
• the individual rights of the plaintiff shareholder have been infringed or are about to be infringed.
Once a shareholder has relinquished his, her or its shares (whether by redemption or otherwise), it is generally the case that they could no longer bring a derivative action as they would no longer be a registered shareholder.
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Pursuant to Delaware law, in any derivative suit instituted by a stockholder of a corporation, it must be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which the stockholder complains or that such stockholder’s stock thereafter devolved upon such stockholder by operation of law.
Pursuant to Delaware law, the complaint must set forth with particularity the efforts of the plaintiff to obtain action by the board of directors (“demand refusal”) or the reasons for not making such effort (“demand excusal”).
Such action may not be dismissed or compromised without the approval of the court.
In general, the stockholder instituting the derivative suit must maintain stock ownership through the pendency of the derivative suit.
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|
Anti-Takeover Provisions
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|
Not applicable.
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|
Delaware law generally prohibits “business combinations,” including mergers, sales and leases of assets, issuances of securities and other transactions resulting in financial benefit to an “interested stockholder”, with an “interested stockholder” who directly or indirectly beneficially “owns” 15% or more
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Provision
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Acuren BVI
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Acuren Delaware
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of a corporation’s voting stock, within three years after the person or entity becomes an interested stockholder, unless:
• the business combination or the transaction which caused the person or entity to become an interested stockholder is approved by the board of directors prior to the business combination or the transaction;
• upon the completion of the transaction in which the person or entity becomes an interested stockholder, the interested stockholder “owns” at least 85% of the “voting stock” of the corporation not including (a) shares “owned” by officers and directors and (b) shares “owned” by employee benefit plans under certain circumstances; or
• at or after the person or entity becomes an interested stockholder, the business combination is approved by the board of directors and holders of at least 66 2/3% of the outstanding “voting stock”, excluding voting stock “owned” by the interested stockholder.
A Delaware corporation may elect not to be governed by this Delaware law by provision of its initial certificate of incorporation. Acuren Delaware will not make such an election in the Acuren Delaware certificate of incorporation.
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Exclusive Forum
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|
The Acuren BVI Articles do not provide for a specific forum.
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|
Unless Acuren Delaware consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Acuren Delaware, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee of Acuren Delaware to Acuren Delaware or to Acuren Delaware stockholders, (iii) any civil action to interpret, apply or
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Provision
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Acuren BVI
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Acuren Delaware
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enforce any provision of the DGCL, (iv) any action asserting a claim, including a claim in the right of Acuren Delaware, as to which the DGCL confers jurisdiction upon the Court of Chancery, or (v) any action asserting a claim against Acuren Delaware governed by the internal affairs doctrine. Subject to the preceding provision, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act.
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Indemnification of Directors and Officers
The Acuren BVI Articles provide that Acuren BVI may indemnify any person who is or was a director or who is or was, at our request, serving as a director of, or in any other capacity is or was acting for, another entity, against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. A person may be indemnified only if he or she acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings, had no reasonable cause to believe that his or her conduct was unlawful. The decision of the Acuren BVI board of directors as to whether the director or officer acted honestly and in good faith with a view to Acuren BVI’s best interests and as to whether the director or officer had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purpose of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director or officer did not act honestly and in good faith and with a view to our best interests or that the director or officer had reasonable cause to believe that his or her conduct was unlawful.
Under the DGCL, a Delaware corporation may include in its certificate of incorporation a provision that, subject to the limitations described below, eliminates or limits the personal liability of a director or officer to the corporation or its stockholders for monetary damages for breaches of fiduciary duty as a director or officer. Such a provision may not eliminate or limit the liability of (a) a director or officer for (i) any breach of the duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) transactions from which such director or officer derived an improper personal benefit; (b) a director for the willful or negligent payment of unlawful dividends or purchases or redemptions of shares of stock; or (c) an officer in any action by or in the right of the corporation. The Acuren Delaware certificate of incorporation will include a provision providing that directors and officers of Acuren Delaware shall not be liable to Acuren Delaware or its stockholders for monetary damages for breach of fiduciary duty, except to the extent such exemption or limitation is not permitted by the DGCL.
The DGCL also provides that a Delaware corporation has the power to indemnify any person who is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee of another entity, against reasonable expenses (including attorneys’ fees) and, in actions or suits not brought by or in the right of the corporation, judgments, fines and amounts paid in settlement, in each case, actually and reasonably incurred in connection with such action, suit or proceeding, but only if such person acted in a manner reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful, except that in any action brought by or in the right of the corporation, such indemnification may not be made if such person is adjudged liable to the corporation (unless otherwise determined by the court in which such action, suit or proceeding was brought or the Delaware Court of Chancery). In addition, under Delaware law, to the extent that a present or former director or officer of a Delaware corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred
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to above or any claim, issue or matter therein, he or she must be indemnified by the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by him or her. Furthermore, under Delaware law, a Delaware corporation is permitted to maintain directors’ and officers’ insurance.
The Acuren Delaware bylaws will require Acuren Delaware to indemnify any person who is or was a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding described above by reason of the fact that such person is or was a director of Acuren Delaware or, while a director or officer of Acuren Delaware, is or was serving at the request of Acuren Delaware as a director, officer, employee or agent of another entity, to the fullest extent permitted by law. Acuren Delaware’s bylaws also will require Acuren Delaware to pay the legal expenses (including attorneys’ fees) of any such person in defending any such action, suit or proceeding in advance of its final disposition subject, in the case of present directors and officers, to the provision by such director or officer of an undertaking to repay the amounts advanced if it is ultimately determined that such director or officer is not entitled to be indemnified under the Acuren Delaware bylaws or otherwise.
Further, effective July 30, 2024, we entered into director indemnification agreements pursuant to which we agreed to additional indemnification and advancement procedures and protections for our directors.
Delaware Anti-Takeover Laws and the New Acuren Delaware Certificate of Incorporation and Bylaws
Delaware law and the Acuren Delaware certificate of incorporation and bylaws will contain provisions that may prevent or discourage a third party from acquiring Acuren Delaware, even if the acquisition would be beneficial to its stockholders.
Upon effectiveness of the Domestication and pursuant to the Acuren Delaware certificate of incorporation, the board of directors of Acuren Delaware will have the authority to create one or more series of preferred stock of Acuren Delaware (in addition to the Series A Preferred Stock) and to fix the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of shares of such new series of preferred stock of Acuren Delaware and to issue shares of such series without a stockholder vote, which could be used to dilute the ownership of a hostile acquiror.
Upon the effectiveness of the Domestication and pursuant to the Acuren Delaware certificate of incorporation, the Acuren Delaware board of directors will have the power to amend the bylaws of Acuren Delaware, which may allow Acuren Delaware’s board of directors to take certain actions to prevent an unsolicited takeover.
Upon effectiveness of the Domestication, Acuren Delaware will also be subject to Delaware law prohibiting Acuren Delaware from engaging in any “business combination” with an “interested stockholder” for a period of three years subsequent to the time that the stockholder became an interested stockholder unless:
• prior to such time, the Acuren Delaware’s board of directors approved either the business combination or the transaction in which the stockholder became an interested stockholder;
• upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder “owns” at least 85% of the outstanding “voting stock” (with certain exclusions); or
• at or after the person becomes an interested stockholder, the business combination is approved by the Acuren Delaware board of directors and authorized by a vote of at least 66 2/3% of the outstanding voting stock of Acuren Delaware not “owned” by the interested stockholder.
For purposes of Delaware law, an “interested stockholder” generally is defined as an entity or person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) directly or indirectly beneficially “owning” 15% or more of the outstanding “voting stock” of the corporation and any entity or person affiliated or associated with such entity or person.
For purposes of Delaware law, a “business combination” includes mergers, asset sales and other transactions resulting in financial benefit to a stockholder. This Delaware law could prohibit or delay mergers or other takeover or change of control attempts with respect to Acuren Delaware and, accordingly, may discourage attempts that might result in a premium over the market price for the shares held by stockholders of Acuren Delaware.
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
This section describes the material U.S. federal income tax consequences of (A) the Domestication to a U.S. Holder (as defined below) of Acuren BVI ordinary shares and (B) the ownership and disposition of shares of Acuren Delaware common stock after the Domestication by a non-U.S. Holder (as defined below). This section applies only to holders that hold Acuren BVI ordinary shares or Acuren Delaware common stock, as applicable, as capital assets for U.S. federal income tax purposes (generally, property held for investment). This section is general in nature and does not discuss all aspects of U.S. federal income taxation that might be relevant to a particular holder in light of its personal investment circumstances or status, nor does it address tax considerations applicable to a holder that is a member of a special class of holders subject to special rules, including:
• a broker or dealer in securities;
• a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
• a tax-exempt organization, qualified retirement plan, individual retirement account or other tax deferred account;
• a financial institution, underwriter, insurance company, real estate investment trust or regulated investment company;
• a person liable for alternative minimum tax;
• a U.S. expatriate or former long-term resident of the United States;
• a person that owns (directly, indirectly, or by attribution) 10% or more (by vote or value) of Acuren BVI ordinary shares or Acuren Delaware common stock (except as specifically provided below);
• a partnership or other pass-through entity for U.S. federal income tax purposes, or a beneficial owner of a partnership or other pass-through entity;
• a person that holds Acuren BVI ordinary shares or Acuren Delaware common stock as part of a straddle, hedging or conversion transaction, constructive sale, or other arrangement involving more than one position;
• a person that is required to accelerate the recognition of any item of gross income with respect to the Acuren BVI ordinary shares or Acuren Delaware common stock as a result of such income being recognized on an applicable financial statement;
• a U.S. holder whose functional currency is not the U.S. dollar;
• a person that received Acuren BVI ordinary shares or Acuren Delaware common stock as compensation for services;
• a controlled foreign corporation; or
• a passive foreign investment company.
This section is based on the Code, its legislative history, existing and proposed Treasury regulations promulgated under the Code (the “Treasury Regulations”), published rulings by the U.S. Internal Revenue Service (“IRS”) and court decisions, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. This discussion does not address U.S. federal tax laws other than those pertaining to U.S. federal income taxation (such as estate or gift tax laws or the Medicare tax on investment income), nor does it address any aspects of U.S. state or local or non-U.S. taxation.
We have not and do not intend to seek any rulings from the IRS regarding the Domestication. The Domestication will be effected in part under the applicable provisions of British Virgin Islands law which are not identical to analogous provisions of U.S. corporate law. There is no assurance that the IRS will not take positions concerning the tax consequences of the Domestication that are different from those discussed below, or that any such different positions would not be sustained by a court.
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If a partnership (including for this purpose any entity or arrangement so characterized for U.S. federal income tax purposes) holds Acuren BVI ordinary shares, the tax treatment of such partnership and a person treated as a partner of such partnership generally will depend on the status of the partner and the activities of the partnership.
Partnerships holding Acuren BVI ordinary shares or Acuren Delaware common stock and persons that are treated as partners of such partnerships should consult their own tax advisors as to the particular U.S. federal income tax consequences of the Domestication and holding or disposing of Acuren BVI ordinary shares or Acuren Delaware common stock.
THE FOLLOWING IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE. SHAREHOLDERS SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE DOMESTICATION AND CONSIDERATIONS RELATING TO THE OWNERSHIP AND POSSIBLE DISPOSITION OF ACUREN DELAWARE COMMON STOCK, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. TAX LAWS.
U.S. Holders
The following describes the material U.S. federal income tax consequences of the Domestication to a U.S. Holder. For purposes of this discussion, a U.S. Holder means a beneficial owner of an Acuren BVI ordinary share that is, for U.S. federal income tax purposes:
• an individual who is a citizen or resident of the United States;
• a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any state thereof (including the District of Columbia);
• an estate whose income is subject to U.S. federal income tax regardless of its source; or
• a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust; or (2) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
U.S. Federal Income Tax Characterization of the Domestication
The U.S. federal income tax consequences of the Domestication will depend primarily upon whether the Domestication qualifies as a “reorganization” within the meaning of Section 368 of the Code. Under Section 368(a)(1)(F) of the Code, a reorganization (an “F Reorganization”) is a “mere change in identity, form, or place of organization of one corporation, however effected.” Pursuant to the Domestication, the Company will change its jurisdiction of incorporation from the British Virgin Islands to Delaware.
In the opinion of Greenberg Traurig, counsel to the Company, the Domestication should qualify as an F Reorganization, subject to the assumptions, qualifications and limitations described herein and in the opinion included as Exhibit 8.1 hereto. An opinion of counsel is not binding on the IRS or any court, and there can be no assurance that the IRS or any court will agree with this position. The Company has not requested a ruling from the IRS with respect to any aspect of the U.S. federal income tax treatment of the Domestication.
If the Domestication qualifies as an F Reorganization, U.S. Holders generally should not recognize taxable gain or loss on the Domestication for U.S. federal income tax purposes, except as provided below under the headings “Effects of Section 367” and “PFIC Considerations.” The aggregate adjusted tax basis of the Acuren Delaware common stock received in the Domestication by a U.S. Holder should be equal to the adjusted tax basis of the Acuren BVI ordinary shares deemed exchanged therefor, increased by any amount included in the income of such U.S. Holder as a result of Section 367 of the Code (as discussed below), and the holding period of the Acuren Delaware common stock should include U.S. Holder’s holding period of the Acuren BVI ordinary shares deemed exchanged therefor.
If the Domestication does not qualify as an F Reorganization, it is not clear how the Domestication would be characterized for U.S. federal income tax purposes and what the resulting tax consequences would be. In such case, the tax consequences of the Domestication to U.S. Holders may depend, among other things, on whether the
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Domestication would otherwise qualify for tax-free treatment under Section 368 or Section 351 of the Code, and U.S. Holders might be required to recognize any gain realized on the deemed exchange of Acuren BVI ordinary shares for Acuren Delaware common stock, although possibly not any loss realized.
Effect of Section 367
Section 367 of the Code applies to certain non-recognition transactions involving foreign (i.e., non-U.S.) corporations, including a domestication of a foreign corporation in an F Reorganization. When it applies, Section 367 imposes income tax on certain United States persons in connection with transactions that would otherwise be tax-free.
A. U.S. Holders of 10 Percent or More of Acuren BVI Ordinary Shares
A U.S. Holder who on the date of the Domestication beneficially owns (directly, indirectly or constructively) 10% or more of the total combined voting power of all classes of Acuren BVI stock entitled to vote or 10% or more of the total value of shares of all classes of Acuren BVI stock (a “U.S. 10% Shareholder”) must include in income as a dividend the “all earnings and profits amount” attributable to the Acuren BVI stock it directly owns, within the meaning of Treasury Regulation Section 1.367(b)-2(d). A U.S. Holder’s ownership of stock options will be taken into account in determining whether such holder owns 10% or more of the total combined voting power of all classes of Acuren BVI stock entitled to vote or 10% or more of the total value of shares of all classes of Acuren BVI stock. Complex attribution rules apply in determining whether a U.S. Holder owns 10% or more (by vote or value) of Acuren BVI stock.
A U.S. 10% Shareholder’s all earnings and profits amount with respect to its Acuren BVI ordinary shares is the net positive earnings and profits of the corporation (as determined under Treasury Regulation Section 1.367(b)-2(d)(2)) attributable to the shares (as determined under Treasury Regulation Section 1.367(b)-2(d)(3)) but without regard to any gain that would be realized on a sale or exchange of such shares. Treasury Regulation Section 1.367(b)-2(d)(3) provides that all earnings and profits amount attributable to a shareholder’s stock is determined according to the principles of Section 1248 of the Code. In general, Section 1248 of the Code and the Treasury Regulations thereunder provide that the amount of earnings and profits attributable to a block of stock in a foreign corporation is the ratably allocated portion of the foreign corporation’s earnings and profits generated during the period the shareholder held the block of stock.
Accordingly, under Treasury Regulation Section 1.367(b)-3(b)(3), a U.S. 10% Shareholder should be required to include in income as a deemed dividend the all earnings and profits amount (as defined in Treasury Regulation Section 1.367(b)-2(d)) with respect to its Acuren BVI ordinary shares. Based on its own expectation of its projected earnings and profits through the Domestication, Acuren BVI expects to have cumulative earnings and profits through the date of the Domestication. As a result, depending upon the period in which such a U.S. 10% Shareholder held its Acuren BVI ordinary shares, such U.S. 10% Shareholder would be required to include its earnings and profits amount in income as a deemed dividend under Treasury Regulation Section 1.367(b)-3(b)(3) as a result of the Domestication. We intend to advise all Acuren BVI shareholders of the results of all earnings and profits analysis by posting the results on our website.
The determination of the Company’s earnings and profits is a complex determination and may be impacted by numerous factors. It is possible that the amount of Acuren BVI’s earnings and profits could be greater than expected through the date of the Domestication or could be adjusted as a result of an IRS examination.
B. U.S. Holders That Own Less Than 10 Percent of Acuren BVI Ordinary Shares
A U.S. Holder who on the date of the Domestication beneficially owns (directly, indirectly or constructively) Acuren BVI ordinary shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of Acuren BVI stock entitled to vote and less than 10% or more of the total value of shares of all classes of Acuren BVI stock, generally will recognize gain but not loss with respect to the deemed receipt of Acuren BVI ordinary shares in the Domestication or, in the alternative, may elect to recognize the “all earnings and profits” amount as described below.
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Unless a U.S. Holder makes the “all earnings and profits” election as described below, such holder generally must recognize gain (but not loss) with respect to the deemed receipt of Acuren BVI ordinary shares in the Domestication. Any such gain should be equal to the excess of the fair market value of the Acuren Delaware common stock received over the U.S. Holder’s adjusted basis in the Acuren BVI ordinary shares deemed to be surrendered in exchange therefor. Such gain should be capital gain, and should be long-term capital gain if the holder held the Acuren BVI ordinary shares for longer than one year.
In lieu of recognizing any gain as described in the preceding paragraph, a U.S. Holder may elect to include in income the all earnings and profits amount attributable to its Acuren BVI ordinary shares under Section 367(b). There are, however, strict conditions for making this election. This election must comply with applicable Treasury Regulations and generally must include, among other things: (i) a statement that the transaction is a Section 367(b) exchange; (ii) a complete description of the transaction, (iii) a description of any stock, securities or other consideration transferred or received in the transaction, (iv) a statement describing the amounts required to be taken into account for U.S. federal income tax purposes, (v) a statement that the U.S. Holder is making the election that includes (A) a copy of the information that the U.S. Holder received from Acuren BVI establishing and substantiating the U.S. Holder’s all earnings and profits amount with respect to the U.S. Holder’s Acuren BVI ordinary shares, and (B) a representation that the U.S. Holder has notified Acuren BVI (or Acuren Delaware) that the U.S. Holder is making the election, and (vi) certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the Code or the Treasury Regulations. In addition, the election must be attached by the U.S. Holder to its timely filed U.S. federal income tax return for the year of the Domestication, and the U.S. Holder must send notice to Acuren BVI of the election no later than the date such tax return is filed. As mentioned above, we intend to advise all Acuren BVI shareholders of the results of all earnings and profits analysis by posting the results on our website.
Acuren BVI expects to have cumulative earnings and profits through the date of the Domestication. As a result, a U.S. Holder that makes the election described herein would have an all earnings and profits amount with respect to its Acuren BVI ordinary shares, and thus would be required to include that amount in income as a deemed dividend as a result of the Domestication.
The determination of the Company’s earnings and profits is a complex determination and may be impacted by numerous factors. It is possible that the amount of Acuren BVI’s earnings and profits could be greater than expected through the date of the Domestication or could be adjusted as a result of an IRS examination.
U.S. HOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING WHEN AND WHETHER TO MAKE THIS ELECTION AND, IF THE ELECTION IS DETERMINED TO BE ADVISABLE, THE APPROPRIATE FILING REQUIREMENTS WITH RESPECT TO THIS ELECTION.
C. U.S. Holders that Own Acuren BVI Ordinary Shares with a Fair Market Value Less Than $50,000
A U.S. Holder who on the date of the Domestication owns (directly, indirectly or constructively) stock of Acuren BVI with a fair market value less than $50,000 should not be required to recognize any gain or loss under Section 367 of the Code in connection with the Domestication, and generally should not be required to include any part of the all earnings and profits amount in income.
U.S. HOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TIMING OF THE APPLICABILITY AND THE CONSEQUENCES OF SECTION 367(b) IN THE CASE OF THE DOMESTICATION.
PFIC Considerations
In addition to the discussion above, the Domestication could be a taxable event to U.S. Holders under the PFIC provisions of the Code if Acuren BVI is or ever was a PFIC.
A. Definition of a PFIC
In general, Acuren BVI will be a PFIC with respect to a U.S. Holder if, for any taxable year in which such U.S. Holder held the Acuren BVI ordinary shares, (a) at least 75% or more of Acuren BVI’s gross income for the taxable year was passive income or (b) at least 50% or more of the value, determined on the basis of a quarterly average, of Acuren BVI’s assets is attributable to assets that produce or are held to produce passive income. Passive
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income generally includes dividends, interest, rents and royalties (other than certain rents and royalties that are derived in the active conduct of a trade or business), and gains from the disposition of passive assets. For purposes of these rules, cash generally is considered to be a passive asset.
Pursuant to a “startup exception,” a foreign corporation will not be a PFIC for the first taxable year the foreign corporation has gross income (the “startup year”) if (1) no predecessor of the foreign corporation was a PFIC; (2) the foreign corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (3) the foreign corporation is not in fact a PFIC for either of those years.
B. PFIC Status of the Company
While we believe Acuren BVI may be eligible for the start-up exception, the application of such exception is subject to uncertainty and there can be no assurance with respect to Acuren BVI’s status as a PFIC for our current taxable year or any prior taxable year.
C. Effect of PFIC Rules on the Domestication
Section 1291(f) of the Code requires that, to the extent provided in Treasury Regulations, a U.S. person who disposes of stock of a PFIC recognizes gain notwithstanding any other provision of the Code. No final Treasury Regulations are currently in effect under Section 1291(f). However, proposed Treasury Regulations under Section 1291(f) have been promulgated and may be applied with a retroactive effective date. If finalized in their current form, those regulations would generally require taxable gain recognition to U.S. Holders of the Acuren BVI ordinary shares on the Domestication if Acuren BVI was classified as a PFIC at any time during such U.S. Holder’s holding period for such shares and the U.S. Holder had not made a QEF Election (as discussed below) for the first taxable year in which the U.S. Holder owned the Acuren BVI ordinary shares and in which Acuren BVI was a PFIC (or, if in a later taxable year, a QEF Election together with a deemed sale election). The tax on any such recognized gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of computational rules designed to offset the tax deferral with respect to the undistributed earnings of Acuren BVI. Under these “excess distribution” rules:
• the U.S. Holder’s gain would be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s Acuren BVI ordinary shares;
• the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which Acuren BVI was a PFIC, would be taxed as ordinary income;
• the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s holding period would be taxed at the highest tax rate in effect for that year applicable to the U.S. Holder; and
• the interest charge generally applicable to underpayments of tax would be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.
The proposed Treasury Regulations under Section 1291(f) of the Code were proposed before the Code was amended to allow a U.S. person to make a mark-to-market election (as discussed below). Accordingly, it is not clear how these rules would apply to a U.S. Holder who has made such an election.
Any “all earnings and profits amount” included in income by a U.S. Holder under Section 367(b) of the Code as a result of the Acuren Acquisition generally would be treated as gain subject to the PFIC rules. In addition, the proposed Treasury Regulations would provide coordinating rules with Section 367(b) of the Code, whereby, if the gain recognition rule of the proposed Treasury Regulations under Section 1291(f) applies to a disposition of PFIC stock that results from a transfer with respect to which Section 367(b) requires the shareholder to recognize gain or include an amount in income as a distribution under Section 301 of the Code, the gain realized on the transfer is taxable as an excess distribution under Section 1291 of the Code, and the excess, if any, of the amount to be included in income under Section 367(b) over the gain realized under Section 1291 is taxable as provided under Section 367(b). See the discussion above under the caption heading “— Effect of Section 367.”
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It is not possible to predict whether, in what form and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such Treasury Regulations would apply. Therefore, U.S. Holders of Acuren BVI ordinary shares that have not made a timely QEF Election may, pursuant to the proposed Treasury Regulations, be subject to taxation under the PFIC rules on the Domestication.
D. QEF Election, Deemed Sale Election and Mark-to-Market Election
The impact of the PFIC rules on a U.S. Holder of Acuren BVI ordinary shares may depend on whether the U.S. Holder has made a timely and effective election to treat Acuren BVI as a “qualified electing fund” under Section 1295 of the Code for the taxable year that is the first year in the U.S. Holder’s holding period of Acuren BVI ordinary shares during which Acuren BVI was classified as a PFIC (a “QEF Election”) or, if in a later taxable year, the U.S. Holder made a QEF Election together with a deemed sale election. A deemed sale election creates a deemed sale of the U.S. Holder’s Acuren BVI ordinary shares at their then fair market value and requires the U.S. Holder to recognize gain (but not loss) pursuant to the election subject to the special PFIC tax and interest charge rules described above. As a result of any deemed sale election, the U.S. Holder would increase its tax basis in its Acuren BVI ordinary shares to the extent of any gain recognized, but its holding period in its Acuren BVI ordinary shares would remain unchanged for general federal income tax purposes, but such holding period would be restarted for purposes of applying the PFIC excess distribution rules described above. The QEF Election requires the U.S. Holder to include in income its pro rata share of Acuren BVI’s net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which Acuren BVI’s taxable year ends. If a QEF Election and deemed sale election have been made, the electing U.S. Holder thereafter generally will not be subject to the excess distribution rules described above.
The impact of the PFIC rules on a U.S. Holder of Acuren BVI ordinary shares may also depend on whether the U.S. Holder has made an election under Section 1296 of the Code. U.S. Holders who hold (or are deemed to hold) stock of a foreign corporation that is classified as a PFIC may annually elect to mark such stock to its market value if such stock is “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including the NYSE, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value (a “mark-to-market election”). If the U.S. Holder makes a valid mark-to-market election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Acuren BVI ordinary shares and for which Acuren BVI is classified as a PFIC, such holder generally will not be subject to the excess distribution rules described above. Instead, in general, the U.S. Holder will include as ordinary income for each of the taxable years the excess, if any, of the fair market value of its Acuren BVI ordinary shares at the end of such taxable year over the adjusted basis in its Acuren BVI ordinary shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Acuren BVI ordinary shares over the fair market value of its Acuren BVI ordinary shares at the end of such taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Acuren BVI ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of the Acuren BVI ordinary shares will be treated as ordinary income. As discussed above, it is not clear how the proposed Treasury Regulations under Section 1291(f) of the Code would apply to a U.S. Holder who has made a mark-to-market election.
E. Information Reporting
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder generally is required to file an IRS Form 8621 (whether or not a QEF Election or mark-to-market election is made) and such other information as may be required under the Treasury Regulations or other IRS guidance. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding these filing requirements.
The PFIC rules are complex and the implementation of certain aspects of the PFIC rules requires the issuance of Treasury Regulations which in many instances have not been promulgated but which may be promulgated with retroactive effect. There can be no assurance that any of these proposals will be enacted or promulgated, and if so, the form they will take or the effect that they may have on this discussion. Accordingly, and due to the complexity of the PFIC rules, U.S. Holders are strongly urged to consult their own tax advisers concerning the impact of these
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rules on the Domestication, including, without limitation, whether a QEF Election, deemed sale election and/or mark to market election is available with respect to their Acuren BVI ordinary shares and the consequences to them of any such election.
Non-U.S. Holders
We do not expect the Domestication to result in any U.S. federal income tax consequences to non-U.S. Holders of Acuren BVI ordinary shares. The following describes the material U.S. federal income tax consequences of the ownership and disposition of shares of Acuren Delaware common stock after the Domestication by a non-U.S. Holder. For purposes of this discussion, a non-U.S. Holder means a beneficial owner of Acuren Delaware common stock that is neither a U.S. Holder nor a partnership (or entity or arrangement treated as a partnership) for U.S. federal income tax purposes.
Distributions
As discussed under the section entitled “Risk Factors” above, Acuren Delaware does not anticipate paying dividends. In the event that Acuren Delaware does make a distribution of cash or property with respect to Acuren Delaware common stock, respectively, any such distribution will be treated as a dividend for U.S. federal income tax purposes to the extent paid from Acuren Delaware’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Dividends paid to a non-U.S. Holder generally will be subject to withholding tax at a 30% rate or a reduced rate specified by an applicable income tax treaty. In order to obtain a reduced rate of withholding, a non-U.S. Holder generally will be required to provide to Acuren Delaware an IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying its entitlement to benefits under the treaty.
The withholding tax does not apply to dividends paid to a non-U.S. Holder that provides an IRS Form W-8ECI, certifying that the dividends are effectively connected with the non-U.S. Holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to U.S. tax on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons (subject to an applicable income tax-treaty providing otherwise). A corporate non-U.S. Holder receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
If a non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty, the non-U.S. Holder may obtain a refund of any amounts withheld in excess of that rate by timely filing a refund claim with the IRS.
If the amount of a distribution paid by Acuren Delaware on a share of Acuren Delaware common stock to a non-U.S. Holder exceeds Acuren Delaware’s current and accumulated earnings and profits, as the case may be, such excess will be treated first as a tax-free return of capital to the extent of the non-U.S. Holder’s adjusted tax basis in such share, and thereafter as capital gain from a sale or other disposition of such share that is taxed as described below under the heading “— Sale or Other Taxable Disposition of Acuren Delaware common stock.”
Sale or Other Taxable Disposition of Acuren Delaware common stock
A non-U.S. Holder generally will not be subject to U.S. federal income tax on gain realized on a sale or other disposition of a share of Acuren Delaware common stock unless:
(i) the non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of the disposition and other requirements are met,
(ii) the gain is effectively connected with a trade or business of the non-U.S. Holder in the United States (in which case, the gain will be subject to U.S. tax on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons (subject to an applicable income tax-treaty providing otherwise) and, if the non-U.S. Holder is a corporation, an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate) may also apply), or
(iii) Acuren Delaware is or has been a U.S. real property holding corporation at any time within the five-year period preceding the disposition or the non-U.S. Holder’s holding period, whichever period is shorter, and either (A) the Acuren Delaware common stock has ceased to be regularly traded on an established
113
Table of Contents
securities market or (B) the non-U.S. Holder has owned or is deemed to have owned, at any time within the five-year period preceding the disposition or the non-U.S. Holder’s holding period, whichever period is shorter, more than 5% of Acuren Delaware’s common stock.
Acuren Delaware does not anticipate becoming a U.S. real property holding corporation for U.S. federal income tax purposes. However, the determination of whether a corporation is a U.S. real property holding corporation is primarily factual and there can be no assurance whether such facts will change or whether the IRS or a court will agree with our determination.
Information Reporting Requirements and Backup Withholding
Information returns will be filed with the IRS in connection with payments of dividends on and the proceeds from a sale or other disposition of Acuren Delaware common stock. A non-U.S. Holder may have to comply with certification procedures to establish that it is not a United States person or otherwise establish an exemption in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding as well. The amount of any backup withholding from a payment to a non-U.S. Holder will be allowed as a credit against such non-U.S. Holder’s U.S. federal income tax liability and may entitle such non-U.S. Holder to a refund, provided that the required information is furnished to the IRS in a timely manner.
Under the Code and the Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. U.S. Holders are urged to consult with their own tax advisors concerning such reporting requirements, including whether any reporting is required under Section 367(b).
FATCA
Sections 1471 to 1474 of the Code (commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) impose a 30% withholding tax on payments of U.S.-source dividends (including amounts treated as dividends received pursuant to a redemption of stock or a constructive distribution), and subject to the discussion of certain proposed Treasury Regulations below, on the gross proceeds from a sale, exchange or other taxable disposition of stock (including a redemption treated as a sale), in each case if paid to “foreign financial institutions” (which is broadly defined for this purpose and generally includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). If FATCA withholding is imposed, certain non-U.S. Holders may be able to obtain a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Non-U.S. Holders located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Non-U.S. Holders should consult their tax advisers regarding the possible implications of FATCA to the sale, exchange, or other taxable disposition of, or distribution with respect to, the Acuren Delaware common stock.
The IRS has released proposed Treasury Regulations that, if finalized in their present form, would eliminate the U.S. federal withholding tax of 30% applicable to the gross proceeds from the sale, exchange or other taxable disposition of stock (including a redemption treated as a sale). In its preamble to such proposed Treasury Regulations, the IRS stated that taxpayers may generally rely on the proposed Treasury Regulations until final Treasury Regulations are issued.
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE DESCRIBED TRANSACTIONS IN THEIR PARTICULAR CIRCUMSTANCES.
114
Table of Contents
SECURITIES ACT RESTRICTIONS ON RESALE OF ACUREN DELAWARE COMMON STOCK
At the Effective Time, the outstanding shares of common and preferred stock of Acuren Delaware will have been registered under the Securities Act, and holders of shares of such stock who are not affiliates of the Company may freely resell their stock under the Securities Act. Holders of shares of stock who are affiliates of the Company, however, will not be permitted to resell their shares except pursuant to an effective resale registration statement under the Securities Act or an available exemption from registration under the Securities Act, such as Rule 144 thereunder. In general, Rule 144 will permit an affiliate of the Company to resell shares of stock received in connection with the Domestication only if certain requirements are met. Among other things, the affiliate of the Company may not sell shares of any class (including any shares of that class otherwise acquired) in an amount that, during any three-month period, exceeds 1% of the outstanding shares of that class (or, solely in the case of the common stock, the average weekly trading volume of the stock on the NYSE during the four calendar weeks preceding the filing of the notice referenced below, if greater). In addition, all such resales must be made in unsolicited brokers’ transactions, the Company must have filed all periodic reports it was required to file under the Exchange Act within the year preceding the resale and (depending on the amount being resold), the affiliate of the Company must have filed a notice of sale on Form 144 with the SEC. For this purpose, an “affiliate” of the Company is any person who controls, is controlled by or is under common control with the Company.
Restrictions on the use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination-related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
• the issuer of the securities that was formerly a shell company has ceased to be a shell company;
• the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
• the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
• at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC, which information is included in this registration statement of which this prospectus forms a part, reflecting its status as an entity that is not a shell company.
Upon the closing of the Acuren Acquisition, we are no longer a shell company; accordingly, once the conditions listed above are satisfied, Rule 144 will become available for the resale of any of our restricted securities.
ACCOUNTING TREATMENT OF THE DOMESTICATION
There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of Acuren BVI as a result of Domestication. The consolidated business, capitalization, assets, liabilities and financial statements of Acuren Delaware immediately following the Domestication will be the same as those of Acuren BVI immediately prior to thereto.
VALIDITY OF THE CAPITAL STOCK
The validity of the shares common stock of Acuren Delaware into which the outstanding Acuren BVI ordinary shares will be converted in connection with the Domestication will be passed upon for Acuren Delaware by Greenberg Traurig.
TAX MATTERS
The U.S. federal income tax consequences of the Domestication have been passed upon by Greenberg Traurig.
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CHANGE IN THE COMPANY’S CERTIFYING ACCOUNTANT
(a) Previous independent registered public accounting firm
(i) On July 30, 2024, Acuren Corporation (the “Registrant”) dismissed Grant Thornton UK LLP as its independent registered accounting firm in connection with the Acuren Acquisition. Such dismissal will become effective upon completion by Grant Thornton UK LLP of its audit of the financial statements of Acuren Corporation as of and for the year ended December 31, 2023. The Registrant’s Board of Directors and Audit Committee participated in and approved the decision to change Acuren Corporation’s independent registered accounting firm.
(ii) The report of Grant Thornton UK LLP on the financial statements for the period from January 1, 2023 to December 31, 2023 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.
(iii) During the period from December 15, 2022 (inception) to December 31, 2023 and the subsequent interim period through the dismissal date, there have been no disagreements with Grant Thornton UK LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Grant Thornton UK LLP would have caused them to make reference thereto in their reports on the financial statements for such years.
(iv) During the period from December 15, 2022 (inception) to December 31, 2023 and the subsequent interim period through the dismissal date, there have been no reportable events (as defined in Regulation S-K 304(a)(1)(v)).
(v) The Registrant has requested that Grant Thornton UK LLP furnish it with a letter addressed to the SEC stating whether or not it agrees with the above statements. A copy of such letter, dated November 4, 2024, is filed as Exhibit 16.1 to this registration statement on Form S-4.
(b) New independent registered public accounting firm
(i) The Registrant approved PricewaterhouseCoopers LLP as its new independent registered public accounting firm on November 4, 2024. During the period from December 15, 2022 (inception) to December 31, 2023 and the subsequent interim period through November 4, 2024, the Registrant had not consulted with PricewaterhouseCoopers LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Registrant’s financial statements, and neither a written report was provided to the Registrant or oral advice was provided that PricewaterhouseCoopers LLP concluded was an important factor considered by the Registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Regulation S-K 304(a)(1)(iv) and the related instructions to Regulation S-K 304, or a reportable event, as that term is defined in Regulation S-K 304(a)(1)(v).
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EXPERTS
The financial statements of Acuren Corporation included in this prospectus and elsewhere in the registration statement have been so included in the reliance upon the report of Grant Thornton UK LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.
The financial statements of ASP Acuren as of December 31, 2023 and December 31, 2022 and for each of the two years in the period ended December 31, 2023 included in this Prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC the Registration Statement on Form S-4 (the “Registration Statement”) under the Securities Act with respect to the Domestication. This prospectus, which constitutes part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information about us and the Domestication, we refer you to the Registration Statement and the exhibits and schedules filed as a part of the Registration Statement. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete. If a contract or document has been filed as an exhibit to the Registration Statement, we refer you to the copy of the contract or document that has been filed as an exhibit to the Registration Statement, each statement about such contract or document being qualified in all respects by such reference.
The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that site is www.sec.gov. Our reports and any other information that we have filed or may in the future file with the SEC are not incorporated by reference into, and do not constitute a part of, this prospectus or the Registration Statement.
You may obtain copies of the information and documents incorporated by reference in this prospectus at no charge by writing or telephoning us at the following address or telephone number:
Acuren Corporation
14434 Medical Complex Drive, Suite 100
Tomball, TX 77377
(800) 218-7450
Attention: Chief Financial Officer
We will become subject to the full informational requirements of the Exchange Act following effectiveness of the Registration Statement. We will fulfill our obligations with respect to such requirements by filing periodic reports and other information with the SEC. We intend to furnish our shareholders with annual reports containing consolidated financial statements certified by an independent public accounting firm.
117
Table of Contents
INDEX TO FINANCIAL STATEMENTS
Acuren Corporation f/k/a Admiral Acquisition Limited
ASP Acuren Holdings, Inc. and Subsidiaries
F-1
Table of Contents
Independent auditor’s report to the shareholders of Acuren Corporation
Board of Directors
Acuren Corporation
Opinion on the financial statements
We have audited the accompanying balance sheets of Acuren Corporation (formerly Admiral Acquisition Limited) (a British Virgin Islands corporation) (the “Company”) as of December 31, 2023 and 2022, the related statements of income, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Grant Thornton UK LLP
We have served as the Company’s auditor since 2023.
London, England
November 4, 2024
F-2
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Balance Sheet
As of December 31
|
|
|
December 31,
2023
|
|
December 31,
2022
|
| |
|
US$
|
|
US$
|
| |
|
(in thousands,
except share
and per share
amounts)
|
|
(in thousands,
except share
and per share
amounts)
|
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
2,098
|
|
—
|
|
Marketable securities at fair value
|
|
553,370
|
|
—
|
|
Prepayments and other assets
|
|
371
|
|
—
|
|
Total assets
|
|
555,839
|
|
—
|
| |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accrued expenses
|
|
95
|
|
—
|
|
Total current liabilities
|
|
95
|
|
—
|
| |
|
|
|
|
|
Total liabilities
|
|
95
|
|
—
|
| |
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
Founder Preferred Shares, no par value; unlimited authorised shares; 1 share issued and outstanding as of December, 31 2022 1,000,000 shares issued and outstanding as of December, 31 2023
|
|
—
|
|
—
|
|
Ordinary Shares, no par value; unlimited authorised shares; Nil shares issued and outstanding as of December, 31 2022 53,975,000 shares issued and outstanding as of December, 31 2023
|
|
—
|
|
—
|
|
Additional paid-in capital (net of costs)
|
|
539,275
|
|
—
|
|
Retained earnings
|
|
16,469
|
|
—
|
|
Total shareholders’ equity
|
|
555,744
|
|
—
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
555,839
|
|
—
|
The notes on pages F-7 to F-14 form an integral part of these audited financial statements.
F-3
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Statement of Operations
for the years ended December 31, 2023 and December 31, 2022
|
|
|
For the
year ended
December 31,
2023
|
|
For the
year ended
December 31,
2022
|
| |
|
US$
|
|
US$
|
| |
|
(in thousands,
except share
and per share
amounts)
|
|
(in thousands,
except share
and per share
amounts)
|
|
Operating expenses:
|
|
|
|
|
|
|
General and administrative
|
|
(1,425
|
)
|
|
—
|
|
Loss from operations
|
|
(1,425
|
)
|
|
—
|
| |
|
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
Investment income
|
|
12,358
|
|
|
—
|
|
Unrealised gain on marketable securities at fair value
|
|
5,536
|
|
|
—
|
|
Total other income
|
|
17,894
|
|
|
—
|
| |
|
|
|
|
|
|
Net income
|
|
16,469
|
|
|
—
|
| |
|
|
|
|
|
|
Basic income per Ordinary Share and Founder Preferred Share
|
|
0.30
|
|
|
—
|
|
Diluted income per Ordinary Share and Founder Preferred Share
|
|
0.30
|
|
|
—
|
|
Weighted average Ordinary Shares outstanding, basic and diluted
|
|
53,975,000
|
|
|
—
|
|
Weighted average Founder Preferred Shares outstanding, basic and diluted
|
|
1,000,000
|
|
|
—
|
The notes on pages F-7 to F-14 form an integral part of these audited financial statements.
F-4
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Statement of Stockholders’ Equity
for the years ended December 31, 2023 and December 31, 2022
|
|
|
Founder Preferred Shares
|
|
Ordinary Shares
|
| |
|
No. of
Shares
|
|
US$
|
|
No. of
Shares
|
|
US$
|
|
Balance as of incorporation, December 15, 2022(1)
|
|
1
|
|
—
|
|
—
|
|
—
|
|
Issue of shares
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Balance as at December 31, 2022
|
|
1
|
|
—
|
|
—
|
|
—
|
| |
|
|
|
|
|
|
|
|
|
Issue of shares
|
|
999,999
|
|
—
|
|
53,950,000
|
|
—
|
|
Issue costs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Share-based compensation – directors
|
|
—
|
|
—
|
|
25,000
|
|
—
|
|
Net income
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Balance as at December 31, 2023
|
|
1,000,000
|
|
—
|
|
53,975,000
|
|
—
|
|
|
|
Additional paid
in capital
|
|
Retained
earnings
|
|
Total
equity
|
| |
|
US$
|
|
US$
|
|
US$
|
| |
|
(in thousands,
except share
amounts)
|
|
(in thousands,
except share
amounts)
|
|
(in thousands,
except share
amounts)
|
|
Balance as of incorporation, December 15, 2022
|
|
—
|
|
|
—
|
|
—
|
|
|
Issue of shares
|
|
—
|
|
|
—
|
|
—
|
|
|
Balance as at December 31, 2022
|
|
—
|
|
|
—
|
|
—
|
|
| |
|
|
|
|
|
|
|
|
|
Issue of shares
|
|
550,000
|
|
|
—
|
|
550,000
|
|
|
Issue costs
|
|
(10,975
|
)
|
|
—
|
|
(10,975
|
)
|
|
Share-based compensation – directors
|
|
250
|
|
|
—
|
|
250
|
|
|
Net income
|
|
—
|
|
|
16,469
|
|
16,469
|
|
|
Balance as at December 31, 2023
|
|
539,275
|
|
|
16,469
|
|
555,744
|
|
The notes on pages F-7 to F-14 form an integral part of these audited financial statements.
F-5
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Statement of Cash Flows
for the years ended December 31, 2023 and December 31, 2022
|
|
|
For the
year ended
December 31,
2023
|
|
For the
year ended
December 31,
2022
|
|
US$
|
|
US$
|
|
(in thousands)
|
|
(in thousands)
|
|
Net income
|
|
16,469
|
|
|
—
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
Unrealized gain on marketable securities
|
|
(5,536
|
)
|
|
—
|
|
Share based payments
|
|
250
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Prepaids and other assets
|
|
(371
|
)
|
|
—
|
|
Accruals
|
|
95
|
|
|
—
|
|
Net cash provided by operating activities
|
|
10,907
|
|
|
—
|
| |
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchase of marketable securities – short-term
|
|
(1,217,979
|
)
|
|
—
|
|
Redemption of marketable securities – short-term
|
|
670,145
|
|
|
—
|
|
Net cash used in investing activities
|
|
(547,834
|
)
|
|
—
|
| |
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from issuance of Founder Preferred Shares and Warrants
|
|
10,500
|
|
|
—
|
|
Proceeds from issuance of Ordinary Shares and Warrants, gross
|
|
539,500
|
|
|
—
|
|
Issue costs
|
|
(10,975
|
)
|
|
—
|
|
Net cash provided by financing activities
|
|
539,025
|
|
|
—
|
| |
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
2,098
|
|
|
—
|
|
Cash and cash equivalents at beginning of year
|
|
—
|
|
|
—
|
|
Cash and cash equivalents at end of year
|
|
2,098
|
|
|
—
|
|
Supplementary information:
|
|
|
|
|
|
Share based payment
|
|
|
|
250
|
The notes on pages F-7 to F-14 form an integral part of these audited financial statements.
F-6
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
1. Organization
The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Business Companies Act, 2004, on December 15, 2022. The address of the Company’s registered office is Ritter House, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands. The Ordinary Shares and Warrants were admitted for trading on the main market of the London Stock Exchange on May 22, 2023. The Company raised gross proceeds of US$539.5 million in its initial public offering (“IPO”), through the placing of ordinary shares of no par value in the capital of the Company (“Ordinary Shares”) (with matching warrants (“Warrants”) to subscribe for Ordinary Shares) issued at a placing price of US$10.00 per Ordinary Share and a further US$10.5 million was raised through the subscription of the founder preferred shares of no par value (“Founder Preferred Shares”) (with Warrants being issued on the basis of one Warrant per Founder Preferred Share) at a price of US$10.50 per Founder Preferred Share, for a potential acquisition of a target company or business (which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganization or similar business combination) of an interest in an operating company or business (an “Acquisition”). The Company was admitted to the Official List of the FCA by way of a standard listing and to trading on the main market of the London Stock Exchange on May 22, 2023 (“Admission”). Costs of Admission of US$10.97 million were paid in relation to the IPO, resulting in net proceeds of US$539.03 million.
2. Summary of Significant Accounting Policies
Basis of preparation
The accompanying financial statements are presented in U.S. dollars rounded to the nearest thousand and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Going concern
The financial statements have been prepared on a going concern basis. The Board has assessed the Company’s financial forecasts for the next twelve months and there are adequate financial resources to enable the Company to meet its liabilities as they fall due for a period of at least one year following the date of signature of these financial statements and therefore, the directors are confident that the Company is a going concern and have adopted the going concern basis in the preparation of the financial statements.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires the Company 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 those estimates.
Cash and Cash Equivalents
The Company believes that no material credit or market risk exposure exists due to the high quality of the institutions at which cash is held. The Company has US$2.098 million of cash and cash equivalents as of December 31, 2023 (December 31, 2022 : US$:Nil). The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The cash balances may at times exceed the Depositors’ Compensation Scheme (“DCS”) limits.
Investments in Marketable Securities
Marketable securities being instruments with a maturity date of more than three months from transaction date are securities carried at fair value as determined by the most recently traded price of each security at the balance sheet date. All unrealized gains and losses are reported in the statement of operations.
F-7
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
2. Summary of significant Accounting Policies (cont.)
Fair Value Measurements
Fair value is determined using the principles of ASC 820, Fair Value Measurement. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows:
• Level 1 — Observable quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
• Level 3 — Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.
Marketable securities are recorded at fair value. The Company uses the Level 1 fair value hierarchy assumptions to measure the marketable securities as of December 31, 2023. The Company’s cash and cash equivalents and accrued expenses are carried at cost, which approximates fair value due to the short-term nature of these instruments and are considered level 1 securities.
The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement. There have not been any transfers between the levels of the hierarchy for the year ended December 31, 2023.
Share-based Compensation
The Company expenses share-based compensation over the requisite service period of the awards (usually the vesting period) based on the grant date fair value of awards. For share option grants with performance-based milestones, the expense is recorded over the service period after the achievement of the milestone is probable or the performance condition is achieved. The Company estimates the fair value of share option grants using the Black-Scholes option pricing model. An offsetting increase to shareholders’ equity will be recorded equal to the amount of the compensation expense charge. The Company recognizes forfeitures as they occur as a reduction of expense. The Company does not have any forfeitures for the year ended December 31, 2023. See Note 4.
Founder Preferred Shares
In connection with the IPO, the Company issued 1,000,000 Founder Preferred Shares at US$10.50 per share to Mariposa Acquisition IX, LLC (the “Founder Entity”) an entity controlled by Sir Martin E. Franklin. The Founder Preferred Shares are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number of equity shares. As such, the Founder Preferred Shares are classified as permanent equity in the accompanying balance sheets. The Founder Preferred Shares are not unconditionally redeemable or conditionally puttable by the Holder for cash. The Founder Preferred Shares do not have a par value or stated value and thus the Founder Preferred Shares have been recorded in additional paid-in capital. The Founders Preferred Shares have been accounted for under ASC 718 — Compensation — Stock compensation.
Warrants
The Company has Warrants issued with its Ordinary Shares that were determined to be equity classified in accordance with ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity (see Note 4). The Company also issued Warrants with Ordinary Shares issued to non-executive directors for
F-8
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
2. Summary of significant Accounting Policies (cont.)
compensation, and Warrants issued with the Founder Preferred Shares that were determined to be equity classified in accordance with ASC 718 — Compensation — Stock Compensation. The fair value of the Warrants was recorded as additional paid-in capital on the issuance date, and no further adjustments were made.
Earnings per Share
Basic earnings per ordinary share excludes dilution and is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. The Company has determined that its Founder Preferred Shares represent a class of ordinary shares. Accordingly, the Company used the two-class method of computing earnings per share, for Ordinary Shares and Founder Preferred Shares according to participation rights in undistributed earnings. Under this method, net income applicable to holders of Ordinary Shares is allocated on a pro rata basis to the holders of Ordinary and Founder Preferred Shares to the extent that each class may share income for the period; whereas undistributed net loss is allocated to holders of Ordinary Shares and Founder Preferred Shares on a pro rata basis.
Income Taxes
Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company does not have any deferred taxes.
As a British Virgin Islands limited liability company, the Company is not subject to any income, withholding or capital gains taxes.
Comprehensive Income
Comprehensive income is the same as net income for all periods presented.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as it is the body that makes strategic decisions. The Company only has one operating segment.
Recently Adopted Accounting Pronouncements
For public business entities, the amendments in this update require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments — Credit Losses — Measured at Amortized Cost.
Effective Date: Effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The adoption of this update did not impact the Company’s financial statements.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit
F-9
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
2. Summary of significant Accounting Policies (cont.)
or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The standard is effective for annual reporting periods beginning after December 15, 2023 with early adoption permitted. The Board is currently assessing the impact that the adoption will have on its financial statements it is not envisaged that this change will be onerous given Company only has one operating segment. The Pronouncement has not been early adopted.
3. Marketable Securities
Marketable securities are held at fair value, The Company’s investment in marketable securities consists of U.S. Treasury Bills. Investment income is recorded as a realized investment income at the time the investment in U.S. Treasury Bills matures.
The change in the unrealized gains on these investments are included in the Statement of Operations. Unrealized gains on the U.S. Treasury Bills are summarized in thousands as follows:
|
|
|
Cost
|
|
Gross
Unrealized
Gain
|
|
Net
Unrealized
Gain
|
|
Fair Value
|
| |
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
As at December 31, 2023
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills Held
|
|
547,834
|
|
5,536
|
|
5,536
|
|
553,370
|
|
|
|
Cost
|
|
Gross
Unrealized
Gain
|
|
Net
Unrealized
Gain
|
|
Fair Value
|
| |
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
As at December 31, 2022
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills Held
|
|
—
|
|
—
|
|
—
|
|
—
|
4. Shareholders’ Equity
On May 22 2023, the Company’s IPO raised gross proceeds of US$550 million, consisting of US$539.50 million through the placement of Ordinary Shares at US$10.00 per share, and US$10.5 million through the subscription of 1,000,000 Founder Preferred Shares at US$10.50 per share by the Founders through the Founder Entity. Costs of Admission of US$10.97 million were paid in relation to the IPO, resulting in net proceeds of US$539.03 million. In addition, 25,000 Ordinary Shares were issued, in aggregate, to the Independent Non-Founder Directors in lieu of cash totalling a combined value US$0.25 million (See Note 6). Each Ordinary Share and Founder Preferred Share was issued with a Warrant as described below.
Founder Preferred Shares
The Founder Preferred Shares are accounted for under ASC 718 — Compensation — Stock Compensation. After the closing of an Acquisition, and if the Average Price (as defined in the Articles) of the Ordinary Shares is at least US$11.50 per share for any ten consecutive trading days, the holders of the Founder Preferred Shares will be entitled to receive a dividend in the form of Ordinary Shares or cash, at the option of the Company, equal to 20 percent of the appreciation of the market price of ordinary shares issued to Ordinary Shareholders in the IPO. In the first year an Annual Dividend Amount (as defined in the Articles) is payable (if any), the Annual Dividend Amount will be calculated at the end of the calendar year based on the Dividend Price, (as defined below) compared to the initial Ordinary Share offering price of US$10.00 per Ordinary Share. In subsequent years, the Annual Dividend Amount will be calculated based on the appreciated Dividend Price compared to the highest Dividend Price previously used in calculating the Annual Dividend Amount. For the purposes of determining the Annual Dividend Amount, the Dividend Price is the Average Price per Ordinary Share for the last ten consecutive trading days in the
F-10
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
4. Shareholders’ Equity (cont.)
relevant Dividend Period. Upon the liquidation of the Company, an Annual Dividend Amount shall be payable for the shortened Dividend Period and the holders of Founder Preferred Shares shall have the right to a pro rata share (together with holders of the Ordinary Shares) in the distribution of the surplus assets of the Company.
The Founder Preferred Shares will participate in any dividends on the Ordinary Shares on an as converted basis. In addition, commencing on and after consummation of the Acquisition, where the Company pays a dividend on its Ordinary Shares the Founder Preferred Shares will also receive an amount equal to 20 per cent of the dividend which would be distributable on such number of Ordinary Shares. All such dividends on the Founder Preferred Shares will be paid at the same time as the dividends on the Ordinary Shares. Dividends are paid for the term the Founder Preferred Shares are outstanding.
The Founder Preferred shares will be automatically converted into Ordinary Shares on a one for one basis upon the last day of the tenth full financial year following an Acquisition (the “Conversion”). Each Founder Preferred Share is convertible into one Ordinary Share at the option of the holder until the Conversion. If there is more than one holder of Founder Preferred Shares, a holder of Founder Preferred Shares may exercise its rights independently of any other holder of Founder Preferred Shares.
In accordance with ASC 718 — Compensation — Stock Compensation (“ASC 718”), the Annual Dividend Amount based on the market price of the Company’s Ordinary Shares is akin to a market condition award settled in shares. As the right to the Annual Dividend Amount will only be triggered upon the Acquisition (which is not considered probable until consummated) and accordingly no expense has been recognized. The fair value of the any potential future Annual Dividend amounts to US$72.76 million, which has been measured using a Monte Carlo method which takes into consideration different share price paths. Following are the assumptions used in calculating the issuance date fair value:
|
Number of securities issued
|
|
1,000,000
|
|
|
Vesting period
|
|
Immediate
|
|
|
Assumed price upon Acquisition
|
|
US$10.00
|
|
|
Probability of winding-up
|
|
40.50
|
%
|
|
Probability of Acquisition
|
|
59.50
|
%
|
|
Time to Acquisition
|
|
1.17 years
|
|
|
Volatility (post-Acquisition)
|
|
46.47
|
%
|
|
Risk free interest rate
|
|
3.54
|
%
|
The Founder Preferred Shares carry the same voting rights as are attached to the Ordinary Shares being one vote per Founder Preferred Share. Additionally, the Founder Preferred Shares alone carry the right to vote on any Resolution of Members required, pursuant to BVI law, to approve any matter in connection with an Acquisition, or a merger or consolidation in connection with an Acquisition. Initial Founder Preferred Shareholders, that hold 20 per cent. of the Founder Preferred Shares, can nominate up to three people as directors of the Company.
See Note 6 for details on share based payments the expense of which has not been recognized until the performance condition of vesting on an Acquisition (which is not considered probable until an Acquisition has occurred). The Company’s Acquisition completed on July 30, 2024. Please see Note 9 for subsequent events.
Ordinary shares
In connection with the IPO on May 22, 2023, the Company issued 53,950,000 Ordinary Shares for gross proceeds of US$539.50 million. In conjunction with the IPO, the Company also issued an aggregate of 25,000 Ordinary Shares to the Independent Non-Founder Directors for US$10.00 per share in lieu of their cash directors’ fees for one year. Each Ordinary Share was issued with a Warrant. Ordinary Shares have voting rights and winding-up rights.
F-11
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
4. Shareholders’ Equity (cont.)
Warrants
The Company issued 54,975,000 Warrants to the purchasers of both Ordinary Shares and Founder Preferred Shares (including the 25,000 Warrants that were issued to the Independent Non-Founder Directors in connection with their fees). Each Warrant has a term of 3 years following an Acquisition and entitles a Warrant holder to purchase one-fourth of an Ordinary Share upon exercise. Warrants will be exercisable in multiples of four for one ordinary share at a price of US$11.50 per whole ordinary share. The Warrants are mandatorily redeemable by the Company at a price of US$0.01 should the average market price of an Ordinary Share exceed US$18.00 for 10 consecutive trading days (subject to any prior adjustment in accordance with the terms of the Warrants). The Warrants expire worthless at the end of year 3, if not exercised or redeemed.
5. Commitments and Contingencies
There were no known or threatened lawsuits or unasserted claims known at the balance sheet date up to date of signing these audited financial statements.
6. Share-based Compensation
Refer to Note 4 in relation to the Founder Preference Shares and attached Warrants.
On May 22, 2023, the Company issued its Independent Non-Founder Directors an aggregate of 125,000 share options (the “Share Options”) to purchase Ordinary Shares of the Company that vest upon the Acquisition. The Independent Non-Founder Directors are required to have continued service until the time of the Acquisition to vest in the Share Options. The options expire on the 5th anniversary following the Acquisition and have an exercise price of US$11.50 per Ordinary Share (subject to such adjustment as the Directors consider appropriate in accordance with the terms of the Option Deeds). The Share Options have a performance condition of vesting on an Acquisition (which is not considered probable until an Acquisition has occurred). Therefore, in accordance with ASC 718, the fair value of the awards, as determined on the grant date, will be recognized as an expense and an increase of additional paid-in capital upon consummation of an Acquisition.
The following table summarizes the share option activity:
|
|
|
Number of
Shares
|
|
Weighted
Average Exercise
Price US$
|
|
Aggregate
Intrinsic Value
US$
|
|
Options outstanding at inception and at December 31 2022
|
|
—
|
|
—
|
|
—
|
|
Granted
|
|
125,000
|
|
11.50
|
|
—
|
|
Options outstanding at 31 December 2023
|
|
125,000
|
|
11.50
|
|
—
|
|
Options vested and exercisable
|
|
—
|
|
—
|
|
—
|
The fair value of each Share Option was estimated at US$1.647 on the grant date using the Black-Scholes option pricing model with the following assumptions for the grant during the period from May 22 2023 to December 31 2023:
|
Share Price
|
|
$
|
10.00
|
|
|
Exercise Price
|
|
$
|
11.50
|
|
|
Risk-Free Rate
|
|
|
3.52
|
%
|
|
Dividend Yield
|
|
|
—
|
|
|
Post-Acquisition Volatility
|
|
|
46.39
|
%
|
On May 22, 2023, the Company issued 25,000 Ordinary Shares and Warrants, in aggregate, to Independent Non-Founder Directors for their first year’s annual fees in lieu of cash. The US$10.00 per share fair value of the Ordinary Shares and Warrants was based on the price paid by outside shareholders in the equity offering on May 22, 2023 (see Note 4). In accordance with ASC 718, as the Ordinary Shares and related Warrants were fully vested and have a non-substantive service period, the fair value of US$0.25 million was recorded as an expense on the grant date.
F-12
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
7. Related Parties
During the year ended December 31, 2023, 999,999 (year ended December 31, 2022: 1) Founder Preferred Shares, 8,950,000 (2022: Nil) Ordinary Shares and 9,950,000 (year ended December 31 2022: Nil) Warrants were issued to the Founder Entity. Sir Martin E. Franklin, a Founder and Director, is a beneficial owner and the managing member of the Founder Entity and, as such, may be considered to have beneficial ownership of all the Founder Entity’s interests in the Company. The Founders, in aggregate, hold an indirect pecuniary interest of approximately 69 percent in the Founder Entity. Other Directors were issued 25,000 Ordinary Shares and 25,000 Warrants along with 125,000 Share Options in lieu of directors fees.
Except as set forth herein, there were no other Ordinary Shares, Warrants and options issued to the directors of the Company for the years ended December 31, 2023 and December 31, 2022.
An entity owned by Sir Martin E. Franklin, Mariposa Capital, LLC, earned advisory fees of US$0.21 million (2022: US$ Nil) for the year.
8. Earnings Per Share
Basic earnings per ordinary share excludes dilution and is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period. The Company has determined that its Founder Preferred Shares are a class of ordinary shares. Accordingly, the Company used the two-class method of computing earnings per share for Ordinary Shares and Founder Preferred Shares according to participation rights in undistributed earnings. Under this method, net income (loss) is allocated on a pro rata basis to the holders of Ordinary and Founder Preferred Shares.
For the year ended December 31, 2023, the Company excluded the Share Options to purchase 125,000 Ordinary Shares from the diluted earnings per ordinary share as the performance condition (see Note 6 Share-Based Compensation) for these Share Options was not met as of December 31, 2023. The Company has also excluded the Warrants in issue from such earnings on the basis they are antidilutive.
The following table sets forth the computation of basic and diluted earnings per Ordinary Share and Founder Preferred Share using the two-class method. The application of the two-class method yields the same dilutive effects applying if-converted to the Founder Preferred Shares given 1:1 participation:
|
|
|
For the
year ended
December 31,
2023
|
|
For the
year ended
December 31,
2022
|
|
Basic Shares:
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
16,469
|
|
|
$
|
—
|
|
Undistributed earning allocated to Founder Preferred Shares
|
|
|
(300
|
)
|
|
|
—
|
|
Net income available to Ordinary Share holders
|
|
$
|
16,169
|
|
|
$
|
—
|
| |
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average Ordinary Shares outstanding – basic
|
|
|
53,975,000
|
|
|
|
—
|
|
Weighted average Founder Preferred Shares outstanding – basic
|
|
|
1,000,000
|
|
|
|
—
|
| |
|
|
|
|
|
|
|
|
Basic earning per Ordinary Share
|
|
$
|
0.30
|
|
|
$
|
—
|
|
Basic earning per Founder Preferred Share
|
|
$
|
0.30
|
|
|
$
|
—
|
F-13
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to the audited financial statements
for the years ended December 31, 2023 and December 31, 2022
8. Earnings Per Share (cont.)
|
|
|
For the
year ended
December 31,
2023
|
|
For the
year ended
December 31,
2022
|
|
Dilutive Shares:
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
16,169
|
|
$
|
—
|
|
Add back: undistributed earning allocated to Founder Preferred Shares
|
|
|
300
|
|
|
—
|
|
Net income available to Ordinary Share holders
|
|
$
|
16,469
|
|
$
|
—
|
| |
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted average Ordinary Shares outstanding – basic
|
|
|
53,975,000
|
|
|
—
|
|
Add: dilutive securities
|
|
|
|
|
|
|
|
Share Options
|
|
|
—
|
|
|
—
|
|
Warrants
|
|
|
—
|
|
|
|
|
Convertible Founder Preferred Shares
|
|
|
1,000,000
|
|
|
—
|
|
Weighted average Ordinary Shares outstanding – diluted
|
|
|
54,975,000
|
|
|
—
|
|
Weighted average Founder Preferred Shares outstanding – diluted
|
|
|
1,000,000
|
|
|
—
|
| |
|
|
|
|
|
|
|
Diluted earning per Ordinary Share
|
|
$
|
0.30
|
|
$
|
—
|
|
Diluted earning per Founder Preferred Share
|
|
$
|
0.30
|
|
$
|
—
|
9. Subsequent Events
On July 30, 2024, the Company completed its acquisition of ASP Acuren Holdings Inc. (“ASP Acuren”), a market leading provider of critical asset integrity services. In conjunction with the acquisition, the Company changed its name to Acuren Corporation.
The consideration paid at closing for the ASP Acuren plus the related transaction expenses was approximately $1.88 billion in cash. The purchase price and related transaction expenses were funded with a combination of $568.0 million cash on hand, a $775.0 million senior loan facility and an aggregate of $675.0 million of proceeds from the issuance of 58,259,984 ordinary shares at $10.00 per ordinary share to investors and proceeds from an early exercise of 36,710,124 warrants in exchange for 9,177,531 ordinary shares also at $10.00 per ordinary share. Following the closing, the Company’s ordinary shares outstanding total 121,412,515 and warrants outstanding total 18,264,876.
In connection with the closing, the Company entered into the new credit facility pursuant to which the Company incurred a $775.0 million seven-year senior secured term loan under the senior secured term loan facility, which was used to fund a part of the cash portion of the purchase price of ASP Acuren. The Credit Agreement also provides for a $75.0 million five-year senior secured revolving credit facility.
Due to the recent completion of the acquisition, the Company has not yet completed its accounting for the acquisition of ASP Acuren.
The Company has evaluated subsequent events from the balance sheet date through November 4, 2024 the date at which the financial statements were issued.
F-14
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Condensed Balance Sheets
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
| |
|
US$
|
|
US$
|
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
6,036
|
|
2,098
|
|
Marketable securities at fair value
|
|
561,031
|
|
553,370
|
|
Prepayments and other assets
|
|
21
|
|
371
|
|
Total assets
|
|
567,088
|
|
555,839
|
| |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accrued expenses
|
|
641
|
|
95
|
|
Derivative liability
|
|
1,725
|
|
—
|
|
Total current liabilities
|
|
2,366
|
|
95
|
| |
|
|
|
|
|
Total liabilities
|
|
2,366
|
|
95
|
| |
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
Founder Preferred Shares, no par value, unlimited authorised shares; 1,000,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023
|
|
—
|
|
—
|
|
Ordinary Shares, no par value, unlimited authorised shares; 53,975,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023
|
|
—
|
|
—
|
|
Additional paid-in capital (net of costs)
|
|
557,427
|
|
539,275
|
|
Retained earnings
|
|
7,295
|
|
16,469
|
|
Total shareholders’ equity
|
|
564,722
|
|
555,744
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
567,088
|
|
555,839
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-15
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Condensed Statements of Operations
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
For the
six months
ended
June 30,
2024
|
|
For the
six months
ended
June 30,
2023
|
| |
|
US$
|
|
US$
|
|
Operating expenses:
|
|
|
|
|
|
|
|
General and administrative
|
|
(1,099
|
)
|
|
(374
|
)
|
|
Loss from operations
|
|
(1,099
|
)
|
|
(374
|
)
|
| |
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
Investment income
|
|
16,472
|
|
|
566
|
|
|
Unrealized (loss) gain on marketable securities
|
|
(1,851
|
)
|
|
2,508
|
|
|
Transaction costs
|
|
(2,819
|
)
|
|
—
|
|
|
Change in fair value of derivative instruments
|
|
(19,877
|
)
|
|
—
|
|
|
Total other income (expense)
|
|
(8,075
|
)
|
|
3,074
|
|
| |
|
|
|
|
|
|
|
Net income (loss)
|
|
(9,174
|
)
|
|
2,700
|
|
| |
|
|
|
|
|
|
|
Basic income per Ordinary Share and Founder Preferred Share
|
|
(0.17
|
)
|
|
0.05
|
|
|
Diluted income per Ordinary Share and Founder Preferred Share
|
|
(0.17
|
)
|
|
0.05
|
|
|
Weighted average Ordinary Shares outstanding, basic and diluted
|
|
53,975,000
|
|
|
53,975,000
|
|
|
Weighted average Founder Preferred Shares outstanding, basic and diluted
|
|
1,000,000
|
|
|
1,000,000
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-16
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Condensed Statements of Equity
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
Founder Preferred
Shares
|
|
Ordinary Shares
|
|
Additional
paid in
capital
|
|
Retained
earnings
|
|
Total equity
|
| |
|
No. of
Shares
|
|
US$
|
|
No. of
Shares
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
Balance as at December 31, 2023
|
|
1,000,000
|
|
—
|
|
53,975,000
|
|
—
|
|
539,275
|
|
|
16,469
|
|
|
555,744
|
|
|
Net income (loss)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(9,174
|
)
|
|
(9,174
|
)
|
|
Contingent forward contracts
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,820
|
|
|
—
|
|
|
14,820
|
|
|
Modification to warrants
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,332
|
|
|
—
|
|
|
3,332
|
|
|
Balance as at June 30, 2024
|
|
1,000,000
|
|
—
|
|
53,975,000
|
|
—
|
|
557,427
|
|
|
7,295
|
|
|
564,722
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at December 31, 2022
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net income
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,700
|
|
|
2,700
|
|
|
Issue of shares
|
|
999,999
|
|
—
|
|
53,950,000
|
|
—
|
|
550,000
|
|
|
—
|
|
|
550,000
|
|
|
Issue costs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,525
|
)
|
|
—
|
|
|
(10,525
|
)
|
|
Share-based compensation
|
|
—
|
|
—
|
|
25,000
|
|
—
|
|
250
|
|
|
—
|
|
|
250
|
|
|
Balance as at June 30, 2023
|
|
1,000,000
|
|
—
|
|
53,975,000
|
|
—
|
|
539,725
|
|
|
2,700
|
|
|
542,425
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-17
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Condensed Statements of Cash Flows
(amounts in thousands)
(Unaudited)
|
|
|
For the
six months
ended
June 30,
2024
|
|
For the
six months
ended
June 30,
2023
|
| |
|
US$
|
|
US$
|
|
Net income (loss)
|
|
(9,174
|
)
|
|
2,700
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Change in fair value of derivative instruments
|
|
19,877
|
|
|
—
|
|
|
Unrealized loss (gain) on marketable securities
|
|
1,851
|
|
|
(2,508
|
)
|
|
Share-based payments
|
|
—
|
|
|
250
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Prepayments and other assets
|
|
351
|
|
|
(230
|
)
|
|
Accrued expenses
|
|
545
|
|
|
199
|
|
|
Net cash provided by operating activities
|
|
13,450
|
|
|
411
|
|
| |
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase of marketable securities – short-term
|
|
(836,804
|
)
|
|
(670,145
|
)
|
|
Redemption of marketable securities – short-term
|
|
827,292
|
|
|
133,956
|
|
|
Net cash used in investing activities
|
|
(9,512
|
)
|
|
(536,189
|
)
|
| |
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from issuance of Founder Preferred Shares and Warrants
|
|
—
|
|
|
10,500
|
|
|
Proceeds from issuance of Ordinary Shares and Warrants, gross
|
|
—
|
|
|
539,500
|
|
|
Issue costs
|
|
—
|
|
|
(10,525
|
)
|
|
Net cash provided by financing activities
|
|
—
|
|
|
539,475
|
|
| |
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
3,938
|
|
|
3,697
|
|
|
Cash and cash equivalents at beginning of period
|
|
2,098
|
|
|
—
|
|
|
Cash and cash equivalents at end of period
|
|
6,036
|
|
|
3,697
|
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
F-18
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
1. Organization
The Company was incorporated with limited liability under the laws of the British Virgin Islands under the BVI Business Companies Act, 2004, on December 15, 2022. The address of the Company’s registered office is Ritter House, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands. The Ordinary Shares and Warrants were admitted for trading on the main market of the London Stock Exchange on May 22, 2023. The Company raised gross proceeds of US$539.5 million in its initial public offering (“IPO”), through the placing of ordinary shares of no par value in the capital of the Company (“Ordinary Shares”) (with matching warrants (“Warrants”) to subscribe for Ordinary Shares) issued at a placing price of US$10.00 per Ordinary Share and a further US$10.5 million was raised through the subscription of the founder preferred shares of no par value (“Founder Preferred Shares”) (with Warrants being issued on the basis of one Warrant per Founder Preferred Share) at a price of US$10.50 per Founder Preferred Share, for a potential acquisition of a target company or business (which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganization or similar business combination) of an interest in an operating company or business (an “Acquisition”). The Company was admitted to the Official List of the FCA by way of a standard listing and to trading on the main market of the London Stock Exchange on May 22, 2023 (“Admission”). Costs of Admission of US$10.97 million were paid in relation to the IPO, resulting in net proceeds of US$539.03 million.
On July 30, 2024, the Company acquired ASP Acuren Holdings, Inc. (“ASP Acuren”), for approximately US$1.88 billion (the “Acuren Acquisition”). Refer to Note 9 Subsequent Events for further details on the transaction.
2. Summary of Significant Accounting Policies
Basis of Preparation
The accompanying unaudited condensed financial statements are presented in U.S. dollars rounded to the nearest thousand and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the unaudited condensed financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods ending June 30, 2024 and 2023. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed financial statements should be read in conjunction with the 2023 audited financial statements and notes thereto (“2023 Financial Statements”).
Cash and Cash Equivalents
The Company believes that no material credit or market risk exposure exists due to the high quality of the institutions at which cash is held. The Company has US$6.036 million of cash and cash equivalents as of June 30, 2024 (December 31, 2023 : US$2.098 million). The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The cash balances may at times exceed the Depositors’ Compensation Scheme (“DCS”) limits.
Use of Estimates
The preparation of the condensed financial statements in conformity with U.S. GAAP requires the Company 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Comprehensive Income
Comprehensive income is the same as net income (loss) for all periods presented.
F-19
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
2. Summary of Significant Accounting Policies (cont.)
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. Public business entities are required to adopt for annual fiscal periods beginning after December 15, 2024 and early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed financial statements and related disclosures.
3. Marketable Securities
Fair value is determined using the principles of ASC 820, Fair Value Measurement. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows:
• Level 1 — Observable quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
• Level 3 — Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.
The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement. There have not been any transfers between the levels of the hierarchy for the period ended June 30, 2024.
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy:
|
|
|
As at June 30, 2024
|
| |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Marketable Securities
|
|
$
|
561,031
|
|
$
|
—
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,725
|
|
|
|
As at December 31, 2023
|
| |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Marketable Securities
|
|
$
|
553,379
|
|
$
|
—
|
|
$
|
—
|
F-20
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
3. Marketable Securities (cont.)
Marketable securities are recorded at fair value. The Company uses the Level 1 fair value hierarchy assumptions to measure the marketable securities as of June 30, 2024. The Company’s cash and cash equivalents and accrued expenses are carried at cost, which approximates fair value due to the short-term nature of these instruments and are considered Level 1 securities.
The Company’s investment in marketable securities consists of U.S. Treasury Bills. Investment income is recorded as realized investment income at the time the investment in U.S. Treasury Bills matures.
Unrealized gains, in thousands, on the U.S. Treasury Bills are summarized as follows:
|
|
|
Cost
|
|
Gross
Unrealised
Gain
|
|
Net
Unrealised
Gain
|
|
Fair Value
|
| |
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
As at June 30, 2024
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills Held
|
|
557,346
|
|
3,685
|
|
3,685
|
|
561,031
|
|
|
|
Cost
|
|
Gross
Unrealised
Gain
|
|
Net
Unrealised
Gain
|
|
Fair Value
|
| |
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
As at December 31, 2023
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills Held
|
|
547,834
|
|
5,536
|
|
5,536
|
|
553,370
|
4. Shareholders’ Equity
On May 22, 2023, the Company’s IPO raised gross proceeds of US$550 million, consisting of US$539.50 million through the placement of Ordinary Shares at US$10.00 per share, and US$10.5 million through the subscription of 1,000,000 Founder Preferred Shares at US$10.50 per share by the Founders through the Founder Entity. Costs of Admission of US$10.53 million were incurred in relation to the IPO through June 30, 2023, resulting in net proceeds of US$539.48 million recognized as of June 30, 2023. Subsequent to June 30, 2023 through December 31, 2023, additional Costs of Admission of US$0.45 million were incurred, resulting in final net proceeds of US$539.03. In addition, 25,000 Ordinary Shares were issued, in aggregate, to the Independent Non-Founder Directors in lieu of cash totaling a combined value US$0.25 million (refer to Note 6 Share-Based Compensation). Each Ordinary Share and Founder Preferred Share was issued with a Warrant as described below.
Founder Preferred Shares
In connection with the IPO, the Company issued 1,000,000 Founder Preferred Shares at US$10.50 per share to Mariposa Acquisition IX, LLC (the “Founder Entity”), an entity controlled by Sir Martin E. Franklin. The Founder Preferred Shares are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number of equity shares. As such, the Founder Preferred Shares are classified as permanent equity in the accompanying condensed balance sheets. The Founder Preferred Shares are not unconditionally redeemable or conditionally puttable by the Holder for cash. The Founder Preferred Shares do not have a par value or stated value and thus the Founder Preferred Shares have been recorded in additional paid-in capital. The Founders Preferred Shares have been accounted for under ASC 718, Compensation — Stock Compensation.
The Founder Preferred Shares are accounted for under ASC 718, Compensation — Stock Compensation. After the closing of an Acquisition, and if the Average Price (as defined in the Articles) of the Ordinary Shares is at least US$11.50 per share for any ten consecutive trading days, the holders of the Founder Preferred Shares will be entitled to receive a dividend in the form of Ordinary Shares or cash, at the option of the Company, equal to 20 percent of the appreciation of the market price of ordinary shares issued to Ordinary Shareholders in the IPO. In the first year, an Annual Dividend Amount (as defined in the Articles) is payable (if any). The Annual Dividend Amount
F-21
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
4. Shareholders’ Equity (cont.)
will be calculated at the end of the calendar year based on the Dividend Price (as defined below) compared to the initial Ordinary Share offering price of US$10.00 per Ordinary Share. In subsequent years, the Annual Dividend Amount will be calculated based on the appreciated Dividend Price compared to the highest Dividend Price previously used in calculating the Annual Dividend Amount. For the purposes of determining the Annual Dividend Amount, the Dividend Price is the Average Price per Ordinary Share for the last ten consecutive trading days in the relevant Dividend Period. Upon the liquidation of the Company, an Annual Dividend Amount shall be payable for the shortened Dividend Period and the holders of Founder Preferred Shares shall have the right to a pro rata share (together with holders of the Ordinary Shares) in the distribution of the surplus assets of the Company.
The Founder Preferred Shares will participate in any dividends on the Ordinary Shares on an as converted basis. In addition, commencing on and after consummation of the Acquisition, where the Company pays a dividend on its Ordinary Shares, the Founder Preferred Shares will also receive an amount equal to 20 percent of the dividend which would be distributable on such number of Ordinary Shares. All such dividends on the Founder Preferred Shares will be paid at the same time as the dividends on the Ordinary Shares. Dividends are paid for the term the Founder Preferred Shares are outstanding.
The Founder Preferred shares will be automatically converted into Ordinary Shares on a one for one basis upon the last day of the tenth full financial year following an Acquisition (the “Conversion”). Each Founder Preferred Share is convertible into one Ordinary Share at the option of the holder until the Conversion. If there is more than one holder of Founder Preferred Shares, a holder of Founder Preferred Shares may exercise its rights independently of any other holder of Founder Preferred Shares.
In accordance with ASC 718, Compensation — Stock Compensation, the Annual Dividend Amount based on the market price of the Company’s Ordinary Shares is akin to a market condition award settled in shares. As the right to the Annual Dividend Amount will only be triggered upon the Acquisition (which is not considered probable until consummated), no expense has been recognized. The fair value of any potential future Annual Dividend amounts to US$72.76 million, which has been measured using the Monte Carlo method which takes into consideration different share price paths. Following are the assumptions used in calculating the issuance date fair value:
|
Number of securities issued
|
|
1,000,000
|
|
|
Vesting period
|
|
Immediate
|
|
|
Assumed price upon Acquisition
|
|
US$10.00
|
|
|
Probability of winding-up
|
|
40.50
|
%
|
|
Probability of Acquisition
|
|
59.50
|
%
|
|
Time to Acquisition
|
|
1.17 years
|
|
|
Volatility (post-Acquisition)
|
|
46.47
|
%
|
|
Risk free interest rate
|
|
3.54
|
%
|
The Founder Preferred Shares carry the same voting rights as are attached to the Ordinary Shares being one vote per Founder Preferred Share. Additionally, the Founder Preferred Shares alone carry the right to vote on any Resolution of Members required, pursuant to BVI law, to approve any matter in connection with an Acquisition or a merger or consolidation in connection with an Acquisition. Initial Founder Preferred Shareholders that hold 20 percent of the Founder Preferred Shares can nominate up to three people as directors of the Company.
Refer to Note 6 Share-Based Compensation and Note 9 Subsequent Events for further information.
Ordinary Shares
In connection with the IPO on May 22, 2023, the Company issued 53,950,000 Ordinary Shares for gross proceeds of US$539.50 million. In conjunction with the IPO, the Company also issued an aggregate of 25,000 Ordinary Shares to the Independent Non-Founder Directors for US$10.00 per share in lieu of their cash directors’ fees for one year. Each Ordinary Share was issued with a Warrant. Ordinary Shares have voting rights and winding-up rights.
F-22
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
4. Shareholders’ Equity (cont.)
Warrants
The Company has Warrants issued with its Ordinary Shares that were determined to be equity classified in accordance with ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity. The Company also issued Warrants with Ordinary Shares issued to non-executive directors for compensation, and Warrants issued with the Founder Preferred Shares that were determined to be equity classified in accordance with ASC 718, Compensation — Stock Compensation. The fair value of the Warrants was recorded as additional paid-in capital on the issuance date, and no further adjustments were made.
The Company issued 54,975,000 Warrants to the purchasers of both Ordinary Shares and Founder Preferred Shares (including the 25,000 Warrants that were issued to the Independent Non-Founder Directors in connection with their fees). Each Warrant has a term of 3 years following an Acquisition and entitles a Warrant holder to purchase one-fourth of an Ordinary Share upon exercise. Warrants will be exercisable in multiples of four for one ordinary share at a price of US$11.50 per whole ordinary share. The Warrants are mandatorily redeemable by the Company at a price of US$0.01 should the average market price of an Ordinary Share exceed US$18.00 for 10 consecutive trading days (subject to any prior adjustment in accordance with the terms of the Warrants). The Warrants expire worthless at the end of year 3, if not exercised or redeemed.
On May 21, 2024, the Company received commitments from certain warrant holders, including the Founder Entity, to exercise approximately 31 million Warrants at a reduced exercise price of US$10.00 per whole Ordinary Share immediately before the consummation of the Acuren Acquisition. Through the commitments, the warrant holders were obligated to exercise the Warrants upon the consummation of the Acuren Acquisition. In the event the Acuren Acquisition fell through, the Warrants would remain outstanding and revert back to the original exercise price and exercise period. The modified Warrants were not considered to be indexed to the Company’s own stock and therefore, accounted for as a derivative. No incremental fair value was transferred to the holders as a result of the modification. The Company recorded a financial asset of US$3,332, representing the fair value of 31 million modified Warrants on May 21, 2024, with an offsetting entry to additional paid-in capital. On June 30, 2024, the Company remeasured the modified Warrants to their fair value and recognized a derivative liability of US$539 and the change in their fair value of US$3,871 on the condensed statement of operations for the six months ended June 30, 2024.
As of June 30, 2024, none of the modified Warrants were exercised, and no funds were received from any warrant holders.
Contingent Forward Contracts
On May 21, 2024, the Company received commitments from a limited group of institutional shareholders to purchase up to US$312 million of the Company’s Ordinary Shares at the price of US$10.00 per share, contingent on the consummation of the Acuren Acquisition. The Company accounted for the equity commitments as contingent forward contracts as they were not considered indexed to the Company’s equity. Accordingly, the Company recognized a derivative asset of US$14.8 million for the fair value of the forward contracts as of May 21, 2024, with a corresponding increase to additional paid-in capital.
On June 30, 2024, the Company remeasured the forward contracts to their fair value and recognized a derivative liability of US$1.2 million and the change in their fair value of US$16.0 million on the condensed statement of operations for the six months ended June 30, 2024.
F-23
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
4. Shareholders’ Equity (cont.)
The Company used a probability weighted method to estimate the fair value of the Warrants and the forward contract model to estimate the fair value of the contingent forward contracts. The assumptions used to estimate the fair value of the Warrants and contingent forward contracts include both Level 1 inputs including the publicly traded prices of the warrants as well as the following Level 3 inputs:
|
|
|
May 21,
2024
|
|
June 30,
2024
|
|
Risk-free rate
|
|
5.37
|
%
|
|
5.40
|
%
|
|
Expected term
|
|
0.33
|
|
|
0.22
|
|
|
Dividend yield
|
|
0.00
|
%
|
|
0.00
|
%
|
5. Commitments and Contingencies
There were no known or threatened lawsuits or unasserted claims at the balance sheet date up to the date of signing these condensed financial statements.
6. Share-Based Compensation
The Company expenses share-based compensation over the requisite service period of the awards (usually the vesting period) based on the grant date fair value of awards. For share option grants with performance-based milestones, the expense is recorded over the service period after the achievement of the milestone is probable or the performance condition is achieved. The Company estimates the fair value of share option grants using the Black-Scholes option pricing model. An offsetting increase to shareholders’ equity will be recorded equal to the amount of the compensation expense charge. The Company recognizes forfeitures as they occur as a reduction of expense. The Company does not have any forfeitures for the six months ended June 30, 2024 and 2023. Refer to Note 4 Shareholders’ Equity for further details on the Founder Preference Shares and attached Warrants.
On May 22, 2023, the Company issued its Independent Non-Founder Directors an aggregate of 125,000 share options (the “Share Options”) to purchase Ordinary Shares of the Company that vest upon the Acquisition. The Independent Non-Founder Directors are required to have continued service until the time of the Acquisition to vest in the Share Options. The options expire on the 5th anniversary following the Acquisition and have an exercise price of US$11.50 per Ordinary Share (subject to such adjustment as the Directors consider appropriate in accordance with the terms of the Option Deeds). The Share Options have a performance condition of vesting on an Acquisition (which is not considered probable until an Acquisition has occurred). Therefore, in accordance with ASC 718, Compensation — Stock Compensation, the fair value of the awards, as determined on the grant date, will be recognized as an expense and an increase of additional paid-in capital upon consummation of an Acquisition.
On May 22, 2023, the Company issued 25,000 Ordinary Shares and Warrants, in aggregate, to Independent Non-Founder Directors for their first year’s annual fees in lieu of cash. The US$10.00 per share fair value of the Ordinary Shares and Warrants was based on the price paid by outside shareholders in the equity offering on May 22, 2023 (refer to Note 4 Shareholders’ Equity). In accordance with ASC 718, Compensation — Stock Compensation, as the Ordinary Shares and related Warrants were fully vested and have a non-substantive service period, the fair value of US$0.25 million was recorded as an expense on the grant date.
7. Related Parties
During the six months ended June 30, 2024, no Founder Preferred Shares, Ordinary Shares, or Warrants were issued to the Founder Entity. During the six months ended June 30, 2023, 999,999 Founder Preferred Shares, 8,950,000 Ordinary Shares, and 9,950,000 Warrants were issued to the Founder Entity.
F-24
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
7. Related Parties (cont.)
Sir Martin E. Franklin, a Founder and Director, is a beneficial owner and the managing member of the Founder Entity and, as such, may be considered to have beneficial ownership of all the Founder Entity’s interests in the Company. The Founders, in aggregate, hold an indirect pecuniary interest of approximately 69 percent in the Founder Entity. During the six months ended June 30, 2023, Other Directors were issued 25,000 Ordinary Shares and 25,000 Warrants along with 125,000 Share Options in lieu of directors fees.
Except as set forth herein, there were no other Ordinary Shares, Warrants, and Share Options issued to the Directors of the Company for the six months ended June 30, 2024 and 2023.
An entity owned by Sir Martin E. Franklin, Mariposa Capital, LLC, earned advisory fees of US$125,000 and US$30,137, respectively, for the six months ended June 30, 2024 and 2023.
8. Earnings Per Share
Basic earnings per ordinary share excludes dilution and is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period. The Company has determined that its Founder Preferred Shares are a class of ordinary shares. Accordingly, the Company used the two-class method of computing earnings per share for Ordinary Shares and Founder Preferred Shares according to participation rights in undistributed earnings. Under this method, net income (loss) is allocated on a pro rata basis to the holders of Ordinary and Founder Preferred Shares.
For the period ended June 30, 2024 and 2023, the Company excluded the Share Options to purchase 125,000 Ordinary Shares from the diluted earnings per ordinary share as the performance condition (refer to Note 6 Share-Based Compensation) for these Share Options was not met as of June 30, 2024 and 2023. The Company has also excluded the Warrants in issue from such earnings on the basis they are antidilutive.
The following table sets forth the computation of basic and diluted earnings per ordinary share and Founder Preferred Shares using the two-class method. The application of the two-class method yields the same dilutive effects applying if-converted to the Founder Preferred Shares given 1:1 participation:
|
|
|
For the
six months
ended
June 30,
2024
|
|
For the
six months
ended
June 30,
2023
|
|
Basic Shares:
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(9,174
|
)
|
|
$
|
2,700
|
|
|
Undistributed (earning) loss allocated to Founder Preferred Shares
|
|
|
167
|
|
|
|
(49
|
)
|
|
Net income (loss) available to Ordinary Share holders
|
|
$
|
(9,007
|
)
|
|
$
|
2,651
|
|
| |
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted average Ordinary Shares outstanding – basic
|
|
|
53,975,000
|
|
|
|
53,975,000
|
|
|
Weighted average Founder Preferred Shares outstanding – basic
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
Basic earning (loss) per Ordinary Share
|
|
$
|
(0.17
|
)
|
|
$
|
0.05
|
|
|
Basic earning (loss) per Founder Preferred Share
|
|
$
|
(0.17
|
)
|
|
$
|
0.05
|
|
| |
|
|
|
|
|
|
|
|
|
Dilutive Shares:
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(9,007
|
)
|
|
$
|
2,651
|
|
|
Add back: undistributed earning (loss) allocated to Founder Preferred Shares
|
|
|
(167
|
)
|
|
|
49
|
|
|
Net income (loss) available to Ordinary Share holders
|
|
$
|
(9,174
|
)
|
|
$
|
2,700
|
|
F-25
Table of Contents
Acuren Corporation f/k/a Admiral Acquisition Limited
Notes to Condensed Financial Statements
(Unaudited)
8. Earnings Per Share (cont.)
|
|
|
For the
six months
ended
June 30,
2024
|
|
For the
six months
ended
June 30,
2023
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average Ordinary Shares outstanding – basic
|
|
|
53,975,000
|
|
|
|
53,975,000
|
|
Add: dilutive securities
|
|
|
|
|
|
|
|
|
Share Options
|
|
|
—
|
|
|
|
—
|
|
Warrants
|
|
|
—
|
|
|
|
—
|
|
Convertible Founder Preferred Shares
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
Weighted average Ordinary Shares outstanding – diluted
|
|
|
54,975,000
|
|
|
|
54,975,000
|
|
Weighted average Founder Preferred Shares outstanding – diluted
|
|
|
1,000,000
|
|
|
|
1,000,000
|
| |
|
|
|
|
|
|
|
|
Dilutive earning (loss) per Ordinary Share
|
|
$
|
(0.17
|
)
|
|
$
|
0.05
|
|
Dilutive earning (loss) per Founder Preferred Share
|
|
$
|
(0.17
|
)
|
|
$
|
0.05
|
9. Subsequent Events
The Company has evaluated subsequent events through November 4, 2024 the date these condensed financial statements were issued. The Company did not identify any material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements except for the following:
On July 30, 2024, the Company completed its acquisition of ASP Acuren, a market leading provider of critical asset integrity services. In conjunction with the acquisition, the Company changed its name to Acuren Corporation.
The consideration paid at closing for the ASP Acuren plus the related transaction expenses was approximately US$1.88 billion in cash. The purchase price and related transaction expenses were funded with a combination of $568.0 million cash on hand, a US$775.0 million senior loan facility and an aggregate of US$675.0 million of proceeds from the issuance of 58,259,984 ordinary shares at US$10.00 per ordinary share to investors and proceeds from an early exercise of 36,710,124 warrants in exchange for 9,177,531 ordinary shares also at US$10.00 per ordinary share. Following the closing, the Company’s ordinary shares outstanding total 121,412,515 and warrants outstanding total 18,264,876.
In connection with the closing of the Acuren Acquisition, on July 30, 2024, the Company entered into the New Credit Facility and executed a US$775.0 million seven-year senior secured term loan (the “Term Loan”) under the senior secured term loan facility (the “Term Loan Facility”), which was used to fund a part of the cash portion of the purchase price in the Acuren Acquisition. The Credit Agreement also provides for a US$75.0 million five-year senior secured revolving credit facility (the “Revolving Credit Facility,” and together with the Term Loan Facility, the “New Credit Facility”).
Due to the recent completion of the acquisition, the Company has not yet completed its accounting for the acquisition of ASP Acuren.
As of the closing of the acquisition, the Company will record a one-time, non-cash expense preliminarily estimated to be approximately US$62.3 million, which represents the fair value of the Founder preferred dividend rights at the time the Founder Preferred Shares were issued. Refer to Note 4 Shareholders’ Equity.
F-26
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of ASP Acuren Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ASP Acuren Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), of equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for certain costs in 2024.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
August 12, 2024, except for the effects of the revision and the change in the manner in which the Company accounts for certain costs discussed in Note 1 to the consolidated financial statements, as to which the date is November 4, 2024
We have served as the Company’s auditor since 2006.
F-27
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
87,061
|
|
|
$
|
62,585
|
|
|
Accounts receivable, net
|
|
|
233,244
|
|
|
|
234,840
|
|
|
Prepaid expenses and other current assets
|
|
|
13,608
|
|
|
|
10,293
|
|
|
Total current assets
|
|
|
333,913
|
|
|
|
307,718
|
|
|
Property, plant and equipment, net
|
|
|
112,264
|
|
|
|
134,200
|
|
|
Operating lease right-of-use assets, net
|
|
|
22,441
|
|
|
|
23,427
|
|
|
Goodwill
|
|
|
511,501
|
|
|
|
505,401
|
|
|
Intangible assets, net
|
|
|
264,335
|
|
|
|
299,135
|
|
|
Deferred income tax asset
|
|
|
2,368
|
|
|
|
1,528
|
|
|
Other assets
|
|
|
15,793
|
|
|
|
28,952
|
|
|
Total assets
|
|
$
|
1,262,615
|
|
|
$
|
1,300,361
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
23,206
|
|
|
$
|
20,198
|
|
|
Accrued expenses and other current liabilities
|
|
|
60,345
|
|
|
|
50,525
|
|
|
Current portion long-term debt
|
|
|
7,280
|
|
|
|
5,488
|
|
|
Current portion of lease obligations
|
|
|
16,623
|
|
|
|
16,146
|
|
|
Income taxes payable
|
|
|
5,430
|
|
|
|
8,308
|
|
|
Total current liabilities
|
|
|
112,884
|
|
|
|
100,665
|
|
|
Long-term debt, net of current
|
|
|
668,031
|
|
|
|
555,864
|
|
|
Non-current lease obligations
|
|
|
38,061
|
|
|
|
37,383
|
|
|
Deferred income tax liability
|
|
|
35,294
|
|
|
|
57,896
|
|
|
Income taxes payable
|
|
|
15,731
|
|
|
|
16,715
|
|
|
Other liabilities
|
|
|
10,615
|
|
|
|
9,709
|
|
|
Total liabilities
|
|
|
880,616
|
|
|
|
778,232
|
|
|
Commitments and contingencies (Note 17)
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; 5,700,000 shares issued and 5,024,802 shares outstanding
|
|
|
50
|
|
|
|
50
|
|
|
Treasury stock, 7,769 common shares at cost
|
|
|
(1,029
|
)
|
|
|
(1,029
|
)
|
|
Additional paid-in capital
|
|
|
366,327
|
|
|
|
511,352
|
|
|
Accumulated earnings
|
|
|
17,447
|
|
|
|
23,736
|
|
|
Accumulated other comprehensive loss
|
|
|
(796
|
)
|
|
|
(11,980
|
)
|
|
Total equity
|
|
|
381,999
|
|
|
|
522,129
|
|
|
Total liabilities and equity
|
|
$
|
1,262,615
|
|
|
$
|
1,300,361
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-28
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(amounts in thousands, except share and per share data)
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Service revenue
|
|
$
|
1,050,057
|
|
|
$
|
928,326
|
|
|
Cost of revenue
|
|
|
810,534
|
|
|
|
725,375
|
|
|
Gross profit
|
|
|
239,523
|
|
|
|
202,951
|
|
|
Selling, general and administrative expenses
|
|
|
185,022
|
|
|
|
168,229
|
|
|
Income from operations
|
|
|
54,501
|
|
|
|
34,722
|
|
|
Interest expense, net
|
|
|
60,022
|
|
|
|
24,159
|
|
|
Other expense (income), net
|
|
|
(1,241
|
)
|
|
|
(385
|
)
|
|
Gain on bargain purchase
|
|
|
—
|
|
|
|
(12,503
|
)
|
|
Income (loss) before provision for income taxes
|
|
|
(4,280
|
)
|
|
|
23,451
|
|
|
Provision for income taxes
|
|
|
2,009
|
|
|
|
3,408
|
|
|
Net income (loss)
|
|
|
(6,289
|
)
|
|
|
20,043
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
11,184
|
|
|
|
(25,168
|
)
|
|
Total other comprehensive income (loss)
|
|
|
11,184
|
|
|
|
(25,168
|
)
|
|
Total comprehensive income (loss)
|
|
$
|
4,895
|
|
|
$
|
(5,125
|
)
|
| |
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.25
|
)
|
|
$
|
3.99
|
|
|
Diluted
|
|
$
|
(1.25
|
)
|
|
$
|
3.93
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,024,802
|
|
|
|
5,026,061
|
|
|
Diluted
|
|
|
5,024,802
|
|
|
|
5,093,724
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-29
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Consolidated Statements of Equity
(amounts in thousands, except share and per share data)
|
|
|
Common
Shares
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
|
Balances at December 31, 2021
|
|
5,027,825
|
|
|
$
|
50
|
|
$
|
(276
|
)
|
|
$
|
508,525
|
|
|
$
|
3,693
|
|
|
$
|
13,188
|
|
|
$
|
525,180
|
|
|
Share-based compensation expense
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
2,561
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,561
|
|
|
Exercise of stock options
|
|
659
|
|
|
|
—
|
|
|
—
|
|
|
|
66
|
|
|
|
—
|
|
|
|
—
|
|
|
|
66
|
|
|
Capital contributions from stockholder
|
|
1,331
|
|
|
|
—
|
|
|
—
|
|
|
|
200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
200
|
|
|
Treasury stock repurchased
|
|
(5,013
|
)
|
|
|
—
|
|
|
(753
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(753
|
)
|
|
Net income
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
20,043
|
|
|
|
—
|
|
|
|
20,043
|
|
|
Other comprehensive loss
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,168
|
)
|
|
|
(25,168
|
)
|
|
Balances at December 31, 2022
|
|
5,024,802
|
|
|
|
50
|
|
|
(1,029
|
)
|
|
|
511,352
|
|
|
|
23,736
|
|
|
|
(11,980
|
)
|
|
|
522,129
|
|
|
Dividend
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
(150,000
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(150,000
|
)
|
|
Share-based compensation expense
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
4,975
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,975
|
|
|
Net loss
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,289
|
)
|
|
|
—
|
|
|
|
(6,289
|
)
|
|
Other comprehensive income
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,184
|
|
|
|
11,184
|
|
|
Balances at December 31, 2023
|
|
5,024,802
|
|
|
$
|
50
|
|
$
|
(1,029
|
)
|
|
$
|
366,327
|
|
|
$
|
17,447
|
|
|
$
|
(796
|
)
|
|
$
|
381,999
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-30
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(amounts in thousands)
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(6,289
|
)
|
|
$
|
20,043
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
|
1,353
|
|
|
|
1,325
|
|
|
Depreciation and amortization
|
|
|
94,818
|
|
|
|
86,436
|
|
|
Noncash lease expense
|
|
|
9,992
|
|
|
|
8,069
|
|
|
Share-based compensation expense
|
|
|
4,975
|
|
|
|
2,561
|
|
|
Gain on bargain purchase
|
|
|
—
|
|
|
|
(12,503
|
)
|
|
Amortization of deferred financing costs
|
|
|
3,586
|
|
|
|
3,249
|
|
|
Fair value adjustments on interest rate derivatives
|
|
|
7,244
|
|
|
|
(9,069
|
)
|
|
Deferred income taxes
|
|
|
(23,442
|
)
|
|
|
(20,370
|
)
|
|
Other
|
|
|
(78
|
)
|
|
|
179
|
|
|
Changes in operating assets and liabilities, net of effects of business acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
881
|
|
|
|
(38,798
|
)
|
|
Prepaid expenses and other current assets
|
|
|
(3,243
|
)
|
|
|
2,170
|
|
|
Accounts payable
|
|
|
2,917
|
|
|
|
(3,503
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
9,820
|
|
|
|
(207
|
)
|
|
Income taxes payable
|
|
|
(3,862
|
)
|
|
|
19,453
|
|
|
Operating lease obligations
|
|
|
(9,284
|
)
|
|
|
(5,672
|
)
|
|
Other assets and liabilities
|
|
|
6,421
|
|
|
|
(13,383
|
)
|
|
Net cash provided by operating activities
|
|
|
95,809
|
|
|
|
39,980
|
|
| |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(22,141
|
)
|
|
|
(23,075
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
|
1,617
|
|
|
|
978
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(6,010
|
)
|
|
|
(45,575
|
)
|
|
Net cash used in investing activities
|
|
|
(26,534
|
)
|
|
|
(67,672
|
)
|
| |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings under long-term debt
|
|
|
195,000
|
|
|
|
50,000
|
|
|
Repayments of long-term debt
|
|
|
(81,384
|
)
|
|
|
(5,767
|
)
|
|
Payments of debt issuance costs
|
|
|
(2,844
|
)
|
|
|
(72
|
)
|
|
Principal payments on finance lease obligations
|
|
|
(9,948
|
)
|
|
|
(7,424
|
)
|
|
Dividends paid to stockholder
|
|
|
(150,000
|
)
|
|
|
—
|
|
|
Proceeds from exercise of stock options
|
|
|
—
|
|
|
|
66
|
|
|
Capital contributions from stockholder
|
|
|
—
|
|
|
|
200
|
|
|
Treasury stock repurchase
|
|
|
—
|
|
|
|
(753
|
)
|
|
Payments of contingent consideration
|
|
|
—
|
|
|
|
(285
|
)
|
|
Net cash (used in) provided by financing activities
|
|
|
(49,176
|
)
|
|
|
35,965
|
|
|
Net effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
4,377
|
|
|
|
(5,625
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
24,476
|
|
|
|
2,648
|
|
| |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
62,585
|
|
|
|
59,937
|
|
|
End of period
|
|
$
|
87,061
|
|
|
$
|
62,585
|
|
| |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
60,355
|
|
|
$
|
35,910
|
|
|
Income taxes paid
|
|
$
|
29,761
|
|
|
$
|
17,403
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-31
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices
Description of Business
ASP Acuren Holdings, Inc. (hereinafter referred to as “we,” “our,” “us,” “Acuren,” and the “Company”), a Delaware corporation, is a leading provider of critical asset integrity services. Acuren operates primarily in North America serving a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. Acuren provides these essential and often compliance-mandated (often at customer locations) services in the industrial space and is focused on the recuring maintenance needs of its customers.
Principles of Consolidation
These consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition.
Revision of Previously Issued Consolidated Financial Statements and Update to the Presentation of Cost of Revenue and Selling, General and Administrative Expenses
Revision
In August 2024, the Company identified an error in its previously issued annual consolidated financial statements as of and for the years ended December 31, 2023 and 2022, which were issued effective as of August 12, 2024. The error related to accounting for unbilled receivables in each of the years ended December 31, 2023 and 2022, respectively. The error was determined to be individually, and in the aggregate, quantitatively and qualitatively immaterial. However, the Company has elected to revise its annual financial statements to correct this error for the years ended December 31, 2023 and 2022, as illustrated in this note, referred to as the “Previously Issued Consolidated Financial Statements Revision”.
The impact of the Previously Issued Consolidated Financial Statements Revision on the Company’s consolidated financial statements as of and for the years ended December 31, 2023 and 2022 is reflected below under the Revision Adjustment column.
Update to the Presentation of Cost of Revenue and Selling, General and Administrative Expenses
During the six months ended June 30, 2024, we changed the presentation of certain costs incurred at our operational sites on our statement of operations. This voluntary change resulted in a reclassification of certain overhead costs, which, although incurred at our operational sites are not directly related to the delivery of our services, from cost of revenue to selling, general and administrative expenses. We believe this presentation is preferable as it will provide greater transparency regarding the true cost of delivery of our services consistent with the principles of ASC 340-40 and better align with how we internally manage our business.
This change in classification has been applied retrospectively to all periods presented and affects selling, general and administrative expenses, cost of revenue, and gross profit. This change in presentation had no impact to service revenue, income from operations, loss before provision for income taxes, provision for income taxes, net income, earnings per share, retained earnings or other components of equity or net assets. In addition, gross profit information in the segment footnote will also be updated for this change. The impact of the update to the presentation of certain indirect costs to the Previously Issued Consolidated Financial Statements on the Company’s consolidated financial statements as of and for the years ended December 31, 2023 and 2022 is reflected below under the Presentation Adjustment column.
F-32
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
|
|
|
Year Ended December 31, 2023
|
| |
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Service revenue
|
|
$
|
1,050,914
|
|
|
$
|
(857
|
)
|
|
$
|
—
|
|
|
$
|
1,050,057
|
|
|
Cost of revenue
|
|
|
891,247
|
|
|
|
—
|
|
|
|
(80,713
|
)
|
|
|
810,534
|
|
|
Gross profit
|
|
|
159,667
|
|
|
|
(857
|
)
|
|
|
80,713
|
|
|
|
239,523
|
|
|
Selling, general and administrative expenses
|
|
|
104,309
|
|
|
|
—
|
|
|
|
80,713
|
|
|
|
185,022
|
|
|
Income from operations
|
|
|
55,358
|
|
|
|
(857
|
)
|
|
|
—
|
|
|
|
54,501
|
|
|
Loss before provision for income taxes
|
|
|
(3,423
|
)
|
|
|
(857
|
)
|
|
|
—
|
|
|
|
(4,280
|
)
|
|
Provision for income taxes
|
|
|
2,205
|
|
|
|
(196
|
)
|
|
|
—
|
|
|
|
2,009
|
|
|
Net loss
|
|
$
|
(5,628
|
)
|
|
$
|
(661
|
)
|
|
$
|
—
|
|
|
$
|
(6,289
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.12
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
—
|
|
|
$
|
(1.25
|
)
|
|
Diluted
|
|
$
|
(1.12
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
—
|
|
|
$
|
(1.25
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,024,802
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,024,802
|
|
|
Diluted
|
|
|
5,024,802
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,024,802
|
|
|
|
|
December 31, 2023
|
| |
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Accounts receivable, net
|
|
|
230,469
|
|
|
2,775
|
|
|
—
|
|
|
233,244
|
|
Total current assets
|
|
|
331,138
|
|
|
2,775
|
|
|
—
|
|
|
333,913
|
|
Total assets
|
|
$
|
1,259,840
|
|
$
|
2,775
|
|
$
|
—
|
|
$
|
1,262,615
|
|
Income taxes payable
|
|
|
4,859
|
|
|
571
|
|
|
—
|
|
|
5,430
|
|
Total current liabilities
|
|
|
112,313
|
|
|
571
|
|
|
—
|
|
|
112,884
|
|
Total liabilities
|
|
$
|
880,045
|
|
$
|
571
|
|
$
|
—
|
|
$
|
880,616
|
|
Accumulated earnings
|
|
|
15,243
|
|
|
2,204
|
|
|
—
|
|
|
17,447
|
|
Total equity
|
|
|
379,795
|
|
|
2,204
|
|
|
—
|
|
|
381,999
|
|
Total liabilities and equity
|
|
$
|
1,259,840
|
|
$
|
2,775
|
|
$
|
—
|
|
$
|
1,262,615
|
|
|
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(5,628
|
)
|
|
(661
|
)
|
|
—
|
|
(6,289
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities, net of effects of business acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
24
|
|
|
857
|
|
|
—
|
|
881
|
|
|
Income taxes payable
|
|
(3,666
|
)
|
|
(196
|
)
|
|
—
|
|
(3,862
|
)
|
|
Net cash provided by operating activities
|
|
95,809
|
|
|
—
|
|
|
—
|
|
95,809
|
|
F-33
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
|
|
|
Year Ended December 31, 2022
|
| |
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Service revenue
|
|
$
|
927,583
|
|
$
|
743
|
|
$
|
—
|
|
|
$
|
928,326
|
|
Cost of revenue
|
|
|
797,415
|
|
|
—
|
|
|
(72,040
|
)
|
|
|
725,375
|
|
Gross profit
|
|
|
130,168
|
|
|
743
|
|
|
72,040
|
|
|
|
202,951
|
|
Selling, general and administrative expenses
|
|
|
96,189
|
|
|
—
|
|
|
72,040
|
|
|
|
168,229
|
|
Income from operations
|
|
|
33,979
|
|
|
743
|
|
|
—
|
|
|
|
34,722
|
|
Income (loss) before provision for income taxes
|
|
|
22,708
|
|
|
743
|
|
|
—
|
|
|
|
23,451
|
|
Provision for income taxes
|
|
|
3,219
|
|
|
189
|
|
|
—
|
|
|
|
3,408
|
|
Net income (loss)
|
|
$
|
19,489
|
|
$
|
554
|
|
$
|
—
|
|
|
$
|
20,043
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.88
|
|
$
|
0.11
|
|
$
|
—
|
|
|
$
|
3.99
|
|
Diluted
|
|
$
|
3.83
|
|
$
|
0.11
|
|
$
|
—
|
|
|
$
|
3.93
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,026,061
|
|
|
—
|
|
|
—
|
|
|
|
5,026,061
|
|
Diluted
|
|
|
5,093,724
|
|
|
—
|
|
|
—
|
|
|
|
5,093,724
|
|
|
|
December 31, 2022
|
| |
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Accounts receivable, net
|
|
|
231,208
|
|
|
3,632
|
|
|
—
|
|
|
234,840
|
|
Total current assets
|
|
|
304,086
|
|
|
3,632
|
|
|
—
|
|
|
307,718
|
|
Total assets
|
|
$
|
1,296,729
|
|
$
|
3,632
|
|
$
|
—
|
|
$
|
1,300,361
|
|
Income taxes payable
|
|
|
7,541
|
|
|
767
|
|
|
—
|
|
|
8,308
|
|
Total current liabilities
|
|
|
99,898
|
|
|
767
|
|
|
—
|
|
|
100,665
|
|
Total liabilities
|
|
$
|
777,465
|
|
$
|
767
|
|
$
|
—
|
|
$
|
778,232
|
|
Accumulated earnings
|
|
|
20,871
|
|
|
2,865
|
|
|
—
|
|
|
23,736
|
|
Total equity
|
|
|
519,264
|
|
|
2,865
|
|
|
—
|
|
|
522,129
|
|
Total liabilities and equity
|
|
$
|
1,296,729
|
|
$
|
3,632
|
|
$
|
—
|
|
$
|
1,300,361
|
|
|
|
As
Reported
|
|
Revision
Adjustment
|
|
Presentation
Adjustment
|
|
As
Revised
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
19,489
|
|
|
554
|
|
|
—
|
|
20,043
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities, net of effects of business acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(37,477
|
)
|
|
(1,321
|
)
|
|
—
|
|
(38,798
|
)
|
|
Income taxes payable
|
|
18,686
|
|
|
767
|
|
|
—
|
|
19,453
|
|
|
Net cash provided by operating activities
|
|
39,980
|
|
|
—
|
|
|
—
|
|
39,980
|
|
F-34
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires that the Company make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. Significant items subject to such estimates and assumptions include the carrying amount of acquired property, plant and equipment, intangibles and goodwill, interest rate swap derivatives, stock-based compensation awards, and the estimated liability for certain self-insured risks. As future events and their effects cannot be predicted with precision, actual results could differ significantly from these estimates, which may cause the Company’s future results to be affected.
Business Combinations
The Company accounts for its business combinations under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Certain estimates and judgments are required in the application of the fair value techniques, including estimates of the respective acquisition’s future performance and related cash flows, selection of a discount rate and economic lives, and use of Level 3 measurements. While the Company uses the best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, estimates are inherently uncertain and subject to refinement. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive Income (Loss).
Cash and Cash Equivalents
Cash and cash equivalents include cash deposited in banks, demand deposits, money market accounts, and highly-liquid short-term investments with an initial term of three months or less.
Accounts Receivables and Allowance for Credit Losses
Accounts receivables are recorded net of an allowance for credit losses and includes invoiced and accrued but unbilled revenue. Unbilled revenue is generally billed in the subsequent quarter. The Company considers unbilled receivables as short-term in nature as they are normally converted to trade receivables within 90 days, thus future changes in economic conditions will not have a significant effect on the credit loss estimate. The Company’s unbilled receivables contain an unconditional right to receive payment and are, therefore, recorded within accounts receivable on the consolidated balance sheet. The Company records an allowance for credit losses for accounts receivable based on management’s expected credit losses. Management’s estimate of expected credit losses is based on its assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging and customer disputes.
Each reporting period, the Company reassesses whether any accounts receivable no longer share similar risk characteristics and should instead be evaluated as part of another pool or on an individual basis. Changes to the allowance for credit losses are adjusted through credit loss expense, which is included within selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).
F-35
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
The following table presents the allowance for credit losses activity:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Beginning balances
|
|
$
|
1,098
|
|
|
$
|
1,057
|
|
|
Provision
|
|
|
1,353
|
|
|
|
1,325
|
|
|
Accounts written off
|
|
|
(226
|
)
|
|
|
(1,263
|
)
|
|
Foreign currency translation
|
|
|
16
|
|
|
|
(21
|
)
|
|
Ending balances
|
|
$
|
2,241
|
|
|
$
|
1,098
|
|
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property, plant and equipment is included within cost of revenue or selling, general and administrative expenses based on the nature of the asset. Expenditures for repairs and maintenance that do not extend the useful lives of the related assets are expensed as incurred. Expenditures that significantly improve or extend the life of an asset are capitalized. Upon retirement or disposition of property, plant and equipment, the cost and related accumulated depreciation are removed from the accounts and any gain or loss recorded in income from operations.
Goodwill and Intangible Assets
Goodwill represents the excess of purchase price of acquired businesses over the fair value of the underlying net tangible and intangible assets acquired. The Company evaluates the impairment of its goodwill annually or more frequently when events or changes in circumstances indicate that goodwill may be impaired. Goodwill is required to be evaluated for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete financial information is available. The Company has two reporting units, United States and Canada, which align with the Company’s reportable segments.
The Company first assesses qualitatively, step zero, whether it is necessary to perform step one of the annual impairment tests. An entity is required to perform step one if the entity concludes that it is more likely than not that a reporting unit’s fair value is below its carrying amount (that is, a likelihood of more than fifty percent). When step one indicates that the reporting unit’s carrying value exceeds its fair value, an impairment will be recorded.
The Company performs an annual goodwill impairment assessment or more frequently if events or circumstances arise which indicate that goodwill may be impaired. An assessment can be performed by first completing a qualitative assessment on none, some or all of its reporting units. The Company can also bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test, and then resume the qualitative assessment in any subsequent period. Qualitative indicators that may trigger the need for annual or interim quantitative impairment testing include, among other things, deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or an expectation of selling or disposing of a portion of a reporting unit. Additionally, a significant change in business climate, a loss of a significant customer, increased competition, a sustained decrease in share price, or a decrease in estimated fair value below book value may trigger the need for interim impairment testing of goodwill associated with one or more reporting units.
If the Company believes that, as a result of its qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. The quantitative test involves comparing the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded as a reduction to goodwill with a corresponding change to earnings in the period the goodwill is determined to be impaired. Any goodwill impairment is limited to the total amount of goodwill allocated to that reporting unit. The
F-36
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
income tax effect associated with an impairment of tax-deductible goodwill is also considered in the measurement of the goodwill impairment. During the years ended December 31, 2023 and 2022, the Company performed a qualitative analysis. There were no impairment charges in 2023 or 2022.
The Company considers the income and market approaches when estimating the fair values of reporting units which requires significant judgement in evaluating economic and industry trends, estimated future cash flows, discount rates, and other factors.
Intangible assets consisting of customer relationships, technology, tradenames, and noncompete agreements, have been recorded based on their fair value at the date of acquisition and are amortized over their economic useful lives which range from 1 to 15 years. Amortization on other intangibles assets is included within Selling, general, and administrative expense.
Valuation of Long-Lived Assets
Long-lived assets, such as property, plant and equipment and purchased identifiable intangible assets that are subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of an asset is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No indications of impairment were identified during 2023 or 2022.
Debt Issuance Costs
Debt issuance costs represent the cost of obtaining financing arrangements. Debt issuance costs related to the revolving credit facility were deferred and recorded as an asset and amortized over the term of the revolving credit arrangement using the straight-line method. Debt issuance costs relating to the term loan are recorded as a direct deduction from the carrying amount of the term loan and are amortized over the term of the related financing agreement using the effective interest method.
Earnings Per Share
Basic earnings per share is computed by dividing the Company’s net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing the Company’s net income (loss) by the sum of the weighted average number of shares of common stock outstanding during the period plus the potential dilutive effects of stock options.
The potential dilutive shares of stock options during the period are calculated using the treasury stock method and are excluded from the computation of diluted net income (loss) per common share if their effect is anti-dilutive.
Cost of revenue
Cost of revenue consists primarily of direct labor. Cost of revenue also includes materials and indirect costs, such as supplies, tools, and depreciation of equipment related to contract performance. In addition, we incur travel, per diem, and hotel costs. Labor costs are recognized as labor hours are incurred in delivering services.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of executive and administrative employee compensation, acquisition related earnout and incentive costs, information systems and technology costs, share-based compensation, rent expense, and management consulting services.
F-37
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
Share-based Compensation
Share-based payments are measured at the grant date, based on the fair value of the award, and are expensed over the requisite service period.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured at the enacted income tax rates expected to apply in the taxable year that the asset or liability is expected to be recovered or settled.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of a deferred income tax asset will not be realized. Valuation allowances are provided when management believes, after estimating future taxable income, considering feasible income tax planning opportunities and weighing all facts and circumstances that certain deferred tax assets are not recoverable. The Company evaluates its tax contingencies and recognizes a liability when it believes it is more-likely-than-not that a liability exists.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.
The Company records interest expenses and penalties on uncertain tax liabilities in the provision for income taxes.
Currency Translation
Assets and liabilities of subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars at the rate of exchange in effect on the balance sheet date; income and expenses are translated monthly at average rates of exchange prevailing during the year.
The Company has foreign currency exposure related to operations in foreign locations. This foreign currency exposure arises from the translation of foreign subsidiaries’ financial statements into U.S. Dollars. Increases and decreases in the value of the U.S. Dollar relative to these foreign currencies have a direct impact on the value in U.S. Dollars of foreign currency denominated assets and liabilities, even if the value of these items has not changed in their original currency.
Translation adjustments are included in foreign currency translation adjustments to arrive at other comprehensive income (loss). Due to the materiality of its international operations, the Company is subject to market risks resulting from fluctuations in foreign currencies.
Derivative Instruments
The Company entered into interest rate swap agreements which are intended to reduce the impact of fluctuations in interest rates on a portion of its variable rate debt. The accounting for changes in the fair value of a derivative depends upon the intended use of the derivative and the resulting designation. The Company has not designated any derivatives as hedging instruments and reports these agreements at fair value with changes in fair value recognized in interest expense, net.
F-38
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
Research and Development
Research and product development costs are expensed as incurred.
Workers Compensation and Self-Insurance
The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews our loss contingencies on an ongoing basis to ensure that the appropriate reserves are recorded on our consolidated balance sheet. These reserves are based on historical experience with claims incurred but not received, estimates and judgments made by the Company, applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. The Company is self-insured for certain losses relating to workers’ compensation and health benefit claims. The Company maintains third-party excess insurance coverage for workers’ compensation and health benefit claims. As of December 31, 2023, and 2022 the Company had accrued approximately $4.3 million and $2.7 million, respectively for workers’ compensation related liabilities. Self-insured losses are accrued when it is probable that an uninsured claim has been incurred but not reported and the amount of the loss can be reasonably estimated at the balance sheet date.
Concentration of Credit Risk
The Company’s interest rate swap agreements contain an element of risk related to the counterparties’ potential inability to meet the terms of the agreement. However, the Company minimizes this risk by limiting the counterparties to a diverse group of highly rated, major domestic financial institutions. Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of trade accounts receivable as the Company grants credit terms in the normal course of business to its diverse customer base. To mitigate credit risks, the Company evaluates and monitors the creditworthiness of its customers. Historical bad debt write-offs have not been significant.
As of and for the years ended December 31, 2023 and 2022, no individual customer represented more than 10% of consolidated sales or accounts receivable, and no individual vendor represented more than 10% of purchases or accounts payable.
Recently Adopted Accounting Standards
Leases
In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”), to increase transparency and comparability among organizations related to their leasing arrangements. This comprehensive new standard supersedes existing lease accounting guidance and is intended to increase transparency and comparability among organizations recognizing lease assets representing the right to use an underlying asset (“ROU asset”) and lease liabilities representing the obligation to make lease payments over the lease term, measured on a discounted basis, and requires disclosure of key information about leasing arrangements. Topic 842 retains a distinction between finance leases and operating leases using classification criteria that is substantially similar to the previous lease guidance, with classification affecting the pattern of expense recognition in the statement of operations. The Company adopted Topic 842 on January 1, 2022 using the optional transition method to the modified retrospective approach. Under this transition provision, results for reporting periods beginning on January 1, 2022 are presented under Topic 842.
To reduce the burden of adoption and ongoing compliance with Topic 842, a number of practical expedients and policy elections are available. The Company elected the “package of practical expedients”, which did not require reassessment of whether contracts entered into prior to adoption are or contain leases, and allowed carryforward of the historical lease classification and initial direct costs treatment for existing leases. The Company has not elected the “hindsight” practical expedient, and therefore will measure the ROU asset and lease liability using the remaining portion of the lease term at adoption on January 1, 2022.
F-39
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
The Company made an accounting policy election under Topic 842 not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease (or January 1, 2022 for existing leases upon the adoption of Topic 842). The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives.
Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index). Subsequent changes an index and other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred. Payments for terminating the lease and residual value guarantees are included in the lease payments only when it is probable they will be incurred.
The Company’s leases may include a non-lease component representing additional services transferred to the Company, such as common area maintenance for real estate. The Company made an accounting policy election to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Non-lease components that are variable in nature are recorded in variable lease expense in the period incurred.
The Company uses an incremental borrowing rate (“IBR”) to determine the present value of lease payments, as the Company’s leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgement is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease. The Company’s IBR reflects the rate of the parent level as the Company acts as the central treasury function for all it subsidiaries and its collateral quality was considered in aggregate for the IBR. The Company developed IBR curves for all currency denominations of its leases.
Adoption of Topic 842 resulted in the recording of ROU assets and lease liabilities related to the Company’s operating leases of approximately $16.5 million and $16.9 million on January 1, 2022. The adoption of the new lease standard did not materially impact our consolidated net income (loss) or consolidated cash flows and did not result in a cumulative-effect adjustment to the opening balance of accumulated earnings.
Financial Instruments — Credit Losses
On January 1, 2023, the Company adopted Topic 326 Financial Instruments — Credit Losses (“CECL”). CECL affects loans, debt securities, trade receivables, and any other financial asset in which the Company has a contractual right to receive cash. The standard requires the Company to recognize expected credit losses rather than incurred losses on financial assets. The Company evaluates its expected credit losses on accounts receivable based on historical collection experience, on current financial condition of its customers, and on expected future movement in economic drivers that could effect collection. The adoption of CECL did not have a material effect on our Consolidated Financial Statements.
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (“Topic 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). The guidance in ASU 2020-04 and ASU 2021-01, Reference Rate Reform (“Topic 848”): Scope, which was issued in January 2021, provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference the London Interbank Offered Rate, (“LIBOR”), or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. On December 21, 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848)
F-40
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
1. Summary of Significant Accounting Policies and Practices (cont.)
Deferral of the Sunset Date of Topic 848 which defers the sunset date of ASC 848, Reference Rate Reform, from December 31, 2022, to December 31, 2024. We adopted ASU 2020-04 during the year ended December 31, 2022. The adoption of ASU 2020-04 did not have a material impact on our Consolidated Financial Statements.
Accounting Standards Not Yet Adopted
ASU 2023-09
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. This guidance requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. ASU 2023-09 is effective to all annual periods beginning after December 15, 2024, and is applied prospectively, while retrospective application is permitted. We are currently evaluating the effect this guidance will have on our income tax disclosures.
ASU 2023-07
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (“Topic 280”): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures regarding significant segment expenses and other segment items. The guidance requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective to all fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, and is applied retrospectively to all periods presented. We are evaluating the effect this guidance will have on our segment disclosures.
2. Revenue
The majority of the Company’s revenues are derived from providing services on a time and material basis and are short-term in nature. Payments are generally due within 45 days of services unless otherwise noted. There are no warranties, refunds, or other similar obligations. Refer to Note 18 — Segment Reporting for disaggregated revenue information.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. The Company provides highly integrated and bundled inspection services to its customers. Some contracts have multiple performance obligations, most commonly due to the contract providing for a combination of inspection, engineering or industrial services.
For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation utilizing several different pricing scenarios and is able to discreetly price out each individual component based on its nature and relation to the overall performance obligation.
Contract modifications are not routine in the performance of contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the services that are provided. In most instances, contract modifications reflect either additions or subtractions to previously identified performance obligations and therefore are not considered distinct.
F-41
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
2. Revenue (cont.)
Performance obligations are satisfied over time as work progresses. Revenue is recognized over time based on time and material incurred to date which best portrays the transfer of control to the customer. The Company expects any significant remaining performance obligations to be satisfied within one year.
Contract Balances
The majority of revenue is short-term in nature. From time to time, the Company may enter into long-term contracts, which can range from several months to several years. The Company has many Master Service Agreements (“MSAs”) that specify an overall framework and terms of contract when the Company and customers agree upon services to be provided. The actual contracting to provide services is triggered by a work order, purchase order, or some similar document issued pursuant to an MSA which sets forth the scope of services and/or identifies the products to be provided.
Amounts are generally billed as work progresses in accordance with agreed upon contractual terms, generally at periodic intervals (e.g., weekly, bi-weekly, or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets.
Service revenues are recognized in the period when services are performed for the customer. For testing equipment sales, revenues are recognized in the period when delivery has occurred. The Company does not recognize revenue on either an installment sale or percentage of completion basis. The Company does not include sales or value added taxes in revenue.
3. Business Combinations
Alloyweld Acquisition
On September 13, 2023, the Company acquired substantially all of the assets of Alloyweld Inspection Co. Inc. (“Alloyweld”) for $6,010 of cash. Alloyweld is a U.S. company that provides nondestructive testing services intended to serve critical industries including aerospace, electronics, medical devices and forensics. The company offers nondestructive testing, welding, brazing and metal finishing services. This acquisition provides the Company with a significant amount of nondestructive testing experience which it can use to broaden its range of services available to customers. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed. The entire acquired Goodwill balance was allocated to the U.S. reporting unit. There were no significant legal, accounting, or other professional fees related to this purchase. The Company finalized the purchase price allocation for the Alloyweld Acquisition as of December 31, 2023.
The fair values of the assets acquired and liabilities assumed are below:
|
|
|
September 13,
2023
|
|
Accounts receivable
|
|
$
|
638
|
|
|
Prepaid and other current assets
|
|
|
72
|
|
|
Property, plant and equipment
|
|
|
510
|
|
|
Intangible assets
|
|
|
2,300
|
|
|
Accounts payable
|
|
|
(91
|
)
|
|
Net assets acquired
|
|
|
3,429
|
|
|
Goodwill
|
|
|
2,581
|
|
|
Total purchase consideration
|
|
$
|
6,010
|
|
F-42
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
3. Business Combinations (cont.)
The amounts of Alloyweld revenue and operating income included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2023, are as follows:
|
|
|
December 31,
2023
|
|
Revenue
|
|
$
|
1,438
|
|
Operating income
|
|
|
421
|
Versa Acquisition
On November 14, 2022, the Company purchased all the issued and outstanding stock of GBOG Holding Corporation, a U.S. company, and indirectly acquired 100% of the outstanding stock of its subsidiary, Versa Integrity Group, Inc. (collectively, “Versa”) for consideration of $39,928, which is net of cash acquired of $3,430 included on Versa’s balance sheet prior to closing. Versa is a leading provider of engineering, materials testing and analysis, and technology development. The Versa acquisition will enhance the Company’s service offering by delivering turnkey comprehensive integrity management solutions to the Company’s customers, particularly across the Midstream and Pipeline Integrity markets. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed. There were no significant legal, accounting, or other professional fees related to this purchase.
The fair value of the identifiable assets acquired and liabilities assumed exceeded the fair value of the purchase price of the business. As a result, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measurements were appropriate. As shown below, as part of the acquisition, the company recorded an indemnification asset and a corresponding tax liability of $14,500 refer to Note 13 — Income Taxes for additional information. Accordingly, the acquisition has been accounted for as a bargain purchase and as a result, the Company recognized a gain of $12,503 associated with the acquisition for the year ended December 31, 2022. The Company believes the bargain purchase gain was primarily the result of the sellers’ desire to exit quickly due to a slowdown in their business and lingering uncertainty in the business surrounding the COVID-19 pandemic, as well as uncertainty around certain of Versa’s tax positions that were not resolved until the sell was completed. Further, with the Company’s existing infrastructure, scale and expertise, the Company believes it has access to the necessary synergies to allow necessary operational improvements to be implemented more efficiently than the seller.
The fair values of the assets acquired and liabilities assumed are below:
|
Accounts receivable
|
|
$
|
30,156
|
|
|
Prepaids and other current assets
|
|
|
3,273
|
|
|
Property, plant and equipment
|
|
|
15,726
|
|
|
Finance lease right-of-use assets
|
|
|
3,363
|
|
|
Operating lease right-of-use assets
|
|
|
5,030
|
|
|
Intangible assets
|
|
|
5,600
|
|
|
Deferred tax asset
|
|
|
10,915
|
|
|
Indemnification asset
|
|
|
14,500
|
|
|
Other assets
|
|
|
201
|
|
|
Accounts payable
|
|
|
(6,565
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(6,705
|
)
|
|
Finance lease obligations
|
|
|
(3,363
|
)
|
|
Operating lease obligations
|
|
|
(5,200
|
)
|
|
Income tax payable
|
|
|
(14,500
|
)
|
|
Net assets acquired
|
|
|
52,431
|
|
|
(Less) bargain purchase gain
|
|
|
(12,503
|
)
|
|
Total purchase consideration
|
|
$
|
39,928
|
|
F-43
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
3. Business Combinations (cont.)
The amounts of Versa revenue and operating income included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2022, are as follows:
|
|
|
December 31,
2022
|
|
Revenue
|
|
$
|
12,853
|
|
|
Operating income
|
|
|
(2,690
|
)
|
Cambridge Acquisition
On March 15, 2022, the Company acquired all the outstanding stock of Cambridge Materials Testing Limited (“Cambridge”), a Canadian company, for $5,647, net of cash acquired. Cambridge is a testing laboratory, operating two modern facilities in southern Ontario, Canada. The acquisition expands the breadth and depth of the Company’s lab testing capabilities, particularly in the aerospace, nuclear, medical, and consumer end markets, while providing Cambridge customers a broader range of services, such as nondestructive testing and field engineering services. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed. The entire acquired Goodwill balance was allocated to the Canada reporting unit. There were no significant legal, accounting, or other professional fees related to this purchase.
The fair values of the assets acquired and liabilities assumed are below:
|
|
|
March 15,
2022
|
|
Accounts receivable
|
|
$
|
613
|
|
|
Prepaid and other current assets
|
|
|
84
|
|
|
Property, plant and equipment
|
|
|
3,741
|
|
|
Operating lease right-of-use assets
|
|
|
148
|
|
|
Other assets
|
|
|
213
|
|
|
Accounts payable and accrued expenses
|
|
|
(370
|
)
|
|
Operating lease liabilities
|
|
|
(148
|
)
|
|
Deferred income tax liabilities
|
|
|
(677
|
)
|
|
Net assets acquired
|
|
|
3,604
|
|
|
Goodwill
|
|
|
2,043
|
|
|
Total purchase consideration
|
|
$
|
5,647
|
|
The amounts of the Cambridge revenue and earnings included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2022, are as follows:
|
|
|
December 31,
2022
|
|
Revenue
|
|
$
|
4,765
|
|
|
Operating income
|
|
|
(819
|
)
|
For each acquisition, the fair value of property, plant and equipment was determined by management using the cost approach. The cost approach is based on the amount that currently would be required to replace the service capacity of the asset. The amount is based on the cost to a market participant to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence. Any leases acquired were revalued upon the acquisition date using the income approach. Under the income approach, the fair value of each lease liability was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate.
F-44
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
3. Business Combinations (cont.)
As part of the Alloyweld and Versa acquisitions, the Company identified intangible assets consisting of customer relationships and tradenames. The fair values of the acquired customer relationships intangible assets were determined using the income approach. Specifically, the Company used the multi-period excess earning method, which utilized the following significant assumptions and inputs: projected financial information, probability of renewal, contributory asset charges, income tax rates, depreciation, and discount rates, resulting in a non-recurring Level 3 fair value measurement. The fair value of the tradename intangible assets was estimated using the relief from royalty method. The relief from royalty method assumes that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class.
For the Alloyweld and Cambridge acquisitions, Goodwill is attributable to the anticipated growth of the acquiree’s market upon implementation of the Company’s business model. The goodwill acquired from both businesses is deductible for tax purposes.
The supplemental pro forma information for each transaction during the year in which the transaction was executed was immaterial and therefore has not been disclosed.
4. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(6,289
|
)
|
|
$
|
20,043
|
|
Net income (loss) attributable to common shares
|
|
$
|
(6,289
|
)
|
|
$
|
20,043
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – basic
|
|
|
5,024,802
|
|
|
|
5,026,061
|
|
Weighted average common shares outstanding – diluted
|
|
|
5,024,802
|
|
|
|
5,093,724
|
|
Basic earnings (loss) per common share
|
|
$
|
(1.25
|
)
|
|
$
|
3.99
|
|
Diluted earnings (loss) per common share
|
|
$
|
(1.25
|
)
|
|
$
|
3.93
|
For the year ended December 31, 2023, 100,413 potential dilutive shares from stock options were excluded from the computation of diluted earnings per share because their effect would be antidilutive due to the Company being in a loss position for the year ended December 31, 2023.
The Company had outstanding stock options that were eligible to vest on achievement of certain market thresholds on a change of control. These contingently issuable potential shares are excluded from the computation of basic and diluted earnings per share as the contingency is not met as of the end of each reporting period. These excluded shares are as follows:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Tranche B Options
|
|
186,933
|
|
169,843
|
|
Tranche C Options
|
|
55,872
|
|
55,872
|
5. Accounts Receivables
Accounts receivables consist of the following:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Accounts receivables
|
|
$
|
211,097
|
|
|
$
|
202,497
|
|
|
Unbilled receivables
|
|
|
24,388
|
|
|
|
33,441
|
|
|
Allowance for credit losses
|
|
|
(2,241
|
)
|
|
|
(1,098
|
)
|
|
Total accounts receivables, net
|
|
$
|
233,244
|
|
|
$
|
234,840
|
|
F-45
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
6. Property, Plant and Equipment
Property, plant and equipment consists of the following:
|
|
|
Useful Life
(years)
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Land
|
|
|
|
$
|
5,387
|
|
|
$
|
5,283
|
|
|
Buildings and leasehold improvements
|
|
25
|
|
|
20,208
|
|
|
|
16,199
|
|
|
Computer, software, and office equipment
|
|
3 – 5
|
|
|
4,669
|
|
|
|
4,506
|
|
|
Machinery and equipment
|
|
3 – 10
|
|
|
167,261
|
|
|
|
145,228
|
|
|
Vehicles
|
|
5
|
|
|
69,305
|
|
|
|
60,449
|
|
|
Construction in progress
|
|
|
|
|
2,904
|
|
|
|
7,417
|
|
|
Total property and equipment
|
|
|
|
|
269,734
|
|
|
|
239,082
|
|
|
Accumulated depreciation
|
|
|
|
|
(157,470
|
)
|
|
|
(104,882
|
)
|
|
Property, plant and equipment, net
|
|
|
|
$
|
112,264
|
|
|
$
|
134,200
|
|
Total depreciation expense for property, plant and equipment for the year ended December 31, 2023, was $55,402, of which $898 was recorded within selling, general and administrative expenses and $54,504 was recorded within cost of revenue on the Consolidated Statements of Operations and Comprehensive Income (Loss). Total depreciation expense for property, plant and equipment for the year ended December 31, 2022, was $47,341, of which $1,204 was recorded withing selling, general and administrative expenses and $46,137 was recorded within cost of revenue on the Consolidated Statements of Operations and Comprehensive Income (Loss).
7. Goodwill
The changes in the carrying amount of goodwill by segment is shown below:
|
|
|
US
|
|
Canada
|
|
Total
|
|
Balance at December 31, 2021
|
|
$
|
358,855
|
|
|
$
|
156,421
|
|
|
$
|
515,276
|
|
|
Additions
|
|
|
—
|
|
|
|
2,043
|
|
|
|
2,043
|
|
|
Measurement period adjustments
|
|
|
(1,672
|
)
|
|
|
—
|
|
|
|
(1,672
|
)
|
|
Currency adjustments
|
|
|
—
|
|
|
|
(10,246
|
)
|
|
|
(10,246
|
)
|
|
Balance at December 31, 2022
|
|
|
357,183
|
|
|
|
148,218
|
|
|
|
505,401
|
|
|
Additions
|
|
|
2,581
|
|
|
|
—
|
|
|
|
2,581
|
|
|
Measurement period adjustments
|
|
|
—
|
|
|
|
(127
|
)
|
|
|
(127
|
)
|
|
Currency adjustments
|
|
|
—
|
|
|
|
3,646
|
|
|
|
3,646
|
|
|
Balance at December 31, 2023
|
|
$
|
359,764
|
|
|
$
|
151,737
|
|
|
$
|
511,501
|
|
8. Intangible Assets
The gross carrying amount and accumulated amortization of intangible assets, net were as follows:
| |
Weighted Avg.
Remaining
Life (Years)
|
2023
|
2022
|
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated
Amortization
|
Net
|
|
Customer relationships
|
9.2
|
$266,950
|
$77,081
|
$189,869
|
$262,385
|
$55,099
|
$207,286
|
|
Technology
|
3.3
|
87,017
|
50,981
|
36,036
|
86,202
|
37,607
|
48,595
|
|
Tradenames
|
10.7
|
54,221
|
16,078
|
38,143
|
53,532
|
10,969
|
42,563
|
|
Non-compete agreements
|
1.6
|
1,758
|
1,471
|
287
|
1,717
|
1,026
|
691
|
| |
|
$409,946
|
$145,611
|
$264,335
|
$403,836
|
$104,701
|
$299,135
|
F-46
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
8. Intangible Assets (cont.)
The total weighted-average remaining useful life across all of the Company’s intangibles was 8.6 years as of December 31, 2023. Amortization expense for the years ended December 31, 2023, and 2022, was $39,416 and $39,096, respectively, which is recorded in selling, general, and administrative expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Estimated amortization expense for the five following fiscal years is as follows:
|
2024
|
|
$
|
38,695
|
|
2025
|
|
|
37,400
|
|
2026
|
|
|
30,703
|
|
2027
|
|
|
24,974
|
|
2028
|
|
|
24,962
|
|
Thereafter
|
|
|
107,601
|
| |
|
$
|
264,335
|
9. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities balances consists of the following:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Accrued salaries, wages and related employee benefits
|
|
$
|
31,698
|
|
$
|
28,893
|
|
Accrued trade payables
|
|
|
9,584
|
|
|
3,490
|
|
Accrued indirect taxes
|
|
|
4,320
|
|
|
4,229
|
|
Accrued sales discounts
|
|
|
4,338
|
|
|
2,310
|
|
Insurance accruals
|
|
|
2,965
|
|
|
2,619
|
|
Other accrued expenses
|
|
|
7,440
|
|
|
8,984
|
|
Total accrued expenses and other current liabilities
|
|
$
|
60,345
|
|
$
|
50,525
|
10. Fair Value Measurements
The Company performs fair value measurements by determining the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three-level hierarchy that prioritizes the inputs used to measure fair value. The three levels of the hierarchy are defined as follows:
|
|
|
Level 1 —
|
|
Unadjusted quoted prices in active markets that are accessible at the measurement dates for identical, unrestricted assets or liabilities.
|
| |
|
Level 2 —
|
|
Quoted prices for markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
|
| |
|
Level 3 —
|
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).
|
If the inputs used to measure the financial assets and liabilities fall within the different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying values of cash and cash equivalents, accounts receivable, other receivables, accounts payable, and accrued expenses approximate their fair values because of their short maturity. The fair value of the Company’s revolving line of credit facilities and long-term debt approximate their carrying value as they are based on current lending rates for similar borrowings, assuming the debt is outstanding through maturity, and considering the collateral. The fair value of the Company’s finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt.
F-47
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
10. Fair Value Measurements (cont.)
The fair value of the Company’s interest rate swap agreements are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. This fair value measurement is based on inputs that are observable either directly or indirectly and thus represents a Level 2 measurement within the fair value hierarchy.
11. Debt
Long term debt consisted of the following:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Term loan
|
|
$
|
686,280
|
|
|
$
|
522,663
|
|
|
Revolving credit facility
|
|
|
—
|
|
|
|
50,000
|
|
|
Less: Debt issuance costs
|
|
|
(10,969
|
)
|
|
|
(11,311
|
)
|
|
Total debt
|
|
|
675,311
|
|
|
|
561,352
|
|
|
Less: Current portion
|
|
|
(7,280
|
)
|
|
|
(5,488
|
)
|
|
Long term debt, net of current portion
|
|
$
|
668,031
|
|
|
$
|
555,864
|
|
Term loan
The Company entered into a credit agreement on December 20, 2019 (“Credit Agreement”). The Credit Agreement provided for a term loan of $430,000 and a revolving credit facility of $75,000. On January 23, 2020, the Credit Agreement was amended, increasing the term loan to $445,000. On November 19, 2021, the Credit Agreement was amended, providing for an additional $100,000 of principal under the term loan. On August 15, 2023, the Credit Agreement was amended, providing an additional $170,000 of principal under the term loan in order to finance a one-time dividend of $150,000. The term loan matures on January 23, 2027. At December 31, 2022, the term loan quarterly principal payments were $1,372, and pursuant to the amendment dated August 15, 2023, quarterly principal payment commencing on September 30, 2023, are $1,820. The Credit Agreement is collateralized by all of the Company’s assets. The Company has the option to borrow up to $20,000 of the aggregate commitment in Canadian dollars. The term loan accrues interest at a variable rate which consists of the base rate, as defined in the agreement, plus a SOFR-based applicable rate, which can vary between 3.0% and 4.5% depending on the type of term loan. At December 31, 2023 and 2022, the interest rates of the term loan were 9.7% and 8.6%, respectively. As of December 31, 2023 and 2022, the balance of the term loan was $686,280 and $522,663, respectively. The term loan is reported net of the deferred financing costs of $10,969 and $11,311 as of December 31, 2023 and 2022, respectively.
Revolving credit facility
In connection with the Versa acquisition (Note 3 — Business Combinations), the Company drew on its revolving credit facility to fund the purchase as well as cover any immediate cash flow needs of Versa. At December 31, 2023 and 2022, the balance of the revolving credit facility was $0 and $50,000, respectively. The revolving credit facility matures on October 23, 2026. The revolving credit facility accrues interest at a variable rate which consists of the base rate, as defined in the agreement, plus a SOFR-based applicable rate, which can vary between 3.0% and 4.5% depending on the net leverage ratio, as defined in the agreement, as well as an unutilized fee of 0.5%. At December 31, 2023 and 2022, interest rates on the revolving credit facility were 9.5% and 8.4%, respectively.
Letters of Credit
At December 31, 2023 and 2022, the Company has issued undrawn letters of credit totaling $5,451 and $5,134, respectively in connection with various current and expiring insurance policy obligations. The letter of credit reduces the amount available under the Credit Agreement and is considered funded debt for purposes of calculating financial covenants. Fees for letters of credit range from 4.0% to 4.5% of the letter of credit amount, depending on the net leverage ratio.
F-48
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
11. Debt (cont.)
Financial and non-financial covenants
Under the Credit Agreement, the Company is subject to certain financial and nonfinancial covenants, which among other things place restrictions on leverage ratios. In addition, commencing with the year ending December 31, 2020, the Credit Agreement requires mandatory prepayments of the consolidated excess cash flows, as defined in the agreement, should the Company meet certain cash flow targets. For the years ended December 31, 2023, and 2022, the Company was not required to make an excess cash flow payment.
Debt Issuance Costs
For the years ended December 31, 2023, and 2022, the Company paid $2,844 and $72, respectively, for financing costs associated with the term loan and revolving credit facility agreement. Amortization of the debt issuance costs charged to interest expense was $3,586 and $3,248 for the years ended December 31, 2023, and 2022, respectively.
The aggregate maturities of the term loan in each of the next fiscal years are as follows:
|
2024
|
|
$
|
7,280
|
|
2025
|
|
|
7,280
|
|
2026
|
|
|
7,280
|
|
2027
|
|
|
664,440
|
| |
|
$
|
686,280
|
12. Financial Instruments
The Company’s risk management strategy utilizes interest rate swap agreements to mitigate interest rate exposure on its variable rate debt. The Company has not designated these derivatives as hedging instruments and reports these agreements at fair value with unrealized gains and losses recorded within interest expense/income within the Consolidated Statements of Operations and Comprehensive Income and (Loss) in the reporting period in which the unrealized gains and losses occur.
As of December 31, 2023 and 2022, the Company has two interest rate agreements acting collectively as a collar with an interest rate floor of 0% and an interest rate cap of 1.92% intended to mitigate the Company’s exposure to an increase in its variable interest rate above 2.375% related to an initial notional amount of $333,750 of its variable rate debt obligations. If the variable interest rate component exceeds the benchmark amount, the intended effect is to convert the variable interest rate of the notional debt amount to a fixed interest rate. Upon the adoption of ASC 848, Reference Rate Reform for the year ended December 31, 2022, the Company elected certain optional practical expedients, which did not have a material effect on the Company’s consolidated financial statements.
At December 31, 2023 and 2022, the Company recorded the gross value of the interest rate derivatives in the amount of $3,102 and $12,481, respectively, in prepaid expenses and other current assets and other assets, respectively, on its consolidated balance sheets. At December 31, 2023 and 2022 the changes in fair values of outstanding interest rate agreements resulted in a net unrealized (loss) gain of ($7,778) and $9,069, respectively, which is included within interest expense, net. Additionally, during the periods ended December 31, 2023 and 2022 the Company recognized $11,080 and $970 of realized gains, respectively, relating to interest rate instruments in interest expense, net.
On March 23, 2023, the Company renegotiated, in advance, a new instrument commencing on February 29, 2024, acting as a collar of a notional amount of $400,000, with an interest rate floor of 2.2% and an interest rate cap of 5.0% intended to further mitigate the Company’s exposure to increases in its variable interest rates on its term loans. The instrument agreement terminates on February 27, 2026.
F-49
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
13. Income Taxes
The provision for income taxes consists of the following:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Current
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
8,058
|
|
|
$
|
5,288
|
|
|
State
|
|
|
2,564
|
|
|
|
2,017
|
|
|
Foreign
|
|
|
15,130
|
|
|
|
14,414
|
|
|
Total current tax provision
|
|
$
|
25,752
|
|
|
$
|
21,719
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(14,912
|
)
|
|
|
(9,265
|
)
|
|
State
|
|
|
(2,215
|
)
|
|
|
(1,737
|
)
|
|
Foreign
|
|
|
(6,616
|
)
|
|
|
(7,048
|
)
|
|
Total deferred tax provision
|
|
$
|
(23,743
|
)
|
|
$
|
(18,050
|
)
|
|
Increase (decrease) in valuation allowance
|
|
|
—
|
|
|
|
(261
|
)
|
|
Net deferred tax provision
|
|
|
(23,743
|
)
|
|
|
(18,311
|
)
|
|
Provision for income taxes
|
|
$
|
2,009
|
|
|
$
|
3,408
|
|
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income as follows:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
| |
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Federal income tax provision at statutory tax rate
|
|
$
|
(898
|
)
|
|
21
|
%
|
|
$
|
4,925
|
|
|
21
|
%
|
|
State income taxes, net of federal benefit
|
|
|
283
|
|
|
(7
|
)%
|
|
|
581
|
|
|
3
|
%
|
|
Foreign tax rate differential
|
|
|
1,097
|
|
|
(26
|
)%
|
|
|
889
|
|
|
4
|
%
|
|
Permanent differences
|
|
|
504
|
|
|
(12
|
)%
|
|
|
87
|
|
|
0
|
%
|
|
Meals and entertainment
|
|
|
1,496
|
|
|
(35
|
)%
|
|
|
611
|
|
|
3
|
%
|
|
Goodwill
|
|
|
(576
|
)
|
|
14
|
%
|
|
|
(576
|
)
|
|
(2
|
)%
|
|
Bargain Purchase Gain
|
|
|
—
|
|
|
0
|
%
|
|
|
(2,480
|
)
|
|
(11
|
)%
|
|
Stock compensation
|
|
|
309
|
|
|
(7
|
)%
|
|
|
—
|
|
|
0
|
%
|
|
State rate deferred benefit
|
|
|
(557
|
)
|
|
13
|
%
|
|
|
(828
|
)
|
|
(4
|
)%
|
|
Foreign deferred rate change
|
|
|
40
|
|
|
(1
|
)%
|
|
|
33
|
|
|
0
|
%
|
|
R&D Credits
|
|
|
—
|
|
|
—
|
|
|
|
(175
|
)
|
|
(1
|
)%
|
|
Other
|
|
|
311
|
|
|
(7
|
)%
|
|
|
341
|
|
|
2
|
%
|
|
Provision for income taxes
|
|
$
|
2,009
|
|
|
(47
|
)%
|
|
$
|
3,408
|
|
|
15
|
%
|
Global Intangible Low Taxed Income (“GILTI”) is a tax on income that is earned by certain foreign affiliates owned by a U.S. shareholder. GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. The Company has determined that due to the statutory high tax exception related to foreign earnings, the net impact of GILTI was $0 for the years ended December 31, 2023 and 2022.
F-50
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
13. Income Taxes (cont.)
Deferred income tax attributes resulting from differences between financial accounting and income tax bases of assets and liabilities are as follows:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Deferred income tax assets:
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
$
|
11,926
|
|
|
$
|
12,625
|
|
|
Allowance for doubtful accounts
|
|
|
536
|
|
|
|
281
|
|
|
Accrued expenses
|
|
|
1,832
|
|
|
|
1,426
|
|
|
IRC Sec 163(j) interest carryforward
|
|
|
15,189
|
|
|
|
7,636
|
|
|
Deferred share based compensation
|
|
|
3,315
|
|
|
|
2,577
|
|
|
Other deferred compensation
|
|
|
3
|
|
|
|
278
|
|
|
Pension and workers compensation
|
|
|
655
|
|
|
|
429
|
|
|
Accrued vacation
|
|
|
941
|
|
|
|
862
|
|
|
Foreign tax credit carryovers
|
|
|
625
|
|
|
|
936
|
|
|
Other tax credits
|
|
|
458
|
|
|
|
296
|
|
|
Deferred financing and start up costs
|
|
|
643
|
|
|
|
793
|
|
|
IRC Sec 174 capitalized costs
|
|
|
1,182
|
|
|
|
693
|
|
|
Gross deferred income tax assets
|
|
$
|
37,305
|
|
|
$
|
28,832
|
|
|
Valuation allowance
|
|
|
—
|
|
|
|
—
|
|
|
Net deferred income tax assets
|
|
$
|
37,305
|
|
|
$
|
28,832
|
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
(249
|
)
|
|
|
(270
|
)
|
|
Property and equipment
|
|
|
(10,967
|
)
|
|
|
(15,269
|
)
|
|
Goodwill and other intangibles
|
|
|
(58,457
|
)
|
|
|
(66,839
|
)
|
|
Unrealized gains
|
|
|
(558
|
)
|
|
|
(2,822
|
)
|
|
Gross deferred income tax liabilities
|
|
|
(70,231
|
)
|
|
|
(85,200
|
)
|
|
Net deferred income taxes
|
|
$
|
(32,926
|
)
|
|
$
|
(56,368
|
)
|
At December 31, 2023 the Company’s net deferred income tax balance within the consolidated balance sheet consisted of long term deferred tax assets of approximately $2.4 million and long term deferred tax liabilities of approximately $35.3 million. At December 31, 2022, the balance consisted of long term deferred tax assets of approximately $1.5 million and long term deferred tax liabilities of approximately $57.8 million.
At December 31, 2023 and 2022, the Company had U.S. federal income tax net operating losses (“NOLs”) of approximately $48,374 and $40,893, respectively. At December 31, 2023 and 2022, the Company had U.S. state income tax NOLs of approximately $10,792 and $11,094, respectively. The federal NOLs do not expire and the state NOLs will begin to expire in 2030. In addition, the Company had foreign NOLs of approximately $2,301 and $2,194 at December 31, 2023 and 2022, respectively, which will begin to expire in 2037. At December 31, 2022, the Company released a valuation allowance of approximately $261 attributable to Canadian operations. In connection with the 2022 acquisition of Versa, the 2021 acquisition of Premium and the 2020 acquisition of Suspendem, the Company recorded estimated federal NOLs of $36,663, $17,115 and $172, respectively, which are subject to annual utilization limitations under IRC §382 of $1,297, $1,935, and $0, respectively. These NOLs are included in the NOL balances noted above. Management believes that it will realize all deferred tax assets resulting from sufficient future taxable income in the jurisdictions in which it operates.
F-51
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
13. Income Taxes (cont.)
The Company is subject to ongoing tax examinations and assessments in various jurisdictions. The Company adjusts previously recorded tax expense to reflect examination results, when applicable, and provides for additional tax and related expenses based on probable outcomes of such matters.
For U.S. federal tax purposes, the tax years 2020 and after remain open and subject to examination. For most U.S. state tax purposes, tax years 2019 and after remain open and subject to examination. For Canadian federal tax purposes, tax years 2020 and after remain subject to examination.
The Company has unrecognized tax benefits of $15,183 at December 31, 2023 and 2022. The following table summarized the change in the Company’s unrecognized tax benefits, excluding interest and penalties:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Balance, beginning of year
|
|
$
|
15,183
|
|
$
|
674
|
|
Additions for tax positions related to the current year
|
|
|
—
|
|
|
—
|
|
Additions for tax positions from prior years
|
|
|
—
|
|
|
14,509
|
|
Reductions for tax positions from prior years
|
|
|
—
|
|
|
—
|
|
Settlement payments
|
|
|
—
|
|
|
—
|
|
Statues of limitations expirations
|
|
|
—
|
|
|
—
|
|
Translation and other
|
|
|
—
|
|
|
—
|
|
Balance, end of year
|
|
$
|
15,183
|
|
$
|
15,183
|
At November 14, 2022, the Company recorded a $14,500 unrecognized tax benefit on its balance sheet as long-term tax payable related to the pre-acquisition tax exposures of Versa. The Company is fully indemnified for any future realization of the liability through escrow funding and, as such, has also recorded a long-term asset of $14,500. The amount of unrecognized tax benefits recorded is not anticipated to change significantly in the next 12 months. The company classifies interest and penalties related to unrecognized tax benefits of as a component of income tax expense, which has not been significant during the years ending December 31, 2023, and 2022, respectively.
14. Leases
The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under Topic 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.
The Company leases real estate facilities from unrelated parties under operating lease agreements that have initial terms ranging from 1 to 20 years. The Company also leases vehicles under finance lease agreements with initial terms of four to five years. Many of the Company’s leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to 5 years. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that the Company will exercise that option. The Company’s leases generally do not contain any material restrictive covenants or residual value guarantees that are deemed probably of being owed.
F-52
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
14. Leases (cont.)
Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the ROU assets and interest expense for the outstanding lease liabilities, and results in a front-loaded expense pattern over the lease term. The components of lease expense are as follows:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Operating lease cost
|
|
$
|
8,813
|
|
$
|
7,308
|
|
Finance lease cost – amortization of right-of-use assets
|
|
|
10,298
|
|
|
7,715
|
|
Finance lease cost – interest on lease liabilities
|
|
|
1,523
|
|
|
836
|
|
Variable lease cost
|
|
|
4
|
|
|
8
|
|
Total lease cost
|
|
$
|
20,638
|
|
$
|
15,867
|
Supplemental cash flow information related to leases is as follows:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Cash paid for amounts included in measurement of lease liabilities:
|
|
|
|
|
|
|
|
Operating cash outflows – payments on operating leases
|
|
$
|
9,284
|
|
$
|
5,672
|
|
Operating cash outflows – interest payments on finance leases
|
|
|
1,523
|
|
|
836
|
|
Financing cash outflows – principal payments on finance leases
|
|
|
9,948
|
|
|
7,424
|
| |
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for new lease obligations:
|
|
|
|
|
|
|
|
Operating leases
|
|
$
|
6,949
|
|
$
|
12,400
|
|
Finance leases
|
|
|
11,049
|
|
|
19,878
|
Included within ROU assets obtained in exchange for new lease obligations during the year ended December 31, 2022, there were $5.2 million and $3.4 million of operating and financing leases, respectively, which were stepped up to fair value as part of the business acquisitions.
Supplemental balance sheet information related to leases is as follows:
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Operating Leases
|
|
|
|
|
|
|
|
Operating lease assets
|
|
$
|
22,441
|
|
$
|
23,427
|
| |
|
|
|
|
|
|
|
Current portion of operating lease obligations
|
|
$
|
7,498
|
|
$
|
7,422
|
|
Non-current operating lease obligations
|
|
|
17,773
|
|
|
18,109
|
|
Total operating lease liabilities
|
|
$
|
25,271
|
|
$
|
25,531
|
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Finance Leases
|
|
|
|
|
|
|
|
Equipment, net
|
|
$
|
28,655
|
|
$
|
28,060
|
| |
|
|
|
|
|
|
|
Finance lease liabilities, current
|
|
$
|
9,125
|
|
$
|
8,724
|
|
Finance lease liabilities, non-current
|
|
|
20,288
|
|
|
19,274
|
|
Total finance lease liabilities
|
|
$
|
29,413
|
|
$
|
27,998
|
F-53
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
14. Leases (cont.)
|
|
|
December 31,
|
| |
|
2023
|
|
2022
|
|
Weighted-average remaining lease term (years):
|
|
|
|
|
|
|
|
Operating leases
|
|
5.25
|
|
|
5.32
|
|
|
Finance leases
|
|
3.41
|
|
|
3.60
|
|
| |
|
|
|
|
|
|
|
Weighted-average discount rate:
|
|
|
|
|
|
|
|
Operating leases
|
|
6.21
|
%
|
|
5.00
|
%
|
|
Finance leases
|
|
5.89
|
%
|
|
4.25
|
%
|
Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the balance sheet as of December 31, 2023 is as follows:
|
December 31,
|
|
Operating
Leases
|
|
Finance
Leases
|
|
2024
|
|
$
|
8,806
|
|
|
$
|
10,566
|
|
|
2025
|
|
|
6,165
|
|
|
|
9,216
|
|
|
2026
|
|
|
4,251
|
|
|
|
7,329
|
|
|
2027
|
|
|
3,249
|
|
|
|
4,179
|
|
|
2028
|
|
|
1,849
|
|
|
|
1,012
|
|
|
Thereafter
|
|
|
5,360
|
|
|
|
—
|
|
|
Total lease payments
|
|
$
|
29,680
|
|
|
$
|
32,302
|
|
|
Less imputed interest
|
|
|
(4,409
|
)
|
|
|
(2,889
|
)
|
|
Total present value of lease liabilities
|
|
$
|
25,271
|
|
|
$
|
29,413
|
|
15. Employee Benefit Plans
Retirement Plans
The Company provides a 401(k) savings plan for eligible U.S. based employees. Employee contributions are discretionary up to the IRS prescribed limits; however, catch up contributions are allowed for employees 50 years of age or older. The plan provides for discretionary employer matching contributions. The Company expensed $3,074 and $2,713 for the years ended December 31, 2023 and 2022, respectively, for its contributions to this plan which are included in selling, general and administrative expenses.
The Company’s Canadian subsidiaries provide registered retirement savings plans (“RRSP”). Employee and employer matching contributions are discretionary. The Company expensed $1,948 and $1,770 for the years ended December 31, 2023, and 2022, respectively, for its contributions to this plan which are included in selling, general and administrative expenses. The Company provides plans in certain other foreign jurisdictions, however the amounts charged to expense under these plans have not been material for the years ended December 31, 2023 and 2022.
The Company participates in multiemployer retirement plans that provide defined benefits to certain employees covered by unionized collective bargaining agreements. Such plans are generally administered by the local labor representative of the respective union. The Company expensed $368 and $579 for contributions to these plans for the years ended December 31, 2023 and 2022, respectively, on behalf of all its U.S. based unionized employees. The Company’s Canadian operations are inherently highly unionized. The majority of Canadian direct employees belong to the Quality Control Council of Canada (“QCCC”), a union specifically dedicated to NDT professionals. For years ended December 31, 2023 and 2022, the Company made employer contributions to the QCCC pension on behalf of its employees in the amounts of $11,445 and $11,769, respectively. The Company’s
F-54
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
15. Employee Benefit Plans (cont.)
U.S. contributions are less than 5% of the total contributions in each plan it participates in. The Company is one of 87 participating employers in the QCCC. The Company’s percentage of contributions to the plan is not readily available public information. The future cost of these plans is dependent on several factors including the funded status of the plans and the ability of the participating employers to meet their ongoing funding obligations. If the Company voluntarily withdraws or is deemed to partially withdraw, or there is a mass employer withdrawal from the plan, the Company would be obligated to pay additional contributions for its proportionate share of the unfunded vested liability at that time.
Long-Term Incentive Plans
The Company maintains a long-term management incentive bonus plan for select executives and management personnel who are in positions to significantly contribute to operating results. Annual financial goals are established for share awards. Awards are granted in the form of phantom shares subject to service vesting. Phantom shareholders are entitled to a cash payment calculated by multiplying the number of shares awarded by the phantom share value on the vesting date. Payments are in cash only and paid in two installments. The first installment of 50% is paid on the vesting date first anniversary and the second installment of 50% is paid on the vesting date second anniversary. Awards generally vest in three years. The phantom share value is calculated based on a plan defined formula. There were 221 and 345 phantom shares awarded and outstanding at December 31, 2023 and 2022, respectively; of which 176 and 305, respectively, were vested. The Company has recorded $1,323 and $2,011 for its long-term management incentive bonus plan liability in other long-term liabilities on the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
16. Share-Based Compensation
Stock Option Plans and Stock Grants
Effective December 20, 2019, the Company approved an equity compensation plan to provide for certain employees, (collectively “Eligible Participants”), the ability to participate in an equity compensation plan (the “Stock Compensation Plan”) under which the Eligible Participants could be granted time-based vesting options (the “Tranche A Options”), and performance-based vesting options (the “Tranche B & C Options”) exercisable for common stock of the Company. The Tranche A Options vest twenty percent on each of the first five anniversaries of the grant date (graded vesting) with a contractual term of up to ten years. Share-based compensation expense for the Tranche A Options is recognized on a straight-line basis over the five-year vesting period from the date of issuance, unless accelerated by certain specific transactions or events or reduced by forfeitures. The Tranche B & C Options vest upon a liquidity event and achievement of a certain multiple of investment capital (“MOIC”). The term of each option may be up to ten years from the grant date. The maximum aggregate number of shares reserved for issuance pursuant to the Stock Compensation Plan is 668,982.
As discussed in Note 11 — Debt, on August 15, 2023, the Company amended its credit facility to provide for an incremental term loan in the amount of $170,000. Net proceeds from the credit facility were primarily used to fund a one-time cash dividend of $150,000 to all common stockholders of the Company (“August 2023 Dividend”) in an amount of $29.85 per unit of common stock.
The one-time cash dividend represented an equity restructuring which required modifications to the Company’s option grants per the mandatory antidilution provision within the Stock Compensation Plan. In connection with the August 2023 Dividend, for the holders based in the US, the Company paid a one-time cash advance of $29.85 per Tranche A vested option resulting in an aggregate payment of $1,658 and reduced the exercise price of all unvested stock options (Tranche A, Tranche B and Tranche C) by $29.85 per option. For the vested U.S. based Tranche A options, the Company calculated a “blended” strike price, based on the weighted average of (1) the old strike price applicable to vested shares and (2) the new, reduced strike price applicable to unvested shares. For the holders based in Canada, the strike price on all vested and unvested stock options (Tranche A, Tranche B and Tranche C) was reduced
F-55
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
16. Share-Based Compensation (cont.)
in an amount equal to the dividend paid on common shares as no cash advance was paid. Further, an additional bonus of $3.34 per Tranche A option (both vested and unvested) was paid to all grantees resulting in an aggregate payment of $1,012 based on the incremental one-year cost of the dividend.
The Company accounted for the above modifications by comparing the fair value of the award immediately pre and post modification. As a result of the above modifications the Company recognized compensation expense of $1,538 during the year ended December 31, 2023 which is included in selling, general, and administrative expense.
The Company uses the Black-Scholes option pricing model for determining the fair value of Tranche A option grants. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility, expected life, the risk-free interest rate, and expected dividends. The Company uses a Monte Carlo valuation model to determine the fair value of the Tranche B and Tranche C option grants. The determination of the fair value of share-based payment awards utilizing the Monte Carlo model is affected by a number of assumptions, including expected volatility, the risk-free interest rate, and expected dividends. The Company does not have a history of market prices of the common stock as it is not a public company, and as such, volatility is estimated in accordance with related guidance using historical volatilities of similar public entities. The expected life of the awards is estimated based on the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history and an expectation of the Company paying dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
The weighted average fair value of Tranche A options granted in 2023 and 2022 was $71.75 and $60.68 per option, respectively, which was determined using the following assumptions:
|
|
|
Year Ended December 31,
|
| |
|
2023
|
|
2022
|
|
Weighted average risk-free interest rate
|
|
4.11
|
%
|
|
2.61
|
%
|
|
Expected dividend yield
|
|
0.00
|
%
|
|
0.00
|
%
|
|
Expected volatility
|
|
40.00
|
%
|
|
40.00
|
%
|
|
Expected life of options (years)
|
|
5.0
|
|
|
5.0
|
|
Tranche A Options issued and outstanding were as follows:
|
Time-Vested Options
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Options outstanding at December 31, 2021
|
|
357,551
|
|
|
$
|
103.84
|
|
|
|
Granted
|
|
45,374
|
|
|
|
155.94
|
|
|
|
Exercised
|
|
(658
|
)
|
|
|
100.00
|
|
|
|
Forfeited
|
|
(49,150
|
)
|
|
|
100.00
|
|
|
|
Options outstanding at December 31, 2022
|
|
353,117
|
|
|
|
110.58
|
|
|
|
Granted
|
|
38,571
|
|
|
|
148.82
|
|
|
|
Exercised
|
|
—
|
|
|
|
—
|
|
|
|
Forfeited
|
|
(8,646
|
)
|
|
|
149.63
|
|
|
|
Options outstanding at December 31, 2023
|
|
383,042
|
|
|
$
|
90.97
|
|
6.82
|
|
Options exercisable at December 31, 2023
|
|
229,458
|
|
|
$
|
79.78
|
|
6.31
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock for those stock options that had exercise prices lower than the estimated fair value of the Company’s common stock. The aggregate intrinsic value for Tranche A Options outstanding and exercisable as of December 31, 2023 was $38,995 and $25,937 respectively.
F-56
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
16. Share-Based Compensation (cont.)
The Company recorded $4,975 and $2,561 of stock compensation expense related to Tranche A Options for the year ended December 31, 2023 and 2022, respectively which was included in selling, general, and administrative expense. As of December 31, 2023, there was approximately $7,181 of unrecognized stock compensation expense related to unvested Tranche A Options that is expected to be recognized over a weighted average period of 2.6 years.
Upon exercise, the Company issues new common shares and has no expectation of repurchasing such shares. As of December 31, 2023, 658 stock options issued under the Stock Compensation Plan have been exercised.
Tranche B & C Options issued and outstanding were as follows:
|
Performance Based Options
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Options outstanding at December 31, 2021
|
|
237,164
|
|
|
$
|
102.96
|
|
|
|
Granted
|
|
28,094
|
|
|
|
157.31
|
|
|
|
Forfeited
|
|
(39,543
|
)
|
|
|
102.35
|
|
|
|
Options outstanding at December 31, 2022
|
|
225,715
|
|
|
|
109.84
|
|
|
|
Granted
|
|
21,480
|
|
|
|
148.84
|
|
|
|
Forfeited
|
|
(4,390
|
)
|
|
|
148.87
|
|
|
|
Options outstanding at December 31, 2023
|
|
242,805
|
|
|
$
|
85.37
|
|
6.78
|
|
Options exercisable at December 31, 2023
|
|
—
|
|
|
$
|
—
|
|
—
|
The Company remeasured the fair value of the Tranche B & C Options in August 2023 in connection with their repricing. As a result, the weighted average fair value of the Tranche B & C Options outstanding as of December 31, 2023 is $70.51.
No stock compensation expense was recorded related to Tranche B & C Options for the years ended December 31, 2023, and 2022, as the liquidity event was not probable of occurring as of December 31, 2023. As of December 31, 2023, there was approximately $17,121 of unrecognized stock compensation expense related to unvested Tranche B and C Options.
17. Commitments and Contingencies
Legal Proceedings
The Company is involved in matters that involve various claims which have arisen in the normal course of business. The Company does not believe any liabilities that may arise because of such claims will have a material adverse effect, individually or in the aggregate, on its business, results of operations, cash flow or financial condition.
18. Segment Information
Operating segments are components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources.
The Company has two operating and reportable segments which are the United States and Canada. The Company has operations in the United Kingdom that are not considered material and are included in the United States reportable segment. Each segment is representative of the operations incurred under the respective geographic territory. Both operating segments provide the same services to a similar base of customers.
F-57
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
18. Segment Information (cont.)
The CODM reviews financial information presented at the U.S. and Canada level for the purposes of allocating resources and evaluating financial performance. The accounting policies of the reportable segments are the same as those described in Note 1 — Summary of Significant Accounting Policies and Practices. The Company evaluates the performance of its U.S. and Canada segments based primarily on each segment’s revenue and gross profit.
|
|
|
Year Ended December 31, 2023
|
| |
|
United States
|
|
Canada
|
|
Corporate and
Eliminations
|
|
Total
|
|
Revenue
|
|
$
|
643,847
|
|
$
|
409,150
|
|
$
|
(2,940
|
)
|
|
$
|
1,050,057
|
|
Gross profit(1)
|
|
|
144,883
|
|
|
94,640
|
|
|
—
|
|
|
|
239,523
|
|
Depreciation and amortization
|
|
|
60,997
|
|
|
33,821
|
|
|
—
|
|
|
|
94,818
|
|
Total long-lived assets
|
|
|
69,926
|
|
|
42,338
|
|
|
—
|
|
|
|
112,264
|
|
Total assets
|
|
|
745,925
|
|
|
516,690
|
|
|
—
|
|
|
|
1,262,615
|
|
|
|
Year Ended December 31, 2022
|
| |
|
United States
|
|
Canada
|
|
Corporate and
Eliminations
|
|
Total
|
|
Revenue
|
|
$
|
516,055
|
|
$
|
416,042
|
|
$
|
(3,771
|
)
|
|
$
|
928,326
|
|
Gross profit(1)
|
|
|
112,592
|
|
|
90,359
|
|
|
—
|
|
|
|
202,951
|
|
Depreciation and amortization
|
|
|
53,236
|
|
|
33,201
|
|
|
—
|
|
|
|
86,436
|
|
Total long-lived assets
|
|
|
87,941
|
|
|
46,259
|
|
|
—
|
|
|
|
134,200
|
|
Total assets
|
|
|
817,417
|
|
|
482,944
|
|
|
—
|
|
|
|
1,300,361
|
19. Related Parties
The Company is party to an agreement with American Securities, LLC, a related party, for management consulting services including acquisition planning and evaluation, strategic planning and project management. For the years ended December 31, 2023 and 2022, the Company expensed $3,431 and $3,240, respectively, included in selling, general, and administrative expense in relation to this agreement.
20. Subsequent Events
The Company has evaluated subsequent events through August 12, 2024, the date these consolidated financial statements were available to be issued. The Company did not identify any material subsequent events that required recognition or additional disclosure in these consolidated financial statements except for the following:
On July 30, 2024, the Company was acquired by Acuren Corporation (f/k/a Admiral Acquisition Limited (“Admiral”)), a London Stock Exchange Group PLC listed acquisition vehicle, for approximately $1.88 billion.
On June 20, 2024 (the “Modification Date”), the Company’s Board of Directors decided to accelerate the vesting of all outstanding stock options held by its Canadian employees and make them fully exercisable effective as of June 20, 2024. Stock options that were impacted consisted of 161,144 shares of Tranche A Options, 77,436 shares of Tranche B Options and 28,824 shares of Tranche C Options. The Company applied the modification accounting under ASC 718 and accounted for the change to the vesting condition of Tranche A Options as a Type I (Probable-to-Probable) modification and the change to Tranche B and C Options as a Type III (Improbable-to-Probable) modification. On the Modification Date, unrecognized compensation expense of
F-58
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)
20. Subsequent Events (cont.)
$1.4 million related to Tranche A Options was immediately recognized. Additionally, the Company recognized compensation expenses of $14.9 million for the aggregated incremental fair value transferred to holders of Tranche A, B and C Options, measured as of the Modification date, as a result of the acceleration of their vesting.
On April 15, 2024, the Company acquired all of the outstanding stock of Advance Coating Solutions, Inc. (“Advance”), a Canadian Company, for $2,902, net of cash acquired. Advance specializes in corrosion prevention and remediation solutions, across a wide range of end markets including mining, refining and processing, storage, and pipelines. The Company has not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
On April 2, 2024, the Company acquired all of the outstanding stock of ADV Integrity, Inc. (“ADV”), a company located in Magnolia, Texas, for $14,893, net of cash acquired. ADV is a provider of engineering, materials testing and analysis, and technology development. The Company has not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
On January 30, 2024, the Company acquired all of the outstanding stock of TriQuest Nondestructive Testing Corp. (“TriQuest”), a Canadian company, for $28,552, net of cash acquired. TriQuest provides a wide range of services including conventional and advanced NDT methods and visual inspection services, based in western Canada. The Company has not finalized its accounting for this acquisition and will make appropriate adjustments to the purchase price allocation as valuations are completed.
F-59
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
30,796
|
|
|
$
|
87,061
|
|
|
Accounts receivable, net
|
|
|
280,616
|
|
|
|
233,244
|
|
|
Prepaid expenses and other current assets
|
|
|
19,346
|
|
|
|
13,608
|
|
|
Total current assets
|
|
|
330,758
|
|
|
|
333,913
|
|
|
Property, plant and equipment, net
|
|
|
115,756
|
|
|
|
112,264
|
|
|
Operating lease right-of-use assets, net
|
|
|
25,079
|
|
|
|
22,441
|
|
|
Goodwill
|
|
|
528,182
|
|
|
|
511,501
|
|
|
Intangible assets, net
|
|
|
262,915
|
|
|
|
264,335
|
|
|
Deferred income tax asset
|
|
|
2,368
|
|
|
|
2,368
|
|
|
Other assets
|
|
|
13,949
|
|
|
|
15,793
|
|
|
Total assets
|
|
$
|
1,279,007
|
|
|
$
|
1,262,615
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
18,412
|
|
|
$
|
23,206
|
|
|
Accrued expenses and other current liabilities
|
|
|
71,102
|
|
|
|
65,775
|
|
|
Current portion long-term debt
|
|
|
7,280
|
|
|
|
7,280
|
|
|
Current portion of lease obligations
|
|
|
17,119
|
|
|
|
16,623
|
|
|
Total current liabilities
|
|
|
113,913
|
|
|
|
112,884
|
|
|
Long-term debt, net of current portion
|
|
|
683,528
|
|
|
|
668,031
|
|
|
Non-current lease obligations
|
|
|
40,148
|
|
|
|
38,061
|
|
|
Deferred income tax liability
|
|
|
38,961
|
|
|
|
35,294
|
|
|
Other liabilities
|
|
|
22,321
|
|
|
|
26,346
|
|
|
Total liabilities
|
|
|
898,871
|
|
|
|
880,616
|
|
|
Commitments and contingencies (Note 12)
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; 5,700,000 shares issued and 5,024,802 shares outstanding
|
|
|
50
|
|
|
|
50
|
|
|
Treasury stock, 7,769 common shares at cost
|
|
|
(1,029
|
)
|
|
|
(1,029
|
)
|
|
Additional paid-in capital
|
|
|
384,023
|
|
|
|
366,327
|
|
|
Accumulated earnings
|
|
|
10,726
|
|
|
|
17,447
|
|
|
Accumulated other comprehensive loss
|
|
|
(13,634
|
)
|
|
|
(796
|
)
|
|
Total equity
|
|
|
380,136
|
|
|
|
381,999
|
|
|
Total liabilities and equity
|
|
$
|
1,279,007
|
|
|
$
|
1,262,615
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-60
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
| |
|
2024
|
|
2023
|
|
Service revenue
|
|
$
|
532,354
|
|
|
$
|
514,388
|
|
|
Cost of revenue
|
|
|
395,887
|
|
|
|
398,004
|
|
|
Gross profit
|
|
|
136,467
|
|
|
|
116,384
|
|
|
Selling, general and administrative expenses
|
|
|
102,724
|
|
|
|
87,797
|
|
|
Income from operations
|
|
|
33,743
|
|
|
|
28,587
|
|
|
Interest expense, net
|
|
|
33,551
|
|
|
|
23,643
|
|
|
Other expense (income), net
|
|
|
(286
|
)
|
|
|
62
|
|
|
Income (loss) before provision for income taxes
|
|
|
478
|
|
|
|
4,882
|
|
|
Provision (benefit) for income taxes
|
|
|
7,199
|
|
|
|
(2,293
|
)
|
|
Net income (loss)
|
|
|
(6,721
|
)
|
|
|
7,175
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(12,838
|
)
|
|
|
9,796
|
|
|
Total other comprehensive income (loss)
|
|
|
(12,838
|
)
|
|
|
9,796
|
|
|
Total comprehensive income (loss)
|
|
$
|
(19,559
|
)
|
|
$
|
16,971
|
|
| |
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.34
|
)
|
|
$
|
1.43
|
|
|
Diluted
|
|
$
|
(1.34
|
)
|
|
$
|
1.40
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,024,802
|
|
|
|
5,024,802
|
|
|
Diluted
|
|
|
5,024,802
|
|
|
|
5,132,946
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-61
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Equity
(amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
Common
Shares
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|
Balances at December 31, 2023
|
|
5,024,802
|
|
$
|
50
|
|
$
|
(1,029
|
)
|
|
$
|
366,327
|
|
$
|
17,447
|
|
|
$
|
(796
|
)
|
|
$
|
381,999
|
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(6,721
|
)
|
|
|
—
|
|
|
|
(6,721
|
)
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
17,696
|
|
|
—
|
|
|
|
—
|
|
|
|
17,696
|
|
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
(12,838
|
)
|
|
|
(12,838
|
)
|
|
Balances at June 30, 2024
|
|
5,024,802
|
|
$
|
50
|
|
$
|
(1,029
|
)
|
|
$
|
384,023
|
|
$
|
10,726
|
|
|
$
|
(13,634
|
)
|
|
$
|
380,136
|
|
|
|
|
Common
Shares
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|
Balances at December 31, 2022
|
|
5,024,802
|
|
$
|
50
|
|
$
|
(1,029
|
)
|
|
$
|
511,352
|
|
$
|
23,736
|
|
$
|
(11,980
|
)
|
|
$
|
522,129
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
7,175
|
|
|
—
|
|
|
|
7,175
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,727
|
|
|
—
|
|
|
—
|
|
|
|
1,727
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
9,796
|
|
|
|
9,796
|
|
Balances at June 30, 2023
|
|
5,024,802
|
|
$
|
50
|
|
$
|
(1,029
|
)
|
|
$
|
513,079
|
|
$
|
30,911
|
|
$
|
(2,184
|
)
|
|
$
|
540,827
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-62
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
| |
|
2024
|
|
2023
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(6,721
|
)
|
|
$
|
7,175
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Provision (reversals) for credit losses
|
|
|
(297
|
)
|
|
|
859
|
|
|
Depreciation and amortization
|
|
|
38,763
|
|
|
|
47,946
|
|
|
Noncash lease expense
|
|
|
6,070
|
|
|
|
5,247
|
|
|
Share-based compensation expense
|
|
|
17,696
|
|
|
|
1,727
|
|
|
Amortization of deferred financing costs
|
|
|
2,043
|
|
|
|
1,625
|
|
|
Fair value adjustments on interest rate derivatives
|
|
|
3,102
|
|
|
|
(1,080
|
)
|
|
Deferred income taxes
|
|
|
(5,401
|
)
|
|
|
473
|
|
|
Other
|
|
|
(357
|
)
|
|
|
71
|
|
|
Changes in operating assets and liabilities, net of effects of business acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(46,084
|
)
|
|
|
(46,675
|
)
|
|
Prepaid expenses and other current assets
|
|
|
(4,991
|
)
|
|
|
(13,612
|
)
|
|
Accounts payable
|
|
|
(7,052
|
)
|
|
|
(1,809
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
3,710
|
|
|
|
7,266
|
|
|
Operating lease obligations
|
|
|
(6,369
|
)
|
|
|
(4,574
|
)
|
|
Other assets and liabilities
|
|
|
(2,866
|
)
|
|
|
(6,376
|
)
|
|
Net cash used in operating activities
|
|
|
(8,754
|
)
|
|
|
(1,737
|
)
|
| |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(11,321
|
)
|
|
|
(9,513
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
|
974
|
|
|
|
684
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(46,280
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
(56,627
|
)
|
|
|
(8,829
|
)
|
| |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings under long-term debt
|
|
|
30,000
|
|
|
|
25,000
|
|
|
Repayments of long-term debt
|
|
|
(16,346
|
)
|
|
|
(52,743
|
)
|
|
Principal payments on finance lease obligations
|
|
|
(4,904
|
)
|
|
|
(5,021
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
8,750
|
|
|
|
(32,764
|
)
|
| |
|
|
|
|
|
|
|
|
|
Net effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
366
|
|
|
|
6,178
|
|
|
Net change in cash and cash equivalents
|
|
|
(56,265
|
)
|
|
|
(37,152
|
)
|
| |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
87,061
|
|
|
|
62,585
|
|
|
End of period
|
|
$
|
30,796
|
|
|
$
|
25,433
|
|
| |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
7,377
|
|
|
$
|
10,925
|
|
| |
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
$
|
16,723
|
|
|
$
|
13,403
|
|
| |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash operating and investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment accrued and not yet paid
|
|
$
|
1,795
|
|
|
$
|
1,704
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-63
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
1. Summary of Significant Accounting Policies and Practices
Description of Business
ASP Acuren Holdings, Inc. (hereinafter referred to as “we,” “our,” “us,” “Acuren,” and the “Company”), a Delaware corporation, is a leading provider of critical asset integrity services. Acuren operates primarily in North America serving a broad range of industrial markets, most notably chemical, pipeline, refinery, power generation, oilsands, automotive, aerospace, mining, manufacturing, renewable energy, and pulp and paper. Acuren provides these essential and often compliance-mandated (typically at customer locations) services in the industrial space and is focused on the recuring maintenance needs of its customers.
On July 30, 2024, the Company was acquired by Acuren Corporation (f/k/a Admiral Acquisition Limited (“Admiral”)), a London Stock Exchange Group PLC listed acquisition vehicle, for approximately $1.88 billion. Refer to Note 15 Subsequent Events for further details on the transaction.
Basis of Presentation and Principles of Consolidation
The unaudited condensed consolidated financial statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and Securities and Exchange Commission (“SEC”) guidance allowing for reduced disclosure for interim periods. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods ending June 30, 2024 and 2023. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition. Certain prior period amounts have been reclassified to conform to current year presentation.
Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include the carrying amount of acquired property, plant and equipment, intangibles and goodwill, interest rate swap derivatives, stock-based compensation awards, and the estimated liability for certain self-insured risks. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the 2023 audited consolidated financial statements and notes thereto (“2023 Financial Statements”).
Update to the Presentation of Cost of Revenue and Selling, General and Administrative Expenses
During the six months ended June 30, 2024, we changed the presentation of certain costs incurred at our operational sites on our statement of operations. This voluntary change resulted in a reclassification of certain overhead costs, which, although incurred at our operational sites are not directly related to the delivery of our services, from cost of revenue to selling, general and administrative expenses. We believe this presentation is preferable as it will provide greater transparency regarding the true cost of delivery of our services consistent with the principles of ASC 340-40 and better align with how we internally manage our business.
This change in classification has been applied retrospectively to all periods presented and affects selling, general and administrative, cost of revenue, and gross profit. This change in presentation had no impact to service revenue, income from operations, loss before provision for income taxes, provision for income taxes, net income, earnings per share, retained earnings or other components of equity or net assets. In addition, gross profit information in the segment footnote will also be updated for this change. The impact of the update to the presentation of certain indirect costs on the Company’s condensed consolidated financial statements as of and for the six months ended June 30, 2024 and 2023 is reflected below under the Presentation Adjustment column.
|
|
|
Six months ended June 30, 2024
|
| |
|
Prior
Presentation
|
|
Presentation
Adjustment
|
|
As Reported
|
|
Cost of revenue
|
|
$
|
435,593
|
|
$
|
(39,706
|
)
|
|
$
|
395,887
|
|
Gross profit
|
|
|
96,761
|
|
|
39,706
|
|
|
|
136,467
|
|
Selling general and administrative expenses
|
|
|
63,018
|
|
|
39,706
|
|
|
|
102,724
|
F-64
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
1. Summary of Significant Accounting Policies and Practices (cont.)
|
|
|
Six months ended June 30, 2023
|
| |
|
Prior
Presentation
|
|
Presentation
Adjustment
|
|
As Reported
|
|
Cost of revenue
|
|
$
|
438,859
|
|
$
|
(40,855
|
)
|
|
$
|
398,004
|
|
Gross profit
|
|
|
75,529
|
|
|
40,855
|
|
|
|
116,384
|
|
Selling general and administrative expenses
|
|
|
46,942
|
|
|
40,855
|
|
|
|
87,797
|
Significant Accounting Policies
On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to business combinations, stock-based compensation, allowance for credit losses, goodwill impairment, income tax provision, among others. There have been no changes to the significant accounting policies described in the 2023 Financial Statements included elsewhere in this Prospectus that have had a material impact on the Company’s condensed consolidated financial statements and related notes.
Revenue
The majority of the Company’s revenues are derived from providing services on a time and material basis and are short-term in nature. Payments are generally due within 45 days of services unless otherwise noted. There are no warranties, refunds, or other similar obligations. Refer to Note 13 Segment Reporting for disaggregated revenue information.
Cost of revenue
Cost of revenue consists primarily of direct labor. Cost of revenue also includes materials and indirect costs, such as supplies, tools, and depreciation of equipment related to contract performance. In addition, we incur travel, per diem, and hotel costs. Labor costs are recognized as labor hours are incurred in delivering services.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of executive and administrative employee compensation, acquisition related earnout and incentive costs, information systems and technology costs, share-based compensation, rent expense, and management consulting services.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property, plant and equipment is included within cost of revenue or selling, general and administrative expenses based on the nature of the asset. Expenditures for repairs and maintenance that do not extend the useful lives of the related assets are expensed as incurred. Expenditures that significantly improve or extend the life of an asset are capitalized. Upon retirement or disposition of property, plant and equipment, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is recorded in income from operations.
Total depreciation expense for property, plant and equipment for the six months ended June 30, 2024 was $18,712, of which $170 was recorded within selling, general and administrative expenses and $18,542 was recorded within cost of revenue on the condensed consolidated statements of operations and comprehensive income (loss). Total depreciation expense for property, plant and equipment for the six months ended June 30, 2023 was $27,845, of which $437 was recorded withing selling, general and administrative expenses and $27,408 was recorded within cost of revenue on the condensed consolidated statements of operations and comprehensive income (loss).
F-65
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
1. Summary of Significant Accounting Policies and Practices (cont.)
Intangible Assets
Intangible assets consisting of customer relationships, technology, tradenames, and noncompete agreements have been recorded based on their fair value at the date of acquisition and are amortized over their economic useful lives which range from 1 to 15 years. Amortization expense for the six months ended June 30, 2024 and 2023 was $20,051 and $20,101, respectively, which is recorded in selling, general, and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).
Accounting Standards Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. Public business entities are required to adopt for annual fiscal periods beginning after December 15, 2024 and early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.
2. Business Combinations
TriQuest Acquisition
On January 30, 2024, the Company acquired all of the outstanding stock of TriQuest Nondestructive Testing Corp. (“TriQuest”), a Canadian company, for $29,265 of cash. TriQuest provides a wide range of services including conventional and advanced NDT methods and visual inspection services, based in western Canada. This acquisition provides the Company with a significant amount of nondestructive testing and visual inspection experience which it can use to broaden its range of services available to customers.
The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value of the individual assets acquired and liabilities assumed. The entire goodwill balance was allocated to the Canada reporting unit. The Company has not finalized the purchase price allocation for the TriQuest acquisition as of June 30, 2024.
F-66
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
2. Business Combinations (cont.)
The fair values of the assets acquired and liabilities assumed are below:
|
Cash
|
|
$
|
171
|
|
|
Accounts receivable
|
|
|
1,670
|
|
|
Prepaids and other current assets
|
|
|
610
|
|
|
Income tax receivable
|
|
|
293
|
|
|
Property, plant and equipment
|
|
|
740
|
|
|
Right of use assets
|
|
|
1,176
|
|
|
Intangible assets – tradenames
|
|
|
968
|
|
|
Intangible assets – technology
|
|
|
745
|
|
|
Intangible assets – customer relationships
|
|
|
15,046
|
|
|
Accounts payable
|
|
|
(223
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(226
|
)
|
|
Current portion of lease obligations
|
|
|
(444
|
)
|
|
Non-current lease obligations
|
|
|
(785
|
)
|
|
Deferred tax liabilities
|
|
|
(3,966
|
)
|
|
Net assets acquired
|
|
|
15,775
|
|
|
Goodwill
|
|
|
13,490
|
|
|
Total purchase consideration
|
|
$
|
29,265
|
|
The amounts of TriQuest revenue and operating income included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2024 are as follows:
|
Revenue
|
|
$
|
4,283
|
|
Operating income
|
|
|
1,010
|
ADV Acquisition
On April 2, 2024, the Company acquired all of the outstanding stock of ADV Integrity, Inc. (“ADV”), a company located in Magnolia, Texas, for $16,372 of cash. ADV is a provider of engineering, materials testing and analysis, and technology development. This acquisition enhances the Company’s service offerings by providing turnkey comprehensive integrity management solutions to customers.
The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value of the individual assets acquired and liabilities assumed. The entire acquired goodwill balance was allocated to the United States reporting unit. The Company has not finalized the purchase price allocation for the ADV Acquisition as of June 30, 2024.
The fair values of the assets acquired and liabilities assumed are below:
|
Cash
|
|
$
|
1,171
|
|
|
Accounts receivable
|
|
|
1,551
|
|
|
Prepaid and other current assets
|
|
|
60
|
|
|
Property, plant and equipment
|
|
|
3,828
|
|
|
Intangible assets – tradenames
|
|
|
410
|
|
|
Intangible assets – customer relationships
|
|
|
5,000
|
|
|
Accounts payable
|
|
|
(494
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(536
|
)
|
|
Deferred tax liability
|
|
|
(1,902
|
)
|
|
Net assets acquired
|
|
|
9,088
|
|
|
Goodwill
|
|
|
7,284
|
|
|
Total purchase consideration
|
|
$
|
16,372
|
|
F-67
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
2. Business Combinations (cont.)
The amounts of ADV revenue and operating income included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2024 are as follows:
|
Revenue
|
|
$
|
2,821
|
|
Operating income
|
|
|
571
|
Advance Acquisition
On April 15, 2024, the Company acquired certain assets and liabilities of Advance Coating Solutions, Inc (“Advance”), a Canadian Company, for $1,985 of cash. Advance specializes in corrosion prevention and remediation solutions, across a wide range of end markets including mining, refining and processing, storage, and pipelines. This acquisition enhances the Company’s Rope Access Technician Solutions by delivering turnkey corrosion prevention and remediation solutions to customers, across a wide range of end markets.
The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value to the individual assets acquired and liabilities assumed. The entire acquired goodwill balance was allocated to the Canada reporting unit. The Company has not finalized the purchase price allocation for the Advance acquisition as of June 30, 2024.
The fair values of the assets acquired and liabilities assumed are below:
|
Accounts receivable
|
|
$
|
235
|
|
|
Prepaid and other current assets
|
|
|
197
|
|
|
Property, plant and equipment
|
|
|
139
|
|
|
Intangible assets – tradenames
|
|
|
37
|
|
|
Accounts payable
|
|
|
(15
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(30
|
)
|
|
Net assets acquired
|
|
|
563
|
|
|
Goodwill
|
|
|
1,422
|
|
|
Total purchase consideration
|
|
$
|
1,985
|
|
The amounts of the Advance revenue and earnings included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2024 are as follows:
|
Revenue
|
|
$
|
351
|
|
|
Operating income
|
|
|
(89
|
)
|
For each of the finalized acquisitions, the fair value of property, plant and equipment was determined by management using the cost approach. The cost approach is based on the amount that currently would be required to replace the service capacity of the asset. The amount is based on the cost to a market participant to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence. Any leases acquired were revalued upon the acquisition date using the income approach. Under the income approach, the fair value of each lease liability was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate.
As part of the acquisitions, the Company identified intangible assets consisting of customer relationships, technology, and tradenames. The fair values of the acquired customer relationships intangible assets were determined using the income approach. Specifically, the Company used the multi-period excess earning method to estimate the fair value of customer relationships, which utilized the following significant assumptions and inputs: projected financial information, probability of renewal, contributory asset charges, income tax rates, depreciation, and discount rates, resulting in a non-recurring Level 3 fair value measurement. The fair value of the tradename intangible assets was estimated using the relief from royalty method. The relief from royalty method assumes that, in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset class. The fair value of the technology intangible asset was determined using the cost approach. The cost approach is based on the amount that currently would be required to replace the service capacity of the asset.
F-68
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
2. Business Combinations (cont.)
For the acquisitions, goodwill is a residual amount attributable to other intangible assets, such as the acquired workforce and the anticipated growth of the acquiree’s market upon implementation of the Company’s business model, which do not qualify as separately recognizable intangible assets. For both the Triquest and ADV acquisitions, the goodwill acquired is not deductible for tax purposes. For the Advance acquisition, the entire $1,422 of acquired goodwill is deductible for tax purposes.
The supplemental pro forma information for each transaction during the six months ended June 30, 2024 in which the transaction was executed was immaterial both individually and in aggregate and, therefore, has not been disclosed. The legal, accounting, or other professional fees related to each transaction during the six months ended June 30, 2024 were not significant.
3. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
|
|
|
Six Months Ended
June 30,
|
| |
|
2024
|
|
2023
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(6,721
|
)
|
|
$
|
7,175
|
|
Net (loss) income attributable to common shares
|
|
$
|
(6,721
|
)
|
|
$
|
7,175
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – basic
|
|
|
5,024,802
|
|
|
|
5,024,802
|
|
Weighted average common shares outstanding – diluted
|
|
|
5,024,802
|
|
|
|
5,132,946
|
|
Basic (loss) earnings per common share
|
|
$
|
(1.34
|
)
|
|
$
|
1.43
|
|
Diluted (loss) earnings per common share
|
|
$
|
(1.34
|
)
|
|
$
|
1.40
|
For the six months ended June 30, 2024, 185,327 potential dilutive shares from stock options were excluded from the computation of diluted earnings per share because their effect would be antidilutive due to the Company being in a loss position for six months ended June 30, 2024.
The Company had outstanding stock options that were eligible to vest on achievement of certain market thresholds on a change of control. These contingently issuable potential shares are excluded from the computation of basic and diluted earnings per share as the contingency is not met as of the end of each reporting period. These excluded shares are as follows:
|
|
|
June 30,
|
| |
|
2024
|
|
2023
|
|
Tranche B Options
|
|
180,828
|
|
181,933
|
|
Tranche C Options
|
|
55,872
|
|
55,872
|
4. Accounts Receivable
Accounts receivable are recorded net of an allowance for credit losses and includes invoiced and accrued but unbilled revenue. Accounts receivable consist of the following:
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Accounts receivables
|
|
$
|
220,572
|
|
|
$
|
211,097
|
|
|
Unbilled receivables
|
|
|
61,395
|
|
|
|
24,388
|
|
|
Allowance for credit losses
|
|
|
(1,351
|
)
|
|
|
(2,241
|
)
|
|
Total accounts receivables, net
|
|
$
|
280,616
|
|
|
$
|
233,244
|
|
F-69
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
4. Accounts Receivable (cont.)
The Company records an allowance for credit losses for accounts receivable based on management’s expected credit losses. Management’s estimate of expected credit losses is based on its assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes. Changes to the allowance for credit losses are adjusted through credit loss expense, which is included within selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).
The following table presents the allowance for credit losses activity:
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Beginning balance
|
|
$
|
2,241
|
|
|
$
|
1,098
|
|
|
Provision (reversals)
|
|
|
(115
|
)
|
|
|
1,353
|
|
|
Accounts written off
|
|
|
(749
|
)
|
|
|
(226
|
)
|
|
Foreign currency translation
|
|
|
(26
|
)
|
|
|
16
|
|
|
Ending balance
|
|
$
|
1,351
|
|
|
$
|
2,241
|
|
5. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities balances consists of the following:
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Accrued salaries, wages and related employee benefits
|
|
$
|
38,792
|
|
$
|
31,698
|
|
Accrued trade payables
|
|
|
3,700
|
|
|
9,584
|
|
Accrued indirect taxes
|
|
|
8,196
|
|
|
4,320
|
|
Accrued sales discounts
|
|
|
1,700
|
|
|
4,338
|
|
Insurance accruals
|
|
|
3,044
|
|
|
2,965
|
|
Income taxes payable
|
|
|
3,513
|
|
|
5,430
|
|
Other accrued expenses
|
|
|
12,157
|
|
|
7,440
|
|
Total accrued expenses and other current liabilities
|
|
$
|
71,102
|
|
$
|
65,775
|
6. Fair Value Measurements
The Company performs fair value measurements by determining the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three-level hierarchy that prioritizes the inputs used to measure fair value. The three levels of the hierarchy are defined as follows:
|
Level 1 —
|
|
Unadjusted quoted prices in active markets that are accessible at the measurement dates for identical, unrestricted assets or liabilities.
|
|
Level 2 —
|
|
Quoted prices for markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
|
|
Level 3 —
|
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
|
If the inputs used to measure the financial assets and liabilities fall within the different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
F-70
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
6. Fair Value Measurements (cont.)
The carrying values of cash and cash equivalents, accounts receivable, other receivables, accounts payable, and accrued expenses approximate their fair values because of their short maturity. The fair values of the Company’s revolving line of credit facilities and long-term debt approximate their carrying value as they are based on current lending rates for similar borrowings, assuming the debt is outstanding through maturity, and considering the collateral. The fair values of the Company’s finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt.
The fair value of the Company’s interest rate swap agreements, existing as of December 31, 2023 and terminated during the six months ended June 30, 2024, are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. This fair value measurement is based on inputs that are observable either directly or indirectly and thus represents a Level 2 measurement within the fair value hierarchy. Refer to Note 8 Financial Instruments for further details on the accounting treatment of the swap agreements.
7. Debt
Long-term debt consists of the following:
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Term loan
|
|
$
|
679,933
|
|
|
$
|
686,280
|
|
|
Revolving credit facility
|
|
|
20,000
|
|
|
|
—
|
|
|
Less: Debt issuance costs
|
|
|
(9,125
|
)
|
|
|
(10,969
|
)
|
|
Total debt
|
|
|
690,808
|
|
|
|
675,311
|
|
|
Less: Current portion
|
|
|
(7,280
|
)
|
|
|
(7,280
|
)
|
|
Long-term debt, net of current portion
|
|
$
|
683,528
|
|
|
$
|
668,031
|
|
Term loan
The Company entered into a credit agreement on December 20, 2019 (“Credit Agreement”). In addition to prior amendments, on August 15, 2023, the Credit Agreement was further amended, providing an additional $170,000 of principal under the term loan in order to finance a one-time dividend of $150,000. The gross principal balance under the term loan was $715,000 for both June 30, 2024 and December 31, 2023. The quarterly principal payments for the six months ended June 30, 2024 and 2023 were $1,820 and $1,372, respectively. The Credit Agreement is collateralized by all of the Company’s assets. The Company has the option to borrow up to $20,000 of the aggregate commitment in Canadian dollars. The term loan accrues interest at a variable rate which consists of the base rate, as defined in the agreement, plus a SOFR-based applicable rate, which can vary between 3.0% and 4.5% depending on the type of term loan.
As of June 30, 2024 and 2023, the interest rates of the term loan were 9.4% and 9.2%, respectively. As of June 30, 2024 and December 31, 2023, the balance of the term loan was $679,933 and $686,280, respectively. The term loan is reported net of the deferred financing costs of $9,125 and $10,969 as of June 30, 2024 and December 31, 2023, respectively.
Revolving credit facility
As of June 30, 2024 and December 31, 2023, the balance of the revolving credit facility was $20,000 and $0, respectively. The revolving credit facility matures on October 23, 2026. The revolving credit facility accrues interest as of a variable rate which consists of the base rate, as defined in the agreement, plus a SOFR-based applicable rate, which can vary between 3.0% and 4.5% depending on the net leverage ratio, as defined in the agreement, as well as an unutilized fee of 0.5%. As of June 30, 2024 and 2023, interest rates on the revolving credit facility were 9.2% and 8.9%, respectively.
F-71
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
7. Debt (cont.)
Letters of credit
As of June 30, 2024 and December 31, 2023, the Company had issued undrawn letters of credit totaling $4,851 and $5,451, respectively, in connection with various current and expiring insurance policy obligations. The letter of credit reduces the amount available under the Credit Agreement and is considered funded debt for purposes of calculating financial covenants. Fees for letters of credit range from 4.0% to 4.5% of the letter of credit amount, depending on the net leverage ratio.
Financial and non-financial covenants
Under the Credit Agreement, the Company is subject to certain financial and nonfinancial covenants which place restrictions on leverage ratios, among other things. In addition, commencing with the year ending December 31, 2020, the Credit Agreement requires mandatory prepayments of the consolidated excess cash flows, as defined in the agreement, should the Company meet certain cash flow targets. For the six months ended June 30, 2024 and 2023, the Company was not required to make an excess cash flow payment.
Debt issuance costs
The Company did not pay any financing costs associated with the term loan and revolving credit facility agreement for either the six months ended June 30, 2024 and 2023. Amortization of the debt issuance costs charged to interest expense was $2,043 and $1,625 for the six months ended June 30, 2024 and 2023, respectively.
8. Financial Instruments
The Company’s risk management strategy utilizes interest rate swap agreements to mitigate interest rate exposure on its variable rate debt. The Company has not designated these derivatives as hedging instruments and reports these agreements at fair value with unrealized gains and losses recorded within interest expense, net within the condensed consolidated statements of operations and comprehensive income (loss) in the reporting period in which the unrealized gains and losses occur.
As of December 31, 2023, the Company had two interest rate agreements acting collectively as a collar with an interest rate floor of 0% and an interest rate cap of 1.92% intended to mitigate the Company’s exposure to an increase in its variable interest rate above 2.375% related to an initial notional amount of $333,750 of its variable rate debt obligations. If the variable interest rate component exceeds the benchmark amount, the intended effect was to convert the variable interest rate of the notional debt amount to a fixed interest rate.
On March 23, 2023, the Company renegotiated, in advance, a new instrument commencing on February 29, 2024, acting as a collar of a notional amount of $400,000, with an interest rate floor of 2.2% and an interest rate cap of 5.0% intended to further mitigate the Company’s exposure to increases in its variable interest rates on its term loans. As of June 30, 2024, both interest rate instruments are terminated.
As of June 30, 2024 and December 31, 2023, the Company recorded the gross value of the interest rate derivatives in the amount of $0 and $3,102, respectively, in prepaid expenses and other current assets on its condensed consolidated balance sheets. As of June 30, 2024 and 2023, the changes in the fair values of outstanding interest rate agreements resulted in a net unrealized gain of $0 and $2,473, respectively, which is included within interest expense, net.
F-72
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
9. Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured at the enacted income tax rates expected to apply in the taxable year that the asset or liability is expected to be recovered or settled.
We recorded an income tax provision of $7,199 for the six months ended June 30, 2024, compared to a provision of $(2,293) for the six months ended June 30, 2023. The effective tax rate, inclusive of discrete items, was 1,518% for the six months ended June 30, 2024. The rate increase from 21% is primarily driven by non-deductible meals and entertainment, non-deductible stock-based compensation, and Canadian federal and provincial tax rates.
10. Leases
The Company accounts for its leases in accordance with ASU 2016-02 (“ASC 842”). The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under Topic 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.
The Company leases real estate facilities from unrelated parties under operating lease agreements that have initial terms ranging from 1 to 20 years. The Company also leases vehicles under finance lease agreements with initial terms of four to five years. Accordingly, the Company recognizes a right-of-use (“ROU”) asset representing the right to use an underlying asset and a lease liability representing the obligation to make lease payments over the lease term for substantially all leases with a lease term greater than 12 months. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the ROU assets and interest expense for the outstanding lease liabilities, and results in a front-loaded expense pattern over the lease term.
Supplemental balance sheet information related to leases is as follows:
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Operating Leases
|
|
|
|
|
|
|
|
Operating lease right-of-use assets, net
|
|
$
|
25,079
|
|
$
|
22,441
|
| |
|
|
|
|
|
|
|
Current portion of operating lease obligations
|
|
|
7,520
|
|
$
|
7,498
|
|
Non-current operating lease obligations
|
|
|
19,967
|
|
|
17,773
|
|
Total operating lease liabilities
|
|
$
|
27,487
|
|
$
|
25,271
|
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Finance Leases
|
|
|
|
|
|
|
|
Equipment, net
|
|
$
|
29,279
|
|
$
|
28,655
|
| |
|
|
|
|
|
|
|
Current portion of finance lease obligations
|
|
|
9,599
|
|
$
|
9,125
|
|
Non-current finance lease obligations
|
|
|
20,181
|
|
|
20,288
|
|
Total finance lease liabilities
|
|
$
|
29,780
|
|
$
|
29,413
|
F-73
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
10. Leases (cont.)
Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the condensed consolidated balance sheets is as follows:
|
Year Ending December 31,
|
|
Operating
Leases
|
|
Finance
Leases
|
|
2024 (excluding the six months ended June 30, 2024)
|
|
$
|
4,875
|
|
|
$
|
5,725
|
|
|
2025
|
|
|
8,006
|
|
|
|
10,517
|
|
|
2026
|
|
|
6,133
|
|
|
|
8,575
|
|
|
2027
|
|
|
4,088
|
|
|
|
5,437
|
|
|
2028
|
|
|
2,568
|
|
|
|
2,275
|
|
|
2029
|
|
|
1,881
|
|
|
|
380
|
|
|
Thereafter
|
|
|
4,951
|
|
|
|
—
|
|
|
Total lease payments
|
|
$
|
32,502
|
|
|
$
|
32,909
|
|
|
Less imputed interest
|
|
|
(5,015
|
)
|
|
|
(3,129
|
)
|
|
Total present value of lease liabilities
|
|
$
|
27,487
|
|
|
$
|
29,780
|
|
11. Share-Based Compensation
Stock Option Plans and Stock Grants
Effective December 20, 2019, the Company approved an equity compensation plan to provide for certain employees (“Eligible Participants”) the ability to participate in an equity compensation plan (the “Stock Compensation Plan”) under which the Eligible Participants could be granted time-based vesting options (the “Tranche A Options”), and performance-based vesting options (the “Tranche B & C Options”) exercisable for common stock of the Company. The Tranche A Options vest twenty percent on each of the first five anniversaries of the grant date (graded vesting) with a contractual term of up to ten years. Share-based compensation expense for the Tranche A Options is recognized on a straight-line basis over the five-year vesting period from the date of issuance, unless accelerated by certain specific transactions or events or reduced by forfeitures. The Tranche B & C Options vest upon a liquidity event and achievement of a certain multiple of investment capital (“MOIC”). The term of each option may be up to ten years from the grant date. The maximum aggregate number of shares reserved for issuance pursuant to the Stock Compensation Plan is 668,982.
On May 17, 2024, the Company reached an agreement with a member of the Company’s Board of Directors to make a one-time cash payment equal to two times the amount of share-based compensation awards entitled at the close of the Acuren Acquisition. In exchange, 42,240 shares of Tranche A Options, 21,120 shares of Tranche B Options, and 12,367 shares of Tranche C Options were forfeited. This transaction resulted in a modification to the share-based compensation awards from equity to liability classification. However, because the completion of the Acuren Acquisition is not deemed probable until the actual consummation, no liability was recognized and no change to accounting made as of June 30, 2024. The related share-based compensation expense will be recognized at the close of the Acuren Acquisition.
On June 20, 2024 (the “Modification Date”), the Company’s Board of Directors decided to accelerate the vesting of all outstanding stock options held by its Canadian employees and make them fully exercisable effective as of June 20, 2024. Stock options that were impacted consisted of 157,844 shares of Tranche A Options, 75,656 shares of Tranche B Options, and 28,824 shares of Tranche C Options. The Company applied the modification accounting under ASC 718 and accounted for the change to the vesting condition of Tranche A Options as a Type I (Probable-to-Probable) modification and the change to Tranche B and C Options as a Type III (Improbable-to-Probable) modification. On the Modification Date, unrecognized compensation expense of $1,241 related to Tranche A Options was immediately recognized. Additionally, the Company recognized compensation expense of $14,774 for the aggregated incremental fair value transferred to holders of Tranche A, B, and C Options, measured as of the Modification date, as a result of the acceleration of their vesting.
Subsequent to the modification on June 24, 2024, a significant number of eligible Canadian employees exercised their vested Tranche A, B, and C Options to purchase 262,324 shares of common stock and paid the exercise price with a non-recourse promissory note (“Promissory Note”). The aggregated principal amount of Promissory Notes from employees was $28,331, consisting of $19,649 for exercise prices and $8,682 for
F-74
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
11. Share-Based Compensation (cont.)
withholding taxes. The Promissory Notes are secured by the equity interest in the common stock, bear interest at the rate of 6% per annum (increased by 3% on an event of default), and are payable on Maturity Date which is defined as the earlier of (i) the date of the closing of (x) the transactions contemplated by that certain Agreement and Plan of Merger, dated May 21, 2024, or (y) any other change of control, (ii) the termination of employment of the Holder, and (iii) the date that is three (3) years from the date of the Promissory Notes. The exercises of these options are not considered substantive until the Promissory Notes are repaid. As of the close of the Acuren Acquisition on July 30, 2024, the entire balance of the Promissory Notes was repaid.
The Company uses the Black-Scholes option pricing model to determine the fair value of options with service only vesting conditions and the Monte Carlo valuation model to determine the fair value of the option grants with market vesting condition. The following assumptions were used to value the options issued during the six months ended June 30, 2023 and options modified during the six months ended June 30, 2024:
|
|
|
Six Months Ended
June 30,
|
| |
|
2024
|
|
2023
|
|
Weighted average risk-free interest rate
|
|
4.20 – 4.90
|
%
|
|
3.68 – 4.16
|
%
|
|
Expected dividend yield
|
|
0
|
%
|
|
0
|
%
|
|
Expected volatility
|
|
40
|
%
|
|
40
|
%
|
|
Expected life of options (years)
|
|
1.50 – 6.04
|
|
|
5.00
|
|
The Company recorded $17,696 and $1,727 of stock compensation expense related to the Tranche A, B, and C options for the six months ended June 30, 2024 and 2023, respectively, which is included in selling, general and administrative expenses.
12. Commitments and Contingencies
Legal Proceedings
The Company is involved in matters that involve various claims which have arisen in the normal course of business. The Company does not believe any liabilities that may arise as a result of such claims will have a material adverse effect, individually or in the aggregate, on its business, results of operations, cash flows, or financial condition.
13. Segment Information
Operating segments are components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources.
The Company has two operating and reportable segments which are the United States and Canada. The Company has operations in the United Kingdom that are not considered material and are included in the United States reportable segment. Each segment is representative of the operations incurred under the respective geographic territory. Both operating segments provide the same services to a similar base of customers.
The CODM reviews financial information presented at the United States and Canada levels for the purposes of allocating resources and evaluating financial performance. The Company evaluates the performance of its United States and Canada segments based primarily on each segment’s revenue and gross profit.
|
|
|
Six Months Ended June 30, 2024
|
| |
|
United States
|
|
Canada
|
|
Corporate &
Eliminations
|
|
Total
|
|
Revenue
|
|
$
|
308,927
|
|
$
|
224,191
|
|
$
|
(764
|
)
|
|
$
|
532,354
|
|
Gross profit
|
|
|
81,075
|
|
|
55,392
|
|
|
—
|
|
|
|
136,467
|
|
Depreciation and amortization
|
|
|
23,924
|
|
|
14,839
|
|
|
—
|
|
|
|
38,763
|
F-75
Table of Contents
ASP Acuren Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
(Unaudited)
13. Segment Information (cont.)
|
|
|
Six Months Ended June 30, 2023
|
| |
|
United States
|
|
Canada
|
|
Corporate &
Eliminations
|
|
Total
|
|
Revenue
|
|
$
|
308,693
|
|
$
|
206,246
|
|
$
|
(551
|
)
|
|
$
|
514,388
|
|
Gross profit
|
|
|
71,588
|
|
|
44,796
|
|
|
—
|
|
|
|
116,384
|
|
Depreciation and amortization
|
|
|
31,176
|
|
|
16,770
|
|
|
—
|
|
|
|
47,946
|
Total assets for the United States segment amounted to $768,684 and $745,925 as of June 30, 2024 and December 31, 2023, respectively. Total assets for the Canada segment amounted to $510,323 and $516,690 as of June 30, 2024 and December 31, 2023, respectively.
14. Related Parties
The Company is party to an agreement with American Securities, LLC, a related party, for management consulting services including acquisition planning and evaluation, strategic planning, and project management. For the six months ended June 30, 2024 and 2023, the Company expensed $1,701 and $1,697, respectively, included in selling, general, and administrative expenses in relation to this agreement. On July 30, 2024, Admiral Acquisition Limited (the “Acquirer”) acquired all outstanding equity of ASP Acuren (the “Acuren Acquisition”). Refer to Note 15 Subsequent Events for further details.
15. Subsequent Events
The Company has evaluated subsequent events through November 4, 2024, the date these condensed consolidated financial statements were available to be issued. The Company did not identify any material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements except for the following:
On July 30, 2024, the Company was acquired by Acuren Corporation (f/k/a Admiral Acquisition Limited), a London Stock Exchange Group PLC-listed acquisition vehicle, for approximately $1.88 billion. The purchase price is subject to customary post-closing adjustments.
Credit Agreement
Acuren had entered into a credit agreement on December 20, 2019, which, subsequent to all amendments through August 15, 2023, provided for a term loan of $715,000 and a revolving credit facility of $75,000. The revolving credit facility was set to mature on October 23, 2026, and the term loan on January 23, 2027. As a result of the Acuren Acquisition on July 30, 2024, the Prior Credit Agreement was extinguished and repaid in full.
Stock Options
At the close of the Acuren Acquisition, Tranche A and B stock options held by U.S. employees and certain Canadian employees whose options were not modified in June 2024 became fully vested based on their original vesting conditions and their Tranche C stock options satisfied the original performance condition but failed to meet the market condition. Additionally, a one-time cash payment for a member of the Company’s Board of Directors was triggered due to modification made to his stock option awards in May 2024. Consequently, the Company recognized a total compensation expense of $27,835 at the close of the Acuren Acquisition.
As noted in Note 11 Share-Based Compensation, stock options held by Canadian employees became fully vested due to a modification in June 2024 and the accounting impact from the modification was recognized during the six months ended June 30, 2024. Subsequent to the modification on June 24, 2024, some of the Canadian employees early exercised their vested Tranche A, B, and C Options to purchase 262,324 shares of common stock in exchange for a non-recourse Promissory Note.
As stipulated in the merger agreement for the Acuren Acquisition, all unvested stock options were immediately vested at the close, including the Tranche C stock options which would not have otherwise become exercisable due to the market condition not being achieved. Both U.S. and Canadian holders of Tranche C stock options received cash proceeds totaling $7,355 at the close.
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Table of Contents
APPENDIX A — ACUREN BVI AMENDED AND RESTATED MEMORANDUM
AND ARTICLES OF ASSOCIATION
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT (AS AMENDED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
ACUREN CORPORATION
Incorporated the 15th day of December 2022
Amended and restated on the 9th day of May 2023
Amended on the 29th day of July 2024
Table of Contents
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT 2004
MEMORANDUM OF ASSOCIATION
OF
ACUREN CORPORATION
a company limited by shares
1 NAME
1.1 The name of the Company is Acuren Corporation.
2 STATUS
2.1 The Company is a company limited by shares.
3 REGISTERED OFFICE AND REGISTERED AGENT
3.1 The first registered office of the Company shall be Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands, the office of the first registered agent.
3.2 The first registered agent of the Company will be Intertrust Corporate Services (BVI) Limited of Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands.
3.3 The Company may change its registered office or registered agent by a Resolution of Directors or a Resolution of Members. The change shall take effect upon the Registrar registering a notice of change filed under section 92 of the Act.
4 CAPACITY AND POWER
4.1 The Company has, subject to the Act and any other British Virgin Islands legislation for the time being in force, irrespective of corporate benefit:
(a) full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and
(b) for the purposes of sub-paragraph (a), full rights, powers and privileges.
4.2 There are subject to Clause 4.1 no limitations on the business that the Company may carry on.
5 NUMBER AND CLASSES OF SHARES
5.1 The Company is authorised to issue an unlimited number of shares each of no par value which may be Ordinary Shares or Founder Preferred Shares.
6 DESIGNATIONS, POWERS, PREFERENCES OF SHARES
6.1 Ordinary Shares confer upon the holders:
(a) subject to the right of the Founder Preferred Shares in accordance with Article 4 to receive any Annual Dividend Amount, any Change of Control Dividend Amount or any amount pursuant to clause (ii) of Article 4.7 from time to time, the right, together with the holders of the Founder Preferred Shares, to receive all amounts available for distribution and from time to time to be distributed by way of dividend or otherwise in accordance with the Articles;
(b) in respect of each such Ordinary Share the right to receive notice of, attend and vote as a Member at any meeting of Members, except that each holder of Ordinary Shares does not have a right to vote on any Resolution of Members as provided for by Article 35 (Continuation), Article 41.2 (Merger and Consolidation) and Article 42 (Acquisition), and no right to receive notice of or attend any meeting of Members in respect thereof; and
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(c) the right to a pro rata share (with the holders of Founder Preferred Shares) in the distribution of the surplus assets of the Company on its liquidation as are attributable to the holders of Ordinary Shares in accordance with the Articles.
6.2 Founder Preferred Shares confer upon the holders:
(a) the right to receive any Annual Dividend Amount, any Change of Control Dividend Amount or any amount pursuant to clause (ii) of Article 4.7 from time to time in accordance with Article 4 of the Articles;
(b) subject to the right in accordance with Article 4 of the Articles to receive any Annual Dividend Amount, any Change of Control Dividend Amount or any amount pursuant to clause (ii) of Article 4.7 from time to time, the right, together with the holders of the Ordinary Shares, to receive all amounts available for distribution and from time to time to be distributed by way of dividend or otherwise at such time as the Directors shall determine in accordance with the Articles;
(c) the right to receive notice of, attend and vote as a Member at any meeting of Members and to vote on a Resolution of Members to be passed as a resolution in writing, in accordance with the Articles;
(d) the right to a pro rata share (with the holders of Ordinary Shares) in the distribution of the surplus assets of the Company on its liquidation as are attributable to the Founder Preferred Shares in accordance with the Articles; and
(e) the right to require the conversion of their Founder Preferred Shares into Ordinary Shares subject to and in accordance with Article 5.
6.3 For the purposes of Section 9 of the Act, any rights, privileges, restrictions and conditions attaching to any of the Shares as provided for in this Memorandum and the Articles are deemed to be set out and stated in full in this Memorandum.
6.4 The Directors may by a Resolution of Directors redeem, purchase or otherwise acquire all or any of the shares in the Company, with the consent of the Member whose shares are to be redeemed, purchased or otherwise acquired (unless the Company is permitted by any other provision in the Memorandum or the Articles to purchase, redeem or otherwise acquire the shares without such consent being obtained), subject to the Articles.
7 VARIATION OF RIGHTS
7.1 Subject to Clause 7.2, the rights attached to a class of shares as specified in Clauses 6.1 and 6.2 may only, whether or not the Company is being wound up, be varied in such a manner which the Directors determine by Resolution of Directors may have a material adverse effect on such rights, with the consent in writing of the holders of not less than 50 (fifty) per cent. of the issued shares of that class, or by a resolution passed by the holders representing not less than 50 (fifty) per cent. of the votes cast by eligible holders of the issued shares of that class at a separate meeting of the holders of that class. Notwithstanding the foregoing, the Directors may by Resolution of Directors make such variation to the rights of any class of shares that they determine to be necessary or desirable in relation to or in connection with or resulting from an Acquisition (including at any time after the Acquisition has been made) including without limitation in connection with admission to listing on the New York Stock Exchange or any other US exchange or trading market.
7.2 For the purposes of any consent required pursuant to Clause 7.1, the Directors may treat one or more classes of shares as forming one class if they consider that any proposed variation of the rights attached to each such class of shares as specified in Clauses 6.1 and 6.2 would affect each such class in materially the same manner.
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8 REGISTERED SHARES
8.1 The Company shall issue registered shares only.
8.2 The Company is not authorised to issue bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares.
9 TRANSFER OF SHARES
9.1 A share may be transferred in accordance with the Articles.
10 AMENDMENT OF MEMORANDUM AND ARTICLES
10.1 The Company may amend its Memorandum or Articles by way of a Resolution of Members or in accordance with the Articles.
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We, Intertrust Corporate Services (BVI) Limited of Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands, in our capacity as registered agent for the Company hereby apply to the Registrar for the incorporation of the Company this 15th day of December 2022.
Incorporator
Shanica Maduro-Christopher
Authorised Signatory
Intertrust Corporate Services (BVI) Limited
Table of Contents
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
of
ACUREN CORPORATION
table of Contents
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Page
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1
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INTERPRETATION
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A-1
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2
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SHARES
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A-7
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3
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DISAPPLICATION OF PRE-EMPTIVE RIGHTS
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A-8
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4
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DIVIDEND RIGHTS
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A-8
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5
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CONVERSION OF FOUNDER PREFERRED SHARES
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A-9
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6
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DISCLOSURE REQUIREMENTS
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A-10
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7
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CERTIFICATES
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A-11
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8
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LIEN
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A-12
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9
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CALLS IN RESPECT OF SHARES AND FORFEITURE
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A-12
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10
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UNTRACED SHAREHOLDERS
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A-13
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11
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TRANSFER OF SHARES
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A-14
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12
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TRANSMISSION OF SHARES
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A-15
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13
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COMPULSORY TRANSFER
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A-15
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14
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ALTERATION OF SHARES
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A-16
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15
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DISTRIBUTIONS
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A-16
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16
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REDEMPTION OF SHARES AND TREASURY SHARES
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A-18
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17
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MEETINGS AND CONSENTS OF MEMBERS
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A-18
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18
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PROCEEDINGS AT MEETINGS OF MEMBERS
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A-21
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19
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VOTES OF MEMBERS
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A-22
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20
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SQUEEZE OUT PROVISIONS
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A-25
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21
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NUMBER OF DIRECTORS
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A-25
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22
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ALTERNATE DIRECTORS
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A-25
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23
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POWERS OF DIRECTORS
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A-26
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24
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DELEGATION OF DIRECTORS’ POWERS
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A-26
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25
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APPOINTMENT AND RETIREMENT OF DIRECTORS
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A-27
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26
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DISQUALIFICATION AND REMOVAL OF DIRECTORS
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A-28
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27
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DIRECTORS’ REMUNERATION AND EXPENSES
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A-28
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28
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OFFICERS AND AGENTS
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A-28
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29
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DIRECTORS’ INTERESTS
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A-29
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30
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DIRECTORS’ GRATUITIES AND PENSIONS
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A-29
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31
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PROCEEDINGS OF DIRECTORS
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A-30
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32
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INDEMNIFICATION
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A-31
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33
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RECORDS
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A-31
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34
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REGISTERS OF CHARGES
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A-33
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35
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CONTINUATION
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A-33
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36
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SEAL
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A-33
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37
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ACCOUNTS AND AUDIT
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A-33
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38
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CAPITALISATION OF PROFITS
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A-34
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39
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NOTICES
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A-34
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40
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WINDING UP
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A-36
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41
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MERGER AND CONSOLIDATION
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A-36
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42
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ACQUISITION
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A-37
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43
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AMENDMENT OF MEMORANDUM AND ARTICLES
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A-37
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A-i
Table of Contents
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT 2004
ARTICLES OF ASSOCIATION
OF
ACUREN CORPORATION
a company limited by shares
1 INTERPRETATION
1.1 In these Articles and the attached Memorandum, the following words shall bear the following meanings if not inconsistent with the subject or context:
Acquisition means an initial acquisition by the Company or by any subsidiary thereof (which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganisation or similar business combination) of an interest in an operating company or business, as contemplated by the Prospectus;
Act means the BVI Business Companies Act, 2004 (as amended), and includes the regulations made under the Act;
Admission means the initial admission of the Ordinary Shares to the standard listing segment of the Official List and to trading on the Main Market which occurred on 22 May 2023;
Affiliate has the meaning given to it in Rule 405 under the US Securities Act;
Annual Dividend Amount for each Dividend Period means:
A x B
where:
“A” = an amount equal to 20 per cent. of the increase (if any) in the value of an Ordinary Share, such increase calculated as being the difference between (i) the Dividend Price for the relevant Dividend Period and (ii) (a) if no Annual Dividend Amount has previously been paid, a price of US$10.00 per Ordinary Share, or (b) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Period, provided that in each case such amount is subject to such adjustment either as the Directors determine by Resolution of Directors in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4; and
“B” = the Preferred Share Dividend Equivalent;
Appointee has the meaning specified in Article 25.3;
Articles means the articles of association of the Company as the same may be amended, supplemented or otherwise modified from time to time;
Auditors means the auditors from time to time of the Company;
Average Price means, in respect of any Ordinary Share or any other Security, as of any date or relevant period (as applicable): (i) the volume weighted average price for such Security on the London Stock Exchange for such date or relevant period (as applicable) as reported by Bloomberg through its “Volume at Price” function with “Calculation” mode set to “Bloomberg Definition” as reported up to two hours after the respective market closes on such date or each date of the relevant period (as applicable); (ii) if the Directors determine (by a Resolution of Directors) that the London Stock Exchange is not the principal securities exchange or trading market for that Security, the volume weighted average price of that Security for such date or relevant period (as applicable) on the principal securities exchange or trading market on which that
A-1
Table of Contents
Security is listed or traded as reported by Bloomberg through its “Volume at Price” functions; (iii) if the foregoing do not apply, the last closing trade price or the average of the last closing trade price for each Trading Day of the relevant period (as applicable) of that Security in the over-the-counter market on the electronic bulletin board for that Security as reported by Bloomberg; or (iv) if no last closing trade price is reported for that Security by Bloomberg, the last closing ask price or the average of the last ask price for each Trading Day of the relevant period (as applicable) of that Security as reported by Bloomberg; provided, however, if the Average Price cannot be calculated for that Security on such date or relevant period on any of the foregoing bases, the Average Price of that Security on such date or relevant period shall be the fair market value as mutually determined by the Company and the holders of the majority of outstanding Founder Preferred Shares (acting reasonably);
Bloomberg means Bloomberg Financial Markets;
Board means the board of Directors at any time of the Company or the Directors present at a duly convened meeting of Directors at which a quorum is present;
Business Day means a day (except Saturday or Sunday) on which banks are open for business in London and the BVI;
BVI means the territory of the British Virgin Islands;
Change of Control means (a) the acquisition of Control by any person or party (or by any group of persons or parties who are acting in concert) whether by merger, consolidation or otherwise or (b) any sale, lease or exchange of all or substantially all of the property and assets of the Company, including its goodwill and its corporate franchises (which for the purposes of this definition only, the property and assets of the Company shall include the property and assets of any wholly owned and controlled, directly or indirectly, subsidiary of the Company);
Change of Control Dividend Amount means the aggregate amount determined by adding together each Annual Dividend Amount that would have been payable for each Dividend Period occurring during the Change of Control Dividend Period assuming that (a) the Company does not enter into liquidation during the Change of Control Dividend Period, (b) the Founder Preferred Shares are not converted pursuant to Article 5.1 during the Change of Control Dividend Period, (c) no Change of Control occurs during the Change of Control Dividend Period and (d) the Average Price per Ordinary Share for the last ten consecutive Trading Days of the relevant Dividend Period is determined by multiplying the Change of Control Price by eight per cent. per annum;
Change of Control Dividend Date has the meaning specified in Article 4.5;
Change of Control Dividend Period means the period beginning on the date of the consummation of the Change of Control and ending on the last day of the tenth full Financial Year following the completion of the Acquisition (or if such day is not a Trading Day, the first Trading Day immediately following such day);
Change of Control Price means either (i) the cash amount per Ordinary Share to be received by holders of Ordinary Shares in connection with a Change of Control or (ii) where the amount per Ordinary Share to be received by holders of Ordinary Shares in connection with a Change of Control is in a form other than cash, the Average Price per Ordinary Share for the last ten consecutive Trading Days prior to the consummation of the Change of Control event;
Company means Acuren Corporation incorporated under the Act;
Control means: (i) the power (whether by way of record or beneficial ownership of shares, proxy, contract, agency or otherwise) to: (a) cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Company, or (b) appoint or remove all, or the majority of the Directors or other equivalent officers of the Company, or (c) give directions with respect to the operating and financial policies of the Company with which the Directors or other equivalent officers of the Company are obliged to comply, and/or (ii) the holding beneficially of more than 50 per cent. of the issued shares of the Company (excluding any issued shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital), but excluding in the case of each of (i) and
A-2
Table of Contents
(ii) above at any time prior to the completion of the Acquisition, any such power or holding that arises as a result of the issue of Ordinary Shares by the Company in connection with the Acquisition;
Conversion Date has the meaning specified in Article 5.1;
Default Shares has the meaning specified in Article 6.4;
Depositary means Computershare Investor Services PLC, or such other custodian or other person (or a nominee for such custodian or other person) appointed under contractual arrangements with the Company or other arrangements approved by the Board whereby such custodian or other person or nominee holds or is interested in shares of the Company or rights or interests in shares of the Company and issues securities or other documents of title or otherwise evidencing the entitlement of the holder thereof to or to receive such shares, rights or interests, provided and to the extent that such arrangements have been approved by the Board for the purpose of these Articles;
Director means a director of the Company for the time being or, as the case may be, the directors assembled as a Board or committee of such Board;
Disclosure Notice has the meaning specified in Article 6.1;
Dividend Date means the last Trading Day of the relevant Dividend Period;
Dividend Period means, following Admission, each Financial Year, except that:
(a) in the event of the Company’s entry into liquidation, the relevant Dividend Period will end on the Trading Day immediately prior to the date of commencement of liquidation; and
(b) in the event of automatic conversion of the Founder Preferred Shares pursuant to Article 5.1, the relevant Dividend Period shall end on the Trading Day immediately prior to the Conversion Date;
Dividend Price means the Average Price per Ordinary Share for the last ten consecutive Trading Days of the relevant Dividend Period;
Document has the meaning set out in Article 39.1;
Dormant Company means a company which does not engage in trade or otherwise carry on business in the ordinary course;
equity security means a share (other than a bonus share) or a right to subscribe for, or to convert securities into, shares in the Company;
ERISA means the US Employee Retirement Income Security Act of 1974, as amended;
executed includes any mode of execution;
FCA means the Financial Conduct Authority of the United Kingdom or any successor;
Financial Year means the financial year of the Company, being from the date of incorporation to 30 November 2023 for the first financial year, from 1 December 2023 to 31 December 2024 for the second financial year, and thereafter each 12 month period ending on 31 December in each year, or such other financial year(s) (each of which may be a 12 month period or any longer or shorter period) as may be determined from time to time by Resolution of Directors and in accordance with any applicable laws and regulations;
Founder Entity means Mariposa Acquisition IX, LLC;
Founder Preferred Share means a convertible preferred share of no par value in the Company having the rights and being subject to the restrictions specified in the Memorandum;
Founders means Sir Martin E. Franklin, Ian G.H. Ashken, Desiree DeStefano, Michael E. Franklin, Robert A.E. Franklin and James E. Lillie, collectively (and each individual, a Founder);
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Table of Contents
holder, Member or shareholder in relation to shares means the member recorded as a holder of a share in the Company’s Register of Members;
Independent Directors means those Directors of the Board from time to time considered by the Board to be independent for the purposes of the UK Corporate Governance Code (or any other appropriate corporate governance regime complied with by the Company from time to time) together with the chairman of the Board provided that such person was considered by the Board to be independent on appointment for the purposes of the UK Corporate Governance Code (or any other appropriate corporate governance regime complied with by the Company from time to time);
Law means every order in council, law, statutory instrument, rule or regulation for the time being in force concerning companies incorporated in the BVI and affecting the Company (including, for the avoidance of doubt, the Act) in each case as amended, extended or replaced from time to time;
Listing Rules means the listing rules of the FCA as amended from time to time;
London Stock Exchange means the London Stock Exchange plc;
Main Market means the London Stock Exchange’s main market for listed securities (or, if the Ordinary Shares are not at the relevant time admitted to trading on such market, the principal stock exchange or securities market on which the Ordinary Shares are then listed or traded or if the Ordinary Shares are at the relevant time listed or traded (at the request of the Company) on more than one stock exchange or securities market, the stock exchange or securities market on which the Directors determine by Resolution of Directors that Ordinary Shares have the greatest liquidity);
Memorandum means the memorandum of association of the Company, as the same may be amended, supplemented or otherwise modified from time to time;
Office means the registered office of the Company;
Official List means the Official List maintained by the FCA;
Ordinary Share means an ordinary share of no par value in the Company having the rights and being subject to the restrictions specified in the Memorandum;
paid up in relation to shares means fully paid or credited as fully paid, but excludes partly paid shares;
parent has the meaning specified in section 2 of the Act;
Payment Date means a day no later than ten Trading Days after the Dividend Date, except in respect of any Annual Dividend Amount becoming due on the Trading Day immediately prior to the date of commencement of the Company’s liquidation, in which case the Payment Date shall be such Trading Day;
Permitted Transferees means any of the following donees or transferees of Founder Preferred Shares transferred to such donees or transferees by the Founder Entity: (i) a donee that receives Founder Preferred Shares as a bona fide gift made by a Founder Entity; (ii) any of the Directors or Founders (from time to time); (iii) a person immediately related to a Founder or a Director by blood, marriage or adoption in connection with a transfer for estate planning purposes; (iv) any trust that is solely for the benefit of the Founder Entity or any of its Affiliates, or a Permitted Transferee of the Founder Entity or any direct or indirect wholly-owned subsidiary of such trust; and/or (v) any Affiliate or direct or indirect holder of equity, holder of partnership interests or member of a Founder Entity or any of its Affiliates, or a Permitted Transferee of a Founder Entity;
Preferred Share Dividend Equivalent means such number of Ordinary Shares outstanding on:
(a) the four-month anniversary of the closing of the Acquisition; or
(b) if the relevant Dividend Date falls before the four-month anniversary of the closing of the Acquisition, such earlier Dividend Date,
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in either case including any Ordinary Shares issued pursuant to the exercise of Warrants but excluding any Ordinary Shares issued to shareholders or other beneficial owners of a company or business acquired pursuant to or in connection with the Acquisition (which total number is subject to such adjustment either as determined by Resolution of Directors in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4);
Prospectus means the prospectus issued by the Company in connection with Admission;
Register of Members has the meaning specified in Article 2.8;
Registrar means the Registrar of Corporate Affairs of the BVI;
Relevant System means a computer-based system and procedures which enable title to units of a Security (including depositary interests) to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters;
Resolution of Directors means either:
(a) a resolution approved at a duly convened and constituted meeting of Directors or of a committee of Directors by the affirmative vote of a majority of the Directors present at the meeting who voted and did not abstain; or
(b) a resolution consented to in writing by such number of Directors as constitutes a majority of the Directors or, in the case of a resolution of a committee of the Directors, consented to in writing by such number of Directors as constitutes a majority of the members of such committee;
Resolution of Members means either:
(a) a resolution approved at a duly convened and constituted meeting of the Members of the Company by the affirmative vote of a majority of the votes of the shares entitled to vote thereon which were present at the meeting and were voted; or
(b) a resolution consented to in writing by Members representing a majority of the votes of shares entitled to vote thereon;
Sale Share has the meaning specified in Article 10.2;
Seal means any seal which has been duly adopted as the common seal of the Company;
secretary means the secretary of the Company or other person appointed to perform the duties of the secretary of the Company including a joint, assistant or deputy secretary;
Securities means shares and debt obligations of every kind of the Company, and including without limitation options, warrants and rights to acquire shares or debt obligations, and Security shall be construed accordingly;
Special Resolution of Members means either:
(a) a resolution approved at a duly convened and constituted meeting of the Members of the Company by the affirmative vote of not less than 75 (seventy five) per cent. of the votes of the shares entitled to vote thereon which were present at the meeting and were voted; or
(b) a resolution consented to in writing by Members representing not less than 75 (seventy five) per cent. of the votes of shares entitled to vote thereon;
subsidiary has the meaning as specified in section 2 of the Act;
Trading Day means any day on which the Main Market is open for business (other than a day on which the Main Market is scheduled to or does close prior to its regular weekday closing time);
Transfer Notice has the meaning specified in Article 13.2;
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Treasury Share means a share that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled;
UK Corporate Governance Code means the UK Corporate Governance Code (or equivalent code) issued by the Financial Reporting Council in the United Kingdom from time to time;
US or United States means the United States of America, its territories and possessions, any state in the United States of America and District of Columbia;
US Securities Act means the US Securities Act of 1933, as amended;
US$, USD or United States Dollars means the currency of the United States;
Warrant Instrument means the instrument constituting the Warrants executed by the Company on 16 May 2023 as may be amended and restated from time to time; and
Warrants means the warrants to subscribe for Ordinary Shares issued or to be issued pursuant to the Warrant Instrument.
1.2 A reference to any law, statute or statutory provision, rule or regulation shall, unless the context otherwise requires, be construed as a reference to such law, statute or statutory provision, rule or regulation as the same may have been or may from time to time be amended, modified, extended, consolidated, re-enacted or replaced and shall include any subordinated legislation or regulation made thereunder.
1.3 Words denoting the singular include the plural and vice versa.
1.4 Words denoting a gender include every gender.
1.5 References to persons shall include firms, corporations, partnerships, associations and other bodies of persons, whether corporate or not.
1.6 The word may shall be construed as permissive and the word shall be construed as imperative.
1.7 The word signed shall include a signature or a representation of a signature affixed by mechanical means.
1.8 The words in writing shall mean written, facsimiled, or otherwise electronically transmitted or published in a readable form, printed, photographed or lithographed or represented by any other substitute for writing or partly one or partly another.
1.9 References to something in electronic form shall include:
(a) something partly in electronic form;
(b) something, whether or not itself in electronic form:
(i) made wholly or partly by electronic means; or
(ii) made wholly or partly by means of something wholly or partly in electronic form.
1.10 References to notice means a notice in writing unless otherwise specifically stated.
1.11 A reference to the Auditors or such other person confirming any matter shall be construed to mean confirmation of their opinion as to such matter whether qualified or not.
1.12 A reference to a Clause, unless the context requires otherwise, is a reference to a clause of the Memorandum and a reference to an Article, unless the context otherwise requires, is a reference to an Article of these Articles.
1.13 Subject to the above provisions any words defined in the Act shall bear the same meaning in these Articles.
1.14 The headings in these Articles are intended for convenience only and shall not affect the construction of these Articles.
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2 SHARES
2.1 Shares and other Securities may be issued and options to acquire shares or other Securities may be granted at such times, to such persons, for such consideration and on such terms as the Directors may by Resolution of Directors determine.
2.2 The Company may issue fractions of shares and any such fractional shares shall rank pari passu in all respects with the other shares of the same class issued by the Company.
2.3 Subject to the Law, the Directors may permit the holding of shares of any class in uncertificated form (including in the form of depositary interests or similar interests, instruments or Securities) in such manner as the Directors may determine from time to time.
2.4 The Company may exercise the powers of paying commissions and in such an amount or at such a percentage rate as the Directors may determine. Subject to the provisions of the Law, any such commission may be satisfied by the payment of cash or by the issue of fully or partly paid shares or partly in one way and partly in another. The Company may also on issue of shares pay such brokerage as may be lawful.
2.5 Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the Directors think fit (subject always to any applicable laws and regulations and the facilities and requirements of any Relevant System). The Company shall maintain the Register of Members in each case as is required by any applicable laws and regulations and the facilities and requirements of any Relevant System.
2.6 The rights conferred upon the holders of any shares of any class issued with preferred, deferred or other rights shall not (unless otherwise expressly provided by the conditions of issue of such shares) be deemed to be varied or abrogated by the creation or issue of further shares ranking pari passu therewith or in the case of Founder Preferred Shares (for the avoidance of doubt) by the creation or issue of Ordinary Shares, or by the exercise of any power under the disclosure provisions requiring Members to disclose an interest in the Company’s shares pursuant to Article 6, the reduction of capital on such shares, the conversion of shares in accordance with these Articles, or by the purchase or redemption by the Company of its own shares or the sale of any shares held as Treasury Shares in accordance with the provisions of the Act.
2.7 No shares may be issued for a consideration which is, in whole or in part, other than money, unless a Resolution of Directors has been passed stating:
(a) the amount to be credited for the issue of the shares; and
(b) that, in their opinion, the present cash value of the non-money consideration and money consideration, if any, for the issue is not less than the amount to be credited for the issue of the shares.
A bonus share issued by the Company shall be deemed to have been fully paid for on issue.
2.8 The Company shall keep a register (the Register of Members) containing:
(a) the names and addresses of the persons who hold shares;
(b) the number of each class and series of shares held by each Member;
(c) the date on which the name of each Member was entered in the Register of Members; and
(d) the date on which any person ceased to be a Member.
2.9 The Register of Members may be in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the Directors otherwise determine, the magnetic, electronic or other data storage form shall be the original Register of Members.
2.10 A share is deemed to be issued when the name of the Member is entered in the Register of Members.
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2.11 Except as required by law, no person shall be recognised by the Company as holding any share upon any trust and (except as otherwise provided by these Articles or by law) the Company shall not be bound by or recognise (even when having notice thereof) any interest in any share other than an absolute right of the registered holder to the entirety of a share or fraction thereof.
2.12 On a winding-up of the Company the assets (if any) of the Company available for distribution to Members shall be distributed to the holders of Ordinary Shares and Founder Preferred Shares pro rata to the number of such paid up shares held by each holder relative to the total number of issued and paid up Ordinary Shares as if such paid up Founder Preferred Shares had been converted into Ordinary Shares immediately prior to the winding-up on a one-for-one basis, subject to adjustment in accordance with these Articles.
2.13 The Company may, subject to the provisions of the Act and of these Articles, issue warrants or grant options to subscribe for shares in the Company. Such warrants or options shall be issued upon such terms and subject to such conditions as may be resolved upon by the Board.
3 DISAPPLICATION OF PRE-EMPTIVE RIGHTS
3.1 Section 46 of the Act does not apply to the Company.
4 DIVIDEND RIGHTS
4.1 Commencing from consummation of the Acquisition, and only once the Average Price per Ordinary Share (subject to such adjustment either as the Directors determine by Resolution of Directors in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4) for any ten consecutive Trading Days following Admission is at least US$11.50, for the financial year in which the Acquisition completes and for a further ten full financial years, the holders of Founder Preferred Shares will be entitled to receive in aggregate an Annual Dividend Amount in respect of each Dividend Period as calculated in accordance with these Articles, payable in Ordinary Shares or cash, at the sole option of the Company (exercised by Resolution of Directors). If the Company exercises its option to pay such Annual Dividend Amount in Ordinary Shares, then the Annual Dividend Amount shall be divided between the holders of Founder Preferred Shares, pro rata to the number of Founder Preferred Shares held by them on the relevant Dividend Date. The Annual Dividend Amount will be paid on the relevant Payment Date by the issue to each holder of Founder Preferred Shares of such number of whole Ordinary Shares as is equal to the pro rata amount of the Annual Dividend Amount to which they are entitled divided by the Dividend Price (provided that any fractional Ordinary Shares due to a holder resulting from such calculation shall not be issued and such holder shall be entitled to be paid the nearest lower whole number of Ordinary Shares).
4.2 In the event of the Company entering liquidation, the Dividend Date for the relevant Dividend Period shall be the Trading Day immediately prior to the date of commencement of liquidation and accordingly an Annual Dividend Amount shall be calculated as of such Dividend Date and be payable on the relevant Payment Date.
4.3 In the event of an automatic conversion of Founder Preferred Shares occurring in accordance with Article 5.1, the Dividend Date for the relevant Dividend Period shall be the Trading Day immediately prior to the relevant Conversion Date and accordingly an Annual Dividend Amount shall be calculated as of such Dividend Date and be payable on the relevant Payment Date.
4.4 For the avoidance of doubt, any Annual Dividend Amount due in respect of a Dividend Period, including in accordance with Article 4.2 or 4.3, shall be payable in full and shall not be subject to prorating notwithstanding any Dividend Period being longer or shorter than 12 months.
4.5 In the event of a Change of Control occurring at any time after the consummation of the Acquisition, the holders of the Founder Preferred Shares will be entitled to receive, in the aggregate, a one-time dividend equal to the Change of Control Dividend Amount, payable in Ordinary Shares, the Change of Control Dividend Amount being divided between the holders of the Founder Preferred Shares pro rata to the number of Founder Preferred Shares held by them immediately prior to the consummation of the Change of Control
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(the “Change of Control Dividend Date”). The Change of Control Dividend Amount shall be paid on the Change of Control Dividend Date by the issue to each holder of Founder Preferred Shares of such number of Ordinary Shares as is equal to the pro rata amount of the Change of Control Dividend Amount to which they are entitled divided by the Change of Control Price.
4.6 In the event an Annual Dividend Amount or a Change of Control Dividend Amount is payable in Ordinary Shares, where the Ordinary Shares (or any interests therein) are listed or traded on any stock exchange or securities market, the Company shall use reasonable endeavours, including the issue of any prospectus, listing document or similar as may be required, to procure that, upon the payment of the Annual Dividend Amount or the Change of Control Dividend Amount, as applicable, the Ordinary Shares arising from such payment (or any interests therein) are promptly admitted to such stock exchange or securities market (or where more than one, all of them) and that any interests in the Ordinary Shares (including depositary interests) be capable of being transferred in a Relevant System.
4.7 In addition to the right to receive an Annual Dividend Amount and the Change of Control Dividend Amount, Founder Preferred Shares confer upon the holders the right, together with the holders of the Ordinary Shares, to receive (i) all amounts available for distribution and from time to time distributed by way of dividend or otherwise at such time as the Directors shall determine by Resolution of Directors, pro rata to the number of fully paid up Ordinary Shares held by the then holders of Ordinary Shares and Founder Preferred Shares, as if for such purpose the Founder Preferred Shares had been converted into Ordinary Shares immediately prior to such distribution plus (ii) commencing from consummation of the Acquisition, an amount equal to 20 per cent. of the dividend which would be distributable on the Preferred Share Dividend Equivalent.
5 CONVERSION OF FOUNDER PREFERRED SHARES
5.1 Each Founder Preferred Share will automatically convert into one Ordinary Share (subject to such adjustment either as the Directors determine by Resolution of Directors in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4) upon the earlier of (i) immediately following the Change of Control Dividend Date and (ii) the last day of the tenth full Financial Year following the completion of the Acquisition or, if such day is not a Trading Day, the first Trading Day immediately following such day (the Conversion Date).
5.2 A holder of Founder Preferred Shares may by notice in writing to the Company require the conversion of such number of that holder’s Founder Preferred Shares as is specified in such notice (and, if such notice is silent as to the number of Founder Preferred Shares, that holder shall be deemed to have required the conversion of all of his Founder Preferred Shares), into an equal number of Ordinary Shares (subject to such adjustment either as the Directors determine by Resolution of Directors in the event of a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise as determined in accordance with Article 5.4), and in such circumstances those Founder Preferred Shares the subject of such notice shall be converted five Trading Days following receipt of the notice by the Company.
5.3 In the event of a conversion pursuant to Article 5.1 or Article 5.2:
(a) any share certificates relating to the converted shares shall be cancelled and the Company shall issue to the relevant Member new certificates in respect of the Ordinary Shares which have arisen on the conversion unless the holder elects (or is deemed to have elected) to hold their new Ordinary Shares in uncertificated form;
(b) subject to the terms of these Articles, the Ordinary Shares arising on conversion shall be credited as paid up and shall rank pari passu with the outstanding Ordinary Shares in issue at the Conversion Date, including as to dividends and other distributions declared, by reference to a record date falling after the Conversion Date; and
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(c) where the Ordinary Shares (or any interests therein) are listed or traded on any stock exchange or securities market the Company shall use reasonable endeavours, including the issue of any prospectus, listing document or similar as may be required, to procure that, upon conversion, the Ordinary Shares arising from such conversion (or any interests therein) are promptly admitted to such stock exchange or securities market (or where more than one, all of them) and that any interests in the Ordinary Shares (including depositary interests) be capable of being transferred in a Relevant System.
5.4 Notwithstanding any other provisions in these Articles, in any circumstances where:
(a) the Directors or the holders of a majority of the outstanding Founder Preferred Shares consider that an adjustment should be made to (1) any factor relevant for the calculation of the Annual Dividend Amount (including the amount which the Dividend Price per Ordinary Share must meet or exceed in order for the right to an Annual Dividend Amount to commence (initially set at US$11.50)), or (2) any factor relevant for the calculation of the Change of Control Dividend Amount (including the Change of Control Price) or (3) the number of Ordinary Shares into which the Founder Preferred Shares shall convert, or (4) the Preferred Share Dividend Equivalent, whether following a consolidation or sub-division of the Ordinary Shares in issue after the date of Admission or otherwise; or
(b) the holders of a majority of the outstanding Founder Preferred Shares disagree with any adjustment as determined by the Directors,
the Directors will either (i) make such adjustment as is mutually determined by the Directors and the holders of the majority of the outstanding Founder Preferred Shares (acting reasonably) or (ii) failing agreement within a reasonable time, will at the Company’s expense appoint the Auditors, or such other person as the Directors shall, acting reasonably, determine to be an expert for such purpose, to determine as soon as practicable what adjustment (if any) is fair and reasonable. Upon determination in either case the adjustment (if any) will be made and will take effect in accordance with the determination. The Auditors (or such other expert as may be appointed) shall be deemed to act as an expert and not an arbitrator and applicable laws relating to arbitration shall not apply, the determination of the Auditors (or such other expert as may be appointed) shall be final and binding on all concerned and the Auditors (or such other expert as may be appointed) shall be given by the Company all such information and other assistance as they may reasonably require.
5.5 Conversion of the Founder Preferred Shares pursuant to this Article 5 shall be in such manner as may be determined by the Company, including, without limitation, by redemption of such shares and applying the proceeds in the subscription for the applicable number of Ordinary Shares, by means of sub-division and/or consolidation and/or a combination of both (in which case, for the avoidance of doubt, the requisite sub-division and/or consolidation shall be effected pursuant to the provisions of these Articles), by automatically converting the Founder Preferred Shares into Ordinary Shares or by redesignating any such Founder Preferred Shares as Ordinary Shares.
6 DISCLOSURE REQUIREMENTS
6.1 The Company may, by notice in writing (a Disclosure Notice) require a person whom the Company knows to be or has reasonable cause to believe is or, at any time during the 3 (three) years immediately preceding the date on which the Disclosure Notice is issued, to have been interested in any shares:
(a) to confirm that fact or (as the case may be) to indicate whether or not it is the case; and
(b) to give such further information as may be required in accordance with Article 6.2.
6.2 A Disclosure Notice may (without limitation) require the person to whom it is addressed:
(a) to give particulars of his status, domicile, nationality and residency;
(b) to give particulars of his own past or present interest in any shares (held by him at any time during the 3 (three) year period specified in Article 6.1);
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(c) to disclose the identity of any other person who has a present interest in the shares held by him;
(d) where the interest is a present interest and any other interest in any shares subsisted during that 3 (three) year period at any time when his own interest subsisted, to give (so far as is within his knowledge) such particulars with respect to that other interest as may be required by the Disclosure Notice; and
(e) where his interest is a past interest to give (so far as is within his knowledge) like particulars of the identity of the person who held that interest immediately upon his ceasing to hold it.
6.3 Any Disclosure Notice shall require any information in response to such notice to be given within the prescribed period (which is 14 (fourteen) calendar days after service of the notice or 7 (seven) days if the shares concerned represent 0.25 (nought point two five) per cent. or more in number of the issued shares of the relevant class) or such other reasonable period as the Directors may determine.
6.4 If any Member is in default in supplying to the Company the information required by the Company within the prescribed period or such other reasonable period as the Directors determine, the Directors may serve a direction notice on the Member. The direction notice may direct that in respect of the shares in respect of which the default has occurred (the Default Shares) the Member shall not be entitled to attend or vote in meetings of Members or class meetings. Where the Default Shares represent at least 0.25 (nought point two five) per cent. in number of the class of shares concerned the direction notice may additionally direct that dividends on such shares will be retained by the Company (without interest) and that no transfer of the Default Shares (other than a transfer authorised under the Articles) shall be registered until the default is rectified.
6.5 Where Default Shares in which a person appears to be interested are held by a Depositary, the provisions of this Article 6 shall be treated as applying only to those shares held by the Depositary in which such person appears to be interested and not (insofar as such person’s apparent interest is concerned) to any other shares held by the Depositary.
6.6 Where the Member on which a Disclosure Notice is served is a Depositary acting in its capacity as such, the obligations of the Depositary as a Member shall be limited to disclosing to the Company such information relating to any person appearing to be interested in the shares held by it, as has been recorded by it pursuant to the arrangements entered into by the Company or approved by the Board pursuant to which it was appointed as a Depositary.
7 CERTIFICATES
7.1 The Company may (but shall not be obliged to) issue to a Member without payment one certificate for all the shares of each class held by him (and upon transferring a part of his holding of shares of any class to a certificate for the balance of such holding) or several certificates each for one or more of his certificated shares upon payment, for every certificate after the first, of such reasonable sum as the Directors may determine. Every certificate shall specify the number, class and distinguishing numbers (if any) of the shares to which it relates and the amount or respective amounts paid up or partly paid thereon. The Company shall not be bound to issue more than one certificate for certificated shares held jointly by several persons and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
7.2 All forms of certificate for shares or any other form of security shall be issued in such manner as the Directors may determine which may include under the Seal, which may be affixed to or printed on it or in such other manner as the Directors may approve, having regard to the terms of allotment or issue of shares, and shall be signed autographically unless there shall be in force a Resolution of Directors adopting some method of mechanical signature in which event the signatures (if authorised by such resolution) may be appended by the method so adopted.
7.3 If a share certificate is defaced, worn out, lost or destroyed it may be renewed on such terms (if any) as to evidence and indemnity and payment of the liability and expenses reasonably incurred by the Company in investigating evidence as the Directors may determine but otherwise free of charge and (in the case of defacement or wearing out) on delivery up of the old certificate.
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7.4 Any Member receiving a certificate shall indemnify and hold the Company and its Directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof.
7.5 No provision of these Articles shall apply so as to require the Company to issue a certificate to any person holding such shares in uncertificated form.
7.6 Uncertificated shares of a class are not to be regarded as forming a separate class from certificated shares of that class.
8 LIEN
8.1 The Company shall have a first and paramount lien on every share (not being a paid up share) for all monies (whether presently payable or not) payable at a fixed time or called in respect of that share. The Directors may at any time declare any share to be wholly or in part exempt from the provisions of this Article 8. The Company’s lien on a share shall extend to any amount payable in respect of it.
8.2 The Company may sell in such manner as the Directors determine any shares on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 (fourteen) calendar days after notice has been given to the holder of the share or to the person entitled to it by transmission or operation of the law, demanding payment and stating that if the notice is not complied with the shares may be sold.
8.3 To give effect to a sale the Directors may authorise any person to execute an instrument of transfer of the shares sold to or in accordance with the directions of the purchaser. The title of the transferee to the shares shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
8.4 The net proceeds of the sale after payment of the costs shall be applied in payment of so much of the sum for which the lien exists as is presently payable and any residue shall (upon surrender to the Company for cancellation of the certificate for the shares sold and subject to a like lien for any moneys not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.
9 CALLS IN RESPECT OF SHARES AND FORFEITURE
9.1 Subject to the terms of allotment the Directors may make calls upon the Members in respect of any monies unpaid in respect of their shares and each Member shall (subject to receiving at least 14 (fourteen) calendar days’ notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called in respect of his shares. A call may be required to be paid by instalments. A call may, before receipt by the Company of any sum due thereunder, be revoked in whole or part and payment of a call may be postponed in whole or part. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect whereof the call was made.
9.2 A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed.
9.3 The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
9.4 If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the calendar day it became due and payable until it is paid; either at the rate fixed by the terms of allotment of the share or in the notice of the call or at such rate not exceeding 15 (fifteen) per cent. per annum as the Directors may determine. The Directors may waive payment of the interest wholly or in part.
9.5 An amount payable in respect of a share on allotment or at any fixed date, whether in respect of the issue price or premium or as an instalment of a call, shall be deemed to be a call and if it is not paid the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call. The Company may accept from a Member the whole or a part of the amount remaining unpaid on any shares held by him although no part of that amount has been called up.
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9.6 Subject to the terms of allotment, the Directors may make arrangements on the issue of shares to distinguish between Members as to the amounts and times of payment of calls in respect of their shares.
9.7 If a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than 14 (fourteen) calendar days’ notice requiring payment of the amount unpaid together with any interest which may have accrued and any expenses which may have been incurred by the Company in respect thereof. The notice shall name the place where payment is to be made and shall state that if the notice is not complied with the shares in respect of which the call was made will be liable to be forfeited.
9.8 If the notice is not complied with any share in respect of which it was given may at any time thereafter before the payment required by the notice has been made be forfeited by a resolution of the Directors and the forfeiture shall include all dividends or other moneys payable in respect of the forfeited shares and not paid before the forfeiture.
9.9 A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such a manner as the Directors determine either to the person who was before the forfeiture the holder or to any other person and at any time before sale re-allotment or other disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the share to that person.
9.10 A person any of whose shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for any certificated shares forfeited but shall remain liable to the Company for all monies which at the date of forfeiture were presently payable by him to the Company in respect of those shares with interest at the rate at which interest was payable on those monies before the forfeiture and/or at such rate as the Directors may determine from the date of forfeiture until payment and all expenses of the Company but the Directors may waive payment wholly or in part or enforce payment without any allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal.
9.11 A declaration under oath by a Director or the secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share and the declaration shall (subject to the execution of an instrument of transfer if necessary) constitute a good title to the share and the person to whom the share is disposed of shall not be bound to see to the application of the consideration, if any, nor shall his title to the share be affected by any irregularity in or invalidity of the proceedings in reference to the forfeiture or disposal of the share.
10 UNTRACED SHAREHOLDERS
10.1 The Company may sell the share of a Member or of a person entitled by transmission at the best price reasonably obtainable at the time of sale, if:
(a) during a period of not less than 12 (twelve) years before the date of publication of the advertisements referred to in sub-paragraph (c) of this Article 10.1 (or, if published on two different dates, the first date) (the relevant period) at least three cash dividends have become payable in respect of the share;
(b) throughout the relevant period no cheque payable on the share has been presented by the holder of, or the person entitled by transmission to, the share to the paying bank of the relevant cheque, no payment made by the Company by any other means permitted by Article 15.8 has been claimed or accepted and, so far as any Director of the Company at the end of the relevant period is then aware, the Company has not at any time during the relevant period received any communication from the holder of, or person entitled by transmission to, the share;
(c) on expiry of the relevant period the Company has given notice of its intention to sell the share by advertisement in (i) a United Kingdom national daily newspaper (ii) either one newspaper circulated widely in the BVI or the BVI Gazette and (iii) a newspaper circulating in the area of the address of the holder of, or person entitled by transmission to, the share shown in the Register of Members; and
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(d) the Company has not, so far as the Board is aware, during a further period of three months after the date of the advertisements referred to in sub-paragraph (c) of this Article 10.1 (or the later advertisement if the advertisements are published on different dates) and before the exercise of the power of sale received a communication from the holder of, or person entitled by transmission to, the share.
10.2 Where a power of sale is exercisable over a share pursuant to Article 10.1 (a Sale Share), the Company may at the same time also sell any additional share issued in right of such Sale Share or in right of such an additional share previously so issued provided that the requirements of sub-paragraphs (b) to (d) of Article 10.1 (as if the words “throughout the relevant period” were omitted from sub-paragraph (b) and the words “on expiry of the relevant period” were omitted from sub-paragraph (c)) shall have been satisfied in relation to the additional share.
10.3 To give effect to a sale pursuant to Article 10.1 and Article 10.2, the Board may authorise a person to transfer the share in the name and on behalf of the holder of, or person entitled by transmission to, the share, or to cause the transfer of such share, to the purchaser or his nominee and in relation to an uncertificated share may require the operator of any Relevant System to convert the share into certificated form. The purchaser is not bound to see to the application of the purchase money and the title of the transferee is not affected by an irregularity or invalidity in the proceedings connected with the sale of the share.
10.4 The Company shall be indebted to the Member or other person entitled by transmission to the share for the net proceeds of sale and shall carry any amount received on sale to a separate account. The Company is deemed to be a debtor and not a trustee in respect of that amount for the Member or other person. Any amount carried to the separate account may either be employed in the business of the Company or invested as the Board may think fit. No interest is payable on that amount and the Company is not required to account for money earned on it.
11 TRANSFER OF SHARES
11.1 Subject to the terms of these Articles any Member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Directors may approve. The Directors may, without assigning any reasons therefor, but subject to any applicable laws and regulations and the facilities and requirements of the Relevant System concerned, refuse to register the transfer of a certificated share (whether paid up or not) unless the instrument of transfer is lodged with the Company and is accompanied by any certificates for the shares to which it relates and such other evidence as the Directors may require to show the right of the transferor to make the transfer.
11.2 The Directors may accept such evidence of title of the transfer of uncertificated shares as they determine. The Directors may permit shares (or interests in shares) in uncertificated form (including in the form of depositary interests or similar interests, instruments or Securities) to be transferred by means of a Relevant System of holding and transferring shares (or interests in shares) in uncertificated form in such manner as the Directors may determine from time to time. The Directors shall, subject always to the Act and any other applicable laws and regulations and the facilities and requirements of any Relevant System concerned and these Articles, have power to implement and/or approve any arrangements they may think fit in relation to the evidencing of title to and transfer of interests in shares of the Company in uncertificated form (including in the form of depositary interests or similar interests, instruments or Securities), which may include arrangements restricting transfers, and to the extent such arrangements are so implemented, no provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent (as determined by the Directors) with the holding or transfer thereof or the shares in the Company represented thereby. Subject always to the Act and any other applicable laws and regulations and the facilities and requirements of any Relevant System concerned and these Articles, the Directors may from time to time take such actions and do such things as they think fit in relation to the operation of any such arrangements, including, without limitation, treating holders of any depositary interests or similar interests relating to shares as if they were the holders directly thereof for the purposes of compliance with any obligations imposed by these Articles.
11.3 If the Directors refuse to register a transfer of a share they shall, within two months after the date on which the instrument of transfer was lodged with the Company, send to the transferor and the transferee notice of the refusal.
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11.4 No fee shall be charged for the registration of any instrument of transfer or, subject as otherwise herein provided, any other document relating to or affecting the title to any share.
11.5 The Company shall be entitled to retain any instrument of transfer of a certificated share which is registered but any instrument of transfer which the Directors refuse to register shall be returned to the person lodging it when notice of the refusal is given.
12 TRANSMISSION OF SHARES
12.1 If a Member dies, the survivor or survivors where he was a joint holder, and his personal representatives where he was a sole holder or the only survivor of joint holders, shall be the only persons recognised by the Company as having any title to his interest; but nothing herein contained shall release the estate of a deceased Member from any liability in respect of any share which had been held by him.
12.2 A person becoming entitled to a share in consequence of the death, bankruptcy or incapacity of a Member may, upon such evidence being produced as the Directors may properly require, elect either to become the holder of the share or to make such transfer thereof as the deceased, bankrupt or incapacitated Member could have made. If he elects to become the holder he shall give notice to the Company to that effect. If he elects to transfer the share he shall execute an instrument of transfer of the share to the transferee. All of the Articles relating to the transfer of shares shall apply to the notice or instrument of transfer as if it were an instrument of transfer executed by the Member and the death, bankruptcy or incapacity of the Member had not occurred.
12.3 A person becoming entitled to a share in consequence of the death, bankruptcy or incapacity of a Member shall have the rights to which he would be entitled if he were the holder of the share except that he shall not before being registered as the holder of the share be entitled in respect of it to attend or vote at any meeting of the Company or at any separate meeting of the holders of any class of shares in the Company.
13 COMPULSORY TRANSFER
13.1 Without limitation to any of their powers under Article 6, the Directors may at any time and from time to time, by notice to such Member, request any Member to provide the Company with such information and evidence as the Directors shall reasonably require in relation to such Member or beneficial owner which relates to or is connected with their holding of or interest in shares in the Company. In the event of any failure of the relevant Member to comply with the request contained in such notice within a reasonable time as determined by the Directors in their sole and unfettered discretion, the Directors may require (to the extent permitted by any applicable laws and regulations and the facilities and requirements of any Relevant System concerned) the transfer by lawful sale, by gift or otherwise as permitted by law of such shares in respect of which, in the reasonable determination of the Directors, such information or evidence in relation to such Member or beneficial owner has not been provided. In the event that the Member cannot locate a purchaser qualified to acquire and hold the shares within such reasonable time as the Directors may determine then the Company may seek to locate (but does not guarantee that it will locate) an eligible purchaser of the shares and shall introduce the selling Member to such purchaser. If no purchaser of the shares is found by the selling Member or located by the Company before the time the Company requires the transfer to be made then the Member shall be obligated to sell the shares at the highest price that any purchaser has offered and the Member agrees that the Company shall have no obligation to the Member to find the best price for the relevant shares.
13.2 In the event that the Directors require the transfer of shares in accordance with Article 13.1 above the Directors will serve a notice (a Transfer Notice) on the relevant Member requiring such person within 28 (twenty eight) calendar days to transfer the applicable shares to another person. On and after the date of such Transfer Notice, and until registration of a transfer of the applicable shares to which it relates the rights and privileges attaching to the relevant shares will be suspended and not capable of exercise. To the extent permitted under, and subject to any applicable laws and regulations and the facilities and requirements of any Relevant System concerned, the Directors may instruct the operator of such Relevant System to convert any uncertificated share which is subject to a Transfer Notice into certificated form.
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13.3 Members who do not comply with the terms of any Transfer Notice shall forfeit or be deemed to have forfeited their shares immediately. The Directors, the Company and the duly authorised agents of the Company, including, without limitation, the registrar of the Company, shall not be liable to any Member or otherwise for any loss incurred by the Company as a result of any Member breaching the compulsory transfer restrictions referred to herein and any Member who breaches such restrictions is required under these Articles to indemnify the Company for any loss to the Company caused by such breach.
14 ALTERATION OF SHARES
14.1 Subject to the Act, where the Directors consider it necessary or desirable to undertake any action as is specified in sub-paragraphs (a) to (f) below, the Company may, pursuant to a Resolution of Directors obtained at any time where such action is in relation to, or in connection with or resulting from an Acquisition, or pursuant to a Resolution of Members at any time:
(a) consolidate and divide all or any of its shares into a smaller number than its existing shares;
(b) sub-divide its shares, or any of them, into shares of a larger number so, however, that in such sub-division the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be the same as in the case of the share from which the reduced share is derived;
(c) cancel any shares which at the date of the passing of the resolution have not been taken up or agreed to be taken up by any person;
(d) convert all or any of its shares denominated in a particular currency or former currency into shares denominated in a different currency, the conversion being effected at the rate of exchange (calculated to not less than three significant figures) current on the date of the resolution or on such other dates as may be specified therein;
(e) where its shares are expressed in a particular currency or former currency, denominate or redenominate those shares, whether by expressing the amount in units or subdivisions of that currency or former currency, or otherwise; and
(f) reduce any of the Company’s reserve accounts (including any share premium amount) in any manner.
14.2 Whenever as a result of a consolidation of shares any Members would become entitled to fractions of a share, the Directors may on behalf of those Members, sell the shares representing the fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Act, the Company) and distribute the net proceeds of sale in due proportion among those Members. The Directors may authorise some person to execute an instrument of transfer of the shares to or in accordance with the directions of the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
15 DISTRIBUTIONS
15.1 The Directors may, by a Resolution of Directors, authorise a distribution at a time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. For the avoidance of doubt, the requirements of this Article 15.1 shall not apply in respect of any issue of Ordinary Shares to the holders of Founder Preferred Shares in satisfaction of any Annual Dividend Amount or Change of Control Dividend Amount to which such holders are entitled pursuant to Articles 4.1 or 4.5.
15.2 Subject to the terms of these Articles, dividends may be paid in money, shares, or other property.
15.3 The Board may, before declaring any dividend, carry to reserve out of the profits of the Company (including any premiums received upon the issue of debenture or other securities of the Company) such sums as they think proper as a reserve or reserves which shall be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit. The Board may also without placing the same to reserve carry forward any profits which they may think prudent not to divide.
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15.4 All dividends or other distributions (including but not limited to dividends or distributions declared and paid in accordance with Clauses 6.1 and 6.2 of the Memorandum and Articles 2.12, 4.1, 4.5 and 4.7) shall be declared and paid only in respect of paid up shares and the holder of any share or shares not paid up as at the date such dividend is declared or such distribution is authorised shall not be entitled to such dividend or distribution. For the purposes of calculating each holder’s pro rata share of any dividend or distribution paid, reference shall only be had to paid up shares (as at the date the dividend is declared or the distribution authorised) of the class or classes to which the dividend or distribution relates. If any share is issued on terms providing that it shall rank for dividend or other distributions as from a particular date, that share shall rank for dividend or other distribution accordingly.
15.5 Any Resolution of Directors declaring a dividend or a distribution on a share may specify that the same shall be payable to the person registered as the holders of the shares at the close of business on a particular date notwithstanding that it may be a date prior to that on which the resolution is passed and thereupon the dividend or distribution shall be payable to such persons in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such dividend or distribution of transferors and transferees of any such shares.
15.6 Any Resolution of Directors declaring a dividend or other distribution may direct that it shall be satisfied wholly or partly by the distribution of assets, may authorise the issue of fractional certificates, may fix the value for distribution of any assets and may determine that cash shall be paid to any Member upon the footing of the value so fixed in order to adjust the rights of Members and may vest any assets in trustees.
15.7 Notice in writing of any dividend that may have been declared shall be given to each Member in accordance with Article 39 and all unclaimed dividends or other distributions may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed and the Company shall not be constituted a trustee thereof. All dividends unclaimed for 3 years after notice shall have been given to a Member may be forfeited by Resolution of Directors for the benefit of the Company, and shall cease to remain owing by the Company.
15.8 Any dividend or other moneys payable in respect of a share may be paid by electronic transfer or cheque sent by post to the registered address (or in the case of a Depositary, subject to the approval of the Board, such persons and addresses as the Depositary may require) of the person entitled or, if two or more persons are the holders of the share or are jointly entitled to it by reason of the death or bankruptcy of the holder, to the registered address of the one of those persons who is first named in the Register of Members or to such person and to such address as the person or persons entitled may in writing direct (and in default of which direction to that one of the persons jointly so entitled as the Directors shall determine). Every cheque shall be made payable to the order of the person or persons entitled or to such other person as the person or persons entitled may in writing direct and payment of the cheque shall be a good discharge to the Company. Any joint holder or other person jointly entitled to a share as aforesaid may give receipts for any dividend or other moneys payable in respect of the share. Every cheque is sent at the risk of the person entitled to the payment. If payment is made by electronic transfer, the Company is not responsible for amounts lost or delayed in the course of making that payment.
15.9 The Directors may deduct from any dividend or distribution or other monies, payable to any Member on or in respect of a share, all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to the shares.
15.10 No dividend or distribution or other moneys payable in respect of a share shall bear interest against the Company unless otherwise provided by the rights attached to the share and no dividend shall be paid on Treasury Shares.
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15.11 If, in respect of a dividend or other distribution or other amount payable in respect of a share, on any one occasion:
(a) a cheque is returned undelivered or left uncashed; or
(b) an electronic transfer is not accepted,
and reasonable enquiries have failed to establish another address or account of the person entitled to the payment, the Company is not obliged to send or transfer a dividend or other amount payable in respect of that share to that person until he notifies the Company of an address or account to be used for that purpose. If the cheque is returned undelivered or left uncashed or transfer not accepted on two consecutive occasions, the Company may exercise this power without making any such enquiries.
16 REDEMPTION OF SHARES AND TREASURY SHARES
16.1 The Company may purchase, redeem or otherwise acquire and hold its own shares with the consent of the Member whose shares are to be purchased, redeemed or otherwise acquired.
16.2 The purchase, redemption or other acquisition by the Company of its own shares is deemed not to be a distribution where:
(a) the Company purchases, redeems or otherwise acquires the shares pursuant to a right of a Member to have his shares redeemed or to have his shares exchanged for money or other property of the Company, or
(b) the Company purchases, redeems or otherwise acquires the shares by virtue of the provisions of section 176 of the Act.
16.3 Sections 60, 61 and 62 of the Act shall not apply to the Company.
16.4 Shares that the Company purchases, redeems or otherwise acquires pursuant to this Article 16 may be cancelled or held as Treasury Shares except to the extent that such shares are in excess of 50 (fifty) per cent. of the issued shares of that class in which case they shall be cancelled but they shall be available for reissue.
16.5 All rights and obligations attaching to a Treasury Share are suspended and shall not be exercised by the Company while it holds the share as a Treasury Share.
16.6 Treasury Shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with the Memorandum and Articles) as the Company may by Resolution of Directors determine.
16.7 Where shares are held by another body corporate of which the Company holds, directly or indirectly, shares having more than 50 (fifty) per cent. of the votes in the election of directors of the other body corporate, all rights and obligations attaching to the shares held by the other body corporate are suspended and shall not be exercised by the other body corporate.
17 MEETINGS AND CONSENTS OF MEMBERS
17.1 The Company shall hold the first annual general meeting within a period of 18 months following the date of an Acquisition. Not more than 15 months shall elapse between the date of one annual general meeting and the date of the next, unless such period is extended, or such requirement is waived, by a Resolution of Members.
17.2 Any Director may convene a meeting of the Members at such times and in such manner and places within or outside the BVI as the Director considers necessary or desirable.
17.3 Upon the written request of Members entitled to exercise 30 (thirty) per cent. or more of the voting rights in respect of the matter for which the meeting is requested the Directors shall convene a meeting of the Members.
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17.4 The Director convening a meeting shall give not less than 10 (ten) calendar days’ written notice of a meeting of the Members to:
(a) those Members who are entitled to vote at the meeting; and
(b) the other Directors.
17.5 A meeting of Members held in contravention of the requirement to give notice is valid if Members holding at least 90 (ninety) per cent. of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a Member at the meeting shall constitute a waiver in relation to all the shares which that Member holds.
17.6 The inadvertent failure of a Director who convenes a meeting to give notice of a meeting to a Member or another Director, or the fact that a Member or another Director has not received notice, does not invalidate the meeting.
17.7 If the Board considers that it is impractical or unreasonable for any reason to hold a meeting of Members at the time or place specified in the notice calling the meeting of Members, it may move and/or postpone the meeting of Members to another time and/or place. Notice of the business to be transacted at such moved and/or postponed meeting is not required. The Board must take reasonable steps to ensure that Members trying to attend the meeting of Members at the original time and/or place are informed of the new arrangements for the meeting of Members. Proxy forms can be delivered as specified in Article 19.10 until 48 (forty eight) hours before the rearranged meeting. Any postponed and/or moved meeting may also be postponed and/or moved under this Article 17.
17.8 In these Articles:
(a) a “physical meeting” means a general meeting held and conducted by physical attendance by members and/or proxies at a particular place; and
(b) a “hybrid meeting” means a general meeting held and conducted by both physical attendance by members and/or proxies at a particular place and by members and/or proxies also being able to attend and participate by electronic means without needing to be in physical attendance at that place.
17.9 The Directors may decide in relation to any general meeting (including a postponed or adjourned meeting) whether the general meeting is to be held as a physical meeting or as a hybrid meeting and shall, for the avoidance of doubt, be under no obligation to convene a meeting as a hybrid meeting whatever the circumstances.
17.10 Subject to the requirements of the Act, the Directors may make such arrangements as they may decide in connection with the facilities for participation by electronic means in a hybrid meeting. In the case of a hybrid meeting, the provisions of these Articles shall be treated as modified to permit any such arrangements and, in particular:
(a) references in these Articles to attending and being present at the meeting, including in relation to the quorum for the meeting and the right to vote at the meeting, shall be treated as including participating in the meeting by electronic means;
(b) the meeting shall be duly constituted and its proceedings valid if the chairman of the meeting is satisfied that adequate facilities have been made available so that all persons (being entitled to do so) attending the hybrid meeting by electronic means, may:
(i) participate in the business for which the meeting has been convened;
(ii) hear all persons who speak at the meeting; and
(iii) be heard by all other persons present at the meeting,
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but under no circumstances shall the inability of one or more members or proxies to access, or continue to access, the facilities for participation in the meeting despite adequate facilities being made available by the Company, affect the validity of the meeting or any business conducted at the meeting, provided that the meeting is quorate;
(c) all resolutions put to members at a hybrid meeting, including in relation to procedural matters, shall be decided on a poll;
(d) the Directors may authorise any voting application, system or facility in respect of the electronic platform for the hybrid meetings as they may see fit; and
(e) if it appears to the chairman of the meeting that the electronic facilities for a hybrid meeting have become inadequate for the purpose of holding the meeting then the chairman of the meeting may, with or without the consent of the meeting, interrupt or adjourn the meeting (before or after it has started) and the provisions in Article 18.7 shall apply to any such adjournment. All business conducted at the hybrid meeting up to the point of the adjournment shall be valid.
17.11 In relation to electronic participation at a general meeting, the right of a member to participate electronically shall include without limitation the right to speak, vote on a poll, be represented by a proxy and have access (including electronic access) to all documents which are required by the Act or these Articles to be made available at the meeting.
17.12 If, after the sending of notice of a hybrid meeting but before the meeting is held (or after the adjournment of a hybrid meeting but before the adjourned meeting is held), the Board considers that it is impracticable or unreasonable to hold the meeting at the time specified in the notice of meeting using the electronic facilities stated in the notice of meeting or made available prior to the meeting, they may change the meeting to a physical meeting, change the electronic facilities (and make details of the new facilities available in the manner stated in the notice of meeting), and/or postpone the time at which the meeting is to be held.
17.13 An adjourned general meeting or postponed general meeting may be held as a physical meeting or a hybrid meeting irrespective of the form of the general meeting which was adjourned or postponed.
17.14 The Directors or the chairman of the meeting may make any arrangement and impose any requirement or restriction they or he considers appropriate to ensure the security of a hybrid meeting including, without limitation, requirements for evidence of identity that is:
(a) necessary to ensure the identification of those taking part and the security of the electronic communication, and
(b) proportionate to those objectives.
17.15 The Board may make such arrangements as it shall consider to be appropriate for any of the following purposes:
(a) to regulate the level of attendance at any place specified for the holding of a general meeting or any adjournment of such a meeting;
(b) to ensure the safety of people attending at any such place, including without limitation deciding that physical attendance at a meeting by a Member or a proxy should be prohibited for public health reasons; or
(c) to facilitate attendance at such meeting or adjournment,
and may from time to time vary any such arrangements or make new arrangements in their place. Such arrangements may include, without prejudice to the generality of the foregoing, the issue of tickets or the use of some random means of selection or otherwise as the Board shall consider to be appropriate.
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18 PROCEEDINGS AT MEETINGS OF MEMBERS
18.1 The quorum of any meeting of Members shall be one Member present in person or by proxy and entitled to vote.
18.2 A Member shall be deemed to be present at a meeting of Members if he participates by telephone or other electronic means and all Members participating in the meeting are able to hear or read what is said or communicated by each other.
18.3 If a quorum is not present within half an hour from the time appointed for the meeting (or such longer period as the chairman of the meeting may think fit and allow), or if during a meeting such a quorum ceases to be present, the meeting, if convened by or upon the requisition of Members, shall be dissolved. If otherwise convened, it shall stand adjourned to such day, time and place as the chairman may determine or as otherwise may be specified in the original notice of meeting and, if at such adjourned meeting a quorum is not present within five minutes from the time appointed for the holding of the meeting, those Members present in person or by proxy shall be a quorum.
18.4 The chairman may invite any person to attend and speak at any meeting of Members of the Company where he considers this will assist in the deliberations of the meeting. The Directors may attend and speak at any meeting of Members and at any separate meeting of the holders of any class or series of shares.
18.5 The notice of meeting may also specify a time (which shall not be more than 48 (forty eight) hours before the time fixed for the meeting) by which a person must be entered on the Register of Members in order to have the right to attend or vote at the meeting. Changes to entries on the Register of Members after the time so specified in the notice shall be disregarded in determining the rights of any person to so attend or vote.
18.6 The Directors may determine that those persons who are entered on the Register of Members at the close of business on a day determined by the Directors (which may not be more than 21 (twenty one) calendar days before the date on which the notices of meeting were sent) shall be the persons who are entitled to receive notice.
18.7 The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place. When a meeting is adjourned for 14 (fourteen) calendar days or more, at least 7 (seven) calendar days’ notice shall be given specifying the day, time and place of the adjourned meeting and the general nature of the business to be transacted. Otherwise it shall not be necessary to give any such notice.
18.8 At any meeting of Members, the chairman (if any) of the Board or, if he is absent or unwilling, any one of the other Directors present at the meeting (as determined by the Director(s) present or, in the absence of such determination, by the Members present), shall preside as chairman of the meeting. If none of the Directors are present or are present but unwilling to preside, the Members present and entitled to vote shall choose one of their number to preside as chairman of the meeting.
18.9 At any meeting of the Members the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any Member present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting.
18.10 The demand for a poll may be withdrawn before the poll is taken but only with the consent of the chairman. A demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.
18.11 A poll shall be taken as the chairman directs and he may appoint scrutineers (who need not be Members) and fix a day, time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
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18.12 A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or at such day, time and place as the chairman directs not being more than 30 (thirty) calendar days after the poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll was demanded. Subject to Article 18.10, if a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.
18.13 No notice need be given of a poll not taken forthwith if the day, time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case at least 7 (seven) calendar days’ notice shall be given specifying the day, time and place at which the poll is to be taken.
18.14 In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall not be entitled to a casting vote in addition to any other vote he may have.
18.15 The provisions of this Article 18 in relation to any meeting of Members shall apply equally to any separate meeting of a class of Members.
19 VOTES OF MEMBERS
19.1 Subject to any rights or restrictions attached to any shares or class of shares and to the provisions of the Articles:
(a) on a show of hands every Member who is present in person (or in the case of corporations, present by a duly authorised representative) or by proxy shall have one vote; and
(b) on a poll every Member present in person (or in the case of corporations, present by a duly authorised representative) or by proxy shall have one vote for every share of which he is the holder.
19.2 The following applies where shares are jointly owned:
(a) if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of Members and may speak as a Member;
(b) if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and
(c) if two or more of the joint owners are present in person or by proxy they must vote as one and in the event of disagreement between any of the joint owners of shares then the vote of the joint owner whose name appears first (or earliest) in the Register of Members in respect of the relevant shares shall be recorded as the vote attributable to the shares.
19.3 A Member in respect of whom an order has been made by any court having jurisdiction (whether in the BVI or elsewhere) in matters concerning mental disorder may vote, whether by a show of hands or by a poll, by his attorney, receiver or other person authorised in that behalf appointed by that court, and any such attorney, receiver or other person may vote by proxy. Evidence to the satisfaction of the Board of the authority of the person claiming to exercise the right to vote shall be deposited at the Office, or at such other place within the BVI as is specified in accordance with these Articles for the deposit of instruments of proxy, before the time appointed for holding the meeting or adjourned meeting or the holding of a poll at which the right to vote is to be exercised and in default the right to vote shall not be exercisable.
19.4 Unless the Directors otherwise decide, no Member shall be entitled to vote at any meeting of Members or at any separate meeting of the holders of any class of shares in the Company, either in person or by proxy, in respect of any share held by him or to exercise rights as a holder of shares unless all calls and other sums presently payable by him in respect of shares of which he is the holder or one of the joint holders have been paid.
19.5 No Member shall, if the Directors so determine, be entitled in respect of any share held by him to attend or vote (either personally or by representative or by proxy) at any meeting of Members or separate class meeting of the Company or to exercise any other right conferred by membership in relation to any such
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meeting if he or any other person appearing to be interested in such shares has failed to comply with a Disclosure Notice within 14 (fourteen) calendar days, in a case where the shares in question represent at least 0.25 (nought point two five) per cent. of their class, or within 7 (seven) calendar days, in any other case, from the date of such Disclosure Notice. These restrictions will continue until the information required by the notice is supplied to the Company or until the shares in question are transferred or sold in circumstances specified for this purpose in these Articles.
19.6 No objection shall be raised to the entitlement of any voter or to any person to vote as he did except at the meeting or adjourned meeting or poll at which the vote objected to is or may be tendered, and every vote not disallowed at such meeting or poll shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.
19.7 On a poll, a person entitled to more than one vote need not if he votes, use all his votes or cast all votes he uses in the same way.
19.8 A Member may appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the Company. A proxy need not be a Member. A Member may appoint more than one proxy to attend on the same occasion, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him. When two or more valid but differing appointments of proxy are delivered or received for the same share for use at the same meeting, the one which is last validly delivered or received (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which appointment was last validly delivered or received, none of them shall be treated as valid in respect of that share.
19.9 The instrument appointing a proxy shall be in writing in any usual form (or in another form approved by the Board) under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney so authorised.
19.10 The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority shall be:
(a) delivered to the Office or at such other place as is specified for that purpose in the notice of meeting or in the instrument of proxy issued by the Company not less than 48 (forty eight) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote;
(b) given by email or any other electronic method to the address of the Company specified for that purpose in the notice of the meeting or in the instrument of proxy issued by the Company not less than 48 (forty eight) hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote and subject to the need to deposit any power of attorney or other authority (if any) under which an instrument of proxy is signed, an instrument so given shall be deemed to be duly deposited. However any power of attorney or other authority (if any) under which an instrument of proxy is executed, or a notarially certified copy of such power or authority, shall not be given by email or any other electronic method;
(c) in the case of a poll taken more than 48 hours after it is demanded, delivered as required by sub-paragraph (a) or (b) of this Article 19.10 not less than 24 (twenty four) hours before the time appointed for the taking of the poll; or
(d) in the case of a poll not taken immediately but taken not more than 48 (forty eight) hours after it was demanded, the time at which it was demanded,
and in default and unless the Board directs otherwise, the instrument of proxy shall not be treated as valid.
19.11 No instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution, except at an adjourned meeting or on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within 12 months from such date. Notwithstanding this Article, the Directors may accept the appointment of a proxy at any time prior to holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote.
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19.12 Without limiting the foregoing, in relation to any shares which are held in uncertificated form, the Board may from time to time permit appointments of a proxy to be made by means of an uncertificated proxy instruction and may in a similar manner permit supplements to, or amendments or revocations of, any such uncertificated proxy instruction to be made by like means. The Board may in addition prescribe the method of determining the time at which any such uncertificated proxy instruction (and/or other instruction or notification) is to be treated as received by the Company or a participant acting on its behalf. The Board may treat any such uncertificated proxy instruction which purports to be or is expressed to be sent on behalf of a holder of a share as sufficient evidence of the authority of the person sending that instruction to send it on behalf of that holder.
19.13 A vote given or poll demanded in accordance with the terms of an instrument of proxy shall be valid notwithstanding the death or insanity of the principal or the revocation or determination of the instrument of proxy or of the authority under which the instrument of proxy was executed or the transfer of the share in respect of which the instrument of proxy is given, provided that no intimation in writing of such death, insanity, revocation or determination shall have been received by the Company at the Office or at such other place at which the instrument of proxy was duly deposited before the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll.
19.14 Notwithstanding anything contained in these Articles, and subject to such being permissible under the Law, the Directors of the Company may elect to provide a facility for using electronic voting and polling by the holders for any purpose deemed appropriate by the Directors, including without limitation, the polling of holders and electronic voting by holders at any meeting of Members.
19.15 Any vote given by proxy may be given by email or any other electronic method (including any instruction or message under a Relevant System) to the address of the Company or person nominated by the Company and specified for that purpose in the notice of meeting or in the instrument of proxy issued by the Company (unless using a Relevant System in which case such message may be received by the Company’s agent) and, with the exception of votes cast using a Relevant System subject to the need to deposit any power of attorney or other authority (if any) under which a vote given by proxy is made, a vote so given shall be deemed to be duly made. However, any power of attorney or other authority (if any) under which a vote given by proxy is made, or a notarially certified copy of such power or authority, shall not be given by email or any other electronic method.
19.16 Subject to the specific provisions contained in this Article 19 for the appointment of representatives of Members other than individuals the right of any individual to speak for or represent a Member shall be determined by the law of the jurisdiction where, and by the documents by which, the Member is constituted or derives its existence. In case of doubt, the Directors may seek legal advice and unless and until a court of competent jurisdiction shall otherwise rule, the Directors may rely and act upon such advice without incurring any liability to any Member or the Company.
19.17 Any corporation which is a Member may, by resolution of its Board or other governing body or officers authorised by such body, authorise such person or persons as it thinks fit to act as its representative at any meeting of the Company or at any meeting of the holders of shares of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Member. A corporation present at any meeting by such representative shall be deemed for the purposes of these Articles to be present in person.
19.18 The chairman of any meeting at which a vote is cast by proxy or on behalf of any Member other than an individual may at the meeting but not thereafter call for a notarially certified copy of such proxy or authority which shall be produced within 7 (seven) calendar days of being so requested or the votes cast by such proxy or on behalf of such Member shall be disregarded.
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19.19 An action that may be taken by the Members at a meeting may also be taken by a Resolution of Members consented to in writing, without the need for any prior notice. If any Resolution of Members is adopted otherwise than by the unanimous written consent of all Members, a copy of such resolution shall forthwith be sent to all Members not consenting to such resolution. The consent may be in the form of counterparts, each counterpart being signed by one or more Members. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which eligible Members holding a sufficient number of votes of shares to constitute a Resolution of Members have consented to the resolution by signed counterparts.
20 SQUEEZE OUT PROVISIONS
Section 176 of the Act shall not apply to the Company.
21 NUMBER OF DIRECTORS
21.1 The Directors shall be elected by Resolution of Members or by Resolution of Directors for such term as the Members or Directors, as applicable, determine.
21.2 The minimum number of Directors shall be one and there shall be no maximum number of Directors.
22 ALTERNATE DIRECTORS
22.1 Any Director (other than an alternate Director) may by notice sent to or deposited at the Office or tabled at the meeting of the Board or in any other manner approved by the Board appoint any other Director or any other person to be an alternate Director to attend and vote in his place at any meeting of the Directors at which he is not personally present or to undertake and perform such duties and functions and to exercise such rights as he would personally.
22.2 Any such appointment may be made generally or specifically or for any period or for any particular meeting and with and subject to any particular restrictions. An alternate Director need not be a Member.
22.3 A Director may by notice delivered to the Office or tabled at a meeting of the Board revoke the appointment of his alternate Director and, subject to the provisions of this Article 22, appoint another person in his place. If a Director ceases to hold the office of Director or if he dies, the appointment of his alternate Director automatically ceases. If a Director retires but is reappointed or deemed reappointed at the meeting at which his retirement takes effect, a valid appointment of an alternate Director which was in force immediately before his retirement continues to operate after his reappointment as if he has not retired. The appointment of an alternate Director ceases on the happening of an event which, if he were a Director otherwise appointed, would cause him to vacate office.
22.4 Every alternate Director while he holds office as such shall be entitled:
(a) if his appointor so directs the secretary, to notice of meetings of the Directors and all committees of the Board of which his appointor is a member;
(b) to attend and to exercise (subject to any restrictions) all the rights and privileges of his appointor at all such meetings at which his appointor is not personally present; and
(c) to sign written resolutions on behalf of his appointor.
22.5 A Director acting as alternate Director has a separate vote at meetings of the Board and committees of the Board for each Director for whom he acts as alternate Director but he counts as only one for the purpose of determining whether a quorum is present.
22.6 Without prejudice to Article 22.3 every alternate Director shall ipso facto vacate office if and when his appointment expires by effluxion of time.
22.7 Save as otherwise provided in these Articles, an alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his own acts and defaults and he shall not be deemed to be the agent of the Director appointing him.
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23 POWERS OF DIRECTORS
23.1 The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors. The Directors have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The Directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or the Articles required to be exercised by the Members.
23.2 The continuing Directors may act notwithstanding any vacancy in their body.
23.3 Subject as hereinafter provided, the Directors may exercise all the powers of the Company to borrow or raise money (including the power to borrow for the purpose of redeeming shares) and secure any debt or obligation of or binding on the Company in any manner including by the issue of debentures (perpetual or otherwise) and to secure the repayment of any money borrowed raised or owing by mortgage charge pledge or lien upon the whole or any part of the Company’s undertaking property or assets (whether present or future) and also by a similar mortgage charge pledge or lien to secure and guarantee the performance of any obligation or liability undertaken by the Company or any third party.
23.4 All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors.
23.5 Section 175 of the Act shall not apply to the Company.
24 DELEGATION OF DIRECTORS’ POWERS
24.1
The Directors may, by Resolution of Directors, designate one or more committees, each consisting of one or more Directors, and delegate one or more of their powers, including the power to affix the Seal, to the committee. They may also delegate to any other Director (whether holding any other executive office or not) such of their powers as they consider desirable to be exercised by him. Any such delegation may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee shall be governed by the Articles regulating the proceedings of Directors so far as they are capable of applying and so far as the same are not superseded by any provisions in the Resolution of Directors establishing the committee, provided that it is not necessary to give notice of a meeting of that committee to Directors other than the Director or Directors who form the committee.
24.2 The Directors have no power to delegate to a committee of Directors any of the following powers:
(a) to amend the Memorandum or the Articles;
(b) to designate committees of Directors;
(c) to delegate powers to a committee of Directors;
(d) to appoint or remove Directors;
(e) to appoint or remove an agent;
(f) to approve a plan of merger, consolidation or arrangement;
(g) to make a declaration of solvency or to approve a liquidation plan; or
(h) to make a determination that the Company will immediately after a proposed distribution, satisfy the solvency test (as defined in the Act).
24.3 Articles 24.1 and 24.2 do not prevent a committee of Directors, where authorised by the Resolution of Directors appointing such committee or by a subsequent Resolution of Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.
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24.4 The Directors may, by power of attorney signed by any one or more persons duly authorised, appoint any person either generally or in respect of any specific matter, to represent the Company, act in its name and execute documents on its behalf.
25 APPOINTMENT AND RETIREMENT OF DIRECTORS
25.1 Subject to the Act and these Articles, the Directors shall have power from time to time, without sanction of the Members, to appoint any person to be a Director, either to fill a casual vacancy or as an additional Director. Subject to the Act and these Articles, the Directors shall also have power, from time to time, without sanction of the Members, to remove a Director whose proposed removal has been notified to the Company in accordance with Article 25.3. A vacancy in relation to Directors occurs if a Director dies or otherwise ceases to hold office prior to the expiration of his term of office.
25.2 Subject to the Act and these Articles, the Members may by a Resolution of Members appoint any person as a Director and remove any person as a Director and there shall be no requirement for the appointment of two or more Directors to be considered separately.
25.3 For so long as the Founder Entity or one or more of its Affiliates and/or its Permitted Transferee(s) in aggregate hold 20 (twenty) per cent. or more of the Founder Preferred Shares in issue, such Founder Entity (or if it elects, a single specified Founder, Affiliate or Permitted Transferee (which may be different for any appointment or subsequent appointment)) shall be entitled from time to time to nominate up to a maximum of three persons as directors of the Company and, subject to such persons having consented in writing to such appointment pursuant to section 112 of the Act and not being disqualified for appointment pursuant to section 111 of the Act, the Directors shall by a Resolution of Directors appoint any such persons as directors of the Company (each an Appointee). In the event the Founder Entity (or its electee as aforesaid) notifies the Company in writing to remove any Appointee nominated by it the other Directors shall by a Resolution of Directors remove such Appointee, and in the event of such a removal the Founder Entity (or its electee as aforesaid) shall have the right to nominate another person as a director of the Company to fill such vacancy (and to subsequently request his removal, and to subsequently nominate any further persons as a director and subsequently request their removal from time to time) in accordance with the provisions of this Article 25 and in such circumstances the provisions of this Article 25 shall apply.
25.4 For the avoidance of doubt, no more than three Directors in total may be appointed to the Board at any one time pursuant to Article 25.3.
25.5 A Director is appointed for such term as may be specified in the Resolution of Directors or Resolution of Members appointing him. Where the Directors appoint a person as Director to fill a vacancy, such replacement Director may be appointed for any term as the Directors determine.
25.6 Each Director holds office for the term, if any, fixed by the Resolution of Members or Resolution of Directors appointing or otherwise provided for in the relevant Director’s service agreement or letter of appointment (if applicable), or until his earlier death, resignation or removal. If no term is fixed on the appointment of a Director, the Director serves indefinitely until his earlier death, resignation or removal.
25.7 A person must not be appointed a Director unless he has in writing consented to being a Director of the Company.
25.8 A Director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company at the office of its registered agent or from such later date as may be specified in the notice, provided in both instances that such resignation is in accordance with the terms of the relevant Director’s service agreement or letter of appointment (if applicable). A Director shall resign forthwith as a Director if he is, or becomes, disqualified from acting as a Director under the Act.
25.9 A Director is not required to hold a share as a qualification to office.
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26 DISQUALIFICATION AND REMOVAL OF DIRECTORS
26.1 The office of a Director shall be vacated if:
(a) he ceases to be a Director by virtue of any provision of the Law or he ceases to be eligible to be a Director or is disqualified in accordance with the Law;
(b) he becomes bankrupt or makes any arrangement or composition with his creditors generally or otherwise has any judgment executed on any of his assets;
(c) he becomes of unsound mind or incapable or an order is made by a court having jurisdiction (whether in the BVI or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver or other person to exercise powers with respect to his property or affairs;
(d) he is absent from meetings of Directors for a consecutive period of 12 months and the other Directors resolve that his office shall be vacated;
(e) he dies;
(f) he resigns his office by written notice to the Company;
(g) he is removed by a Resolution of Members passed at a meeting of Members called for the purposes of removing the Director or for purposes including the removal of the Director or by a written resolution passed by a Special Resolution of Members;
(h) he is removed by a Resolution of Directors passed for the purposes of Article 25.3; or
(i) where there are more than two Directors, all the other Directors request him to resign in writing,
and for the purposes of this Article 26.1, Section 114 of the Act shall not apply.
27 DIRECTORS’ REMUNERATION AND EXPENSES
27.1 The Directors shall be remunerated for their services at such rate as the Directors shall determine.
27.2 The Directors may grant special remuneration to any Director who, being so called upon, shall be willing to render any special or extra services to the Company. Such special remuneration may be made payable to such Director in addition to or in substitution for his ordinary remuneration as a Director and may be made payable by a lump sum or by way of salary or commission or by any or all of those models or otherwise.
27.3 The Directors may be paid:
(a) all reasonable travelling, hotel and other out of pocket expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors or meetings of Members or separate meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties; and
(b) all reasonable expenses properly incurred by them in seeking independent professional advice on any matter that concerns them in the furtherance of their duties as a Director of the Company.
28 OFFICERS AND AGENTS
28.1 The Company may by Resolution of Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a Chairman of the Board, a Chief Executive Officer, one or more vice-presidents, secretaries, assistant secretaries and treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person.
28.2 The officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by Resolution of Directors.
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28.3 The emoluments of all officers shall be fixed by Resolution of Directors.
28.4 The officers of the Company shall hold office until their death, resignation or removal. Any officer elected or appointed by the Directors may be removed at any time, with or without cause, by Resolution of Directors. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors.
28.5 Subject to the provisions of the Act, the Directors may appoint one or more of their number to the office of managing director or to any other executive office in the Company and may enter into an agreement or arrangement with any Director for his employment by the Company or for the provision by him of any services outside the scope of the ordinary duties of a director. Any such appointment, agreement or arrangement may be made upon such terms as the Directors determine and they may remunerate any such Director for his services as they determine.
28.6 The Directors may, by a Resolution of Directors, appoint any person, including a person who is a Director, to be an agent of the Company. An agent of the Company shall have such powers and authority of the Directors, including the power and authority to affix the Seal, as are set forth in the Articles or in the Resolution of Directors appointing the agent, except that no agent has any power or authority with respect to the matters specified in Article 24.2. The Resolution of Directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. The Directors may remove an agent appointed by the Company and may revoke or vary a power conferred on him.
29 DIRECTORS’ INTERESTS
29.1 A Director shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other Directors.
29.2 For the purposes of Article 29.1, a disclosure to all other Directors to the effect that a Director is a member, director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.
29.3 Subject to any applicable rules or regulations, a Director who is interested in a transaction entered into or to be entered into by the Company may:
(a) vote on a matter relating to the transaction;
(b) attend a meeting of Directors at which a matter relating to the transaction arises and be included among the Directors present at the meeting for the purposes of a quorum; and
(c) sign a document on behalf of the Company, or do any other thing in his capacity as a Director, that relates to the transaction,
and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
30 DIRECTORS’ GRATUITIES AND PENSIONS
The Directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any Director who has held but no longer holds any executive office or employment with the Company or with any body corporate which is or has been a subsidiary of the Company or a predecessor in business of the Company or of any such subsidiary, and for any member of his family (including a spouse and a former spouse) or any person who is or who was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.
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31 PROCEEDINGS OF DIRECTORS
31.1 Subject to the provisions of these Articles, the Directors may regulate their proceedings as they think fit. A Director may, and the secretary at the request of a Director shall, call a meeting of the Directors by notifying each other Director in writing or otherwise. Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes the chairman of the meeting shall have a second or casting vote. A Director who is also an alternate Director shall be entitled to a separate vote for each Director for whom he acts as alternate in addition to his own vote.
31.2 A Director shall be given notice of meetings of Directors. A meeting of Directors held without notice having been given to all Directors shall be valid if all the Directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a Director at a meeting shall constitute a waiver by that Director. The inadvertent failure to give notice of a meeting to a Director, or the fact that a Director has not received the notice, does not invalidate the meeting.
31.3 The quorum for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed at any other number shall be two except where there is a sole Director, in which case the quorum shall be one. Subject to Article 22.5, a person who is an alternate Director shall be counted in the quorum.
31.4 The Directors or any committee thereof may meet at such times and in such manner and places within or outside the BVI as the notice calling the meeting provides.
31.5 A meeting of Directors may be held notwithstanding that such Directors may not be in the same place if a Director is, by any means, in communication with one or more other Directors so that each Director participating in the communication can hear or read what is said or communicated by each of the others and any such meeting shall be deemed to be held in the place in which the chairman of the meeting is present and each such Director shall be deemed to be present at such meeting and shall be counted when reckoning a quorum.
31.6 The continuing Directors or the only continuing Director may act notwithstanding any vacancies in their number, but, if the number of Directors is less than the number fixed as the quorum, the continuing Directors or Director may act only for the purpose of filling vacancies or of calling a meeting of Members. In lieu of minutes of a meeting a sole continuing Director shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes.
31.7 The Directors may appoint one of their number to be the chairman of the Board and may at any time remove him from that office. Unless he is unwilling to do so, the Director so appointed shall preside at every meeting of Directors at which he is present. But if there is no Director holding that office, or if the Director holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting, the Directors present may appoint one of their number to be chairman of the meeting.
31.8 All acts done by a meeting of Directors, or of a committee of Directors, or by a person acting as a Director shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any Director or that any of them were disqualified from holding office, be as valid as if every such person had been duly appointed and was qualified.
31.9 An action that may be taken by the Directors or a committee of Directors at a meeting by Resolution of Directors may also be taken by a Resolution of Directors or a resolution of a committee of Directors consented to in writing without the need for any notice. The consent may be in the form of counterparts each counterpart being signed by one or more Directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which sufficient Directors have consented to the resolution by signed counterparts.
31.10 The Company shall keep a register of Directors containing:
(a) the names and addresses, date and place of birth, and nationality of the persons who are Directors;
(b) the date on which each person whose name is entered in the register was appointed as a Director;
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(c) the date on which each person named as a Director ceased to be a Director; and
(d) such other information as may be prescribed by the Act and/or any applicable law, rules and regulations.
31.11 The register of Directors may be kept in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until a Resolution of Directors determining otherwise is passed, the magnetic, electronic or other data storage shall be the original register of Directors.
32 INDEMNIFICATION
32.1 Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who:
(a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a Director; or
(b) is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.
32.2 The indemnity in Article 32.1 only applies if the person acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful.
32.3 The decision of the Directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless a question of law is involved.
32.4 The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful.
32.5 The Company may purchase and maintain insurance in relation to any person who is or was a Director, officer or liquidator of the Company, or who at the request of the Company is or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles.
33 RECORDS
33.1 The Company shall keep the following documents at the office of its registered agent:
(a) the Memorandum and the Articles;
(b) the Register of Members, or a copy of the Register of Members;
(c) the register of Directors, or a copy of the register of Directors; and
(d) copies of all notices and other documents filed by the Company with the Registrar in the previous 10 (ten) years.
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33.2 If the Company maintains only a copy of the Register of Members or a copy of the register of Directors at the office of its registered agent, it shall:
(a) within 15 (fifteen) calendar days of any change in either register, notify the registered agent in writing of the change; and
(b) provide the registered agent with a written record of the physical address of the place or places at which the original Register of Members or the original register of Directors is kept.
33.3 The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the BVI, as the Directors may determine:
(a) minutes of meetings and Resolutions of Members and classes of Members;
(b) minutes of meetings and Resolutions of Directors and committees of Directors; and
(c) an impression of the Seal, if any.
33.4 Where any original records referred to in this Article 33 are maintained other than at the office of the registered agent of the Company, and the place at which the original records is changed, the Company shall provide the registered agent with the physical address of the new location of the records of the Company within 14 (fourteen) calendar days of the change of location.
33.5 The records kept by the Company under this Article 33 shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act.
33.6 A Director is entitled, on giving reasonable notice, to inspect the documents and records of the Company:
(a) in written form;
(b) without charge; and
(c) at a reasonable time specified by the Director,
and to make copies of or take extracts from the documents and records.
33.7 Subject to Article 33.8, a Member is entitled, on giving written notice to the Company, to inspect:
(a) the Memorandum and Articles;
(b) the Register of Members;
(c) the register of Directors; and
(d) minutes of meetings of Members and Resolutions of Members and of those classes of Members of which he is a Member,
and to make copies of or take extracts from the documents and records.
33.8 The Directors may, if they are satisfied that it would be contrary to the Company’s interests to allow a Member to inspect any document, or part of a document, specified in Article 33.7(b), 33.7(c) or 33.7(d), refuse to permit the Member to inspect such document or limit the inspection of such document, including limiting the making of copies or the taking of extracts from the records.
33.9 The rights of inspection of a Director and a Member shall be exercisable during ordinary business hours.
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34 REGISTERS OF CHARGES
34.1 The Company shall maintain at the office of its registered agent a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company:
(a) the date of creation of the charge;
(b) a short description of the liability secured by the charge;
(c) a short description of the property charged;
(d) the name and address of the trustee for the security or, if there is no such trustee, the name and address of the chargee;
(e) unless the charge is a security to bearer, the name and address of the holder of the charge; and
(f) details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge.
35 CONTINUATION
The Company may by Resolution of Directors or Resolution of Members continue as a company incorporated under the laws of a jurisdiction outside the BVI in the manner provided under those laws. Notwithstanding anything to the contrary in these Articles, any matters which the Directors consider is necessary or desirable to approve in relation to, in connection with or resulting from an Acquisition (whether before or after the closing of an Acquisition), including, without limitation any continuance as a corporation under the laws of the State of Delaware and any initial certificate of incorporation of the domesticated Delaware corporation, the manner (if any) of exchanging or converting shares, rights or securities of, or interests in, the Company pursuant to Delaware law or any plan of domestication permitted by Delaware law, may be approved at any time by a Resolution of Directors or a Resolution of Members (upon the approval of a Resolution of Members on which only the holders of Founder Preferred Shares shall be entitled to vote and in respect of which the holders of Ordinary Shares shall have no right to receive notice of or attend any meeting of Members or vote on such resolution).
36 SEAL
36.1 The Seal (if any) shall only be used by the authority of the Directors or of a committee of Directors authorised by the Directors.
36.2 Subject to the provisions of the Act, the Directors may determine to have an official seal for use in any country, territory or place outside the BVI, which shall be a facsimile of the Seal. Any such official seal shall in addition bear the name of every territory, district or place in which it is to be used.
36.3 The Directors may determine who shall sign any instrument to which the Seal or any official seal is affixed and, in respect of the Seal, unless otherwise so determined: (i) share certificates need not be signed or, if signed, a signature may be applied by mechanical or other means or may be printed; and (ii) every other instrument to which the Seal is affixed shall be signed by a Director and by the secretary or by a second Director. A person affixing the Seal or any official seal to any instrument shall certify thereon the date upon which and the place at which it is affixed (or, in the case of a share certificate, on which the Seal may be printed). The Directors may also decide, either generally or in a particular case, that a signature or the Seal may be dispensed with or affixed by mechanical means.
37 ACCOUNTS AND AUDIT
37.1 No Member shall (as such) have any right of inspecting any accounting records or other book or document of the Company except as conferred by the Act or authorised by the Directors or by these Articles.
37.2 The Company may appoint auditors to examine the accounts and report thereon in accordance with the Law.
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38 CAPITALISATION OF PROFITS
38.1 The Directors may by a Resolution of Directors:
(a) resolve to capitalise any undistributed profits of the Company or any part of the amount for the time being standing to the credit of any of the Company’s reserve accounts (including a capital reserve, profit and loss account or revenue reserve) or subject as hereinafter provided any such amount standing to the credit of a share premium account or capital redemption reserve fund, whether or not available for distribution;
(b) appropriate the sum resolved to be capitalised to the Members who, in the case of any amount capable of being distributed by way of dividend, would have been entitled thereto if so distributed or, in the case of any amount not so capable, to the Members who would have been entitled thereto on a winding-up of the Company and in either case in the same proportions and apply that sum on their behalf in or towards:
(i) paying up the amounts (if any) for the time being unpaid on shares held by them respectively, or
(ii) paying up in full unissued shares or debentures of an amount equal to that sum,
and allot the shares or debentures, credited as paid up, to the Members (or as they may direct) in those proportions, or partly in one way and partly in the other;
(c) make any arrangements it thinks fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where shares or debentures become distributable in fractions the Board may deal with the fractions as it thinks fit, including issuing fractional certificates, disregarding fractions or selling shares or debentures representing the fractions to a person for the best price reasonably obtainable and distributing the net proceeds of the sale in due proportion amongst the Members (except that if the amount due to a Member is less than $10.00, or such other sum as the Board may decide, the sum may be retained for the benefit of the Company);
(d) authorise a person to enter (on behalf of all the Members concerned) an agreement with the Company providing for either:
(i) the allotment to the Members respectively, credited as paid up, of shares or debentures to which they may be entitled on the capitalisation; or
(ii) the payment by the Company on behalf of the Members (by the application of their respective proportions of the reserves resolved to be capitalised) of the amounts or part of the amounts remaining unpaid on their existing shares,
an agreement made under the authority being effective and binding on all those Members; and
(e) generally do all acts and things required to give effect to the resolution.
38.2 Notwithstanding any other provision of these Articles, but subject to the rights attached to shares, the Board may fix any date as the record date for a dividend, distribution, allotment or issue. The record date may be on or at any time before or after a date on which the dividend, distribution, allotment or issue is declared, made or paid.
39 NOTICES
39.1 Any notice and any account, balance sheet, report or other document (each a Document) to be given to or by any person pursuant to these Articles shall be in writing except that a notice calling a meeting of the Directors or a committee of Directors need not be in writing.
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39.2 The Company may give any Document either:
(a) personally;
(b) by sending it by post in a prepaid envelope addressed to the Member at his registered address or by leaving it at that address or by sending it to or leaving it at such other address nominated for the purpose;
(c) by transmitting it by facsimile to the facsimile number provided by the Member;
(d) by sending it by electronic means (other than by transmission by facsimile) to such electronic address from time to time held by the Company for that Member, or by means of a website, unless such Member notifies the Company otherwise and unless and until the Company receives such notice, a Member is deemed to agree to the sending of Documents by electronic means in any particular electronic form and to the sending of documents by means of a website; or
(e) if service cannot be effected in accordance with sub-paragraphs (a) to (d) inclusive above, in any other manner permitted by the Act.
39.3 Any Document to be given to the Company pursuant to these Articles may be given either:
(a) by being sent by post in a prepaid envelope addressed to the Company (i) at its Office, or by leaving it at such address or (ii) by sending it to or leaving it at such other address nominated by the Directors from time to time for the purpose;
(b) by transmitting it by facsimile (addressed to the Company) (i) to the Office or (ii) to such other address nominated by the Directors from time to time for the purpose;
(c) by sending it by electronic means (other than by transmission by facsimile) to (i) such electronic address, or by means of a website, from time to time provided by the Company for the purpose of the service of Documents upon it, or (ii) such other electronic address nominated by the Directors from time to time for the purpose; or
(d) if service cannot be effected in accordance with sub-paragraphs (a) to (c) inclusive above, in any other manner permitted by the Act.
39.4 In the case of joint holders of a share, all Documents shall be given to the joint holder whose name stands first in the Register of Members in respect of the joint holding and Documents so given shall be sufficient disclosure to all the joint holders.
39.5 A Member present, either in person or by proxy, at any meeting of the Company or of the holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.
39.6 Every person who becomes entitled to a share shall be bound by any notice in respect of that share which, before his name is entered in the Register of Members, has been duly given to a person from which he derives his title.
39.7 Service of any Document by post shall be proved by showing the date of posting, the address thereon and the fact of prepayment.
39.8 A Document addressed to the Office, a registered address or an address for service is, if sent by post, deemed to be given 2 (two) calendar days after it has been posted or, if such day is not a Business Day, on the next Business Day, and in proving service it is sufficient to prove that the envelope containing the Document was properly addressed and duly posted.
39.9 A Document not sent by post but left at the Office, a registered address or at an address for service is deemed to be given on the day it is left or, if such day is not a Business Day, on the next Business Day.
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39.10 Where a Document is sent by facsimile, service of the Document shall be deemed to be effected by transmitting the facsimile to the facsimile number provided by the intended recipient and shall be deemed to have been received on the same day that it was transmitted or, if such day is not a Business Day, on the next Business Day, and it shall not be necessary for the receipt of the facsimile to be acknowledged by the recipient. Where a notice is given by e-mail, service shall be deemed to be effected by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent or, if such day is not a Business Day, on the next Business Day, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient.
39.11 Any Document served by an advertisement or notice published in a newspaper or the BVI Gazette is deemed to be given to all Members and other persons entitled to receive it at noon on the day when the advertisement or notice appears or, where an advertisement or notice is given by more than one advertisement or notice and the advertisements or notices appear on different days, at noon on the last of the days when the advertisements or notices appear.
39.12 Any Document served or delivered by the Company by any other means is deemed to be served when the Company has taken the action it has been authorised to take for that purpose.
39.13 A Document may be given by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a Member by sending or delivering it, in any manner authorised by these Articles for the giving of Documents to a Member, addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt or curator of the Member or by any like description at the address, if any, supplied for that purpose by the persons claiming to be so entitled. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death, bankruptcy or incapacity had not occurred. If more than one person would be entitled to receive a notice in consequence of the death, bankruptcy or incapacity of a Member, notice given to any one of such persons shall be sufficient notice to all such persons.
40 WINDING UP
40.1 At any time after the closing of an Acquisition, the Directors may by a Resolution of Directors approve the winding up of the Company to occur where the Directors reasonably conclude that the Company is or will become a Dormant Company (and will be at the time of the winding up).
40.2 Save in the circumstances provided in Article 40.1 and Article 42, a Special Resolution of Members is required to approve the voluntary winding-up of the Company.
40.3 If any proposal to wind up the Company is approved by a Special Resolution of Members pursuant to Article 40.2, or by a Resolution of Directors pursuant to this Article 40 or Article 42 or in accordance with the Act, the Company shall proceed to be wound-up in accordance with section 199 of the Act.
41 MERGER AND CONSOLIDATION
41.1 The Company may, with the approval of a Resolution of Members, merge or consolidate with one or more BVI or foreign companies, in the manner provided in the Act.
41.2 Where the Directors consider a merger or consolidation of any kind referred to in Article 41.1 to be necessary or desirable in relation to, in connection with, or resulting from the Acquisition (including, at any time after the closing of an Acquisition), the Directors may determine that only the holders of Founder Preferred Shares shall be entitled to vote on any such Resolution (in which event the holders of Ordinary Shares shall have no right to receive notice of or attend any meeting of Members or vote in respect of such Resolution).
41.3 A Resolution of Members (either pursuant to Article 41.2 or otherwise) shall not (unless the Law requires otherwise) be required in relation to a merger of a parent company with one or more subsidiary companies (each as defined in section 169 of the Act) in accordance with section 172 of the Act.
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42 ACQUISITION
Notwithstanding anything to the contrary in these Articles, but subject to compliance with the Law, any matters which the Directors consider is necessary or desirable to approve in relation to, in connection with or resulting from an Acquisition (whether before or after the closing of an Acquisition), may be approved at any time by a Resolution of Directors or, to the extent a Resolution of Members is required pursuant to the Law, upon the approval of a Resolution of Members on which only the holders of Founder Preferred Shares shall be entitled to vote and in respect of which the holders of Ordinary Shares shall have no right to receive notice of or attend any meeting of Members or vote on such resolution.
43 AMENDMENT OF MEMORANDUM AND ARTICLES
The Directors may at any time (including after the closing of an Acquisition) amend the Memorandum or these Articles where the Directors determine by a Resolution of Directors that such changes are necessary or desirable in relation to, in connection with or resulting from an Acquisition (whether before or after the closing of an Acquisition), unless in each case the Directors determine that such change would have a materially adverse effect on the rights attaching to any class of shares as set out in Clause 6.1 or 6.2 of the Memorandum (as applicable), in which case such changes may only be made pursuant to a Resolution of Directors if also approved by the holders of each class of shares affected in such manner in accordance with Clause 7.1 of the Memorandum.
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We, Intertrust Corporate Services (BVI) Limited of Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands, in our capacity as registered agent for the Company hereby apply to the Registrar for the incorporation of the Company this 15th day of December 2022.
Incorporator
Shanica Maduro-Christopher
Authorised Signatory
Intertrust Corporate Services (BVI) Limited
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APPENDIX B — FORM OF NEW CERTIFICATE OF INCORPORATION OF ACUREN DELAWARE
CERTIFICATE OF INCORPORATION
OF
ACUREN CORPORATION
First. The name of the corporation is Acuren Corporation (the “Corporation”).
Second. The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, State of Delaware, 19808. The name of its registered agent at such address is Corporation Service Company.
Third. 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.
Fourth.
A. CLASSES OF STOCK.
1. Capital Stock. The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is Five Hundred Five Million (505,000,000) shares, divided into two (2) classes consisting of the numbers of shares and series thereof as follows: (i) Five Hundred Million (500,000,000) shares, par value $0.0001 per share, of common stock (the “Common Stock”); and (ii) five Million (5,000,000) shares, par value $0.0001 per share, of preferred stock (the “Preferred Stock”), of which one Million (1,000,000) shares are designated as “Series A Preferred Stock” (the “Series A Preferred Stock”).
2. Additional Series of Preferred Stock. The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly authorized, by resolution or resolutions thereof, to provide from time to time out of the unissued shares of Preferred Stock for one or more series of Preferred Stock, and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the powers (including voting powers), if any, of the shares of such series and the preferences and relative, participating, optional, special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the shares of such series. The designations, powers (including voting powers), preferences and relative, participating, optional, special and other rights of each series of Preferred Stock, if any, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series of Preferred Stock at any time outstanding. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote irrespective of Section 242(b)(2) of the General Corporation Law of the State of Delaware, without the separate vote of the holders of the Preferred Stock as a class.
B. COMMON STOCK.
1. Dividends. Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock then outstanding, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.
2. Voting Rights. Except as may otherwise be provided in the certificate of incorporation of the Corporation (including any certificate filed with the Secretary of State of the State of Delaware establishing a series of Preferred Stock) or by applicable law, each holder of Common Stock, as such, shall be entitled to one (1) vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, and no holder of any series of Preferred Stock, as such, shall be entitled to any voting powers in respect thereof.
3. Liquidation Rights. Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock then outstanding, in the event of any liquidation, dissolution or winding up of the Corporation, the holders of the Common Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of Common Stock held by them. A merger or, consolidation, statutory conversion, domestication, continuance or statutory transfer of the Corporation,
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or a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation, dissolution or winding up of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 3.
C. SERIES A PREFERRED STOCK.
The powers (including voting powers), if any, and the preferences and relative, participating, optional, special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the shares of Series A Preferred Stock are as follows:
1. Definitions. The following terms have the following meanings for purposes of this Part C of this Article:
a. “Acquisition” means the acquisition of ASP Acuren Holdings, Inc. pursuant to the Merger Agreement, which was consummated on July 30, 2024.
b. “Admission” means the initial admission of ordinary shares of Acuren Corporation (f/k/a Admiral Acquisition Limited) to the standard listing segment of the Official List maintained by the Financial Conduct Authority of the United Kingdom or any successor, acting in its capacity as competent authority for the purposes of admission to the Official List and to trading on the London Stock Exchange’s main market for listed securities, which occurred on May 22, 2023.
c. “Annual Dividend Amount” for each Dividend Period means:
A x B, where
“A” = an amount equal to twenty percent (20%) of the increase (if any) in the value of a share of Common Stock, such increase calculated as being the difference between (i) the Dividend Price for the relevant Dividend Period, and (ii) (x) if no Annual Dividend Amount has previously been paid, a price of $10.00 per share of Common Stock, or (y) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Period, which such amount shall be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification of the issued and outstanding shares of Common Stock after the original filing of the certificate of incorporation of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification of the issued and outstanding shares of Series A Preferred Stock; and
“B” = the Preferred Share Dividend Equivalent.
d. “Average Price” means, in respect of shares of Common Stock or any other security of the Corporation, as of any date or relevant period (as applicable): (i) the volume weighted average price for such security on the New York Stock Exchange for such date or relevant period (as applicable) as reported by Bloomberg through its “Volume at Price” function with “Calculation” mode set to “Bloomberg Definition” as reported up to two hours after the respective market closes on such date or each date of the relevant period (as applicable); (ii) if the Board of Directors determines by a resolution of the Board of Directors that the New York Stock Exchange is not the principal securities exchange or trading market for that security, the volume weighted average price of that security for such date or relevant period (as applicable) on the principal securities exchange or trading market on which that security is listed or traded as reported by Bloomberg through its “Volume at Price” functions; (iii) if the foregoing do not apply, the last closing trade price or average of the last closing trade price for each Trading Day of the relevant period (as applicable) of that security in the over-the-counter market on the electronic bulletin board for that security as reported by Bloomberg; or (iv) if no last closing trade price is reported for that security by Bloomberg, the last closing ask price or the average of the last ask price for each Trading Day of the relevant period (as applicable) of that security as reported by Bloomberg; provided, however, if the Average Price cannot be calculated for that security on such date or relevant period on any of the foregoing bases, the Average Price of that security on such date or relevant period shall be the fair market value as mutually determined by the Corporation and the holders of at least a majority of the then outstanding shares of Series A Preferred Stock (acting reasonably), separately as a single class.
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e. “Bloomberg” means Bloomberg Financial Markets.
f. “Merger Agreement” means the Merger Agreement, entered into as of May 21, 2024, by and among the Corporation, ASP Acuren Holdings, Inc., AAL Merger Sub, Inc. and ASP Acuren Investco LP, as shareholder representative, as amended.
g. “Change of Control” means (a) the acquisition of Control by any person or party (or by any group of persons or parties who are acting in concert) whether by merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise or (b) any sale, lease or exchange of all or substantially all of the property and assets of the Corporation, including its goodwill and its corporate franchises (which for the purposes of this definition only, the property and assets of the Corporation shall include the property and assets of any wholly owned and controlled, directly or indirectly, subsidiary of the Corporation).
h. “Change of Control Dividend Amount” means the aggregate amount determined by adding together each Annual Dividend Amount that would have been payable for each Dividend Period occurring during the Change of Control Dividend Period assuming that (a) there is no liquidation, dissolution or winding up of the Corporation during the Change of Control Dividend Period, (b) there is not an automatic conversion of shares of Series A Preferred Stock into shares of Common Stock on the Mandatory Conversion Date during the Change of Control Dividend Period, (c) no Change of Control occurs during the Change of Control Dividend Period and (d) the Dividend Price means, for each Dividend Period (or part thereof) in the Change of Control Dividend Period, the amount equal to the Change of Control Price increasing by eight percent (8%) per annum (compounded annually) for each such Dividend Period (or part thereof). For the avoidance of doubt, for the period beginning on the Change of Control Dividend Date and ending on the last day of the Financial Year in which the Change of Control occurred, the eight percent per annum would be applied as a pro rata percentage based on the portion of the year between the Change of Control Dividend Date and the last day of the Financial Year in which the Change of Control occurred. The resulting price calculated would then apply 8% per annum (compounded annually) for each such remaining full Dividend Period.
i. “Change of Control Dividend Date” has the meaning specified in Section 2(b).
j. “Change of Control Dividend Period” means the period beginning on the date of the consummation of the Change of Control and ending on the last day of the tenth (10th) full Financial Year following the completion of the Acquisition (or if such day is not a Trading Day, the first Trading Day immediately following such day).
k. “Change of Control Price” means either (i) the cash amount per share of Common Stock to be received by holders of such shares in connection with a Change of Control or (ii) where the amount per share of Common Stock to be received by holders of such shares in connection with a Change of Control is in a form other than cash, the Average Price per Common Stock for the last ten (10) consecutive Trading Days prior to the consummation of the Change of Control event.
l. “Control” means: (i) the power (whether by way of record or beneficial ownership of shares, proxy, contract, agency or otherwise) to: (a) cast, or control the casting of, at least a majority of the maximum number of votes that might be cast at an annual meeting of the Corporation, or (b) appoint or remove all, or a majority of the Board of Directors, or (c) give directions with respect to the operating and financial policies of the Corporation with which the Board of Directors is obliged to comply, and/or (ii) the holding beneficially of at least a majority of the voting power of the issued and outstanding shares of the Corporation (excluding any issued shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital).
m. “Dividend Date” means in respect of a Dividend Period, the last Trading Day of such Dividend Period.
n. “Dividend Period” means, each Financial Year, except that: (i) in the event of the Corporation’s dissolution, the relevant Dividend Period shall end on the Trading Day immediately prior to the date of dissolution; and (ii) in the event of the automatic conversion of shares of Series A Preferred Stock into shares of Common Stock on the Mandatory Conversion Date, the relevant Dividend Period shall end on the Trading Day immediately prior to the Mandatory Conversion Date.
o. “Dividend Price” means the Average Price per share of Common Stock for the last ten (10) consecutive Trading Days of the relevant Dividend Period.
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p. “Financial Year” means the financial year of the Corporation, being each period of the same calendar year ending on December 31 of such calendar year or such other financial year(s) (each of which may be a twelve (12) month period or any longer or shorter period) as may be determined from time to time by resolution of the Board of Directors.
q. “Junior Stock” means the Common Stock and any series of Preferred Stock then outstanding ranking junior to the Series A Preferred Stock as to dividends or as to distributions payable to holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation, as applicable.
r. “London Stock Exchange” means London Stock Exchange plc.
s. “Mandatory Conversion Date” means the earlier of (i) immediately following the Change of Control Divided Date and (ii) the last day of the tenth (10th) full Financial Year of the Corporation after July 30, 2024, or, if such date is not a Trading Day, the first Trading Day immediately following such date.
t. “NYSE” means the New York Stock Exchange or any successor national securities exchange.
u. “Parity Stock” means any series of Preferred Stock then outstanding ranking on parity with the Series A Preferred Stock as to dividends or as to distributions payable to the holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation, as applicable.
v. “Payment Date” means the date fixed by the Board of Directors for the payment of the Annual Dividend Amount, which date shall be no later than ten (10) Trading Days after the Dividend Date, except in respect of any Annual Dividend Amount becoming due on the Trading Day immediately prior to the date of the Corporation’s dissolution, in which case, such date shall be such Trading Day.
w. “Preferred Share Dividend Equivalent” means such number of shares of Common Stock equal to the number of ordinary shares of Acuren Corporation (or shares of Common Stock) outstanding on (i) the four-month anniversary of the closing of the Acquisition; or (ii) if the relevant Dividend Date falls before the four-month anniversary of the closing of the Acquisition, such earlier Dividend Date, in either case including ordinary shares of Acuren Corporation (or shares of Common Stock) issued pursuant to the exercise of Warrants, but excluding any ordinary shares of Acuren Corporation issued to shareholders or other beneficial owners of ASP Acuren Holdings, Inc. pursuant to or in connection with the Acquisition, which such amount shall be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification of the issued and outstanding shares of Common Stock into a greater or lesser number of shares occurring after the original filing of the certificate of incorporation of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification of the outstanding shares of Series A Preferred Stock.
x. “SEC” means the United States Securities and Exchange Commission.
y. “Senior Stock” means any series of Preferred Stock then outstanding ranking senior to the Series A Preferred Stock as to dividends or as to distributions payable to holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation, as applicable.
z. “Trading Date” means any date on which the NYSE (or other applicable securities exchange or quotation system) is open for business and on which shares of Common Stock may be traded (other than a day on which the NYSE (or other applicable securities exchange or quotation system) is scheduled to or does close prior to its regular weekday closing time).
aa. “Twenty-Percent Equivalent Amount” means the amount obtained by multiplying the dividend that would be distributable on a number of shares of Common Stock equal to the Preferred Share Dividend Equivalent by 0.20.
bb. “Warrant Instrument” means the instrument constituting the Warrants executed by Acuren Corporation on May 16, 2023, as supplemented on or about May 21, 2024, as amended and restated by the Amended and Restated Warrant Instrument, dated on or about September 23, 2024, as the same may be amended and/or restated from time to time.
cc. “Warrants” means the warrants conferring the right to subscribe for ordinary shares of Acuren Corporation (or shares of Common Stock) of Acuren Corporation issued pursuant to the Warrant Instrument.
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2. Dividends.
a. Preferential Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), and on parity with the holders of any Parity Stock (as to dividends), the holders of the Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of assets legally available therefor, and payable in preference and priority to the declaration or payment of any dividends on any Junior Stock (as to dividends), cumulative annual dividends of the Annual Dividend Amount commencing from the date that is both (i) on or after the consummation of the Acquisition, and (ii) after the Average Price per share of Common Stock (as adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification of the outstanding shares of Common Stock into a greater or lesser number of shares occurring after the original filing of the certificate of incorporation of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification of the outstanding shares of Series A Preferred Stock) for any ten (10) consecutive Trading Days following the Admission of at least $11.50. The Annual Dividend Amount shall be paid in shares of Common Stock. The Annual Dividend Amount shall be paid on the Payment Date and shall be allocated among the holders of shares of Series A Preferred Stock pro rata based on the number of shares of Series A Preferred Stock held by them on the relevant Dividend Date. Each holder of a share of Series A Preferred Stock shall be entitled to receive such number of whole shares of Common Stock as is determined by dividing the pro rata amount of the Annual Dividend Amount to which a holder is entitled by the Dividend Price. For the avoidance of doubt, the Annual Dividend Amount shall be payable in full and shall not be subject to prorating notwithstanding any Dividend Period being longer or shorter than twelve (12) months.
b. Change of Control Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), each holder of shares of Series A Preferred Stock shall be entitled to receive out of assets legally available therefor, that number of shares of Common Stock equal to (i) the number of shares of Series A Preferred Stock held by such holder immediately prior to the consummation of the Change of Control (the “Change of Control Dividend Date”), multiplied by (ii) the Change of Control Dividend Amount, divided by (iii) the number of shares of Series A Preferred Stock outstanding as of the Change of Control Dividend Date.
c. Participation Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), the holders of the Series A Preferred Stock shall be entitled to receive when, as and if a dividend (other than a dividend paid in shares of the Corporation) is declared on the Common Stock by the Board of Directors out of assets legally available therefor, and on parity with the Common Stock and any series of Preferred Stock then outstanding ranking on parity with the Common Stock as to dividends, (i) a dividend per share of Series A Preferred Stock equal to the product obtained by multiplying the number of shares of Common Stock into which such share of Series A Preferred Stock could then be converted pursuant to Section 5(b), by the dividend payable on each share of Common Stock, and (ii) from and after the consummation of the Acquisition, a dividend per share of Series A Preferred Stock equal to the amount determined by dividing the Twenty-Percent Equivalent Amount by the number of shares of Series A Preferred Stock outstanding on the record date for such dividend.
3. Voting Rights.
a. Generally. Except as may otherwise be provided in the certificate of incorporation of the Corporation or by applicable law, each holder of Series A Preferred Stock, as such, shall be entitled to one (1) vote for each share of Series A Preferred Stock held of record by such holder on all matters on which stockholders generally are entitled to vote.
b. Protective Provisions. For so long as any shares of Series A Preferred Stock shall remain outstanding, the Corporation shall not, without the prior vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, voting or consenting separately as a single class, amend, alter or repeal any provision of the certificate of incorporation of the Corporation, whether by merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise, if such amendment, alteration or repeal would adversely alter or change the powers (including voting powers), if any, or the preferences or relative, participating, optional, special or other rights, if any, or the qualifications, limitations or restrictions, if any, of the Series A Preferred Stock.
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c. Action by Consent. Notwithstanding Article SIXTH, any action required or permitted to be taken at any meeting of the holders of Series A Preferred Stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the Series A Preferred Stock then outstanding having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Series A Preferred Stock then outstanding were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of corporate action without a meeting by less than unanimous consent of the holders of Series A Preferred Stock shall, to the extent required by applicable law, be given to those holders of Series A Preferred Stock who have not consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that consents signed by a sufficient number of holders of Series A Preferred Stock to take the action were delivered to the Corporation.
4. Liquidation. In the event of any liquidation, dissolution or winding up of the Corporation, subject to the rights of the holders of any Senior Stock (as to distributions payable to the holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation), and on parity with the holders of any Parity Stock (as to distributions payable to the holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation) the holders of the Series A Preferred Stock shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably with the holders of the Common Stock in proportion to the number of shares of Common Stock into which such shares of Series A Preferred Stock could then be converted pursuant to Section 5(b). A merger, consolidation, statutory conversion, domestication, continuance or statutory transfer of the Corporation, or a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation, dissolution or winding up of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be liquidation, dissolution or winding up of the Corporation within the meaning of this Section 4.
5. Conversion.
a. Automatic Conversion. Upon the Mandatory Conversion Date, each outstanding share of Series A Preferred Stock shall automatically be converted into one (1) share of Common Stock.
b. Optional Conversion. Each outstanding share of Series A Preferred Stock may be converted into one (1) share of Common Stock by written notice of the holder thereof delivered to the Corporation specifying the number of shares of Series A Preferred Stock to be converted (if such notice is silent as to the number of shares of Series A Preferred Stock held by the holder and proposed to be converted hereunder, the notice shall be deemed to apply to all shares of Series A Preferred Stock held by such holder) and the surrender of the certificate(s) representing the shares of Series A Preferred Stock proposed to be converted hereunder, duly indorsed for transfer to the Corporation, on the fifth (5th) Trading Day following receipt of said notice and certificate(s) by the Corporation (the “Optional Conversion Date”).
c. Mechanics of Conversion. Before any holder of shares of Series A Preferred Stock shall be entitled to receive certificate(s) representing the shares of Common Stock into which shares of Series A Preferred Stock shall have been converted pursuant to this Section 5, such holder shall surrender the certificate(s) representing such shares of Series A Preferred Stock to the Corporation, duly indorsed for transfer to the Corporation. The Corporation shall, as soon as practicable, and in no event later than ten (10) days after the delivery of said certificate(s), issue and deliver to such holder, or the nominee or nominees of such holder, certificate(s) representing the number of shares of Common Stock to which such holder shall be entitled under this Section 5, and the certificate(s) representing the share(s) of Series A Preferred Stock so converted shall be cancelled. The person(s) entitled to receive share(s) of Common Stock issuable upon conversion of share(s) of Series A Preferred Stock pursuant to this Section 5 shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the Mandatory Conversion Date or the Optional Conversion Date, as applicable.
d. Adjustments. In the event that at any time or from time to time after the original filing of this certificate of incorporation, the Corporation effects a subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification of the outstanding shares of Common Stock into a greater or lesser number
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of shares without a proportionate and corresponding subdivision, combination or similar reclassification of the outstanding shares of Series A Preferred Stock, then and in each such event, the share(s) of Common Stock to be received upon conversion of share(s) of Series A Preferred Stock pursuant to this Section 5 shall be proportionately increased or decreased, as applicable.
6. Reservation of Shares.
a. The Corporation shall at all times keep reserved, free from preemptive rights, out of its authorized but unissued shares of Common Stock, or shares held in treasury, sufficient shares of Common Stock to provide for the conversion of Series A Preferred Stock as required by the certificate of incorporation of the Corporation.
b. Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon conversion of Series A Preferred Stock, as herein provided, shares of Common Stock reacquired and held in the treasury of the Corporation (in lieu of the issuance of authorized and unissued Common Stock), so long as any such treasury shares are free and clear of all liens, charges, security interests or encumbrances.
c. All shares of Common Stock delivered upon conversion of the Series A Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests and other encumbrances.
7. Waiver. The powers (including voting powers), if any, of the Series A Preferred Stock and the preferences and relative, participating, optional, special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the Series A Preferred Stock may be waived as to all shares of Series A Preferred Stock in any instance (without the necessity of calling, noticing or holding a meeting of stockholders) by the consent or agreement of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, consenting or agreeing separately as a single class.
Fifth. Board of Directors.
1. Management. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
2. Removal of Directors. Except for removal without cause of any directors elected by the holders of any series of Preferred Stock then outstanding (collectively, the “Preferred Directors” and each, a “Preferred Director”), any director or the entire Board of Directors may be removed, solely by the affirmative vote of the holders of at least a majority in voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
3. Vacancies. Subject to the rights, if any, of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from the death, resignation, disqualification, removal or other cause shall be filled solely and exclusively by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Any director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.
4. Automatic Increase/Decrease in Authorized Directors. During any period when the holders of any series of Preferred Stock then outstanding have the right to elect one or more Preferred Directors, then upon commencement of, and for the duration of, the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified Preferred Directors, and the holders of such series of Preferred Stock shall be entitled to elect such Preferred Director or Directors; and (ii) each such Preferred Director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates, whichever occurs earlier, subject to such director’s earlier death, resignation, disqualification or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions providing for such series of Preferred Stock pursuant to the provisions of Article FOURTH, whenever the holders of any series of Preferred Stock then outstanding having the right to elect one or more Preferred Directors are divested of such right pursuant to the provisions of such capital stock, the term of office of each such Preferred Director elected by the holders of such series of Preferred Stock, or elected to fill
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any vacancy resulting from the death, resignation, disqualification or removal of each such Preferred Director, shall forthwith terminate and the total authorized number of directors of the Corporation shall automatically be decreased by such specified number of directors.
5. No Written Ballot. Unless and except to the extent that the bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.
6. Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, alter, amend and repeal the bylaws of the Corporation. In addition to any affirmative vote required by the certificate of incorporation of the Corporation, any bylaw that is to be adopted, altered, amended or repealed by the stockholders of the Corporation shall receive the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2⁄3%) in voting power of the then outstanding shares of stock of the Corporation generally entitled to vote, voting together as a single class.
7. Meetings of Stockholders. Except as may otherwise be provided for or fixed pursuant to the provisions of Article FOURTH relating to the rights of the holders of any series of Preferred Stock then outstanding, special meetings of stockholders for any purpose or purposes may be called at any time, but only by (a) the Chief Executive Officer of the Corporation, (b) any Chairman of the Board of Directors, or (c) the Board of Directors. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by another person or persons. Any meeting of stockholders may be postponed by action of the Board of Directors or by the person calling such meeting (if other than the Board of Directors) at any time in advance of such meeting.
Sixth. Except as may otherwise be provided for or fixed pursuant to the provisions of Article FOURTH relating to the rights of the holders of any series of Preferred Stock then outstanding, no action that is required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of stockholders may be effected by consent of stockholders in lieu of a meeting of stockholders.
Seventh. A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
Eighth. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought by or on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any civil action to interpret, apply or enforce any provision of the General Corporation Law of the State of Delaware, (d) any action asserting a claim, including a claim in the right of the Corporation, as to which the General Corporation Law of the State of Delaware confers jurisdiction upon the Court of Chancery of the State of Delaware (the “Court of Chancery”), or (e) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery; provided, however, in the event that the Court of Chancery lacks jurisdiction over such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in all cases, subject to such court having personal jurisdiction over the indispensable parties named as defendants, except for, as to each of (a) through (e) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and such indispensable party does not consent to the personal jurisdiction of such court within ten (10) days following such determination). For the avoidance of doubt, the foregoing shall not apply to the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act of 1933, as amended.
For the avoidance of doubt, this Article EIGHTH shall not apply to any action asserting claims arising under the Exchange Act.
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Any person or entity purchasing or otherwise acquiring any interest in shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article.
Ninth. The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in the certificate of incorporation of the Corporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by applicable law; and all rights, preferences, powers and privileges of whatsoever nature conferred upon stockholders, directors, officers or any other persons whomsoever by and pursuant to the certificate of incorporation of the Corporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article. In addition to any affirmative vote required by applicable law or the certificate of incorporation of the Corporation (including any certificate filed with the Secretary of State of the State of Delaware establishing a series of Preferred Stock), the affirmative vote of the holders of at least sixty-six and two-thirds percent (66⅔%) in voting power of the then outstanding shares of stock of the Corporation generally entitled to vote, voting together as a single class, shall be required to amend, alter, repeal or adopt any provision inconsistent with Articles FIFTH, SIXTH, or SEVENTH or this sentence.
Tenth. This certificate shall become effective on [•], 2024.
Eleventh. The incorporator of the Corporation is [•], whose mailing address is [•].
[Signature Page Follows]
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The undersigned incorporator has executed and acknowledged this certificate of incorporation on _____________, 2024.
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APPENDIX C — FORM OF NEW BYLAWS OF ACUREN DELAWARE
BYLAWS
OF
ACUREN CORPORATION
ARTICLE I
Meetings of Stockholders
Section 1.1 Annual Meetings. If required by applicable law, an annual meeting of stockholders shall be held for the election of directors at such date, time and place, if any, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors of the corporation (the “Board of Directors”) from time to time. Any annual meeting of stockholders may be postponed by action of the Board of Directors at any time in advance of such meeting. Any other proper business may be transacted at the annual meeting of stockholders.
Section 1.2 Special Meetings. Except as otherwise provided by or pursuant to the certificate of incorporation, special meetings of stockholders for any purpose or purposes may be called at any time, but only by (a) the Chief Executive Officer, (b) any Chairman of the Board of Directors, or (c) the Board of Directors. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by any other person or persons. Any special meeting of stockholders may be postponed by action of the Board of Directors at any time in advance of such meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 1.3 Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given that shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present and vote at such meeting, the record date for determining 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, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by applicable law, the certificate of incorporation or these bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, as of the record date for determining the stockholders entitled to notice of the meeting.
Section 1.4 Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, if any, and notice need not be given of any such adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person or by proxy and vote at such adjourned meeting are (a) announced at the meeting at which the adjournment is taken, (b) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication, or (c) set forth in the notice of meeting given in accordance with Section 1.3. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a 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 of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 1.8 of these bylaws, 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.
Section 1.5 Quorum. Except as otherwise provided by applicable law, the certificate of incorporation or these bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of a majority in voting power of the then outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 1.4 of these bylaws until a quorum shall be present in person or represented by proxy. Shares of the corporation’s capital stock shall neither be entitled to vote nor be counted for quorum purposes if such shares belong to (a) the corporation, (b) another corporation,
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if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, or (c) any other entity, if a majority of the voting power of such other entity is held, directly or indirectly, by the corporation or if such other entity is otherwise controlled, directly or indirectly by the corporation. Nothing in the foregoing sentence shall be construed as limiting the right of the corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6 Organization. Meetings of stockholders shall be presided over by the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, the Co-Chairperson of the Board designated by the Co-Chairpersons of the Board), if any, or in his or her absence by the Vice Chairperson of the Board (or, if there are Co-Vice Chairpersons of the Board, the Co-Vice Chairperson of the Board designated by the Co-Vice Chairpersons of the Board), if any, or in his or her absence by the President, or in the absence of the foregoing persons by a chairperson designated by the Board of Directors, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 1.7 Voting; Proxies. Except as otherwise provided by or pursuant to the provisions of the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one (1) vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to consent to corporate action 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 (3) years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot. When a quorum is present at any meeting of stockholders, all elections, questions or business presented to the stockholders at such meeting shall be decided by the affirmative vote of a majority of votes cast with respect to any such election, question or business presented to the stockholders unless the election, question or business is one which, by express provision of the certificate of incorporation, these bylaws (including, without limitation, Article II of these bylaws) or the laws of the State of Delaware, a vote of a different number or voting by class or series is required, in which case, such express provision shall govern.
Section 1.8 Fixing Date for Determination of Stockholders of Record.
(a) In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, or to consent to corporate action without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 of Directors 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 of Directors, and which record date: (i) in the case of a determination of stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, shall, unless otherwise required by applicable law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting and, unless the Board of Directors 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 determining the stockholders entitled to vote at such meeting, the record date for determining the stockholders entitled to notice of such meeting shall also be the record date for determining the stockholders entitled to vote at such meeting; (ii) in the case of a determination of stockholders entitled to consent to corporate action without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (iii) in the case of any other action, shall not be more than sixty (60) days prior to such other action.
(b) If no record date is fixed: (i) 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 day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to consent to corporate action without a meeting, when no prior action of the Board of Directors is required by applicable law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by applicable law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and
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(iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. 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 of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for the stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 1.8 at the adjourned meeting.
Section 1.9 List of Stockholders Entitled to Vote. The corporation shall prepare, no later than the tenth (10th) day before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of ten (10) days ending on the day before the meeting dated (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting, or (b) during ordinary business hours at the principal place of business of the corporation. Except as otherwise provided by applicable law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.
Section 1.10 Action By Consent in Lieu of Meeting. Except as otherwise provided by or pursuant to the certificate of incorporation with respect to the rights of the holders of any series of preferred stock of the corporation then outstanding, no action that is required or permitted to be taken by the stockholders of the corporation at any annual or special meeting of stockholders may be effected by consent of stockholders in lieu of a meeting of stockholders. When, as provided by or pursuant to the certificate of incorporation with respect to the rights of the holders of any series of preferred stock of the corporation then outstanding, action required or permitted to be taken at any annual or special meeting of stockholders is taken without a meeting, without prior notice and without a vote, a consent or consents, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. When, as provided by or pursuant to the certificate of incorporation with respect to the rights of the holders of any shares of preferred stock of the corporation then outstanding, action required or permitted to be taken at any annual or special meeting of stockholders is taken without a meeting, without prior notice and without a vote, prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall, to the extent required by applicable law, be given to those stockholders as of the record date for the action by consent who have not consented and who would have been entitled to notice of the meeting if the action had been taken at a meeting and the record date for the notice of the meeting were the record date for the action by consent.
Section 1.11 Inspectors of Election. The corporation may, and shall if required by applicable law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (a) ascertain the number of shares of stock of the corporation outstanding and the voting power of each such share, (b) determine the shares of stock of the corporation represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares of stock of the corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by applicable law. In determining
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the validity and counting of proxies and ballots cast at any meeting of stockholders of the corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.
Section 1.12 Conduct of Meetings. The date and time of the opening and the closing of the polls for each election, question or business upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person at 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 presiding person 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. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that an election, question or business was not properly brought before the meeting and, if such presiding person should so determine, such presiding person shall so declare to the meeting, and any such election, question or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 1.13 Notice of Stockholder Business and Nominations.
(a) Annual Meetings.
(1) Nominations of one or more individuals for election to the Board of Directors (each, a “Nomination,” and more than one, “Nominations”) and the proposal of business other than Nominations to be considered by the stockholders (“Business”) may be made at an annual meeting of stockholders only:
(A) pursuant to the corporation’s notice of meeting (or any supplement thereto), provided, however, that reference in the corporation’s notice of meeting to the election of directors or the election of members of the Board of Directors shall not include or be deemed to include Nominations;
(B) by or at the direction of the Board of Directors; or
(C) by any stockholder who was a stockholder of record of the corporation at the time the notice provided for in this Section 1.13 is delivered to the Secretary at the principal executive offices of the corporation, who is entitled to vote at the annual meeting of stockholders and who complies with the notice procedures set forth in this Section 1.13(a).
(2) For Nominations or Business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to Section 1.13(a)(1)(C), the stockholder must have given timely notice thereof in writing to the Secretary and any proposed Business must constitute a proper subject for stockholder action under applicable law. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one-hundred twentieth (120th) day prior to the first (1st) anniversary of the preceding year’s annual meeting of stockholders (provided, however, that in the event that the date of the annual meeting of stockholders is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one-hundred twentieth (120th) day prior to such annual meeting of stockholders and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting of stockholders or the tenth (10th) day following the day on which public announcement
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of the date of such meeting is first made by the corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth:
(A) as to each Nomination to be made by such stockholder:
(i) the name, age, business address and residence address of the individual subject to such Nomination (the “Stockholder Nominee”);
(ii) all other information relating to the Stockholder Nominee that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case, pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), without regard to the application of the Exchange Act to either the Nomination or the corporation;
(iii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the stockholder giving the notice or the beneficial owner, if any, on whose behalf the Nomination is made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and the Stockholder Nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if such stockholder or such beneficial owner, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such item and the Stockholder Nominee were a director or executive officer of such registrant; and
(iv) the Stockholder Nominee’s written consent to being named in any proxy statement as a nominee and to serving as a director of the corporation if elected;
(B) as to the Business that the stockholder proposes to bring before the annual meeting of stockholders, a brief description of the Business, the text of the proposed Business (including the text of any resolutions proposed for consideration and in the event that such Business includes a proposal to amend these bylaws, the language of the proposed amendment), the reasons for conducting such Business at such meeting and any material interest in such Business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and
(C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the Nomination or Business is made:
(i) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner;
(ii) the class or series and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner;
(iii) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting of stockholders to propose such Nomination or Business;
(iv) a representation whether the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any other person acting in concert therewith, intends or is part of a group that intends
(I) to deliver a proxy statement and form of proxy to holders of at least the percentage of the corporation’s outstanding shares of stock required to approve or adopt the Business or elect the Stockholder Nominee; and/or
(II) otherwise to solicit proxies from stockholders of the corporation in support of such Business or Nomination;
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(v) a description of any agreement, arrangement or understanding with respect to the Nomination or Business, existing presently or existing during the prior twenty-four (24) months, between or among the stockholder or the beneficial owner, if any, on the one hand, and any of their respective affiliates and associates, or any other person acting in concert therewith, on the other hand, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 of Schedule 13D under the Exchange Act (regardless of whether the requirement to file a Schedule 13D is applicable);
(vi) a description of any agreement, arrangement or understanding (including, without limitation, with respect to any profit interests, options, hedging transactions, borrowed or loaned shares, or other derivative positions) that has been entered into as of the date of the notice by, or on behalf of, the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class or series of the corporation’s capital stock, or to maintain, increase or decrease the voting power of the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, with respect to shares of the corporation (any such agreement, arrangement or understanding, a “Derivative Instrument”);
(vii) a description of the terms of, and the number of shares subject to, any short interest in any securities of the corporation in which the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, has an interest (for purposes of these bylaws, a person shall be deemed to have a short interest in a security if the person or any of its affiliates and associates, directly or indirectly, through any agreement, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security);
(viii) a description of any proportionate interest in the shares of the corporation or any Derivative Instrument held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, of such general or limited partnership or similar entity or is the manager or managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of such limited liability company or similar entity;
(ix) a description of the terms of any performance-related fees (other than asset-based fees) that the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, is entitled to based on any increase or decrease in the value of shares of the corporation or any Derivative Instruments; and
(x) a description of:
(I) any significant equity interest of the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any other person acting in concert therewith, in a Principal Competitor of the corporation; and
(II) any direct or indirect pecuniary interest of the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, in any material contract with a Principal Competitor of the corporation. “Principal Competitor” means a competitor of the corporation with respect to any material line of business of the corporation as determined from time to time by the Chief Executive Officer of the corporation (it being understood that a stockholder may request from the corporation a list of the Principal Competitors prior to submitting a notice described in this Section 1.13 and the Secretary shall provide such list to the stockholder within five (5) business days after receipt of such request); provided, that if the Business is otherwise subject to Rule 14a-8 (or any successor thereto) promulgated under the Exchange Act (“Rule 14a-8”), the foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has
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notified the corporation of such stockholder’s intention to present such Business at an annual meeting of stockholders of the corporation in compliance with Rule 14a-8, and such Business has been included in a proxy statement that has been prepared by the corporation to solicit proxies for such annual meeting of stockholders.
(3) Notwithstanding anything in the second sentence of Section 1.13(a)(2) to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement naming the nominees for election to the additional directorships at least one-hundred (100) days prior to the first (1st) anniversary of the preceding year’s annual meeting, a stockholder’s notice required by Section 1.13(a)(2) shall also be considered timely, but only with respect to nominees for election to the new directorships, 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 tenth (10th) day following the day on which such public announcement is first made by the corporation.
(b) Special Meetings.
(1) Only such Business shall be conducted at a special meeting of stockholders of the corporation as shall have been brought before such meeting pursuant to the corporation’s notice of meeting (or any supplement thereto); provided, however, that reference therein to the election of directors or the election of members of the Board of Directors shall not include or be deemed to include Nominations.
(2) Nominations may be made at a special meeting of stockholders at which directors are to be elected:
(A) pursuant to the corporation’s notice of meeting (or any supplement thereto) as aforesaid; or
(B) in the event a special meeting of stockholders is called for the purpose of electing one or more directors to the Board of Directors, by any stockholder of the corporation who is entitled to vote at such special meeting with respect to the election of directors, who complies with the notice procedures set forth in this Section 1.13(b), and who is a stockholder of record at the time such notice is delivered to the Secretary as provided for in this Section 1.13.
(3) In the event that a special meeting of stockholders of the corporation is called for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may make a Nomination or Nominations (as the case may be) of one or more individuals (as the case may be) for election to such position(s) specified in the corporation’s notice of meeting, if the stockholder’s notice as required by Section 1.13(a)(2) shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the one-hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the (10th) tenth day following the day on which public announcement is first made of the date of such special meeting and of the nominees proposed by the Board of Directors to be elected at such special meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting of stockholders of the corporation commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(c) Stockholder Nominee.
(1) To be eligible to be a Stockholder Nominee pursuant to this Section 1.13 at any annual or special meeting of stockholders, the Stockholder Nominee must complete and deliver (within the time period specified in this Section 1.13 for delivery of a stockholder’s notice), to the Secretary at the principal executive offices of the corporation, a written questionnaire providing information with respect to the background, experience and qualifications of such Stockholder Nominee, together with a written representation and agreement of such Stockholder Nominee (the questionnaire, representation and agreement to be in the form provided by the Secretary upon written request) that such Stockholder Nominee:
(A) is not and will not become a party to, and is not and will not be bound by:
(i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person as to how such Stockholder Nominee, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation; or
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(ii) any Voting Commitment or other agreement, arrangement or understanding or fiduciary capacity that could limit or interfere with such Stockholder Nominee’s ability to comply, if elected as a director of the corporation, with such Stockholder Nominee’s fiduciary duties under applicable law;
(B) is not and will not become a party to any agreement, arrangement or understanding with any person other than the corporation with respect to any direct or indirect compensation, reimbursement, indemnification or advancements in connection with any service, action or omission in his or her capacity as a director of the corporation that has not been disclosed to the corporation;
(C) is not and will not become a party to any Derivative Instrument, and does not and will not acquire any short interest in any securities of the corporation, in each case, that has not been disclosed to the corporation; and
(D) will be in compliance, if elected as a director of the corporation, and will comply with, applicable law and all applicable publicly disclosed corporate governance, business conduct, ethics, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation (and that, to evidence such Stockholder Nominee’s undertaking and commitment to so comply, such Stockholder Nominee will execute and deliver to the corporation all such agreements and instruments that the corporation requires of each of its directors).
(2) At the written request of the corporation, the Stockholder Nominee shall promptly, but in any event within five (5) business days of such request, submit any additional completed and signed questionnaires required of the corporation’s directors and provide to the corporation such other information as the corporation may reasonably request in order for the corporation to comply with its disclosure obligations under applicable law or, as of the date on which the stockholder’s notice required by Section 1.13(a)(2) was delivered or a date subsequent thereto, determine whether such notice satisfies the requirements of this Section 1.13 or ascertain whether the Stockholder Nominee is eligible for nomination pursuant to this Section 1.13. The corporation may request such additional information as necessary to permit the Board of Directors to determine if the Stockholder Nominee is qualified and suitable to serve as a director of the corporation, eligible to serve as an “independent director” or “audit committee financial expert” of the corporation under applicable law, the rules or regulations of any stock exchange applicable to the corporation, any regulation applicable to the corporation or its securities, or any publicly disclosed corporate governance guideline or committee charter of the corporation, and such other information as could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of the Stockholder Nominee. If the Stockholder Nominee fails to furnish such requested information, such Nomination shall not be considered made in compliance with this Section 1.13 and shall be disregarded and not be considered at the meeting of stockholders before which such Nomination is proposed to be brought, notwithstanding that proxies in respect of such vote or such Stockholder Nominee may have been received by the corporation.
(3) Only individuals who are nominated in accordance with the procedures set forth in this Section 1.13 shall be eligible for election as directors of the corporation at a meeting of stockholders, and only such Business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.13.
(4) Except as otherwise provided by applicable law, the certificate of incorporation, or this Section 1.13, the Board of Directors or the individual presiding over the meeting of stockholders, in each case, shall have the power and duty to determine whether a Nomination or any Business proposed to be brought before the meeting of stockholders pursuant to this Section 1.13 was or was not made, proposed or brought, as the case may be, in accordance with the procedures set forth in this Section 1.13 and therefore shall be disregarded and not be considered or transacted at the meeting. Notwithstanding the foregoing provisions of this Section 1.13, if the stockholder (or a qualified representative of such stockholder) does not appear at the meeting of stockholders of the corporation to present a Nomination or Business pursuant to this Section 1.13, such Nomination or Business shall not be considered made in accordance with this Section 1.13 and shall be disregarded and not be considered or transacted at the meeting of stockholders before which such Nomination or Business is proposed to be brought, notwithstanding that proxies in respect of such vote or such Stockholder Nominee or Business may have been received by the corporation.
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(5) For purposes of this Section 1.13, “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 Section 13, 14, or 15(d) of the Exchange Act.
(6) Notwithstanding the foregoing provisions of this Section 1.13, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, including, but not limited to, Rule 14a-19 of the Exchange Act, with respect to the matters set forth in this Section 1.13. If a stockholder fails to comply with any applicable requirements of the Exchange Act, including, but not limited to, Rule 14a-19 promulgated thereunder, such stockholder’s Business and/or Nomination shall be deemed to have not been made in compliance with these bylaws and shall be disregarded.
(7) Nothing in this Section 1.13 shall be deemed to affect any rights:
(A) of stockholders to request inclusion of proposals in the corporation’s proxy materials with respect to a meeting of stockholders pursuant to Rule 14a-8 (to the extent the corporation or such proposals are subject to Rule 14a-8); or
(B) of the holders of:
(i) any series of Preferred Stock then outstanding to nominate one or more Preferred Directors, or
(ii) any other class or series of stock of the corporation to nominate directors or to propose other business, in each case, with respect to which such holders are entitled, by or pursuant to the provisions of the certificate of incorporation, to vote or consent separately as a single class or series.
ARTICLE II
Board of Directors
Section 2.1 Number; Qualifications. Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock of the corporation then outstanding to elect directors pursuant to any applicable provisions of the certificate of incorporation, the Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Except for any directors elected by the holders of any series of Preferred Stock of the corporation then outstanding as provided for or fixed pursuant to the provisions of the certificate of incorporation of the corporation (the “Preferred Directors” and each, a “Preferred Director”) and with respect to newly created directorships resulting from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, disqualification, removal or other cause, each director shall be elected by a majority of the votes cast with respect to the nominee for election to the Board of Directors at any meeting of stockholders at which directors are to be elected by the stockholders generally entitled to vote and a quorum is present; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders at which directors are to be elected by the stockholders generally entitled to vote, a quorum is present and a stockholder or stockholders of the corporation generally entitled to vote has or have (a) nominated one or more individuals for election to the Board of Directors in compliance with Section 1.13 of these bylaws such that the number of nominees for election to the Board of Directors exceeds the number of open seats and (b) not withdrawn such Nomination or Nominations on or prior to the tenth (10th) day preceding the date the corporation first mails its notice of such meeting to the stockholders. For purposes of this Section 2.1, a “majority of the votes cast” means that the number of shares voted “for” a nominee for election to the Board of Directors by the stockholders generally entitled to vote exceeds the votes cast “against” such nominee and shall not include abstentions. Directors need not be stockholders.
Section 2.2 Election; Resignation; Vacancies. The Board of Directors shall initially consist of the person or persons named as directors in the certificate of incorporation or elected by the incorporator of the corporation, and each director so elected shall hold office until the first annual meeting of stockholders and until his or her successor is duly elected and qualified. At each annual meeting of stockholders, the stockholders shall elect directors each of whom shall hold office for a term of one (1) year or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Any director may resign at any time upon notice to the corporation. Unless otherwise provided by applicable law or the certificate
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of incorporation, newly created directorships resulting from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely and exclusively by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Any director so elected shall hold office until the expiration of the term of office of the director whom he or she has replaced and until his or her successor shall be elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal.
Section 2.3 Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine.
Section 2.4 Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chief Executive Officer, President, the Secretary, or by any member of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four (24) hours before the special meeting.
Section 2.5 Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this bylaw shall constitute presence in person at such meeting.
Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board of Directors the directors entitled to cast a majority of the votes of the whole Board of Directors shall constitute a quorum for the transaction of business. Except in cases in which the certificate of incorporation, these bylaws or applicable law otherwise provides, a majority of the votes entitled to be cast by the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 2.7 Organization. Meetings of the Board of Directors shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in his or her absence by the Chief Executive Officer, or in his or her absence by the President, or in their absence by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 2.8 Action by Unanimous Consent of Directors. 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 of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission. After action is taken, the consent or consents relating thereto shall be filed with the minutes of the proceedings of the Board of Directors, or the committee thereof, in the same paper or electronic form as the minutes are maintained.
ARTICLE III
Committees
Section 3.1 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the 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 of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law and to the extent provided in the resolution of the Board of Directors or these bylaws, shall have and may exercise all the powers and authority of the Board of Directors 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 which may require it.
Section 3.2 Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter 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 of Directors conducts its business pursuant to Article II of these bylaws.
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ARTICLE IV
Officers
Section 4.1 Executive Officers; Election; Qualifications; Term of Office, Resignation; Removal; Vacancies. The Board of Directors shall elect a Chief Executive Officer, a Chief Financial Officer, a President and a Secretary, and it may, if it so determines, choose a Chairperson of the Board (or Co-Chairpersons of the Board) and a Vice Chairperson of the Board (or Co-Vice Chairpersons of the Board) from among its members. The Board of Directors may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as it shall from time to time deem necessary or desirable. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. Any officer may resign at any time upon written notice to the corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation. Any number of offices may be held by the same person. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.
Section 4.2 Powers and Duties of Officers. The officers of the corporation shall have such powers and duties in the management of the corporation as may be prescribed in these bylaws or a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties.
Section 4.3 Appointing Attorneys and Agents; Voting Securities of Other Entities. Unless otherwise provided by resolution adopted by the Board of Directors, the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, either Co-Chairperson of the Board), the Chief Executive Officer, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the corporation, for, in the name and on behalf of the corporation, to cast the votes which the corporation may be entitled to cast as the holder of stock or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the corporation, at meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name of the corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consents, and may execute or cause to be executed for, in the name and on behalf of the corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper. Any of the rights set forth in this Section 4.3 which may be delegated to an attorney or agent may also be exercised directly by the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, either Co-Chairperson of the Board), the Chief Executive Officer, the President or any Vice President.
ARTICLE V
Stock
Section 5.1 Certificates. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the corporation by any two authorized officers of the corporation representing the number of shares registered in certificate form. Each of the Chief Executive Officer, the President, any Vice President and the Secretary, in addition to any other officers of the corporation authorized by the Board of Directors or these bylaws, is hereby authorized to sign certificates by, or in the name of, the corporation. Any or all of 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, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue. The corporation shall not have the power to issue a certificate in bearer form.
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Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
ARTICLE VI
Indemnification
Section 6.1 Right to Indemnification. The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, its participants or beneficiaries, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors.
Section 6.2 Prepayment of Expenses. The corporation shall to the fullest extent not prohibited by applicable law, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.
Section 6.3 Claims. If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this Article VI is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense (including attorneys’ fees) of prosecuting such claim. In any such action the corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
Section 6.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
Section 6.5 Other Sources. The corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit entity.
Section 6.6 Amendment or Repeal. Any amendment, repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment, repeal or modification.
Section 6.7 Other Indemnification and Prepayment of Expenses. This Article VI shall not limit the right of the corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
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ARTICLE VII
Miscellaneous
Section 7.1 Fiscal Year. The fiscal year of the corporation shall be determined by resolution of the Board of Directors.
Section 7.2 Seal. The corporate seal shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.
Section 7.3 Manner of Notice. Except as otherwise provided herein or permitted by applicable law, notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice to directors may also be given by telecopier, telephone or other means of electronic transmission.
Section 7.4 Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any waiver of notice, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in a waiver of notice.
Section 7.5 Form of Records. Any records administered by or on behalf of the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases; provided that the records so kept can be converted into clearly legible paper form within a reasonable time, and, with respect to the stock ledger, that the records so kept comply with applicable law.
Section 7.6 Amendment of Bylaws. These bylaws may be altered, amended or repealed, and new bylaws adopted, by the Board of Directors, but the stockholders may adopt additional bylaws and may amend, alter and repeal any bylaws whether adopted by them or otherwise. In addition to any affirmative vote required by the certificate of incorporation, any bylaw that is to be adopted, altered, amended or repealed by the stockholders of the corporation shall receive the affirmative vote of the holders of at least sixty-six and two-thirds percent (66⅔%) in voting power of the then outstanding shares of stock of the corporation entitled to vote.
Section 7.7 Forum for Adjudication of Disputes. Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought by or on behalf of the corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee of the corporation to the corporation or the corporation’s stockholders, (c) any civil action to interpret, apply or enforce any provision of the General Corporation Law of the State of Delaware, (d) any action asserting a claim, including a claim in the right of the Corporation, as to which the General Corporation Law of the State of Delaware confers jurisdiction upon the Court of Chancery of the State of Delaware (the “Court of Chancery”), or (e) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery; provided, however, in the event that the Court of Chancery lacks jurisdiction over such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in all cases, subject to such court having personal jurisdiction over the indispensable parties named as defendants, except for, as to each of (a) through (e) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and such indispensable party does not consent to the personal jurisdiction of such court within ten (10) days following such determination). For the avoidance of doubt, the foregoing shall not apply to the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Unless the corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring any interest in shares of stock of the corporation shall be deemed to have notice of and consented to the provisions of this Article.
For the avoidance of doubt, this Section 7.7 shall not apply to any action asserting claims arising under the Exchange Act.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 102(b)(7) of the DGCL permits a Delaware corporation, in its certificate of incorporation, to limit or eliminate the personal liability of a director or officer to the corporation or its stockholders for monetary damages for breaches of fiduciary duty as a director, except for liability of (a) a director or officer for (i) any breach of the duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) transactions from which such director or officer derived an improper personal benefit; (b) a director for the willful or negligent payment of unlawful dividends or purchases or redemptions of shares of stock; or (c) an officer in any action by or in the right of the corporation.
Under Section 145 of the DGCL, a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of an action brought by or in the right of a corporation, the corporation may indemnify any person who was or is a party or is threatened to be made a party to any such threatened, pending or completed action by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) only against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent the appropriate court finds that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.
As permitted by Section 102(b)(7) of the DGCL, the new Acuren Delaware certificate of incorporation will provide that no director or officer of Acuren Delaware shall be liable to Acuren Delaware or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that such exemption from liability or limitation thereof is not permitted under the DGCL as currently in effect or as the same may be amended. This provision in the Acuren Delaware certificate of incorporation will not eliminate the directors’ or officers’ fiduciary duties, and in appropriate circumstances, equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director and officer of Acuren Delaware may be subject to personal liability for (i) any breach of the duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or (iii) transactions from which such director or officer derived an improper personal benefit; each director of Acuren Delaware may be subject to personal liability for the willful or negligent payment of unlawful dividends or purchases or redemptions of shares of stock; and each officer of Acuren Delaware may be subject to personal liability in any action by or in the right of the corporation. The provision also will not affect a director’s responsibilities under any other applicable law, such as the United States federal securities laws or state or federal environmental laws.
The new Acuren Delaware bylaws will also provide that Acuren Delaware is required to indemnify and advance expenses to its present and former officers and directors to the fullest extent permitted by applicable law. For purposes of the indemnification and advancement rights described in this paragraph, references to Acuren Delaware include Acuren Corporation as incorporated under British Virgin Islands law prior to the continuance of its existence under Delaware law as Acuren Delaware.
Further, effective July 30, 2024, we entered into director indemnification agreements pursuant to which we agreed to additional indemnification and advancement procedures and protections for our directors.
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Table of Contents
Item 21. Exhibits and Financial Statement Schedules
|
Exhibit
Number
|
|
Description
|
|
2.1#
|
|
Agreement and Plan of Merger, dated as of May 21, 2024, by and among Admiral Acquisition Limited, AAL Merger Sub, Inc., ASP Acuren Holdings, Inc. and ASP Acuren Holdings Inc., as the stockholders’ representative.
|
|
3.1
|
|
Form of Certificate of Incorporation of Acuren Corporation.
|
|
3.2
|
|
Form of Bylaws of Acuren Corporation.
|
|
4.1
|
|
Specimen Common Stock certificate.
|
|
4.2
|
|
Specimen Series A Preferred Stock certificate.
|
|
4.3
|
|
Amended and Restated Warrant Instrument, dated as of September 23, 2024, executed by Acuren Corporation (form of Warrant contained in Schedule I thereto).
|
|
5.1
|
|
Form of Opinion of Greenberg Traurig.
|
|
8.1
|
|
Form of Tax Opinion of Greenberg Traurig.
|
|
10.1†
|
|
Acuren Corporation 2024 Equity Incentive Plan.
|
|
10.2†
|
|
Form of Restricted Stock Unit Agreement (Non-Employee Directors) — Acuren Corporation 2024 Equity Incentive Plan.
|
|
10.3†
|
|
Form of Restricted Stock Unit Agreement — Acuren Corporation 2024 Equity Incentive Plan.
|
|
10.4
|
|
Form of Director and Officer Indemnification Agreement.
|
|
10.5#
|
|
Credit Agreement, dated as of July 30, 2024, by and among ASP Acuren Holdings, Inc., as initial borrower, Acuren Corporation (f/k/a Admiral Acquisition Limited), as holdings, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Jefferies Finance LLC, as administrative agent and as collateral agent.
|
|
10.6
|
|
Pledge and Security Agreement, dated as of July 30, 2024, made by AAL Delaware HoldCo, Inc., ASP Acuren Holdings, Inc., Acuren Corporation, and the grantors from time to time party thereto in favor of Jefferies Finance LLC, as collateral agent.
|
|
10.7
|
|
Consulting Services Agreement, dated as of July 30, 2024, by and between Acuren Corporation and Mariposa Capital, LLC.
|
|
10.8#
|
|
Placing Agreement, dated May 17, 2023, by and between Acuren Acquisition Limited, certain of its directors and founders, Mariposa Acquisition IX, LLC, Jefferies International Limited, Jefferies GmbH and UBS AG London Branch.
|
|
10.9†
|
|
Form of Option Deeds.
|
|
10.10
|
|
Founder Insider Letter, dated May 17, 2023.
|
|
10.11†
|
|
Employment Agreement, dated September 19, 2024, by and between Acuren Corporation and Talman B. Pizzey.
|
|
10.12†
|
|
Michael Grigsby Offer Letter dated July 16, 2020.
|
|
10.13†
|
|
Lourinda St. John Offer Letter dated February 10, 2023.
|
|
16.1
|
|
Letter from Grant Thornton UK LLP, dated November 4, 2024, regarding change in certifying accountant.
|
|
21.1
|
|
List of subsidiaries of the registrant.
|
|
23.1
|
|
Consent of Grant Thornton UK LLP (Acuren Corporation).
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|
23.2
|
|
Consent of PricewaterhouseCoopers LLP (ASP Acuren).
|
|
24.1
|
|
Powers of Attorney (included in the signature pages hereto).
|
|
107
|
|
Filing Fee Table.
|
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Table of Contents
Item 22. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of the registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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Table of Contents
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
(7) The undersigned registrant hereby undertakes to supply, by means of a post-effective amendment, all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tomball, State of Texas, on November 4, 2024.
|
|
|
Acuren Corporation
|
| |
|
By:
|
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/s/ Talman Pizzey
|
| |
|
Name:
|
|
Talman Pizzey
|
| |
|
Title:
|
|
President and Chief Executive Officer
|
Each of the undersigned hereby constitutes and appoints Talman Pizzey and Fiona E. Sutherland, and each of them as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite, necessary or advisable to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Talman Pizzey
|
|
President and Chief Executive Officer
|
|
November 4, 2024
|
|
Talman Pizzey
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Michael Grigsby
|
|
Chief Financial Officer
|
|
November 4, 2024
|
|
Michael Grigsby
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Gina Lafferty
|
|
Vice President and Corporate Controller
|
|
November 4, 2024
|
|
Gina Lafferty
|
|
(Controller or Principal Accounting Officer)
|
|
|
|
/s/ Sir Martin E. Franklin
|
|
Co-Chairman of the Board of Directors
|
|
November 4, 2024
|
|
Sir Martin E. Franklin
|
|
|
|
|
|
/s/ Robert A. E. Franklin
|
|
Co-Chairman of the Board of Directors
|
|
November 4, 2024
|
|
Robert A. E. Franklin
|
|
|
|
|
|
/s/ Antoinette C. Bush
|
|
Director
|
|
November 4, 2024
|
|
Antoinette C. Bush
|
|
|
|
|
|
/s/ Rory Cullinan
|
|
Director
|
|
November 4, 2024
|
|
Rory Cullinan
|
|
|
|
|
|
/s/ Elizabeth Meloy Hepding
|
|
Director
|
|
November 4, 2024
|
|
Elizabeth Meloy Hepding
|
|
|
|
|
|
/s/ Peter Hochfelder
|
|
Director
|
|
November 4, 2024
|
|
Peter Hochfelder
|
|
|
|
|
|
/s/ James E. Lillie
|
|
Director
|
|
November 4, 2024
|
|
James E. Lillie
|
|
|
|
|
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Table of Contents
AUTHORIZED REPRESENTATIVE
Pursuant to requirements of Section 6(a) of the Securities Act of 1933, as amended, this registration statement on Form S-4 has been signed on behalf of the registrant by the undersigned, solely in his capacity as the duly authorized representative of the registrant in the United States, on November 4, 2024.
|
|
|
By:
|
|
/s/ Michael Grigsby
|
| |
|
Name:
|
|
Michael Grigsby
|
| |
|
Title:
|
|
Chief Financial Officer
|
| |
|
|
|
(Authorized Representative in the United States)
|
II-6
Exhibit 2.1
AGREEMENT AND PLAN
OF MERGER
BY AND AMONG
ADMIRAL ACQUISITION
LIMITED,
AAL MERGER SUB,
INC.,
ASP ACUREN HOLDINGS,
INC.
AND
ASP Acuren investco
lp
AS the Stockholders’
Representative
Dated as of MAY
21, 2024
TABLE OF CONTENTS
| |
|
Page |
| Article 1 DEFINITIONS |
2 |
| |
|
| Section 1.1 |
Definitions |
2 |
| Section 1.2 |
Interpretive Provisions |
22 |
| |
|
|
| Article 2 THE MERGER |
23 |
| |
|
| Section 2.1 |
Merger |
23 |
| Section 2.2 |
Effective Time |
23 |
| Section 2.3 |
Effects of the Merger |
23 |
| Section 2.4 |
Effect on Capital Stock |
24 |
| Section 2.5 |
Withholding |
25 |
| Section 2.6 |
Options; Option Plan |
25 |
| Section 2.7 |
Dissenting Shares |
26 |
| Section 2.8 |
Distribution Schedule |
26 |
| |
|
|
| Article 3 THE CLOSING |
27 |
| |
|
| Section 3.1 |
Closing; Closing Date |
27 |
| Section 3.2 |
Pre-Closing Actions |
27 |
| Section 3.3 |
Closing Actions |
28 |
| Section 3.4 |
Post-Closing Actions |
31 |
| Section 3.5 |
Treatment of Certain Amounts. |
35 |
| |
|
|
| Article 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
36 |
| |
|
| Section 4.1 |
Organization and Qualification |
36 |
| Section 4.2 |
Capitalization of the Company |
37 |
| Section 4.3 |
Subsidiaries |
37 |
| Section 4.4 |
Authority; Binding Obligation |
38 |
| Section 4.5 |
No Defaults or Conflicts |
38 |
| Section 4.6 |
No Governmental Authorization Required |
39 |
| Section 4.7 |
Financial Statements |
39 |
| Section 4.8 |
No Material Undisclosed Liabilities; No Other Assets |
40 |
| Section 4.9 |
Intellectual Property |
40 |
| Section 4.10 |
Data Privacy and IT |
42 |
| Section 4.11 |
Compliance with Laws |
42 |
| Section 4.12 |
Company Contracts |
42 |
| Section 4.13 |
Litigation |
44 |
| Section 4.14 |
Taxes |
44 |
| Section 4.15 |
Permits |
47 |
| Section 4.16 |
Employee Benefit Plans |
47 |
| Section 4.17 |
Labor Matters |
51 |
| Section 4.18 |
Environmental Compliance |
53 |
| Section 4.19 |
Insurance |
53 |
| Section 4.20 |
Real Property |
53 |
| Section 4.21 |
Affiliate Transactions |
54 |
| Section 4.22 |
Absence of Certain Changes or Events |
55 |
| Section 4.23 |
Financial Advisors |
55 |
| Section 4.24 |
Customers and Suppliers |
55 |
| Section 4.25 |
Anti-Corruption and Anti-Bribery Laws |
55 |
| Section 4.26 |
Compliance with Sanctions Laws and Export Laws |
56 |
| Section 4.27 |
Reliance |
56 |
| |
|
|
| Article 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
57 |
| |
|
| Section 5.1 |
Organization and Qualification |
57 |
| Section 5.2 |
Authority; Binding Obligation |
57 |
| Section 5.3 |
No Defaults or Conflicts |
57 |
| Section 5.4 |
No Authorization or Consents Required |
58 |
| Section 5.5 |
Sufficient Funds |
58 |
| Section 5.6 |
Capitalization; No Prior Activities |
61 |
| Section 5.7 |
No Regulatory Impediment |
61 |
| Section 5.8 |
Absence of Arrangements with Management |
61 |
| Section 5.9 |
Financial Advisors |
61 |
| Section 5.10 |
Solvency |
61 |
| Section 5.11 |
Litigation |
62 |
| Section 5.12 |
Reliance |
62 |
| |
|
|
| Article 6 COVENANTS |
62 |
| |
|
| Section 6.1 |
Conduct of Business of the Company |
62 |
| Section 6.2 |
Conduct of Business of Parent |
67 |
| Section 6.3 |
Access to Information; Retention of Books and Records |
67 |
| Section 6.4 |
Filings and Authorizations; Consummation |
69 |
| Section 6.5 |
Further Assurances |
71 |
| Section 6.6 |
Confidentiality |
71 |
| Section 6.7 |
Officer and Director Indemnification and Insurance |
71 |
| Section 6.8 |
Waiver of Conflicts Regarding Representation |
72 |
| Section 6.9 |
Employee Matters |
72 |
| Section 6.10 |
Section 280G Matters |
74 |
| Section 6.11 |
Publicity |
74 |
| Section 6.12 |
Notices to Stockholders |
75 |
| Section 6.13 |
Termination of Management Consulting Agreement |
75 |
| Section 6.14 |
R&W Insurance Policy |
75 |
| Section 6.15 |
Tax Matters |
75 |
| Section 6.16 |
Financing |
77 |
| Section 6.17 |
Registration Statement; Financial Statements |
84 |
| Section 6.18 |
No Shop |
84 |
| Section 6.19 |
Payoff Letters; Lien Releases; Invoices |
85 |
| Section 6.20 |
Transferred Information |
85 |
| Section 6.21 |
Committee on Foreign Investment in the United States and Other Regulatory Filings. |
86 |
| Article 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB |
87 |
| |
|
| Section 7.1 |
Representations and Warranties Accurate |
87 |
| Section 7.2 |
Performance |
88 |
| Section 7.3 |
No Material Adverse Effect |
88 |
| Section 7.4 |
Company Officer’s Certificate |
88 |
| Section 7.5 |
Legal Prohibition |
88 |
| Section 7.6 |
Governmental Consents |
88 |
| Section 7.7 |
Frustration of Closing Conditions |
88 |
| |
|
|
| Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY |
88 |
| |
|
| Section 8.1 |
Representations and Warranties Accurate |
88 |
| Section 8.2 |
Performance |
89 |
| Section 8.3 |
Parent Officer’s Certificate |
89 |
| Section 8.4 |
Legal Prohibition |
89 |
| Section 8.5 |
Governmental Consents |
89 |
| Section 8.6 |
Frustration of Closing Conditions |
89 |
| |
|
|
| Article 9 TERMINATION |
89 |
| |
|
| Section 9.1 |
Termination |
89 |
| Section 9.2 |
Effect of Termination |
91 |
| |
|
|
| Article 10 MISCELLANEOUS |
93 |
| |
|
| Section 10.1 |
Survival |
93 |
| Section 10.2 |
Amendment |
93 |
| Section 10.3 |
Entire Agreement |
93 |
| Section 10.4 |
Headings |
94 |
| Section 10.5 |
Notices |
94 |
| Section 10.6 |
Exhibits and Company Disclosure Letter |
95 |
| Section 10.7 |
Waiver |
95 |
| Section 10.8 |
Binding Effect; Assignment |
95 |
| Section 10.9 |
Third Party Beneficiaries |
95 |
| Section 10.10 |
Counterparts |
96 |
| Section 10.11 |
Release |
96 |
| Section 10.12 |
Governing Law |
96 |
| Section 10.13 |
Exclusive Jurisdiction; Consent to Service of Process |
96 |
| Section 10.14 |
Waiver of Jury Trial |
97 |
| Section 10.15 |
Specific Performance |
97 |
| Section 10.16 |
No Recourse |
98 |
| Section 10.17 |
Severability |
99 |
| Section 10.18 |
Stockholders’ Representative |
99 |
| Section 10.19 |
Expenses |
101 |
| Section 10.20 |
Debt Financing Sources |
101 |
ANNEXES AND EXHIBITS
| Exhibit A-1 |
Form of Company Stockholder Written Consent |
| Exhibit A-2 |
Form of Merger Sub Stockholder Written Consent |
| Exhibit B |
Form of Option Cancellation and Release Agreement |
| Exhibit C |
Accounting Methodology and Sample Calculation of Net Working Capital |
| Exhibit D |
Sample Calculation of Transaction Tax Deductions |
| Exhibit E |
Form of Letter of Transmittal |
DISCLOSURE LETTERS
Company Disclosure Letter
AGREEMENT AND PLAN
OF MERGER
AGREEMENT AND PLAN OF MERGER
(this “Agreement”), is made and dated as of May 21, 2024, by and among Admiral Acquisition Limited, a company
incorporated in the British Virgin Islands (“Parent”); AAL Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent (“Merger Sub”); ASP Acuren Holdings, Inc., a Delaware corporation (the “Company”);
and ASP Acuren Investco LP, a Delaware limited partnership (the “Stockholders’ Representative”), solely in its
capacity as the representative of all of the Stockholders (as defined below).
RECITALS
WHEREAS, Parent wishes to
acquire the Company by effecting a merger of Merger Sub with and into the Company, with the Company being the Surviving Corporation (as
defined below) (the “Merger”);
WHEREAS, the board of directors
of the Company has unanimously (i) approved, adopted and declared advisable this Agreement and the consummation of the transactions
contemplated by this Agreement, including the Merger, upon the terms and conditions set forth in this Agreement and (ii) resolved to recommend
approval and adoption of this Agreement and the transactions contemplated by this Agreement, including the Merger, to the stockholders
of the Company in accordance with the General Corporation Law of the State of Delaware (“DGCL”);
WHEREAS, Stockholders’
Representative, in its capacity as the holder of a majority of the outstanding voting stock of the Company, in accordance with Section 228
of the DGCL, has executed the written consent in lieu of a meeting in the form attached hereto as Exhibit A-1 (the “Company
Stockholder Written Consent”), adopting this Agreement and approving the transactions contemplated by this Agreement, including
the Merger, in each case, as required by Section 251 of the DGCL and effective, pursuant to instruction given in accordance with
Section 228(c) of the DGCL, as of immediately following the execution of this Agreement by the parties hereto;
WHEREAS, the respective boards
of directors of Parent and Merger Sub have unanimously adopted and approved this Agreement and the transactions contemplated hereby, including
the Merger, upon the terms and conditions set forth in this Agreement; and
WHEREAS, Parent, in its capacity
as the holder of all of the outstanding voting stock of Merger Sub, in accordance with Section 228 of the DGCL, has executed the
written consent in lieu of a meeting in the form attached hereto as Exhibit A-2 (the “Merger Sub Stockholder Written
Consent”) adopting this Agreement and approving the transactions contemplated by this Agreement, including the Merger, in each
case, as required by Section 251 of the DGCL and effective, pursuant to instruction given in accordance with Section 228(c)
of the DGCL, as of immediately following the execution of this Agreement by the parties hereto.
NOW THEREFORE, in consideration
of the foregoing and the respective representations, warranties, covenants and agreements contained herein, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged and agreed, the parties to this Agreement agree
as follows:
Article 1
DEFINITIONS
Section 1.1 Definitions.
The following terms, whenever used herein, shall have the following meanings for all purposes of this Agreement.
“280G Approval”
has the meaning set forth in Section 6.10.
“Accounting Methodology”
means those accounting principles, policies, methodologies, classifications, estimation techniques, procedures and practices set forth
on Exhibit C.
“Action”
means any audit, litigation, investigation, lawsuit, arbitration, mediation or other legal proceeding, in each case before any Governmental
Authority or arbitrator, whether civil, criminal, administrative or otherwise, in law or in equity.
“Acuren Intermediate”
means ASP Acuren Intermediate Holdings, Inc., a Delaware corporation and a direct, wholly owned Subsidiary of the Company.
“Acuren Purchase
Agreement” means that certain Agreement and Plan of Merger, dated as of October 22, 2019, by and among Acuren Intermediate,
Rockwood, ASP Acuren Merger Sub, Inc., RSC Escrow, LLC and Peter O. Scannell, as stockholder representative, as amended by that certain
Amendment No. 1 to Agreement and Plan of Merger, dated as of December 20, 2019, and that certain Amendment No. 2 to Agreement and Plan
of Merger, dated as of May 17, 2024.
“Adjustment Time”
means as of the close of business on the day immediately preceding the Closing Date, except (i) with respect to items relating to
income Taxes, in which case it means as of the end of the Closing Date and (ii) with respect to Indebtedness and Transaction Expenses,
in which case it means as of the Closing.
“Affiliate”
means, 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, and the term “control” (including the terms “controlled”, “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; provided,
that in no event shall the Company or any of the Company Subsidiaries be considered an Affiliate of any other portfolio company of any
investment fund affiliated with American Securities LLC nor shall any other portfolio company of any investment fund affiliated with American
Securities LLC be considered to be an Affiliate of the Company or any of the Company Subsidiaries.
“Agreement”
has the meaning set forth in the Preamble.
“Alternative Financing”
has the meaning set forth in Section 6.16(d).
“AS Set Aside Amount”
has the meaning set forth in Section 3.5(a).
“Business Day”
means any day of the year other than (a) a Saturday, Sunday or federal holiday in the United States or (b) a day on which national banking
institutions in New York, New York, London, England or the British Virgin Islands are required or authorized to close.
“Canadian Tax Act”
means the Income Tax Act, R.S.C. 1985 c.1 (5th Supp.).
“Canadian Upstream
Loans” means the intercompany loan receivables held, from time to time, by Acuren Group Inc. and Rockwood Canada Holdings Inc.
from Rockwood Service Corporation.
“Cash and Cash Equivalents”
means, with respect to the Company and Company Subsidiaries, all of their cash and cash equivalents (including marketable securities,
short term investments, and the amounts of any received but uncleared checks, drafts and wires, and excluding the amounts of any issued
but uncleared checks, drafts and wires), calculated on a consolidated basis and determined in accordance with the Accounting Methodology.
“Certificate of Merger”
has the meaning set forth in Section 2.2.
“CEWS”
means the Canada Emergency Wage Subsidy, enacted in section 125.7 of the Canadian Tax Act, and any other COVID-19 related loan program
or direct or indirect wage, rent or other subsidy offered by any Governmental Authority.
“CEWS Returns”
means any and all Tax Returns filed or required to be filed, or required to be prepared and kept on file, in respect of CEWS.
“CFIUS”
means the Committee on Foreign Investment in the United States.
“CFIUS Clearance”
means that any of the following shall have occurred: (i) CFIUS has informed the parties that the transactions contemplated by this Agreement
do not constitute a “covered transaction” under the DPA; (ii) the parties hereto have received written notice from CFIUS that
there are no unresolved national security concerns and all action under the DPA is concluded with respect to the transactions contemplated
by this Agreement; (iii) CFIUS has decided not to conclude all action under the DPA, but is also not requesting that the parties file
a joint voluntary notice pursuant to 31 C.F.R. § 800.501 with respect to the transactions contemplated by this Agreement; or (iv)
if CFIUS shall have sent a report to the President of the United States requesting the President’s decision under the DPA, either:
(A) the period under the DPA during which the President may announce his decision to take action to suspend, prohibit or place any limitation
on the transactions contemplated by this Agreement shall have expired without any such action being threatened, announced or taken; or
(B) the President shall have announced a decision not to take any action to suspend, prohibit, or place any limitations on the transactions
contemplated by this Agreement.
“CFIUS Declaration”
means a declaration with respect to the transactions contemplated by this Agreement prepared by the parties hereto and submitted to CFIUS
in accordance with the requirements of the DPA.
“CFIUS Mitigation
Measures” has the meaning set forth in Section 6.21(g).
“CFIUS Notice”
means a joint voluntary notice with respect to the transactions contemplated by this Agreement prepared by the parties hereto and submitted
to CFIUS in accordance with the requirements of the DPA.
“Change”
has the meaning set forth in the definition of Material Adverse Effect.
“Closing”
has the meaning set forth in Section 3.1.
“Closing Date”
has the meaning set forth in Section 3.1.
“Closing Statement”
has the meaning set forth in Section 3.4(a).
“Code”
means the Internal Revenue Code of 1986, as amended.
“Commerce”
has the meaning set forth in Section 4.26.
“Commitment Letters”
has the meaning set forth in Section 5.5(a)(ii).
“Common Stock Merger
Consideration” means, with respect to each Share, the aggregate amount determined by adding together: (a) the amount determined
by dividing (i) the amount determined by adding together (A) the aggregate exercise price of all Eligible Options and (B) the amount obtained
by subtracting from the Purchase Price, the Escrow Amount and the Stockholders’ Representative Expense Amount, by (ii) the amount
obtained by adding together (A) the aggregate number of Shares issued and outstanding immediately prior to the Effective Time (other than
any Share held by the Company or in the Company’s treasury) and (B) the Eligible Options; (b) the amount determined by dividing
(i) the portion of the Escrow Amount proposed to be distributed to the holders of Shares converted pursuant to Section 2.4(a) and
the holders of Eligible Options (if any), by (ii) the amount obtained by adding together (A) the aggregate number of Shares issued and
outstanding immediately prior to the Effective Time (other than any Share held by the Company or in the Company’s treasury) and
(B) the Eligible Options; and (c) the amount determined by dividing (i) the portion of the Stockholder’s Representative Expense
Amount proposed to be distributed to the holders of Shares converted pursuant to Section 2.4(a) and the holders of Eligible Options
(if any), by (ii) the amount obtained by adding together (A) the aggregate number of Shares issued and outstanding immediately prior to
the Effective Time (other than any Share held by the Company or in the Company’s treasury) and (B) the Eligible Options. For the
avoidance of doubt, the only portion of Common Stock Merger Consideration that will be paid at the Closing pursuant to Section 3.3(a)(i)
are amounts pursuant to clause (a) above.
“Company”
has the meaning set forth in the Preamble.
“Company Contracts”
has the meaning set forth in Section 4.12.
“Company Disclosure
Letter” has the meaning set forth in Article 4.
“Company Documents”
means all of the agreements, documents, instruments or certifications contemplated by this Agreement to be executed by the Company or
any Company Subsidiary.
“Company Intellectual
Property” has the meaning set forth in Section 4.9(b).
“Company Plan”
has the meaning set forth in Section 4.16(a).
“Company Stockholder
Written Consent” has the meaning set forth in the Recitals.
“Company Subsidiary”
or “Company Subsidiaries” has the meaning set forth in Section 4.3(a).
“Competition Laws”
means the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other
Law or Order that is designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition
or restraint of trade.
“Confidentiality
Agreement” has the meaning set forth in Section 6.6.
“Contingent Payment”
means the “Contingent Payment” as defined in the Acuren Purchase Agreement.
“Contingent Payment
Amount” means the “Contingent Payment Amount” as defined in the Acuren Purchase Agreement.
“Contingent Payment
Holdback Account” has the meaning set forth in Section 3.5(a).
“Continuing Employees”
has the meaning set forth in Section 6.9(a).
“Contract”
means any written contract, deed, mortgage, license, instrument, understanding, arrangement, indenture, note, bond, lease, commitment
or other written legally binding agreement, which is currently in effect.
“D&O Policy”
has the meaning set forth in Section 6.7(c).
“Data Room”
has the meaning set forth in Section 6.14.
“date hereof”
and “date of this Agreement” means the date first written above.
“Debt Commitment
Letter” has the meaning set forth in Section 5.5(a)(i).
“Debt Financing”
has the meaning set forth in Section 5.5(a)(i).
“Debt Financing Commitments”
has the meaning set forth in Section 5.5(a)(i).
“Debt Financing Sources”
means any Persons that have committed to provide or arrange or otherwise have entered into agreements pursuant to any commitment letter,
subject to Equitable Exceptions, in connection with all or any part of the Debt Financing described therein (or any replacement debt financings)
in connection with the transactions contemplated by this Agreement and their respective Affiliates and such Persons’ (and their
respective Affiliates’) respective officers, directors, general or limited partners, shareholders, members, employees, controlling
persons, agents and representatives and their respective successors and assigns involved in the Debt Financing (or any replacement debt
financing), including the parties to any commitment letters (including the Debt Commitment Letter), joinder agreements, indentures or
credit agreements entered into pursuant thereto or relating thereto.
“Definitive Debt
Financing Agreements” has the meaning set forth in Section 6.16(a)(i).
“DGCL”
has the meaning set forth in the Recitals.
“Disclosing Party”
means the party by or on behalf of whom Personal Information is to be disclosed or conveyed.
“Disclosure Guidance
and Transparency Rules” means the disclosure guidance and transparency rules produced by the FCA and forming part of the FCA
Handbook of rules and guidance, as from time to time amended.
“Dispute Statement”
has the meaning set forth in Section 3.4(b)(iii).
“Dissenting Shares”
has the meaning set forth in Section 2.7.
“Distribution Schedule”
means the schedule prepared by the Stockholders’ Representative and delivered to Parent in accordance with this Agreement reflecting
the (1) name and address of each holder of Shares or Eligible Options entitled to receive any Common Stock Merger Consideration or
Option Merger Consideration, respectively, (2) number of Shares converted into the right to receive Common Stock Merger Consideration
or Eligible Options (and related exercise price) converted into the right to receive Option Merger Consideration, as applicable, held
by each such holder, (3) the amount of Common Stock Merger Consideration or Option Merger Consideration payable to each such holder
in respect of such Shares or Eligible Options, as applicable, (4) the portion of the Stockholders’ Representative Expense Amount
and the Escrow Amount allocable to each such holder in respect of such Shares or Eligible Options, as applicable, and (5) such other
reasonably necessary information in connection therewith.
“Divestiture”
has the meaning set forth in Section 6.4(d)(i).
“DPA” means
Section 721 of Title VII of the Defense Production Act of 1950, as amended, (codified at 50 U.S.C. § 4565) and the regulations promulgated
thereunder, codified at 31 C.F.R. Parts 800 to 802.
“Effective Time”
has the meaning set forth in Section 2.2.
“Eligible Option”
means each Option to purchase one (1) Share that remains outstanding immediately prior to the Effective Time whether vested or unvested.
“Eligible Option
Holder” means the holder of an Eligible Option.
“Employment Laws”
has the meaning set forth in Section 4.17(d).
“Encumbrance”
means any and all liens, charges, mortgages, options, pledges, restrictions, rights of first offer or refusal or pre-emption, security
interests, hypothecations, easements, rights-of-way, defects or irregularities in title, or other encumbrances in respect of any property
or asset or any agreement or arrangement or obligations to create any of the same (or anything with the same effect).
“Enterprise Value”
means an amount equal to $1,850,000,000.00.
“Environmental Laws”
means all applicable Laws concerning (i) pollution or protection of the environment or (ii) use, handling, transportation, storage, or
disposal of, or exposure to, Hazardous Materials to the extent regulated by a Governmental Authority with jurisdiction over the environment.
“Environmental Permit”
means any permit, license, registration, approval, certificate, authorization or consent required by or necessary to comply with Environmental
Laws, including, all such permits, licenses, registrations, approvals, certificates, authorizations, or consents required to purchase,
store, use, and dispose of radiological materials and containers and equipment containing radiological materials.
“Equitable Exceptions”
has the meaning set forth in Section 4.4.
“Equity Commitment
Letter” has the meaning set forth in Section 5.5(a)(ii).
“Equity Financing”
has the meaning set forth in Section 5.5(a)(ii).
“Equity Financing
Commitments” has the meaning set forth in Section 5.5(a)(ii).
“Equity Investors”
has the meaning set forth in Section 5.5(a)(ii).
“Equityholders”
means, collectively, the Stockholders and the Eligible Option Holders.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate”
means any entity, trade or business (whether or not incorporated) that, together with the Company or any of the Company Subsidiaries is
treated as a single employer and/or under common control with the Company or any Company Subsidiary under Section 414 of the Code
and/or under Section 4001(a)(14) of ERISA.
“Escrow Account”
has the meaning set forth in Section 3.3(a)(iii).
“Escrow Agent”
means JPMorgan Chase Bank, N.A., a national banking association.
“Escrow Agreement”
means the escrow agreement to be negotiated in good faith by and among Parent, the Stockholders’ Representative and Escrow Agent
promptly following the date of this Agreement based on the form of Escrow Agreement exchanged among counsel to Parent and the Stockholders’
Representative prior to the date hereof, and to be entered into at the Closing.
“Escrow Amount”
means an amount equal to $27,000,000 to be held and distributed by the Escrow Agent in accordance with the terms of the Escrow Agreement
and pursuant to Section 3.4 hereof.
“Estimated Closing
Statement” has the meaning set forth in Section 3.2(b).
“Estimated Net Working
Capital” has the meaning set forth in Section 3.2(b).
“Estimated Purchase
Price” has the meaning set forth in Section 3.2(b).
“Estimated Transaction
Expenses” has the meaning set forth in Section 3.2(b).
“Extended Termination
Date” has the meaning set forth in Section 9.1(b).
“FCA” means
the United Kingdom Financial Conduct Authority.
“FCA Handbook”
means the handbook of the FCA.
“Fee Letters”
has the meaning set forth in Section 5.5(a)(i).
“Final Closing Statement”
has the meaning set forth in Section 3.4(b)(iv).
“Final Purchase Price”
has the meaning set forth in Section 3.4(b)(iv).
“Financial Statements”
has the meaning set forth in Section 4.7.
“Financing”
has the meaning set forth in Section 5.5(a)(ii).
“Financing Commitments”
has the meaning set forth in Section 5.5(a)(ii).
“Financing Indemnitees”
has the meaning set forth in Section 6.16(h).
“Financing Sources”
has the meaning set forth in Section 6.16(e).
“FLSA”
has the meaning set forth in Section 4.17(d).
“Fraud”
means, with respect to the making of any representation or warranty set forth in Article 4 or Article 5, actual and intentional
fraud under the laws of the state of Delaware.
“FSMA”
means the UK Financial Services and Markets Act 2000 (as amended).
“Fundamental Representations”
means the representations and warranties set forth in Section 4.1(a) and (b) (Organization and Qualification), Section 4.2
(Capitalization of the Company), Section 4.3(a) (Subsidiaries), Section 4.4 (Authority; Binding Obligation) and
Section 4.23 (Financial Advisors).
“GAAP”
means United States generally accepted accounting principles as in effect (i) with respect to financial information for periods on
or after the Closing Date, as of the date of this Agreement, and (ii) with respect to financial information for periods prior to the Closing
Date, as of such applicable time, consistently applied.
“Governmental Antitrust
Entity” means any Governmental Authority with regulatory jurisdiction over enforcement of any applicable Competition Law.
“Governmental Authority”
means any nation or government, any state, province or other political subdivision thereof, or any government authority, agency, department,
ministry, board, tribunal, commission or instrumentality of the United States of America, any non-U.S. government, any state of the United
States of America, or any municipality or other political subdivision thereof, and any court, tribunal or arbitrator(s) of competent jurisdiction,
and any self-regulatory organization.
“Governmental Authorizations”
has the meaning set forth in Section 4.6.
“Hazardous Material”
means any substance, material or waste that is defined or regulated as “hazardous,” or “toxic,” or as a “pollutant,”
or a “contaminant” under any applicable Environmental Law.
“Hedge Settlement
Value” means the net value of all outstanding interest rate hedging arrangements of the Company and its Subsidiaries assuming
settlement thereof as of the Adjustment Time.
“HSR Act”
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“Indebtedness”
means, with respect to the Company and Company Subsidiaries, without duplication, and as determined in accordance with the Accounting
Methodology, (i) indebtedness for money borrowed, whether evidenced by a note, debenture, bond, mortgage or other debt instrument
or debt security (including the Specified Funded Indebtedness), (ii) obligations under any performance bond, surety bond or letter
of credit, but, in each case, only to the extent drawn or called, (iii) obligations of the Company or any Company Subsidiaries under leases
required to be treated as finance leases pursuant to GAAP; (iv) the amounts owed under any earn-outs, holdbacks, deferred purchase price
or other contingent payment obligations relating to the acquisitions of (A) Cambridge Materials Testing Limited and (B) Nextgen Industrial
Services Inc., in each case of (A) and (B), less amounts paid prior to the Adjustment Time in satisfaction thereof, (v) unpaid
transaction expenses arising out of acquisitions of businesses by the Company or any Company Subsidiaries consummated prior to the Closing,
(vi) the aggregate remaining rent payments with respect to the South Roxana (St. Louis, MO), Corpus Christi, TX, and Lake Charles, LA
facilities, (vii) the Contingent Payment Amount, (viii) any guarantees with respect to any indebtedness of any other Person of a type
described in clauses (i) through (vii) above, (ix) the Tax Liability Amount and (x) all amounts that would be required to pay, prepay,
discharge, settle or otherwise retire any amount set forth in clauses (i) through (ix) above on the date in question, including all principal,
accrued but unpaid interest, fees and other amounts payable thereon (including any premiums, penalties or other obligations relating thereto,
but excluding any breakage costs, prepayment penalties or fees or other similar amounts or otherwise not payable in connection with the
consummation of the transactions contemplated by this Agreement). In addition, “Indebtedness” will be increased by the absolute
value of the Hedge Settlement Value, if the Hedge Settlement Value is a negative number (i.e., represents a liability), and decreased
by the Hedge Settlement Value, if the Hedge Settlement Value is a positive number (i.e., represents an asset). Notwithstanding the foregoing,
“Indebtedness” shall not include (A) any amounts reflected in Transaction Expenses or Net Working Capital, (B) any obligations
that are solely between and among the Company and any Company Subsidiaries, (C) any Indebtedness incurred by Parent and its Affiliates
(whether or not subsequently assumed by the Company or any of the Company Subsidiaries) on or prior to the Closing Date, (D) any deferred
revenue, (E) any obligations associated with leases of (or other arrangement conveying the right to use) real or personal property,
or a combination thereof, in each case, other than the leases described in clause (iii) above, and (F) any amounts associated with the
April 2024 Employee Retention Incentive Plan.
“Indebtedness Payoff
Amount” means the aggregate principal amount of the Specified Funded Indebtedness, plus all accrued but unpaid interest, fees
and other amounts payable thereon (including any premiums, penalties or other obligations relating thereto), in each case, calculated
as of the Closing based on the Payoff Letters.
“Indemnified Parties”
has the meaning set forth in Section 6.7(a).
“Independent Accountant”
has the meaning set forth in Section 3.4(b)(iii).
“Insurance Policies”
has the meaning set forth in Section 4.19.
“Intellectual Property”
means any of the following: (i) patents and patent applications; (ii) trademarks, service marks, trade dress, trade names, corporate
names and logos, as well as all goodwill related thereto; (iii) copyrights (including copyrights in software), mask works and related
and allied rights (including moral rights and database rights), and works of authorship; (iv) industrial designs, industrial design
applications and industrial design registrations, (v) domain names; (vi) trade secrets under applicable Law, including confidential
and proprietary information, know-how, inventions, ideas, technology, algorithms, procedures, processes, methods, techniques, systems,
creations, inventions, discoveries, improvements, specifications, designs, models, schematics, formulas, chemical compositions, devices,
and prototypes, whether patentable or not (collectively “Trade Secrets”); or (vii) Software.
“Interim Financial
Statements” has the meaning set forth in Section 4.7.
“Invoices”
has the meaning set forth in Section 6.19(b).
“IP Licenses”
means all material Contracts pursuant to which the Company or any Company Subsidiary has granted to or received from a third party the
right to use any material Intellectual Property used in the operation of the business of the Company or any Company Subsidiary as of the
date hereof.
“IRS” means
the United States Internal Revenue Service.
“IT Systems”
means the computer systems (including computers, servers, workstations, routers, hubs, switches, circuits, networks, and data communication
lines), information technology systems, telecommunication systems, and data processing systems that are owned by or leased or licensed
by the Company and the Company Subsidiaries.
“ITCs”
has the meaning set forth in Section 4.14(r).
“Knowledge”
means, (i) when used with respect to Parent and Merger Sub, the actual knowledge of Robert A.E. Franklin and Desiree DeStefano, and
(ii) when used with respect to the Company or any Company Subsidiary, the actual knowledge of Talman Pizzey, Michael Grigsby, Fiona
Sutherland, and Gina Palmieri-Lafferty, provided that, in each case, if the subject matter of such representation or warranty is not within
the area of responsibly of such individual, such individual shall make reasonable inquiry of such individual’s direct reports that
are responsible for such subject matter.
“Last Balance Sheet”
has the meaning set forth in Section 4.7.
“Law” means
any applicable federal, provincial, municipal, state, local or non-U.S. law, statute, by-law, code, ordinance, common law, rule or regulation,
constitution, treaty, Order or other legal requirement enacted, adopted or applied by any Governmental Authority.
“Lease”
has the meaning set forth in Section 4.20(b).
“Leased Property”
has the meaning set forth in Section 4.20(b).
“Letter of Transmittal”
has the meaning set forth in Section 3.3(a)(i).
“Listing”
means the listing of the Parent common securities on the New York Stock Exchange following the Closing.
“Listing Rules”
means the listing rules published by the FCA under section 73A of FSMA as amended from time to time.
“Management Consulting
Agreement” means that certain Management Consulting Agreement, dated as December 20, 2019, by and between Rockwood and
American Securities LLC, as amended by that certain First Amendment to Management Consulting Agreement, dated as of January 26, 2021.
“Material Adverse
Effect” means any event, act, change, effect, circumstance, state of facts or development (“Change”), individually
or in the aggregate with all other Changes, that has had or would reasonably be expected to have a material and adverse effect on (x)
the business, financial condition or results of operations of the Company and Company Subsidiaries taken as a whole or (y) the ability
of the Company to satisfy and perform its obligations under this Agreement and to consummate the Transactions; provided, however,
solely with respect to clause (x), that none of the following shall be deemed (either alone or in combination) to constitute, and none
of the following shall be taken into account in determining whether there has been or may be, a Material Adverse Effect: (i) the
effect of any Change in the United States or non-U.S. economies or securities, financial, banking or credit markets (including changes
in interest or exchange rates), commodities markets (including the price of commodities or raw materials used by the Company or any Company
Subsidiary) or geopolitical conditions in general; (ii) the effect of any Change that generally affects any industry in which the
Company or any Company Subsidiary or any of their customers operates (including the demand for, and availability and pricing of, supplies
and other commodities, and the marketing and transportation thereof) or in which the services of the Company or any Company Subsidiary
are used, or seasonal changes in the results of operations of the Company or any Company Subsidiary; (iii) the effect of any Change
arising in connection with (A) natural or man-made disasters or acts of nature, including earthquakes, floods, hurricanes, tornados,
volcanic eruption, viruses, epidemics, pandemics or contagion, or changes in actual or threatened pandemics (including COVID-19, SARS-CoV-2
virus or any mutation or variation thereof or related health condition), any Governmental Authority or public health authority’s
response to any actual or threatened epidemics or pandemics (including any government mandated shutdown, restrictions on travel or requirement
to shelter at home), any loss of customers, suppliers, orders or contracts in connection with any actual or threatened epidemics or pandemics,
or the spread of infectious diseases affecting the business of the Company and Company Subsidiaries, or (B) global or national political
conditions, hostilities, acts of war, sabotage, terrorism or military actions, or any escalation or material worsening of any such political
conditions, hostilities, acts of war, sabotage, terrorism or military actions; (iv) the effect of any action or any omission to act
taken by Parent or its Affiliates with respect to the transactions contemplated hereby or with respect to the Company or any Company Subsidiary;
(v) the effect of any action or any omission to act taken by the Company or any Company Subsidiary as contemplated by this Agreement
or with the consent of or at the request of Parent; (vi) the effect of any Change (or proposed changes) in applicable Law or accounting
rules or regulatory conditions (or the interpretation, enforcement or implementation thereof) or any action required to be taken under
any applicable Law or Order or any existing Contract by which the Company or any Company Subsidiary (or any of their respective properties)
is bound, in each case, after the date hereof; (vii) the failure of the Company or any Company Subsidiary to meet any internal or
third-party projections, forecasts or estimates (it being understood that the facts or occurrences giving rise to such failure may be
taken into account in determining whether there has been a Material Adverse Effect to the extent permitted by this Agreement); (viii) any
Change resulting from the negotiation, execution, announcement, pendency or performance of this Agreement, compliance with terms of this
Agreement or the consummation of the transactions contemplated by this Agreement; (ix) the failure of Parent to consent to any of
the actions contemplated in Section 6.1 following a request for such consent; (x) seasonal fluctuations affecting the
business of the Company and the Company Subsidiaries to the extent consistent with historical operation of the business, or (xi) any
breach by Parent of its obligations under this Agreement, except, in the case of clauses (i) through (iii) and (vi) above, to the
extent any such Change has had a disproportionate and adverse effect on the business of the Company compared to other companies which
conduct business in the same industry or geographies, in which case only to the extent of such disproportionate and adverse effect shall
be taken into account when determining a “Material Adverse Effect”. For the avoidance of doubt, a Material Adverse Effect
shall be measured only against past performance of the Company and Company Subsidiaries, and not against any forward-looking statements,
financial projections or forecasts of the Company or any Company Subsidiary.
“Merger”
has the meaning set forth in the Recitals.
“Merger Sub”
has the meaning set forth in the Preamble.
“Merger Sub Stockholder
Written Consent” has the meaning set forth in the Recitals.
“Minimum Cash Requirement”
has the meaning set forth in Section 6.16(i).
“Multiemployer Plan”
has the meaning set forth in Section 4.16(d).
“Net Working Capital”
shall have the meaning set forth in Exhibit C. Notwithstanding anything to the contrary contained in this Agreement, Net Working
Capital shall not take into account amounts constituting or otherwise reflected in Cash and Cash Equivalents, Indebtedness or Transaction
Expenses (including any balance sheet accounts arising from Transaction Expenses). Part 2 of Exhibit C includes a sample
calculation of Net Working Capital, assuming March 24, 2024 was the Adjustment Time; provided, that the actual Net Working Capital
will be calculated as of the actual Adjustment Time.
“New Commitment Letter”
has the meaning set forth in Section 6.16(d).
“Non-Party Affiliates”
has the meaning set forth in Section 10.16.
“NRC” has
the meaning set forth in Section 6.4(b).
“OFAC”
has the meaning set forth in Section 4.26.
“Option”
means each outstanding option to purchase Shares issued under the Option Plan.
“Option Holder”
means the holder of an Option.
“Option Merger Consideration”
means, with respect to each Eligible Option, the aggregate amount determined by adding together: (a) the amount determined by subtracting
the exercise price of such Eligible Option from the amount determined by dividing (i) the amount determined by adding together (A) the
aggregate exercise price of all Eligible Options and (B) the amount obtained by subtracting from the Purchase Price, the Escrow Amount
and the Stockholders’ Representative Expense Amount, by (ii) the amount obtained by adding together (A) the aggregate number of
Shares issued and outstanding immediately prior to the Effective Time (other than any Share held by the Company or in the Company’s
treasury) and (B) the Eligible Options; (b) the amount determined by dividing (i) the portion of the Escrow Amount proposed to be distributed
to the holders of Shares converted pursuant to Section 2.4(a) and the holders of Eligible Options (if any), by (ii) the amount
obtained by adding together (A) the aggregate number of Shares issued and outstanding immediately prior to the Effective Time (other than
any Share held by the Company or in the Company’s treasury); and (B) the Eligible Options; and (c) the amount determined by dividing
(i) the portion of the Stockholder’s Representative Expense Amount proposed to be distributed to the holders of Shares converted
pursuant to Section 2.4(a) and the holders of Eligible Options (if any), by (ii) the amount obtained by adding together (A) the
aggregate number of Shares issued and outstanding immediately prior to the Effective Time (other than any Share held by the Company or
in the Company’s treasury) and (B) the Eligible Options. For the avoidance of doubt, the only portion of Option Merger Consideration
that will be paid at the Closing pursuant to Section 3.3(a)(ii) are amounts pursuant to clause (a).
“Option Plan”
means the ASP Acuren Holdings, Inc. 2019 Stock Option Plan, as amended.
“Order”
means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Authority.
“Ordinary Course
of Business” means, with respect to the Company and the Company Subsidiaries, the ordinary and usual course of business of the
Company and Company Subsidiaries (taken as a whole) consistent with past practice and shall include such actions taken or omitted to be
taken by the Company or any Company Subsidiary that are reasonably necessary to mitigate, remedy, respond to or otherwise address the
effects of any epidemic, pandemic, public health emergency or disease outbreak, including complying with shelter in place and non-essential
business orders by any Governmental Authority or measures to protect the health or safety of any Person.
“Organizational Documents”
means, with respect to any Person that is an entity, the certificate of incorporation, bylaws (or the equivalent organizational documents,
including any memorandum of association and articles of incorporation or association), organizational agreement, partnership agreement,
joint venture agreement (or similar formation or governing documents or instruments) of such Person as in effect on the date of this Agreement.
“Owned Intellectual
Property” has the meaning set forth in Section 4.9(b).
“Owned Real Property”
has the meaning set forth in Section 4.20.
“Parent”
has the meaning set forth in the Preamble.
“Parent Documents”
means all of the agreements, documents, instruments or certifications contemplated by this Agreement to be executed by Parent or Merger
Sub.
“Parent Plans”
has the meaning set forth in Section 6.9(b).
“Parent Related Parties”
has the meaning set forth in Section 9.2(c).
“Parent Termination
Fee” has the meaning set forth in Section 9.2(b).
“Parent Warrants”
means warrants (including any depositary interests in respect thereof) to subscribe for ordinary shares of no par value of Parent.
“Payoff Letters”
has the meaning set forth in Section 3.2(a)(i).
“PCAOB”
means the Public Company Accounting Oversight Board and any division or subdivision thereof.
“PCAOB Financials”
has the meaning set forth in Section 6.17(b).
“Permits”
has the meaning set forth in Section 4.15.
“Permitted Encumbrances”
means, (i) Encumbrances securing the obligations of the Company and the Company Subsidiaries pursuant to the Specified Funded Indebtedness
(which Encumbrances shall be released at the Closing), (ii) Encumbrances for Taxes, assessments or other governmental charges that
are (A) not yet due and payable or (B) being contested in good faith by appropriate proceedings or for which adequate reserves
have been established in accordance with GAAP, (iii) landlords’, mechanics’, workmen’s, repairmen’s, warehousemen’s,
carriers’, vendors’ or other like Encumbrances arising in the Ordinary Course of Business that are not overdue for a period
of more than one-hundred twenty (120) days (unless being contested in good faith), (iv) Encumbrances relating to the transferability
of securities under applicable securities Laws, (v) Encumbrances securing rental payments under capitalized leases, (vi) Encumbrances
in favor of the lessors, sublessors and licensors under the Leases, or encumbering the interests of the lessors in the Real Property,
(vii) licenses of Intellectual Property rights granted in the Ordinary Course of Business, (viii) gaps or defects in the chain
of title evident from the publicly-available records of the applicable Governmental Authority maintaining such records, easements, rights-of-way,
covenants, restrictions and other Encumbrances of record as of the date hereof that do not materially impair the use or operation of any
asset to which they relate in the conduct of the business of the applicable Person as presently conducted, (ix) Encumbrances incurred
or deposits made in the Ordinary Course of Business in connection with workers’ or unemployment compensation and employment insurance
related liabilities and other Encumbrances under social security Laws, or similar non-U.S. Laws, (x) any interest or title of a lessor
of any assets being leased pursuant to an equipment lease, (xi) Encumbrances caused or created by Parent or arising under this Agreement,
(xii) the Encumbrances set forth on Section 1.1(a) of the Company Disclosure Letter, (xiii) zoning, entitlement,
building code and other land use Laws regulating the use or occupancy of real property or the activities conducted thereon, (xiv) Encumbrances
on any estate superior to the interest of the Company or any of the Company Subsidiaries in any leased realty, and (xv) such other
imperfections in title, charges, easements, restrictions and Encumbrances which would not reasonably be expected to materially impair
the ability of the Company and the Company Subsidiaries to use the property encumbered or affected thereby or its intended purpose in
the operation of the business of the Company.
“Person”
means any individual, corporation (including any not-for-profit corporation), general or limited partnership, limited liability partnership,
joint venture, estate, trust, firm, company (including any limited liability company or joint stock company), association, organization,
entity or Governmental Authority.
“Personal Information”
means all information that identifies, could be used to identify or is otherwise related to an individual person, in addition to any definition
for “personal information” or any similar term provided by applicable Law or by the Company in any of its privacy policies,
notices or contracts (e.g., “personal data,” “personally identifiable information” or “PII”).
“Pre-Closing Tax
Period” means any taxable period ending on or before the Closing Date, and, in the case of any Straddle Period, the portion
of such period ending on and including the Closing Date.
“Privacy Laws”
means all applicable Laws, regulations, directives or binding guidance, in each case as amended, consolidated, re-enacted or replaced
from time to time, and self-regulatory guidelines relating to privacy, security, data-breach notification, consumer protection, data protection
or the Processing of any Personal Information), including and solely to the extent applicable, the Federal Trade Commission Act, The Controlling
the Assault of Non-Solicited Pornography And Marketing Act of 2003 (CAN-SPAM Act), California Consumer Privacy Act (CCPA), the Telephone
Consumer Protection Act (TCPA), the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Computer Fraud and Abuse Act, the Electronic
Communications Privacy Act, the EU General Data Protection Regulation (GDPR), as amended and incorporated into UK Law under the UK European
Union (Withdrawal) Act 2018 (UK GDPR), and EU or EU Member state Laws, Canada’s Personal Information Protection and Electronic Documents
Act, U.S. state data security Laws, U.S. state unfair or deceptive trade practices Laws, U.S. state biometric privacy acts, U.S. state
social security number protection Laws, U.S. state data breach notification Laws, Payment Card Industry Data Security Standards, and any
Laws concerning requirements for website and mobile application privacy policies and practices, data or web scraping, cybersecurity disclosures
in public filings, call or electronic monitoring or recording or any outbound communications (including, outbound calling and text messaging,
telemarketing, and email marketing).
“Processing”
means the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security (technical, physical or administrative),
disposal, destruction, disclosure or transfer (including cross-border) of any data, including Personal Information.
“Purchase Price”
means an amount equal to (i) the Enterprise Value minus (ii) the Indebtedness as of the Adjustment Time, plus
(iii) Cash and Cash Equivalents as of the Adjustment Time, minus (iv) Transaction Expenses as of the Adjustment Time,
plus (v) the amount, if any, by which Net Working Capital as of the Adjustment Time exceeds the Target Net Working Capital,
minus (vi) the amount, if any, by which the Net Working Capital as of the Adjustment Time is less than the Target Net Working
Capital, plus (vii) the Transaction Tax Benefit Amount.
“R&W Insurance
Policy” has the meaning set forth in Section 6.14.
“Real Property”
has the meaning set forth in Section 4.20.
“Rebuttal Statement”
has the meaning set forth in Section 3.4(b)(iii).
“Recipient”
means the party or any of its representatives or agents to whom Personal Information is to be disclosed or conveyed.
“Registration Statement”
means a registration statement on Form S-4 under the Securities Act (or such other form as Parent may determine to use) to be filed by
Parent with the SEC in connection with the change to the jurisdiction of incorporation of Parent from the British Virgin Islands to the
State of Delaware.
“Related Persons”
has the meaning set forth in Section 4.21.
“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, or dumping, of any Hazardous
Material through the environment.
“Released Parties”
has the meaning set forth in Section 10.11.
“Releasing Parties”
has the meaning set forth in Section 10.11.
“Representatives”
means, with respect to any Person, any director, manager, officer, agent, employee, general partner, member, stockholder, consultant,
advisor or representative of such Person.
“Rockwood”
has the meaning set forth in Section 4.7.
“Scannell Bonus Agreement”
means that certain Services and Bonus Agreement, by and between Rockwood and Peter O. Scannell, dated as of May 17, 2024.
“Scannell Set Aside
Amount” has the meaning set forth in Section 3.5(a).
“Scannell Side Letter”
means that certain Letter Agreement, dated May 17, 2024, by and between ASP Acuren Investco LP and Peter O. Scannell.
“SEC” has
the meaning set forth in Section 6.17(a).
“SEC Financial Statements”
has the meaning set forth in Section 6.17(b).
“Section 280G”
has the meaning set forth in Section 6.10.
“Securities Act”
means the Securities Act of 1933.
“Set Aside Amounts”
has the meaning set forth in Section 3.5(a).
“Share”
means, each share of common stock, par value $0.01 per share, of the Company.
“Significant Customers”
has the meaning set forth in Section 4.24.
“Significant Suppliers”
has the meaning set forth in Section 4.24.
“Software”
means all (a) computer programs and other software, including software implementations of algorithms, models, and methodologies,
whether in source code, object code or other form, including libraries, subroutines and other components thereof; (b) computerized
databases and other computerized compilations and collections of data or information, including all data and information included in such
databases, compilations or collections; (c) screens, user interfaces, command structures, report formats, templates, menus, buttons
and icons; (d) descriptions, flow-charts, architectures, development tools, and other materials used to design, plan, organize and
develop any of the foregoing; and (e) all documentation, including development, diagnostic, support, user and training documentation
related to any of the foregoing.
“Solvent”
means, when used with respect to any Person, that, on a consolidated basis as of any date of determination, (a) the amount of the
present fair saleable value of the assets of such Person will, as of such date, exceed the amount of all liabilities of such Person, as
of such date, as such amounts are determined in accordance with applicable law governing determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required
to pay the liabilities of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim” and (ii) “claim”
means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured. The amount of liabilities at any time shall be computed
as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected
to become an actual or matured liability.
“Specified Funded
Indebtedness” means the Indebtedness set forth on Section 1.1(b) of the Company Disclosure Letter.
“Stock Certificate”
means a certificate evidencing Shares.
“Stockholder”
means a holder of Shares, in its capacity as such.
“Stockholders’
Agreement” has the meaning set forth in Section 4.2(a).
“Stockholders’
Representative” has the meaning set forth in the Preamble.
“Stockholders’
Representative Expense Account” has the meaning set forth in Section 3.3(a)(iv).
“Stockholders’
Representative Expense Amount” means an amount equal to $2,000,000, to be held and distributed by the Stockholders’ Representative
pursuant to Section 3.4(h) hereof.
“Straddle Period”
means any taxable period that includes but does not end on the Closing Date.
“Subsidiary”
means, with respect to a specified Person, any corporation, partnership, limited liability company, limited liability partnership, joint
venture, or other legal entity of which the specified Person (either alone and/or through and/or together with any other Subsidiary) owns,
directly or indirectly, more than 50% of the outstanding voting securities or other equity or partnership interests the holders of which
are generally entitled to vote for the election of the board of directors or other governing body, of such legal entity or of which the
specified Person controls the management.
“Surviving Corporation”
has the meaning set forth in Section 2.1.
“Target Net Working
Capital” means $179,427,000.
“Tax” or
“Taxes” means all federal, state, county, local, municipal, and non-U.S. taxes, assessments, charges, surcharges, fines,
costs, duties or similar charges in the nature of a tax, including income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties, capital, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal property, intangible, inventory, sales, use, transfer,
registration, value-added, alternative or add on minimum, or other tax, impost, duty, levy, governmental charge or assessment of any kind
whatsoever (including liabilities relating to any deemed overpayment in respect of CEWS), whether computed on a separate or consolidated,
unitary or combined basis or in any other manner and whether disputed or not, and including all interest, penalties and additions imposed
with respect to such amounts, imposed by any Tax Authority.
“Tax Authority”
means a Governmental Authority authorized to administer or impose a Tax.
“Tax Liability Amount”
means the amount of unpaid income Taxes of the Company and the Company Subsidiaries owed for any Pre-Closing Tax Period, calculated consistently
with the Company’s and the Company Subsidiaries’ past practice and in respect of solely those jurisdictions in which the Company
or the applicable Company Subsidiary is currently filing income Tax Returns; provided, that, the calculation of Tax Liability Amount shall
(i) exclude any deferred Tax liabilities and deferred Tax assets, (ii) exclude any Taxes resulting from actions of Parent, the
Company, the Company Subsidiaries or any of their respective Affiliates (including the Company and the Company Subsidiaries) taken on
the Closing Date but after the Closing that are outside of the Ordinary Course of Business, (iii) be calculated as of the end of
the Closing Date on a closing of the books basis as if the taxable year of the Company and the Company Subsidiaries ended as of the end
of the Closing Date (and with respect to any Straddle Period, include the portion of Taxes arising in such Straddle Period attributable
to the portion of the Straddle Period treated as a Pre-Closing Tax Period, determined as provided in Section 6.15(b)), (iv) include
any additional amount of income Taxes that result from settling hedges associated with the Hedge Settlement Value as of the Closing Date,
(v) include any additional amount of Canadian withholding Taxes that would result from the repayment or settlement of the amount owed
to Acuren Group Inc. from Rockwood for which a pertinent loan or indebtedness (PLOI) election was filed, and (vi) include any Transaction
Tax Deductions in applicable calculations. Notwithstanding the foregoing, the calculation of Tax Liability Amount shall exclude any liability
of the Company or the Company Subsidiaries under Section 965(h) of the Code (and any similar applicable Laws).
“Tax Returns”
means any report, designation, notice, form, declaration, return, information return, claim for refund, election, disclosure, estimate
or statement required to be supplied to a Tax Authority or required to be prepared and kept in file in connection with Taxes, including
any schedule or attachment thereto, and including any amendments thereof.
“Taxing Authority”
means, with respect to any Tax, the Governmental Authority that imposes such Tax, and the agency (if any) charged with the collection
of such Tax for such entity or subdivision.
“Termination Date”
has the meaning set forth in Section 9.1(b).
“Top Up Amount”
has the meaning set forth in the Scannell Side Letter.
“Topped Up Contingent
Payment Amount” means the sum of (i) the Contingent Payment Amount plus (ii) any other amounts owing to the Persons entitled
to the Contingent Payment Amount, as contemplated in the Scannell Side Letter.
“Transfer Regulations”
means the Transfer of Undertakings (Protection of Employment) Regulations 2006.
“Transferred Information”
means the Personal Information to be disclosed or conveyed to Recipient by or on behalf of a Disclosing Party as a result of or in conjunction
with the transactions contemplated by this Agreement, and includes all such Personal Information disclosed to the Recipient prior to the
execution of this Agreement.
“Transaction Documents”
means the Company Documents and Parent Documents.
“Transaction Expenses”
means, with respect to the Company and the Company Subsidiaries, without duplication, the aggregate amount of (a) any management
or monitoring fees payable by the Company or Company Subsidiaries to American Securities LLC or any of its Affiliates that have not been
paid as of the Closing, (b) all fees and disbursements of attorneys, investment bankers, accountants and other professional advisors,
which, in each case, have been incurred by the Company or Company Subsidiaries in connection with the preparation, execution and consummation
of this Agreement but have not been paid as of the Closing, (c) any sale, transaction, change of control, stay, retention or similar
bonuses (for the avoidance of doubt, including all amounts payable under the Scannell Bonus Agreement), or any gross-up obligations for
any taxes imposed under Section 4999 of the Code, in each case, payable to employees, directors and/or independent contractors of the
Company or any Company Subsidiaries solely as a result of the consummation of the transactions contemplated by this Agreement (but excluding
any amounts that become payable after the Closing Date arising as a result of the occurrence of one or more additional post-Closing events
under so-called “double-trigger” severance provisions contained in any employment-related Contracts and, for the avoidance
of doubt, excluding amounts accrued under the Acuren Phantom Share Plan), plus, in each case, (i) the aggregate amount of the employer
portion of any payroll or other employment Taxes related thereto and (ii) the aggregate amount of any employer contributions to any Company
Plan related thereto (if any), (d) the aggregate amount of the employer portion of any payroll or other employment Taxes related
to the Option Merger Consideration and (e) all brokers and finders fees incurred by the Company or Company Subsidiaries in connection
with the transactions contemplated by this Agreement that have not been paid at Closing; provided, however, that no fees
or expenses of Parent, Merger Sub or their respective Affiliates are included in “Transaction Expenses”; and provided
further, that “Transaction Expenses” shall not include any amounts reflected in Indebtedness or Net Working Capital.
“Transaction Tax
Benefit Amount” means, without duplication, an amount equal to the sum of (a) 26% multiplied by the aggregate amount of
Transaction Tax Deductions, (b) $5,146,000, and (c) 100% of the excess, if any, of (x) the aggregate payments of estimated income
Tax in respect of the Tax year in which the Closing occurs that are made by the Company or the Company Subsidiaries on or prior to the
Closing Date, over (y) the aggregate amount of income Taxes incurred (whether paid before, on or after the Closing Date) by the Company
or the Company Subsidiaries in respect of any taxable period or portion thereof ending on the Closing Date (in the case of a Straddle
Period, the amount of such Taxes included in this subclause (y) shall only include the portion of Taxes arising in such Straddle Period
attributable to the portion of the Straddle Period treated as a Pre-Closing Tax Period, determined as provided in Section 6.15(b)).
Notwithstanding the foregoing, in no event shall the Transaction Tax Benefit Amount include amounts attributable to deductions, credits
or other items to the extent such items are included in, and actually reduce, the calculation of the Tax Liability Amount.
“Transaction Tax
Deductions” means, without duplication and regardless of by whom paid and whether or not paid prior to, at or after the Closing,
any Tax losses or deductions that are deductible or allowable as a loss for income Tax purposes at a “more likely than not”
(or greater) level of comfort arising from or in connection with the consummation of the transactions contemplated by this Agreement,
including those arising as a result of (a) any Transaction Expenses (including amounts that would have been Transaction Expenses
but that were paid prior to the Closing), (b) any fees, expenses and interest (including amounts treated as interest for Tax purposes
and any breakage fees and accelerated deferred financing fees or debt prepayment fees or capitalized debt costs) incurred or paid on or
around the Closing Date with respect to the payment of any Indebtedness or included in Net Working Capital, in each case, including any
adjustments included in the final version of the Final Closing Statement, (c) any payments made in respect of Eligible Options at
or about the Closing pursuant to Section 2.6, (d) any stay bonuses, sale bonuses, change in control payments, retention
payments, synthetic equity payments, or other similar payments by (or deemed to be made by) the Company or any Company Subsidiary, and
(e) all other deductible payments attributable to or related to the Merger or otherwise paid in connection with this Agreement that
are economically borne by the Company or its Affiliates. Exhibit D includes a sample calculation of the Transaction Tax Deductions.
“Transfer Taxes”
means any real property transfer, sales, use, value added, stamp, documentary, recording, registration, conveyance, stock transfer, intangible
property transfer, personal property transfer, gross receipts, registration, duty, securities transactions or similar fees or Taxes or
governmental charges (together with any interest or penalty, addition to Tax or additional amount imposed) as levied by any Taxing Authority
or other Governmental Authority in connection with the transactions contemplated hereby, including any payments made in lieu of any such
Taxes or governmental charges that become payable in connection with the transactions contemplated hereby.
“Treasury Regulations”
means the Treasury regulations promulgated under the Code.
“UK Company Subsidiary”
means Applied Inspection Limited.
“UK MAR”
means Regulation (EU) No 596/2014 as it forms part of assimilate law in the UK by virtue of the European Union (Withdrawal) Act 2018.
“Waived 280G Benefits”
has the meaning set forth in Section 6.10.
“Warrant Commitments”
has the meaning set forth in Section 5.5(a)(iii).
“Warrant Commitment
Letters” has the meaning set forth in Section 5.5(a)(iii).
“Warrant Exercise
Parties” has the meaning set forth in Section 5.5(a)(iii).
“Warrant Financing”
has the meaning set forth in Section 5.5(a)(iii).
“WARN”
has the meaning set forth in Section 4.17(h).
“Weil”
has the meaning set forth in Section 6.8.
“Willful
Breach” means an action or failure to act by one of the parties hereto that constitutes a material breach of this Agreement,
and such action was taken or such failure occurred with such party’s knowledge or intention that such action or failure to act would,
or would reasonably be expected to, constitute a material breach of this Agreement.
Section 1.2 Interpretive
Provisions. Unless the express context otherwise requires:
(a) the
words “hereof,” “hereafter” “herein” and “hereunder” and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, unless the context
otherwise requires;
(b) terms
defined in the singular shall have a comparable meaning when used in the plural, and vice versa;
(c) the
terms “Dollars” and “$” mean United States Dollars; provided, that the specification of any dollar amount in the
representations and warranties or otherwise in this Agreement or in the Exhibits or the Company Disclosure Letter is not intended and
shall not be deemed to be an admission or acknowledgment of the materiality of such amounts or items, nor shall the same be used in any
dispute or controversy between the parties to determine whether any obligation, item or matter (whether or not described herein or included
in the Company Disclosure Letter) is or is not material for purposes of this Agreement;
(d) references
herein to a specific Section, Subsection, Recital, Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Recitals,
Schedules or Exhibits of this Agreement;
(e) wherever
the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be
followed by the words “without limitation” and shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it;
(f) references
herein to any gender shall include each other gender;
(g) references
herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns;
provided, however, that nothing contained in this clause (g) is intended to authorize any assignment or transfer not
otherwise permitted by this Agreement;
(h) references
herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity;
(i) references
herein to any Contract (including this Agreement) mean such Contract as amended, supplemented or modified from time to time in accordance
with the terms thereof;
(j) with
respect to the determination of any period of time, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding”;
(k) references
herein to any law or any license mean such law or license as amended, modified, codified, reenacted, supplemented or superseded in whole
or in part, and in effect from time to time;
(l) if
the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not
a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding
Business Day. The word “day” shall mean “calendar day” unless “Business Day” is expressly identified;
(m) when
calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period shall be excluded; and
(n) references
herein to any law shall be deemed also to refer to all rules and regulations promulgated thereunder.
The parties acknowledge and agree that (i) each
party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision, (ii) the
rule of construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation
of this Agreement, and (iii) the terms and provisions of this Agreement shall be construed fairly as to all parties, regardless of
which party was generally responsible for the preparation of this Agreement.
Article 2
THE
MERGER
Section 2.1 Merger.
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, (a) Merger
Sub shall be merged with and into the Company, (b) the separate corporate existence of Merger Sub shall cease and the Company shall
continue its corporate existence under Delaware law as the surviving corporation in the Merger (the “Surviving Corporation”),
and (c) the Surviving Corporation shall become a wholly-owned Subsidiary of Parent. The Merger shall have the effects specified
in the DGCL, this Agreement and the Certificate of Merger (as defined below).
Section 2.2 Effective
Time. Immediately following the Closing, the Company shall cause a certificate of merger
(the “Certificate of Merger”) to be executed, signed, and acknowledged and Parent and the Company shall cause the
Certificate of Merger to be filed with the Secretary of State of the State of Delaware as provided in Section 251 of the DGCL. The
Merger shall become effective when the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware
or at such other subsequent date or time as Parent and the Company may agree and specify in the Certificate of Merger in accordance with
the DGCL, in which case the Merger shall become effective at such subsequent date or time (the time the Merger becomes effective being
the “Effective Time”).
Section 2.3 Effects
of the Merger.
(a) Certificate
of Incorporation. At the Effective Time, the certificate of incorporation of Merger Sub in effect immediately prior to the Effective
Time shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with the terms thereof and applicable
Law (but subject to compliance with the terms of Section 6.7 hereof).
(b) Bylaws.
The Company shall take all lawful action so that at the Effective Time, the bylaws of Merger Sub in effect immediately prior to the Effective
Time shall be the bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.
(c) Directors
and Officers. The Company shall take all lawful action so that from and after the Effective Time, until successors are duly elected
or appointed (or their earlier resignation or removal), the directors of Merger Sub and the officers of the Company at the Effective Time
shall be the directors and officers of the Surviving Corporation.
Section 2.4 Effect
on Capital Stock.
(a) Conversion
of Shares. At and as of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the
Company or the holders of any Shares, each Share (other than any Share held by the Company or in the Company’s treasury and Dissenting
Shares) issued and outstanding immediately prior to the Effective Time shall be converted automatically into a right to receive, upon
surrender of a Stock Certificate (which surrender shall be deemed to have occurred with respect to any Stock Certificate held or otherwise
recorded in any digital stockholder management system) formerly representing such Shares in the manner provided in Section 3.3(a)(i),
to the extent a Stock Certificate evidencing such Share was issued, and a duly executed and completed Letter of Transmittal, the Common
Stock Merger Consideration applicable to such Share without interest, subject to any withholding taxes required by applicable Law in accordance
with Section 2.5 of this Agreement. At the Effective Time, all Shares will no longer be outstanding and will automatically
be cancelled and will cease to exist. Each holder of a Stock Certificate that represented any such Shares immediately prior to the Effective
Time, if any, will cease to have any rights with respect thereto, except as otherwise required by applicable Law and except for the right
to receive the Common Stock Merger Consideration in accordance with this Section 2.4(a), upon surrender of and in accordance
with Section 3.3; provided that each Stock Certificate held or otherwise recorded in any digital stockholder management
system formerly representing Dissenting Shares shall thereafter represent only the right to receive the payment to which reference is
made in Section 2.7.
(b) Conversion
of Merger Sub Common Stock. At and as of the Effective Time, each share of common stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and become one fully paid and non-assessable share of common stock of the Surviving
Corporation.
(c) Cancellation
of Treasury Shares. At and as of the Effective Time, each Share held by the Company or in the Company’s treasury immediately
prior to the Effective Time shall be automatically cancelled and shall cease to exist without any conversion thereof or payment of any
consideration with respect thereto.
(d) No
Further Rights of Transfer. At and as of the Effective Time, the stock ledger of the Company with respect to Shares shall be closed
and no transfer of Shares shall thereafter be made whether on the stock transfer books of the Surviving Corporation or otherwise.
Section 2.5 Withholding.
All payments made pursuant to this Agreement shall be reduced by any income, employment, or other Tax withholding required under the
Code or any applicable state, provincial, local or non-U.S. Laws applicable to Tax (it being agreed that in such case, except with respect
to payments in the nature of compensation to be made to Eligible Option Holders, employees or former employees, each of Parent, the Company,
or their respective Affiliates, as applicable, shall use commercially reasonable efforts to provide the applicable payee with a written
notice of such party’s intention to withhold at least five (5) Business Days prior to any such withholding and each of the
applicable parties shall use commercially reasonable efforts to minimize any such Taxes). To the extent that any amounts so withheld
are paid to the applicable Tax Authority when due, such amounts shall be treated for all purposes of this Agreement as having been paid
to the Person in respect of which such deduction and withholding was made.
Section 2.6 Options;
Option Plan.
(a) Prior
to the Effective Time, the Company shall provide notice to all Option Holders in accordance with Section 6.3(iii) of the Option Plan that
the Option Holder may exercise the Option Holder’s Options (whether vested or unvested), effective as of immediately prior to the
Effective Time. Upon the terms and subject to the conditions set forth in this Agreement and without any action on the part of Parent,
Merger Sub, the Company or any holder of any Option, each Option outstanding and unexercised immediately prior to the Effective Time (for
which an election to exercise has not been made) shall be cancelled and shall cease to exist effective as of the Effective Time.
(b) With
respect to each Eligible Option that is not exercised and is cancelled in accordance with Section 2.6(a) hereof, the applicable
Eligible Option Holder shall receive, subject to the execution, delivery and non-revocation of an Option Cancellation and Release Agreement
by such applicable Eligible Option Holder either prior to or no later than five (5) days following the Effective Time, in substantially
the form of Exhibit B attached hereto (each, an “Option Cancellation and Release Agreement”), as consideration
in respect of the cancellation of such Eligible Option, in its entirety, an amount in cash equal to the Option Merger Consideration, as
set forth in this Agreement. For the avoidance of doubt, all Options that are not Eligible Options will automatically be extinguished
and cancelled immediately prior to the Effective Time without the right to receive any consideration (with no payment being made hereunder
with respect thereto) and to the extent that the Eligible Option Holder does not deliver an irrevocable Option Cancellation and Release
Agreement within the time period set forth above (and has not elected to exercise the Eligible Options effective as of the Effective Time),
such Eligible Options shall be extinguished and cancelled immediately prior to the Effective Time without the right to receive any consideration
(with no payment being made hereunder with respect thereto). Following the Effective Time, each Eligible Option that has been cancelled
pursuant to this Section 2.6 will be deemed to represent, subject to delivery of an irrevocable Option Cancellation and Release
Agreement within the time period set forth above, only the right to receive the Option Merger Consideration, as set forth in this Agreement
(for the avoidance of doubt, including any adjustments following the Closing as specified in Section 3.4(c) and Section 3.4(h))
in accordance with the terms of this Agreement. No interest will be paid or will accrue on the cash payable upon cancellation of any Eligible
Option. For purposes of this Section 2.6, any Option Merger Consideration shall be paid on the same schedule and under the
same terms and conditions as apply to payments to Stockholders generally, in each case, in order to constitute transaction-based compensation
for purposes of Treasury Regulation Section 1.409A–3(i)(5)(iv).
(c) As
of the Effective Time, the Option Plan shall be terminated and no further Options or other equity interests in the Company or other rights
with respect to Shares shall be granted thereunder. Following the Effective Time, no Options or other equity interest in the Company or
other right with respect to Shares that was outstanding immediately prior to the Effective Time shall remain outstanding, and each former
holder of any such Option or other equity interest in the Company or other right shall cease to have any rights with respect thereto,
except the right to receive the applicable payments set forth in this Section 2.6.
(d) Prior
to the Effective Time, the board of directors of the Company (or, if appropriate, any committee thereof) shall (i) provide such notices
required in Section 2.6(a) and in the Option Plan, (ii) provide each Eligible Option Holder with, and request that they execute
and deliver to the Company, the Option Cancellation and Release Agreement prior to the Effective Time, and (iii) adopt appropriate resolutions
and take such other actions as are necessary, as reasonably determined by the board of directors of the Company, to effect the treatment
and transactions described in this Section 2.6 and otherwise to give effect to the provisions hereof. Prior to distribution
to the Eligible Option Holders, the Company shall provide drafts of the documents set forth in this Section 2.6(d) to Parent for
its review and comment.
Section 2.7 Dissenting
Shares. Notwithstanding any other provision of this Agreement to the contrary, Shares that are issued
and outstanding immediately prior to the Effective Time and which are held by Stockholders who shall have not voted in favor of the Merger
or consented thereto in writing pursuant to the terms of the Stockholder Agreement or otherwise and who shall have properly demanded
to appraisal for such Shares in accordance with Section 262 of the DGCL and who shall not have duly waived their right to appraisal
under the Stockholders’ Agreement or otherwise (collectively, the “Dissenting Shares”) shall not be converted
into or represent the right to receive the Common Stock Merger Consideration. Such Dissenting Shares instead shall represent the right
to receive only those rights provided by the provisions of Section 262 of the DGCL, except that all Dissenting Shares held by Stockholders
who, following the Effective Time, shall have failed to perfect or who effectively shall have withdrawn or otherwise are not entitled
to appraisal of such Shares under such Section 262 of the DGCL shall thereupon be deemed to have been converted into and to have
become exchangeable, as of the Effective Time, for the right to receive, without any interest thereon, the Common Stock Merger Consideration
in accordance with Section 2.4(a). From and after the Effective Time, no Stockholder who has properly exercised and perfected
appraisal rights pursuant to Section 262 of the DGCL shall be entitled to vote his or her or its Shares for any purpose or receive
payment of dividends or other distributions with respect to his or her or its Shares (except for any dividends or distributions payable
to Stockholders of record at a date which is prior to the Effective Time). The Company shall promptly notify Parent upon any written
demands for appraisal under Section 262 of the DGCL and any withdrawals of such demands and Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands.
Section 2.8 Distribution
Schedule. At least three (3) Business Days prior to (i) the Effective Time and (ii) on
any other date on which a particular payment is to be made to Stockholders in accordance with this Agreement, the Stockholders’
Representative shall cause to be delivered to the Company (or, following the Closing, the Surviving Corporation) and Parent, a copy of
the Distribution Schedule, which such Distribution Schedule shall be incorporated herein by reference with respect to payments made after
the Effective Time. To the fullest extent permitted by Law, the Company and Parent shall be entitled to rely on the Distribution Schedule
and none of Parent or any of its Affiliates (including, after the Closing, the Surviving Corporation and any of its Subsidiaries) shall
have any liability to the Stockholders’ Representative or any other Person (including any Stockholder or any holder of Options)
with respect to any Distribution Schedule or the allocation of the Purchase Price (excluding, for the avoidance of doubt, Parent’s
obligation to make payment of the Purchase Price in accordance with any Distribution Schedule and the other terms of this Agreement).
Article 3
THE CLOSING
Section 3.1 Closing;
Closing Date. Unless this Agreement shall have been terminated pursuant to Article 9, the
consummation of the Merger (the “Closing”) shall be conducted remotely via the electronic exchange of documents and
signatures at 10:00 A.M. local time, on the third (3rd) Business Day after the date that the conditions set forth in Article 7
and Article 8 (other than those conditions which, by their terms, are to be satisfied or waived at the Closing, but subject
to the satisfaction or waiver of such conditions) shall have been satisfied or waived by the party entitled to waive the same, or at
such other time, place and date that the Company and Parent may agree in writing; provided that the Closing shall not occur prior to
July 22, 2024. The date upon which the Closing occurs is referred to herein as the “Closing Date.”
Section 3.2 Pre-Closing
Actions.
(a) No
later than the third (3rd) Business Day prior to the Closing Date, the Company shall deliver to Parent:
(i) (A)
the draft payoff letters contemplated by Section 6.19 (the “Payoff Letters”) in respect of the Indebtedness
Payoff Amount and (B) the Invoices contemplated by Section 6.19; and
(ii) duly
executed written resignations (or other evidence of removal), effective as of the Closing, of (A) each of the members of the boards of
directors and boards of managers of the Company and the Company Subsidiaries and (B) each of the officers of the Company and the Company
Subsidiaries (x) that are employees of American Securities LLC or its Affiliates (other than the Company and the Company Subsidiaries)
or (y) that have been requested to resign by Parent in writing to the Company at least three (3) Business Days prior to the
Closing Date.
(b) The
Stockholders’ Representative shall deliver, or cause to be delivered, to Parent:
(i) no
later than the fifth (5th) Business Day prior to the Closing Date, a statement (the “Estimated Closing Statement”)
setting forth Stockholders’ Representative’s good faith estimate of the Purchase Price (“Estimated Purchase Price”)
and which shall reflect its estimate of (i) the aggregate amount of Indebtedness as of the Adjustment Time, (ii) Cash and Cash
Equivalents as of the Adjustment Time, (iii) the Transaction Tax Benefit Amount, (iv) Net Working Capital as of the Adjustment
Time (“Estimated Net Working Capital”) and (v) Transaction Expenses as of the Adjustment Time (“Estimated
Transaction Expenses”), and including reasonably detailed calculations demonstrating each such component of the Estimated Purchase
Price. The Estimated Closing Statement, and the components thereof, shall be prepared based upon the books and records of the Company
and Company Subsidiaries in accordance with the Accounting Methodology and the definitions as provided in this Agreement (it being understood
and agreed that, to the extent the Stockholders’ Representative asserts there is a current asset under this Section 3.2(b)(i)
that was not reflected in the calculation of the Target Net Working Capital but such current asset was historically recorded in accordance
with the Accounting Methodology, the Target Net Working Capital as reflected in the Estimated Closing Statement shall be increased by
the amount of such current asset in accordance with the definitions of Net Working Capital, Target Net Working Capital and the Accounting
Methodology, but only to the extent such asset is also included in the calculation of Net Working Capital as of the Adjustment Time in
the Estimated Closing Statement, and for the avoidance of doubt, the Stockholders’ Representative shall not be permitted to introduce
any current assets except to the extent provided by the Accounting Methodology and the terms of this Agreement). The pre-Closing estimate
of the Purchase Price as set forth in this Section 3.2(b)(i) is not intended to permit the introduction of different accounting
methods, policies, practices, procedures, classifications, conventions, categorizations, definitions, principles, judgments, assumptions,
techniques or estimation methods with respect to financial statements (including any of the foregoing as they relate to the nature of
accounts, calculation of levels of reserves or levels of accruals) from the Accounting Methodology or the accounts used and included in
determining the amount of the Target Net Working Capital. The Estimated Closing Statement shall be binding on the parties hereto for purposes
of this Section 3.2(b) and for purposes of determining the Estimated Purchase Price in this Section 3.2(b); and
(ii) no
later than the third (3rd) Business Day prior to the Closing Date, the Distribution Schedule for payments to be made at the
Closing to Stockholders and Eligible Option Holders in accordance with Section 2.8.
Section 3.3 Closing
Actions. At the Closing,
(a) Parent
shall pay or cause to be paid:
(i) to
each holder of a Share converted into the right to receive the Common Stock Merger Consideration pursuant to Section 2.4(a)
in accordance with the Distribution Schedule delivered pursuant to Section 3.2(b)(ii), by wire transfer of immediately available
funds to such bank account(s) designated in writing by such Stockholder in its Letter of Transmittal, such Stockholder’s Common
Stock Merger Consideration (less the applicable portion of the Stockholders’ Representative Expense Amount and the Escrow
Amount) payable at the Closing in respect of such Stockholder’s Shares (other than such Stockholder’s Dissenting Shares) in
the amount set forth in such Distribution Schedule (based on the Estimated Purchase Price set forth in the Estimated Closing Statement);
provided that, in each case, such Stockholder submits a letter of transmittal to the Company in the form attached hereto as Exhibit E
(a letter of transmittal in such form, a “Letter of Transmittal”), together with Stock Certificate(s) required by this
Agreement (which Stock Certificate(s) shall be deemed delivered with respect to any Stock Certificate held or otherwise recorded in any
digital stockholder management system) at least three (3) Business Days prior to the Closing Date; provided further, that a Stockholder
may submit its Letter of Transmittal to the Surviving Corporation following the Closing Date and Parent shall make (or cause to be made)
the payment described in this Section 3.3(a)(i) as promptly as practicable thereafter (and in no event later than five (5)
Business Days after receipt thereof);
(ii) to
the Company, by wire transfer of immediately available funds to such bank account(s) designated in writing by the Company no less than
two (2) Business Days prior to the Closing, for the benefit of the Eligible Option Holders, the aggregate Option Merger Consideration
(less the applicable portion of the Stockholders’ Representative Expense Amount and the Escrow Amount attributable to the
Option Merger Consideration, in each case, as set forth in the Distribution Schedule) payable at the Closing to all Eligible Option Holders
in the amount set forth in the Distribution Schedule (based on the Estimated Purchase Price set forth in the Estimated Closing Statement).
The Company shall pay or cause to be paid to each Eligible Option Holder no later than the Company’s next scheduled date of payroll
following the Closing the Option Merger Consideration to which such holder is entitled pursuant to Section 2.6 and in accordance
with the Distribution Schedule with respect thereto, such payments to be made net of any applicable withholding Tax; provided, that, in
each case, such Eligible Option Holder executes and delivers an Option Cancellation and Release Agreement to the Company prior to the
Closing Date; provided, further, that an Eligible Option Holder may execute and deliver an Option Cancellation and Release Agreement to
the Surviving Corporation within five (5) days following the Closing Date, and the Company shall make (or cause to be made) the payment
described in this Section 3.3(a)(ii) as promptly as practicable thereafter (and in no event later than the Company’s next
scheduled payroll date following the receipt of such agreement by the Eligible Option Holder).
(iii) to
the Escrow Agent, by wire transfer of immediately available funds to such bank account designated in writing by the Escrow Agent, for
deposit in an escrow account (the “Escrow Account”), the Escrow Amount, to be held in the Escrow Account and distributed
by the Escrow Agent in accordance with the terms of the Escrow Agreement and this Agreement;
(iv) to
the Stockholders’ Representative, by wire transfer of immediately available funds to a bank account(s) designated in writing by
the Stockholders’ Representative prior to the Closing (such account, the “Stockholders’ Representative Expense Account”),
the Stockholders’ Representative Expense Amount to be used as a fund to pay costs, fees and expenses incurred by the Stockholders’
Representative in its capacity as such on or after the Closing Date and which shall be paid or distributed at the direction of the Stockholders’
Representative in accordance with Section 3.4(h);
(v) (A)
the Indebtedness Payoff Amount, on behalf of the Company to the lenders thereof in accordance with the Payoff Letters for the Specified
Funded Indebtedness, and (B) the portion of the Contingent Payment Amount, if any, as indicated in the Estimated Closing Statement, which
is owing based on the Common Stock Merger Consideration paid at the Closing, and the Option Merger Consideration paid at the Closing,
as indicated on the Estimated Closing Statement to the bank account(s) designated in writing by the Company prior to the Closing on behalf
of the Persons entitled to receive such portion of the Contingent Payment; and
(vi) the
applicable portion of the Estimated Transaction Expenses (other than the Scannell Set Aside Amount), by wire transfer of immediately available
funds, to each of the payees thereof (on behalf of the Company) in accordance with the Payoff Letters or Invoices delivered by the Company
(and the wiring instructions set forth therein) no less than three (3) Business Days prior to the Closing; provided, however,
that to the extent that any unpaid Estimated Transaction Expenses are compensatory, then Parent shall pay or cause to be paid such amounts
to the Company or the appropriate Company Subsidiary, as specified by the Company in writing no later than two (2) Business Days prior
to the Closing Date, for further distribution through the appropriate payroll system, subject to applicable payroll and withholding taxes,
to the designated service provider recipients, and (B) no amount in respect of the Scannell Bonus Letter shall be paid at the Closing
to Peter O. Scannell, and the Scannell Set Aside Amount shall be paid and distributed in accordance with Section 3.5.
(b) Parent,
the Stockholders’ Representative and the Escrow Agent shall execute and deliver the Escrow Agreement.
(c) The
Stockholders’ Representative shall deliver to Parent each Option Cancellation and Release Agreement that has been duly executed
by the Company and each Option Holder prior to the Closing.
(d) The
Company shall deliver to Parent the Payoff Letters in respect of the Indebtedness Payoff Amount, duly executed by the holders of such
Specified Funded Indebtedness.
Section 3.4 Post-Closing
Actions.
(a) As
promptly as practicable, but no later than forty-five (45) days after the Closing Date, Parent shall cause to be prepared and delivered
to the Stockholders’ Representative a statement (the “Closing Statement”) setting forth Parent’s calculation
of the Purchase Price, and reasonably detailed calculations demonstrating each of the following components thereof: (i) Cash and
Cash Equivalents as of the Adjustment Time, (ii) Indebtedness as of the Adjustment Time, (iii) Transaction Tax Benefit Amount,
(iv) Net Working Capital as of the Adjustment Time, (v) any adjustments to the Target Net Working Capital pursuant to the parenthetical
at the end of this sentence and the resultant adjustments to Estimated Net Working Capital (which shall be recalculated to reflect such
adjustments) and (vi) Transaction Expenses as of the Adjustment Time (it being understood and agreed that Parent’s calculation
of Net Working Capital shall be used to measure changes in Net Working Capital and not as a form of indemnification and, in furtherance
of the foregoing, to the extent Parent asserts there is a current liability under this Section 3.4 that was not reflected
in the calculation of the Target Net Working Capital but such current liability was historically recorded in accordance with the Accounting
Methodology, the Target Net Working Capital as reflected in the Closing Statement shall be reduced by the amount of such current liability
in accordance with the definitions of Net Working Capital, Target Net Working Capital and the Accounting Methodology, but only to the
extent such liability is also included in the calculation of Net Working Capital as of the Adjustment Time in the Closing Statement, and,
for the avoidance of doubt, Parent shall not be permitted to introduce any current liabilities except to the extent provided by the Accounting
Methodology and the terms of this Agreement). The Closing Statement shall be prepared based upon the books and records of the Company
and Company Subsidiaries in accordance with the Accounting Methodology and the definitions as provided in this Agreement. The post-Closing
purchase price adjustments as set forth in this Section 3.4 are not intended to permit the introduction of different accounting
methods, policies, practices, procedures, classifications, conventions, categorizations, definitions, principles, judgments, assumptions,
techniques or estimation methods with respect to financial statements (including any of the foregoing as they relate to the nature of
accounts, calculation of levels of reserves or levels of accruals) from the Accounting Methodology or the accounts used and included in
determining the amount of the Target Net Working Capital. No actions taken by Parent (or its Affiliates) on its own behalf or on behalf
of the Surviving Corporation or its Subsidiaries, at or following the Closing shall be given effect for purposes of determining the Final
Purchase Price. Once delivered, the Closing Statement may not be amended without the consent of the Stockholders’ Representative.
If Parent fails to timely deliver the Closing Statement in accordance with the foregoing, then the Estimated Closing Statement shall be
deemed to be the Closing Statement; provided, that, for the avoidance of doubt, the Stockholders’ Representative reserves
any and all other rights granted to it or the Company in this Agreement, including its rights under Section 3.4(b).
(b) Dispute
Resolution Procedures.
(i) If
the Stockholders’ Representative disagrees with Parent’s calculation of the Purchase Price derived from the calculation of
Cash and Cash Equivalents, Indebtedness, Transaction Tax Benefit Amount, Net Working Capital (including with respect to Target Net Working
Capital) and Transaction Expenses, in each case as set forth in the Closing Statement delivered pursuant to Section 3.4(a),
the Stockholders’ Representative may, within forty-five (45) days (subject to Section 3.4(b)(iv)) after receipt
of the Closing Statement, deliver a notice to Parent providing reasonable detail of the reasons for such disagreement and setting forth
the Stockholders’ Representative’s calculation of the items and amounts in dispute. Any such notice of disagreement shall
specify all items or amounts as to which the Stockholders’ Representative disagrees, and the Stockholders’ Representative
shall be deemed to have agreed with all other items and amounts, and the calculation thereof, set forth in the Closing Statement.
(ii) If
a notice of disagreement is delivered pursuant to Section 3.4(b)(i), the Stockholders’ Representative and Parent shall,
during the fifteen (15) days following such delivery, negotiate in good faith to reach written agreement on the disputed items or
amounts. The matters set forth in any written resolution executed by the Stockholders’ Representative and Parent shall be final
and binding on the parties on the date of such written resolution.
(iii) If
the Stockholders’ Representative and Parent are unable to reach such agreement during such fifteen (15)-day period, either
the Stockholders’ Representative or Parent, upon written notice to the other party, may promptly (and in any event, within thirty (30)
days) thereafter submit any matters in dispute to an independent accounting firm of international reputation to be mutually agreed to
by Parent and the Stockholders’ Representative within such thirty (30)-day period (the “Independent Accountant”)
for resolution, who shall act as an accounting expert and not as an arbitrator. Within fifteen (15) days after the date of engagement
of the Independent Accountant, the Stockholders’ Representative and Parent shall each deliver a statement to the Independent Accountant
(and copying the other party) setting forth their positions on the matters in dispute (each, a “Dispute Statement”).
Within fifteen (15) days after receipt of such Dispute Statement, the Stockholders’ Representative and Parent may deliver one
statement of rebuttal to the other party’s Dispute Statement to the Independent Accountant (and copying the other party) (each,
a “Rebuttal Statement”). Unless mutually agreed by the Stockholders’ Representative and Parent, other than the
Dispute Statements, Rebuttal Statements (if any) and written responses to the Independent Accountant’s questions (if any), the Stockholders’
Representative and Parent shall make no other submissions, statements or assertions to the Independent Accountant following its engagement.
The Independent Accountant may submit questions in writing to the Stockholders’ Representative and Parent during its review. The
Independent Accountant shall deliver to the Stockholders’ Representative and Parent, as promptly as practicable (but in no event
later than thirty (30) days from the date of engagement of the Independent Accountant), a written report as to the resolution of
each disputed item, accompanied by a certificate of the Independent Accountant that it reached such determination in accordance with the
terms of this Agreement, including the Accounting Methodology and the definitions as provided in this Agreement. Such report shall be
final and binding on the parties and shall not be subject to further review or appeal (absent manifest arithmetical error). The Independent
Accountant shall consider only those items and amounts in the Stockholders’ Representative’s and Parent’s respective
calculations of Cash and Cash Equivalents, Indebtedness, Transaction Tax Benefit Amount, Net Working Capital or Transaction Expenses,
that were disputed within the Stockholders’ Representative’s notice of disagreement and that the parties identify as being
items and amounts to which the Stockholders’ Representative and Parent have still been unable to agree. The Independent Accountant’s
determination of any disputed item shall be (x) based solely on (i) the Dispute Statements, the Rebuttal Statements, and written
responses to the Independent Accountant’s questions submitted by the Stockholders’ Representative and Parent (or by in-person
telephonic conferences if mutually agreed by Parent, the Stockholders’ Representative and the Independent Accountant) and not by
independent review, and (ii) the Accounting Methodology and on the definitions included herein and (y) within the range of the
amounts proposed by Parent and the Stockholders’ Representative. Until the calculations of Cash and Cash Equivalents, Indebtedness,
Transaction Tax Benefit Amount, Net Working Capital (including with respect to the Target Net Working Capital) or Transaction Expenses,
including each of the components thereof, have been finally determined pursuant hereto, neither Parent nor the Stockholders’ Representative
shall without the prior consent of the Stockholders’ Representative (in the case of Parent) or Parent (in the case of the Stockholders’
Representative) (A) have any ex parte conversations or meetings with the Independent Accountant or (B) engage, other than in
the Ordinary Course of Business, the Independent Accountant or any of its Affiliates to perform any new services other than as Independent
Accountant pursuant hereto. Each party agrees to execute a reasonable engagement letter, if such letter is required by the Independent
Accountant. The costs and expenses of the Independent Accountant shall be borne by the Stockholders’ Representative (on behalf of
the Equityholders, and solely from the Stockholders’ Representative Expense Account), on the one hand, and Parent, on the other
hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amounts actually contested
by such party; provided that any initial engagement fee shall be borne fifty percent (50%) each by the Stockholders’
Representative (on behalf of the Equityholders), on the one hand, and Parent, on the other hand, and such amount shall be adjusted in
accordance with the immediately preceding clause after determination of the actual percentage.
(iv) The
Closing Statement (and each of the components thereof) shall become final and binding on the parties (A) on the forty-sixth (46th)
day following the delivery of the Closing Statement if a notice of disagreement has not been delivered to Parent by the Stockholders’
Representative (provided, that, in the event that the Stockholders’ Representative and its Representatives are not provided
access as required by Section 3.4(g) within five (5) days of a request therefor (or such shorter period as may remain
in such forty-five (45) day period), such forty-five (45) day period shall be extended by one (1) day for each additional
day the Stockholders’ Representative and its Representatives are not provided with such access, and in the event Parent, the Surviving
Corporation or their respective Representatives provide the Stockholders’ Representative with additional information subsequent
to delivery of a notice of disagreement, the Stockholders’ Representative shall be permitted to amend the notice of disagreement
to reflect such additional information), (B) with such changes as are necessary to reflect matters resolved pursuant to any written
resolution executed pursuant to Section 3.4(b)(ii), on the date such resolution is executed, if all outstanding matters are
resolved through such resolution and/or (C) with such changes as are necessary to reflect the Independent Accountant’s resolution
of the matters in dispute (together with any changes necessary to reflect matters previously resolved pursuant to any written resolution
executed pursuant to Section 3.4(b)(ii) and any matters not disputed pursuant to a notice of disagreement), on the date the
Independent Accountant delivers its final, binding resolution pursuant to Section 3.4(b)(iii) (the Closing Statement in such
form, a “Final Closing Statement”, and the Purchase Price set forth in such Final Closing Statement, the “Final
Purchase Price”).
(c) Final
Payment. Upon finalization of the Final Closing Statement as provided in Section 3.4(b):
(i) If
the Final Purchase Price exceeds the Estimated Purchase Price,
(A) Parent
shall as promptly as practicable, but in no event later than five (5) Business Days following the final determination of the Final
Purchase Price as provided in Section 3.4(b) and delivery by the Stockholders’ Representative of a Distribution Schedule
setting forth the payments to be made under this Section 3.4(c)(i)(A), pay or cause to be paid to the Stockholders’
Representative on behalf of the Equityholders (but subject to Section 3.4(d) below), by wire transfer of immediately available
funds to the account(s) designated in writing by the Stockholders’ Representative, an amount in cash equal to the amount by which
the Final Purchase Price exceeds the Estimated Purchase Price, which will be distributed by the Stockholders’ Representative to
the Equityholders in accordance with (i) the applicable Distribution Schedule delivered with respect thereto in accordance with Section 2.8
(based on the Final Purchase Price set forth in the Closing Statement) to the account designated in each such Equityholder’s respective
Letter of Transmittal (but subject to Section 3.4(d) below) and/or (ii) Section 3.5; provided, however, the aggregate
payments to be made by Parent under this Section 3.4(c)(i)(A) shall not exceed the Escrow Amount; and
(B) Parent
and the Stockholders’ Representative shall as promptly as practicable, but in no event later than five (5) Business Days
following the final determination of the Final Purchase Price as provided in Section 3.4(b) and delivery by the Stockholders’
Representative of a Distribution Schedule setting forth the payments to be made under this Section 3.4(c)(i)(B), deliver a
joint instruction to the Escrow Agent to release the Escrow Amount by wire transfer to the Equityholders in accordance with (i) their
respective applicable percentage of such amount as set forth in the Distribution Schedule delivered with respect thereto in accordance
with Section 2.8 (based on the Final Purchase Price set forth in the Closing Statement) and/or (ii) Section 3.5 .
(ii) If
the Estimated Purchase Price exceeds the Final Purchase Price,
(A) Parent
and the Stockholders’ Representative shall as promptly as practicable, but in no event later than five (5) Business Days following
final determination of the Final Closing Statement, deliver a joint instruction to the Escrow Agent to release from the Escrow Account
to Parent by wire transfer the amount by which the Estimated Purchase Price exceeds the Final Purchase Price up to an amount equal to
the Escrow Amount; and
(B) Parent
and the Stockholders’ Representative shall as promptly as practicable, but in no event later than five (5) Business Days
following the final determination of the Final Purchase Price as provided in Section 3.4(b), deliver a joint instruction to
the Escrow Agent to release the remaining balance, if any, of the Escrow Amount by wire transfer to the Equityholders in accordance with
(i) their respective applicable percentage of such amount as set forth in the Distribution Schedule with respect thereto (based on the
Final Purchase Price set forth in the Closing Statement) to the account designated in each such Equityholder’s respective Letter
of Transmittal (but subject to Section 3.4(d) below) and/or (ii) Section 3.5.
(iii) If
the Estimated Purchase Price equals the Final Purchase Price, Parent and the Stockholders’ Representative shall as promptly as practicable,
but in no event later than five (5) Business Days following the final determination of the Final Purchase Price as provided in Section 3.4(b),
deliver a joint instruction to the Escrow Agent to release the Escrow Amount by wire transfer to the Equityholders in accordance with
their respective percentage of such amount set forth in the Distribution Schedule with respect thereto (but subject to Section 3.4(d)
below).
(iv) The
Stockholders’ Representative shall promptly deliver to Parent (or its designee) a written summary (which shall at least specify
the name of the recipient, the amount payable, and the applicable bank account details) of any amounts to be paid to any Person in satisfaction
of any then unpaid Topped Up Contingent Payment Amounts.
(d) Any
amounts payable pursuant to the foregoing by the Escrow Agent or Stockholders’ Representative to Eligible Option Holders shall be
paid instead to the Surviving Corporation (or other applicable Affiliate) for distribution to such Eligible Option Holders through the
payroll system of the Surviving Corporation (or other applicable Affiliate). Promptly following the receipt of such payments (and in any
case no later than the next regularly scheduled date of payroll), the Surviving Corporation shall pay to such holder of Eligible Options,
through the payroll system of the Surviving Corporation (or the applicable Company Subsidiary), an amount equal to such holder’s
applicable percentage of such amount with respect to his or her Eligible Options as set forth on the Distribution Schedule (based on the
Final Purchase Price set forth in the Closing Statement), less all applicable Tax withholdings and deductions and without interest thereon.
(e) For
the avoidance of doubt, neither the Stockholders’ Representative, nor any of its Affiliates or any of its
or their respective managers, officers, directors, employees, advisors, consultants, agents or other representatives shall have any liability or
obligation under this Section 3.4 or otherwise for any amount by which the Estimated Purchase Price exceeds the Final
Purchase Price beyond an amount equal to the Escrow Amount. Recovery from the Escrow Account shall be the sole and exclusive remedy available
to Parent or any of its Affiliates against the Company, or any of its Affiliates or otherwise,
arising out of or relating to any amount by which the Estimated Purchase Price exceeds the Final Purchase Price and neither Parent nor
any of its Affiliates shall have any claim against the Company or any of its Affiliates or any of their
respective managers, officers, directors, partners, members, stockholders, employees, advisors, consultants, agents or other representatives
in respect thereof.
(f) The
post-Closing purchase price adjustments as set forth in this Section 3.4 shall be treated as an adjustment to the Purchase
Price for income Tax purposes.
(g) The
parties hereto (i) shall, and shall cause their respective Representatives to, cooperate and (ii) shall make available to one
another and their respective Representatives and, if applicable, the Independent Accountant, to the extent necessary, at reasonable times
and with reasonable advance notice, such books, Contracts, records, work papers and appropriate personnel and other information (including
work papers, appropriate personnel, and outside advisors) as any of the foregoing may reasonably request, in each case, to prepare and
review the Closing Statement (including calculations of Cash and Cash Equivalents, Indebtedness, Transaction Tax Benefit Amount, Net Working
Capital (if adjusted pursuant to Section 3.4(a)) and Transaction Expenses) and/or any matters in dispute (including those
submitted to the Independent Accountant). Parent and the Company each acknowledge and waive any actual or potential conflict of employees
of the Company or any Company Subsidiary assisting the Stockholders’ Representative and Parent as described in this Section 3.4
and will not prevent such access by the Stockholders’ Representative or its Representatives. Any dispute with respect to the extent
or nature of access pursuant to this Section 3.4(g) shall be treated in the same manner as a disputed item set forth in a
notice of disagreement delivered pursuant to Section 3.4(b)(i) and be subject to the applicable dispute resolution processes
set forth in Section 3.4(b)(iii) such that the disputed matter may be referred to the Independent Accountant for its determination,
which shall be final and binding upon the parties, and the applicable period for delivering a notice of disagreement shall be tolled during
the pendency of any such dispute.
(h) Stockholders’
Representative Expense Amount. The Stockholders’ Representative, when it determines that it is no longer necessary to retain
the Stockholders’ Representative Expense Amount, shall distribute any remaining portion thereof to the Equityholders in accordance
with their respective entitlement to such amount as set forth on the Distribution Schedule with respect thereto delivered in accordance
with Section 2.8. The Equityholders shall not receive interest or other earnings on the Stockholders’ Representative
Expense Amount and, by virtue of the adoption of this Agreement and as set forth in the Letters of Transmittal, irrevocably transfer and
assign to the Stockholders’ Representative any ownership right that they may have in any interest that may accrue on the Stockholders’
Representative Expense Amount.
(i) In
the calculation of the Estimated Purchase Price and the Final Purchase Price, respectively, any Transaction Expenses that are calculated
based on the equity value of Common Stock and available for distribution for Equityholders shall be (i) initially calculated assuming
the Hypothetical Options (as defined in the Scannell Side Letter) were outstanding, and disregarding the Change of Control Bonus (as defined
in the Scannell Bonus Agreement), and then (ii) recalculated using the results from clause (i) above (which result shall then be used
in the calculation of the Estimated Purchase Price and the Final Purchase Price, respectively, with appropriate payment, in accordance
with the terms of this Agreement, made on the basis thereof).
Section 3.5 Treatment
of Certain Amounts.
(a) Notwithstanding
anything to the contrary herein, at the Closing, (i) the Company shall pay or cause to be paid to a separate bank account(s) designated
in writing by the Stockholders’ Representative prior to the Closing (the “Contingent Payment Holdback Account”)
the Baseline Amount (as such term is defined in the Scannell Bonus Agreement) (such amount, the “Scannell Set Aside Amount”),
and (ii) ASP Acuren Investco LP shall hold back from its Common Stock Merger Consideration received at the Closing pursuant to Section
3.3(a)(i) (and deposit into the Contingent Payment Holdback Account), an amount equal to the Scannell Set Aside Amount (such amount,
the “AS Set Aside Amount”, and together with the Scannell Set Aside Amount, the “Set Aside Amounts”).
The Set Aside Amounts shall be held by the Stockholder Representative in the Contingent Payment Holdback Account for the benefit of the
Equityholders entitled to receive the Top Up Amount. For the purposes of calculating the AS Set Aside Amount and the Scannell Set Aside
Amount at the Closing, the amount to be released from the Escrow Account (or the Stockholders’ Representative Expense Account) and
any additional payment on account of any true up payment under Section 3.4 hereof paid to Equityholders or Option Holders shall
be deemed to be zero.
(b) Upon
finalization of the Final Closing Statement as provided in Section 3.4(b), and the determination by the Stockholders’ Representative
of the Topped Up Contingent Payment Amount and any Top Up Amount and the delivery of the payment details specified in Section 3.4(c)(iv),
the Stockholders’ Representative shall, as promptly as practicable, but in no event later than five (5) Business Days following
final determination of the Final Closing Statement, contribute to Parent (or its designee) (A) the applicable portion of the Set Aside
Amounts and the portion of the Escrow Amount that would otherwise be eligible to be paid to the Equityholders pursuant to Section 3.4(c)
to pay any such Top Up Amount, which amounts Parent shall then cause to be used to make the payments to the Persons specified pursuant
to the payment details provided under Section 3.4(c)(iv), and (B) the balance (if any) of the Scannell Set Aside Amounts for payment
to Peter O. Scannell in satisfaction of any amounts then owing and unpaid under the Scannell Bonus Agreement. ASP Acuren Investco LP shall
thereafter retain for its own use its applicable portion of the AS Set Aside Amount not contributed in accordance with the previous sentence
of this Section 3.5(b).
Article 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the
disclosure letter delivered by the Company to Parent concurrently with the execution of this Agreement (the “Company Disclosure
Letter”), the Company represents and warrants to Parent and Merger Sub as follows:
Section 4.1 Organization
and Qualification.
(a) The
Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware.
(b) The
Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.
The Company is duly qualified or authorized to do business as a foreign corporation and is in good standing under the laws of each jurisdiction
in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the
failure to be so qualified, authorized or in good standing would not, individually or in the aggregate, be material to the Company and
the Company Subsidiaries, taken as a whole, or materially and adversely affect the ability of the Company or the Company Subsidiaries
to consummate the transactions contemplated hereby.
(c) The
Company has made available to Parent true, correct and complete copies of the Organizational Documents of the Company as in effect on
the date hereof. The Company is not in default under, or in violation of, any provision of its Organizational Documents. Section 4.1(c)
of the Company Disclosure Letter sets forth a true and correct list of all of the officers and directors of the Company and each of
the Company Subsidiaries as of the date hereof.
Section 4.2 Capitalization
of the Company.
(a) Section 4.2
of the Company Disclosure Letter sets forth a complete and accurate list of the authorized, issued and outstanding Shares and Options
of the Company as of the date hereof. All of the issued and outstanding Shares of the Company as of the date hereof are duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in the certificate of incorporation of the Company, the Company’s
Stockholders’ Agreement, dated as of December 20, 2019, as amended (the “Stockholders’ Agreement”),
and the Options described in Section 4.2 of the Company Disclosure Letter, there are no other equity appreciation, phantom
stock, profit participation rights or shares of capital stock or other equity securities of the Company authorized, issued, reserved for
issuance or outstanding and no outstanding or authorized options, warrants, convertible or exchangeable securities, subscriptions, rights
(including any preemptive rights), calls or commitments of any character whatsoever, relating to the capital stock of, or other equity
or voting interest in, the Company, to which the Company or any of the Company Subsidiaries is a party or is bound requiring the issuance,
delivery or sale of shares of capital stock of the Company.
(b) Section 4.2(b)
of the Company Disclosure Letter sets forth, as of the date of this Agreement, the following information with respect to each outstanding
Option: (i) the name of the Option Holder; (ii) the number of Shares subject to such Option; (iii) the exercise price of
such Option; (iv) the date on which such Option was granted; and (v) whether such Option is intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code. Each Option was granted in accordance with the terms of the Option Plan, and
each Option has been granted with an exercise price that is no less than the fair market value of the underlying Shares on the date of
grant, as determined by the board of directors of the Company in its sole discretion in accordance with Section 409A of the Code.
Section 4.3 Subsidiaries.
(a) Section 4.3
of the Company Disclosure Letter sets forth a complete and accurate list of the name of each of the Company’s Subsidiaries (each,
a “Company Subsidiary,” and collectively, the “Company Subsidiaries”) and the jurisdiction in which
it is incorporated or organized and such Subsidiary’s direct owner and such owner’s percentage ownership. No Company Subsidiary
owns, directly or indirectly, any capital stock of, or equity ownership or voting interest in, any Person (other than a Company Subsidiary).
Each of the Company Subsidiaries is duly incorporated or organized, validly existing and in good standing (to the extent such concepts
are applicable) under the Laws of its state or province of organization, and each of the Company Subsidiaries has all requisite organizational
power and authority under such Laws and its Organizational Documents to own, lease and operate its properties and carry on its business
as presently owned or conducted, except where the failure to be so organized, existing and in good standing or to have such power or authority
would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, or materially
and adversely affect the ability of the Company or the Company Subsidiaries to consummate the transactions contemplated hereby.
(b)
The Company has made available to Parent true, correct and complete copies of the Organizational Documents of each of the Company Subsidiaries
as in effect on the date hereof. No Company Subsidiary is in default, violation or breach of any provision of any Company Subsidiary’s
Organizational Documents.
(c) All
of the outstanding shares of capital stock (or other equity securities) of each Company Subsidiary are duly authorized, validly issued,
fully paid and non-assessable (to the extent such concepts are applicable) and are directly owned of record by the Company or a Company
Subsidiary, free and clear of any Encumbrances other than (i) the Permitted Encumbrances set forth in clauses (i) and (v) of the
definition thereof, and (ii) Encumbrances created by acts of Parent, Merger Sub or any of their respective Affiliates’ acts.
There are no Contracts to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary is
bound to (x) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interest in, any Company
Subsidiary or (y) vote or dispose of any shares of the capital stock of, or other equity or voting interest in, any Company Subsidiary.
Except to the extent provided under the Stockholders’ Agreement, there are no irrevocable proxies and no voting agreements with
respect to any shares of capital stock of, or other equity or voting interest in, any Company Subsidiary.
Section 4.4 Authority;
Binding Obligation. The Company has the requisite corporate authority and power to execute, deliver
and perform this Agreement and each of the Company Documents, and, subject to the effectiveness of the Company Stockholder Written Consent,
to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Company Documents
by the Company, and the consummation of the Merger and other transactions contemplated hereby have been duly and validly authorized (or
in the case of Company Documents to be entered into after the date hereof, will be by the date of entry into such Company Document) by
all required corporate action on the part of the Company and, except for the approval of this Agreement and the transactions contemplated
hereby pursuant to the Company Stockholder Written Consent, no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement and the consummation of the transactions contemplated hereby (other than as required by the DGCL and the filing
of the Certificate of Merger with the Secretary of State of the State of Delaware). This Agreement has been duly executed and delivered
by the Company and, assuming that this Agreement constitutes the legal, valid and binding obligation of Parent and Merger Sub, constitutes
the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent
that the enforceability thereof may be limited by (a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws from time to time in effect affecting generally the enforcement of creditors’ rights and remedies; and
(b) general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity) (collectively, the “Equitable Exceptions”).
Section 4.5 No
Defaults or Conflicts. The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby by the Company and performance by the Company of its obligations hereunder do not (a) contravene or conflict
with, or result in any violation or breach of, the Organizational Documents of the Company or any Company Subsidiary; (b) result in any
violation or breach of any of the terms or provisions of, or constitute a default (with or without notice or lapse of time or both) under
any Company Contract (other than the Specified Funded Indebtedness); or (c) assuming that all Governmental Authorizations in Section 4.6
have been obtained or made, result in any violation or breach of any existing applicable Law or Order of any Governmental Authority
having jurisdiction over the Company, the Company Subsidiaries or any of their respective properties; provided, however,
that no representation or warranty is made in the foregoing clauses (b) or (c) with respect to matters that would not, individually
or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, or materially and adversely affect the
ability of the Company or the Company Subsidiaries to consummate the transactions contemplated hereby.
Section 4.6 No
Governmental Authorization Required. Except for (a) the filing of the Certificate of Merger, (b) the
filing of the pre-merger notification report under the HSR Act(and any actions or nonactions, waivers, consents, clearances or approvals
by a Governmental Authority, or expirations or terminations of waiting periods, required in connection with the foregoing), (c) compliance
with any applicable foreign or state securities or blue sky laws, and (d) the other consents and/or notices set forth on Section 4.6
of the Company Disclosure Letter, no authorization or approval or other action by, and no notice to or filing with, any Governmental
Authority (collectively, “Governmental Authorizations”) will be required to be obtained or made by the Company in
connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions
contemplated hereby; provided, however, that no representation and warranty is made with respect to any Governmental Authorizations
that, if not obtained or made, would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries,
taken as a whole, or materially and adversely affect the ability of the Company or the Company Subsidiaries to consummate the transactions
contemplated hereby.
Section 4.7 Financial
Statements.
(a) Section 4.7
of the Company Disclosure Letter contains true and complete copies of (i) the audited consolidated balance sheets of Rockwood Service
Corporation, an indirect wholly-owned subsidiary of the Company (“Rockwood”), and its consolidated Subsidiaries as
of December 31, 2023 and December 31, 2022 and the audited consolidated income statements and cash flow statements of Rockwood and
its consolidated Subsidiaries for the years then ended, and (ii) the unaudited consolidated balance sheet of Rockwood and its consolidated
Subsidiaries as of March 24, 2024 (the “Last Balance Sheet”) and the unaudited consolidated income statement and cash
flow statement of Rockwood and its consolidated Subsidiaries for the period then ended (such statements referred to in clause (ii),
including the related notes and schedules thereto, as the case may be, are referred to herein as the “Interim Financial Statements”
and together with the statements referred to in clause (i), including the related notes and schedules thereto, the “Financial
Statements”). Each of the Financial Statements fairly presents, in all material respects, the consolidated financial position
of Rockwood and its consolidated Subsidiaries as of their respective dates, and the other related statements included in the Financial
Statements fairly present, in all material respects, the results of their consolidated operations and cash flows for the periods indicated.
The Financial Statements have been prepared from the books and records of Rockwood and, except as may be indicated in the notes thereto,
have been prepared in accordance with GAAP in all material respects, and in the case of the Interim Financial Statements, with the exception
of the absence of recurring normal audit adjustments and certain notes or other textual disclosures required under GAAP.
(b) The
Company and Acuren Intermediate are each a holding company with no operations, employees, assets or liabilities (except for de minimis
assets or liabilities) other than (A) in the case of the Company: (i) ownership of 100% of the equity securities of Acuren Intermediate
and rights and obligations arising under this Agreement, (ii) agreements governing the transactions contemplated by this Agreement to
which it is a party, (iii) its Organizational Documents, the Option Plan and related award agreements, and restricted activities agreements
with its stockholders and option holders, and (iv) the consolidated Taxes of the Company, and (B) in the case of Acuren Intermediate,
(i) acting as a guarantor under the Amended and Restated Credit Agreement, by and among Rockwood Service Corporation, ASP Acuren Intermediate
Holdings, Inc., the lenders from time to time party thereto, and Bank of America, N.A., dated as of January 23, 2020, as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, (ii) obligations under the Acuren Purchase Agreement and the
Scannell Side Letter, and (iii) immaterial liabilities set forth in Section 4.7 of the Company Disclosure Letter, which would not,
individually and in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole.
Section 4.8 No Material
Undisclosed Liabilities; No Other Assets.
(a) As
of the date of this Agreement, there are no liabilities of the Company or any of the Company Subsidiaries, whether absolute, accrued,
contingent or otherwise, whether due or to become due, required under GAAP to be set forth on a consolidated balance sheet other than
(i) liabilities disclosed and provided for in the Last Balance Sheet or in the notes thereto, (ii) liabilities incurred since
the date of the Last Balance Sheet in the Ordinary Course of Business, which liabilities would not, individually or in the aggregate,
be material to the Company and the Company Subsidiaries taken as a whole, (iii) liabilities in connection with the negotiation, execution,
delivery or performance of this Agreement or consummation of the transactions contemplated hereby, and (iv) other liabilities that
would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole.
(b) At
the time of the delivery of each Distribution Schedule in accordance with Section 2.8, each such Distribution Schedule will reflect
a true, correct and complete listing of the entitlement of each Option Holder and each Stockholder, as applicable, to the applicable payments
in connection with this Agreement and the transactions contemplated hereby. No Option Holder or Stockholder is entitled to any payment
in respect of their respective Shares and Options other than as set forth in each Distribution Schedule delivered in accordance with Section
2.8. After giving effect to the payment of the amounts contemplated by this Agreement, as set forth in each Distribution Schedule,
the Company will have no further liability, including with respect to the Contingent Payment.
Section 4.9 Intellectual
Property.
(a) Section 4.9(a)
of the Company Disclosure Letter sets forth, as of the date hereof, all material Intellectual Property owned by the Company or any Company
Subsidiary that is registered, issued or subject to a pending application for registration or issuance by or with any Governmental Authority,
all material unregistered trademarks owned by the Company or any Company Subsidiary, and all material proprietary Software owned by the
Company or any Company Subsidiary.
(b) The
Company or a Company Subsidiary, as applicable, owns, is licensed to use, or otherwise has a valid right to use all material Intellectual
Property required for the operation of the business of the Company and the Company Subsidiaries, taken as a whole, as of the date hereof
(collectively, the “Company Intellectual Property”) in each case, free and clear of Encumbrances other than Permitted
Encumbrances. To the Knowledge of the Company, each item of Intellectual Property owned by the Company or any Company Subsidiary (“Owned
Intellectual Property”) is subsisting, valid, and enforceable, as applicable, and all of the Company’s and its Subsidiaries’
rights in and to the Owned Intellectual Property are subsisting, valid, and enforceable, as applicable. The Company or a Company Subsidiary
possesses all right, title, and interest in and to the Owned Intellectual Property, except as would not, individually or in the aggregate,
be material to the Company and the Company Subsidiaries, taken as a whole.
(c) To
the Knowledge of the Company, the operation of the business of the Company and the Company Subsidiaries, including the use of the Company
Intellectual Property by the Company and the Company Subsidiaries in connection with the operation of their businesses, as of the date
hereof, does not and, for the past three (3) years has not, infringed upon or misappropriated the Intellectual Property rights of
a third party. During the past three (3) years, there has been no Action initiated by any third party pending or threatened in writing
against the Company or any Company Subsidiary alleging any such infringement or misappropriation. During the past three (3) years,
neither the Company nor any Company Subsidiary has received a written threat alleging any such infringement or misappropriation (including
any claim that the Company or a Company Subsidiary must license or refrain from using any Intellectual Property of a third party).
(d) To
the Knowledge of the Company, (i) no Person is infringing or misappropriating, or has infringed or misappropriated during the past
three (3) years, any of the Intellectual Property owned by the Company or any Company Subsidiary; and (ii) there is no Action
pending or threatened, and there has been no Action pending or threatened during the past three (3) years, by the Company or any
Company Subsidiary against a third party alleging any such infringement or misappropriation.
(e) The
Company and the Company Subsidiaries have taken reasonable measures to protect and preserve the confidentiality of the material Trade
Secrets of the business conducted by the Company and the Company Subsidiaries as of the date hereof, except where failure to do so would
not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole. To the Knowledge of
the Company, neither the Company nor any Company Subsidiary has made material Trade Secrets of the Company or any Company Subsidiary available
to any Person except pursuant to valid and binding written agreements requiring such Person to maintain the confidentiality and non-disclosure
of such Trade Secrets and restricting the use of such Trade Secrets with appropriate limitations on use, reproduction and disclosure,
and there have been no breaches of such written agreements. The Company and the Company Subsidiaries have obtained from all employees,
consultants, contractors and any other persons who have created or developed any Owned Intellectual Property, written, valid present tense
assignments of any such Intellectual Property, except where failure to do so would not, individually or in the aggregate, be material
to the Company and the Company Subsidiaries, taken as a whole.
Section 4.10 Data
Privacy and IT.
(a) The
Company and the Company Subsidiaries have for the past three (3) years: (i) complied in all material respects with all applicable
Privacy Laws; (ii) to the Knowledge of the Company, not experienced any information security breaches, including any unauthorized use
or access, involving any computer systems or Personal Information in the possession or control of the Company and the Company Subsidiaries;
or (iii) not received any subpoenas, demands, inquiries, or other written notice of any claims of, or allegations of any non-compliance
with any Privacy Laws or with respect to the Company or a Company Subsidiary’s Processing of Personal Information.
(b) Except
as would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, the IT Systems
used by the Company and the Company Subsidiaries in the operation of the business of the Company and the Company Subsidiaries (i) are
sufficient for the conduct of the business as currently conducted by the Company and the Company Subsidiaries as of the Closing; (ii) are
in good working condition, ordinary wear and tear excepted, to effectively perform all computing, information technology, and data processing
operations necessary for the conduct of the business; and (iii) are free of any viruses, defects, bugs, and errors.
Section 4.11 Compliance
with Laws. The Company and the Company Subsidiaries are, and have been for the past (3) years, in compliance
with all applicable Laws, except where the failure to be in compliance would not, individually or in the aggregate, be material to the
Company and the Company Subsidiaries, taken as a whole, or materially and adversely affect the ability of the Company or the Company
Subsidiaries to consummate the transactions contemplated hereby. The business of the Company and the Company Subsidiaries, taken as a
whole, is not being conducted in violation of any applicable Law, and neither the Company nor any of the Company Subsidiaries has as
of the date of this Agreement received any written notice from any Governmental Authority regarding any material violation by the Company
or any Company Subsidiaries of any applicable Law, except for in each case such violations which would not, individually or in the aggregate,
be material to the Company and the Company Subsidiaries, taken as a whole, or materially and adversely affect the ability of the Company
or the Company Subsidiaries to consummate the transactions contemplated hereby.
Section 4.12 Company
Contracts. Section 4.12 of the Company Disclosure Letter lists or describes, as of the
date hereof, all Contracts (other than Company Plans, Leases and purchase orders) to which the Company or any Company Subsidiary is a
party or to which their respective assets or property are bound as of the date hereof, which:
(a) are
agreements or instruments related to the incurrence of any Indebtedness of the Company or any Company Subsidiary in an amount in excess
of $4,000,000 individually, or otherwise relate to the placing of any Encumbrance (other than Permitted Encumbrances and Encumbrances
which will be released at or prior to Closing) on any of the assets or properties of the Company or any of its Subsidiaries;
(b) are
partnership, joint venture or similar agreements (other than any Organizational Documents of the Company or the Company Subsidiaries);
(c) are
Contracts with any Significant Customer or Significant Supplier;
(d) any
Contract, other than Contracts with any Significant Customer or Significant Supplier or related to insurance premiums, that requires either
(A) annual payments to or from the Company or the Company Subsidiaries of more than $6,000,000 or (B) aggregate payments to or from the
Company or the Company Subsidiaries of more than $6,000,000 during the term of such Contract, and the payments under such Contract are
fixed for a period of more than one (1) year;
(e) are
Contracts which provide for capital expenditures by the Company or any of its Subsidiaries with an outstanding amount of unpaid or remaining
commitments in excess of $500,000 individually or $1,000,000 in the aggregate (except in the case of capital expenditures for vehicle
leases in the Ordinary Course of Business and other capital expenditures to be made in accordance with an annual budget of the Company
approved by the board of directors of the Company prior to the date hereof);
(f) are
Contracts which restrict the Company or any Company Subsidiary from engaging in any material aspect of its business anywhere in the world;
(g) require
the future acquisition from or disposition to another Person (other than the Company or a Company Subsidiary) of material operating assets
(other than ordinary course purchasing activities or inventory sales (including vehicle acquisitions and dispositions)) or capital stock
or other equity interest of another Person (other than the Company or a Company Subsidiary), other than (i) acquisitions pursuant to capital
expenditures in the Ordinary Course of Business or (ii) acquisitions or dispositions that do not individually have a value in excess of
$10,000,000;
(h) include
any outstanding deferred purchase price, earn-out or other contingent payment obligation of the Company or any Company Subsidiary;
(i) provide
for material indemnification obligations of the Company or any Company Subsidiary, other than any indemnification obligations to customers
pursuant to Contracts entered into in the Ordinary Course of Business or related to Leases;
(j) are
IP Licenses, excluding (i) licenses pertaining to “off-the-shelf” commercially available software used pursuant to shrink-wrap
or click-through license agreements on standard terms and (ii) non-exclusive licenses granted in the Ordinary Course of Business);
(k) are
collective bargaining agreements or works council agreements with any labor union or labor organization;
(l) are employment,
consulting or independent contractor agreement, whether on a full-time, part-time, consulting, or other basis, which provides base compensation
in excess of $350,000 during any year that is not terminable by the Company or such Subsidiary upon notice of thirty (30) days or less
without penalty, or which provides for a contractual requirement to provide severance, termination or similar payments in excess of three
(3) months;
(m) (i) were
entered into in connection with the settlement or other resolution of any Action under which the Company or any of the Company Subsidiaries
has any continuing liabilities in excess of $500,000 or (ii) are an Order or settlement or similar Contract of or with any Governmental
Authority requiring performance or payments by the Company or any of its Subsidiaries after the date hereof;
(n) are
with any Affiliate of the Company or any Company Subsidiary; or
(o) are
otherwise material to the Company and the Company Subsidiaries, taken as a whole.
Collectively, the Contracts listed on Section 4.12
of the Company Disclosure Letter are referred to herein as the “Company Contracts”. Each Company Contract is, subject
to the Equitable Exceptions, a valid and binding agreement of the Company or the applicable Company Subsidiary, except where failure to
be valid and binding would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a
whole. As of the date hereof, neither the Company, any Company Subsidiary nor, to the Knowledge of the Company, any other party to any
Company Contract is in breach thereof or default thereunder and there does not exist under any Company Contract any event which, with
the giving of notice or the lapse of time, would constitute such a breach or default by the Company, any Company Subsidiary or, to the
Knowledge of the Company, any other party, in each case except for such breaches, defaults and events as to which requisite waivers or
consents have been obtained or which would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries,
taken as a whole. The Company has made available to Parent a true, correct and complete copy of each Company Contract (including all amendments,
exhibits and schedules thereto) as in effect as of the date hereof.
Section 4.13 Litigation.
Except as set forth in Section 4.13 of the Company Disclosure Letter, as of the date hereof, there are no Actions pending,
or to the Knowledge of the Company, threatened against the Company or any Company Subsidiary or any of their respective properties or
assets that, individually or in the aggregate, would result in a material liability to the Company or any of the Company Subsidiaries
or materially and adversely affect the ability of the Company or the Company Subsidiaries to consummate the transactions contemplated
hereby. As of the date hereof, neither the Company nor any Company Subsidiary nor any of their respective properties or assets is subject
to any unsatisfied Order that, individually or in the aggregate, would be material to the Company or any of the Company Subsidiaries
or materially and adversely affect the ability of the Company or the Company Subsidiaries to consummate the transactions contemplated
hereby.
Section 4.14 Taxes.
(a) All
income and other material Tax Returns required to be filed by or with respect to the Company or any Company Subsidiary have been timely
(within any applicable extension periods) filed, and all such Tax Returns are true, complete and correct in all material respects.
(b) The
Company and the Company Subsidiaries have fully and timely paid all material Taxes (whether or not shown to be due on the Tax Returns
referred to in Section 4.14(a)). Neither the Company nor any Company Subsidiary has received any material refund of Taxes
or any material credit against Taxes to which it is not entitled.
(c) All
material deficiencies for Taxes asserted or assessed in writing against the Company or the Company Subsidiaries have been fully and timely
(within any applicable extension periods) paid, settled or properly reflected in the Financial Statements.
(d) No
written claim has been made within the past five (5) years by a Tax Authority in a jurisdiction where the Company or any of the Company
Subsidiaries does not file Tax Returns that the Company or any of the Company Subsidiaries is or may be subject to a material amount of
taxation by that jurisdiction.
(e) Each
of the Company and the Company Subsidiaries has withheld and paid all material Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all information reporting
required with respect thereto have been properly completed and timely filed in all material respects.
(f) Each
of the Company and the Company Subsidiaries has properly collected and remitted all material amounts of sales, resales, goods and services,
harmonized sales, and similar Taxes and has properly received and retained all material Tax exemption certificates or other documentation
for all supplies, sales, leases, or other services made without charging or remitting sales, resales, goods and services, harmonized sales,
or similar Taxes that qualify as exempt from sales, goods and services, harmonized sales, and similar Taxes.
(g) No
audit, dispute or claim is pending or, to the Knowledge of the Company, threatened in writing with respect to any material Taxes due from
or with respect to the Company or any Company Subsidiary.
(h) Neither
the Company nor any Company Subsidiary (i) has been a member of an affiliated, consolidated, combined or unitary group for federal
income Tax purposes (other than a group the common parent of which was and is the Company or was a Company Subsidiary), (ii) is a
party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement (except for customary commercial leases or contracts
that are not primarily related to Taxes entered into in the Ordinary Course of Business), or (iii) has any material liability for
the Taxes of any Person (other than the Company or any of the Company Subsidiaries) under Treasury Regulations Section 1.1502-6 (or
any similar provision of state, local, or non-U.S. law), under section 160 of the Canadian Tax Act, as a transferee or successor,
by contract, or otherwise (except for customary commercial leases or contracts that are not primarily related to Taxes entered into in
the Ordinary Course of Business and liabilities thereunder).
(i) There
are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, material Taxes due from the Company or any Company Subsidiary for any taxable period
and no request for any such waiver or extension is currently pending.
(j) Neither
the Company nor any of the Company Subsidiaries will be required to include any material amount of income in, or exclude any material
amount of deduction from, taxable income for any taxable period (or portion thereof) beginning on or after the Closing Date under any
Laws applicable to Tax as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing
Date; (ii) use of the cash method, a hybrid method or an improper method of accounting for a taxable period ending on or prior to
the Closing Date; (iii) a prepaid amount, deposit, advanced payment received or paid, deferred revenue accrued, or reserve claimed
on or before the Closing Date; (iv) any “closing agreement” as described in Section 7121 of the Code (or any corresponding
or similar provision of state, local, or non-U.S. Law applicable to income Tax) or to the Knowledge of the Company, any other agreement
with any Taxing Authority executed on or prior to the Closing Date; (v) intercompany transactions or any excess loss account described
in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or non-U.S. Law
applicable to income Tax) entered into or in existence prior to the Closing; (vi) installment sale or open transaction disposition made
on or prior to the Closing; or (vii) income arising or accruing prior to or on the Closing Date and includable after the Closing
Date under Subchapter K or Section 951, 951A or 956 of the Code (or any comparable provisions of other applicable state, local or
foreign Law) with respect to any interest held by the Company or any of its Subsidiaries in a “controlled foreign corporation”
or entity classified as a partnership. The Company and each of the Company Subsidiaries uses the accrual method of accounting, and none
of such entities uses the cash or hybrid method of accounting, for U.S. federal and applicable state, local and foreign income Tax purposes.
(k) Neither
the Company nor any Company Subsidiaries shall be required to pay any Tax pursuant to or as a result of Section 965 of the Code. Neither
the Company nor any Company Subsidiaries has claimed any “employee retention credit” pursuant to Section 2301 of the
Coronavirus Aid, Relief, and Economic Security Act of 2020 or any similar or successor Law, executive order, executive memorandum or guidance
issued thereunder (or any corresponding or similar provision of state or local Law).
(l) Within
the past two (2) years, neither the Company nor any Company Subsidiary has distributed stock of another Person, or has had its stock
distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355
or Section 361 of the Code.
(m) Neither
the Company nor any Company Subsidiary is or has been a party to any “listed transaction” as defined in Section 6707A(c)(2)
of the Code. Neither the Company nor any Company Subsidiary has engaged in any “reportable transaction” as defined in subsection 237.3(l)
of the Canadian Tax Act or any “notifiable transaction” as defined in subsection 237.4(1) of the Canadian Tax Act.
(n) The
equity interests of the Company Subsidiaries that are subject to Tax in Canada do not constitute taxable Canadian property as defined
in subsection 248(1) of the Canadian Tax Act.
(o) There
are no circumstances or situations existing, or that have existed, which have resulted, or which could result in the application of any
of sections 15, 17, 78, 80 to 80.04 or subsection 90(6) to 90(12) of the Canadian Tax Act or any equivalent provision of any applicable
Law to the Company or any Company Subsidiary.
(p) Each
of the Company and the Company Subsidiaries has complied in all material respects with the transfer pricing provisions of all Laws applicable
to Tax (including section 247 of the Canadian Tax Act), including the contemporaneous documentation, retention, and filing requirements
thereof.
(q) Neither
the Company nor any Company Subsidiary has ever made an “excessive eligible dividend election” as defined in subsection 89(1)
of the Canadian Tax Act in respect of any dividends paid or deemed to be paid on any class of shares of its capital. Neither the Company
nor any Company Subsidiary has ever made a capital dividend election under subsection 83(2) of the Canadian Tax Act in an amount
which exceeds the applicable company’s capital dividend account at the time of such election.
(r) All
research and development investment tax credits and other tax credits (“ITCs”) claimed by each of the Company and the
Company Subsidiaries were claimed in accordance with the Canadian Tax Act and the relevant provincial Laws applicable to Tax and each
of the Company and the Company Subsidiaries satisfied at all times the relevant criteria and conditions entitling it to such ITCs. All
refunds of ITCs received or receivable by the Company and any Company Subsidiary in any taxation year were claimed in accordance with
the Canadian Tax Act and the relevant provincial Laws applicable to Tax and the Company and the Company Subsidiaries satisfied at all
times the relevant criteria and conditions entitling them to claim a refund of such ITCs.
(s) Each
of the Company and the Company Subsidiaries has duly and timely completed and filed all CEWS Returns required to be filed by it, or that
it elected to file, and all such CEWS Returns are complete and accurate in all material respects. Neither the Company nor any Company
Subsidiary has claimed any CEWS to which it was not entitled and no CEWS would be required to be repaid, whether in whole or in part,
by the Company or any Company Subsidiary to a Governmental Authority after the Closing.
(t) Each
of the Company and the Company Subsidiaries has never had a permanent establishment (within the meaning of an applicable Tax treaty) in
a jurisdiction outside of its country of organization, and each of the Company and the Company Subsidiaries has never been subject to
Tax in a jurisdiction outside of its country of organization.
Section 4.15 Permits.
As of the date of this Agreement, except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) the
Company and each Company Subsidiary have all consents, authorizations, registrations, waivers, privileges, exemptions, qualifications,
quotas, certificates, filings, franchises, licenses, notices, permits and rights necessary for the ownership of their properties and
assets or the operation of their businesses as conducted on the date hereof (collectively, “Permits”), and (b) all
such material Permits are in full force and effect.
Section 4.16 Employee
Benefit Plans.
(a) Section 4.16
of the Company Disclosure Letter contains a true and complete list of each material Company Plan by country. “Company Plan”
means each “employee benefit plan” (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) and
each other equity, equity-based, severance, leaving service, employment, consultant, change-in-control, fringe benefit, bonus, incentive,
deferred compensation, profit sharing, pension, ex gratia pension benefits, retirement, medical, hospital, supplemental insurance, paid
time off, vacation, sick leave, death, disability, and all other employee benefit plans, programs and agreements in effect as of the date
of this Agreement, which, in each case, are sponsored, maintained and/or contributed by the Company or any Company Subsidiary for the
benefit of any of its current or former employees, directors and/or individual consultants, or under which the Company has or could reasonably
be expected to incur any material liability (contingent or otherwise), but excluding any statutory plans, common law entitlements, Multiemployer
Plans and any other benefit plan sponsored by a union.
(b) With
respect to each material Company Plan, the Company has made available to Parent, to the extent applicable: (i) the Company Plan document
and any related trust agreement or funding agreement and all amendments thereto; (ii) the most recent IRS determination or opinion
letter; (iii) the most recent summary plan description and all summaries of material modifications thereto; (iv) the Form 5500
and attached schedules for the three (3) most recent plan years, (v) copies of the non-discrimination testing results for
the three (3) most recent plan years, (vi) copies of the Forms 1094C and 1095C (sampling) for the three (3) most recent
plan years and (vii) all non-routine correspondence received from any Governmental Authority with respect to each Company Plan
within the past three (3) years.
(c) (i)
Each Company Plan has been established and administered in accordance and in compliance, in all material respects, with its terms and
applicable Laws; and (ii) each Company Plan intended to be qualified within the meaning of Section 401(a) of the Code has received
a favorable determination letter or is the subject of a favorable opinion from the IRS as to its qualification, and to the Knowledge of
the Company nothing has occurred that could reasonably be expected to cause the loss of such qualification.
(d) Except
as set forth on Section 4.16 of the Company Disclosure Letter, no Company Plan is or was within the past six (6) years, and
neither the Company nor any Company Subsidiary nor any ERISA Affiliate has or reasonably expects to have any liability or obligation under
(i) any “employee pension benefit plan,” as defined in Section 3(2) of ERISA that is subject to Title IV of ERISA,
Section 412 of the Code and/or Section 302 of ERISA; (ii) a “multiemployer plan” as defined in Section 3(37)
of ERISA (“Multiemployer Plan”); (iii) a “multiple employer plan” (within the meaning of Section 413
of the Code), or (iv) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).
(e) With
respect to each Company Plan: (i) all contributions, premiums and other similar payments to, and payments from, the Company Plans
which are required to have been made with respect to any period ending on or before the Closing Date, in accordance with the Company Plans,
have been timely made; (ii) all material reports, returns and similar documents required to be filed with any Governmental Authority
or distributed to any plan participant have been duly and timely filed or distributed; and (iii) the Company and each Company Subsidiary
is not in violation of any Company Plan provision, in each case of (i), (ii) and (iii), except as would not, individually or in the aggregate,
result in material liability to the Company or any of the Company Subsidiaries. All annual bonuses payable by the Company or any Company
Subsidiaries to employees, directors and/or independent contractors of the Company or Company Subsidiaries with respect to the 2023 fiscal
year have been fully paid.
(f) With
respect to any Company Plan, no Actions (other than routine claims for benefits in the ordinary course) are pending, or, to the Knowledge
of Company, threatened by any Governmental Authority involving any Company Plan, the assets of any of the trusts under any Company
Plan or against the Company or any Company Subsidiary or fiduciary of any Company Plan with respect to the operation of such plan,
except as would not, individually or in the aggregate, reasonably be expected to be material to the business of the Company and the Company
Subsidiaries taken as a whole.
(g) No
non-exempt “prohibited transaction” (within the meaning of Section 406 of ERISA and Section 4975 of the Code) for
any Company Plans, and no reportable event, as defined in ERISA, has occurred in connection with the Company Plans.
(h) The
Company, each Company Subsidiary and each ERISA Affiliate has complied in all material respects with (i) the notice and continuation
coverage requirements, and all other requirements, of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA, and the regulations
thereunder, and (ii) the affordability and minimum essential coverage requirements of the Patient Protection and Affordable Care
Act of 2010, as amended, in each case, with respect to each Company Plan that is a group health plan.
(i) There
are no Company Plans, Contracts or other obligations of the Company or any Company Subsidiary which provides for health, life or other
welfare benefits to past or present employees beyond their retirement or other termination of service, other than coverage mandated by
the Consolidated Omnibus Budget Recommendation Act of 1985, Section 4980B of the Code, Title I of ERISA or any similar state group
health plan continuation Laws, the cost of which is fully paid by such U.S. employees or their dependents.
(j) Each
“nonqualified deferred compensation plan” (as defined in Code Section 409A(d)(1) and applicable regulations) with respect
to any service provider of the Company or any Company Subsidiary thereof and to which the Company or any Company Subsidiary thereof is
a party has been maintained and operated in compliance, in all material respects, with Section 409A of the Code and regulations and
other guidance promulgated thereunder, and no additional Tax under Section 409A of the Code has been incurred. Neither the Company
nor any Company Subsidiary has any obligation to indemnify, “gross-up”, reimburse or otherwise compensate any individual with
respect to the additional Taxes or interest imposed pursuant to Section 409A of the Code.
(k) Except
as contemplated by this Agreement, the execution and the consummation of the transactions contemplated by this Agreement (either alone
or in conjunction with any other action by the Company or any of its Company Subsidiaries prior to the Closing) will not (i) result
in any material payment from the Company or any Company Subsidiary becoming due, or increase materially the amount of any compensation
and/or benefits due, in each case, to any current or former employee, director and/or independent contractor of the Company or any Company
Subsidiary, (ii) materially increase any benefits otherwise due under any Company Plan, or (iii) result in the acceleration
of the time of payment or vesting of any material compensation or benefits from the Company or any Company Subsidiary to any current or
former employee, director and/or independent contractor of the Company or any Company Subsidiary.
(l) The
consummation of the transactions contemplated by this Agreement (either alone or in conjunction with any other action by the Company or
any of its Company Subsidiaries prior to the Closing) will not give rise to any payments that would be nondeductible to the payor under
Section 280G of the Code. The consummation of the transactions contemplated by this Agreement will not give rise to any single-trigger
severance or similar payments payable to employees, directors and/or independent contractors of the Company or Company Subsidiaries.
(m) No
Company Plan is, has ever been, or is intended to be (i) a “registered pension plan” as such term is defined in subsection 248(1)
of the Canadian Tax Act; (ii) a “retirement compensation arrangement” as such term is defined in subsection 248(1)
of the Canadian Tax Act; or (iii) an “employee life and health trust” as such term is defined in subsection 248(1)
of the Canadian Tax Act. No Company Plan is intended to be or has ever been found or alleged by a Governmental Authority to be a “salary
deferral arrangement” as such term is defined in subsection 248(1) of the Canadian Tax Act. The only employer obligation under
a Company Plan which is a “multi-employer plan” as such term is defined in subsection 147.1(1) of the Canadian Tax Act is
to remit employer and employee contributions as set out in the respective collective bargaining agreement.
(n) With
respect to each Multiemployer Plan under which the Company or any Company Subsidiary or any ERISA Affiliate contributes or has an obligation
to contribute: (i) all contributions required to be made with respect to employees of the Company or any Company Subsidiary or ERISA Affiliate
have been timely paid; (ii) none of the Company, the Company Subsidiaries, or any ERISA Affiliate, has incurred or has taken any action
to incur, directly or indirectly, any withdrawal liability under ERISA with respect to any such plan (whether by reason of the Merger
or otherwise); (iii) no such plan is insolvent or in reorganization and no accumulated funding deficiency (as defined in Section 302 of
ERISA and Section 431 of the Code), whether or not waived, exists with respect to any such plan and no such plan is in “endangered
status” or “critical status” within the meaning of Section 432 of the Code; (iv) none of the Company, the Company Subsidiaries,
or any ERISA Affiliate has withdrawn, partially withdrawn, or received any notice of any claim or demand for withdrawal liability or partial
withdrawal liability against any of them; (v) the Company has made available to Parent true, correct and complete copies of (A) all information
that has been provided to the Company, the Company Subsidiaries, or any ERISA Affiliate regarding assessed or potential withdrawal liability
under any Multiemployer Plan in the last six (6) years, and (B) the most recent actuarial report or other information received from the
Multiemployer Plan regarding its funding status, financial condition, or related matters; and (vi) none of the Company, the Company Subsidiaries,
or any ERISA Affiliate has any liability under Section 4204 of ERISA.
(o) Any
pension benefits payable to employees of the UK Company Subsidiary consist exclusively of money purchase benefits (as defined in section
181 of the UK’s Pension Schemes Act 1993) and neither the UK Company Subsidiary, the Company nor any Company Subsidiaries has any liability
whatsoever towards any defined benefit arrangement or any minimum level of benefits, nor have they made any defined benefit promise or
been connected or associated with a sponsoring employer of any defined benefit scheme, and no amount is or could become due from the UK
Company Subsidiary, the Company or any Company Subsidiary by virtue of section 75 or 75A of the UK’s Pensions Act 1995; and
(p) No
employee or officer (or former employee or officer) of the UK Company Subsidiary whose employment transferred to the UK Company Subsidiary
under the Transfer Regulations or otherwise was a member of or entitled to be or become a member of any defined benefit occupational pension
scheme and therefore no employee or officer or former employee or officer of the UK Company Subsidiary has any rights to early retirement
or to other enhanced rights, including pension rights on redundancy.
Section 4.17 Labor
Matters.
(a) The
Company has made available to Parent a true, correct, and complete list of all individuals who are employees of the Company or any of
the Company Subsidiaries as of the date specified therein, including any employee who is on a leave of absence of any nature, paid or
unpaid, authorized or unauthorized, and sets forth for each such individual the following, to the extent applicable: (i) title or position
(including whether full-time or part-time); (ii) status (i.e. hourly, salaried, on-call, temporary, casual); (iii) hire or retention date;
(iv) current annual base salary or hourly rate, as applicable; and (v) commission, bonus or other incentive-based compensation. Except
as (A) would not apply to any remuneration scheduled to be remitted on the next regularly scheduled payroll date immediately after the
Closing Date, and (B) would not result in material liability to the Company or any of its Subsidiaries: the Company and its Subsidiaries
have fully paid all wages, salaries, wage premiums, commissions, bonuses, severance and termination payments, fees, and other compensation
that has come due and payable to their current or former employees, independent contractors, or consultants under applicable Laws. Except
as set forth on Section 4.17(a) of the Company Disclosure Letter, the employment of each employee of the Company or any of
its Subsidiaries (i) in the United States is terminable at will by the Company or the applicable Subsidiary without any penalty, severance,
or other liability or obligation incurred by the Company or any of its Subsidiaries; and (ii) in Canada is terminable by the Company or
the applicable Subsidiary in accordance with applicable Laws, without any penalty, severance, or other liability or obligation incurred
by the Company or any of its Subsidiaries other than as required by applicable Laws.
(b) The
Company has made available to Parent a true, correct, and complete list of all individuals who are consultants or independent contractors
engaged by the Company or any Subsidiary as of the date specified therein and earning compensation in excess of $350,000 per year, whether
or not doing business as an entity, and sets forth for each the following: (i) name of individual; (ii) status (i.e., consultant,
independent contractor, sales representative, licensed reseller); (iii) date the engagement or Contract began; and (iv) duration
of engagement or Contract.
(c) Except
as set forth on Section 4.17(c) of the Company Disclosure Letter, neither the Company nor any of the Company Subsidiaries
is a party to or bound by any collective bargaining agreement or other Contract with any labor organization, trade union or employee association,
and no employees of the Company or any of the Company Subsidiaries are represented by any labor organization or employee association with
respect to their employment with the Company or any of the Company Subsidiaries, whether by way of certification, voluntary recognition
or succession rights. Other than those set forth on Section 4.17 of the Company Disclosure Letter, no labor union, trade union,
labor organization or group of employees of the Company or the Company Subsidiaries has made a demand (orally or in writing) for recognition
or certification. To the Knowledge of the Company, there has not been any attempt to organize any employees of the Company and the Company
Subsidiaries for the purpose of forming or joining a labor union or work council other than in connection with the entities set forth
on Section 4.17 of the Company Disclosure Letter. There have been no strikes, slowdowns, picketing, work stoppages, or other material
labor disputes by the employees of the Company and the Company Subsidiaries or, to the Knowledge of the Company, threatened. There are
no unfair labor practice complaints pending or, to the Knowledge of the Company, threatened against the Company or any Company Subsidiary
before the National Labor Relations Board or any other Governmental Authority. During the past twelve (12) months, the Company and the
Company Subsidiaries have not engaged in any conduct that would reasonably give rise to the filing of an unfair labor practice charge
with the National Labor Relations Board by any individual, employee, group of employees, or labor organization. To the Knowledge of the
Company, no Person has applied to have the Company or any of the Company Subsidiaries declared a common or single employer pursuant to
applicable Laws in any jurisdiction in which the Company or any of the Company Subsidiaries carry on business.
(d) The
Company and the Company Subsidiaries are, and have for the previous three (3) years been, in compliance in all material respects with
all applicable labor and employment Laws, including those relating to labor-management relations, wages, hours, overtime, employee classification,
discrimination, sexual harassment, civil rights, affirmative action, work authorization, immigration, safety and health, workers’
compensation, continuation coverage under group health plans, wage payment, and the payment and withholding of Taxes (collectively, the
“Employment Laws”). All employees of the Company or any of its Subsidiaries classified as exempt under the federal
Fair Labor Standards Act (“FLSA”) and state, provincial and local wage and hour Laws are and have been properly classified,
except where failure to be properly classified would not, individually or in the aggregate, result in a material liability to the Company
or any Company Subsidiary.
(e) As
of the date hereof, no material Action relating to the violation by the Company or any of its Subsidiaries of any Employment Laws is pending
or, to the Knowledge of the Company, threatened in writing.
(f) The
Company has reasonably investigated all sexual harassment allegations made by or about any officer or director of the Company and Company
Subsidiaries since January 1, 2021. With respect to each such allegation with potential merit, the Company or applicable Company
Subsidiary has taken prompt corrective action that is reasonably calculated to prevent further harassment, except as would not, individually
or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole.
(g) To
the extent applicable, the Company and each Company Subsidiary complete Form I-9s (Employment Eligibility Verification) for each current
employee in accordance with applicable Law.
(h) In
the past three (3) years, the Company has not implemented any plant closing or layoff of employees implicating the Worker Adjustment
and Retraining Notification Act, 29 U.S.C. §§ 2101, et. Seq. (“WARN”), or any similar state, provincial or
local Law.
Section 4.18 Environmental
Compliance. Except as set forth on Section 4.18 of the Company Disclosure Letter or as would
not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, (a) each of the
Company and each Company Subsidiary has been and is in compliance with all Environmental Laws (which compliance includes obtaining, maintaining
and complying with all Environmental Permits); (b) there are no pending, or to the Knowledge of the Company, threatened Actions
alleging that the Company or any of the Company Subsidiaries is in violation of, or potentially liable under, any Environmental Laws;
(c) there has been no Release by the Company or any Company Subsidiaries on the Real Property, or to the Knowledge of the Company,
at any customer location or at any other property in violation of Environmental Law or for which the Company or any Company Subsidiary
was or is currently obligated under Environmental Law or Environmental Permit to perform any investigation or remedial action; (d)
there are no and have not been any Hazardous Materials used, generated, treated, stored, transported, disposed of, handled or otherwise
existing on, under or at any personal or real property owned, leased, operated or used by the Company or any of the Company Subsidiaries
or, to the Knowledge of the Company, at any customer location, which result in the Company or any Company Subsidiary incurring liability
under Environmental Laws, and (e) neither the Company nor any Company Subsidiary has given or agreed to give, or is a party to or bound
by, any indemnity in respect of any matter relating to the environment or Environmental Laws other than those indemnities contained in
standard leases or loan documents or address liability that would be otherwise imposed on the Company or the Company Subsidiaries as
a matter of law. To the Knowledge of the Company, copies of all material environmental site assessment and studies revealing conditions
that would reasonably be expected to result in the Company and any Company Subsidiary incurring material liability under Environmental
Laws relating to the Company or any Company Subsidiary or any Real Property currently or previously owned or leased by the Company or
any Company Subsidiary or at any customer location, to the extent within the possession or control of the Company, have been made available
to Parent.
Section 4.19 Insurance.
Except as would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, the
Company and the Company Subsidiaries have maintained without interruption insurance policies covering risks and events, and in amounts
adequate in all material respects, in the Company’s determination, for their respective businesses and operations. All material
insurance policies (the “Insurance Policies”) with respect to the properties, assets, or business of the Company and
the Company Subsidiaries are in full force and effect as of the date hereof and all premiums due and payable thereon have been paid in
full. As of the date hereof, neither the Company nor any Company Subsidiary has received a written notice of cancellation or non-renewal
of any Insurance Policy, nor, to the Company’s Knowledge, is the termination of any Insurance Policy threatened. Such Insurance
Policies will not terminate as a result of the consummation of the transactions contemplated hereby.
Section 4.20 Real
Property.
(a) Section 4.20(a)
of the Company Disclosure Letter contains a complete and accurate list as of the date hereof of all real property owned in fee (or fee
simple, if applicable) by the Company and/or the Company Subsidiaries (the “Owned Real Property”). The Company and/or
a Company Subsidiary has good and marketable fee (or fee simple, if applicable) title to all Owned Real Property, free and clear of all
Encumbrances, except Permitted Encumbrances and Encumbrances which will be released at or prior to Closing. To the Knowledge of the Company,
neither the Company nor any Company Subsidiary, as applicable, has any continuing material obligation in respect of any formerly owned
real property. There are no Contracts entered into by the Company or any Company Subsidiary to acquire or dispose of any of the Owned
Real Property. Except as set forth in Section 4.20(a) of the Company Disclosure Letter, there are no leases, tenancies, licenses,
or other rights of third parties to occupy or use any portion of the Owned Real Property. Neither the Company nor any Company Subsidiary
has received written notice, and to the Knowledge of the Company, neither the Company nor any Company Subsidiary is aware that any of
the Owned Real Property is subject to any Order by a Governmental Authority to be sold, rezoned or is being condemned, expropriated or
otherwise taken by any public authority with or without payment of compensation therefor, and to the Knowledge of the Company, no such
event is pending or threatened. To the Knowledge of the Company, the use, operation and maintenance of each Owned Real Property (including
the buildings and fixtures thereon) is in material compliance with all applicable building, zoning and other applicable Laws to the Owned
Real Property. To the Knowledge of the Company, none of the buildings or fixtures forming part of the Owned Real Properties are in need
of material maintenance or repairs other than routine maintenance and repairs in the Ordinary Course of Business.
(b) Section 4.20(b)
of the Company Disclosure Letter contains a complete and accurate list as of the date hereof of all real property leased by the Company
and/or the Company Subsidiaries as lessee, including all subleases, licenses and other arrangements relating to the use or occupancy of
real property by the Company and the Company Subsidiaries (each, a “Leased Property”, collectively, the “Leased
Properties”, and together with the Owned Real Property, the “Real Property”). True and complete copies of
all leases of Leased Property (each, a “Lease”) have been made available to Parent. As of the date hereof, to the Knowledge
of the Company, neither the Company nor any Company Subsidiary, as applicable, is in breach or default (in each case, with or without
the giving of notice or lapse of time or both, or the happening of any other event or condition) in any material respect under any Lease
to which any such entity is a party that, individually or in the aggregate, is material to the operation of the business of the Company
and the Company Subsidiaries, taken as a whole, other than defaults that have been cured or waived by the landlord thereunder. All of
the Leases that are material to the operation of the business of the Company and the Company Subsidiaries, taken as a whole, are, to the
Knowledge of the Company and subject to the Equitable Exceptions, in full force and effect as of the date hereof, and the Company or one
of the Company Subsidiaries holds a valid and existing leasehold interest under each such Lease, free and clear of any Encumbrances except
for Permitted Encumbrances and Encumbrances which will be released at or prior to the Closing, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights generally, or subject to general principles
of equity. To the Knowledge of the Company, none of the buildings or and fixtures forming part of the Leased Properties require material
maintenance or repairs other than routine maintenance and repairs in the Ordinary Course of Business. To the Knowledge of the Company,
neither the Company nor any Company Subsidiary, as applicable, has any continuing material obligation in respect of any formerly Leased
Property.
Section 4.21 Affiliate
Transactions. Except (a) for employment relationships and compensation, benefits, and travel advances
in the Ordinary Course of Business, (b) for arrangements or other relationships by and between the Company and wholly-owned Company Subsidiaries,
and (c) as set forth in Section 4.21 of the Company Disclosure Letter, no Affiliate of the Company or any Company Subsidiary,
any executive officer or director of the Company or any Company Subsidiary, any member of such executive officer’s or director’s
immediate family, or any 1% or greater Equityholder of the Company or any member of such Equityholder’s immediate family (collectively,
“Related Persons”) (x) owes to the Company or any Company Subsidiary an amount in excess of $500,000, nor does
the Company or any Company Subsidiary owe any amount to, or has committed to make any loan or extend or guarantee credit to or for the
benefit of, any Related Person or (y) is involved in any material business arrangement or other relationship with the Company or
any Company Subsidiary.
Section 4.22 Absence
of Certain Changes or Events. Except as contemplated by this Agreement, between the date of the Last
Balance Sheet to the date of this Agreement, the Company and each Company Subsidiary have conducted their respective businesses in the
Ordinary Course of Business in all material respects. Since December 31, 2023, there has been no Material Adverse Effect. Since the date
of the Last Balance Sheet, neither the Company nor any Company Subsidiary has taken any action that, if taken after the date of this
Agreement, would require the consent of Parent under, subsections (b)(i), (ii), (iii), (vi), (ix), (x), (xi), (xii), (xiii), (xiv),
(xvii) and (xviii) of Section 6.1.
Section 4.23 Financial
Advisors. Except for Robert W. Baird and Co. Incorporated and Harris Williams LLC, no Person has acted,
directly or indirectly, as a broker, finder or financial advisor for the Company or any Company Subsidiary in connection with this Agreement
or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any fee or commission or
like payment in respect thereof.
Section 4.24 Customers
and Suppliers. Section 4.24 of the Company Disclosure Letter sets forth the ten (10)
largest customers (as measured by the dollar amount of purchases thereby) (the “Significant Customers”) and the ten (10)
largest suppliers (as measured by the dollar amount of purchases therefrom) (the “Significant Suppliers”) of the business
of the Company and Company Subsidiaries, in each case, for the twelve (12) month period ending on December 31, 2023. Between
January 1, 2024 and the date of this Agreement, (i) neither the Company nor any of the Company Subsidiaries has been involved in
any material claim, dispute or controversy with any Significant Customer or Significant Supplier, and (ii) no Significant Customer or
Significant Supplier has canceled, terminated, declined to renew, adversely modified or materially reduced the business that it conducts
with the Company and the Company Subsidiaries, or has proposed or provided to the Company or any of the Company Subsidiaries written
notice indicating an intention to do so, except as expressly described on Section 4.24 of the Company Disclosure Letter.
Section 4.25 Anti-Corruption
and Anti-Bribery Laws. None of the Company, any of the Company Subsidiaries, or, any of their respective
executive officers or directors, or, to the Knowledge of the Company, any of their other officers, employees, or agents or representatives
associated with or acting for or on behalf of the Company or any Company Subsidiary has, directly or indirectly, in violation of the
Foreign Corrupt Practices Act of 1977, the Corruption of Foreign Public Officials Act (Canada) or other applicable Law: (a) made
a payment or loan to or for the benefit of any Governmental Authority, candidate for public office, political party or political campaign,
for the purpose of (i) influencing any act or decision of such Governmental Authority, candidate, party or campaign, (ii) obtaining
or retaining business for or with any person, (iii) expediting the performance of official acts of a routine nature, or (iv) otherwise
securing any improper advantage; (b) paid any bribe, payoff, influence payment, kickback, unlawful rebate, or other similar unlawful
payment of any nature; (c) made any unlawful contributions, gifts, entertainment or other unlawful expenditures; or (d) maintained
any unlawful fund of corporate monies or other properties.
Section 4.26 Compliance
with Sanctions Laws and Export Laws. None of the Company, any of the Company Subsidiaries, or, any
of their respective executive officers or directors, or, to the Knowledge of the Company, any of their other officers, employees, or
agents or representatives associated with or acting for or on behalf of the Company or any Company Subsidiary, (a) is a Person with
whom transactions are prohibited or limited under any economic sanctions laws, including those administered by the Office of Foreign
Assets Control of the United States Treasury Department (“OFAC”), the United Nations Security Council, the European
Union, His Majesty’s Treasury, the UK Office of Financial Sanctions implementation, the UK National Crime Agency, or other sanctions
authority, or (b) has violated any economic sanctions laws applicable to such Persons. None of the Company or any of the Company
Subsidiaries is a party to any Contract or has engaged in any transaction, directly or indirectly, with or in (a) any country, region,
or jurisdiction subject to territorial sanctions enforced by OFAC (currently, Cuba, Iran, North Korea, the Crimea Region of Ukraine,
Syria, and the so-called Donetsk People’s Republic and Luhansk People’s Republic), including the government or any subdivision
thereof, agents, representatives or residents thereof, or any entity formed, based or resident therein, (b) any Person that is included,
at the time of the relevant transaction, in any list of restricted parties maintained by any Governmental Authority, including the list
of Specially Designated Nationals and Blocked Persons or any other sanctions list maintained by OFAC, or (c) is owned 50% or more
in the aggregate or controlled by any party that has been or is designated on, any list of restricted parties maintained by any Governmental
Authority, including OFAC’s Specially Designated Nationals and Blocked Persons List, OFAC’s list of Foreign Sanctions Evaders,
OFAC’s Sectoral Sanctions Identifications List, the Department of Commerce’s (“Commerce”) Denied Persons
List, the Commerce Entity List, the Debarred List maintained by the U.S. Department of State. The Company and the Company Subsidiaries,
during the prior ten (10) years, have been in compliance with the Trading with the Enemy Act and each of the foreign assets control regulations
of the United States Treasury Department (including any other enabling legislation or executive order relating thereto). The Company
and the Company Subsidiaries have, during the prior five (5) years, been in compliance with all applicable U.S. export control Laws
and all permits issued pursuant to such Laws, including the Export Administration Regulations codified at 15 C.F.R. part 760 and the
Code codified at 26 U.S.C. § 999.
Section 4.27 Reliance.
The Company and the Company Subsidiaries acknowledge that, except as expressly set forth in Article 5, none of Parent, Merger
Sub or any other Person has made any other representation or warranty, express or implied. Neither the Company nor any Company Subsidiaries
has relied on any other express or implied representation or warranty by or on behalf of Parent or its Affiliates. Except for the representations
and warranties contained in Article 5, the Company and Company Subsidiaries acknowledge that none of Parent, Merger Sub,
or any other Person, has made or makes any other express or implied representation or warranty, either written or oral, as to the accuracy
or completeness of any information regarding Parent or Merger Sub available to the other parties or their respective representatives.
Without limiting the foregoing, the Company and the Company Subsidiaries acknowledge that none of Parent, Merger Sub, or any other Person
(including any Affiliate of Parent or Merger Sub or their respective officers, directors, members, stockholders or partners) makes or
has made any representation or warranty with respect to, and shall have no liability in respect of (including in contract or tort, at
law or in equity, under federal or state securities Laws or otherwise), any oral or, except for the representations and warranties expressly
made by Parent or Merger Sub in Article 5, written information made available to the other parties hereto in the course of
the negotiation of this Agreement.
Article 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
The Parent and Merger Sub represent and warrant
to the Company and the Stockholders’ Representative (on behalf of the Stockholders) as follows:
Section 5.1 Organization
and Qualification. Parent is a business company, validly existing and in good standing under the Laws
of the British Virgin Islands. Merger Sub is a corporation duly incorporated, validly existing, and in good standing under the Laws of
the State of Delaware. Each of Parent and Merger Sub has all requisite corporate power and authority to own, lease and operate its properties
and carry on its business as presently owned or conducted. Each of Parent and Merger Sub is duly qualified or authorized to do business
as a foreign corporation and is in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership
of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing
would not, individually or in the aggregate, reasonably be expected to materially impair the ability of Parent or Merger Sub, as applicable,
to effect the transactions contemplated hereby.
Section 5.2 Authority;
Binding Obligation. Each of Parent and Merger Sub has requisite corporate authority and power to execute,
deliver and perform this Agreement and each of the Parent Documents, and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Parent Documents by the Parent and Merger Sub, and the consummation of the Merger
and other transactions contemplated hereby have been duly and validly authorized (or in the case of Parent Documents to be entered into
after the date hereof, will be by the date of entry into such Parent Documents) by all required corporate action on the part of Parent
and Merger Sub, and by Parent as the sole stockholder of Merger Sub, and no other corporate proceedings on the part of Parent or Merger
Sub are necessary to authorize this Agreement and the consummation of the transactions contemplated hereby (other than as required by
the DGCL and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware). This Agreement has been duly
executed and delivered by each of Parent and Merger Sub and, assuming that this Agreement constitutes the legal, valid and binding obligation
of the Company, constitutes the legal, valid and binding obligations of Parent and Merger Sub, enforceable against each of Parent and
Merger Sub in accordance with its terms, except to the extent that the enforceability thereof may be limited by the Equitable Exceptions.
Section 5.3 No
Defaults or Conflicts. The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Parent and Merger Sub and performance by Parent and Merger Sub of their respective obligations hereunder do not
(a) contravene or conflict with, or result in any violation or breach of, the Organizational Documents of either Parent or Merger
Sub, (b) contravene or conflict with, or result in any violation or breach of, any of the terms or provisions of, or constitute
a default (with or without notice or lapse of time or both) under any indenture, mortgage or loan or any other agreement or instrument
to which Parent or Merger Sub is a party or by which Parent or Merger Sub is bound or to which the properties of Parent or Merger Sub
may be subject, or (c) assuming that all Governmental Authorizations in Section 5.4 have been obtained or made, result
in any violation or breach of any existing applicable Law or Order of any Governmental Authority having jurisdiction over Parent or Merger
Sub or any of their respective properties; provided, however, that no representation or warranty is made in the foregoing clauses (b)
or (c) with respect to matters that would not, individually or in the aggregate, materially and adversely affect the ability of Parent
and Merger Sub to consummate the transactions contemplated herein.
Section 5.4 No
Authorization or Consents Required. Except for (i) applicable requirements of the HSR Act and
(ii) any notices or filings required to be made with the FCA under the Listing Rules, the FSMA or the Disclosure Guidance and Transparency
Rules, no Governmental Authorizations will be required to be obtained or made by Parent or Merger Sub in connection with the execution,
delivery and performance by each of Parent and Merger Sub of this Agreement and the consummation by each of Parent and Merger Sub of
the transactions contemplated hereby; provided, however, that no representations or warranty is made with respect to any Governmental
Authorizations that, if not obtained or made, would not, individually or in the aggregate, materially and adversely affect the ability
of Parent and Merger Sub to consummate the transactions contemplated herein. No approval by the shareholders of Parent is required in
order for Parent to execute, deliver and perform its obligations under this Agreement or to consummate the transactions contemplated
hereby on the terms and subject to the conditions of this Agreement.
Section 5.5 Sufficient
Funds.
(a) Parent
has delivered to the Company true, correct, and complete copies of:
(i) fully
executed debt commitment letters, dated as of the date hereof (together with all annexes, schedules and exhibits thereto and any fee letters
or engagement letters related thereto collectively, the “Debt Commitment Letter”) from the lenders party thereto relating
to the commitment of the Debt Financing Sources to provide the full amount of the debt financing required to consummate the transactions
contemplated by this Agreement on the terms contemplated thereby, and to refinance certain outstanding indebtedness of the Company and
its Subsidiaries, including the Specified Funded Indebtedness, and to pay all related fees and expenses (the “Debt Financing,”
and the commitments under the Debt Commitment Letter, the “Debt Financing Commitments”), and each related fee letter
(collectively, the “Fee Letters”), which copy of such Fee Letter may be redacted to remove only the fees and economic
flex terms set forth therein so long as such redacted information does not adversely affect the enforceability, conditionality, availability,
termination or aggregate principal amount of the Debt Financing;
(ii) a
fully executed commitment letter (together with all annexes, schedules and exhibits thereto and any fee letters or engagement letters
related thereto collectively, the “Equity Commitment Letter”) from the persons identified therein (the “Equity
Investors”), relating to the commitment of the Equity Investors to provide, subject to the terms and conditions therein, the
full amount of the cash equity required to consummate the transactions contemplated by this Agreement on the terms contemplated by this
Agreement and to pay related fees and expenses (the “Equity Financing” and together with the Debt Financing, collectively
referred to as the “Financing”, and the commitments under the Equity Commitment Letter, the “Equity Financing
Commitments”). The Equity Commitment Letter provides, and will continue to provide, that the Company is an express third party
beneficiary of the Equity Commitment Letter and is entitled to enforce such agreement, and that Parent and the Equity Investors have waived
any defenses to the enforceability of such third party beneficiary rights, in each case in accordance with its terms and subject to the
limitations set forth herein and in Section 10.15 (Specific Performance); and
(iii) fully
executed commitment letters, dated as of the date hereof (together with the appendix thereto, collectively, the “Warrant Commitment
Letters” and, together with the Debt Commitment Letter and the Equity Commitment Letter, the “Commitment Letters”),
from each of the Persons identified therein (the “Warrant Exercise Parties”) relating to the commitment of each Warrant
Exercise Party to exercise (or cause the exercise of) all Parent Warrants beneficially owned by such Warrant Exercise Party (or any Affiliate
thereof), subject to the terms and conditions therein (the “Warrant Financing,” and the commitments under the Warrant
Commitment Letters, the “Warrant Commitments” and, together with the Debt Financing Commitments and the Equity Financing
Commitments, the “Financing Commitments”). The Warrant Commitment Letters provide, and will continue to provide, that
the Company is an express third party beneficiary of the Warrant Commitment Letters and are entitled to enforce such agreements, and that
Parent and the Warrant Exercise Parties have waived any defenses to the enforceability of such third party beneficiary rights, in each
case in accordance with its terms and subject to the limitations set forth herein and in Section 10.15 (Specific Performance).
(b) The
Commitment Letters are legal, valid and binding obligations of the parties thereto, are in full force and effect, and are enforceable
against the parties thereto in accordance with their terms, subject only to the Equitable Exceptions. As of the date of this Agreement,
(i) none of the Commitment Letters has been amended, restated, amended and restated, supplemented, waived or otherwise modified (and
no such amendment, restatement, amendment and restatement, supplement, waiver or other modification is contemplated), and (ii) the
respective commitments set forth in the Commitment Letters have not been withdrawn, terminated, rescinded, amended, restated or otherwise
modified in any respect (and no such withdrawal, termination, rescission, amendment, restatement or modification is contemplated). No
event has occurred that, with or without notice, lapse of time, or both, would reasonably be expected to constitute a default or breach
or a failure to satisfy a condition precedent on the part of Parent or Merger Sub under the terms and conditions of the Commitment Letters,
other than any such default, breach or failure that has been waived in writing by the Debt Financing Sources, the Equity Investors or
the Warrant Exercise Parties, as the case may be. Neither Parent nor Merger Sub has any reason to reasonably believe that it will be unable
to satisfy, on a timely basis, any term or condition of the Closing to be satisfied by it contained in the Commitment Letters, or that
full amount of the Financing will not be available to Parent or Merger Sub on the Closing Date. No Financing Source has notified Parent
or Merger Sub of its intention to terminate or withdraw the Financing Commitments, and Parent does not know of any facts or circumstances
that may be reasonably expected to result in any of the conditions set forth in the Commitment Letters not being satisfied.
(c) Except
as expressly set forth in the Commitment Letters, there are no (i) additional conditions precedent to the obligations of the Financing
Sources to provide the Financing or (ii) contingencies (including any condition or contingency relating to the availability of any
“market flex” provisions) that would permit the Financing Sources to change the total amount of the Financing or impose any
additional conditions precedent to the availability of the Financing. Parent represents and warrants that there are no side letters or
agreements or understandings to which Parent, Merger Sub or any of their Affiliates is a party related to the funding or investing, as
applicable, of the Financing that would reasonably be expected to adversely affect the availability of the Financing other than as expressly
set forth in the Commitment Letters.
(d) Parent
and Merger Sub have, and will have at the Closing, (i) the resources and capabilities (financial and otherwise) to perform its obligations
under this Agreement (including all payments to be made by it in connection herewith) and (ii) immediately available funds in connection
with the Financing in an aggregate amount (after netting out applicable fees, expenses, original issue discount and similar premiums and
charges provided under the Debt Commitment Letter, and assuming that all rights to flex the terms of the Debt Financing are exercised
to their maximum extent) that will enable Parent and Merger Sub to (x) consummate the Merger and the other transactions contemplated
hereby on the terms contemplated by this Agreement, including the payoff, satisfaction and discharge and/or defeasance by Parent of the
Specified Funded Indebtedness, the release of any guarantees relating thereto and the release of any liens or other security thereunder
if so requested by Parent and (y) pay all related fees and expenses and undertake its other obligations at the Closing upon the terms
contemplated by this Agreement. Neither Parent nor Merger Sub has incurred any obligation, commitment, restriction or other liability
of any kind, and is not contemplating or aware of any obligation, commitment, restriction or other liability of any kind, in either case
which would reasonably be expected to impair or adversely affect such resources, funds or capabilities.
(e) As
of the date of this Agreement, Parent (both before and after giving effect to any “market flex” provisions contained in the
Debt Commitment Letter) does not know of any (i) event that would result in any breach of, violation of, or constitute a default
(or an event which with notice or lapse of time or both would become a default) by Parent or Merger Sub under the Financing, (ii) reason
that any of the terms or conditions to the Financing will not be satisfied or that the Financing will not be available on the Closing
Date or (iii) reason that Parent and Merger Sub will not have funds otherwise available at the Closing sufficient to satisfy its
obligations hereunder, including any reason to believe that any Equity Investor, Debt Financing Source or Warrant Exercise Party will
not perform its respective funding obligations under the Commitment Letters in accordance with their respective terms and conditions.
In no event shall the receipt or availability of any funds or financing by Parent or any Affiliate or any other financing or other transactions
contemplated by this Agreement be a condition to any of Parent’s or Merger Sub’s obligations to consummate the Closing hereunder.
(f) Parent
and/or Merger Sub has fully paid (or caused to be paid) any and all commitment fees and other fees required by the Debt Commitment Letter
to be paid as of the date of this Agreement, and will pay (or cause to be paid) in full any other commitment fees and other fees required
to be paid thereunder as and when they become payable. The Equity Commitment Letter contains all of the conditions precedent to the obligations
of the parties thereunder to make the full amount of the Equity Financing available to Parent on the terms set forth therein. The Debt
Commitment Letter contains all of the conditions precedent to the obligations of the parties thereunder to make the full amount of the
Debt Financing available to Parent on the terms set forth therein. The Warrant Commitment Letters contain all of the conditions precedent
to the obligations of the parties thereunder to fund the full amount of the Warrant Financing on the terms set forth therein.
Section 5.6 Capitalization;
No Prior Activities. All of the issued and outstanding capital stock or other equity interests of Merger
Sub is, and at the Effective Time will be, owned directly by Parent. Merger Sub has no outstanding option, warrant, right or any other
agreement pursuant to which any Person other than Parent may acquire any capital stock or other equity interests of Merger Sub. Except
for obligations incurred in connection with its formation or the negotiation and consummation of this Agreement and the transactions
contemplated hereby, Merger Sub has neither incurred any obligation or liability nor engaged in any business or activity of any type
or kind whatsoever or entered into any agreement or arrangement with any Person. Merger Sub has no Subsidiaries or any capital stock
or other equity interests in any Person.
Section 5.7 No
Regulatory Impediment. Parent is not aware of any fact relating to Parent or any of its Affiliates’
respective businesses, operations, financial condition or legal status, including any officer’s, director’s or current employee’s
status, that might reasonably be expected to materially impair the ability of the parties hereto to obtain, on a timely basis, any authorization
or approval or other action by, or ability to contract with, any Governmental Authority or third party necessary for the consummation
of the transactions contemplated hereby.
Section 5.8 Absence
of Arrangements with Management. There are no contracts, undertakings, commitments, agreements or obligations
or understandings between Parent or its Affiliates, on the one hand, and any member of the Company’s management or the Company
Subsidiaries’ management, on the other hand, relating to the transactions contemplated by this Agreement.
Section 5.9 Financial
Advisors. Other than Jefferies LLC and UBS Securities LLC, no broker, finder or financial advisor has
acted for or on behalf of Parent or Merger Sub in connection with this Agreement or the transactions contemplated hereby, and no broker,
finder, agent or similar intermediary is entitled to any fee or commission or like payment in respect thereof.
Section 5.10 Solvency.
On and as of the Closing Date, and after giving effect to the transactions contemplated by this Agreement (including after giving effect
to any financing incurred in connection with the transactions contemplated hereby, including the Financing) and the making of the payments
contemplated by this Agreement, assuming the accuracy of the Company’s representations and warranties set forth in Section 4.7,
Parent, the Surviving Corporation and the Subsidiaries of the Surviving Corporation, taken as a whole, will be Solvent. No transfer of
property is being made by Parent or Merger Sub and no obligation is being incurred by Parent or Merger Sub in connection with the transactions
contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of Parent or Merger Sub.
Section 5.11 Litigation.
As of the date hereof, there is no Action pending or to the Knowledge of Parent, threatened against Parent or Merger Sub or any material
portion of its properties or assets that would reasonably be expected, individually or in the aggregate, to materially (i) impair
the ability of Parent or Merger Sub to effect the transactions contemplated hereby or (ii) affect the legality, validity or enforceability
of any Financing. As of the date hereof, neither Parent nor Merger Sub is subject to any unsatisfied Order that, individually or in the
aggregate, would reasonably be expected to materially (x) impair the ability of Parent or Merger Sub to effect the transactions
contemplated hereby or (y) affect the legality, validity or enforceability of any Financing.
Section 5.12 Reliance.
Parent and Merger Sub acknowledge that, except as expressly set forth in Article 4, none of the Company, the Stockholders’
Representative or any other Person has made any representation or warranty, express or implied relating to the Company, any Company Subsidiary
or their respective businesses, as to the accuracy or completeness of any information that the Company and the Company Subsidiaries furnished
or made available to Parent, Merger Sub and their respective Representatives. Except for the representations and warranties by the Company
expressly set forth in Article 4, neither Parent nor Merger Sub has relied on any other express or implied representation
or warranty by or on behalf of the Company or its Affiliates. Neither the Company nor any other Person (including any Affiliate of the
Company or their respective officers, directors, members, stockholders or partners) shall have or be subject to any liability to Parent
or Merger Sub (including in contract or tort, at law or in equity, under federal or state securities Laws or otherwise) resulting from
Parent’s or Merger Sub’s use of any information, documents or material made available to Parent or Merger Sub (or any omissions
therefrom) in any “data rooms,” management presentations, due diligence or in any other form in expectation of the transactions
contemplated hereby. Parent and Merger Sub acknowledge that, should the Closing occur, Parent and Merger Sub shall acquire the Company
and the Company Subsidiaries without any representation or warranty as to merchantability or fitness for any particular purpose of their
respective assets, in an “as is” condition and on a “where is” basis, except for the representations and warranties
by the Company expressly set forth in Article 4. Parent and Merger Sub acknowledge that neither the Company, the Stockholders’
Representative nor any other Person, directly or indirectly, has made, and neither Parent nor Merger Sub has relied on, any representation
or warranty regarding the pro-forma financial information, financial projections or other forward-looking statements of the Company or
any Company Subsidiary.
Article 6
COVENANTS
Section 6.1 Conduct
of Business of the Company.
(a) Prior
to the Closing, except (w) as set forth on Section 6.1(a) of the Company Disclosure Letter, (x) as required by applicable
Law, (y) as otherwise expressly contemplated by this Agreement or any Company Documents, or (z) with the prior written consent
of Parent (such consent not to be unreasonably withheld, conditioned or delayed; provided, that the consent of Parent shall be deemed
to have been given if Parent does not object or request additional information within ten (10) Business Days from the date on which a
request for such consent is provided by the Company to Parent), the Company shall, and shall cause the Company Subsidiaries to use its
commercially reasonable efforts to (i) conduct the respective businesses of the Company and Company Subsidiaries in the Ordinary
Course of Business and (ii) preserve the present (A) business operations, organization and goodwill of the Company and the Company
Subsidiaries, and (B) relationships with customers and suppliers of the Company and the Company Subsidiaries,; provided, that
no action that is specifically permitted by any of subclauses (i) through (xix) of Section 6.1(b) shall be deemed
a breach of either this Section 6.1(a) or any other subclause of Section 6.1(b).
(b) Other
than (v) as set forth on Section 6.1(b) of the Company Disclosure Letter, (w) as required by applicable Law, (x) as
otherwise expressly contemplated by this Agreement or any of the other Transaction Documents, (y) in the Ordinary Course of Business,
or (z) with the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed; provided,
that the consent of Parent shall be deemed to have been given if Parent does not object or request additional information within ten (10)
Business Days from the date on which a request for such consent is provided by the Company to Parent), the Company shall not, and shall
not permit Company Subsidiaries to:
(i) (1) transfer,
issue, sell, retire or grant any equity interests of the Company or Company Subsidiaries or any options, warrants, calls or other rights
to purchase equity interests of the Company or Company Subsidiaries (other than any Shares issued pursuant to Options outstanding on the
date of this Agreement in accordance with the existing terms of such awards and the Option Plan) and (2) purchase, redeem, repurchase,
or otherwise acquire any equity interests of the Company or Company Subsidiaries or any securities convertible or exchangeable into or
exercisable for any equity interests of the Company or Company Subsidiaries (other than (x) pursuant to the exercise of any Options
outstanding on the date hereof or the forfeiture of, or withholding of Taxes with respect to, any Options outstanding on the date hereof,
or (y) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the
Company or any other wholly owned Subsidiary of the Company, or repurchases of equity of employees or other service providers of the Company
and its Subsidiaries in connection with their separation from such service);
(ii) reclassify,
combine, split, subdivide or amend the terms of any of its capital stock (except for any such transaction by a wholly owned Company Subsidiary
which remains a wholly owned Company Subsidiary after consummation of such transaction), issue or authorize the issuance of any other
securities in respect of, in lieu of, or in substitution for, shares of its capital stock, or declare, make or pay any non-cash dividend
or other non-cash distribution to Stockholders in the form of shares of its capital stock;
(iii) amend
the Organizational Documents of the Company or Company Subsidiaries;
(iv) except
pursuant to any existing Company Plan, materially increase the amount of any salary, compensation, wages or cash incentive compensation
to any employee, director, officer, independent contractor or consultant of the Company or Company Subsidiaries having an annualized base
compensation of at least $300,000 or materially increase the benefits provided to any employee, director and/or independent contractor;
(v) except
as required under applicable Laws or with respect to general changes to any material Company Plans that are health or welfare plans made
during the Company’s open enrollment process, adopt, amend or terminate any material Company Plan;
(vi) implement
or announce any mass layoffs, plant closings, or other such actions that would implicate WARN or any similar federal, state local or foreign
Law;
(vii) waive
or release any noncompetition, non-solicitation, nondisclosure, noninterference, non-disparagement or other restrictive covenant obligations
of any current or former officer or any current or former employee or consultant earning compensation in excess of $150,000 per year;
(viii) enter
into any Contract that would limit or otherwise restrict the Company or any of the Company Subsidiaries (or any of their successors) from
engaging or competing in any line of business or in any geographic area;
(ix) make,
authorize or commit to make any capital expenditures, other than in the Ordinary Course of Business and which do not exceed, in the aggregate,
for the periods between the date hereof and the Effective Time, 110% of the capital expenditures provided for in the Company’s capital
expenditure budget for the applicable period;
(x) without
duplication of subsection (vi) and excluding with respect to any Intellectual Property, acquire any material properties or assets
or sell, assign, pledge license, transfer, convey, or otherwise dispose of any of the material properties or assets of the Company and
Company Subsidiaries, in each case, with a fair market value in excess of $500,000 for an individual asset, or $1,000,000 for a group
of related assets, except for (1) sales of surplus equipment in the Ordinary Course of Business, (2) acquisitions, dispositions
or sales of inventory and vehicles wherever located, together with all attachments, accessories, exchanges and additions (including replacement
parts installed in or repairs to) to any such vehicles used in the operation of the business of the Company and the Company Subsidiaries,
in each case, in the Ordinary Course of Business, (3) sales, leases or other transfers between and among the Company and wholly-owned
Company Subsidiaries, or (4) Permitted Encumbrances or Encumbrances that will be released at or in connection with the Closing;
(xi) change
its present accounting methods or principles in any material respect, except (1) as required by GAAP or by the Company’s auditors
or (2) with respect to Company Subsidiaries that have been acquired prior to the date hereof, to the extent necessary in order to
adopt accounting methods or principles consistent with those of other Company Subsidiaries;
(xii) make
or change any material Tax election, amend any material Tax Return, change any Tax accounting period or settle any material Tax claim
relating to the Company or any of the Company Subsidiaries, in each case, outside the Ordinary Course of Business;
(xiii) incur
and draw down on any Indebtedness in excess of $4,000,000 other than (1) in the Ordinary Course of Business, (2) short-term
Indebtedness, including commercial paper, (3) Indebtedness under the Company’s existing revolving credit facilities or commercially
reasonable replacement facilities for working capital purposes, (4) in order to refinance any existing Indebtedness at the maturity
thereof or on terms more favorable in the aggregate to the Company and (5) interest rate hedging arrangements; provided, that,
for the avoidance of doubt, (x) borrowings under the Specified Funded Indebtedness, as amended, shall not require the consent of
Parent and shall not be limited by such amount and guarantees by the Company or any Company Subsidiaries of Indebtedness shall not require
the consent of Parent so long as the Company or such Company Subsidiary is released from liability in respect of such Indebtedness at
Closing and (y) termination by the Company and its Subsidiaries of any hedging arrangement to which they are a party shall not require
the consent of Parent.
(xiv) permit
the Company or Company Subsidiaries to enter into or agree to enter into any merger, consolidation or other business combination with
any corporation or other entity, acquire the securities of, or make any material investments in, or any material capital contributions,
material loans or other advances to, any other Person, except, in each case, for transactions between the Company and/or any wholly-owned
Company Subsidiaries; or
(xv) terminate
or cancel (excluding any termination upon expiration in accordance with the terms of such Contract), or agree to any amendment to or waiver
under, in any material respect, any Company Contract, or enter into or amend any Contract that, if existing on the date hereof, would
be a Company Contract, in each case, other than (A) in the Ordinary Course of Business and (B) replacements, renewals or extensions
of any existing Company Contracts (and amendments that accompany such renewals or extensions) on terms that are consistent in all material
respects with the terms of the applicable Company Contract as of the date hereof;
(xvi) waive,
release, assign, settle or compromise any material rights, claims, litigation or proceedings, other than (1) in the Ordinary Course of
Business, (2) payment or satisfaction of liabilities reflected or reserved for on the Last Balance Sheet, (3) liabilities otherwise covered
by insurance and (4) other liabilities not in excess of $1,000,000;
(xvii) voluntarily
fail to maintain, or cancel or change coverage under, in a manner materially detrimental to the Company or any of the Company Subsidiaries,
any insurance policy maintained with respect to the Company and the Company Subsidiaries or their respective businesses, assets and properties;
(xviii) enter
into any material new line of business outside of the business currently conducted by the Company and the Company Subsidiaries or terminate
any material existing line of business currently conducted by the Company and the Company Subsidiaries as of the date of this Agreement;
(xix) enter
into or establish any new, or terminate or materially amend or modify any collective bargaining agreement, voluntary recognition agreement,
card check agreement, neutrality agreement, union security agreement, project labor agreements, or relationship with any labor union,
labor organization, works council or trade association or similar body;
(xx) enter
into severance arrangements with a group or class or employees or effect a restructuring program for which severance would exceed $150,000
in aggregate;
(xxi) enter
into severance arrangements with any employee earning compensation in excess of $150,000 per year; or
(xxii) agree
in writing to take any of the foregoing actions.
(c) Nothing
contained in this Agreement shall give Parent, directly or indirectly, rights to control or direct the operations of the Company or the
Company Subsidiaries before the Effective Time. Before the Effective Time, the Company shall, consistent with the terms and conditions
of this Agreement, exercise complete control and supervision over the operations of the Company and each Company Subsidiary. If the Company
desires to take an action which would be prohibited pursuant to this Section 6.1 without the written consent of Parent, prior
to taking such action the Company may request such written consent by sending an e-mail to the individuals specified as the notice parties
of Parent in Section 10.5 hereof. Any of such individuals may grant consent on behalf of Parent to the taking of any action that
would otherwise be prohibited pursuant to this Section 6.1 by e-mail or such other notice that complies with the provisions
of Section 10.5.
(d) For
the avoidance of doubt, the Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date their cash management
systems, maintain the cash management procedures as currently conducted, and periodically settle intercompany balances consistent with
past practices (including through dividends and capital contributions). The Company and the Company Subsidiaries shall be permitted to
dividend all Cash and Cash Equivalents of the Company and the Company Subsidiaries to Stockholders immediately prior to the delivery of
the Closing Statement.
Section 6.2 Conduct
of Business of Parent. During the period from the date of this Agreement to the earlier of the Closing
Date and the termination of this Agreement in accordance with Article 9, Parent shall not, and shall cause its Affiliates
not to, without the prior written consent of the Company take or agree to take any of the following actions:
(a) acquire
or enter into any agreement to acquire (by merger, consolidation, acquisition of equity interests or assets, joint venture or otherwise)
any business, any assets or any corporation, partnership, limited liability company, joint venture or other business organization or division
thereof or otherwise enter into any agreement, if such acquisition or the entering into such agreement could reasonably be expected to
(i) impose any delay in the obtaining of, or increase the risk of not obtaining, any Governmental Authorization (including any consents
of any Governmental Antitrust Entity), permit or Order necessary to consummate the transactions contemplated hereby or the expiration
or termination of any waiting period under applicable Law; (ii) increase the risk of any Governmental Authority (including any Governmental
Antitrust Entity) entering an Order prohibiting the consummation of the transactions contemplated hereby, (iii) increase the risk
of not being able to remove any such Order on appeal or otherwise; or (iv) otherwise delay or prevent the consummation of the transactions
contemplated hereby; or
(b) any
action that would reasonably be expected to materially interfere with or delay Parent or Merger Sub’s ability to satisfy any of
its obligations under this Agreement.
Section 6.3 Access
to Information; Retention of Books and Records.
(a) During
the period from the date of this Agreement to the earlier of the Closing Date and the termination of the Agreement in accordance with
Article 9, the Company shall give (i) Parent, Merger Sub and their respective authorized Representatives reasonable access
during normal business hours to all books, records, offices and other facilities and properties of the Company and each Company Subsidiary
as Parent, Merger Sub or their respective authorized Representatives may from time to time reasonably request; provided, however,
that any such access shall be conducted in a manner not to interfere with the businesses or operations of the Company and the Company
Subsidiaries and, without the prior written consent of the Company, neither Parent nor Merger Sub nor any of their Affiliates or Representatives
shall, directly or indirectly, conduct any appraisals or environmental and engineering inspections of real property, or take and/or analyze
any samples of any environmental media (including soil, groundwater, surface water, air or sediment) or any building material or perform
any testing procedure on any building or real property, and (ii) furnish promptly to Parent such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the Company and each Company Subsidiary as Parent or its Representatives
may reasonably request, including information relating to the Company and each Company Subsidiary to enable Parent to comply with its
obligations under article 17(1) of UK MAR on the basis that the Company and the Company Subsidiaries were already subsidiaries of
Parent during this time. Notwithstanding anything to the contrary in this Agreement, neither the Company nor any Company Subsidiary shall
be required to provide such access or disclose any information to Parent, Merger Sub or their respective authorized Representatives, if
doing so could (i) result in a waiver of attorney-client privilege, work product doctrine or similar privilege or (ii) violate
any agreement or federal, state, provincial, municipal, local or non-U.S. Law to which the Company or any Company Subsidiary is a party
or to which the Company or any Company Subsidiary is subject (it being agreed that the parties to this Agreement shall use their commercially
reasonable efforts to cause such information to be provided in a manner that would not result in such jeopardy, contravention or involvement).
(b) The
Stockholders’ Representative may retain a copy of any or all of the books and records relating to the business or operations of
the Company and Company Subsidiaries prior to the Closing. In addition, Parent shall cause the Surviving Corporation and its Subsidiaries
to retain all books, ledgers, files, reports, plans, operating records and any other material documents pertaining to the Company and
Company Subsidiaries in existence at the Closing that are required to be retained under current retention policies for a period of not
less than seven years from the Closing Date. From and after the Closing, Parent and the Surviving Corporation shall (i) give the
Stockholders’ Representative and its authorized Representatives reasonable access during normal business hours to all books, records,
offices and other facilities and properties of or relating to the Surviving Corporation and its Subsidiaries as the Stockholders’
Representative or its authorized Representatives may from time to time reasonably request; provided, however, that any such
access shall be conducted in a manner not to interfere with the businesses or operations of the Surviving Corporation and its Subsidiaries,
(ii) permit the Stockholders’ Representative to make such copies and inspections thereof as the Stockholders’ Representative
may reasonably request, and (iii) furnish the Stockholders’ Representative with such financial and operating data and other
information with respect to the Surviving Corporation and its Subsidiaries as the Stockholders’ Representative may from time to
time reasonably request, in each case (A) to comply with requirements imposed on the Stockholders’ Representative, the Equityholders
or their respective Affiliates by a Governmental Authority having jurisdiction over the Stockholders’ Representative, the Equityholders
or their respective Affiliates, (B) for use in order to satisfy audit, accounting, claims, regulatory, litigation, subpoena or other
similar requirements or (C) to comply with the obligations of the Stockholders’ Representative under this Agreement. Notwithstanding
anything to the contrary in this Agreement, neither the Surviving Corporation nor any of its Subsidiaries shall be required to provide
such access or disclose any information to the Stockholders’ Representative or its authorized Representatives, if doing so could
(i) result in a waiver of attorney-client privilege, work product doctrine or similar privilege or (ii) violate any agreement
or federal, state, provincial, municipal, local or non-U.S. Law to which the Company or any Company Subsidiary is a party or to which
the Company or any Company Subsidiary is subject.
(c) For
three (3) years after the Closing, the Stockholders’ Representative shall keep confidential and shall not disclose (and shall direct
its Representatives to keep confidential and not disclose), without the prior written consent of the Surviving Corporation, any information
with respect to the Surviving Corporation and its Subsidiaries that is proprietary to the Surviving Corporation or any of its Subsidiaries
or is otherwise not available to the general public; provided, however, that the Stockholders’ Representative and
its Representatives may: (i) disclose such information in connection with clauses (A) through (C) of Section 6.3(b), provided,
however, that prior to any such disclosure in connection with clauses (A) and (B) of Section 6.3(b), the Stockholders’
Representative shall, to the extent legally permissible, (A) promptly notify the Surviving Corporation of the existence, terms and circumstances
surrounding such disclosure, (B) furnish only that portion of such information that, in the opinion of independent counsel for the Stockholders’
Representative, is required to be disclosed, (C) consult with the Surviving Corporation regarding the advisability of taking legally available
steps to resist or narrow such disclosure and (D) to the extent such disclosure is in connection with an Action, cooperate with the Surviving
Corporation or any of its Subsidiaries to obtain a protective order or other reliable assurance that confidential treatment will be accorded
such information; (ii) assert any right or claim of the Stockholders’ Representative or the Equityholders or defend any claim against
the Stockholders’ Representative or the Equityholders based upon, arising out of or relating to this Agreement and/or the other
Transaction Documents or the negotiation, execution or performance of this Agreement and/or the other Transaction Documents, provided
that to the extent such disclosure is in connection with an Action, the Stockholders’ Representative shall cooperate with the Surviving
Corporation or any of its Subsidiaries to obtain a protective order or other reliable assurance that confidential treatment will be accorded
such information; (iii) disclose such information to the Equityholders or the Stockholders’ Representative or the Equityholders’
respective Affiliates, provided that the Stockholders’ Representative shall notify the Equityholders or the Stockholders’
Representative or the Equityholders’ respective Affiliates that such information is confidential and must be kept confidential and
each Person shall have agreed to keep such information confidential; and (iv) disclose such information in the ordinary course of the
Stockholders’ Representative’s business, in each case to its current or prospective direct or indirect investors, equityholders
or financing sources (and their respective advisors), so long as such recipients are bound by an obligation to keep such information confidential.
The aforesaid sentence shall not apply to any information with respect to the Surviving Corporation and its Subsidiaries that (i) is or
has become generally available to the public other than as a result of disclosure by the Stockholders’ Representative or its Representatives
in breach of any of the provisions of this Section 6.3(c), (ii) is independently developed by the Stockholders’ Representative
or its Representatives other than as a result of the Stockholders’ Representative’s or its Representatives’ breach of
this Section 6.3(c) or (iii) is made available to the Stockholders’ Representative or its Representatives on a non-confidential
basis by any third party who is not prohibited from disclosing such information by any legal, contractual or fiduciary obligation to the
Surviving Corporation, any of its Subsidiaries or any other Person. Notwithstanding anything to the contrary herein, knowledge of information
with respect to the Surviving Corporation and its Subsidiaries that is proprietary to the Surviving Corporation or any of its Subsidiaries,
or is otherwise not available to the general public, shall not be imputed to any Affiliate of the Stockholders’ Representative solely
by virtue of the fact that a director, officer or employee of the Stockholders’ Representative (who serves also as a director, officer
of employee of an Affiliate of the Stockholders’ Representative) has such knowledge provided that such director, officer or employee
of the Stockholders’ Representative does not disclose such proprietary information to such Affiliate.
Section 6.4 Filings
and Authorizations; Consummation.
(a) Subject
to the terms and conditions herein, each party hereto agrees to use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done as promptly as practicable, all things necessary, proper and advisable under applicable Laws to consummate
and make effective as promptly as practicable the Merger and the other transactions contemplated hereby. Subject to appropriate confidentiality
protections and applicable Law, each party hereto shall furnish to the other parties such necessary information and reasonable assistance
as such other party may reasonably request in connection with the foregoing.
(b) Each
of the parties shall cooperate with one another in good faith and use its reasonable best efforts to prepare all necessary documentation
(including furnishing all information required under the HSR Act or other applicable Competition Laws) to effect promptly all necessary
filings and to obtain all consents, waivers and approvals necessary to consummate the transactions contemplated by this Agreement (including
complying with all Nuclear Regulatory Commission (“NRC”) regulations requiring licensees to notify the NRC of proposed
changes of control prior to the transfer of licensed activities and use reasonable best efforts to obtain prior written consent from NRC
for the transactions contemplated by this Agreement, including the Merger). Each such party shall promptly inform the other parties hereto
of any oral communication with, and provide copies of written communications between it (or its advisors) and any Governmental Authority
relating to the Merger or any of the matters described in this Section 6.4. No party hereto shall independently participate
in any meeting, conference, or telephone call with any Governmental Authority in respect of any such filings, investigation, or other
inquiry without giving the other parties hereto prior notice of the meeting, conference, or telephone call and, to the extent permitted
by such Governmental Authority, the opportunity to attend and/or participate. Subject to applicable Law, the parties hereto will consult
and cooperate with one another in connection with, and allow the other party to have a reasonable opportunity to review in advance and
comment on, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on
behalf of any party hereto relating to proceedings under the HSR Act or other applicable Competition Laws. None of the parties shall consent
to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the Merger at
the behest of any Governmental Antitrust Entity without the prior written consent of the other parties, which consent shall not be unreasonably
withheld or delayed.
(c) Without
limiting the generality of the undertakings pursuant to this Section 6.4, but subject to Section 6.4(e), the parties
hereto shall as promptly as practicable, but in no event later than five (5) Business Days after the date hereof, submit all filings
required under the HSR Act. The parties shall respond as promptly as practicable and advisable to any request for additional information
or documentary material that may be made and under the HSR Act and any requests for information under any other applicable Competition
Law. Parent shall be responsible for fees associated with filings required by the HSR Act and any other applicable Competition Laws.
(d) Further,
each of Parent and the Company agrees to promptly take any and all steps and actions necessary to avoid or eliminate each and every impediment
under the HSR Act or other applicable Competition Laws that may be asserted by any Governmental Antitrust Entity, so as to enable the
parties to consummate the Merger as expeditiously as possible and no later than the Termination Date. In connection therewith,
if any Action is instituted (or reasonably foreseeable or threatened to be instituted) challenging the Merger as in violation of any applicable
Competition Law, each of the parties hereto shall cooperate and use its best efforts to contest and resist any such Action, and to have
vacated, lifted, reversed or overturned any Order whether temporary, preliminary or permanent, that is in effect and that delays, prohibits,
prevents or restricts consummation of the Merger, including by pursuing all available avenues of administrative and judicial appeal and
all available legislative action, unless, by mutual agreement, Parent and the Stockholders’ Representative decide that litigation
is not in their respective best interests. Without limiting the generality of the foregoing, Parent shall:
(i) at
Parent’s sole cost, comply with all restrictions and conditions, if any, imposed, required or requested by any (A) Governmental
Antitrust Entity with respect to Competition Laws in connection with granting any necessary clearance or terminating any applicable waiting
period including (1) proposing, negotiating, offering to commit and effect (and if such offer is accepted, committing to and effecting)
to sell, divest, hold separate, license, cause a third party to acquire, or otherwise dispose of, any Subsidiary, operations, divisions,
businesses, product lines, customers or assets of Parent, its Affiliates, or any of its or their respective Subsidiaries contemporaneously
with or after the Closing and regardless as to whether a third party buyer has been identified or approved prior to the Closing (a “Divestiture”),
(2) taking or committing to take such other actions that may limit Parent, its Affiliates, or any of its or their respective Subsidiaries’
freedom of action with respect to, or its ability to retain, one or more of its operations, divisions, businesses, products lines, customers
or assets, and (3) entering into any Order or other agreement to effectuate any of the foregoing or (B) third party in connection with
a Divestiture (provided, that the Company shall not be obligated to take any such actions unless the taking of such action is conditioned
on the consummation of the Merger);
(ii) terminate
any Contract or other business relationship as may be required to obtain any necessary clearance or approval of any Governmental Antitrust
Entity or to obtain termination of any applicable waiting period under the HSR Act or any other Competition Laws; and
(iii) not
extend any waiting period or enter into any agreement or understanding with any Governmental Antitrust Entity without the prior written
consent of the Company.
(e) In
respect of the Investment Canada Act notification in connection with the Merger: (i) Parent shall as soon as reasonably practicable after
the Closing Date, file a notification under the Investment Canada Act with respect to the transactions contemplated under this Agreement;
and (ii) prior to the Closing, the Company shall provide Parent with all requested assistance that the Parent reasonably considers necessary
in respect of preparing the notification.
(f) The
Company and the Company Subsidiaries shall use commercially reasonable efforts to obtain, and shall cooperate with Parent in obtaining,
as soon as possible after the execution of this Agreement, all approvals, consents and waivers in respect of the Contracts set forth on
Section 4.5 of the Company Disclosure Letter; provided that the Company shall not be required to make any payment in connection
with obtaining such approvals, consents, and waivers.
Section 6.5 Further
Assurances. Other than as provided in Section 6.4, each of the parties hereto shall use
its reasonable best efforts to (i) take all actions necessary or appropriate to consummate the Merger and the transactions contemplated
by this Agreement and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations
to consummate the Merger and the transactions contemplated by this Agreement.
Section 6.6 Confidentiality.
Any information provided to or obtained by Parent, Merger Sub or their respective authorized Representatives by or on behalf of the Company
or its Affiliates in connection with this Agreement shall constitute “Confidential Information” as defined in the Confidentiality
Agreement, dated as of March 22, 2024, by and between the Company and Parent (the “Confidentiality Agreement”),
and shall be held by Parent and Merger Sub in accordance with and be subject to the terms of the Confidentiality Agreement. Notwithstanding
anything to the contrary herein, effective upon the Closing, the terms and provisions of the Confidentiality Agreement shall terminate
with respect to information relating exclusively to the Company and the Company Subsidiaries.
Section 6.7 Officer
and Director Indemnification and Insurance
(a) Parent
and Merger Sub agree that all rights to indemnification, advancement of expenses and exculpation from liability for acts or omissions
occurring on or prior to the Effective Time now existing in favor of the current or former directors, officers or employees of the Company
and the Company Subsidiaries and the fiduciaries of any Company Plans (the “Indemnified Parties”), as provided in the
respective Organizational Documents, indemnification agreements, minutes of any meetings of the boards of directors, or any committee
of the boards of directors or equivalent governing bodies, or otherwise in effect on the date of this Agreement, shall survive the Closing
Date and shall continue in full force and effect in accordance with their respective terms for a period of not less than six (6)
years after the Closing Date.
(b) The
Surviving Corporation shall indemnify all Indemnified Parties to the fullest extent permitted by applicable Law with respect to all acts
and omissions arising out of or relating to their services as directors, officers or employees of the Company, the Company Subsidiaries
or another Person, if such Indemnified Party is or was serving as a director, officer or employee of such other Person at the request
of the Company, or fiduciaries of the Company Plans, whether asserted or claimed at or after or occurring before the Effective Time (including
in connection with the negotiation and execution of this Agreement and the consummation of the transactions contemplated by this Agreement
or otherwise).
(c) On
or prior to the Closing Date, Parent shall pay for (or provide funds for the Surviving Corporation to pay for) and bind, a non-cancelable
“run-off” or “tail” insurance policy (the “D&O Policy”), and maintain such policy in effect
for a period of six (6) years after the Closing Date to provide insurance coverage of not less than the existing coverage, for events,
acts or omissions occurring on or prior to the Closing Date for all persons who were directors, managers or officers of the Company or
any Company Subsidiary on or prior to the Closing Date, which policy shall contain terms and conditions no less favorable to the insured
persons than the directors’ and officers’ liability insurance coverage presently maintained by the Company; provided,
that in no event will Parent or the Surviving Corporation be required to expend a total premium for such coverage in excess of $500,000.
The Company and Parent shall reasonably cooperate and consult in good faith in the selection and binding of the D&O Policy.
(d) Parent
hereby acknowledges that the Indemnified Parties may have certain rights to indemnification, advancement of expenses and/or insurance
provided by other Persons. Parent hereby agrees that (i) Parent and the Surviving Corporation shall be required to advance the full amount
of expenses incurred by any Indemnified Party and shall be liable for the full amount of all expenses, judgments, penalties, fines and
amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement or the Surviving Corporation’s
or any of the Company Subsidiaries’ respective certificate of incorporation, by-laws or comparable organizational documents (or
any other agreement between the Company or any Company Subsidiaries and any such Indemnified Party), without regard to any rights the
Indemnified Party may have, (ii) Parent and the Surviving Corporation are the indemnitor of first resort (i.e., their obligations
to the Indemnified Parties are primary and any obligation of such other Persons to advance expenses or to provide indemnification for
the same expenses or liabilities incurred by any such Indemnified Party are secondary), and (iii) Parent and the Surviving Corporation
irrevocably waive, relinquish and release such other Persons from any and all claims against any such other Persons for contribution,
subrogation or any other recovery of any kind in respect thereof. Each of Parent and the Surviving Corporation further agrees that no
advancement or payment by any of such other Persons on behalf of any such Indemnified Party with respect to any claim for which such Indemnified
Party has sought indemnification from the Surviving Corporation shall affect the foregoing and such other Persons shall have a right of
contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnified Party
against the Surviving Corporation.
(e) The
covenants contained in this Section 6.7(e) are intended to be for the benefit of, and shall be enforceable by, each of the
Indemnified Parties and their respective heirs and legal Representatives and shall not be deemed exclusive of any other rights to which
an Indemnified Party is entitled, whether pursuant to law, contract or otherwise.
(f) In
the event that the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all
or substantially all of its properties and assets to any other Person, then, and in each such case, the Surviving Corporation shall take
all necessary action so that the successors or assigns of the Surviving Corporation shall succeed to the obligations set forth in this
Section 6.7(f).
(g) Parent
agrees that the certificate of incorporation, the bylaws, the limited liability company agreements or comparable Organizational Documents
of the Company and the Company Subsidiaries after the Closing shall contain provisions with respect to indemnification and exculpation
from liability that are at least as favorable to the beneficiaries of such provisions as those provisions that are set forth in the certificate
of incorporation, bylaws and comparable Organizational Documents of the Company and Company Subsidiaries, respectively, on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years following the
Closing Date in any manner that would adversely affect the rights thereunder in any material respect relating to the indemnification of
Persons who at or prior to the Closing were directors, officers, employees or agents of the Company or any of the Company Subsidiaries,
unless such modification is required by Law.
Section 6.8 Waiver
of Conflicts Regarding Representation. Notwithstanding anything to the contrary in any other agreement,
recognizing that Weil, Gotshal & Manges LLP (“Weil”) has, prior to the Effective Time, acted as legal counsel
to the Stockholders’ Representative, the Company and the Company Subsidiaries and their respective Affiliates in connection with
the Merger and the other transactions contemplated hereby, and that Weil intends to continue to act as legal counsel to the Stockholders’
Representative and its Affiliates (but not the Company and the Company Subsidiaries) after the Closing, the Company, Parent and Merger
Sub each hereby waives, on its own behalf and on behalf of its Affiliates, any conflicts that have arisen or may arise in connection
with Weil representing the Stockholders’ Representative and its Affiliates prior to, at or after the Closing or the Stockholders’
Representative in contesting and settling any claims arising out of this Agreement or resolving any other disputes hereunder, including
representing the Stockholders’ Representative and its Affiliates against Parent, Merger Sub, the Surviving Corporation, any Company
Subsidiary and/or any of their respective Affiliates in litigation, arbitration or mediation in connection therewith. Parent, Merger
Sub and the Company each consents, on its own behalf on behalf of its Affiliates, to the continued representation of the Stockholders’
Representative and its Affiliates by Weil in connection with the Merger notwithstanding the fact that Weil may have represented or advised,
and may currently or in the future represent or advise, the Company and/or any of its Affiliates with respect to unrelated matters and
notwithstanding anything to the contrary in any other agreement. In addition, Parent, Merger Sub and the Company each hereby acknowledges
that its consent and waiver under this Section 6.8 is voluntary and informed, and that Parent, Merger Sub and the Company
have each obtained independent legal advice with respect to this consent and waiver. Parent, Merger Sub and the Company each agree that
Weil is an express third party beneficiary of this Section 6.8.
Section 6.9 Employee
Matters.
(a) For
the period of twelve (12) months following the Closing (or, if earlier, the date of the termination of the employee’s employment
with the Company and Company Subsidiaries), Parent shall, or shall cause the Company and Company Subsidiaries to, provide employees who
are employed by the Company and Company Subsidiaries on the Closing Date (including any employees on vacation, leave of absence or short-
or long-term disability) (collectively, “Continuing Employees”) with (i) annual base salary or base wages, short-term
cash incentive compensation opportunities and commission opportunities, that, in each case, are no less favorable than those provided
to each such Continuing Employee immediately prior to the Closing, and (ii) any employee benefits (including welfare benefits, retirement
benefits, vacation and other benefits, but excluding any retiree welfare benefits, equity or equity-based compensation, long-term disability
insurance, severance, change-in-control, deferred compensation and retention benefits) that are substantially comparable in the aggregate
to the employee benefits (excluding any retiree welfare benefits, equity or equity-based compensation, long-term disability insurance,
severance, change-in-control, deferred compensation and retention benefits) provided to each such Continuing Employee immediately prior
to the Closing.
(b) Following
the Closing, Parent shall or shall cause the Company and the Company Subsidiaries to (i) provide to Continuing Employees full credit
for eligibility, vesting and calculation of vacation entitlement and severance benefits under any employee benefit plans or arrangements
maintained by Parent, the Company or Company Subsidiaries (collectively, the “Parent Plans”) for such Continuing Employees’
service with the Company or Company Subsidiaries (or any predecessor entity) to the same extent recognized by the Company and Company
Subsidiaries as of the Closing Date; provided, however, that no such service shall be recognized to the extent such recognition
would result in the duplication of benefits; (ii) use commercially reasonable efforts to waive all limitations as to preexisting
conditions, exclusions, waiting periods, actively-at-work requirements and any other limitations with respect to participation and coverage
requirements applicable to the Continuing Employees and his or her dependents or beneficiaries under any Parent Plan that such employees
may be eligible to participate in after the Closing Date; and (iii) use commercially reasonable efforts to provide credit under any
Parent Plan for amounts paid prior to the date on which such Continuing Employees commence participation in such Parent Plan for purposes
of applying co-payments, deductibles and out-of-pocket expenditures.
(c) The
provisions of this Section 6.9 are solely for the benefit of the parties hereto, and shall not confer upon any Person any
third-party beneficiary rights. Nothing contained in this Section 6.9, whether express or implied: (i) shall be treated
as establishing, amending or modifying for any purpose any labor agreement or Company Plan or any other employee benefit plan or arrangement;
(ii) shall alter or limit the ability of Parent, the Company, or any of their respective Affiliates to amend, modify or terminate
any labor agreement, Company Plan, Parent Plan or other benefit plan, program, agreement or arrangement at any time assumed, established,
sponsored or maintained by any of them; or (iii) is intended to confer upon any current or former employee or any other Person any right
to employment or continued employment for any period of time by reason of this Agreement, or any right to a particular term or condition
of employment.
Section 6.10 Section 280G
Matters. If required to avoid the imposition of Taxes under Section 4999 of the Code or the loss
of deduction under Section 280G of the Code with respect to any payments or benefits in connection with the transactions contemplated
by this Agreement, the Company will (a) prior to soliciting the Stockholder Approval (as defined below), solicit from each “disqualified
individual” (as defined in Section 280G(c) of the Code) who may receive any payments or benefits that could reasonably constitute
a “parachute payment” (within the meaning of Section 280G(b)(2)(A) of the Code) a waiver of such disqualified individual’s
rights to some or all of such payments or benefits (the “Waived 280G Benefits” and, each such waiver, a “280G
Waiver”) so that all remaining payments and/or benefits, if any, shall not be “excess parachute payments” (within
the meaning of Section 280G of the Code) and (b) solicit with respect to each individual who provides a duly executed 280G
Waiver, stockholder approval (in a manner satisfying the requirements of Section 280G(b)(5)(A)(ii) and Section 280G(b)(5)(B)
of the Code and the Treasury Regulations promulgated thereunder, in particular, Treasury Regulation Section 1.280G-1, Q/A-7) (the
“Stockholder Approval”) of the rights of any such “disqualified individual” to receive the Waived 280G
Benefits. As promptly as practicable prior to soliciting 280G Waivers from the “disqualified individuals,” the Company shall
provide drafts of such waivers and disclosure materials to Parent for its review and comment. If any of the Waived 280G Benefits fail
to be approved by the Stockholders as contemplated above, such Waived 280G Benefits shall not be made or provided. Prior to the Closing
Date, the Company shall deliver to Parent evidence that Stockholder Approval was solicited in accordance with the foregoing provisions
of this Section 6.10 and that either (i) the requisite number of votes of the Stockholders of the Company was obtained
with respect to any Waived 280G Benefits (the “280G Approval”) or (ii) the 280G Approval was not obtained, and,
as a consequence, any Waived 280G Benefits shall not be made or provided.
Section 6.11 Publicity.
No party hereto shall, directly or indirectly, issue any press release, public announcement or filing of any kind (including with any
national securities exchange) concerning this Agreement or the transactions contemplated hereby without the prior written consent of
the other parties hereto, except where such press release, public announcement or filing is required by applicable Law, or by obligations
pursuant to any listing agreement with or rules of any national or international securities exchange, and only to the extent so required;
provided, that Parent, the Stockholders’ Representative and their respective Affiliates are permitted to report and disclose
the status of this Agreement and the transactions contemplated by this Agreement to their direct and indirect limited partners and prospective
limited partners, Financing Sources and any other Persons expected to provide Financing in connection with fund raising, marketing, information
or reporting activities of the kind customarily provided with respect to investments of this kind; provided, further, that the
foregoing shall not restrict or prevent the Company from making (after consultation with Parent) any announcements to its employees,
customers, and other business relations to the extent the Company determines in good faith that such announcement is necessary or advisable
and permitted by applicable Law. In the event any such press release, public announcement or filing is required by applicable Law, or
by obligations pursuant to any listing agreement with or rules of any national securities exchange, Parent and the Company will use reasonable
commercial efforts to allow the other parties reasonable time to comment on such press release, public announcement or filing in advance
of its issuance.
Section 6.12 Notices
to Stockholders. The Company, as promptly as reasonably practicable after the date hereof, shall mail
or deliver to each Stockholder which did not execute the Company Stockholder Written Consent (i) the notification required by Section 228(e)
of the DGCL with respect to the Company Stockholder Written Consent, (ii) the notification required by Section 262(d)(2) of
the DGCL, and (iii) a Letter of Transmittal.
Section 6.13 Termination
of Management Consulting Agreement. At or prior to the Closing, the Company shall cause the Management
Consulting Agreement to be terminated and of no force and effect as of immediately following the Effective Time, except for those rights
and obligations that expressly survive in accordance with its terms (including indemnification provisions).
Section 6.14 R&W
Insurance Policy. In the event Parent or any of its Affiliates obtains a representations and warranties
insurance policy in respect of the representations and warranties contained in this Agreement or in any certificate or other instrument
contemplated by or delivered in connection with this Agreement (such policy, a “R&W Insurance Policy”), (a) all
premiums, underwriting fees, brokers’ commissions and other costs and expenses related to such R&W Insurance Policy shall be
borne solely by Parent or such Affiliate (including the Surviving Corporation after the Merger), (b) such R&W Insurance Policy shall
not provide for any “seller retention” (as such phrase is commonly used in the representations and warranties insurance policy
industry) and (c) such R&W Insurance Policy shall expressly waive any claims of subrogation against the Equityholders or the Stockholders’
Representative except in the case of Fraud. From and after the date hereof and prior to the Closing, the Company shall, and shall cause
the Company Subsidiaries to, use commercially reasonable efforts to cooperate with Parent’s efforts to obtain the R&W Insurance
Policy. Within ten (10) calendar days following the date of this Agreement, the Company shall deliver (or cause to be delivered)
to Parent a consolidated electronic copy of the virtual data room (“Data Room”), which electronic copy shall contain
all contents of the Data Room as of the date hereof.
Section 6.15 Tax
Matters.
(a) Parent
shall not, and shall cause the Company and the Company Subsidiaries not to, to the extent such action could be reasonably likely to affect
the Final Purchase Price or increase the Tax liabilities of any Stockholder (or any Affiliate of any Stockholder), (i) amend any
Tax Returns for any Pre-Closing Tax Period, (ii) make, change or revoke any Tax election that has retroactive effect to any Pre-Closing
Tax Period, (iii) enter into any voluntary disclosure or similar agreement, or otherwise voluntarily disclose information to, any
Taxing Authority with respect to any Pre-Closing Tax Period, in each case without the prior written consent of the Stockholders’
Representative (such consent not to be unreasonably withheld, conditioned or delayed), or (iv) take or fail to take any other action,
to the extent doing so could reasonably be expected to result in a decrease to the Transaction Tax Benefit Amount (other than any such
action or inaction (x) that is in the Ordinary Course of Business or (y) allowed under this Agreement or any other Transaction Document;
provided, that, the Transaction Tax Benefit Amount shall not be decreased by any actions or inactions taken in accordance
with clause (y) unless such actions or inactions are explicitly permitted under this Agreement or any other Transaction Document). To
the extent any Tax Returns of the Company and the Company Subsidiaries relating to Pre-Closing Tax Periods could impact the Final Purchase
Price, the Parent shall provide the Stockholders’ Representative with drafts of such Tax Returns no later than thirty (30) days
prior to filing of such Tax Returns, for the Stockholders’ Representative’s review and approval, and such approval shall not
be unreasonably withheld, conditioned, or delayed. Notwithstanding anything to the contrary in this Agreement: (i) Parent will be entitled
to make an election pursuant to subsection 256(9) of the Canadian Tax Act in the Tax Return of any Company Subsidiary for its taxation
year ending by virtue of the Closing, and (ii) if applicable, the Company will elect under subsection 110(1.1) of the Canadian Tax
Act and otherwise comply with the conditions thereof in connection with the surrender of the Eligible Options.
(b) Any
Taxes attributable to any Straddle Period shall be allocated between the portion of such Straddle Period ending on the Closing Date (which
portion shall be treated as Taxes for a Pre-Closing Tax Period) and the portion of such Straddle Period beginning after the Closing Date
as follows: (i) Taxes, other than those referred to in clause (ii) below, shall be allocated by means of a deemed closing of the books
and records of the Company, the Company Subsidiaries and any entities in which they may hold equity interests as of the end of the Closing
Date, with the taxable period of all of the foregoing being treated as ending as of the end of the Closing Date; and (ii) property and
ad valorem Taxes attributable to a Straddle Period shall be allocated between such two portions of the Straddle Period in proportion to
the number of days in each such portion of the Straddle Period.
(c) Neither
Parent nor any of its Affiliates shall (or, from and after the Closing, shall cause or permit the Company or any of its Affiliates to)
make an election under Section 336 or Section 338 of the Code or any similar election under state, local or foreign Laws applicable
to Tax with respect to the Merger.
(d) All
Transfer Taxes shall be borne by Parent. Parent shall procure any stock transfer stamps required by any Transfer Tax, and timely file,
to the extent required by applicable Law, all necessary Tax Returns and other documentation with respect to all such Transfer Taxes and
provide to the Stockholders’ Representative upon request evidence of payment of all Transfer Taxes. The Parent, the Company and
the Stockholders’ Representative shall reasonably cooperate to reduce or eliminate the amount of Transfer Taxes payable in accordance
with applicable Law.
(e) At
the Closing, the Company shall deliver or cause to be delivered to Parent a certificate in the form and substance required by Treasury
Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h) and reasonably satisfactory to the Parent, executed by a duly authorized officer
of the Company, certifying that the Company is not and has not been during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code;
provided that, notwithstanding anything to the contrary in this Agreement, the Company’s failure to provide such certificate
at the Closing shall not be taken into account for purposes of determining whether the conditions set forth in Section 7.2
are satisfied and shall not otherwise be a condition to the parties’ obligation to effect the Closing, and Parent’s sole remedy
for such a failure shall be to withhold in accordance with Section 2.5. After the Closing, the Company shall provide notice
of such certification to the IRS in accordance with Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h)(2) no later than
thirty (30) days after the Closing Date.
(f) At
the Closing, the Stockholders’ Representative shall deliver or cause to be delivered to Parent a duly completed and executed IRS
Form W-9 or appropriate IRS W-8 series form, as applicable, for each of the Stockholders; provided that, notwithstanding anything to the
contrary in this Agreement, the failure to provide such form at the Closing for a Stockholder shall not be taken into account for purposes
of determining whether the conditions set forth in Section 7.2 are satisfied and shall not otherwise be a condition to the parties’
obligation to effect the Closing, and Parent’s sole remedy for such a failure shall be to withhold in accordance with Section
2.5.
(g) The
Parent and the Stockholders’ Representative shall cooperate fully, as and to the extent reasonably requested by any other party,
in connection with preparing and filing any Tax Return, seeking any Tax refund, investigating and defending any audit, litigation or other
proceeding with respect to Taxes, or such other matter with respect to Taxes.
(h) The
Company has caused, or on or prior to the Closing, the Company shall cause Acuren Group Inc. to file elections under subsections 15(2.11)
and 15(2.12) of the Canadian Tax Act in respect of the Canadian Upstream Loans and shall pay or cause to be paid any penalties, interest
or similar fees required to be paid in connection with such filings.
Section 6.16 Financing.
(a) Each
of Parent and Merger Sub shall, and Parent shall cause Merger Sub to, do all things necessary, proper or advisable to obtain the proceeds
of the Financing on the terms and conditions described in the Commitment Letters, including using reasonable best efforts to, as promptly
as practicable after the date of this Agreement and prior to the earlier of the Closing Date and the date this Agreement is terminated
in accordance with its terms:
(i) negotiate
definitive financing agreements with respect to the Debt Financing (the “Definitive Debt Financing Agreements”) consistent
with the terms and conditions contained in the Debt Commitment Letter (including any “market flex” terms and conditions),
provided, however, that in no event shall any of the Definitive Debt Financing Agreements (A) reduce the aggregate amount of the Debt
Financing provided for in the Debt Commitment Letter (including by changing the amount of fees or original issue discount contemplated
by the Debt Commitment Letter); (B) expand the conditions or other contingencies relating to the receipt or funding of the Debt Financing
beyond those expressly set forth in the Debt Commitment Letter, amend or modify any of such conditions or other contingencies in a manner
adverse to Parent, Merger Sub, the Company or its Affiliates (whether by making any such conditions or other contingencies less likely
to be satisfied on a timely basis or otherwise) or impose any new or additional condition or other contingency relating to the receipt
or funding of the Debt Financing; or (C) contain terms (other than those terms expressly set forth in the Debt Commitment Letter)
that (1) could delay the Effective Time or the date on which the Debt Financing would be obtained or make the timely funding of the
Debt Financing less likely to occur, (2) adversely impact the ability of Parent or Merger Sub to enforce its rights against any of
the other parties to the Debt Commitment Letter or Definitive Debt Financing Agreements or (3) are otherwise materially adverse to the
interests of the Company or its Affiliates in any respect;
(ii) maintain
in effect the Commitment Letters and enter into Definitive Debt Financing Agreements with respect to the Debt Commitment Letter and consummate
the Financing at or prior to the Closing;
(iii) satisfy
on a timely basis all covenants and conditions in the Commitment Letters and the Definitive Debt Financing Agreements;
(iv) pay
in a timely manner any commitment or other fees that are or become payable under any of the Commitment Letters or Definitive Debt Financing
Agreements on or following the date of this Agreement;
(v) obtain
all rating agency approvals necessary to obtain the Financing;
(vi) comply
with its obligations under the Commitment Letters and Definitive Debt Financing Agreements in all material respects (including (A) drawing
on any interim or bridge financing in the event that other elements of the Debt Financing are not available and (B) if applicable, complying
with any “market flex” provisions contained in the Commitment Letters or the Definitive Debt Financing Agreements in the event
such “market flex” provisions are exercised in accordance with the terms thereof);
(vii) fully
enforce its rights under the Commitment Letters and Definitive Debt Financing Agreements;
(viii) cause
the Debt Financing Sources, the Equity Investors and any other Persons expected to provide Financing to fund on the date the Closing is
required to occur in accordance with this Agreement the full amount of the Financing; and
(ix) otherwise
cause the Financing to be funded in full on or prior to the date the Closing is required to occur in accordance with this Agreement.
(b) Parent
and Merger Sub will furnish to the Company complete copies of all Definitive Debt Financing Agreements. Without limiting any of their
respective obligations hereunder, Parent and Merger Sub shall use reasonable best efforts to keep the Company fully informed on a current
basis in reasonable detail with respect to the status of the Financing and material developments with respect thereto, including the status
of Parent’s and Merger Sub’s efforts to comply with their covenants and other obligations under, and satisfy the conditions
and other contingencies set forth in, the Commitment Letters and Definitive Debt Financing Agreements. If requested by the Company, without
limiting the foregoing, Parent and Merger Sub shall give the Company and the Company’s legal counsel reasonable opportunity to review
and comment upon drafts of all Definitive Debt Financing Agreements. Without limiting the generality of the foregoing, Parent and Merger
Sub shall give the Company prompt notice (in no event later than 48 hours after obtaining knowledge) of (i) any breach or default
(or any event or circumstance that, with or without notice, lapse of time or both, could reasonably be expected to give rise to any breach
or default) on the part of any party to any Commitment Letter or Definitive Debt Financing Agreement, (ii) the receipt by Parent
or Merger Sub of any notice or other communication from any Person with respect to any actual or potential breach, default or dispute
by or involving any party under any Commitment Letter or Definitive Debt Financing Agreement, (iii) any actual or purported expiration,
withdrawal, modification, termination, rescission or repudiation of any Commitment Letter or Definitive Debt Financing Agreement, or any
provision thereof, (iv) the exercise of any “market flex” provisions provided for in any Commitment Letter or Definitive
Debt Financing Agreement, (v) any actual or contemplated dispute or disagreement with any Person expected to provide any portion
of the Financing and/or the aggregate amount of the Financing required to consummate the transactions contemplated hereby and (vi) any
other circumstance that could reasonably be expected to adversely affect the ability of Parent and/or Merger Sub to obtain, prior to the
date the Closing is required to occur in accordance with this Agreement, all or any portion of the Financing on the terms, in the manner
or from the sources contemplated by any of the Commitment Letters or Definitive Debt Financing Agreements. As soon as reasonably practicable,
but in any event within 48 hours after the Company delivers to Parent or Merger Sub a written request therefor, Parent and Merger Sub
shall provide any information reasonably requested by the Company relating to any circumstance referred to in clauses “(i)”
– “(vi)” of the preceding sentence.
(c) Neither
Parent nor Merger Sub shall, without the prior written consent of the Company (which consent shall not be unreasonably withheld), agree
to or permit any amendment, restatement, amendment and restatement, replacement, supplement, modification, waiver or consent to be made
to, or any waiver of any provision or remedy under, any Commitment Letter or Definitive Debt Financing Agreement if such amendment, restatement,
amendment and restatement, replacement, supplement, modification, waiver or consent could reasonably be expected to: (i) reduce the
aggregate amount of the Financing (including by changing the amount of fees to be paid or original issue discount); (ii) expand the
conditions or other contingencies relating to the receipt or funding of the Financing, amend or modify in a manner adverse to Parent,
Merger Sub, the Company or any of its Affiliates any of the conditions or other contingencies relating to the receipt or funding of the
Financing (whether by making any of such conditions or other contingencies less likely to be satisfied on a timely basis or otherwise)
or impose new or additional conditions or other contingencies relating to the receipt or funding of the Financing; (iii) (A) prevent,
impede, impair or delay the Effective Time or the date on which the Financing would be obtained or (B) make the timely funding of
the Financing less likely to occur; (iv) adversely impact the ability of Parent or Merger Sub to enforce its rights against any of
the other parties to the Commitment Letters or Definitive Debt Financing Agreements; or (v) otherwise be adverse to the interests
of Parent, Merger Sub, the Company or any of its Affiliates. Notwithstanding the foregoing, amendments, restatements, supplements, replacements
and substitutions to the Debt Commitment Letter solely to (x) correct typographical errors, (y) add lenders, lead arrangers, bookrunners,
syndication agents and similar entities that had not previously executed the Debt Commitment Letter, or (z) reallocate commitments or
assign or reassign titles or roles to, or between or among, any entities party thereto (unless such assignment or reallocation would reduce
the aggregate amount of the Financing (including by changing the amount of fees to be paid or original issue discount), add or expand
the conditions precedent to closing or otherwise be reasonably expected to make the timely funding of any of the Debt Financing or satisfaction
of the conditions to obtaining any of the Debt Financing less likely to occur) will be permitted and will not require the prior written
consent of the Stockholders’ Representative. Neither Parent nor Merger Sub shall agree to or permit the withdrawal, repudiation,
termination or rescission of any Commitment Letter or Definitive Debt Financing Agreement or any provision thereof. For purposes of this
Section 6.16, the definitions of “Debt Commitment Letter,” “Equity Commitment Letter,” “Commitment
Letters,” “Debt Financing Commitments,” “Equity Financing Commitments,” “Financing Commitments,”
“Debt Financing,” “Equity Financing,” and “Financing” shall include the Financing Commitments or documents
related thereto as permitted to be amended, amended and restated, replaced, supplemented, modified, waived or consented to by this Section 6.16(c).
Parent and Merger Sub shall promptly deliver to the Company copies of any amendment, restatement, amendment and restatement, replacement,
supplement, modification, waiver or consent to the Commitment Letters and/or any Definitive Debt Financing Agreement. Further, for the
avoidance of doubt, if the Financing (or any Alternative Financing) has not been obtained, Parent and Merger Sub shall continue to be
obligated to consummate the transactions contemplated hereby subject only to the satisfaction or waiver of the conditions set forth in
Article 7.
(d) In
the event that any portion of the Debt Financing or Debt Financing Commitments (or any Debt Commitment Letter or Definitive Debt Financing
Agreement relating thereto) becomes unavailable on the terms and conditions contemplated in the Debt Financing Commitments or otherwise
expire or are terminated, regardless of the reason therefor, Parent and Merger Sub will (i) use reasonable best efforts (x) to
obtain alternative debt financing (in an amount sufficient, when taken together with the proceeds from the Equity Financing, to pay all
amounts required to be paid by Parent and Merger Sub under or in connection with this Agreement on the terms contemplated hereby and to
pay all related fees and expenses) (the “Alternative Financing”) and (y) to obtain (and, if obtained, will provide
the Company with a copy of) a new financing commitment that provides for at least the same amount of financing as such Debt Financing
Commitment as originally issued, to the extent needed to fund the transactions contemplated by this Agreement (the “New Commitment
Letter”) on substantially equivalent or more favorable terms from other sources and which do not include any conditions to the
consummation of the Alternative Financing that are more onerous than the conditions set forth in the Debt Financing and (ii) promptly
notify (and, in any event, within 48 hours) the Company of such unavailability and the reason therefor. To the extent applicable, Parent
and Merger Sub shall use reasonable best efforts to take, or cause to be taken, all things necessary, proper or advisable to arrange promptly
and consummate the Alternative Financing on the terms and conditions described in any New Commitment Letter, including (A) using
reasonable best efforts to (x) satisfy on a timely basis all terms, covenants and conditions set forth in the New Commitment Letter;
(y) entering into definitive agreements with respect thereto on the terms and conditions contemplated by the New Commitment Letter;
and (z) consummating the Alternative Financing at or prior to the Closing and (B) seeking to enforce its rights under the New
Commitment Letter. In the event Alternative Financing is obtained, references in this Agreement to the Financing shall also be deemed
to refer to such Alternative Financing, and if one or more commitment letters or definitive financing agreements are entered into or proposed
to be entered into in connection with such Alternative Financing, references in this Agreement to the Commitment Letters and the Definitive
Debt Financing Agreements shall also be deemed to refer to such commitment letters and definitive financing agreements relating to such
Alternative Financing, and all obligations of Parent and Merger Sub pursuant to this Section 6.16 shall be applicable thereto
to the same extent as Parent’s and Merger Sub’s obligations with respect to the Financing. Notwithstanding the foregoing,
compliance by Parent and Merger Sub with the provisions of this Section 6.16(d) shall not relieve Parent or Merger Sub of
their obligation to consummate the Merger or other transactions contemplated hereby whether or not the Financing is available.
(e) Subject
to Section 6.16(f), prior to Closing, the Company shall, and shall cause the Subsidiaries to, and shall use its reasonable
best efforts to cause the respective officers, employees, and advisors, and other representatives including legal and accounting, of the
Company and its Subsidiaries to, provide to Parent all cooperation reasonably requested by Parent that is customary for financings of
the type contemplated by the applicable Financing, and at Parent’s sole expense, in connection with Parent’s arrangement and
obtaining the Financing, including the following:
(i) furnishing
on a confidential basis to Parent and its Debt Financing Sources as promptly as reasonably practicable, (A) the financial information
required by paragraph 1, 4, and 7 of Exhibit C to the Debt Commitment Letter (it being understood and agreed that the Company
shall not be required to provide any information regarding any post-Closing or pro forma cost savings, synergies, capitalization, ownership
or other post-Closing pro forma adjustments (or otherwise prepare pro forma financial information or post-Closing financial information)
and (B) such other financial data and other customary information and financing deliverables regarding the Company and the Company Subsidiaries
as may reasonably be requested by Parent or Debt Financing Sources, the Equity Investors and any other Warrant Exercise Parties (such
persons collectively, the “Financing Sources”);
(ii) causing
the Company’s and the Company Subsidiaries’ senior officers and representatives, in each case, with appropriate seniority
and expertise, to participate (which may be virtual, telephonic, or in person) in a reasonable number of meetings, presentations, due
diligence sessions and/or other sessions with Financing Sources and/or rating agencies (in each case, at reasonable times and upon reasonable
prior notice);
(iii) assisting
with the preparation of appropriate and customary materials for a rating agency presentation, a confidential bank information memorandum
or placement memorandum, and a lender presentation or other offering materials related to the Debt Financing or Equity Financing, as applicable
(including providing such information regarding the Company and Subsidiaries as may be necessary in connection with Parent’s preparation
of pro forma financial statements), all as reasonably requested in connection with the Debt Financing or Equity Financing;
(iv) facilitating
the provision of guarantees by the Company, the granting of a security interest (and the perfection thereof) and the pledging of collateral
of the Company; provided, that no such guarantees or pledges shall be effective prior to the Effective Time;
(v) assisting
in the preparation of, and executing and delivering, documents related to the Definitive Debt Financing Agreements, including (A) documents
relating to the repayment of the Specified Funded Indebtedness and the release of related Encumbrances, including the Payoff Letters,
(B) Definitive Debt Financing Agreements and certificates, including agreements, documents or certificates that facilitate the creation
and perfection of Encumbrances securing the Debt Financing, as reasonably requested by the Parent or the Debt Financing Sources, and (C) other
financing deliverables required as a condition to closing the Debt Financing (including delivering stock or limited liability company
certificates for certificated securities and limited liability company membership or equity interests with transfer powers executed in
blank to the extent required to be delivered at Closing), guarantee and collateral documents and customary closing certificates;
(vi) furnishing
Parent and the Debt Financing Sources at least three (3) Business Days prior to the Closing Date with all customary documentation
and other information required by any Governmental Authority with respect to the Debt Financing under applicable “know your customer”
and anti-money laundering rules and regulations (including the USA Patriot Act of 2001, and information regarding beneficial ownership
information under 31 C.F.R. § 1010.230) that is reasonably requested by Parent or the Debt Financing Sources (through Parent) at
least ten (10) Business Days prior to the Closing Date;
(vii) to
identify the locations and types of the Company’s assets for the purpose of facilitating the pledging of collateral on the Closing
Date with respect to any pledge that becomes effective on and after the Closing Date;
(viii) obtaining
such insurance certificates and landlord and warehousemen waivers, as reasonably requested by Parent or the Financing Sources in connection
with the Debt Financing and required as a condition to closing the Debt Financing, in each case, effective as of the Closing Date;
(ix) executing
and delivering customary authorization and representation letters and authorizing the distribution of information relating to the Company
to the Parent or the Financing Sources as reasonably requested by Parent or the Financing Sources;
(x) reasonably
cooperating with Parent’s legal counsel in connection with any legal opinions that such legal counsel may be required to deliver
as a condition to closing the Debt Financing;
(xi) providing
assistance with the preparation or review of risk factors for any private placement memoranda or other offering materials related to the
Equity Financing;
(xii) reasonably
cooperating with the marketing efforts of Financing Sources; and
(xiii) cooperating
with Parent to take such corporate or other organizational action, subject to the occurrence of the Closing, as Parent may reasonably
request to permit the consummation of the Debt Financing.
(f) Notwithstanding
anything in Section 6.16(e) or in this Agreement to the contrary, until the Closing occurs, the cooperation requested by Parent
pursuant to Section 6.16(e) shall not:
(i) require
the entry by Company or any of its Subsidiaries into any agreement or commitment that would be effective prior to the Effective Time and
that is not contingent on the occurrence of the Effective Time;
(ii) require
the Company or any of its Subsidiaries to pay any commitment or other fee, reimburse any expenses or otherwise incur any liability or
provide any indemnity under any agreement or document related to the Financing, in each case, prior to the Effective Time (unless otherwise
simultaneously reimbursed or indemnified by Parent);
(iii) unreasonably
interfere with the normal operations of the Company and its Subsidiaries;
(iv) provide
access to or disclose information that the Company determines in good faith could result in a waiver of attorney-client privilege, work
product doctrine or similar privilege, or violate any confidentiality requirements applicable to, the Company or any of its Affiliates
(to the extent such confidentiality requirements were not entered into in contemplation of this Agreement);
(v) include
any actions that the Company reasonably believes would (A) result in a violation of any material Contract, including the Specified Funded
Indebtedness, or confidentiality agreement or any Law, or the loss of any legal or other privilege, (B) conflict with or violate the Company’s
or its Subsidiaries’ Organizational Documents or (C) cause any representation, warranty, covenant or other obligation in this Agreement
to be breached or any condition set forth in Article 7 or Article 8 to fail to be satisfied;
(vi) involve
consenting to the pre-filing of UCC-1s or any other grant of Encumbrance that would be effective prior to the Closing;
(vii) other
than as set forth in Section 6.16(e)(iii)(B) with respect to the authorization letters contemplated thereby, require the giving
of representations or warranties to any third parties or the indemnification thereof;
(viii) require
the waiver or amendment of any terms of this Agreement;
(ix) cause
any director, officer or employee of the Company or any of its Subsidiaries to incur any personal liability in connection with the Financing
prior to the Closing (including that none of the board of directors of the Company or any Company Subsidiaries’ resolutions or similar
actions approving the Financing or authorizing execution or delivery of any definitive documentation in connection with the Financing
shall be effective until the Closing);
(x) require
the furnishing of any information (x) which is not prepared by the Company and its Subsidiaries in the Ordinary Course of Business or
(y) with respect to a month or fiscal quarter that has not yet ended or has ended less than 60 days prior to the date of such request;
(xi) require
the delivery of any financial statements in a form or subject to a standard different than those provided to Parent on or prior to the
date hereof, or
(xii) require
providing any cooperation or information that does not pertain to the Company or its Subsidiaries or otherwise is not customarily required
for contemplation of debt financings similar to the Financing.
Parent shall, promptly upon request
of the Company, reimburse the Company for all reasonable out-of-pocket costs incurred by the Company or any of its Subsidiaries in connection
with such cooperation, including all reasonable and documented fees and expenses of counsel and other advisors.
(g) Parent
and Merger Sub shall not permit any assignment of any Commitment Letter or waive any provision or remedy under any Commitment Letter,
in each case without obtaining the Company’s prior written consent. In addition to the foregoing, Parent and Merger Sub shall not
release or consent to the termination of any Debt Commitment Letter or of any lender in accordance with the terms of any Debt Commitment
Letter prior to the first to occur of Closing and the expiration of such Debt Commitment Letter in accordance with its terms, except (i)
for replacements of any Debt Commitment Letter with Alternative Financing in accordance with Section 6.16(d) or (ii) with
the Company’s prior written consent.
(h) Parent
shall indemnify and hold harmless each of the Company and its Subsidiaries and their respective officers, directors, employees, agents,
Affiliates, and representatives (collectively, the “Financing Indemnitees”) for and against any and all losses suffered
or incurred by them in connection with the arrangement of the Financing and any information utilized in connection therewith (other than
information provided by the Company and its Affiliates to Parent for use in connection with the Debt Financing). This Section 6.16(h)
shall survive the consummation of the Merger and any termination of this Agreement, and is intended to benefit, and may be enforced by,
the Financing Indemnitees and their respective Affiliates.
(i) Parent
shall maintain at all times from and after the date hereof until the earlier of (i) the Closing and (ii) satisfaction of liabilities following
termination of this Agreement, unrestricted cash in an amount (such amount, the “Minimum Cash Requirement”) at least
equal to the amount required to pay (A) the Parent Termination Fee and, if applicable, any costs and expenses in connection with the enforcement
thereof that Parent is required to pay pursuant to Section 9.2(d) (Effect of Termination), (B) its obligations pursuant to Section
10.19 (Expenses), and (C) its obligations pursuant to Section 6.16(h) (Financing Indemnitees).
Section 6.17 Registration
Statement; Financial Statements
(a) The
Company shall use commercially reasonable efforts to (i) furnish Parent with information concerning itself and its Affiliates as
may be commercially reasonably necessary or advisable in connection with the preparation and filing by Parent of the Registration Statement
with the U.S. Securities and Exchange Commission (“SEC”) (including the Listing), and (ii) provide such other
assistance as may be reasonably requested by Parent in connection with the preparation and filing of the Registration Statement with the
SEC (including the Listing); provided, that in each of (i) and (ii), such cooperation shall be conducted in a manner not to unreasonably
interfere with the businesses or operations of the Company and its Subsidiaries.
(b) The
Company shall use commercially reasonable efforts to prepare the Financial Statements as of and for such dates and any later periods required
to be included in the Registration Statement (the “SEC Financial Statements”), which SEC Financial Statements, including,
in each case, any related notes thereto will: (A) be audited in accordance with the auditing standards of the PCAOB (collectively, the
“PCAOB Financials”); (B) comply as to form with the published rules and regulations of the SEC with respect thereto;
(C) be prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the
notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the SEC for quarterly reports on Form
10-Q); and (D) fairly present in all material respects the financial position of Company at the respective dates thereof and the results
of Company’s operations and cash flows for the periods indicated therein, subject, in the case of unaudited interim financial statements,
to normal and year-end audit adjustments as permitted by GAAP and the applicable rules and regulations of the SEC. From the date of the
Agreement through the Closing Date, the Company shall use its commercially reasonable efforts, including dedicating reasonable internal
and external resources, to cause the SEC Financial Statements to be finalized and delivered as soon as possible following the date of
this Agreement. Notwithstanding the foregoing, Parent acknowledges and agrees that the SEC Financial Statements will not be completed
prior to the Closing Date.
(c) Parent
will promptly upon request reimburse the Company for all reasonable and documented out-of-pocket costs and expenses (including third party
accountants and advisors) incurred prior to or after the date of this Agreement by it in complying with their respective covenants pursuant
to this Section 6.17.
Section 6.18 No
Shop. From and after the date hereof and until the earlier of the Effective Time or the termination
of this Agreement pursuant to Article 9, neither the Company or any of its Subsidiaries nor the Stockholders’ Representative
will, and each will cause their respective Affiliates and Representatives not to, directly or indirectly, solicit, initiate, or knowingly
encourage any inquiry, proposal, or offer from, furnish any information to, or participate in any discussion or negotiation with any
Person (other than Parent or any of its Representatives) regarding, or accept any offer or enter into any agreement with respect to,
any acquisition of (a) any Shares or (b) a substantial portion of the Company’s or any Company Subsidiary’s equity interests,
assets, or business, in whole or in part (by purchase, merger, tender offer, statutory share exchange, joint venture or otherwise). The
Company, each of the Company Subsidiaries and the Stockholders’ Representative will, and each will cause their respective Affiliates
and Representatives to, immediately terminate all such discussions or negotiations that may be in progress on the date hereof.
Section 6.19 Payoff
Letters; Lien Releases; Invoices. The Company shall deliver to Parent, at least three (3) Business
Days prior to the Closing Date, draft Payoff Letters by the holders of Specified Funded Indebtedness, in each case, in form and substance
reasonably satisfactory to Parent, together with any UCC authorizations or other lien releases and terminations, each in form and substance
reasonably satisfactory to Parent, to evidence the full repayment and satisfaction of the Indebtedness Payoff Amount and discharge and
termination of associated liens (if any), and use reasonable best efforts to obtain the lien releases related to the Specified Funded
Indebtedness and the Indebtedness Payoff Amount, effective on the Closing Date. The Company shall deliver to Parent, at least three (3)
Business Days prior to the Closing Date, invoices in respect of the Transaction Expenses described in clause (b) of the definition thereof
provided by the applicable vendors and showing the amounts owing to such vendors through and including the Closing Date (the “Invoices”).
Section 6.20 Transferred
Information.
(a) Each
Disclosing Party acknowledges and confirms that the disclosure of Transferred Information is necessary for the purposes of determining
if the parties will proceed with the transactions contemplated herein, and that the disclosure of Transferred Information relates solely
to the carrying on of the business of the Company and the Company Subsidiaries, and the completion of the transactions contemplated herein.
(b) Each
Disclosing Party covenants and agrees to, (i) protect the Transferred Information by security safeguards appropriate to the sensitivity
of the information and (ii) upon request, use reasonable efforts to advise the Recipient of (A) all documented purposes for which the
Transferred Information was initially collected from or in respect of the individual to which such Transferred Information relates and
(B) all additional documented purposes where the Disclosing Party has notified the individual of such additional purpose, and where required
by applicable Law, obtained the consent of such individual to such use or disclosure.
(c) In
addition to its other obligations hereunder, Recipient covenants and agrees to:
(i) prior
to the completion of the transactions contemplated herein, collect, use and disclose the Transferred Information solely for the purpose
of reviewing and completing the transactions contemplated herein, including for the purpose of determining to complete such transactions;
(ii) after
the completion of the transactions contemplated herein, collect, use and disclose the Transferred Information only for those purposes
for which the Transferred Information was initially collected from or in respect of the individual to which such Transferred Information
relates or for the completion of the transactions contemplated herein, unless (1) the Disclosing Party or Recipient have first notified
such individual of such additional purpose, and where required by applicable Law, obtained the consent of such individual to such additional
purpose, or (2) such use or disclosure is permitted or authorized by applicable Law, without notice to, or consent from, such individual;
and
(iii) where
required by applicable Law, promptly notify the individuals to whom the Transferred Information relates that the transactions contemplated
herein have taken place and that the Transferred Information has been disclosed to Recipient.
Section 6.21 Committee
on Foreign Investment in the United States and Other Regulatory Filings.
(a) The
parties hereto shall, and shall cause their Affiliates to, use best efforts to obtain CFIUS Clearance and to submit all other required
notifications, including under the International Traffic in Arms Regulations. Such best efforts shall include the actions set forth in
this Section 6.21.
(b) In
furtherance of the foregoing, the Company will file or cause to be filed as soon as reasonably practicable after the date hereof the notification
with the U.S. Department of State’s Directorate of Defense Trade Controls as referred to in Section 4.6 of the Company Disclosure
Letter.
(c) The
parties hereto shall submit, or cause to be submitted, to CFIUS a CFIUS Declaration or a draft CFIUS Notice as soon as practicable following
the date hereof, but in no event later than ten (10) Business Days following the date hereof.
(d) If
applicable, the parties hereto shall promptly prepare a definitive CFIUS Notice that addresses all questions and comments received from
CFIUS relating to the draft CFIUS Notice. The parties hereto shall submit the definitive CFIUS Notice to CFIUS promptly after the date
on which they receive questions and comments on the draft CFIUS Notice or an indication that CFIUS has no questions or comments, and in
no event later than five (5) Business Days following that date. The parties hereto shall promptly address any further questions and comments
raised by CFIUS concerning the CFIUS Notice following its submission. Parent shall pay the filing fee required by 31 C.F.R. § 800.1101
on or before the date on which the parties hereto submit the definitive CFIUS Notice.
(e) During
the course of a CFIUS review or investigation of the transactions contemplated by this Agreement, each parties hereto shall provide any
information requested by CFIUS or any other agency or branch of the U.S. government in connection with the review or investigation of
the transactions contemplated by this Agreement, within the time period specified by the DPA, or otherwise specified by CFIUS staff.
(f) Each
of the parties hereto shall, in connection with the best efforts to obtain the CFIUS Clearance and to submit all other required notifications,
including under the International Traffic in Arms Regulations, (i) cooperate in all respects and consult with the other party hereto
in connection with such notifications, including by allowing the other party hereto to have a reasonable opportunity to review in advance
and comment on drafts of filings and submissions; (ii) promptly inform the other party hereto of any communication with the relevant Governmental
Authority and promptly provide copies to the other party hereto of any such written communications, except for personal identifying information
required by 31 C.F.R. § 800.502(c)(5)(vi); and (iii) permit the other party hereto to review in advance any communication that it
gives to, and consult with each other in advance of any meeting, telephone call or conference with the relevant Governmental Authority,
and to the extent not prohibited by CFIUS, give the other party hereto the opportunity to attend and participate in any telephonic conferences
or in-person meetings, in each case of (i)-(iii), subject to confidentiality considerations contemplated by the DPA, required by CFIUS,
or otherwise agreed upon by the parties hereto to be restricted to outside counsel only.
(g) With
respect to Parent, such best efforts shall also include taking or causing to be taken all action necessary to obtain the CFIUS Clearance,
including entering into a mitigation agreement, letter of assurance, national security agreement, proxy agreement, trust agreement or
other similar arrangement or agreement in relation to the business and assets of Parent, the Affiliates of Parent, or otherwise divesting
or agreeing to divest assets, with mitigation and related terms and conditions that are required by CFIUS or the President (if under Presidential
review) for such arrangements or agreements (together, “CFIUS Mitigation Measures”); provided, however,
that Parent and its Affiliates shall not be required to take or cause to be taken or agree to take any such action in connection with
this Agreement or any transactions contemplated by this Agreement (i) unless such action would be conditioned upon or occur subsequent
to the Closing; or (ii) if, in its sole discretion, Parent determines that any CFIUS Mitigation Measures would materially and adversely
affect Parent’s ability to operate or manage the Company in any material manner.
(h) The
parties hereto agree that if CFIUS suggests or requests that the parties hereto withdraw and resubmit any CFIUS Notice submitted to CFIUS,
the parties hereto shall cooperate in withdrawing and resubmitting the CFIUS Notice.
(i) No
party hereto shall take or cause any of its Affiliates to take, any action that would reasonably be expected to prevent, materially delay
or materially impede the receipt of CFIUS Clearance.
Article 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub under
this Agreement to effect the Closing shall be subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions,
any one or more of which may be waived by Parent:
Section 7.1 Representations
and Warranties Accurate. (a) The representations and warranties of the Company set forth in this
Agreement (other than the Fundamental Representations and the representation and warranty set forth in the second sentence of Section 4.22)
shall be true and correct at and as of the Closing Date as though made on the Closing Date (except to the extent such representations
and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct on and as of such
date) (without giving effect to any materiality or Material Adverse Effect qualifications contained therein), except for such failures
to be true and correct which, individually or in the aggregate, would not result in a Material Adverse Effect; (b) the Fundamental
Representations shall be true and correct in all material respects, at and as of the Closing Date as though made on the Closing Date;
and (c) the representation and warranty set forth in the second sentence of Section 4.22 shall be true and correct in
all respects, at and as of the Closing Date as though made on the Closing Date.
Section 7.2 Performance.
The Company shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to
be performed and complied with by the Company prior to or on the Closing Date; provided, that the Company shall be deemed to have
complied with Section 6.16(e) and Section 6.17 for the purpose of any condition set forth in Article 7, unless (i)
the Company has materially breached its obligations under Section 6.16(e) or Section 6.17, (ii) Parent has notified the
Company of such breach in writing in good faith, detailing in good faith reasonable steps that the Company may take to comply with Section
6.16(e) or Section 6.17, as applicable, in order to cure such breach, (iii) in the case of Section 6.16(e), the Company
has not taken such steps or otherwise cured such breach with reasonably sufficient time prior to the Termination Date to consummate the
Debt Financing (which in any event shall not be less than five (5) Business Days), and (iv) in the case of Section 6.16(e), the
Debt Financing has not been consummated and the material breach by the Company is a proximate cause of such failure.
Section 7.3 No
Material Adverse Effect. No Material Adverse Effect shall have occurred after the date of this Agreement.
Section 7.4 Company
Officer’s Certificate. Parent shall have received a certificate signed by the chief executive
officer of the Company, certifying as to the matters set forth in Section 7.1, Section 7.2 and Section 7.3.
Section 7.5 Legal
Prohibition. On the Closing Date, there shall exist no final and non-appealable Order issued by (a) any
Governmental Authority or court of competent jurisdiction in the United States of America which prohibits the consummation of the transactions
contemplated under this Agreement, or (b) any other Governmental Authority or court of competent jurisdiction which prohibits the
consummation of the transactions contemplated under this Agreement.
Section 7.6 Governmental
Consents. The waiting period under the HSR Act and the DPA shall have expired or terminated, as applicable.
Section 7.7 Frustration
of Closing Conditions. Neither Parent nor Merger Sub may rely on the failure of any condition set forth
in this Article 7 to be satisfied if such failure was materially contributed to by the failure of Parent or Merger Sub to
comply with any provision of this Agreement.
Article 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligation of the Company to effect the Closing
shall be subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions, any one or more of which may
be waived by the Company:
Section 8.1 Representations
and Warranties Accurate. The representations and warranties of Parent and Merger Sub contained in Article 5
which are not subject to a materiality qualification shall be true and correct in all material respects on and as of the Closing
Date as though made on and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific
date, in which case such representations and warranties shall be true and correct in all material respects on such earlier date) and
the representations and warranties of Parent and Merger Sub which are subject to a materiality qualification, shall be true and correct
in all respects on and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific date,
in which case such representations and warranties shall be true and correct on such earlier date).
Section 8.2 Performance.
Each of Parent and Merger Sub shall have performed and complied in all material respects with all agreements and covenants required by
this Agreement to be performed and complied with by it prior to or on the Closing Date.
Section 8.3 Parent
Officer’s Certificate. The Company shall have received a certificate signed by the chief executive
officer of Parent, certifying as to the matters set forth in Section 8.1 and Section 8.2.
Section 8.4 Legal
Prohibition. On the Closing Date, there shall exist no final and non-appealable Order issued by (a) any
Governmental Authority or court of competent jurisdiction in the United States of America which prohibits the consummation of the transactions
contemplated under this Agreement, or (b) any other Governmental Authority or court of competent jurisdiction which prohibits the
consummation of the transactions contemplated under this Agreement.
Section 8.5 Governmental
Consents. The waiting period under the HSR Act and the DPA shall have expired or terminated.
Section 8.6 Frustration
of Closing Conditions. The Company may not rely on the failure of any condition set forth in this Article 8
to be satisfied if such failure was materially contributed to by the failure of the Company to comply with any provision of this
Agreement.
Article 9
TERMINATION
Section 9.1 Termination.
This Agreement may be terminated at any time prior to the Closing as follows and in no other manner:
(a) by
the mutual written consent of Parent and the Company;
(b) at
the election of Parent or the Company if the Closing Date shall not have occurred on or before September 18, 2024 (the “Termination
Date”); provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall
not be available to any party whose breach of or failure to perform its obligations under this Agreement has materially contributed to,
or resulted in, the failure to consummate the transactions contemplated hereby by such date; provided, further, that no party shall
deliver a termination notice under this Section 9.1(b) during the pendency of any bona fide Action proceeded in good faith
by the other party for specific performance of this Agreement as provided by Section 10.15; provided, further, that the
Termination Date shall be automatically extended on a day-for-day basis, but in no event by more than thirty (30) days, for each day of
any delay to the applicable waiting or review periods, or any extension thereof, by any Governmental Authority (including any specific
request from any Governmental Authority to delay filings for additional time to review the transactions contemplated hereby) arising or
resulting from any local, national, or international shutdown, lockdown or other event, development or occurrence or any epidemic, pandemic,
public health emergency or disease outbreak or any other extraordinary or unusual event that is outside of the control of the parties
or their respective Affiliates (including a government shutdown) that would, or would reasonably be expected to, have the effect of delaying,
impeding, hindering or preventing the review of the transactions contemplated hereby and/or issuance of clearance or approval from such
Governmental Authority to the extent required to satisfy the conditions set forth in Section 7.5 or Section 8.4; provided,
further, that if as of the Termination Date any of the conditions set forth in Sections 7.5, 7.6, 8.4 and 8.5
shall not have been satisfied or waived (to the extent permitted), but all other conditions to Closing set forth in Article 7 and
Article 8 shall have been satisfied, or would be satisfied if the Closing were to occur on such date, the Termination Date shall
automatically be extended for a period of thirty (30) days (the “Extended Termination Date” and, if so extended, the
Extended Termination Date then shall be the Termination Date), it being agreed that there shall be no more than two (2) such extensions
of the Termination Date pursuant to this Section 9.1(b);
(c) by
Parent if the Company shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth
in this Agreement, or if any representation or warranty of the Company shall have become untrue, which breach or failure to perform or
to be true, either individually or in the aggregate, if occurring or continuing at the Effective Time, (i) would result in the failure
of any of the conditions set forth in Section 7.1 or Section 7.2 and (ii) cannot be or has not been cured
or waived by Parent by the earlier of (A) one Business Day prior to the Termination Date and (B) twenty (20) Business Days
after the giving of written notice to the Company of such breach or failure; provided, that Parent shall not have the right to
terminate this Agreement pursuant to this paragraph if Parent or Merger Sub is then in breach of any of its covenants or agreements set
forth in this Agreement, which breach would result in the failure of any of the conditions set forth in Section 8.1 or Section 8.2;
(d) by
the Company, if Parent or Merger Sub shall have breached or failed to perform any of its representations, warranties, covenants or agreements
set forth in this Agreement, or if any representation or warranty of Parent or Merger Sub shall have become untrue, which breach or failure
to perform or to be true, either individually or in the aggregate, if occurring or continuing at the Effective Time, (i) would result
in the failure of any of the conditions set forth in Section 8.1 or Section 8.2 and (ii) cannot be or has
not been cured or waived by the Company by the earlier of (A) one (1) Business Day prior to the Termination Date and (B) 20
Business Days after the giving of written notice to Parent of such breach or failure; provided, that the Company shall not have
the right to terminate this Agreement pursuant to this paragraph if the Company is then in breach of any of its covenants or agreements
set forth in this Agreement, which breach would result in the failure of any of the conditions set forth in Section 7.1 or
Section 7.2;
(e) at
the election of Parent or the Company, subject to Section 6.4, if a court of competent jurisdiction or other Governmental
Authority shall have issued an Order permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such Order shall have become final and non-appealable; it being agreed that subject to Section 6.4(b) hereof,
the parties hereto shall promptly appeal any adverse determination which is not non-appealable (and pursue such appeal with reasonable
diligence); provided, however, that the right to terminate this Agreement under this Section 9.1(e) shall not
be available to a party if such Order was primarily due to the failure of such party to perform any of its obligations under this Agreement;
or
(f) by
the Company if (i) all of the conditions in Article 7 have been satisfied or waived (other than those that by their nature
are to be satisfied at the Closing or the failure of which to be satisfied is due in any material part to a breach by Parent or Merger
Sub of any of its respective representations, warranties, covenants, or agreements contained in this Agreement), (ii) the Company
has confirmed that the Company is ready, willing, and able to consummate the Merger and the other transactions contemplated by this Agreement,
and (iii) Parent fails to consummate the Merger and the other transactions contemplated by this Agreement within five (5) Business
Days following the Company’s delivery of notice indicating its desire to terminate pursuant to this Section 9.1(f) in
accordance with the last sentence of this Section 9.1.
The party desiring to terminate this Agreement
pursuant to this Section 9.1 (other than Section 9.1(a)) shall give written notice of such termination to the
other party.
Section 9.2 Effect
of Termination.
(a) If
this Agreement is validly terminated in accordance with Section 9.1, this Agreement shall, to the fullest extent permitted
by Law, become void and of no further force and effect whatsoever and none of the parties hereto shall have any liability in respect of
a termination of this Agreement; provided, however, that, subject to Section 10.9, no party hereto shall be
relieved from liability for any Willful Breach of any of its representations, warranties, covenants or agreements contained in this Agreement
that occurs prior to termination or any claim or cause of action in the case of Fraud; and provided, further, that the provisions
of Section 6.6 (Confidentiality), 9.2 (Effect of Termination), 10.12 (Governing Law), 10.13 (Exclusive
Jurisdiction; Consent to Service of Process), 10.14 (Waiver of Jury Trial), and 10.18 (Stockholders’ Representative)
shall survive the termination of this Agreement.
(b) In
the event of termination by (i) the Company pursuant to Section 9.1(d) or Section 9.1(f) or (ii) Parent
or the Company pursuant to Section 9.1(b) at a time when the Company was entitled to terminate this Agreement pursuant to
Section 9.1(d) or Section 9.1(f), Parent shall promptly, but in no event later than five (5) Business Days
after the date of such termination, pay or cause to be paid to the Company by wire transfer of same day funds an amount equal to $90,000,000
(the “Parent Termination Fee”).
(c) The
parties hereto acknowledge and hereby agree that the Parent Termination Fee, if, as and when required pursuant to this Section 9.2,
shall not constitute a penalty but will be liquidated damages, in a reasonable amount that will compensate the Company by such amount
in the circumstances in which it is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement
and in reliance on this Agreement and on the expectation of the consummation of the Merger, which amount would otherwise be impossible
to calculate with precision. The parties acknowledge and hereby agree that in no event shall Parent be required to pay the Parent Termination
Fee on more than one occasion. The parties acknowledge and agree that in no event shall Parent be required to pay the Parent Termination
Fee, or any portion thereof, and also be required to drawdown on the Debt Commitment Letter, the Equity Commitment Letter or the Warrant
Commitment Letters or otherwise consummate the transactions contemplated hereby (including pursuant to an order for specific performance
in the circumstances permitted by Section 10.15(d)); provided, however, in the event that the Company is in the process of pursuing
an Action of specific performance, the Company will not be prevented from continuing such action due to receipt of payment of the Parent
Termination Fee.
(d) Each
party hereto acknowledges that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements, no party would have entered into this Agreement; and accordingly, if Parent fails
to pay promptly the Parent Termination Fee, and, in order to obtain such payment, the Company commences a suit which results in a final
and non-appealable judgment against Parent, for the payment of the Parent Termination Fee, or any portion thereof, Parent shall pay to
the Company its costs and expenses (including attorneys’ fees) actually and reasonably incurred in connection with such suit, together
with interest on the amount of the Parent Termination Fee at the prime rate published in the Wall Street Journal, Eastern Edition, in
effect on the date such Parent Termination Fee was required to be paid from such date through the date of full payment thereof.
(e) Notwithstanding
anything to the contrary in this Agreement, but subject to Section 10.15, in any circumstance in which this Agreement is terminated
and the Company receives payment of the Parent Termination Fee and, if applicable, the interest and costs and expenses of the Company
pursuant to Section 9.2(d), the payment of such amounts shall be the sole and exclusive remedy of the Company, its Subsidiaries,
the Stockholders’ Representative, any of their respective Affiliates, any of their respective former, current or future general
or limited partners, stockholders, controlling Persons, managers, members, directors, officers, employees, Affiliates, representatives
or agents, or any their respective assignees or successors, or any former, current or future general or limited partner, stockholder,
controlling Person, manager, member, director, officer, employee, Affiliate, representative, agent, assignee or successor of any of the
foregoing Persons, against Parent, Merger Sub, any of their respective Affiliates, any of their respective former, current or future general
or limited partners, stockholders, controlling Persons, managers, members, directors, officers, employees, Affiliates, financing sources,
representatives or agents, or any their respective assignees or successors, or any former, current or future general or limited partner,
stockholder, controlling Person, manager, member, director, officer, employee, Affiliate, representative, agent, assignee or successor
of any of the foregoing Person (collectively, the “Parent Related Parties”), for any loss or damage suffered as a result
of the failure of the Merger and the other transactions contemplated by this Agreement or any other Transaction Document to be consummated
or for a breach of, or failure to perform under, this Agreement, any other Transaction Document or any certificate or other document delivered
in connection herewith or otherwise or in respect of any representation made or alleged to have been made in connection herewith or therewith,
and upon payment of such amounts, none of the Parent Related Parties shall have any further liability or obligation relating to or arising
out of this Agreement any other Transaction Document or any certificate or other document delivered in connection herewith, whether in
equity or at law, in contract, in tort or otherwise.
Article 10
MISCELLANEOUS
Section 10.1 Survival.
The representations and warranties set forth in this Agreement and any certificate or other writing delivered pursuant to this Agreement,
and any covenants and agreements in this Agreement or in any schedule, exhibit, instrument or other document pursuant to this Agreement,
in each case, to be complied with prior to the Closing, shall terminate at the earlier of the Closing or the time of termination of this
Agreement pursuant to Article 9, and thereafter none of the parties hereto or any of their Affiliates or any of their respective
managers, officers, directors, employees, advisors, consultants, agents, stockholders, partners or representatives shall have any liability
whatsoever with respect to, based on, arising out of or in connection with any such representation, warranty, covenant or agreement,
and no claim for breach of any such representation or warranty, detrimental reliance or other right or remedy (whether in contract, in
tort or at law or in equity) may be brought after the Closing with respect thereto. The provisions of this Section 10.1 will
not, however, prevent or limit a cause of action under Section 10.15 to obtain an injunction to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, nor will it prevent or limit causes of action under Section 6.16(h)
(Financing Indemnification), and Section 10.20 (Debt Financing Sources). Notwithstanding anything expressed
or implied herein to the contrary, nothing in this Agreement will prevent or limit any claim or cause of action in the case of Fraud.
Section 10.2 Amendment.
This Agreement may be amended at any time prior to the filing of the Certificate of Merger with the Secretary of State of the State of
Delaware solely by an instrument in writing approved by the boards of directors of the Company and Merger Sub and signed on behalf of
each of the parties thereto; provided that an amendment to this Agreement made subsequent to the adoption of this Agreement by
the stockholders of the Company or Merger Sub, as applicable, shall not without the consent of the stockholders of the Company or Merger
Sub, as applicable, that hold at least a majority of the voting stock of such Person, (1) alter or change the amount or kind of
shares, securities, cash, property and/or rights to be received in exchange for or on conversion of all or any of the shares of any class
or series thereof of the Company or Merger Sub, as applicable, (2) alter or change any term of the certificate of incorporation
of the Surviving Corporation to be effected by the Merger or (3) alter or change any of the terms and conditions of this Agreement
if such alteration or change would adversely affect the holders of any class or series thereof of the Company or Merger Sub, as applicable.
Section 10.3 Entire
Agreement. This Agreement, including the Company Disclosure Letter and Exhibits attached hereto,
which are deemed for all purposes to be part of this Agreement, the other documents delivered pursuant to this Agreement, and the Confidentiality
Agreement, contain all of the terms, conditions and representations and warranties agreed upon or made by the parties relating to the
subject matter of this Agreement and the businesses and operations of the Company and supersede all prior and contemporaneous agreements,
negotiations, correspondence, undertakings and communications of the parties or their Representatives, oral or written, respecting such
subject matter. No representation, warranty, inducement, promise, understanding or condition not set forth in this Agreement has been
made or relied upon by any of the parties. The parties have voluntarily agreed to define their rights, liabilities and obligations respecting
the subject matter hereof exclusively in contract pursuant to 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, the parties
each hereby acknowledge that this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length
negotiations; the parties specifically acknowledge that no party has any special relationship with another party that would justify any
expectation beyond that of ordinary parties in an arm’s-length transaction.
Section 10.4 Headings.
The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement.
Section 10.5 Notices.
Any notice or other communication required or permitted under this Agreement shall be deemed to have been duly made if in writing and
duly given if (a) served by personal delivery upon the party for whom it is intended, (b) delivered by email with receipt confirmed,
or (c) delivered by certified mail, registered mail, courier service, return-receipt received to the party, in each case, at the
relevant address set forth below, with copies sent to the Persons indicated:
If to the Stockholders’ Representative or
to the Company prior to Closing:
c/o American Securities LLC
590 Madison Avenue, 38th Floor
New York, NY 10022
Attention: Michael Sand; Eric Schondorf, Esq.
Email: msand@american-securities.com; eschondorf@american-securities.com
With a copy to (which shall not constitute notice):
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Michael Lubowitz, Esq.; Ryan Taylor, Esq.
Email: michael.lubowitz@weil.com; ryan.taylor@weil.com
If to Parent or Merger Sub or, after the Closing,
the Surviving Corporation:
Admiral Acquisition Limited
c/o Mariposa Acquisition IX, LLC
500 South Pointe Drive
Suite 240
Miami Beach, FL 33149
Attention: Sir Martin E. Franklin and Robert A.E. Franklin
Email: mfranklin@marcapllc.com and rfranklin@marcapllc.com
With a copy to (which shall not constitute notice):
Greenberg Traurig, P.A.
401 East Las Olas Boulevard
Suite 2000
Fort Lauderdale, FL 33301
Attention: Brian J. Gavsie
Email: brian.gavsie@gtlaw.com
Such addresses may be changed, from time to time,
by means of a notice given in the manner provided in this Section 10.5.
Section 10.6 Exhibits
and Company Disclosure Letter. Any matter, information or item disclosed in the Company Disclosure
Letter, shall be deemed to have been disclosed for all purposes of this Agreement in response to every representation, warranty or covenant
in this Agreement in respect of which the relevance of such disclosure is reasonably apparent on its face. The inclusion of any matter,
information or item in the Company Disclosure Letter shall not be deemed to constitute an admission, indication, acknowledgment or representation
of any liability by the Company or Parent, respectively, to any third party or otherwise imply that any such matter, information or item
is material or creates a measure for materiality for the purposes of this Agreement.
Section 10.7 Waiver.
Waiver of any term or condition of this Agreement by any party shall only be effective if in writing and shall not be construed as a
waiver of any subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement.
The failure of any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights,
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or
privilege under this Agreement.
Section 10.8 Binding
Effect; Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their permitted successors and assigns. No party to this Agreement may assign or delegate, by operation of law or otherwise,
all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of the other parties
to this Agreement; provided, however, that, without prior written consent, (a) Parent and Merger Sub may assign this
Agreement and all or any portion of their respective rights and obligations hereunder to any direct or indirect wholly-owned Subsidiary
of Parent or to any insurer under the R&W Insurance Policy, (b) Parent may assign all or any portion of its rights and obligations
pursuant to this Agreement from and after the Effective Time in connection with a merger or consolidation involving Parent or other disposition
of all or substantially all of the assets of Parent or the Surviving Corporation, (c) Parent may assign all or any portion of its
rights pursuant to this Agreement upon or following the Closing for collateral security purposes to any Debt Financing Source, and (d)
Parent may designate, by written notice to the Company, a Subsidiary that is wholly owned by Parent to be merged with and into the Company
in lieu of Merger Sub, in which event all references in this Agreement to Merger Sub shall, to the fullest extent permitted by applicable
Laws, be deemed references to such Subsidiary, and in that case, all representations and warranties made in this Agreement with respect
to Merger Sub as of the date of this Agreement shall be deemed representations and warranties made with respect to such Subsidiary as
of the date of such designation. No assignment by any party shall relieve such party of any of its obligations hereunder, including,
for the avoidance of doubt, Parent’s Minimum Cash Requirement in Section 6.16(i). Except as set forth in this Section 10.8,
any purported assignment without such prior written consents shall, to the fullest extent permitted by Law, be void and of no force and
effect whatsoever.
Section 10.9 Third
Party Beneficiaries. Nothing in this Agreement shall confer any rights, remedies or claims upon any
Person or entity not a party or a permitted assignee of a party to this Agreement, except for (a) the Indemnified Parties as set
forth in Section 6.7, (b) Weil as set forth in Section 6.8, (c) the Released Parties as set forth in
Section 10.11, (d) the Non-Party Affiliates as set forth in Section 10.16, and (e) the rights of Equityholders
to receive payments described in Sections 2.4, 2.6 and 3.4.
Section 10.10 Counterparts.
This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each counterpart were upon a
single instrument, and all such counterparts together shall be deemed an original of this Agreement. Facsimile signatures or signatures
received as a pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement.
Section 10.11 Release.
Effective as of the Effective Time, each of Parent, Merger Sub and the Company (as the Surviving Corporation) agrees (and, from and after
the Closing, shall cause their respective Subsidiaries and Affiliates and each of its and their respective current and former officers,
directors, employees, partners, managers, members, advisors, successors and assigns (collectively, the “Releasing Parties”))
to irrevocably and unconditionally release and forever discharge the Stockholders’ Representative and its Affiliates and each of
its and their respective current and former officers, directors, employees, equityholders, partners, stockholders, managers, members,
advisors, lenders, successors and assigns (collectively, the “Released Parties”) of and from any and all actions,
causes of action, suits, proceedings, executions, judgments, duties, debts, dues, accounts, bonds, contracts and covenants (whether express
or implied), and claims and demands whatsoever, whether in law or equity, which the Releasing Parties may have against any or all of
the Released Parties, now or in the future, in each case in respect of causes, matters or things relating to the Released Parties, solely
in their capacity as equityholders of the Company, and arising out of, or relating to, the organization, management or operation of the
businesses of the Company or any Company Subsidiary prior to the Closing; provided, however, that nothing contained in
this Section 10.11 shall operate to release (a) any Released Party from any actions, causes of action, suits, proceedings,
executions, judgments, duties, debts, dues, accounts, bonds, contracts, covenants (whether express or implied), claims or demands (i) arising
from Fraud or (ii) in connection with any general commercial contracts or arrangements with any Released Parties or (b) any
officer or employee of the Company or any of the Company Subsidiaries (not associated with American Securities LLC) in their capacity
as such.
Section 10.12 Governing
Law. This Agreement and the other Transaction Documents and all claims, actions and proceedings (whether
in contract or tort) based upon, arising out of or relating to this Agreement and/or the other Transaction Documents or the negotiation,
execution or performance of this Agreement and/or the other Transaction Documents (including any claim or cause of action based upon,
arising out of or related to any representation or warranty made in or in connection with this Agreement and/or the other Transaction
Documents), shall be governed by and construed in accordance with the substantive and procedural Laws of the State of Delaware, without
giving effect to the conflict of laws principles thereof that might require the application of the laws of another jurisdiction.
Section 10.13 Exclusive
Jurisdiction; Consent to Service of Process. To the fullest extent permitted by Law, all claims, actions
and proceedings (whether in contract or tort) based upon, arising out of or relating to this Agreement and/or the other Transaction Documents
or the negotiation, execution or performance of this Agreement and/or the other Transaction Documents (including any claim or cause of
action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement and/or the
other Transaction Documents) shall be heard and determined exclusively in the Court of Chancery of the State of Delaware (or, if the
Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the
State of Delaware), and the parties hereto hereby irrevocably (i) submit to the exclusive jurisdiction of such courts (and, in the
case of appeals, appropriate appellate courts therefrom) in any such action or proceeding, (ii) waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding, (iii) waive any objection to the laying of venue of any such action or
proceeding in such courts and (iv) consent to service of process in the manner provided in Section 10.5 or in any other
manner permitted by Law. The consents to jurisdiction set forth in this paragraph shall not constitute general consents to service of
process in the State of Delaware and shall have no effect for any purpose except as provided in this Section 10.13 and shall
not be deemed to confer rights on any Person other than the parties hereto. The parties hereto agree that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner
provided by applicable Law.
Section 10.14 Waiver
of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY CLAIM, ACTION OR PROCEEDING (WHETHER IN CONTRACT OR TORT) BASED UPON, ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND/OR THE OTHER TRANSACTION DOCUMENTS OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT AND/OR
THE OTHER TRANSACTION DOCUMENTS (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR
WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT AND/OR THE OTHER TRANSACTION DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
ANY PROCEEDING, 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 10.14.
Section 10.15 Specific
Performance.
(a) The
parties agree that irreparable damage would occur in the event that the parties hereto do not perform the provisions of this Agreement
in accordance with its terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that the parties shall
be entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of this Agreement
and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.
(b) Each
of the parties hereby waives any defenses in any action for specific performance, and agrees that it will not oppose the granting of an
injunction, specific performance and other equitable relief as provided herein on the basis that, (i) it has an adequate remedy at
law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or equity. To the fullest extent
permitted by Law, each of the parties hereto hereby additionally waives any requirement under any Law to post a bond or other security
as a prerequisite to obtaining equitable relief.
(c) In
no event shall the exercise of a party’s right to seek specific performance pursuant to this Section 10.15 reduce, restrict
or otherwise limit such party’s right to terminate this Agreement pursuant to Section 9.1 or such party’s right
to pursue (subject to Section 9.2) all applicable remedies at law, including seeking money damages.
(d) Notwithstanding
Sections 10.15(a)-(c), and subject to the last sentence of this Section 10.15(d), it is explicitly agreed that
the Company shall be entitled to specific performance of Parent’s obligation to cause the Equity Financing and the Warrant Financing
to be funded in accordance with the terms of the Equity Commitment Letter or the Warrant Commitment Letters to fund the transactions contemplated
by this Agreement and consummate the Closing only in the event that (i) all conditions in Article 7 and Section 8.4
and Section 8.5 have been satisfied or waived (other than those that by their terms are to be satisfied at the Closing) and Parent
fails to consummate the Merger on the date the Closing should have occurred pursuant to Section 3.1, (ii) the financing
provided for by the Debt Commitment Letter (or, if Alternative Financing is being used in accordance with Section 6.16(d),
pursuant to the Financing Commitments with respect thereto) has been funded or will be funded at the Closing if the Equity Financing and
the Warrant Financing are funded at the Closing and (iii) the Company has confirmed that it is ready, willing and able to consummate
the Closing if specific performance is granted and the Equity Financing, the Warrant Financing and the Debt Financing are funded. The
Company, on behalf of itself and its Subsidiaries, and the Stockholders’ Representative, on behalf of itself and each Stockholder,
agree not to, and shall not permit any of their respective controlled Affiliates to, directly or indirectly bring any action or proceeding
seeking specific performance against any of the Debt Financing Sources relating to or in any way arising out of this Agreement, the Debt
Financing, any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby.
Section 10.16 No
Recourse. Except as otherwise expressly provided herein, this Agreement may only be enforced against,
and any claims or causes of action (whether in tort, contract or otherwise) for breach of this Agreement may only be made against the
entities that are expressly identified as parties hereto and no other Person shall have any liability for any obligations or liabilities
of the parties to this Agreement for any claim or cause of action (whether in tort, contract or otherwise) for breach of this Agreement
or in respect of any oral representations made or alleged to be made in connection herewith. All claims or causes of action (whether
in tort, contract or otherwise) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance
of this Agreement (including any representation or warranty made in or in connection with this Agreement or as an inducement to enter
into this Agreement), shall be subject to the limitations in Section 9.2 and Section 10.1 and may be made only
against the entities that are expressly identified as parties hereto. No Person who is not a named party to this Agreement, including
any director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of any named
party to this Agreement (“Non-Party Affiliates”), shall have any liability (whether in contract or in tort, in law
or in equity, or based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates), for any obligations
or liabilities arising under, in connection with or related to this Agreement or for any claim or cause of action (whether in tort, contract
or otherwise) based on, in respect of, or by reason of this Agreement or its negotiation, execution or performance; and each party hereto
waives and releases all such liabilities, claims and obligations against any such Non-Party Affiliates.
Section 10.17 Severability.
If any term, provision, agreement, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, agreements, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a reasonably
acceptable manner so that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.
Section 10.18 Stockholders’
Representative.
(a) To
the fullest extent permitted by Law, by virtue of the adoption of this Agreement by the Stockholders in accordance with Section 251
of the DGCL, the Stockholders’ Representative is hereby (i) delegated the exclusive power and authority with respect to the
enforcement of the rights of the Equityholders under this Agreement and the Escrow Agreement and (ii) authorized, directed and appointed,
as set forth in the Letters of Transmittal, to act as sole and exclusive agent, attorney-in-fact and representative of the Equityholders,
with full power of substitution and re-substitution, with respect to all matters under this Agreement and the Escrow Agreement, including
determining, giving and receiving notices and processes hereunder, receiving certain distributions of the Escrow Account or otherwise
payable to the Equityholders pursuant to this Agreement for the benefit of the Equityholders, executing and delivering, on behalf of the
Equityholders, any and all documents or certificates to be executed by the Equityholders, in connection with this Agreement or the Escrow
Agreement and the transactions contemplated hereby and thereby, granting any waiver, consent or approval on behalf of the Equityholders
under this Agreement or the Escrow Agreement, appointing one or more successor Stockholders’ Representatives, contesting and settling
any and all claims in respect of this Agreement or the Escrow Agreement and the transactions contemplated hereby and thereby, resolving
any other disputes hereunder, performing the duties expressly assigned to the Stockholders’ Representative hereunder, engaging and
employing agents and Representatives and incurring such other costs, fees and expenses as the Stockholders’ Representative shall
reasonably deem necessary or prudent in connection with the foregoing, taking any action or providing any waiver, or receiving any notice
with respect to any claims in respect of this Agreement or the Escrow Agreement and the transactions contemplated hereby and thereby,
and settling any claim or controversy arising with respect thereto. Any such actions taken, exercises of rights, power or authority, and
any decision or determination made by the Stockholders’ Representative consistent herewith, shall, to the fullest extent permitted
by Law, be absolutely and irrevocably binding on each Equityholder as if such Equityholder personally had taken such action, exercised
such rights, power or authority or made such decision or determination in such Equityholder’s individual capacity, and no Equityholder
shall have the right to object, dissent, protest or otherwise contest the same.
(b) The
appointment of the Stockholders’ Representative as each Equityholder’s attorney-in-fact pursuant to Section 10.18(a)
revokes any power of attorney heretofore granted that authorized any other Person to represent such Equityholder with regard to the matters
described in Section 10.18(a). The appointment of the Stockholders’ Representative as attorney-in-fact pursuant hereto
is coupled with an interest and is irrevocable. The obligations of each Equityholder pursuant to this Agreement (i) will not be terminated
by operation of law, death, mental or physical incapacity, liquidation, dissolution, bankruptcy, insolvency or similar event with respect
to such Equityholder or any proceeding in connection therewith, or in the case of a trust, by the death of any trustee or trustees or
the termination of such trust, or any other event, and (ii) shall survive the delivery of an assignment by any Equityholders of the
whole or any fraction of its interest in any payment due to it under this Agreement.
(c) The
Stockholders’ Representative hereby accepts the foregoing appointment and agrees to serve as Stockholders’ Representative,
subject to the provisions hereof, for the period of time from and after the date hereof without compensation except for the reimbursement
from the Equityholders, in accordance with this Agreement, of costs, fees and expenses incurred by Stockholders’ Representative
in its capacity as such.
(d) In
the event that the costs, fees and expenses incurred by the Stockholders’ Representative, in its capacity as such, are in excess
of the Stockholders’ Representative Expense Amount, the Stockholders’ Representative shall be entitled to be reimbursed by
the Equityholders (including by offsetting such amount against any amounts owed to the Equityholders), and the Equityholders agree to
so reimburse the Stockholders’ Representative, and make the Stockholders’ Representative whole for such shortfall. Upon written
notice from the Stockholders’ Representative to the Equityholder as to the existence of a shortfall, including a reasonably detailed
description as to such shortfall, each Equityholder shall promptly deliver to the Stockholders’ Representative full payment of his
or her ratable share of the amount of such shortfall based upon the Distribution Schedule determined from the Final Purchase Price.
(e) For
all purposes of this Agreement and the Escrow Agreement, Parent shall be entitled to rely conclusively on the instructions and decisions
of the Stockholders’ Representative as to the settlement of any claims in respect of this Agreement or the Escrow Agreement and
the transactions contemplated hereby and thereby or any other actions required or permitted to be taken by the Stockholders’ Representative
hereunder or in connection with any of the transactions and other matters contemplated hereby or thereby.
(f) The
Stockholders’ Representative shall not, in the absence of bad faith, willful misconduct or gross negligence, have any liability
to the Equityholders whatsoever with respect to its actions, decisions and determinations under this Agreement, and shall be entitled
to assume that all actions, decisions and determinations under this Agreement are fully authorized by each and every one of the Equityholders.
(g) The
Stockholders’ Representative shall be entitled to rely upon any Order, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein or the propriety
or validity of the service thereof. The Stockholders’ Representative may act in reliance upon any instrument or signature believed
by it to be genuine and may assume that the Person purporting to give receipt or advice or make any statement or execute any document
in connection with the provisions hereof has been duly authorized to do so. The Stockholders’ Representative may conclusively presume
that the undersigned representative of any party hereto which is an entity other than a natural person has full power and authority to
instruct the Stockholders’ Representative on behalf of that party unless written notice to the contrary is delivered to the Stockholders’
Representative.
(h) The
Stockholders’ Representative may act pursuant to the advice of counsel with respect to any matter relating to this Agreement and
shall not be liable for any action taken or omitted by it in good faith in accordance with such advice.
(i) Parent
hereby agrees that the Stockholders’ Representative shall not, in its capacity as such, have any liability to Parent, Merger Sub
or the Surviving Corporation whatsoever with respect to its actions, decisions or determinations under this Agreement.
(j) The
rights, powers, benefits and obligations of the Stockholders’ Representative under this Agreement shall survive any termination
of this Agreement.
Section 10.19 Expenses.
Whether or not the transactions contemplated by this Agreement are consummated, and except as otherwise provided in this Agreement, including
Section 6.16 (Financing) and Section 9.2 (Effect of Termination), each party to this Agreement
will bear its respective fees, costs and expenses incurred in connection with the preparation, negotiation, execution and performance
of this Agreement or the transactions contemplated by this Agreement (including legal, accounting and other professional fees). Without
limiting the foregoing, Parent will pay and be solely responsible for all fees and expenses related to the Financing incurred in connection
with the Closing.
Section 10.20 Debt
Financing Sources. Notwithstanding anything in this
Agreement to the contrary, (i) the Company, on behalf of itself, the Company Subsidiaries and each of its controlled Affiliates
and (ii) the Stockholders’ Representative, on behalf of itself and each Stockholder, hereby:
(a) agree
that any proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Debt Financing Sources, arising
out of or relating to, this Agreement, the Debt Financing and/or any of the agreements (including the Debt Commitment Letter and any Definitive
Debt Financing Agreements related to the Debt Financing) entered into in connection with the Debt Financing or any of the transactions
contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of any federal
or state court in the Borough of Manhattan, New York, New York, and any appellate court thereof and each party hereto irrevocably submits
itself and its property with respect to any such proceeding to be the exclusive jurisdiction of such court;
(b) agree
that any such proceeding shall be governed by, construed and enforced under the laws of the State of New York (without giving effect to
any conflicts of law principles that would result in the application of the laws of another state), except as otherwise provided in the
Debt Commitment Letter or other applicable Definitive Debt Financing Agreement relating to the Debt Financing;
(c) without
limiting the rights of Parent and/or Merger Sub under the Debt Commitment Letter and/or any right or remedy available to any person under
the Definitive Debt Financing Agreements governing the Debt Financing, agree not to bring or support or permit any of its Affiliates to
bring or support any proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise,
against any Debt Financing Source in any way arising out of or relating to, this Agreement, the Debt Commitment Letter, the Definitive
Debt Financing Agreements related to the Debt Financing, the Debt Financing or any of the transactions contemplated hereby or thereby
or the performance of any services thereunder in any forum other than any federal or state court in the Borough of Manhattan, New York,
New York;
(d) agree
that service of process upon the Company, the Company Subsidiaries or its controlled Affiliates in any such proceeding shall be effective
if notice is given in accordance with Section 10.5;
(e) irrevocably
waive, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such Action in
any such court;
(f) knowingly,
intentionally and voluntarily waive, to the fullest extent permitted by applicable law, trial by jury in any proceeding brought against
any Debt Financing Source in any way arising out of or relating to this Agreement, the Debt Commitment Letter, the Definitive Debt Financing
Agreements related to the Debt Financing, the Debt Financing or any of the transactions contemplated hereby or thereby or the performances
of any services thereunder;
(g) without
limiting the rights of Parent and/or Merger Sub under the Debt Commitment Letter and/or any right or remedy available to any person under
the Definitive Debt Financing Agreements governing the Debt Financing, agree that none of the Debt Financing Sources will have any liability
to the Company or any of the Company Subsidiaries or any of their respective equityholders and controlled Affiliates (in each case, other
than Parent and its subsidiaries) relating to or arising out of this Agreement, the Debt Commitment Letter, the Definitive Debt Financing
Agreements related to the Debt Financing, the Debt Financing or any of the transactions contemplated hereby or the performance of any
services thereunder, whether in law or in equity, whether in contract or in tort or otherwise;
(h) (A)
waive any and all rights or claims against the Debt Financing Sources in connection with the Agreement, the Debt Commitment Letter, the
Definitive Debt Financing Agreements related to the Debt Financing, the Debt Financing or any of the transactions contemplated hereby
or the performance of any services thereunder, whether in law or in equity, whether in contract or in tort or otherwise, and (B) agrees
not to commence (and if commenced agrees to dismiss or otherwise terminate) any proceeding or legal or equitable action against any Debt
Financing Source in connection with this Agreement, the Debt Commitment Letter, the Definitive Debt Financing Agreements related to the
Debt Financing, the Debt Financing or any of the transactions contemplated hereby or the performance of any services thereunder;
(i) agree
that no Debt Financing Source shall be subject to any special, consequential, punitive or indirect damages or damages of a tortious nature
in connection with this Agreement, the Debt Financing or the Debt Commitment Letter or any of the transactions contemplated hereby or
thereby or the performance of any services thereunder; and
(j) agree
that the Debt Financing Sources are express third party beneficiaries of, and may rely upon and enforce, any of the provisions of Section
9.2(e), Section 10.8(c), Section 10.15(d), Section 10.16 and this Section 10.20
and that such provisions and the definition of “Debt Financing Sources” (or any other provision of this Agreement to the extent
such amendment, modification or waiver would modify the substance of such section or such definition) shall not be amended, modified or
waived in any way adverse to any Debt Financing Source without the prior written consent of such Debt Financing Source. This Section 10.20
will, with respect to the matters referenced herein, supersede any provision of this Agreement to the contrary. The provisions of this
Section 10.20 will survive any termination of this Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement as of the date first above written.
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ADMIRAL ACQUISITION
LIMITED |
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By: |
/s/ Robert A.E. Franklin |
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Name: |
Robert A.E. Franklin |
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Title: |
Director |
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AAL MERGER SUB, INC. |
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By: |
/s/ Desiree DeStefano |
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Name: |
Desiree DeStefano |
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Title: |
Chief Financial Officer |
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ASP
ACUREN HOLDINGS, INC.
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By: |
/s/ Michael Sand |
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Name: |
Michael Sand |
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Title: |
President |
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ASP ACUREN INVESTCO LP |
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By: |
/s/ Michael Sand |
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Name: |
Michael Sand |
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Title: |
Vice President |
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
ACUREN CORPORATION
First. The
name of the corporation is Acuren Corporation (the “Corporation”).
Second. The
address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of
New Castle, State of Delaware, 19808. The name of its registered agent at such address is Corporation Service Company.
Third. 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.
Fourth.
A. CLASSES
OF STOCK.
1. Capital
Stock. The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is Five Hundred
Five Million (505,000,000) shares, divided into two (2) classes consisting of the numbers of shares and series thereof as follows: (i)
Five Hundred Million (500,000,000) shares, par value $0.0001 per share, of common stock (the “Common Stock”); and (ii)
five Million (5,000,000) shares, par value $0.0001 per share, of preferred stock (the “Preferred Stock”), of which
one Million (1,000,000) shares are designated as “Series A Preferred Stock” (the “Series A Preferred Stock”).
2. Additional
Series of Preferred Stock. The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly
authorized, by resolution or resolutions thereof, to provide from time to time out of the unissued shares of Preferred Stock for one or
more series of Preferred Stock, and, with respect to each such series, to fix the number of shares constituting such series and the designation
of such series, the powers (including voting powers), if any, of the shares of such series and the preferences and relative, participating,
optional, special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the shares of such series.
The designations, powers (including voting powers), preferences and relative, participating, optional, special and other rights of each
series of Preferred Stock, if any, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and
all other series of Preferred Stock at any time outstanding. The number of authorized shares of Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of
all of the then outstanding shares of capital stock of the Corporation entitled to vote irrespective of Section 242(b)(2) of the General
Corporation Law of the State of Delaware, without the separate vote of the holders of the Preferred Stock as a class.
B. COMMON
STOCK.
1. Dividends.
Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock then outstanding, dividends may be declared
and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.
2. Voting
Rights. Except as may otherwise be provided in the certificate of incorporation of the Corporation (including any certificate filed
with the Secretary of State of the State of Delaware establishing a series of Preferred Stock) or by applicable law, each holder of Common
Stock, as such, shall be entitled to one (1) vote for each share of Common Stock held of record by such holder on all matters on which
stockholders generally are entitled to vote, and no holder of any series of Preferred Stock, as such, shall be entitled to any voting
powers in respect thereof.
3. Liquidation
Rights. Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock then outstanding, in the
event of any liquidation, dissolution or winding up of the Corporation, the holders of the Common Stock shall be entitled to receive the
assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares of Common Stock
held by them. A merger or, consolidation, statutory conversion, domestication, continuance or statutory transfer of the Corporation, or
a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation, dissolution
or winding up of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be a liquidation, dissolution
or winding up of the Corporation within the meaning of this Section 3.
C. SERIES
A PREFERRED STOCK.
The powers (including voting
powers), if any, and the preferences and relative, participating, optional, special or other rights, if any, and the qualifications, limitations
or restrictions, if any, of the shares of Series A Preferred Stock are as follows:
1. Definitions.
The following terms have the following meanings for purposes of this Part C of this Article:
a. “Acquisition”
means the acquisition of ASP Acuren Holdings, Inc. pursuant to the Merger Agreement, which was consummated on July 30, 2024.
b. “Admission”
means the initial admission of ordinary shares of Acuren Corporation (f/k/a Admiral Acquisition Limited) to the standard listing segment
of the Official List maintained by the Financial Conduct Authority of the United Kingdom or any successor, acting in its capacity as competent
authority for the purposes of admission to the Official List and to trading on the London Stock Exchange’s main market for listed
securities, which occurred on May 22, 2023.
c. “Annual
Dividend Amount” for each Dividend Period means:
A x B, where
“A” = an amount
equal to twenty percent (20%) of the increase (if any) in the value of a share of Common Stock, such increase calculated as being the
difference between (i) the Dividend Price for the relevant Dividend Period, and (ii) (x) if no Annual Dividend Amount has previously been
paid, a price of $10.00 per share of Common Stock, or (y) if an Annual Dividend Amount has previously been paid, the highest Dividend
Price for any prior Dividend Period, which such amount shall be adjusted to account for any subdivision (by stock split, subdivision,
exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise)
or similar reclassification of the issued and outstanding shares of Common Stock after the original filing of the certificate of incorporation
of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification of the issued and outstanding
shares of Series A Preferred Stock; and
“B” = the Preferred
Share Dividend Equivalent.
d. “Average
Price” means, in respect of shares of Common Stock or any other security of the Corporation, as of any date or relevant period
(as applicable): (i) the volume weighted average price for such security on the New York Stock Exchange for such date or relevant period
(as applicable) as reported by Bloomberg through its “Volume at Price” function with “Calculation” mode set to
“Bloomberg Definition” as reported up to two hours after the respective market closes on such date or each date of the relevant
period (as applicable); (ii) if the Board of Directors determines by a resolution of the Board of Directors that the New York Stock Exchange
is not the principal securities exchange or trading market for that security, the volume weighted average price of that security for such
date or relevant period (as applicable) on the principal securities exchange or trading market on which that security is listed or traded
as reported by Bloomberg through its “Volume at Price” functions; (iii) if the foregoing do not apply, the last closing trade
price or average of the last closing trade price for each Trading Day of the relevant period (as applicable) of that security in the over-the-counter
market on the electronic bulletin board for that security as reported by Bloomberg; or (iv) if no last closing trade price is reported
for that security by Bloomberg, the last closing ask price or the average of the last ask price for each Trading Day of the relevant period
(as applicable) of that security as reported by Bloomberg; provided, however, if the Average Price cannot be calculated for that security
on such date or relevant period on any of the foregoing bases, the Average Price of that security on such date or relevant period shall
be the fair market value as mutually determined by the Corporation and the holders of at least a majority of the then outstanding shares
of Series A Preferred Stock (acting reasonably), separately as a single class.
e. “Bloomberg”
means Bloomberg Financial Markets.
f. “Merger
Agreement” means the Merger Agreement, entered into as of May 21, 2024, by and among the Corporation, ASP Acuren Holdings, Inc.,
AAL Merger Sub, Inc. and ASP Acuren Investco LP, as shareholder representative, as amended.
g. “Change
of Control” means (a) the acquisition of Control by any person or party (or by any group of persons or parties who are acting
in concert) whether by merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise or (b)
any sale, lease or exchange of all or substantially all of the property and assets of the Corporation, including its goodwill and its
corporate franchises (which for the purposes of this definition only, the property and assets of the Corporation shall include the property
and assets of any wholly owned and controlled, directly or indirectly, subsidiary of the Corporation).
h. “Change
of Control Dividend Amount” means the aggregate amount determined by adding together each Annual Dividend Amount that
would have been payable for each Dividend Period (or part thereof) occurring during the Change of Control Dividend Period assuming
that (a) there is no liquidation, dissolution or winding up of the Corporation during the Change of Control Dividend Period, (b)
there is not an automatic conversion of shares of Series A Preferred Stock into shares of Common Stock on the Mandatory Conversion
Date during the Change of Control Dividend Period, (c) no Change of Control occurs during the Change of Control Dividend Period and
(d) the Dividend Price means, for each Dividend Period (or part thereof) in the Change of Control Dividend Period, the amount equal
to the Change of Control Price increasing by eight percent (8%) per annum (compounded annually)for each such Dividend Period (or
part thereof). For the avoidance of doubt, for the period beginning on the Change of Control Dividend Date and ending on the last
day of the Financial Year in which the Change of Control occurred, the eight percent per annum would be applied as a pro rata
percentage based on the portion of the year between the Change of Control Dividend Date and the last day of the Financial Year in which the Change of Control occurred. The
resulting price calculated would then apply 8% per annum (compounded annually) for each such remaining full Dividend Period.
i. “Change
of Control Dividend Date” has the meaning specified in Section 2(b).
j. “Change
of Control Dividend Period” means the period beginning on the date of the consummation of the Change of Control and ending on
the last day of the tenth (10th) full Financial Year following the completion of the Acquisition (or if such day is not a Trading
Day, the first Trading Day immediately following such day).
k. “Change
of Control Price” means either (i) the cash amount per share of Common Stock to be received by holders of such shares in connection
with a Change of Control or (ii) where the amount per share of Common Stock to be received by holders of such shares in connection with
a Change of Control is in a form other than cash, the Average Price per Common Stock for the last ten (10) consecutive Trading Days prior
to the consummation of the Change of Control event.
l. “Control”
means: (i) the power (whether by way of record or beneficial ownership of shares, proxy, contract, agency or otherwise) to: (a) cast,
or control the casting of, at least a majority of the maximum number of votes that might be cast at an annual meeting of the Corporation,
or (b) appoint or remove all, or a majority of the Board of Directors, or (c) give directions with respect to the operating and financial
policies of the Corporation with which the Board of Directors is obliged to comply, and/or (ii) the holding beneficially of at least a
majority of the voting power of the issued and outstanding shares of the Corporation (excluding any issued shares that carry no right
to participate beyond a specified amount in a distribution of either profits or capital).
m. “Dividend
Date” means in respect of a Dividend Period, the last Trading Day of such Dividend Period.
n. “Dividend
Period” means, each Financial Year, except that: (i) in the event of the Corporation’s dissolution, the relevant Dividend
Period shall end on the Trading Day immediately prior to the date of dissolution; and (ii) in the event of the automatic conversion of
shares of Series A Preferred Stock into shares of Common Stock on the Mandatory Conversion Date, the relevant Dividend Period shall end
on the Trading Day immediately prior to the Mandatory Conversion Date.
o. “Dividend
Price” means the Average Price per share of Common Stock for the last ten (10) consecutive Trading Days of the relevant Dividend
Period.
p. “Financial
Year” means the financial year of the Corporation, being each period of the same calendar year ending on December 31 of such
calendar year or such other financial year(s) (each of which may be a twelve (12) month period or any longer or shorter period) as may
be determined from time to time by resolution of the Board of Directors.
q. “Junior
Stock” means the Common Stock and any series of Preferred Stock then outstanding ranking junior to the Series A Preferred Stock
as to dividends or as to distributions payable to holders of capital stock of the Corporation upon a liquidation, dissolution or winding
up of the Corporation, as applicable.
r. “London
Stock Exchange” means London Stock Exchange plc.
s. “Mandatory
Conversion Date” means the earlier of (i) immediately following the Change of Control Divided Date and (ii) the last day of
the tenth (10th) full Financial Year of the Corporation after July 30, 2024, or, if such date is not a Trading Day, the first
Trading Day immediately following such date.
t. “NYSE”
means the New York Stock Exchange or any successor national securities exchange.
u. “Parity
Stock” means any series of Preferred Stock then outstanding ranking on parity with the Series A Preferred Stock as to dividends
or as to distributions payable to the holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the
Corporation, as applicable.
v. “Payment
Date” means the date fixed by the Board of Directors for the payment of the Annual Dividend Amount, which date shall be no later
than ten (10) Trading Days after the Dividend Date, except in respect of any Annual Dividend Amount becoming due on the Trading Day immediately
prior to the date of the Corporation’s dissolution, in which case, such date shall be such Trading Day.
w. “Preferred
Share Dividend Equivalent” means such number of shares of Common Stock equal to the number of ordinary shares of Acuren Corporation
(or shares of Common Stock) outstanding on (i) the four-month anniversary of the closing of the Acquisition; or (ii) if the relevant Dividend
Date falls before the four-month anniversary of the closing of the Acquisition, such earlier Dividend Date, in either case including ordinary
shares of Acuren Corporation (or shares of Common Stock) issued pursuant to the exercise of Warrants, but excluding any ordinary shares
of Acuren Corporation issued to shareholders or other beneficial owners of ASP Acuren Holdings, Inc. pursuant to or in connection with
the Acquisition, which such amount shall be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend,
reclassification or otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification
of the issued and outstanding shares of Common Stock into a greater or lesser number of shares occurring after the original filing of
the certificate of incorporation of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification
of the outstanding shares of Series A Preferred Stock.
x. “SEC”
means the United States Securities and Exchange Commission.
y. “Senior
Stock” means any series of Preferred Stock then outstanding ranking senior to the Series A Preferred Stock as to dividends or
as to distributions payable to holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation,
as applicable.
z. “Trading
Date” means any date on which the NYSE (or other applicable securities exchange or quotation system) is open for business and
on which shares of Common Stock may be traded (other than a day on which the NYSE (or other applicable securities exchange or quotation
system) is scheduled to or does close prior to its regular weekday closing time).
aa. “Twenty-Percent
Equivalent Amount” means the amount obtained by multiplying the dividend that would be distributable on a number of shares of
Common Stock equal to the Preferred Share Dividend Equivalent by 0.20.
bb. “Warrant
Instrument” means the instrument constituting the Warrants executed by Acuren Corporation on May 16, 2023, as supplemented on
or about May 21, 2024, as amended and restated by the Amended and Restated Warrant Instrument, dated on or about September 23, 2024, as
the same may be amended and/or restated from time to time.
cc. “Warrants”
means the warrants conferring the right to subscribe for ordinary shares of Acuren Corporation (or shares of Common Stock) of Acuren Corporation
issued pursuant to the Warrant Instrument.
2. Dividends.
a. Preferential
Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), and on parity with the holders of any
Parity Stock (as to dividends), the holders of the Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of assets legally available therefor, and payable in preference and priority to the declaration or
payment of any dividends on any Junior Stock (as to dividends), cumulative annual dividends of the Annual Dividend Amount commencing
from the date that is both (i) on or after the consummation of the Acquisition, and (ii) after the Average Price per share of Common
Stock (as adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or
otherwise) or combination (by reverse stock split, exchange, reclassification or otherwise) or similar reclassification of the
outstanding shares of Common Stock into a greater or lesser number of shares occurring after the original filing of the certificate
of incorporation of the Corporation without a proportionate and corresponding subdivision, combination or similar reclassification
of the outstanding shares of Series A Preferred Stock) for any ten (10) consecutive Trading Days following the Admission of at least
$11.50. The Annual Dividend Amount shall be paid in shares of Common Stock. The Annual Dividend Amount shall be paid on the Payment
Date and shall be allocated among the holders of shares of Series A Preferred Stock pro rata based on the number of shares of
Series A Preferred Stock held by them on the relevant Dividend Date. Each holder of a share of Series A Preferred Stock shall be
entitled to receive such number of whole shares of Common Stock as is determined by dividing the pro rata amount of the
Annual Dividend Amount to which a holder is entitled by the Dividend Price. For the avoidance of doubt, the Annual Dividend Amount
shall be payable in full and shall not be subject to prorating notwithstanding any Dividend Period being longer or shorter than
twelve (12) months.
b. Change of Control
Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), each holder of shares of Series A Preferred
Stock shall be entitled to receive out of assets legally available therefor, that number of shares of Common Stock equal to (i) the number
of shares of Series A Preferred Stock held by such holder immediately prior to the consummation of the Change of Control (the “Change
of Control Dividend Date”), multiplied by (ii) the Change of Control Dividend Amount, divided by (iii) the number of shares
of Series A Preferred Stock outstanding as of the Change of Control Dividend Date.
c. Participation
Dividends. Subject to the rights of the holders of any Senior Stock (as to dividends), the holders of the Series A Preferred
Stock shall be entitled to receive when, as and if a dividend (other than a dividend paid in shares of the Corporation) is declared
on the Common Stock by the Board of Directors out of assets legally available therefor, and on parity with the Common Stock and any
series of Preferred Stock then outstanding ranking on parity with the Common Stock as to dividends, (i) a dividend per share of
Series A Preferred Stock equal to the product obtained by multiplying the number of shares of Common Stock into which such share of
Series A Preferred Stock could then be converted pursuant to Section 5(b), by the dividend payable on each share of
Common Stock, and (ii) from and after the consummation of the Acquisition, a dividend per share of Series A Preferred Stock
equal to the amount determined by dividing the Twenty-Percent Equivalent Amount by the number of shares of Series A Preferred Stock
outstanding on the record date for such dividend.
3. Voting
Rights.
a. Generally.
Except as may otherwise be provided in the certificate of incorporation of the Corporation or by applicable law, each holder of Series
A Preferred Stock, as such, shall be entitled to one (1) vote for each share of Series A Preferred Stock held of record by such holder
on all matters on which stockholders generally are entitled to vote.
b. Protective
Provisions. For so long as any shares of Series A Preferred Stock shall remain outstanding, the Corporation shall not, without the
prior vote or consent of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, voting or consenting
separately as a single class, amend, alter or repeal any provision of the certificate of incorporation of the Corporation, whether by
merger, consolidation, statutory conversion, domestication, continuance, statutory transfer or otherwise, if such amendment, alteration
or repeal would adversely alter or change the powers (including voting powers), if any, or the preferences or relative, participating,
optional, special or other rights, if any, or the qualifications, limitations or restrictions, if any, of the Series A Preferred Stock.
c. Action
by Consent. Notwithstanding Article SIXTH, any action required or permitted to be taken at any meeting of the holders of Series A
Preferred Stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of the Series A Preferred Stock then outstanding having not less than the minimum
number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Series A Preferred Stock
then outstanding were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes of proceedings
of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered
mail, return receipt requested. Prompt notice of the taking of corporate action without a meeting by less than unanimous consent of the
holders of Series A Preferred Stock shall, to the extent required by applicable law, be given to those holders of Series A Preferred Stock
who have not consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record
date for notice of such meeting had been the date that consents signed by a sufficient number of holders of Series A Preferred Stock to
take the action were delivered to the Corporation.
4. Liquidation.
In the event of any liquidation, dissolution or winding up of the Corporation, subject to the rights of the holders of any Senior Stock
(as to distributions payable to the holders of capital stock of the Corporation upon a liquidation, dissolution or winding up of the Corporation),
and on parity with the holders of any Parity Stock (as to distributions payable to the holders of capital stock of the Corporation upon
a liquidation, dissolution or winding up of the Corporation) the holders of the Series A Preferred Stock shall be entitled to receive
the assets of the Corporation available for distribution to its stockholders ratably with the holders of the Common Stock in proportion
to the number of shares of Common Stock into which such shares of Series A Preferred Stock could then be converted pursuant to Section
5(b). A merger, consolidation, statutory conversion, domestication, continuance or statutory transfer of the Corporation, or a sale
or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation, dissolution or winding
up of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be liquidation, dissolution or winding
up of the Corporation within the meaning of this Section 4.
5. Conversion.
a. Automatic
Conversion. Upon the Mandatory Conversion Date, each outstanding share of Series A Preferred Stock shall automatically be converted
into one (1) share of Common Stock.
b. Optional
Conversion. Each outstanding share of Series A Preferred Stock may be converted into one (1) share of Common Stock by written notice
of the holder thereof delivered to the Corporation specifying the number of shares of Series A Preferred Stock to be converted (if such
notice is silent as to the number of shares of Series A Preferred Stock held by the holder and proposed to be converted hereunder, the
notice shall be deemed to apply to all shares of Series A Preferred Stock held by such holder) and the surrender of the certificate(s)
representing the shares of Series A Preferred Stock proposed to be converted hereunder, duly indorsed for transfer to the Corporation,
on the fifth (5th) Trading Day following receipt of said notice and certificate(s) by the Corporation (the “Optional
Conversion Date”).
c. Mechanics
of Conversion. Before any holder of shares of Series A Preferred Stock shall be entitled to receive certificate(s) representing the
shares of Common Stock into which shares of Series A Preferred Stock shall have been converted pursuant to this Section 5, such
holder shall surrender the certificate(s) representing such shares of Series A Preferred Stock to the Corporation, duly indorsed for transfer
to the Corporation. The Corporation shall, as soon as practicable, and in no event later than ten (10) days after the delivery of said
certificate(s), issue and deliver to such holder, or the nominee or nominees of such holder, certificate(s) representing the number of
shares of Common Stock to which such holder shall be entitled under this Section 5, and the certificate(s) representing the share(s)
of Series A Preferred Stock so converted shall be cancelled. The person(s) entitled to receive share(s) of Common Stock issuable upon
conversion of share(s) of Series A Preferred Stock pursuant to this Section 5 shall be treated for all purposes as the record holder(s)
of such shares of Common Stock as of the Mandatory Conversion Date or the Optional Conversion Date, as applicable.
d. Adjustments.
In the event that at any time or from time to time after the original filing of this certificate of incorporation, the Corporation effects
a subdivision (by stock split, subdivision, exchange, stock dividend, reclassification or otherwise) or combination (by reverse stock
split, exchange, reclassification or otherwise) or similar reclassification of the outstanding shares of Common Stock into a greater or
lesser number of shares without a proportionate and corresponding subdivision, combination or similar reclassification of the outstanding
shares of Series A Preferred Stock, then and in each such event, the share(s) of Common Stock to be received upon conversion of share(s)
of Series A Preferred Stock pursuant to this Section 5 shall be proportionately increased or decreased, as applicable.
6. Reservation
of Shares.
a. The
Corporation shall at all times keep reserved, free from preemptive rights, out of its authorized but unissued shares of Common Stock,
or shares held in treasury, sufficient shares of Common Stock to provide for the conversion of Series A Preferred Stock as required by
the certificate of incorporation of the Corporation.
b. Notwithstanding
the foregoing, the Corporation shall be entitled to deliver upon conversion of Series A Preferred Stock, as herein provided, shares of
Common Stock reacquired and held in the treasury of the Corporation (in lieu of the issuance of authorized and unissued Common Stock),
so long as any such treasury shares are free and clear of all liens, charges, security interests or encumbrances.
c. All
shares of Common Stock delivered upon conversion of the Series A Preferred Stock shall be duly authorized, validly issued, fully paid
and non-assessable, free and clear of all liens, claims, security interests and other encumbrances.
7. Waiver.
The powers (including voting powers), if any, of the Series A Preferred Stock and the preferences and relative, participating, optional,
special or other rights, if any, and the qualifications, limitations or restrictions, if any, of the Series A Preferred Stock may be waived
as to all shares of Series A Preferred Stock in any instance (without the necessity of calling, noticing or holding a meeting of stockholders)
by the consent or agreement of the holders of at least a majority of the shares of Series A Preferred Stock then outstanding, consenting
or agreeing separately as a single class.
Fifth. Board
of Directors.
1. Management.
The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
2. Removal
of Directors. Except for removal without cause of any directors elected by the holders of any series of Preferred Stock then outstanding
(collectively, the “Preferred Directors” and each, a “Preferred Director”), any director or the
entire Board of Directors may be removed, solely by the affirmative vote of the holders of at least a majority in voting power of the
then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as
a single class.
3. Vacancies.
Subject to the rights, if any, of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting
from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from the death, resignation,
disqualification, removal or other cause shall be filled solely and exclusively by a majority of the directors then in office, although
less than a quorum, or by the sole remaining director. Any director so elected shall hold office until the expiration of the term of office
of the director whom he or she has replaced and until his or her successor shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
4. Automatic
Increase/Decrease in Authorized Directors. During any period when the holders of any series of Preferred Stock then outstanding have
the right to elect one or more Preferred Directors, then upon commencement of, and for the duration of, the period during which such right
continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified
Preferred Directors, and the holders of such series of Preferred Stock shall be entitled to elect such Preferred Director or Directors;
and (ii) each such Preferred Director shall serve until such director’s successor shall have been duly elected and qualified, or
until such director’s right to hold such office terminates, whichever occurs earlier, subject to such director’s earlier death,
resignation, disqualification or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions providing
for such series of Preferred Stock pursuant to the provisions of Article FOURTH, whenever the holders of any series of Preferred Stock
then outstanding having the right to elect one or more Preferred Directors are divested of such right pursuant to the provisions of such
capital stock, the term of office of each such Preferred Director elected by the holders of such series of Preferred Stock, or elected
to fill any vacancy resulting from the death, resignation, disqualification or removal of each such Preferred Director, shall forthwith
terminate and the total authorized number of directors of the Corporation shall automatically be decreased by such specified number of
directors.
5. No
Written Ballot. Unless and except to the extent that the bylaws of the Corporation shall so require, the election of directors of
the Corporation need not be by written ballot.
6. Amendment
of Bylaws. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors
is expressly authorized to adopt, alter, amend and repeal the bylaws of the Corporation. In addition to any affirmative vote required
by the certificate of incorporation of the Corporation, any bylaw that is to be adopted, altered, amended or repealed by the stockholders
of the Corporation shall receive the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2⁄3%)
in voting power of the then outstanding shares of stock of the Corporation generally entitled to vote, voting together as a single class.
7. Meetings
of Stockholders. Except as may otherwise be provided for or fixed pursuant to the provisions of Article FOURTH relating to the rights
of the holders of any series of Preferred Stock then outstanding, special meetings of stockholders for any purpose or purposes may be
called at any time, but only by (a) the Chief Executive Officer of the Corporation, (b) any Chairman of the Board of Directors, or (c)
the Board of Directors. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by another person
or persons. Any meeting of stockholders may be postponed by action of the Board of Directors or by the person calling such meeting (if
other than the Board of Directors) at any time in advance of such meeting.
Sixth. Except
as may otherwise be provided for or fixed pursuant to the provisions of Article FOURTH relating to the rights of the holders of any series
of Preferred Stock then outstanding, no action that is required or permitted to be taken by the stockholders of the Corporation at any
annual or special meeting of stockholders may be effected by consent of stockholders in lieu of a meeting of stockholders.
Seventh. A
director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the General
Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the
foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect
of any act or omission occurring prior to the time of such amendment, modification or repeal.
Eighth. Unless
the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action
or proceeding brought by or on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director,
officer, stockholder or employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any civil action to
interpret, apply or enforce any provision of the General Corporation Law of the State of Delaware, (d) any action asserting a claim, including
a claim in the right of the Corporation, as to which the General Corporation Law of the State of Delaware confers jurisdiction upon the
Court of Chancery of the State of Delaware (the “Court of Chancery”), or (e) any action asserting a claim governed
by the internal affairs doctrine shall be the Court of Chancery; provided, however, in the event that the Court of Chancery
lacks jurisdiction over such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or
federal court located within the State of Delaware, in all cases, subject to such court having personal jurisdiction over the indispensable
parties named as defendants, except for, as to each of (a) through (e) above, any claim as to which such court determines that there is
an indispensable party not subject to the jurisdiction of such court (and such indispensable party does not consent to the personal jurisdiction
of such court within ten (10) days following such determination). For the avoidance of doubt, the foregoing shall not apply to the resolution
of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Unless the Corporation consents
in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted
by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act of 1933, as amended.
For the avoidance of doubt,
this Article EIGHTH shall not apply to any action asserting claims arising under the Exchange Act.
Any person or entity purchasing
or otherwise acquiring any interest in shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions
of this Article.
Ninth. The
Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in the certificate
of incorporation of the Corporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed by applicable law; and all rights, preferences, powers and privileges of
whatsoever nature conferred upon stockholders, directors, officers or any other persons whomsoever by and pursuant to the certificate
of incorporation of the Corporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article.
In addition to any affirmative vote required by applicable law or the certificate of incorporation of the Corporation (including any certificate
filed with the Secretary of State of the State of Delaware establishing a series of Preferred Stock), the affirmative vote of the holders
of at least sixty-six and two-thirds percent (66⅔%) in voting power of the then outstanding shares of stock of the Corporation
generally entitled to vote, voting together as a single class, shall be required to amend, alter, repeal or adopt any provision inconsistent
with Articles FIFTH, SIXTH, or SEVENTH or this sentence.
Tenth. This
certificate shall become effective on [●], 2024.
Eleventh. The
incorporator of the Corporation is [●], whose mailing address is [●].
[Signature Page Follows]
The undersigned incorporator
has executed and acknowledged this certificate of incorporation on _____________, 2024.
Exhibit 3.2
BYLAWS
OF
ACUREN CORPORATION
ARTICLE I
Meetings of Stockholders
Section 1.1 Annual Meetings.
If required by applicable law, an annual meeting of stockholders shall be held for the election of directors at such date, time and place,
if any, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors of the corporation
(the “Board of Directors”) from time to time. Any annual meeting of stockholders may be postponed by action of the
Board of Directors at any time in advance of such meeting. Any other proper business may be transacted at the annual meeting of stockholders.
Section 1.2 Special
Meetings. Except as otherwise provided by or pursuant to the certificate of incorporation, special meetings of stockholders for any
purpose or purposes may be called at any time, but only by (a) the Chief Executive Officer, (b) any Chairman of the Board of Directors,
or (c) the Board of Directors. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by any
other person or persons. Any special meeting of stockholders may be postponed by action of the Board of Directors at any time in advance
of such meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 1.3 Notice of
Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting shall be given
that shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and
proxy holders may be deemed to be present and vote at such meeting, the record date for determining 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, and, in the case
of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by applicable law, the certificate
of incorporation or these bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before
the date of the meeting to each stockholder entitled to vote at such meeting, as of the record date for determining the stockholders entitled
to notice of the meeting.
Section 1.4 Adjournments.
Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, if any, and
notice need not be given of any such adjourned meeting if the time and place, if any, thereof, and the means of remote communications,
if any, by which stockholders and proxy holders may be deemed to be present in person or by proxy and vote at such adjourned meeting are
(a) announced at the meeting at which the adjournment is taken, (b) displayed, during the time scheduled for the meeting, on the same
electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication, or (c)
set forth in the notice of meeting given in accordance with Section 1.3. At the adjourned meeting the corporation may transact
any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a 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 of Directors shall fix a new record date for
notice of such adjourned meeting in accordance with Section 1.8 of these bylaws, 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.
Section 1.5 Quorum.
Except as otherwise provided by applicable law, the certificate of incorporation or these bylaws, at each meeting of stockholders the
presence in person or by proxy of the holders of a majority in voting power of the then outstanding shares of stock entitled to vote at
the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the stockholders so present may, by
a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 1.4 of these bylaws
until a quorum shall be present in person or represented by proxy. Shares of the corporation’s capital stock shall neither be entitled
to vote nor be counted for quorum purposes if such shares belong to (a) the corporation, (b) another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, or
(c) any other entity, if a majority of the voting power of such other entity is held, directly or indirectly, by the corporation or if
such other entity is otherwise controlled, directly or indirectly by the corporation. Nothing in the foregoing sentence shall be construed
as limiting the right of the corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6 Organization.
Meetings of stockholders shall be presided over by the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, the Co-Chairperson
of the Board designated by the Co-Chairpersons of the Board), if any, or in his or her absence by the Vice Chairperson of the Board (or,
if there are Co-Vice Chairpersons of the Board, the Co-Vice Chairperson of the Board designated by the Co-Vice Chairpersons of the Board),
if any, or in his or her absence by the President, or in the absence of the foregoing persons by a chairperson designated by the Board
of Directors, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the
meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 1.7 Voting; Proxies.
Except as otherwise provided by or pursuant to the provisions of the certificate of incorporation, each stockholder entitled to vote at
any meeting of stockholders shall be entitled to one (1) vote for each share of stock held by such stockholder which has voting power
upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to consent to corporate action 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 (3) years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it
is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest
in the corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person
or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need
not be by written ballot. When a quorum is present at any meeting of stockholders, all elections, questions or business presented to the
stockholders at such meeting shall be decided by the affirmative vote of a majority of votes cast with respect to any such election, question
or business presented to the stockholders unless the election, question or business is one which, by express provision of the certificate
of incorporation, these bylaws (including, without limitation, Article II of these bylaws) or the laws of the State of Delaware,
a vote of a different number or voting by class or series is required, in which case, such express provision shall govern.
Section 1. Fixing Date
for Determination of Stockholders of Record.
(a) In order that the corporation
may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, or to consent to corporate
action without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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
of Directors 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 of Directors, and which record date: (i) in the case of a determination of stockholders entitled to notice of any meeting
of stockholders or any adjournment thereof, shall, unless otherwise required by applicable law, not be more than sixty (60) nor less than
ten (10) days before the date of such meeting and, unless the Board of Directors 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 determining the stockholders entitled to vote at such meeting,
the record date for determining the stockholders entitled to notice of such meeting shall also be the record date for determining the
stockholders entitled to vote at such meeting; (ii) in the case of a determination of stockholders entitled to consent to corporate action
without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the
Board of Directors; and (iii) in the case of any other action, shall not be more than sixty (60) days prior to such other action.
(b) If no record date is fixed:
(i) 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 day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to consent to corporate action
without a meeting, when no prior action of the Board of Directors is required by applicable law, shall be the first date on which a signed
consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or,
if prior action by the Board of Directors is required by applicable law, shall be at the close of business on the day on which the Board
of Directors adopts the resolution taking such prior action; and (iii) the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. 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 of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned
meeting, and in such case shall also fix as the record date for the stockholders entitled to notice of such adjourned meeting the same
or an earlier date as that fixed for the determination of stockholders entitled to vote in accordance with the foregoing provisions of
this Section 1.8 at the adjourned meeting.
Section 1.9 List of
Stockholders Entitled to Vote. The corporation shall prepare, no later than the tenth (10th) day before each meeting of
stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date
for determining the stockholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders
entitled to vote as of the tenth (10th) day before the meeting date, arranged in alphabetical order, and showing the address
of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting for a period of ten (10) days ending on the day before the meeting dated (a) on
a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with
the notice of meeting, or (b) during ordinary business hours at the principal place of business of the corporation. Except as otherwise
provided by applicable law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of
stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.
Section 1.10 Action
By Consent in Lieu of Meeting. Except as otherwise provided by or pursuant to the certificate of incorporation with respect to the
rights of the holders of any series of preferred stock of the corporation then outstanding, no action that is required or permitted to
be taken by the stockholders of the corporation at any annual or special meeting of stockholders may be effected by consent of stockholders
in lieu of a meeting of stockholders. When, as provided by or pursuant to the certificate of incorporation with respect to the rights
of the holders of any series of preferred stock of the corporation then outstanding, action required or permitted to be taken at any annual
or special meeting of stockholders is taken without a meeting, without prior notice and without a vote, a consent or consents, setting
forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall
be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an
officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery
made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. When,
as provided by or pursuant to the certificate of incorporation with respect to the rights of the holders of any shares of preferred stock
of the corporation then outstanding, action required or permitted to be taken at any annual or special meeting of stockholders is taken
without a meeting, without prior notice and without a vote, prompt notice of the taking of the corporate action without a meeting by less
than unanimous consent shall, to the extent required by applicable law, be given to those stockholders as of the record date for the action
by consent who have not consented and who would have been entitled to notice of the meeting if the action had been taken at a meeting
and the record date for the notice of the meeting were the record date for the action by consent.
Section 1.11 Inspectors
of Election. The corporation may, and shall if required by applicable law, in advance of any meeting of stockholders, appoint one
or more inspectors of election, who may be employees of the corporation, to act at the meeting or any adjournment thereof and to make
a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails
to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at
the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of
his or her ability. The inspector or inspectors so appointed or designated shall (a) ascertain the number of shares of stock of the corporation
outstanding and the voting power of each such share, (b) determine the shares of stock of the corporation represented at the meeting and
the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares
of stock of the corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and
report shall specify such other information as may be required by applicable law. In determining the validity and counting of proxies
and ballots cast at any meeting of stockholders of the corporation, the inspectors may consider such information as is permitted by applicable
law. No person who is a candidate for an office at an election may serve as an inspector at such election.
Section 1.12 Conduct
of Meetings. The date and time of the opening and the closing of the polls for each election, question or business upon which the
stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors
may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except
to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting
of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person at 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 presiding person
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. The presiding person at any meeting of stockholders, in addition to making
any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to
the meeting that an election, question or business was not properly brought before the meeting and, if such presiding person should so
determine, such presiding person shall so declare to the meeting, and any such election, question or business not properly brought before
the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding
over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 1.13 Notice of Stockholder Business
and Nominations.
(a) Annual
Meetings.
(1) Nominations
of one or more individuals for election to the Board of Directors (each, a “Nomination,” and more than one, “Nominations”)
and the proposal of business other than Nominations to be considered by the stockholders (“Business”) may be made at
an annual meeting of stockholders only:
(A) pursuant
to the corporation’s notice of meeting (or any supplement thereto), provided, however, that reference in the corporation’s
notice of meeting to the election of directors or the election of members of the Board of Directors shall not include or be deemed to
include Nominations;
(B) by
or at the direction of the Board of Directors; or
(C) by
any stockholder who was a stockholder of record of the corporation at the time the notice provided for in this Section 1.13 is
delivered to the Secretary at the principal executive offices of the corporation, who is entitled to vote at the annual meeting of stockholders
and who complies with the notice procedures set forth in this Section 1.13(a).
(2) For
Nominations or Business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to Section 1.13(a)(1)(C),
the stockholder must have given timely notice thereof in writing to the Secretary and any proposed Business must constitute a proper subject
for stockholder action under applicable law. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal
executive offices of the corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business
on the one-hundred twentieth (120th) day prior to the first (1st) anniversary of the preceding year’s annual meeting of stockholders
(provided, however, that in the event that the date of the annual meeting of stockholders is more than thirty (30) days before or more
than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business
on the one-hundred twentieth (120th) day prior to such annual meeting of stockholders and not later than the close of business on the
later of the ninetieth (90th) day prior to such annual meeting of stockholders or the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made by the corporation). In no event shall the public announcement of an adjournment
or postponement of an annual meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder’s
notice as described above. Such stockholder’s notice shall set forth:
(A) as
to each Nomination to be made by such stockholder:
(i) the
name, age, business address and residence address of the individual subject to such Nomination (the “Stockholder Nominee”);
(ii) all
other information relating to the Stockholder Nominee that is required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case, pursuant to and in accordance with Regulation 14A under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), without regard to the application of the Exchange Act to either
the Nomination or the corporation;
(iii) a
description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the
past three (3) years, and any other material relationships, between or among the stockholder giving the notice or the beneficial owner,
if any, on whose behalf the Nomination is made, and their respective affiliates and associates, or others acting in concert therewith,
on the one hand, and the Stockholder Nominee, and his or her respective affiliates and associates, or others acting in concert therewith,
on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation
S-K if such stockholder or such beneficial owner, or any affiliate or associate thereof or person acting in concert therewith, were the
“registrant” for purposes of such item and the Stockholder Nominee were a director or executive officer of such registrant;
and
(iv) the
Stockholder Nominee’s written consent to being named in any proxy statement as a nominee and to serving as a director of the corporation
if elected;
(B) as
to the Business that the stockholder proposes to bring before the annual meeting of stockholders, a brief description of the Business,
the text of the proposed Business (including the text of any resolutions proposed for consideration and in the event that such Business
includes a proposal to amend these bylaws, the language of the proposed amendment), the reasons for conducting such Business at such meeting
and any material interest in such Business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made;
and
(C) as
to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the Nomination or Business is made:
(i) the
name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner;
(ii) the
class or series and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial
owner;
(iii) a
representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the
annual meeting of stockholders to propose such Nomination or Business;
(iv) a
representation whether the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any other
person acting in concert therewith, intends or is part of a group that intends
(I) to
deliver a proxy statement and form of proxy to holders of at least the percentage of the corporation’s outstanding shares of stock
required to approve or adopt the Business or elect the Stockholder Nominee; and/or
(II) otherwise to solicit proxies from
stockholders of the corporation in support of such Business or Nomination;
(v) a
description of any agreement, arrangement or understanding with respect to the Nomination or Business, existing presently or existing
during the prior twenty-four (24) months, between or among the stockholder or the beneficial owner, if any, on the one hand, and any of
their respective affiliates and associates, or any other person acting in concert therewith, on the other hand, including, without limitation,
any agreements that would be required to be disclosed pursuant to Item 5 of Schedule 13D under the Exchange Act (regardless of whether
the requirement to file a Schedule 13D is applicable);
(vi) a
description of any agreement, arrangement or understanding (including, without limitation, with respect to any profit interests, options,
hedging transactions, borrowed or loaned shares, or other derivative positions) that has been entered into as of the date of the notice
by, or on behalf of, the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person
acting in concert therewith, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price
of any class or series of the corporation’s capital stock, or to maintain, increase or decrease the voting power of the stockholder
or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith, with
respect to shares of the corporation (any such agreement, arrangement or understanding, a “Derivative Instrument”);
(vii) a
description of the terms of, and the number of shares subject to, any short interest in any securities of the corporation in which the
stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any person acting in concert therewith,
has an interest (for purposes of these bylaws, a person shall be deemed to have a short interest in a security if the person or any of
its affiliates and associates, directly or indirectly, through any agreement, arrangement, understanding, relationship or otherwise, has
the opportunity to profit or share in any profit derived from any decrease in the value of the subject security);
(viii) a
description of any proportionate interest in the shares of the corporation or any Derivative Instrument held, directly or indirectly,
by a general or limited partnership or limited liability company or similar entity in which the stockholder or the beneficial owner, if
any, or any of their respective affiliates and associates, or any person acting in concert therewith, is a general partner or, directly
or indirectly, beneficially owns an interest in a general partner, of such general or limited partnership or similar entity or is the
manager or managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of such limited
liability company or similar entity;
(ix) a
description of the terms of any performance-related fees (other than asset-based fees) that the stockholder or the beneficial owner, if
any, or any of their respective affiliates and associates, or any person acting in concert therewith, is entitled to based on any increase
or decrease in the value of shares of the corporation or any Derivative Instruments; and
(x) a
description of:
(I) any significant equity interest
of the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, or any other person acting
in concert therewith, in a Principal Competitor of the corporation; and
(II) any direct or indirect pecuniary
interest of the stockholder or the beneficial owner, if any, or any of their respective affiliates and associates, in any material contract
with a Principal Competitor of the corporation. “Principal Competitor” means a competitor of the corporation with respect
to any material line of business of the corporation as determined from time to time by the Chief Executive Officer of the corporation
(it being understood that a stockholder may request from the corporation a list of the Principal Competitors prior to submitting a notice
described in this Section 1.13 and the Secretary shall provide such list to the stockholder within five (5) business days after
receipt of such request); provided, that if the Business is otherwise subject to Rule 14a-8 (or any successor thereto) promulgated
under the Exchange Act (“Rule 14a-8”), the foregoing notice requirements shall be deemed satisfied by a stockholder
if the stockholder has notified the corporation of such stockholder’s intention to present such Business at an annual meeting of
stockholders of the corporation in compliance with Rule 14a-8, and such Business has been included in a proxy statement that has been
prepared by the corporation to solicit proxies for such annual meeting of stockholders.
(3) Notwithstanding
anything in the second sentence of Section 1.13(a)(2) to the contrary, in the event that the number of directors to be elected
to the Board of Directors at an annual meeting is increased and there is no public announcement naming the nominees for election to the
additional directorships at least one-hundred (100) days prior to the first (1st) anniversary of the preceding year’s annual meeting,
a stockholder’s notice required by Section 1.13(a)(2) shall also be considered timely, but only with respect to nominees
for election to the new directorships, 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 tenth (10th) day following the day on which such public announcement is first made by the
corporation.
(b) Special
Meetings.
(1) Only
such Business shall be conducted at a special meeting of stockholders of the corporation as shall have been brought before such meeting
pursuant to the corporation’s notice of meeting (or any supplement thereto); provided, however, that reference therein to the election
of directors or the election of members of the Board of Directors shall not include or be deemed to include Nominations.
(2) Nominations
may be made at a special meeting of stockholders at which directors are to be elected:
(A) pursuant to the corporation’s
notice of meeting (or any supplement thereto) as aforesaid; or
(B) in the event a special meeting of
stockholders is called for the purpose of electing one or more directors to the Board of Directors, by any stockholder of the corporation
who is entitled to vote at such special meeting with respect to the election of directors, who complies with the notice procedures set
forth in this Section 1.13(b), and who is a stockholder of record at the time such notice is delivered to the Secretary as provided
for in this Section 1.13.
(3) In
the event that a special meeting of stockholders of the corporation is called for the purpose of electing one or more directors to the
Board of Directors, any such stockholder entitled to vote in such election of directors may make a Nomination or Nominations (as the case
may be) of one or more individuals (as the case may be) for election to such position(s) specified in the corporation’s notice of
meeting, if the stockholder’s notice as required by Section 1.13(a)(2) shall be delivered to the Secretary at the principal
executive offices of the corporation not earlier than the close of business on the one-hundred twentieth (120th) day prior to such special
meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the (10th)
tenth day following the day on which public announcement is first made of the date of such special meeting and of the nominees proposed
by the Board of Directors to be elected at such special meeting. In no event shall the public announcement of an adjournment or postponement
of a special meeting of stockholders of the corporation commence a new time period (or extend any time period) for the giving of a stockholder’s
notice as described above.
(c) Stockholder
Nominee.
(1) To
be eligible to be a Stockholder Nominee pursuant to this Section 1.13 at any annual or special meeting of stockholders, the Stockholder
Nominee must complete and deliver (within the time period specified in this Section 1.13 for delivery of a stockholder’s
notice), to the Secretary at the principal executive offices of the corporation, a written questionnaire providing information with respect
to the background, experience and qualifications of such Stockholder Nominee, together with a written representation and agreement of
such Stockholder Nominee (the questionnaire, representation and agreement to be in the form provided by the Secretary upon written request)
that such Stockholder Nominee:
(A) is
not and will not become a party to, and is not and will not be bound by:
(i) any agreement, arrangement or understanding
with, and has not given any commitment or assurance to, any person as to how such Stockholder Nominee, if elected as a director of the
corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation;
or
(ii) any Voting Commitment or other agreement,
arrangement or understanding or fiduciary capacity that could limit or interfere with such Stockholder Nominee’s ability to comply,
if elected as a director of the corporation, with such Stockholder Nominee’s fiduciary duties under applicable law;
(B) is
not and will not become a party to any agreement, arrangement or understanding with any person other than the corporation with respect
to any direct or indirect compensation, reimbursement, indemnification or advancements in connection with any service, action or omission
in his or her capacity as a director of the corporation that has not been disclosed to the corporation;
(C) is
not and will not become a party to any Derivative Instrument, and does not and will not acquire any short interest in any securities of
the corporation, in each case, that has not been disclosed to the corporation; and
(D) will
be in compliance, if elected as a director of the corporation, and will comply with, applicable law and all applicable publicly disclosed
corporate governance, business conduct, ethics, conflict of interest, confidentiality and stock ownership and trading policies and guidelines
of the corporation (and that, to evidence such Stockholder Nominee’s undertaking and commitment to so comply, such Stockholder Nominee
will execute and deliver to the corporation all such agreements and instruments that the corporation requires of each of its directors).
(2) At
the written request of the corporation, the Stockholder Nominee shall promptly, but in any event within five (5) business days of such
request, submit any additional completed and signed questionnaires required of the corporation’s directors and provide to the corporation
such other information as the corporation may reasonably request in order for the corporation to comply with its disclosure obligations
under applicable law or, as of the date on which the stockholder’s notice required by Section 1.13(a)(2) was delivered or
a date subsequent thereto, determine whether such notice satisfies the requirements of this Section 1.13 or ascertain whether the
Stockholder Nominee is eligible for nomination pursuant to this Section 1.13. The corporation may request such additional information
as necessary to permit the Board of Directors to determine if the Stockholder Nominee is qualified and suitable to serve as a director
of the corporation, eligible to serve as an “independent director” or “audit committee financial expert”
of the corporation under applicable law, the rules or regulations of any stock exchange applicable to the corporation, any regulation
applicable to the corporation or its securities, or any publicly disclosed corporate governance guideline or committee charter of the
corporation, and such other information as could be material to a reasonable stockholder’s understanding of the independence, or
lack thereof, of the Stockholder Nominee. If the Stockholder Nominee fails to furnish such requested information, such Nomination shall
not be considered made in compliance with this Section 1.13 and shall be disregarded and not be considered at the meeting of stockholders
before which such Nomination is proposed to be brought, notwithstanding that proxies in respect of such vote or such Stockholder Nominee
may have been received by the corporation.
(3) Only
individuals who are nominated in accordance with the procedures set forth in this Section 1.13 shall be eligible for election as directors
of the corporation at a meeting of stockholders, and only such Business shall be conducted at an annual meeting of stockholders as shall
have been brought before the meeting in accordance with the procedures set forth in this Section 1.13.
(4) Except
as otherwise provided by applicable law, the certificate of incorporation, or this Section 1.13, the Board of Directors or the
individual presiding over the meeting of stockholders, in each case, shall have the power and duty to determine whether a Nomination or
any Business proposed to be brought before the meeting of stockholders pursuant to this Section 1.13 was or was not made, proposed or
brought, as the case may be, in accordance with the procedures set forth in this Section 1.13 and therefore shall be disregarded
and not be considered or transacted at the meeting. Notwithstanding the foregoing provisions of this Section 1.13, if the stockholder
(or a qualified representative of such stockholder) does not appear at the meeting of stockholders of the corporation to present a Nomination
or Business pursuant to this Section 1.13, such Nomination or Business shall not be considered made in accordance with this Section
1.13 and shall be disregarded and not be considered or transacted at the meeting of stockholders before which such Nomination or Business
is proposed to be brought, notwithstanding that proxies in respect of such vote or such Stockholder Nominee or Business may have been
received by the corporation.
(5) For
purposes of this Section 1.13, “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 Section 13, 14, or 15(d) of the Exchange Act.
(6) Notwithstanding
the foregoing provisions of this Section 1.13, a stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder, including, but not limited to, Rule 14a-19 of the Exchange Act, with respect to the matters
set forth in this Section 1.13. If a stockholder fails to comply with any applicable requirements of the Exchange Act, including,
but not limited to, Rule 14a-19 promulgated thereunder, such stockholder’s Business and/or Nomination shall be deemed to have not
been made in compliance with these bylaws and shall be disregarded.
(7) Nothing
in this Section 1.13 shall be deemed to affect any rights:
(A) of
stockholders to request inclusion of proposals in the corporation’s proxy materials with respect to a meeting of stockholders pursuant
to Rule 14a-8 (to the extent the corporation or such proposals are subject to Rule 14a-8); or
(B) of
the holders of:
(i) any series of Preferred Stock then
outstanding to nominate one or more Preferred Directors, or
(ii) any other class or series of stock
of the corporation to nominate directors or to propose other business, in each case, with respect to which such holders are entitled,
by or pursuant to the provisions of the certificate of incorporation, to vote or consent separately as a single class or series.
ARTICLE II
Board of Directors
Section 2.1 Number;
Qualifications. Subject to applicable law and the rights, if any, of the holders of any series of Preferred Stock of the corporation
then outstanding to elect directors pursuant to any applicable provisions of the certificate of incorporation, the Board of Directors
shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Except
for any directors elected by the holders of any series of Preferred Stock of the corporation then outstanding as provided for or fixed
pursuant to the provisions of the certificate of incorporation of the corporation (the “Preferred Directors” and each,
a “Preferred Director”) and with respect to newly created directorships resulting from an increase in the authorized
number of directors or any vacancies on the Board of Directors resulting from death, disqualification, removal or other cause, each director
shall be elected by a majority of the votes cast with respect to the nominee for election to the Board of Directors at any meeting of
stockholders at which directors are to be elected by the stockholders generally entitled to vote and a quorum is present; provided,
however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders at which directors are
to be elected by the stockholders generally entitled to vote, a quorum is present and a stockholder or stockholders of the corporation
generally entitled to vote has or have (a) nominated one or more individuals for election to the Board of Directors in compliance with
Section 1.13 of these bylaws such that the number of nominees for election to the Board of Directors exceeds the number of open
seats and (b) not withdrawn such Nomination or Nominations on or prior to the tenth (10th) day preceding the date the corporation
first mails its notice of such meeting to the stockholders. For purposes of this Section 2.1, a “majority of the votes
cast” means that the number of shares voted “for” a nominee for election to the Board of Directors by the stockholders
generally entitled to vote exceeds the votes cast “against” such nominee and shall not include abstentions. Directors need
not be stockholders.
Section 2.2 Election;
Resignation; Vacancies. The Board of Directors shall initially consist of the person or persons named as directors in the certificate
of incorporation or elected by the incorporator of the corporation, and each director so elected shall hold office until the first annual
meeting of stockholders and until his or her successor is duly elected and qualified. At each annual meeting of stockholders, the stockholders
shall elect directors each of whom shall hold office for a term of one (1) year or until his or her successor is duly elected and qualified,
subject to such director’s earlier death, resignation, disqualification or removal. Any director may resign at any time upon notice
to the corporation. Unless otherwise provided by applicable law or the certificate of incorporation, newly created directorships resulting
from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled solely and exclusively by a majority of the directors then in office, although less than a quorum,
or by the sole remaining director. Any director so elected shall hold office until the expiration of the term of office of the director
whom he or she has replaced and until his or her successor shall be elected and qualified, subject to such director’s earlier death,
resignation, disqualification or removal.
Section 2.3 Regular
Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such
times as the Board of Directors may from time to time determine.
Section 2.4 Special
Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever
called by the Chief Executive Officer, President, the Secretary, or by any member of the Board of Directors. Notice of a special meeting
of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four (24) hours before the special
meeting.
Section 2.5 Telephonic
Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a
meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this bylaw shall constitute presence in person at such meeting.
Section 2.6 Quorum;
Vote Required for Action. At all meetings of the Board of Directors the directors entitled to cast a majority of the votes of the
whole Board of Directors shall constitute a quorum for the transaction of business. Except in cases in which the certificate of incorporation,
these bylaws or applicable law otherwise provides, a majority of the votes entitled to be cast by the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
Section 2.7 Organization.
Meetings of the Board of Directors shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice
Chairperson of the Board, if any, or in his or her absence by the Chief Executive Officer, or in his or her absence by the President,
or in their absence by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence
the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 2. Action by
Unanimous Consent of Directors. 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 of Directors, or of any committee thereof, may be taken without a meeting if all
members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission. After
action is taken, the consent or consents relating thereto shall be filed with the minutes of the proceedings of the Board of Directors,
or the committee thereof, in the same paper or electronic form as the minutes are maintained.
ARTICLE III
Committees
Section 3.1 Committees.
The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation.
The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the 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 of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the
extent permitted by applicable law and to the extent provided in the resolution of the Board of Directors or these bylaws, shall have
and may exercise all the powers and authority of the Board of Directors 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 which may require it.
Section 3.2 Committee
Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter 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 of Directors conducts its business pursuant to Article II of these bylaws.
ARTICLE IV
Officers
Section 4.1 Executive
Officers; Election; Qualifications; Term of Office, Resignation; Removal; Vacancies. The Board of Directors shall elect a Chief Executive
Officer, a Chief Financial Officer, a President and a Secretary, and it may, if it so determines, choose a Chairperson of the Board (or
Co-Chairpersons of the Board) and a Vice Chairperson of the Board (or Co-Vice Chairpersons of the Board) from among its members. The Board
of Directors may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers
and such other officers as it shall from time to time deem necessary or desirable. Each such officer shall hold office until the first
meeting of the Board of Directors after the annual meeting of stockholders next succeeding his or her election, and until his or her successor
is elected and qualified or until his or her earlier death, resignation or removal. Any officer may resign at any time upon written notice
to the corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without
prejudice to the contractual rights of such officer, if any, with the corporation. Any number of offices may be held by the same person.
Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion
of the term by the Board of Directors at any regular or special meeting.
Section 4.2 Powers and
Duties of Officers. The officers of the corporation shall have such powers and duties in the management of the corporation as may
be prescribed in these bylaws or a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to their
respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee
to give security for the faithful performance of his or her duties.
Section 4.3 Appointing
Attorneys and Agents; Voting Securities of Other Entities. Unless otherwise provided by resolution adopted by the Board of Directors,
the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, either Co-Chairperson of the Board), the Chief Executive
Officer, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the corporation,
for, in the name and on behalf of the corporation, to cast the votes which the corporation may be entitled to cast as the holder of stock
or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the corporation, at
meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name
of the corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consents, and may execute or cause to be executed for, in the name and
on behalf of the corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he or she may
deem necessary or proper. Any of the rights set forth in this Section 4.3 which may be delegated to an attorney or agent may also
be exercised directly by the Chairperson of the Board (or, if there are Co-Chairpersons of the Board, either Co-Chairperson of the Board),
the Chief Executive Officer, the President or any Vice President.
ARTICLE V
Stock
Section 5.1 Certificates.
Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the corporation
by any two authorized officers of the corporation representing the number of shares registered in certificate form. Each of the Chief
Executive Officer, the President, any Vice President and the Secretary, in addition to any other officers of the corporation authorized
by the Board of Directors or these bylaws, is hereby authorized to sign certificates by, or in the name of, the corporation. Any or all
of 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, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent, or registrar
at the date of issue. The corporation shall not have the power to issue a certificate in bearer form.
Section 5.2 Lost, Stolen
or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares. The corporation may issue a new certificate
of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed,
and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to
give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft
or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
ARTICLE VI
Indemnification
Section 6.1 Right to
Indemnification. The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law, any person
(a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact
that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while
a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee
benefit plans, its participants or beneficiaries, against all liability and loss suffered and expenses (including attorneys’ fees)
reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3,
the corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered
Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the
Board of Directors.
Section 6.2 Prepayment
of Expenses. The corporation shall to the fullest extent not prohibited by applicable law, pay the expenses (including attorneys’
fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition; provided, however, that,
to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the
Covered Person is not entitled to be indemnified under this Article VI or otherwise.
Section 6.3 Claims.
If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this
Article VI is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by
the corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall
be entitled to be paid the expense (including attorneys’ fees) of prosecuting such claim. In any such action the corporation shall
have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable
law.
Section 6.4 Nonexclusivity
of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such
Covered Person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement,
vote of stockholders or disinterested directors or otherwise.
Section 6.5 Other Sources.
The corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall
be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership,
joint venture, trust, enterprise or non-profit entity.
Section 6.6 Amendment
or Repeal. Any amendment, repeal or modification of the foregoing provisions of this Article VI shall not adversely affect
any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment,
repeal or modification.
Section 6.7 Other Indemnification
and Prepayment of Expenses. This Article VI shall not limit the right of the corporation, to the extent and in the manner permitted
by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate
action.
ARTICLE VII
Miscellaneous
Section 7.1 Fiscal Year.
The fiscal year of the corporation shall be determined by resolution of the Board of Directors.
Section 7.2 Seal.
The corporate seal shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to
time by the Board of Directors.
Section 7.3 Manner of
Notice. Except as otherwise provided herein or permitted by applicable law, notices to directors and stockholders shall be in writing
and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice
to directors may also be given by telecopier, telephone or other means of electronic transmission.
Section 7.4 Waiver of
Notice of Meetings of Stockholders, Directors and Committees. Any waiver of notice, given by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted
at nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified
in a waiver of notice.
Section 7.5 Form of
Records. Any records administered by or on behalf of the corporation in the regular course of its business, including its stock ledger,
books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, method, or one
or more electronic networks or databases (including one or more distributed electronic networks or databases; provided that the
records so kept can be converted into clearly legible paper form within a reasonable time, and, with respect to the stock ledger, that
the records so kept comply with applicable law.
Section 7.6 Amendment
of Bylaws. These bylaws may be altered, amended or repealed, and new bylaws adopted, by the Board of Directors, but the stockholders
may adopt additional bylaws and may amend, alter and repeal any bylaws whether adopted by them or otherwise. In addition to any affirmative
vote required by the certificate of incorporation, any bylaw that is to be adopted, altered, amended or repealed by the stockholders of
the corporation shall receive the affirmative vote of the holders of at least sixty-six and two-thirds percent (66⅔%) in voting
power of the then outstanding shares of stock of the corporation entitled to vote.
Section 7.7 Forum for
Adjudication of Disputes. Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive
forum for (a) any derivative action or proceeding brought by or on behalf of the corporation, (b) any action asserting a claim of breach
of a fiduciary duty owed by any director, officer, stockholder or employee of the corporation to the corporation or the corporation’s
stockholders, (c) any civil action to interpret, apply or enforce any provision of the General Corporation Law of the State of Delaware,
(d) any action asserting a claim, including a claim in the right of the Corporation, as to which the General Corporation Law of the State
of Delaware confers jurisdiction upon the Court of Chancery of the State of Delaware (the “Court of Chancery”), or
(e) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery; provided, however,
in the event that the Court of Chancery lacks jurisdiction over such action or proceeding, the sole and exclusive forum for such action
or proceeding shall be another state or federal court located within the State of Delaware, in all cases, subject to such court having
personal jurisdiction over the indispensable parties named as defendants, except for, as to each of (a) through (e) above, any claim as
to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and such indispensable
party does not consent to the personal jurisdiction of such court within ten (10) days following such determination). For the avoidance
of doubt, the foregoing shall not apply to the resolution of any complaint asserting a cause of action arising under the Securities Act
of 1933, as amended.
Unless the corporation consents
in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted
by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act of 1933, as amended.
Any person or entity purchasing or otherwise acquiring any interest in shares of stock of the corporation shall be deemed to have notice
of and consented to the provisions of this Article.
For the avoidance of doubt,
this Section 7.7 shall not apply to any action asserting claims arising under the Exchange Act.
19
Exhibit 4.1
Exhibit 4.2
Exhibit 4.3
DATED 23 September
2024
amended and restated
warrant instrument
Acuren corporation
TABLE OF CONTENTS
| 1. |
DEFINITIONS AND INTERPRETATION |
1 |
| 2. |
CONSTITUTION AND FORM OF WARRANTS |
6 |
| 3. |
WARRANT CERTIFICATES |
7 |
| 4. |
EXERCISE OF WARRANTS |
7 |
| 5. |
UNDERTAKINGS |
12 |
| 6. |
ADJUSTMENT OF SUBSCRIPTION RIGHTS |
12 |
| 7. |
MANDATORY REDEMPTION |
13 |
| 8. |
GENERAL OFFERS AND LIQUIDATION |
14 |
| 9. |
TRANSFER AND TITLE |
14 |
| 10. |
MEETINGS OF WARRANTHOLDERS |
15 |
| 11. |
MODIFICATIONS |
16 |
| 12. |
PURCHASE, surrender AND CANCELLATION |
17 |
| 13. |
AVAILABILITY OF INSTRUMENT AND NOTICES |
17 |
| 14. |
PURCHASE OF ORDINARY SHARES BY THE COMPANY |
17 |
| 15. |
ENFORCEMENT |
17 |
| 16. |
GOVERNING LAW |
18 |
| 17. |
SEVERABILITY |
18 |
| 18. |
FORCE MAJEURE |
18 |
| 19. |
CONCERNING THE Warrant AGENT |
18 |
| SCHEDULE 1 Form of Warrant Certificate |
21 |
| SCHEDULE 2 REGISTRATION, TRANSFER AND TRANSMISSION |
29 |
| SCHEDULE 3 CONCERNING THE WARRANT AGENT; MERGER, CONSOLIDATION OR CHANGE OF WARRANT AGENT |
33 |
| SCHEDULE 4 INSTRUMENT OF TRANSFER |
37 |
THIS AMENDED AND RESTATED WARRANT INSTRUMENT
(this “Instrument”) IS EXECUTED ON 23 SEPTEMBER 2024 BY ACUREN CORPORATION (F/K/A ADMIRAL ACQUISITION LIMITED),
a company incorporated in the British Virgin Islands with registered number 2114331, whose registered office is at Ritter House, Wickhams
Cay II, Road Town, Tortola VG 1110, British Virgin Islands (which for these purposes, for the avoidance of doubt, shall include the Company
in such form as it exists following any continuation, change of jurisdiction, merger, consolidation or similar action under the laws of
the British Virgin Islands or any relevant foreign jurisdiction, the “Company”).
BACKGROUND
| (A) | By a resolution of the Board (as defined below) passed on 16 May 2023 the Board authorised the issue by
the Company of up to 54,975,000 Warrants (as defined below) subject to the terms and conditions as set out in the Warrant Instrument dated
as of 16 May, 2023, as supplemented by the Supplement dated 21 May 2024 (the “Original Warrant Instrument”), of which
18,264,876 Warrants remain outstanding on the date hereof. |
| (B) | The Company intends to change its jurisdiction of incorporation from the British Virgin Islands to the
State of Delaware pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “Domestication”)
and, upon the effectiveness of such Domestication pursuant to the Delaware General Corporation Law (the “DGCL”), the
Company, as a domesticated Delaware corporation, will be, for all purposes of the laws of the State of Delaware, deemed to be the same
entity as the Company, as a domesticating British Virgin Islands company; |
| (C) | In connection with the Domestication, the shares of common stock of the Company after the Domestication,
into which the ordinary shares of the Company before the Domestication will be converted in connection with the Domestication, will be
listed on the New York Stock Exchange instead of the “London Stock Exchange” (as defined in the Original Warrant Instrument); |
| (D) | This Amended and Restated Warrant Instrument, which amends and restates the Original Warrant Instrument,
to among other things (i) appoint Computershare Inc. and Computershare Trust Company, N.A., collectively as the Warrant Agent hereunder,
(ii) reference the New York Stock Exchange instead of the London Stock Exchange after the Domestication and upon listing of the shares
of common stock of the Company in the New York Stock Exchange, and (iii) make certain other changes including in order to comply with
the DGCL, in each case, pursuant to the power and authority granted to the Board by Clause 11.1 of the Original Warrant Instrument; |
| (E) | The Company has accordingly determined to execute this Amended and Restated Warrant Instrument (as further
modified, supplemented, amended or amended and restated from time to time, this “Instrument”) to set out the rights and
interests of the Warrantholders (as defined below) and sets out to incorporate the duties, obligations and immunities of the Warrant Agent
(as defined below) appointed under this Instrument. |
OPERATIVE PROVISIONS
| 1. | DEFINITIONS AND INTERPRETATION |
“Accredited
Investor” has the meaning given by Rule 501(a) of Regulation D;
“Acquisition”
means the initial acquisition by the Company or by any subsidiary thereof (which may be in the form of a merger, capital stock exchange,
asset acquisition, stock purchase, scheme of arrangement, reorganisation or similar business combination) of an interest in an operating
company or business as further described in the Prospectus (and, in the context of the Acquisition, references to a company without reference
to a business and references to a business without reference to a company shall in both cases be construed to mean both a company or a
business), being the acquisition of Acuren Holdings, Inc. which completed on 30 July 2024;
“Adjustment
Percentage” has the meaning given in clause 6.1;
“Admission”
means admission of the Ordinary Shares and Warrants to the standard segment of the official list maintained by the UK Financial Conduct
Authority and to trading on the main market for listed securities of the London Stock Exchange;
“Articles”
means (i) prior to the Domestication, the amended and restated memorandum and articles of association of the Company, and (ii) following
the Domestication, the certificate of incorporation of the Company or any similar document governing the Company, as further modified,
supplemented, amended or amended and restated from time to time;
“Average Price”
means, in respect of any Ordinary Share or any other Security, as of any date or relevant period (as applicable): (i) the volume weighted
average price for such Security on the New York Stock Exchange for such date or relevant period (as applicable) as reported by Bloomberg
through its “Volume at Price” function with “Calculation” mode set to “Bloomberg Definition” as reported
up to two hours after the respective market closes on such date or each date of the relevant period (as applicable); (ii) if the Directors
determine (by a resolution of the directors) that the New York Stock Exchange is not the principal securities exchange or trading market
for that Security, the volume weighted average price of that Security for such date or relevant period (as applicable) on the principal
securities exchange or trading market on which that Security is listed or traded as reported by Bloomberg through its “Volume at
Price” functions; (iii) if the foregoing do not apply, the last closing trade price or the average of the last closing trade price
for each Trading Day of the relevant period (as applicable) of that Security in the over-the-counter market on the electronic bulletin
board for that Security as reported by Bloomberg; or (iv) if no last closing trade price is reported for that Security by Bloomberg, the
last closing ask price or the average of the last ask price for each Trading Day of the relevant period (as applicable) of that Security
as reported by Bloomberg; provided, however, if the Average Price cannot be calculated for that Security on such date or relevant period
on any of the foregoing bases, the Average Price of that Security on such date or relevant period shall be the fair market value as mutually
determined by the Company and the holders of the majority of outstanding Founder Preferred Shares (acting reasonably);
“Business
Day” means any day (excluding a Saturday or a Sunday) on which banks in New York, New York or, if the Warrant Agent is not located
in the United States, the country of location of the Warrant Agent (or such other person as has been notified to the Warrantholders in
accordance with clause 13.2) are open for business;
“BVI”
means the territory of the British Virgin Islands;
“CREST”
means the relevant system as defined in the CREST Regulations in respect of which Euroclear is the operator (as defined in the CREST Regulations),
in accordance with which securities may be held in uncertificated form;
“CREST Regulations”
means The Uncertified Securities Regulations 2001 (SI 2001 No.3755), as amended;
“Depositary”
means Computershare Investor Services PLC or any other depositary appointed by the Company from time to time;
“Depositary
Interests” means the dematerialised depositary interests in respect of the Ordinary Shares and Warrants issued or to be issued
by the Depositary;
“Directors”
or “Board” means the board of directors of the Company from time to time;
“ERISA”
means the US Employee Retirement Income Security Act of 1974, as amended;
“Exchange
Act” means the US Securities Exchange Act of 1934, as amended;
“Exercise
Price” means $11.50 per Ordinary Share (or such adjusted price as may be determined from to time in accordance with the provisions
of clause 6), which is the aggregate amount payable for each Minimum Exercise Amount;
“Euroclear” means Euroclear UK & International
Limited, or a similar system of foreign jurisdiction following any continuation, change of jurisdiction, merger or similar action under
the laws of the British Virgin Islands or any relevant foreign jurisdiction;
“Form of Nomination”
means in relation to any Warrant the form of nomination attached to the Warrant Certificate;
“Founder Preferred
Shares” means (i) prior to the Domestication, the founder preferred shares of no par value each in the capital of the Company;
and (ii) following the Domestication, any capital shares into which such founder preferred shares shall have been changed, exchanged,
or converted or any share capital resulting from the Domestication or otherwise under applicable law from time to time;
“New York
Stock Exchange” means New York Stock Exchange (or any successor national securities exchange);
“Minimum Exercise
Amount” means, as of the applicable time of determination, with respect to each exercise of Warrants, the number of Warrants
necessary for a Warrantholder to exercise to receive one whole Ordinary Share upon such exercise as determined by the Board, which number,
as at the date first set forth above and prior to any adjustment in accordance with the provisions of this Instrument, is four;
“New Company”
has the meaning given in clause 8.2;
“Ordinary
Shares” means (i) prior to the Domestication, the ordinary shares of no par value each in the capital of the Company, and (ii)
after the Domestication, any capital shares into which such ordinary shares shall have been changed, exchanged, or converted or any
share capital resulting from the Domestication or otherwise under applicable law from time to time;
“Plan Asset
Regulations” means the regulations promulgated by the U.S. Department of Labor at 29 CFR 25 10.3-1 01, as modified by section
3(42) of ERISA;
“Plan Investor”
means (i) any “employee benefit plan” that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii) a plan, individual retirement
account or other arrangement that is subject to section 4975 of the U.S. Tax Code, (iii) entities whose underlying assets are considered
to include “plan assets” of any plan, account or arrangement described in preceding paragraph (i) or (ii), or (iv) any governmental
plan, church plan, non-U.S. plan or other investor whose purchase or holding of Ordinary Shares would be subject to any state, local,
non-U.S. or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section 4975 of the U.S. Tax Code or that
would have the effect of the Plan Asset Regulations;
“Portion”
means, as of the applicable time of determination, (as applicable) (i) from and after the date of the Original Warrant Instrument through
the time immediately preceding the first adjustment (if any) under clause 6, one fourth (1/4th), (ii) from and after the
time of the first adjustment (if any) under clause 6 until the next adjustment thereunder, the product of (x) one fourth (1/4th)
multiplied by (y) the applicable Adjustment Percentage that is calculated in respect of such first adjustment, or (iii) from and after
the time of each successive adjustment (if any) under clause 6, the product of (x) the fraction then in effect as previously determined
pursuant to the immediately preceding clause (ii) or this clause (iii) (as the case may be) multiplied by (y) the applicable Adjustment
Percentage that is calculated in respect of such applicable adjustment, subject to adjustment in accordance with clause 6.3;
“Prospectus”
means the prospectus published by the Company in connection with Admission dated 17 May 2023;
“QIB”
has the meaning given to the term “qualified institutional buyer” in Rule 144A under the Securities Act;
“Redemption
Event” has the meaning given in clause 7.2;
“Redemption
Notice” means the notice to Warrantholders notifying the occurrence of a Redemption Event to be given pursuant to clause 7.3;
“Redemption
Trigger Price” means $18.00 (subject to adjustment pursuant to clause 7.5);
“Register”
means the register of Warrantholders required to be maintained pursuant to clause 9.1;
“Registrar”
means Computershare Inc. and Computershare Trust Company, N.A., collectively, or such other person or persons appointed by the Company
from time to time to maintain the Register;
“Regulation
D” means Regulation D under the Securities Act;
“Regulation
S” means Regulation S under the Securities Act;
“Rule 144”
means Rule 144 under the Securities Act;
“Rule 144A”
means Rule 144A under the Securities Act;
“Securities”
means shares and debt obligations of every kind of the Company, and including without limitation options, warrants and rights to acquire
shares or debt obligations, and “Security” shall be construed accordingly;
“Securities
Act” means the U.S. Securities Act of 1933, as amended;
“Subscription
Notice” means in relation to any Warrant the notice of subscription attached to the Warrant Certificate;
“Subscription
Period” means the period commencing on the date of Admission and ending on the earlier to occur of (i) 5.00 p.m. on the third
anniversary of the completion of the Acquisition, or 30 July 2027, and (ii) such earlier date as determined by this Instrument, provided
that, in each case, if such day is not a Trading Day, the Trading Day immediately following such day;
“Subscription
Rights” means the rights to subscribe for Ordinary Shares granted by the Company to Warrantholders pursuant to this Instrument;
“Trading Day”
means a day on which the New York Stock Exchange (or such other applicable securities exchange or quotation system on which the Ordinary
Shares or Warrants are listed) is open for business (other than a day on which the New York Stock Exchange (or such other applicable securities
exchange or quotation system) is scheduled to or does close prior to its regular weekday closing time);
“U.S. Investment
Company Act” means the U.S. Investment Company Act of 1940, as amended, and related rules;
“U.S. Person”
has the meaning given to the term “U.S. Person” in Regulation S;
“U.S. Tax
Code” means the U.S. Internal Revenue Code of 1986, as amended;
“Warrant Agent”
means Computershare Inc. and Computershare Trust Company, N.A., collectively, or such other Warrant Agent as the Company may appoint from
time to time;
“Warrant Certificate”
means a certificate evidencing a holding of Warrants in certificated form, such certificate being in or substantially in the form set
out in schedule 1 attached hereto;
“Warrantholder”
means in relation to any Warrant, the person or persons who is or are for the time being the registered holder or joint holders of such
Warrant in the Register;
“Warrantholder
Resolution” means:
| (a) | a resolution passed at a meeting of the Warrantholders duly convened and passed by Warrantholders representing
not less than three-fourths of the votes cast, whether on a show of hands or on a poll; or |
| (b) | a resolution consented to in writing by Warrantholders representing not less than three-fourths of the
votes of Warrantholders entitled to vote thereon. |
“Warrants”
means each of the warrants of the Company constituted by this Instrument and all rights conferred by this Instrument.
| 1.2 | The clause headings are used for guidance only and shall not affect the meaning or interpretation of any
part of this Instrument. |
| 1.3 | Reference to clauses, sub clauses and schedules in this Instrument are references to the clauses, sub
clauses and schedules of and to this Instrument. |
| 1.4 | References to any statute or statutory provision includes references to that statute or statutory provision
as it may be amended, extended or re-enacted from time to time and shall extend to any rules, orders, regulations or delegated legislation
made thereunder. |
| 1.5 | Words importing the singular shall include the plural and vice versa; words importing the masculine shall
include the feminine and neuter and vice versa; words importing persons shall include bodies corporate, unincorporated associations, partnerships,
joint ventures, limited liability companies, firms, organizations, trusts or other entities, and shall include any successor (by merger
or otherwise) of any such person. |
| 1.6 | Any register, index, minute book or book of account required to be kept by the Company pursuant to this
Instrument shall be kept, and inspection thereof shall be allowed and copies shall be supplied, in such form and manner and subject to
such precautions as would from time to time be permissible or required if it were a register, index, minute book or book of account required
to be kept by the BVI Companies Act, 2004 (as amended) (or if the Company changes its jurisdiction from the British Virgin Islands to
a foreign jurisdiction, the relevant laws of such foreign jurisdiction) and references to such records in the Instrument shall be construed
accordingly. Notwithstanding the foregoing and for the avoidance of doubt, the Warrant Agent and Registrar shall keep all books and records
required to be maintained by it hereunder in accordance with the express terms of this Agreement. |
| 1.7 | A Warrant is “outstanding” unless the Subscription Rights attached to such Warrant have been
exercised in full or have lapsed in accordance with the provisions of this Instrument. |
| 1.8 | Any reference to “writing” or “written” includes any method of reproducing words or
text in a legible and non-transitory form but shall not include e-mail. |
| 1.9 | All references to “$” are to the lawful currency of the United States as at the date of this
Instrument. |
| 1.10 | References to times of the day are to that time in New York, New York and references to a day are to a
period of 24 hours running from midnight to midnight. |
| 1.11 | Any reference to “Company” includes the Company in such form as it exists following the Domestication
or any continuation, change of jurisdiction, merger, consolidation or similar action under the laws of the British Virgin Islands or any
relevant foreign jurisdiction. |
| 1.12 | References to “shares in the capital of” or “share capital” or similar terms in this
Instrument shall be construed so as to include, if the company is incorporated in the British Virgin Islands, shares in a company which
has no share capital but is authorised to issue a maximum or unlimited number of shares. |
| 2. | CONSTITUTION AND FORM OF WARRANTS |
| 2.1 | The Company previously created and constituted, pursuant to a resolution of the Board passed on 16 May
2023, 54,975,000 Warrants to subscribe for Ordinary Shares on the terms and subject to the conditions of the Original Warrant Instrument,
of which 18,264,876 are outstanding on the date hereof. |
| 2.2 | Each Warrant confers the right (but not the obligation) on the Warrantholder to subscribe for the applicable
Portion of an Ordinary Share during the Subscription Period on the terms and subject to the conditions set out in this Instrument. |
| 2.3 | The Company undertakes to comply with the terms and conditions of this Instrument and specifically, but
without limitation, to do all such things and execute all such documents to the extent necessary in order to give effect to the exercise
of any Subscription Rights in accordance with this Instrument. |
| 2.4 | Upon the issue of any Warrant, the Company shall (or cause the Registrar to) enter the person or persons
to whom the Warrant is issued into the Register in respect of such Warrant. Subject to clause 9.5, the Warrants registered in a Warrantholder’s
name will be held in certificated form and will be evidenced by a Warrant Certificate issued by the Company. |
| 2.5 | The Company shall, upon exercise of all or any of the Warrants in accordance with clause 4 from time
to time during the Subscription Period, including, without limitation, the payment, in full, of the Exercise Price with respect thereto,
forthwith allot and issue the number of Ordinary Shares required to be allotted and issued in accordance with the terms of this Instrument. |
| 2.6 | The Warrants are issued subject to the Articles and otherwise on the terms and conditions of this Instrument,
which are binding upon the Company and each Warrantholder and all persons claiming through them. |
| 3.1 | Every Warrant Certificate shall be in the form or substantially in the form set out in schedule 1
(or such other form as determined from time to time by the Company and reasonably acceptable to the Registrar and Warrant Agent ) and
shall have endorsed thereon a Subscription Notice and Form of Nomination in the form or substantially in the form set out in schedule 1. |
| 3.2 | Every Warrantholder shall be entitled without charge to one Warrant Certificate for the Warrants held
by such holder in certificated form save that joint holders shall be entitled to one certificate only in respect of the Warrants held
by them jointly in certificated form which certificate shall be delivered to the holder whose name stands first in the Register in respect
of such joint holding. The Company shall not be bound to register more than four persons as joint holders of any Warrants. |
| 3.3 | Where some, but not all, of the Warrants represented by any Warrant Certificate are transferred or exercised
the Company shall issue, free of charge, to the relevant Warrantholder a new Warrant Certificate in accordance with the other provisions
of this Instrument for the balance of the Warrants retained by such Warrantholder. |
| 3.4 | All Warrant Certificates shall be executed by or on behalf of the Company by such officers of the Company
as the Board may designate, either manually or by facsimile signature. Upon written request by the Company, the Warrant Certificates shall
be countersigned, either manually or by facsimile signature, by an authorized signatory of the Warrant Agent, but it shall not be necessary
for the same signatory to countersign all of the Warrant Certificates hereunder. |
| 3.5 | If a Warrant Certificate is mutilated, defaced, lost, stolen or destroyed, it shall, at the discretion
of the Company, be replaced at the office of the Registrar on payment of such expenses as may reasonably be incurred by the Company, Warrant
Agent or Registrar in connection therewith and on such terms as to evidence, indemnity and/or security as the Company, Warrant Agent and/or
Registrar may reasonably require. Mutilated or defaced Warrant Certificates must be surrendered before replacements will be issued. |
| 4.1 | Subject to this clause 4 and the terms and conditions of this Instrument, a Warrantholder may exercise
all or any portion of its Subscription Rights for all or any whole number of Ordinary Shares for which he is entitled to subscribe at
any time during the Subscription Period. The exercise of Subscription Rights must be made subject to, and in compliance with, any applicable
laws and regulations and upon payment of any taxes, duties and other governmental charges payable by reason of the exercise (other than
taxes and duties imposed on the Company). Neither the Registrar nor the Warrant Agent shall have any duty or obligation to take any action
under any section of this Instrument that requires the payment of taxes and/or charges unless and until it is satisfied that all such
payments have been made. |
| 4.2 | No fractions of an Ordinary Share will be issued to a Warrantholder upon exercise of any Warrants pursuant
to this Instrument. Where a Warrantholder purports to exercise Warrants for an aggregate amount (a “Purported Exercise Amount”)
that is not equal to a multiple of the Minimum Exercise Amount, such purported exercise will only be valid in respect of the amount of
Warrants which are equal to the largest multiple of the Minimum Exercise Amount which is less than the Purported Exercise Amount (the
“Largest Multiple Amount”). |
| 4.3 | In order to exercise Subscription Rights, whether in whole or in part, Warrantholders must deliver or
cause to be delivered the relevant Warrant Certificate(s) to the Warrant Agent at the address of the Warrant Agent designated for such
purposes (or to any other person or address otherwise notified to Warrantholders in accordance with clause 13.2) together with the
Subscription Notice properly completed and duly signed (or any other document(s) as the Company, the Warrant Agent or Registrar may, in
its absolute discretion, accept), together with a remittance in cleared funds for the Exercise Price in respect of the whole number of
Ordinary Shares being acquired with respect to the Warrants being exercised. Once so delivered, a Subscription Notice shall be irrevocable
save with the consent of the Board. Alternatively, holders of Depositary Interests representing the underlying Warrants may exercise Subscription
Rights through CREST. Depositary Interest holders should refer to the CREST Manual for information on the CREST procedures and authentication
required to effect such exercise. The exercise rights which are conferred by Warrants held in uncertificated form as Depositary Interests
shall be exercisable if an uncertificated exercise notice is received up to 1.00 p.m. on the final exercisable date. The prescribed form
of uncertificated exercise notice is an Unmatched Stock Event (“USE”) instruction, which, on settlement will have the
effect of crediting a stock account of the Warrant Agent. |
| 4.4 | The USE instruction must be properly authenticated in accordance with Euroclear’s specifications and must
contain the following details in addition to any other information required: |
| 4.4.1 | the nominal amount of Warrants in respect of which the Exercise Rights are being are being exercised; |
| 4.4.2 | the participant ID of the Warrantholder; |
| 4.4.3 | the member account ID of the Warrantholder; |
| 4.4.4 | the Warrant Agent’s participant ID: this is RA68; |
| 4.4.5 | the Warrant Agent’s member account ID: this is ADMWAR01; |
| 4.4.6 | the corporate action number, which will be allocated by Euroclear and can be found by viewing the relevant
corporate action details in CREST; |
| 4.4.7 | the corporate action ISIN: this is VGG0093S1175; and |
| 4.4.8 | the Warrantholder’s intended settlement date. |
A request to exercise Subscription Rights
through CREST will be deemed identical in all respects to a request to exercise Warrants in certificated form and will not require any
further action to be taken by the Depositary on behalf of the Warrantholder.
| 4.5 | Warrants will be deemed to be exercised on the Business Day upon which the Warrant Agent (or such other
person as shall have been notified to Warrantholders in accordance with clause 13.2) shall have received the relevant documentation
and remittance in cleared funds referred to in this clause 4. Subject to Subscription Rights being validly exercised and value having
been received by the Company in respect of the relevant remittance, and subject to clause 4.7, the Company shall issue the Ordinary
Shares to be issued pursuant to the exercise of Subscription Rights and enter the holder of such Ordinary Shares in the Company’s register
of shareholders not later than 10 days after the date on which such Subscription Rights are exercised. If an adjustment is made pursuant
to clause 6 after the exercise date but before the relevant Ordinary Shares have been issued, the Warrantholder will receive such
number of Ordinary Shares as it would have received had the exercise taken place following the adjustment taking effect. In the case of
Warrants held in uncertificated form as Depositary Interests, the Company will issue the Ordinary Shares to be issued pursuant to the
exercise of Subscription Rights to the Depositary in the Company’s register of shareholders not later than 10 days after the date on which
such Subscription Rights are exercised, and the Depositary will cause to be issued Depositary Interests representing such Ordinary Shares
within one Business Day to the relevant holder of Depositary Interests representing the underlying Warrants who exercised their Subscription
Rights through CREST. |
| 4.6 | Subject to clause 4.7, as soon as practicable following the exercise of Subscription Rights in accordance
with the terms of this Instrument and, in any event, not later than 28 days after the date on which such Subscription Rights are exercised,
the Company shall issue (or cause to be issued): |
| 4.6.1 | a certificate for the Ordinary Shares in the name of such Warrantholder or such other person as may be
named on the Form of Nomination set out in the Warrant Certificate (subject to applicable law and to payment of stamp duty, stamp duty
reserve tax or any similar tax as may be applicable); and |
| 4.6.2 | in the event of a partial exercise of Subscription Rights by any Warrantholder, a Warrant Certificate
in the name of such Warrantholder in respect of the balance of the Warrants represented by the relevant Warrant Certificate that remain
outstanding. |
The certificate for the Ordinary Shares
issued upon the exercise of Warrants (together with any balancing Warrant Certificate) will be delivered at the risk of the person entitled
thereto to the address of such person or (in the case of a joint holding) to that one of them whose name stands first in the Register
or relevant Form of Nomination and will be sent by ordinary postal delivery.
| 4.7 | At any time when the Ordinary Shares are capable of electronic settlement in uncertificated form on any
securities exchange or quotation system on which the Ordinary Shares are traded or quoted, the Ordinary Shares to be issued upon the exercise
of Subscription Rights may, at the absolute discretion of the Board (exercised in the manner required by any applicable laws), be issued
in uncertificated form (whether in the form of Depositary Interests or otherwise) in such manner as the Company may notify the Warrantholders,
the Registrar and the Warrant Agent. |
| 4.8 | Every Warrant in respect of which Subscription Rights: |
| 4.8.1 | have been exercised in full; or |
| 4.8.2 | have not been exercised (whether in whole or in part) during the Subscription Period, |
shall lapse and be cancelled and Warrantholders
will have no further Subscription Rights in respect of such Warrants and such Warrants may not be re-issued or re-sold.
| 4.9 | Ordinary Shares issued pursuant to the exercise of Warrants in accordance with the terms of this Instrument
shall be issued fully paid and free from any liens, charges or encumbrances and rights of pre-emption but shall not rank for any dividends
or other distributions declared, made or paid on the Ordinary Shares for which the record date is prior to the relevant day on which the
Warrants are exercised but, subject thereto, shall rank in full for all dividends and other distributions declared, made or paid on the
Ordinary Shares on or after the relevant day on which the Warrants are exercised and otherwise pari passu in all respects with the Ordinary
Shares in issue at that date. |
| 4.10 | At any time when the Ordinary Shares are listed on the New York Stock Exchange and/or any other securities
exchange or quotation system, it is the intention of the Company to apply to the New York Stock Exchange (or relevant authority for any
other securities exchange or quotation system) for the Ordinary Shares issued pursuant to any exercise of Warrants to be admitted to the
New York Stock Exchange or such other securities exchange or quotation system on which the Ordinary Shares are traded or quoted. |
| 4.11 | The exercise of Subscription Rights by any holder or beneficial owner of Warrants who is a U.S. Person,
or the right of such a holder or beneficial owner of Warrants or other U.S. Person to receive the Ordinary Shares falling to be issued
to him following the exercise of his Subscription Rights, will be subject to such requirements, conditions, restrictions, limitations
and/or prohibitions as the Company may at any time impose, in its absolute discretion, for the purpose of complying with the securities
laws of the United States (including, without limitation, the Securities Act, the Exchange Act, the U.S. Investment Company Act, and any
rules or regulations promulgated under such acts). The Company shall promptly inform the Warrantholders, Registrar and Warrant Agent in
writing of any such requirements, conditions, restrictions, limitations and/or prohibitions. |
| 4.12 | To the extent any holder or beneficial owner of Warrants, including but not limited to any U.S. Person,
holds Warrants in uncertificated form (whether in the form of Depositary Interests or otherwise) and exercises Subscription Rights through
CREST (or any other system pursuant to which the Warrants may be held in uncertificated form as determined by the Board) they will be
deemed to represent, warrant and agree to the Company, the Registrar, the Warrant Agent and the Depositary that each of the provisions
set out in clause 4.13 are true and accurate as at the time(s) of such exercise and the Company, the Registrar, the Warrant Agent and
the Depositary will be entitled to rely on the truth and accuracy of the same. |
| 4.13 | Each person exercising Subscription Rights represents, warrants and agrees, as at the time(s) of such
exercise as follows: |
| (a) | it is an Accredited Investor or a QIB and exercising for its own account or the account of a QIB with
respect to which it invests on a discretionary basis and is doing so in reliance upon an applicable exemption from the registration requirements
of the Securities Act and in accordance with all applicable laws; and: |
| (i) | it understands that the Ordinary Shares to be issued upon exercise of the Warrants have not been and are
not registered under the Securities Act and will be subject to certain restrictions on transfer as set out in the Articles, including
that they may not be offered or sold in the United States or to, or for the account or benefit of U.S. Persons, other than Accredited
Investors or QIBs, absent registration or exemption from registration under the Securities Act; |
| (ii) | it may be asked to supply an opinion of legal counsel that the Ordinary Shares issuable upon exercise
of the Warrants are exempt from registration under the Securities Act; |
| (iii) | it understands that: |
| (A) | a new holding period for the Ordinary Shares issued upon exchange of such Warrants for cash, for purposes
of Rule 144, will commence upon issue of such Ordinary Shares; and |
| (B) | its exercise of Warrants and acquisition of Ordinary Shares was not solicited by any form of general solicitation
or general advertising (as those terms are defined in Regulation D under the Securities Act) and that it has been given access to information
sufficient to permit it to make an informed decision as to whether to invest in the Ordinary Shares; or |
| (b) | it is located outside the United States and is not a U.S. Person and is not exercising the Warrants for
the account or benefit of a U.S. Person; and: |
| (i) | it is acquiring the Ordinary Shares to be issued upon exercise of such Warrants in an offshore transaction
within the meaning of Regulation S and in accordance with all applicable laws; |
| (ii) | its exercise of Warrants and acquisition of Ordinary Shares to be issued upon exercise of the Warrants
were not solicited by means of any “directed selling efforts” as defined in Regulation S; |
| (iii) | it understands that: |
| (A) | the Ordinary Shares will be subject to certain restrictions on transfer as set out in the Articles; |
| (B) | the Ordinary Shares have not been and are not registered under the Securities Act and may not be offered
or sold in the United States or to, or for the account or benefit of U.S. Persons, other than Accredited Investors or QIBs, absent registration
or an exemption from the registration requirements under the Securities Act; and |
| (C) | a new holding period for the Ordinary Shares issued upon exchange of such Warrants for cash, for purposes
of Rule 144, will commence upon issue of such Ordinary Shares; |
| 4.13.2 | no portion of the assets used by the Warrantholder to exercise its Subscription Rights constitutes or
will constitute the assets of (i) an “employee benefit plan” that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii)
a plan, individual retirement account or other arrangement that is subject to section 4975 of the U.S. Tax Code, (iii) entities whose
underlying assets are considered to include “plan assets” of any plan, account or arrangement described in preceding clause
(i) or (ii), or (iv) any governmental plan, church plan, non-U.S. plan or other investor whose purchase or holding of Ordinary Shares
would be subject to any state, local, non-U.S. or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section 4975
of the U.S. Tax Code or that would have the effect of the regulations issued by the U.S. Department of Labor set forth at 29 CFR section
2510.3-101, as modified by section 3(42) of ERISA; and |
| 4.13.3 | it is not a resident of any jurisdiction where the offer or sale of relevant securities or the exercise
of the Warrants and receipt of the Ordinary Shares would violate the relevant securities laws of such jurisdiction and is not exercising
the Warrants on behalf of any such person. |
| 4.14 | The Registrar, the Warrant Agent and the Company reserve the right to delay taking any action on any particular
instructions from the Warrantholder if any of them considers that it needs to do so to obtain further information from the Warrantholder
or to comply with any legal or regulatory requirement binding on it (including the obtaining of evidence of identity to comply with money
laundering regulations), or to investigate any concerns they may have about the validity of or any other matter relating to the instruction. |
| 4.15 | The Company shall not be obliged to issue and deliver Ordinary Shares pursuant to the exercise of a Warrant
unless (i) such Ordinary Shares have been registered or qualified or deemed to be exempt under the securities laws of the jurisdiction
of state of residence of the Warrantholder, (ii) a registration statement under the Securities Act with respect to the Ordinary Shares
is effective, (iii) the Warrantholder provides the Company with reasonable assurance that such Ordinary Shares can be sold, novated or
transferred pursuant to Rule 144, Rule 144A promulgated under the Securities Act (or a successor rule thereto), or another applicable
exemption from the registration requirements under the Securities Act, and the applicable sale of the Ordinary Shares to be made in reliance
upon such exemption is made in accordance with the terms of such exemption (in which case the Company shall provide the Warrant Agent
with an opinion of legal counsel, in a form reasonably acceptable to the Warrant Agent, stating the exercise of the Warrants is exempt
from the registration requirements of the Securities Act and such Ordinary Shares are qualified for sale or exempt from qualification
under applicable securities laws of jurisdictions in which the Warrantholder resides). Warrants may not be exercised by, or Ordinary Shares
issued or delivered to, any Warrantholder in any state or other jurisdiction in which such exercise or issue and delivery of Ordinary
Shares would be unlawful. |
| 4.16 | At any time during the Subscription Period, the Board will have the discretion to refuse to accept a notice
of exercise of Subscription Rights to the extent such exercise may affect the Company’s ability to meet the requirements in Listing Rule
14.3.2. |
Subject to the provisions of clause 6
and, unless otherwise authorised by a Warrantholder Resolution, whilst any Subscription Rights remain exercisable, the Company shall at
all times maintain all requisite board and shareholder or other authorizations necessary to enable the issue of Ordinary Shares pursuant
to the exercise of all the Warrants outstanding from time to time.
| 6. | ADJUSTMENT OF SUBSCRIPTION RIGHTS |
| 6.1 | If the Company, at any time while Subscription Rights are outstanding: |
| 6.1.1 | issues any Ordinary Shares by way of dividend or distribution to holders of Ordinary Shares (solely in
their capacity as holders of Ordinary Shares); |
| 6.1.2 | subdivides (by any share split, recapitalisation or otherwise) the number of Ordinary Shares outstanding
into a larger number of Ordinary Shares; or |
| 6.1.3 | consolidates (by consolidation, combination, reverse share split or otherwise) the number of outstanding
Ordinary Shares into a smaller number of Ordinary Shares, |
then in each such case
the Exercise Price shall be divided by the quotient of (x) the number of Ordinary Shares outstanding immediately after such event
divided by (y) the number of Ordinary Shares outstanding immediately
before such event (the result of such quotient is referred to herein the “Adjustment Percentage”). Any adjustment
made pursuant to clause 6.1.1 shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause 6.1.2 or 6.1.3 shall become effective immediately
after the effective date of such subdivision or consolidation. Following each adjustment to the Exercise Price pursuant to this clause
6.1, the Portion shall also be adjusted so that after such adjustment the aggregate Exercise Price payable following adjustment for all
outstanding Warrants shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (subject to any
rounding under clause 6.2).
| 6.2 | On any adjustment to the Exercise Price pursuant to this clause 6, the resultant Exercise Price,
if not an integral multiple of one cent, will be rounded to the nearest cent (0.5 cents being rounded upwards); provided however, in no
event shall any adjustment to the Exercise Price be made if such adjustment would cause the Exercise Price to be less than that required
by any then applicable laws and regulations. |
| 6.3.1 | the Board determines that an adjustment should be made to the Exercise Price and/or the Portion to which
each Warrant relates as a result of one or more events or circumstances not referred to in clause 6.1 or |
| 6.3.2 | an event which gives or may give rise to an adjustment under clause 6.1 occurs in circumstances such
that the Board, in its absolute discretion, determines that the adjustment provisions of clause 6.1 need to be operated subject to
some modification in order to give a result which is fair and reasonable in all the circumstances, |
then the Board may make any adjustment
to the Exercise Price and/or Portion or modification to the operation of clause 6.1 as it determines in good faith to be fair and
reasonable to take account of the relevant event or circumstance and upon determination the adjustment (if any) will be made and will
take effect in accordance with the determination.
Whenever an adjustment
is made or any event affecting the Warrants or their exercisability, the Company shall (i) promptly prepare a certificate setting forth
such adjustment or describing such event, and a brief, reasonably detailed statement of the facts, computation and methodology accounting
for such adjustment, and (ii) promptly file with the Warrant Agent and with each transfer agent for the Ordinary Shares a copy of such
certificate. The Warrant Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein
contained and shall have no duty or liability with respect to and shall not be deemed to have knowledge of any such adjustment or any
such event unless and until it shall have received such certificate.
| 7.1 | Upon the occurrence of the Redemption Event, each Warrant, unless previously exercised or cancelled before
the date set for redemption in accordance with clause 7.3, will be mandatorily redeemed by the Company for $0.01 per Warrant. |
| 7.2 | The Redemption Event occurs if the Average Price of an Ordinary Share for any ten consecutive Trading
Days is equal to or greater than the Redemption Trigger Price (the “Redemption Event”). |
| 7.3 | The Company will give Warrantholders notice of the Redemption Event having occurred within 20 days of
its occurrence in accordance with the terms of this Instrument and will redeem all Warrants failing to be redeemed on the date set by
the Redemption Notice, being a date no longer than 30 days following the occurrence of the Redemption Event. Any Warrant which is exercised
before the date set for redemption by the Redemption Notice will not be redeemed. |
| 7.4 | On the date set for redemption by the Redemption Notice, the Company shall pay to each holder of Warrants
failing to be redeemed the amount due in respect of such redemption and upon making such payment the relevant Warrant will be cancelled. |
| 7.5 | If the Board determines that an adjustment should be made to the Redemption Trigger Price as a result
of matters such as any subsequent consolidation or subdivision of the Ordinary Shares or issue of Ordinary Shares to shareholders by way
of dividend or distribution, the Board shall determine in good faith as soon as practicable what adjustment (if any) to the Redemption
Trigger Price is fair and reasonable and upon determination the adjustment (if any) will be made and will take effect in accordance with
the determination. |
| 8. | GENERAL OFFERS AND LIQUIDATION |
| 8.1 | While any Subscription Rights remain outstanding, if at any time an offer is made to all holders of Ordinary
Shares (or all such holders other than the offeror and/or any company controlled by the offeror and/or persons acting in concert with
the offeror) to acquire all or some of the issued Ordinary Shares and the Company becomes aware on or before the end of the Subscription
Period that as a result of such offer (or as a result of such offer and any other offer made by the offeror) the right to cast a majority
of the votes which may ordinarily be cast on a poll at a general meeting of members (or shareholders, as applicable) of the Company has
or will become vested in the offeror and/or such companies or persons as aforesaid, the Company will give notice to the Warrantholders
of such vesting within 14 days of it occurring, and each such Warrantholder will be entitled, at any time within the period of 30 days
immediately following the date of such notice, to exercise his Subscription Rights on the terms on which the same could have been exercised
if they had been exercisable and had been exercised on the date of such notice after which time all Subscription Rights will lapse. If
any part of such period falls after the end of the Subscription Period, the end of the Subscription Period will be deemed to be the last
Business Day of that 30 day period. |
| 8.2 | If in connection with the Acquisition, holders of Ordinary Shares are offered or receive shares in another
company (the “New Company”) the Directors may, in their absolute discretion, determine that the Subscription Rights be
replaced by new subscription rights in respect of shares of the New Company and clause 8.1 will not apply if it would otherwise do
so. Any such new subscription rights will be equivalent to the Subscription Rights (as determined by the Directors in their absolute discretion
acting in good faith) and will be on such terms as the Directors consider in their absolute discretion acting in good faith to be fair
and reasonable. |
| 8.3 | If the Company enters into liquidation, all Subscription Rights will lapse on the date of the commencement
of the liquidation. |
| 9.1 | Warrants shall be transferable individually and in integral multiples in accordance with this Instrument
and Schedule 2 pursuant to an instrument of transfer substantially in the form attached hereto as Schedule 4. The Registrar shall maintain
a register of Warrantholders in registered form and the provisions of schedule 2 relating to the transfer, transmission and registration
of Warrants shall have full effect as if the same had been incorporated in this Instrument. |
| 9.2 | The Company shall be entitled to appoint such person or persons as the Company thinks fit as the Registrar
and to remove any such person or persons and make a new appointment in their stead upon at least 30 days prior written notice. The Company
shall forthwith give a notice of any change in the identity or address of the Registrar in accordance with clause 13.2. |
| 9.3 | The registered holder of a Warrant shall be treated as its absolute owner for all purposes notwithstanding
any notice of ownership or notice of previous loss or theft or of trust or other interest therein (except as ordered by a court of competent
jurisdiction or required by law). The Company and Warrant Agent shall not (except as stated above) be bound to recognise any other claim
to or interest in any Warrant. |
| 9.4 | Subject to compliance with all applicable laws and regulations, the Company may make arrangements to enable
Warrants to be held and exercised in uncertificated form (whether in the form of Depositary Interests, or evidenced by a “global
Warrant certificate” deposited on behalf of the Company with a depository or its custodian, or otherwise) in such manner as the
Directors may determine from time to time. In the event the Warrants are held in global form, the exercise, transfer and exchange of the
Warrants or beneficial interests therein shall be effected through the applicable depository, in accordance with this Agreement and the
procedures of the depository therefor. |
| 9.5 | No Warrant may be transferred to any person in the absence of an effective registration statement under
the Securities Act and any applicable state securities laws covering the Warrants, or an exemption from such registration is then available
and the Company provides the Warrant Agent with an opinion of counsel, in a form reasonably acceptable to the Warrant Agent, stating that
such transfer of the Warrants is exempt from the registration requirements of the Securities Act and any applicable state securities laws. |
| 10. | MEETINGS OF WARRANTHOLDERS |
| 10.1 | All the provisions of the Articles as to the conduct of, and standards for a quorum and action at, meetings
of the members (or shareholders, as applicable) apply mutatis mutandis to meetings of Warrantholders as though the Warrants were a class
of shares forming part of the capital of the Company, but: |
| 10.1.1 | the necessary quorum is the requisite number of Warrantholders (present in person or by proxy) entitled
to subscribe for two-tenths in number of the Ordinary Shares attributable to such outstanding Warrants; |
| 10.1.2 | every Warrantholder present in person or by proxy at any such meeting is entitled on a show of hands to
one vote for each Ordinary Share for which he is entitled to subscribe and every such Warrantholder present in person or by proxy is entitled
on a poll to one vote for each Ordinary Share for which he is entitled to subscribe; |
| 10.1.3 | any Warrantholder present in person or by proxy may demand or join in demanding a poll; and |
| 10.1.4 | if at any adjourned or postponed meeting a quorum as above defined is not present, the Warrantholder or
Warrantholders then present in person or by proxy are a quorum. |
| 10.2 | Without prejudice to the generality of the foregoing, at a meeting of Warrantholders, the Warrantholders,
by way of Warrantholder Resolution, shall have power to: |
| 10.2.1 | sanction or approve any compromise or arrangement proposed to be made between the Company and the Warrantholders
or any of them; |
| 10.2.2 | sanction or approve any proposal by the Company for modification, abrogation, variation or compromise
of, or arrangement in respect of the rights of the Warrantholders against the Company whether such rights shall arise under this Instrument
or otherwise; |
| 10.2.3 | sanction or approve any proposal by the Company for the exchange or substitution for the Warrants of,
or the conversion of the Warrants into, shares, stock, bonds, debentures, debenture stock, warrants or other obligations or securities
of the Company or any other body corporate formed or to be formed; |
| 10.2.4 | assent to any modification of the conditions to which the Warrants are subject and/or the provisions contained
in this Instrument which shall be proposed by the Company; |
| 10.2.5 | authorise any person to concur in and execute and do all such documents, acts and things as may be necessary
to carry out and give effect to any Warrantholder Resolution; |
| 10.2.6 | discharge or exonerate any person from any liability in respect of any act or omission for which such
person may have become responsible under this Instrument; and |
| 10.2.7 | give any authority, direction or sanction or approve which under the provisions of this Instrument is
required to be given by Warrantholder Resolution. |
| 10.3 | A Warrantholder Resolution consented to in writing may be contained in one document or several documents
in the same form, each signed by or on behalf of one or more Warrantholders. |
| 11.1 | Any modification, supplement, amendment or amendment and restatement of this Instrument and any of the
rights attached to the Warrants may be effected only by an instrument in writing, executed by the Company and expressed to be a modification,
supplement, amendment or amendment and restatement of this Instrument and, save in the case of (A) a modification, supplement, amendment
or amendment and restatement of this Instrument which is of a formal, minor or technical nature or made to correct a manifest error; or
(B) a modification, supplement, amendment or amendment and restatement of this Instrument deemed necessary or desirable by the Directors
in their absolute discretion (acting in good faith) and which the Directors determine in their absolute discretion (acting in good faith)
does not adversely affect the interests of Warrantholders; or (C) a modification, supplement, amendment or amendment and restatement of
this Instrument in connection with the Company’s change of jurisdiction from the British Virgin Islands to a foreign jurisdiction, only
if it shall first have been sanctioned by a Warrantholder Resolution. Notwithstanding the foregoing, the Company may lower the Exercise
Price (permanently or for limited duration) or extend the duration of the Subscription Period without the prior sanction, consent or approval
of Warrantholders. Upon the delivery of a certificate from an authorized officer of the Company and which states that the proposed modification
is in compliance with the terms of this Section 11.1, the Warrant Agent shall execute such modification. Notwithstanding anything in this
Instrument to the contrary, the Warrant Agent shall not be required to execute any modification to this Instrument that it has determined
would adversely affect its own rights, duties, obligations or immunities under this Instrument. No modification to this Instrument shall
be effective unless duly executed by the Warrant Agent. |
| 11.2 | A memorandum of every such modification, supplement, amendment or amendment and restated instrument shall
be endorsed on this Instrument by the Company. |
| 11.3 | Notice of every modification, supplement, amendment or amendment and restatement of this Instrument shall
be given by the Company to the Warrantholders in accordance with clause 13.2. |
| 12. | PURCHASE, surrender AND CANCELLATION |
| 12.1 | The Company may at any time purchase, from one or more Warrantholders, Warrants, whether: |
| 12.1.1 | by tender at any price; or |
| 12.1.2 | on or through the market; or |
| 12.1.3 | by private treaty at any price, |
or otherwise, on such terms as the Board,
in their absolute discretion (acting in good faith) determine provided such purchases are made in accordance with applicable laws and
regulations and the rules of any stock exchange or trading platform on which Warrants are listed or traded.
| 12.2 | The Company shall accept the surrender (for no consideration) of Warrants at any time. |
| 12.3 | All Warrants purchased pursuant to clause 12.1 or surrendered shall be cancelled forthwith and may
not be reissued or sold. |
| 13. | AVAILABILITY OF INSTRUMENT AND NOTICES |
| 13.1 | Every Warrantholder shall be entitled to inspect a copy of this Instrument at the offices of the Warrant
Agent designated for such purposes (which initially shall be 150 Royall Steet, Canton, MA 02021, U.S. or such other agent and address
as the Company may appoint), during normal business hours (Saturdays, Sundays and public holidays in the location of the Warrant Agent
excepted), and shall be entitled to receive a copy of this Instrument against payment of such charges as the Board may impose in its absolute
discretion. |
| 13.2 | Notices to be given pursuant to the provisions of this Instrument shall be given in accordance with schedule 2,
paragraph 4. |
| 13.3 | The Company will use reasonable efforts to give written notice to each Warrantholder at least fifteen
calendar days prior to the date on which the Company closes its books or takes a record (A) with respect to any distribution on the Ordinary
Shares or (B) for determining rights to vote with respect to any voluntary dissolution or voluntary liquidation of the Company. |
| 14. | PURCHASE OF ORDINARY SHARES BY THE COMPANY |
The Company may at any time purchase
Ordinary Shares, or arrange for the purchase of Ordinary Shares on its behalf or by any other member of its group, and whether by way
of tender offer, without requiring, in each case, the consent of Warrantholders for such purchase.
| 15.1 | The Company acknowledges and covenants that the benefit of the covenants, obligations and conditions on
the part of or binding upon it contained in this Instrument and the schedules hereto shall enure to the benefit of each and every Warrantholder
and the Registrar and Warrant Agent and each of its successors and assigns. |
| 15.2 | Each Warrantholder shall be entitled to enforce the said covenants, obligations and conditions against
the Company insofar as such Warrantholder’s Warrant is concerned, without the need to join the beneficiary of any such Warrant or any
intervening or other Warrantholder in the proceedings for such enforcement. |
| 16.1 | This Instrument and the Warrants and any dispute or claim arising out of or in connection with any of
them or their subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance
with, the laws of (i) prior to the Domestication, the British Virgin Islands except that the rights, immunities, duties and obligations
of the Warrant Agent and Registrar shall 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 without regard to its rules of conflict of laws, and (ii) following the
Domestication, the State of Delaware. |
| 16.2 | Prior to the Domestication, the courts of the British Virgin Islands shall have exclusive jurisdiction
to settle any dispute or claim arising out of or in connection with this Instrument or any Warrant or their subject matter or formation
(including non-contractual disputes or claims), provided that, each party (a) agrees that the courts of the State of Delaware and of the
United States of America located in the State of Delaware (the “Delaware Courts”) shall have exclusive jurisdiction to settle
any dispute or claim to which the Warrant Agent or Registrar is party, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from the Delaware Courts, and (c) waives any claim of improper venue or any claim that
the Delaware Courts are an inconvenient forum. Following the Domestication, the courts of the State of Delaware shall have exclusive jurisdiction
to settle any dispute or claim arising out of or in connection with this Instrument or any Warrant or their subject matter or formation
(including non-contractual disputes or claims). |
| 17.1 | If any term, provision, covenant or restriction of this Instrument is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Instrument
shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded
provision shall affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled
to resign immediately upon written notice to the Company. |
| 18.1 | Notwithstanding anything to the contrary contained herein, the Warrant Agent shall not be liable for any
delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, epidemics,
pandemics, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of any utilities, communications,
or computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war or civil unrest. |
| 19. | CONCERNING THE Warrant AGENT |
The rights, duties and immunities of
the Warrant Agent are set forth on Schedule 3 attached hereto and incorporated herein by reference. The parties hereto acknowledge and
agree that all references to the Warrant Agent shall include Computershare Inc. in its capacity as Registrar, as applicable and that all
protections, rights, immunities and protections in favor of the Warrant Agent in this Instrument (including, without limitation, in Schedule
3 of this Instrument) shall apply to the Registrar as if the Registrar was expressly named therein.
[Signature Page Follows]
IN WITNESS THEREOF this Instrument has
been executed by the Company on the date first written above.
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ACUREN CORPORATION |
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/s/ Desiree DeStefano |
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Name: |
Desiree DeStefano |
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Title: |
Vice President and Assistant Treasurer |
IN WITNESS THEREOF this Instrument has
been executed by Computershare Inc. on the date first written above.
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COMPUTERSHARE TRUST COMPANY, N.A. and COMPUTERSHARE INC. |
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On behalf of both entities |
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/s/ Collin Ekeogu |
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Name: |
Collin Ekeogu |
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Title: |
Senior Manager, Corporate Actions |
SCHEDULE 1
Form of Warrant Certificate
THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE
(INCLUDING THE SECURITIES ISSUABLE UPON EXERCISE OF ANY WARRANT) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR NOVATED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY OR THE WARRANT AGENT), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY AND THE WARRANT AGENT, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER THE ACT.
THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE
(INCLUDING THE SECURITIES ISSUABLE UPON THE EXERCISE OF ANY WARRANT) ARE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE AMENDED
AND RESTATED WARRANT INSTRUMENT DATED 23 SEPTEMBER 2024, EXECUTED BY THE
COMPANY (AS MODIFIED, SUPPLEMENTED, AMENDED OR AMENDED AND RESTATED, THE “WARRANT INSTRUMENT”). COPIES OF SUCH INSTRUMENT MAY
BE OBTAINED BY THE HOLDER HEREOF AT THE OFFICES OF THE WARRANT AGENT, COMPUTERSHARE TRUST COMPANY, N.A. AND COMPUTERSHARE INC., WITH OFFICES
AT THE ADDRESS BELOW (OR SUCH OTHER AGENT AND ADDRESS AS THE COMPANY MAY APPOINT).
SEE ANNEX A TO THIS WARRANT CERTIFICATE FOR ADDITIONAL
RESTRICTIVE LEGENDS APPLICABLE TO THIS WARRANT
| No. of Certificate: |
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| Date of issue: |
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Warrants to subscribe for Ordinary Share(s) in
ACUREN CORPORATION
Registered Office: Ritter House, Wickhams Cay II,
Road Town, Tortola VG1110, British Virgin Islands
incorporated in the British Virgin Islands
(Registered number: 2114331)
This is to certify that [●]
of [●]
is/are the registered holder(s) of [●] Warrants
in Acuren Corporation issued pursuant to and in accordance with the terms of the Amended and Restated Warrant Instrument (as from time
to time amended) executed by the Company and the Warrant Agent thereunder (as modified, supplemented amended or amendment and restated,
the “Warrant Instrument”). Words and expressions used in this Warrant Certificate and the Subscription Notice shall have
the same meanings as in the Warrant Instrument.
The registered holder is entitled in respect of
every one Warrant held to subscribe for the applicable Portion of an Ordinary Share during the Subscription Period on the terms and conditions
set forth in the Warrant Instrument. At the date of issue of this certificate, the applicable Portion is [one-fourth][insert applicable
Portion if there has been a prior adjustment] of an Ordinary Share.
Warrants are exercisable only as specified in
clause 4 of the Warrant Instrument.
Transfer of any of the Warrants comprised herein
will not be registered without production of this Warrant Certificate.
The Warrant Instrument is enforceable severally
by each Warrantholder and is available for inspection at the offices of the Warrant Agent designated for such purposes (which initially
shall be at 150 Royall Street, Canton, MA 02021, U.S.) or such other agent and address as the Company may appoint, until the end of the
Subscription Period.
This Warrant Certificate is subject to all of
the terms, provisions and conditions of the Warrant Instrument, which terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Warrant Instrument reference is hereby made for a full description of the rights, limitations
of rights, obligations, duties and immunities hereunder of the Company and the holders of the Warrant Certificates.
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ACUREN CORPORATION |
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Name: |
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Title: |
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COMPUTERSHARE TRUST COMPANY, N.A. and COMPUTERSHARE INC. |
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On behalf of both entities |
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Name: |
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Title: |
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ANNEX A
PRIOR TO INVESTING IN THE SECURITIES OR CONDUCTING
ANY TRANSACTIONS IN THE SECURITIES, INVESTORS ARE ADVISED TO CONSULT PROFESSIONAL ADVISERS REGARDING THE RESTRICTIONS ON TRANSFER SUMMARISED
BELOW AND ANY OTHER RESTRICTIONS.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”). HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED DIRECTLY OR INDIRECTLY, UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER.
THIS SECURITY MAY NOT BE ACQUIRED, HELD BY OR
TRANSFERRED TO (I) AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE U.S. EMPLOYEE RETIREMENT SECURITIES ACT OF 1974, AS AMENDED (“ERISA”),
(II) A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR ARRANGEMENT THAT IS SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA
OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR TO ANY OTHER STATE, LOCAL, NON-U.S. OR OTHER
LAWS OR REGULATIONS THAT WOULD HAVE THE SAME EFFECT AS REGULATIONS PROMULGATED UNDER ERISA BY THE U.S. DEPARTMENT OF LABOR AND CODIFIED
AT 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) SO AS TO CAUSE THE UNDERLYING ASSETS OF THE COMPANY TO BE TREATED
AS ASSETS OF THAT INVESTING ENTITY BY VIRTUE OF ITS INVESTMENT IN THE COMPANY AND THEREBY SUBJECT THE COMPANY (OR PERSONS RESPONSIBLE
FOR THE INVESTMENT AND OPERATION OF THE COMPANY’S ASSETS) TO LAWS OR REGULATIONS THAT ARE SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED
TRANSACTION PROVISIONS CONTAINED IN TITLE I OF ERISA OR SECTION 4975 OF THE CODE, OR (III) AN ENTITY THE UNDERLYING ASSETS OF WHICH ARE
CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLANS, ACCOUNTS AND ARRANGEMENTS AND WHICH HAVE PURCHASED THIS SECURITY ON BEHALF
OF, OR WITH “PLAN ASSETS” OF, ANY PLAN (COLLECTIVELY A “PLAN”).
SUBSCRIPTION NOTICE
In order to exercise all or any of the Warrants
represented by this Warrant Certificate, this Warrant Certificate must be submitted with this Subscription Notice duly completed and signed,
together with the payment in cleared funds referred to below, to the Warrant Agent, who are initially Computershare Inc. and Computershare
Trust Company, N.A., located at 150 Royall Street, Canton, MA 02021, U.S. (or such other Warrant Agent and address as the Company may
appoint).
To: The Directors of Acuren Corporation
I/We the undersigned, being the registered holder(s)
of the Warrants comprised in this Warrant Certificate (and the several Warrant Certificates (if any) enclosed with this Subscription Notice)
hereby give(s) notice of his/their wish to exercise [●] Warrant(s) to subscribe for [●] Ordinary Shares in accordance with
the provisions of the Warrant Instrument.
I/We enclose proof of payment for $[●] in
favor of the Company being the aggregate payment of the full subscription price for the total number of such Warrants.*
* Please contact the Warrant Agent in order to
pay by way of electronic transfer.
I/we represent, warrant, agree and understand
that:
| (a) | I/we am/are an “accredited investor” as defined in Rule 501(a) of Regulation D under the U.S.
Securities Act of 1933, as amended (the “Securities Act”) or a “qualified institutional buyer” or “QIB”
within the meaning of Rule 144A under the Securities Act and am/are exercising for my/our own account or the account of a QIB with respect
to which I/we invest on a discretionary basis and am/are doing so in reliance upon an applicable exemption from the registration requirements
of the Securities Act and in compliance with all applicable laws; and: |
| (i) | understand that the Ordinary Shares to be issued upon exercise of the Warrants have not been and are not
registered under the Securities Act and will be subject to certain restrictions on transfer as set out in the Articles including that
they may not be offered or sold in the United States or to, or for the account or benefit of U.S. Persons, other than Accredited Investors
or QIBs, absent registration or exemption from registration under the Securities Act; |
| (ii) | I/we may be asked to supply an opinion of legal counsel that the Ordinary Shares issuable upon exercise
of the Warrants are exempt from registration under the Securities Act; |
| (A) | a new holding period for the Ordinary Shares issued upon exchange of such Warrants for cash, for purposes
of Rule 144 under the Securities Act, will commence upon issue of such Ordinary Shares; and |
| (B) | my/our exercise of Warrants and acquisition of Ordinary Shares to be issued upon exercise of such Warrants
was not solicited by any form of general solicitation or general advertising (as those terms are defined in Regulation D under the Securities
Act) and that it has been given access to information sufficient to permit it to make an informed decision as to whether to invest in
such Ordinary Shares; or |
| (b) | I/we am/are located outside the United States and am/are not a “U.S. Person” (as defined in
Regulation S under the Securities Act) and am/are not exercising the Warrants for the account or benefit of a U.S. Person; and: |
| (i) | am/are acquiring the Ordinary Shares to be issued upon exercise of such Warrants in an offshore transaction
within the meaning of Regulation S and in accordance with all applicable laws; |
| (ii) | my/our exercise of Warrants and acquisition of Ordinary Shares to be issued upon exercise of the Warrants
were not solicited by means of any “directed selling efforts” as defined in Regulation S; |
| (A) | the Ordinary Shares will be subject to certain restrictions on transfer as set out in the Articles; |
| (B) | the Ordinary Shares have not been and will not be registered under the Securities Act and may not be offered
or sold in the United States or to, or for the account or benefit of U.S. Persons, other than Accredited Investors or QIBs, absent registration
or an exemption from the registration requirements under the Securities Act; and |
| (C) | a new holding period for the Ordinary Shares issued upon exchange of such Warrants for cash, for purposes
of Rule 144 under the Securities Act, will commence upon issue of such Ordinary Shares; |
| (II) | no portion of the assets used by the Warrantholder to exercise my/our Subscription Rights constitutes
or will constitute the assets of (i) an “employee benefit plan” that is subject to Part 4 of Subtitle B of Title I of ERISA,
(ii) a plan, individual retirement account or other arrangement that is subject to section 4975 of the U.S. Tax Code, (iii) entities whose
underlying assets are considered to include “plan assets” of any plan, account or arrangement described in preceding Clause
(i) or (ii), or (iv) any governmental plan, church plan, non-U.S. plan or other investor whose purchase or holding of Ordinary Shares
would be subject to any state, local, non-U.S. or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section
4975 of the U.S. Tax Code or that would have the effect of the regulations issued by the U.S. Department of Labor set forth at 29 CFR
section 2510.3-101, as modified by section 3(42) of ERISA; and |
| (III) | I/we am/are not a resident of any jurisdiction where the offer or sale of relevant securities or the exercise
of the Warrants and receipt of the Ordinary Shares would violate the relevant securities laws of such jurisdiction and am/are not exercising
the Warrants on behalf of any such person. |
I/We direct you to deliver the registered Ordinary
Shares issued pursuant hereto to the person(s) whose name(s) and address(es) is/are set out in the Form of Nomination set out below and
who has signed the acceptance set out therein or, if none is set out, to me/us in which event I/we agree to accept such shares subject
to the Articles. I/We authorise and request the entry of the name(s) of such persons in the register of shareholders of the Company in
respect thereof.
I/We require the delivery of:
| (a) | certificates in respect of the Ordinary Shares to be issued to such persons; and |
| (b) | a Warrant Certificate in the name(s) of such persons for any balance of my/our Warrants remaining exercisable, |
at the risk of such persons to such address as
is set out in the Form of Nomination or, if none is set out, to my/our address set out in the Register of Warrantholders or (in the case
of joint holders) to the address of that one whose name stands first in such form of Nomination or (if applicable) Register in respect
of the Warrants represented by this Warrant Certificate by ordinary postal service.
GUIDANCE NOTES:
Exercise of the Warrants represented by this Warrant
Certificate may be consolidated with the exercise of Warrants represented by other Warrant Certificates by the use of only one Subscription
Notice, provided that the other Warrant Certificates are attached to the Subscription Notice.
In the case of joint holdings, all joint holders
must sign.
FORM OF NOMINATION
Please insert in BLOCK CAPITALS in the
box below the full name(s) of the person(s) to whom you wish the Ordinary Shares arising on the exercise of your Warrants to be issued
and the address to which the certificate for such Ordinary Shares together with any balance certificate for Warrants should be sent and
the address of the sole or first-named Warrantholder.
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| Signed |
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If the above box is left blank in the case of
Warrants held in certificated form, the Ordinary Shares will be issued to the Warrantholder(s) named in the attached Warrant Certificate
and the certificate for such Ordinary Shares together with any balance Warrant Certificate will be sent to the registered address of the
sole or first-named Warrantholder.
SCHEDULE 2
REGISTRATION, TRANSFER AND TRANSMISSION
| 1.1 | An accurate register of the Warrants (the “Register”) will be kept by the Registrar and
there shall be entered in the Register: |
| 1.1.1 | the names and addresses of the Warrantholders; |
| 1.1.2 | the amount of Warrants held by every registered holder; and |
| 1.1.3 | the date upon which the name of every such registered holder is entered in respect of the Warrants standing
in his name. |
| 1.2 | Any change of name or address on the part of a Warrantholder shall forthwith be notified to the Registrar
at the office of the Warrant Agent, who is initially Computershare Trust Company, N.A. and Computershare Inc. with offices at 150 Royall
Street, Canton, MA 02021, U.S. (or such other agent and address as the Company may appoint), who shall cause the Register to be altered
accordingly. The Register may be closed by the Company for such period or periods and at such times as it may think fit provided that
it shall not be closed for more than thirty days in any calendar year. Any transfer made while the Register is so closed shall, as between
the Company and the person claiming under the transfer (but not otherwise), be considered as made immediately after the reopening of the
Register. The Warrantholders or any of them, and any person duly authorised by any such holder, shall be at liberty at all reasonable
times during office hours to inspect the Register and to take copies of or extracts from the same or any part thereof. |
| 1.3 | The Company, the Registrar and the Warrant Agent shall be entitled to treat the registered holder of any
Warrant as the absolute owner thereof for all purposes notwithstanding any notice of ownership or writing thereon or notice of previous
loss or theft or of trust (whether express or implied) or other interest therein (except as ordered by a court of competent jurisdiction
or required by law) and shall not (except as aforesaid) be bound to recognise any equitable or other claim to or interest in such Warrant. |
| 1.4 | Every Warrantholder will be recognised by the Company as entitled to his Warrants free from any equity,
set-off or cross-claim on the part of the Company against the original or any intermediate holder of the Warrants. |
| 2.1 | Warrants shall be transferable individually and in integral multiples by way of novation by an instrument
of transfer substantially in the form attached hereto as Schedule 4. The instrument of transfer of a Warrant shall be signed by or on
behalf of the transferor and by or on behalf of the transferee. Entry in the Register of a transferee’s name and/or details of Warrants
transferred shall be the Company’s and transferor’s agreement in respect of each novation and upon registration all the rights of the
transferor in respect of Warrants transferred shall cease. In consideration of (inter alia) the transferee agreeing to be registered
as the holder of Warrants the Company shall assume such obligations towards the transferee and the transferee shall have such rights in
respect of such Warrants as are set out under the terms of this Instrument. The transferor shall be deemed to remain the holder of the
Warrant until the name of the transferee is entered in the Register in respect thereof. The Company shall not be obliged to give effect
to any such instrument which purports to transfer any Warrants in respect of which a Subscription Notice shall have been received. |
| 2.2 | The Company, the Registrar and Warrant Agent may decline to recognise any instrument of transfer unless
such instrument is duly executed, properly completed and delivered at the office of the Warrant Agent designated for such purposes (which
initially shall be 150 Royall Steet, Canton, MA 02021, U.S.) or such other agent and other address as the Company may appoint accompanied
by the Warrant Certificate to which it relates and by signature guarantee from an eligible guarantor institution participating in a signature
guarantee program approved by the Securities Transfer Association, and such other evidence as the Registrar or Warrant Agent may reasonably
require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on
behalf of the transferor, the authority of that person so to do. The Registrar or Warrant Agent may waive production of any Warrant Certificate
upon evidence satisfactory to the Registrar or Warrant Agent of its loss or destruction or upon execution of an indemnity reasonably satisfactory
to the Registrar and Warrant Agent. All instruments of transfer which are registered may be retained by the Company for so long as it
thinks fit together with the cancelled Warrant Certificates. |
| 2.3 | No fee shall be charged by the Company in respect of the registration of any instrument of transfer or
probate or letters of administration or certificate of marriage or death, or power of attorney or other document relating to or affecting
the title to any Warrants or otherwise for making any entry in the Register affecting the title to any Warrants. |
| 2.4 | The registration of a transfer shall be conclusive evidence of the approval by the Company and the Registrar
of the transfer and the Company shall, on registration, issue the transferee with a Warrant Certificate in respect of the Warrants transferred. |
| 3.1 | In the case of the death of a Warrantholder the survivors or survivor where the deceased was a joint holder,
and the executors or administrators of the deceased where he was a sole or only surviving holder, shall be the only persons recognised
by the Company and the Registrar as having any title to his Warrants, but nothing herein contained shall release the estate of a deceased
Warrantholder (whether sole or joint) from any liability in respect of any Warrant solely or jointly held by him. |
| 3.2 | Subject to any other provision herein contained, any person becoming entitled to a Warrant in consequence
of the death or bankruptcy of a Warrantholder or otherwise than by transfer may, upon producing such evidence of title as the Company
shall reasonably require, and subject as hereinafter provided, be registered himself as holder of the Warrant. |
| 3.3 | Subject to any other provision herein contained, if any person becoming entitled to a Warrant in consequence
of the death or bankruptcy of a Warrantholder or otherwise than by transfer shall elect to be registered himself, he shall deliver or
send to the Company and the Warrant Agent at its office designated for such purposes (which initially shall be 150 Royall Street, Canton,
MA 02021, U.S.) or such other agent and other address as the Company may appoint a notice in writing signed by him stating that he so
elects. All the limitations, restrictions and provisions herein contained relating to the right to transfer and the registration of transfers
of Warrants shall be applicable to any such notice of transfer as aforesaid as if the death or bankruptcy of the Warrantholder had not
occurred and the notice of transfer were a transfer executed by such Warrantholder. |
| 3.4 | A person becoming entitled to a Warrant in consequence of the death or bankruptcy of a Warrantholder shall
be entitled to receive and may give good discharge for any monies payable in respect thereof, but shall not be entitled to receive notices
of or to attend or vote at meetings of the Warrantholders or, save as aforesaid, to any of the rights or privileges of a Warrantholder
until he shall have become a Warrantholder in respect of the Warrant. |
| 4.1 | Every Warrantholder shall register with the Company and the Registrar an address to which copies of notices
can be sent. Any notice or document may be given or served by the Company, the Registrar or the Warrant Agent on any Warrantholder either
personally or by sending it by post in a prepaid letter addressed to such Warrantholder at his registered address as appearing in the
register or by facsimile transmission to any facsimile number notified by such Warrantholder to the Company. |
Any notices given
pursuant to the provisions of this schedule with respect to Warrants standing in the names of joint holders shall be given to whichever
of such persons is named first in the Register and such notice so given shall be sufficient notice to all the holders of such Warrants.
| 4.2 | Notices or demands authorized by this Instrument to be given by the Warrant Agent or Warrant Holder to
the Company shall be sufficiently given if sent in writing by mail prepaid and addressed (until another address is filed in writing with
the Warrant Agent) as follows: |
Acuren
Corporation
14434
Medical Complex Drive, #100
Tomball,
TX 77377
| 4.3 | Any notice or demand authorized by this Instrument to be given by the Company or by a Warrantholder to
the Warrant Agent shall be sufficiently given if sent in writing by first class mail, prepaid and addressed (until another address is
filed in writing with the Company) as follows: |
Computershare
Inc.
150
Royall Street
Canton,
MA 02021
Attention:
Client Services
| 4.5 | When a given number of days’ notice or notice extending over any other period is required to be given,
the day of service shall, but the day upon which such notice shall expire shall not, be included in calculating such number of days or
other period. The signature to any notice to be given by the Company may be written or printed. |
| 4.6 | Every person who by operation of law, transfer or other means whatsoever becomes entitled to a Warrant
shall be bound by any notice in respect of such Warrant which, before his name is entered in the Register, has been duly given to the
person from whom he derives his title. |
| 4.7 | If at any time by reason of the suspension or curtailment of postal services the Company is unable effectively
to convene a meeting of the Warrantholders by notices sent through the post, such a meeting may be convened by a notice advertised in
at least two national daily newspapers with appropriate circulations (and, where there is a suspension or curtailment of postal services
within the United States, at least one of which shall be published in New York (or, if the Warrants are listed on any other securities
exchange or quotation system, the postal services within the jurisdiction of such other securities exchange or quotation system) and such
notice shall be deemed to have been duly served on all Warrantholders entitled thereto at noon on the day when the advertisement appears.
In any such case the Company shall send confirmatory copies of the notice by post if prior to the meeting the posting of notices to addresses
again becomes practicable. |
| 4.8 | Any Warrantholder present, either personally or by proxy, at any meeting of the Warrantholders shall for
all purposes be deemed to have received due notice of such meeting, and, where requisite, of the purposes for which such meeting was called. |
| 4.9 | Any notice or document delivered or sent by post to or left at the registered address of any Warrantholder
or sent by facsimile transmission to any facsimile number notified by such Warrantholder to the Company in pursuance of this Instrument
shall, notwithstanding that such Warrantholder is then dead, bankrupt, of unsound mind or (being a corporation) in liquidation, and whether
or not the Company has notice of the death, bankruptcy, insanity or liquidation of such Warrantholder, be deemed to have been duly served
in respect of any Warrant registered in the name of such Warrantholder as sole or joint holder unless his name has at the time of the
service of the notice or document been removed from the Register as the holder of the Warrant, and such service shall for all purposes
be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under
him) in the Warrant. |
| 5. | Payment of Redemption or Other Moneys |
Any redemption amount or other moneys
payable to a Warrantholder may be paid by electronic transfer or check sent by post to the registered address of the person entitled or,
if two or more persons are the holders of the Warrant or are jointly entitled to it by reason of the death or bankruptcy of the holder,
to the registered address of the one of those persons who is first named in the Register or to such person and to such address as the
person or persons entitled may in writing direct (and in default of such direction to that one of the persons jointly so entitled as the
Directors shall in their absolute discretion determine). Every check shall be made payable to the order of the person or persons entitled
or to such other person as the person or persons entitled may in writing direct and payment of the check shall be a good discharge to
the Company. Any joint holder or other person jointly entitled to a Warrant as aforesaid may give receipts for any dividend or other moneys
payable in respect of the Warrant. Every check is sent at the risk of the person entitled to the payment. If payment is made by electronic
transfer, the Company is not responsible for amounts lost or delayed in the course of making that payment.
SCHEDULE 3
CONCERNING THE WARRANT AGENT; MERGER, CONSOLIDATION
OR
CHANGE OF WARRANT AGENT
| 1. | CONCERNING THE WARRANT AGENT |
As mutually agreed between the Company
and the Warrant Agent in a fee schedule to be executed on or about the date hereof, the Company agrees to pay to the Warrant Agent compensation
for all services rendered by it hereunder, and, from time to time, on demand of the Warrant Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the preparation, negotiation, delivery, amendment, administration and execution of this Instrument
and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Warrant Agent (including employees,
directors, officers and agents of the Warrant Agent) for, and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement or expense (including the reasonable fees and expenses of legal counsel) that may be paid, incurred
or suffered by it, or which it may become subject, without gross negligence, bad faith or willful misconduct on the part of the Warrant
Agent (which gross negligence, bad faith or willful misconduct must be each as determined by a final, non-appealable judgment of a court
of competent jurisdiction) for any action taken, suffered or omitted to be taken by the Warrant Agent (including employees, directors,
officers and agents of the Warrant Agent), for anything done or omitted by the Warrant Agent in connection with the acceptance, administration,
exercise and performance of its duties under this Instrument, including the costs and expenses of defending against any claim of liability
in connection herewith. In addition, the Company agrees to indemnify the Warrant Agent (including employees, directors, officers and agents
of the Warrant Agent) for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement
or expense (including the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may
become subject arising in connection with this Instrument or the Original Instrument with respect to events occurring before the date
of this Instrument. The reasonable costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company.
The Warrant Agent shall be fully authorized
and protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its acceptance
and administration of this Instrument and the exercise and performance of its duties hereunder, in reliance upon any Warrant Certificate
or certificate for other securities of the Company (including in the case of uncertificated securities, by notation in book entry accounts
reflecting ownership), instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Persons, or otherwise upon the advice of counsel.
Notwithstanding anything in this Instrument
to the contrary, in no event will the Warrant Agent be liable for special, punitive, indirect, incidental or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the Warrant Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action. The Warrant Agent shall not be deemed to have knowledge of any event of which it
was supposed to receive notice thereof hereunder, and the Warrant Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith, unless and until it has received such notice in writing, and all notices or other instruments
required by this Instrument to be delivered to the Warrant Agent must, in order to be effective, be received by the Warrant Agent as specified
in Section 4.3 of Schedule 2. The provisions of this Schedule 3 shall survive the termination of this Instrument, the exercise or expiration
of the Warrants and the resignation, replacement or removal of the Warrant Agent.
| 2. | MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT |
Any Person into which the Warrant Agent
or any successor Warrant Agent may be merged or with which it may effect a share exchange, be consolidated, or otherwise combined, or
any Person resulting from any merger, share exchange, consolidation, or combination to which the Warrant Agent or any successor Warrant
Agent shall be a party, or any Person succeeding to the stock transfer or other shareholder services of the Warrant Agent or any successor
Warrant Agent, shall be the successor to the Warrant Agent under this Instrument without the execution or filing of any paper or document
or any further act on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor
Warrant Agent under the provisions this Schedule 2. The purchase of all or substantially all of the Warrant Agent’s assets employed
in the performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 2. In case at the
time such successor Warrant Agent shall succeed to the agency created by this Instrument, any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and
deliver such Warrant Certificates so countersigned; and, in case at that time any of the Warrant Certificates shall not have been countersigned,
any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent; and, in all such cases, such Warrant Certificates shall have the full force provided in the Warrant Certificates
and in this Instrument. In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates
shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant
Certificates so countersigned; and, in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and, in all such cases, such Warrant
Certificates shall have the full force provided in the Warrant Certificates and in this Instrument.
| 3. | RIGHTS AND DUTIES OF WARRANT AGENT |
The Warrant Agent undertakes to perform
only the duties and obligations expressly set forth in this Instrument and no implied duties or obligations shall be read into this Instrument
against the Warrant Agent. The Warrant Agent shall perform those duties and obligations upon the following terms and conditions, by all
of which the Company and the Warrantholders, by their acceptance thereof, shall be bound:
| 3.1.1 | The Warrant Agent may consult with legal counsel selected by it (who may be legal counsel for the Company
or an employee or legal counsel of the Warrant Agent), and the advice or opinion of such counsel shall be full and complete authorization
and protection to the Warrant Agent and the Warrant Agent shall incur no liability for or in respect of any action taken, suffered or
omitted to be taken by it in accordance with such advice or opinion. Whenever in the performance of its duties under this Instrument the
Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by any authorized officer of the Company and delivered to the
Warrant Agent; and such certificate shall be full and complete authorization and protection to the Warrant Agent and the Warrant Agent
shall incur no liability for or in respect of any action taken, suffered, or omitted to be taken, in each case, in the absence of bad
faith, by it under the provisions of this Instrument in reliance upon such a certificate. The Warrant Agent shall have no duty to act
without such a certificate as set forth in this Section 3.1.1. |
| 3.1.2 | The Warrant Agent shall be liable hereunder to the Company and any other Person only for its own gross
negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable
judgment of a court of competent jurisdiction). Any liability of the Warrant Agent under this Instrument shall be limited to the amount
of the annual fees paid (excluding reimbursed charges and expenses) by the Company to the Warrant Agent during the twelve (12) months
immediately preceding the event for which recovery from the Warrant Agent is being sought. The Warrant Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained in this Instrument or in the Warrant Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company
only. |
| 3.1.3 | The Warrant Agent shall not have any liability or be under any responsibility in respect of the validity
of this Instrument or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the legality
or validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or failure by the Company to satisfy any condition contained in this Instrument or in any Warrant Certificate;
nor shall it be liable or responsible for modification by or order of any court, tribunal, or governmental authority in connection with
the foregoing, any change in the exercisability of the Warrants or any adjustment in the terms of the Warrants (including but not limited
to the manner, method or amount thereof) provided for in this Instrument, or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the
exercise of Warrants evidenced by Warrant Certificates after receipt of a certificate furnished pursuant to this Instrument describing
such change or adjustment upon which the Warrant Agent may rely); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any Ordinary Shares or other securities to be issued pursuant to this Instrument
or any Warrant Certificate or as to whether any Ordinary Shares or other securities will, when so issued, be validly authorized and issued,
fully paid and nonassessable. The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent
for the carrying out or performing by the Warrant Agent of the provisions of this Instrument. |
| 3.1.4 | The Warrant Agent is hereby authorized and directed to accept written instructions with respect to the
performance of its duties hereunder and certificates delivered pursuant to any provision hereof from any Person reasonably believe by
the Warrant Agent to be one of the authorized officers of the Company, and to apply to such officers for advice or instructions in connection
with its duties under this Instrument, and such advice or instructions shall provide full authorization and protection to the Warrant
Agent, and it shall not be liable for any action taken or suffered by it in accordance with the written advice or instructions of any
such officer or for any delay in acting while waiting for those instructions. The Warrant Agent shall be fully authorized and protected
in relying upon the most recent advice or instructions received in writing from any such officer. Any application by the Warrant Agent
for written instructions from the Company may, at the option of the Warrant Agent, set forth in writing any action proposed to be taken,
suffered or omitted to be taken by the Warrant Agent with respect to its duties and obligations under this Instrument and the date on
and/or after which such action shall be taken, suffered or such omission shall be effective. The Warrant Agent and any stockholder, affiliate,
member, director, officer, agent, representative, or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though it were not the Warrant Agent under this Instrument. Nothing
herein shall preclude the Warrant Agent or any such stockholder, affiliate, director, member, officer, agent, representative or employee
from acting in any other capacity for the Company or for any other Person. |
| 3.1.5 | The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Warrant
Agent shall not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company, to the holders of the Warrants or any other Person, resulting from any such act, omission, default, neglect
or misconduct, absent gross negligence or bad faith in the selection and continued employment thereof (which gross negligence or bad faith
must be determined by a final, non-appealable judgment of a court of competent jurisdiction). No provision of this Instrument shall require
the Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise any of its rights or powers if it believes that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it. |
| 3.1.6 | The Warrant Agent shall have no responsibility to the Company, any Warrantholders or any holders of Common
Shares for interest or earnings on any monies held by the Warrant Agent pursuant to this Instrument. |
| 4. | CHANGE OF WARRANT AGENT |
The Warrant Agent or any successor Warrant
Agent may resign and be discharged from its duties under this Instrument upon 30 days’ notice in writing mailed to the Company.
In the event the transfer agency relationship in effect between the Company and the Warrant Agent terminates, the Warrant Agent will be
deemed to have resigned automatically and be discharged from its duties as Warrant Agent under this Instrument as of the effective date
of such termination, and the Company shall be responsible for sending any required notice. The Company may remove the Warrant Agent or
any successor Warrant Agent (with or without cause) upon 30 days’ notice in writing, mailed to the Warrant Agent or successor Warrant
Agent, as the case may be, and to each transfer agent of the Ordinary Shares by registered or certified mail, and to the holders of the
Warrant Certificates by first-class mail. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent.
SCHEDULE 4
INSTRUMENT OF TRANSFER
Acuren Corporation
Company
Number 2114331
(the
“Company”)
INSTRUMENT
OF WARRANT TRANSFER
[●]
of [●] (the “Transferor”), DOES HEREBY TRANSFER TO [●] (the “Transferee”), [●]
fully paid warrants of no par value in the Company, which is at the date hereof registered in the Transferor’s name on the Company’s
[register of members][stockholder ledger].
| EXECUTED BY
TRANSFEROR |
|
|
| |
|
|
| |
|
In the presence of: |
| |
|
|
| Name: |
|
Name: |
| Date: |
|
Title: |
| |
|
Address: |
| |
|
Date: |
| The
Transferee does hereby agree to accept the above warrants subject to the provisions of the Company’s Articles (as defined in
the Instrument). |
| EXECUTED FOR AND ON BEHALF
OF TRANSFEREE |
|
|
| |
|
|
| |
|
In the presence of: |
| |
|
|
| Name: |
|
Name: |
| Title: |
|
Title: |
| Date: |
|
Address: |
| |
|
Date: |
37
Exhibit 5.1
[ ], 2024
Acuren Corporation
14434 Medical Complex Drive, Suite 100
Tomball, Texas 77377
| |
|
Registration Statement on Form S-4 |
Ladies and Gentlemen:
We
have acted as legal counsel to Acuren Corporation, a company incorporated with limited liability under the laws of the British Virgin
Islands (BVI) (“Acuren BVI”), in connection with the Registration Statement on Form S-4 (the “Registration
Statement”) filed by Acuren BVI with the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended, and the domestication of Acuren BVI in the State of Delaware as Acuren Corporation, a Delaware corporation
(the “Company”), pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “Domestication”).
Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Registration Statement.
The
Registration Statement was filed in connection with the Domestication and includes the registration of: (A) 136,312,434 shares of common
stock, par value $0.0001, of the Company (“Common Stock”) comprised of up to (i) 128,976,215 shares of Common Stock
issuable upon the exchange and conversion of Acuren BVI ordinary shares in connection with the Domestication (collectively, the “Company
Shares”); (ii) 1,000,000 shares of Common Stock issuable upon conversion of the Company’s 1,000,000 outstanding shares
of Series A Preferred Stock, par value $0.0001 per share (collectively, the “Series A Preferred Stock”), in accordance
with the certificate of incorporation of the Company (collectively, the “Series A Conversion Shares”); (iii) 4,566,219
shares of Common Stock issuable upon exercise of the Company’s outstanding warrants (collectively, the “Warrants”)
issued pursuant to the Amended and Restated Warrant Instrument dated as of September 23, 2024 (the “Warrant Instrument”),
in accordance with the Warrant Instrument (collectively, the “Warrant Shares”); (iv) 125,000 shares of Common Stock
issuable upon exercise of the Company’s outstanding options (collectively, the “Options”) issued pursuant to
the respective option agreements (collectively, the “Option Agreements”), in accordance with the Option Agreements
(collectively, the “Option Shares”); and (v) 1,645,000 shares of Common Stock issuable upon the vesting and settlement
of the Company’s outstanding unvested restricted stock units (collectively, the “RSUs”) issued pursuant to the
restricted stock unit agreements made by the Company in favor of the relevant holder (collectively, the “RSU Award Agreements”),
upon vesting and settlement in accordance with the RSU Award Agreements (collectively, the “RSU Shares”); (B) 18,264,876
outstanding Warrants; and (C) 1,000,000 shares of Series A Preferred Stock.
We
have examined the following documents and such other documents as in our judgment are necessary to enable us to render the opinions expressed
below (collectively, the “Documents”):
| (i) | the Registration Statement,
including the prospectus contained therein and the exhibits thereto; |
| (ii) | the Agreement and Plan of Merger
dated May 21, 2024 by and among the Company, ASP Acuren Holdings, Inc., AAL Merger Sub, Inc. and ASP Acuren Investco LP (in its capacity
as the representative of the stockholders of ASP Acuren); |
| (iii) | forms of the Company’s
certificate of corporate domestication (the “Certificate of Domestication”) and certificate of incorporation (the
“Certificate of Incorporation”), both of which certificates are to be filed with the Secretary of State of the State
of Delaware; |
| (iv) | a form of the Company’s
bylaws; |
| |
(v) |
the Warrant Instrument; |
| |
(vi) |
the Options and the Option Agreements; |
| |
(vii) |
the RSU Award Agreements; and |
| |
|
|
| |
(viii) |
resolutions adopted by the board of directors of Acuren BVI in connection with the Domestication. |
We
have not reviewed any documents other than the Documents and we assume that there exists no provision in any document relating to the
matters covered by this opinion that we have not reviewed that is inconsistent with the Documents or the opinions stated herein. We have
conducted no independent factual investigation of our own but rather have relied solely upon the Documents, the statements and information
set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate
in all material respects. As to questions of fact material to this opinion letter, we have relied upon certificates or comparable documents
of public officials and of Acuren BVI officers and representatives. In rendering the opinions set forth below, we have assumed without
investigation (i) the genuineness of all signatures on the Documents, (ii) the legal capacity under all applicable laws and
regulations of all natural persons signing each of the Documents as or on behalf of the parties thereto, (iii) the authenticity of
all Documents submitted to us as originals, (iv) the conformity to authentic original documents of all Documents submitted to us
as copies, and (v) that the Documents, in the forms submitted to us for our review, have not been and will not be, altered or amended
in any respect material to our opinions as set forth herein.
We
have further assumed that: Acuren BVI has the full power, authority and legal right to domesticate in the State of Delaware pursuant to
the General Corporation Law of the State of Delaware; the Domestication has been duly authorized by Acuren BVI; the Certificate of Incorporation
and Certificate of Domestication will be duly authorized, executed and filed with the Secretary of State of the State of Delaware and
all related fees and charges will be paid in connection therewith; and the Option Agreements have been duly authorized, executed and delivered
by Acuren BVI.
Based
upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that, subsequent
to the Domestication:
| 1. | the Company Shares and the Series
A Preferred Stock will be validly issued, fully paid and nonassessable and the Warrants will be validly issued and legally binding obligations
of the Company under the laws of the State of Delaware; |
| 2. | upon due conversion of the Series
A Preferred Stock in accordance with the applicable conversion provisions of the Certificate of Incorporation, the Series A Conversion
Shares will be validly issued, fully paid and nonassessable; |
| 3. | upon due exercise and full payment
of the exercise price of the Warrants in accordance with the terms of the Warrant Instrument, the Warrant Shares will be validly issued,
fully paid and nonassessable; |
| 4. | upon due exercise and full payment
of the exercise price of the Options in accordance with the terms of the Option Agreements, the Option Shares will be validly issued,
fully paid and nonassessable; and |
| 5. | upon the vesting and settlement
of the RSUs in accordance with the terms of the RSU Agreements, the RSU Shares will be validly issued, fully paid and non-assessable. |
We
do not express any opinion herein concerning any law other than the laws of the State of Delaware.
We
hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the use of the name of our firm therein.
In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the
Securities Act.
| |
Yours very truly, |
| |
|
| |
Greenberg Traurig LLP |
Exhibit 8.1
[●], 2024
Acuren Corporation
14434 Medical Complex Drive, Suite 100
Tomball, Texas 77377
| Re: | Acuren Corporation
Registration Statement on Form S-4 |
Ladies and Gentlemen:
We have acted as counsel to
Acuren Corporation, a company incorporated with limited liability under the laws of the British Virgin Islands (BVI) (“Acuren
BVI”), in connection with the domestication (the “Domestication”) of Acuren BVI to become and continue as
a corporation incorporated under the laws of the state of Delaware (“Acuren Delaware”). From and after the effective
time on the date of the Domestication (the “Effective Time”), each of Acuren BVI’s currently issued and outstanding
ordinary shares will automatically convert in connection with the Domestication, on a one-for-one basis, into shares of Acuren Delaware
common stock. This opinion is being delivered in connection with the Registration Statement on Form S-4 (the “Registration Statement”)
filed by Acuren BVI with the Securities and Exchange Commission under the Securities Act of 1933, as amended.
We have examined (i) the Registration
Statement and (ii) the representation letter of Acuren BVI delivered to us in connection with this opinion (the “Representation
Letter”). In addition, we have examined, and relied as to matters of fact upon, originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements, documents and other instruments and made such other inquiries as
we have deemed necessary or appropriate to enable us to render the opinion set forth below. In such examination, we have assumed the genuineness
of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals
of such latter documents. We have not, however, undertaken any independent investigation of any factual matter set forth in any of the
foregoing.
In rendering such opinion,
we have assumed, with your permission, that (i) the statements concerning the Domestication set forth in the Registration Statement are
true, complete and correct and will remain true, complete and correct at all times up to and including the Effective Time, (ii) the representations
made by Acuren BVI in its Representation Letter are true, complete and correct and will remain true, complete and correct at all times
up to and including the Effective Time and (iii) any representations made in the Representation Letter “to the knowledge of,”
or based on the belief of Acuren BVI or similarly qualified are true, complete and correct and will remain true, complete and correct
at all times up to and including the Effective Time, in each case without such qualification.
Based upon the foregoing,
and subject to the qualifications, assumptions and limitations stated herein, we hereby confirm that the discussion contained in the Registration
Statement under the caption “Material U.S. Federal Income Tax Consequences” represents our opinion as to such matters.
We do not express any opinion
herein concerning any law other than the federal law of the United States.
We hereby consent to the filing
of this opinion as Exhibit 8.1 to the Registration Statement, and to the references to our firm name therein. In giving this consent,
we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act.
| |
Respectfully submitted, |
| |
|
| |
Greenberg Traurig, P.A. |
Exhibit 10.1
ACUREN
CORPORATION
2024
EQUITY INCENTIVE PLAN
ACUREN
CORPORATION
2024
EQUITY INCENTIVE PLAN
| 1. |
Purpose |
1 |
| 2. |
Definitions |
1 |
| 3. |
Administration |
7 |
| 4. |
Shares Subject to Plan |
8 |
| 5. |
Eligibility |
9 |
| 6. |
Specific Terms of Awards |
9 |
| 7. |
Certain Provisions Applicable to Awards |
16 |
| 8. |
Change in Control |
19 |
| 9. |
General Provisions |
22 |
ACUREN
CORPORATION
2024
EQUITY INCENTIVE PLAN
1. Purpose.
The purpose of this Acuren Corporation 2024 Equity Incentive Plan (including any sub-plans as applicable), as may be amended from time
to time (the “Plan”) is to assist Acuren Corporation (the “Company”), and its Related
Entities (as hereinafter defined) in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers,
directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to acquire
or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s
shareholders, and providing such persons with performance incentives to expend their maximum efforts in the creation of shareholder value.
2. Definitions.
For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 hereof
and elsewhere herein.
(a) “Affiliate”
shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act and any successor
to such Rule.
(b)
“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award,
Share granted as a bonus or in lieu of another Award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with
any other right or interest relating to Shares or other property (including cash), granted to a Participant under the Plan.
(c) “Award
Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted by the
Committee hereunder.
(d) “Beneficiary”
shall mean the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the Plan upon such Participant’s death or to which
Awards or other rights are transferred if and to the extent permitted under Section 9(b) hereof. If, upon a Participant’s death,
there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the Participant’s estate.
(e) “Beneficial
Owner” and “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 under
the Exchange Act and any successor to such Rule.
(f) “Board”
shall mean the Board of Directors of the Company.
(g) “Cause”
shall have the equivalent meaning or the same meaning as “cause” or “for cause” as set forth in any employment,
consulting, or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the
absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform,
in a reasonable manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or breach by the Participant
of his or her employment, consulting or other similar agreement with the Company or a Related Entity, if any, or any violation or breach
of any material written policy or rule of the Company as may be in effect from time to time, including any of such policy or rule regarding
sexual harassment or work-place discrimination, (iii) any violation or breach by the Participant of any non-competition, non-solicitation,
non-disclosure, confidentiality and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of
dishonesty or bad faith with respect to the Company or a Related Entity, including the Participant’s commission of or participation
in an act of fraud, embezzlement, misappropriation, breach of fiduciary duty against the Company or a Related Entity, (v) the Participant’s
unlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or while performing Participant’s
duties and responsibilities for the Company, or the use of alcohol, drugs or other similar substances in a manner that adversely affects
the Participant’s work performance, or (vi) the commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably
upon the Participant or the Company or any Related Entity. The good faith determination by the Committee of whether the Participant’s
Continuous Service was terminated by the Company for “Cause” shall be final and binding for all purposes hereunder.
(h) “Change
in Control” shall mean a Change in Control as defined in Section 8(b) of the Plan.
(i) “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions
and regulations thereto.
(j) “Committee”
shall mean a committee designated by the Board to administer the Plan; provided, however, that if the Board fails to designate a committee
or if there are no longer any members on the committee so designated by the Board, or for any other reason determined by the Board, then
the Board shall serve as the Committee. While it is intended that the Committee shall consist of at least two directors, each of whom
shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless
administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply
to transactions under the Plan and (ii) “Independent”, the failure of the Committee to be so comprised shall not invalidate
any Award that otherwise satisfies the terms of the Plan.
(k) “Consultant”
shall mean any consultant or advisor who provides services to the Company or any Related Entity, so long as (i) such person renders bona
fide services that are not in connection with the offer and sale of the Company’s securities in a capital-raising transaction, (ii)
such person does not directly or indirectly promote or maintain a market for the Company’s securities, and (iii) the identity of
such person would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on either
the exemption from registration provided by Rule 701 under the Securities Act of 1933 or, if the Company is required to file reports pursuant
to Section 13 or 15(d) of the Exchange Act, registration on a Form S-8 Registration Statement under the Securities Act of 1933.
(l) “Continuous
Service” shall mean the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee,
Director, Consultant or other service provider. Continuous Service shall not be considered to be interrupted in the case of (i) any approved
leave of absence (including, without limitation, sick leave, military leave, or any other authorized personal leave), (ii) transfers among
the Company, any Related Entities, or any successor entities, in any capacity of Employee, Director, Consultant or other service provider,
or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee,
Director, Consultant or other service provider (except as otherwise provided in the Award Agreement).
(m) “Director”
shall mean a member of the Board or the board of directors of any Related Entity.
(n) “Disability”
shall mean, unless otherwise defined in an Award Agreement, for purposes of the exercise of an Incentive Stock Option, a permanent and
total disability, within the meaning of Code Section 22(e)(3), and for all other purposes, the Participant's inability to perform the
duties of his or her position with the Company or any Related Entity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
(o) “Dividend
Equivalent” shall mean a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards
or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.
(p) “Domestication”
means the change to the jurisdiction of incorporation of the Company from the British Virgin Islands to the State of Delaware.
(q) “Effective
Date” shall mean the effective date of the Plan, which shall be July 30, 2024.
(r) “Eligible
Person” shall mean each Director, Employee, Consultant and other person who provides services to the Company or any Related
Entity. The foregoing notwithstanding, only Employees of the Company, or any parent corporation or subsidiary corporation of the Company
(as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible Persons for purposes of receiving
any Incentive Stock Options. An Employee on leave of absence may, in the discretion of the Committee, be considered as still in the employ
of the Company or a Related Entity for purposes of eligibility for participation in the Plan.
(s) “Employee”
shall mean any person, including an officer or Director, who is an employee of the Company or any Related Entity, or is a prospective
employee of the Company or any Related Entity (conditioned upon and effective not earlier than, such person becoming an employee of the
Company or any Related Entity). The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.
(t) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(u) “Fair
Market Value” shall mean the fair market value of Shares, Awards or other property on the date as of which the value is
being determined, as determined by the Committee, or under procedures established by the Committee, in a manner intended to satisfy the
principles of Section 409A of the Code or Section 422 of the Code, to the extent applicable, subject to the following:
(i) If,
on such date, the Shares are listed on an international, national or regional securities exchange or market system, the Fair Market Value
of a Share shall be the closing price of a Share (or the mean of the closing bid and asked prices of a Share if the Share is so quoted
instead) as quoted on the applicable exchange or system, as reported in The Wall Street Journal or such other source as the Company deems
reliable. If the relevant date does not fall on a day on which the Share has traded on such exchange or system, the date on which the
Fair Market Value shall be established shall be the last day on which the Share was so traded prior to the relevant date, or such other
appropriate day as shall be determined by the Board, in its discretion.
(ii) If,
on such date, the Shares are not listed on an international, national or regional securities exchange or market system but is traded on
an over-the-counter market, the Fair Market Value of a Share shall be the average of the closing bid and asked prices for Shares or, if
no closing bid and asked prices, the last closing price, in such over-the-counter market for the last preceding date on which there was
a sale of such Shares in such market.
(iii) If,
on such date, the Shares are not listed on an international, national or regional securities exchange or market system and are not traded
on an over-the-counter market, the Fair Market Value of a Share shall be as determined by the Board in good faith without regard to any
restriction other than a restriction which, by its terms, will never lapse.
(v) “Good
Reason” shall, with respect to any Participant, have the equivalent meaning or the same meaning as “good reason”
or “for good reason” set forth in any employment, consulting or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such
term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s
duties or responsibilities as assigned by the Company or a Related Entity, or any other action by the Company or a Related Entity which
results in a material diminution in such duties or responsibilities, excluding for this purpose an action which is remedied by the Company
or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related
Entity to comply with its obligations to the Participant as agreed upon, other than a failure which is remedied by the Company or a Related
Entity promptly after receipt of notice thereof given by the Participant; (iii) solely if the Participant is required to be physically
based at an office or location of the Company or any Related Entity, the Company’s or Related Entity’s requiring the Participant
to be based at any office or location outside of fifty (50) miles from the office or location of employment or service as of the date
of Award (for the avoidance of doubt, (iii) shall not apply to any Participant who performs his or her employment or services on a remote
basis), except for travel reasonably required in the performance of the Participant’s responsibilities; or (iv) a material breach
by the Company or any Related Entity of any employment, consulting or other agreement under which the Participant provides services to
the Company or any Related Entity. For purposes of this Plan, upon termination of a Participant’s Continuous Service, Good Reason
shall not be deemed to exist unless the Participant’s termination of Continuous Service for Good Reason occurs within sixty (60)
days following the initial existence of one of the conditions specified in clauses (i) through (iv) above, the Participant provides the
Company or the Related Entity for which the Participant provides services with written notice of the existence of such condition with
thirty (30) days after the initial existence of the condition, and the Company fails to remedy the condition within thirty (30) days after
its receipt of notice.
(w) “Incentive
Stock Option” shall mean any Option intended to be designated as an incentive stock option within the meaning of Section
422 of the Code or any successor provision thereto.
(x) “Independent”,
when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the Listing Market.
(y) “Incumbent
Board” shall mean the Incumbent Board as defined in Section 8(b)(ii) hereof.
(z) “Listing
Market” shall mean the international, national or regional securities exchange on which any securities of the Company are
listed for trading, and if not listed for trading, by the rules of the New York Stock Exchange.
(aa) “Option”
shall mean a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during
specified time periods.
(bb) “Optionee”
shall mean a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan.
(cc) “Other
Stock-Based Awards” shall mean Awards granted to a Participant under Section 6(i) hereof.
(dd) “Parent”
shall mean any corporation (other than the Company), whether now or hereafter existing, in an unbroken chain of corporations ending with
the Company, if each of the corporations in the chain (other than the Company) owns stock possessing 50% or more of the combined voting
power of all classes of stock in one of the other corporations in the chain.
(ee) “Participant”
shall mean a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible
Person.
(ff) “Performance
Award” shall mean any Award granted pursuant to Section 6(h) hereof.
(gg) “Performance
Period” shall mean that period established by the Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.
(hh) “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof and shall
include a “group” as defined in Section 13(d) thereof.
(ii) “Related
Entity” shall mean any Parent or Subsidiary, and any business, corporation, partnership, limited liability company or other
entity designated by the Committee in which the Company, a Parent or a Subsidiary holds a substantial ownership interest, directly or
indirectly and with respect to which the Company may offer or sell securities pursuant to the Plan in reliance upon either Rule 701 under
the Securities Act of 1933 or, if the Company is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, registration
on a Form S-8 Registration Statement under the Securities Act of 1933.
(jj) “Restricted
Stock” shall mean any Share issued with such risks of forfeiture and other restrictions as the Committee, in its sole discretion,
may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may
lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.
(kk) “Restricted
Stock Award” shall mean an Award granted to a Participant under Section 6(d) hereof.
(ll) “Restricted
Stock Unit” shall mean a right to receive Shares, including Restricted Stock, cash measured based upon the value of Shares,
or a combination thereof, at the end of a specified deferral period.
(mm) “Restricted
Stock Unit Award” shall mean an Award of Restricted Stock Units granted to a Participant under Section 6(e) hereof.
(nn) “Restriction
Period” shall mean the period of time specified by the Committee that Restricted Stock Awards shall be subject to such restrictions
on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose.
(oo) “Rule
16b-3” shall mean Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by
the Securities and Exchange Commission under Section 16 of the Exchange Act.
(pp) “Shares”
shall mean (i) prior to the Domestication, the ordinary shares of the Company, and (ii) after the Domestication, the shares of common
stock of the Company, in each case, and such other securities as may be substituted (or resubstituted) for Shares pursuant to Section
9(c) hereof.
(qq) “Stock Appreciation
Right” shall mean a right granted to a Participant under Section 6(c) hereof.
(rr) “Subsidiary”
shall mean any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in
the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of
the assets on liquidation or dissolution.
(ss) “Substitute
Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for,
Awards previously granted, or the right or obligation to make future Awards, by a company (i) acquired by the Company or any Related Entity,
(ii) which becomes a Related Entity after the date hereof, or (iii) with which the Company or any Related Entity combines.
3. Administration.
(a) Authority
of the Committee. The Plan shall be administered by the Committee except to the extent (and subject to the limitations imposed
by Section 3(b) hereof) the Board elects to administer the Plan, in which case the Plan shall be administered by only those members of
the Board who are Independent members of the Board, in which case references herein to the “Committee” shall be deemed to
include references to the Independent members of the Board. The Committee shall have full and final authority, subject to and consistent
with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other
terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which need not be identical for each Participant)
and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award Agreements and correct defects,
supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary
or advisable for the administration of the Plan. In exercising any discretion granted to the Committee under the Plan or pursuant to any
Award, the Committee shall not be required to follow past practices, act in a manner consistent with past practices, or treat any Eligible
Person or Participant in a manner consistent with the treatment of any other Eligible Persons or Participants. Decisions of the Committee
shall be final, conclusive and binding on all persons or entities, including the Company, any Related Entity or any Participant or Beneficiary,
or any transferee under Section 9(b) hereof or any other person claiming rights from or through any of the foregoing persons or entities.
(b) Manner
of Exercise of Committee Authority. The Committee, and not the Board, shall exercise sole and exclusive discretion (i) on any
matter relating to a Participant then subject to Section 16 of the Exchange Act with respect to the Company to the extent necessary in
order that transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Ac, and (ii) with respect to any Award
to an Independent Director. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall
not be construed as limiting any power or authority of the Committee. The Committee may delegate to members of the Board, or officers
or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms and limitations as the Committee
shall determine, to perform such functions, including administrative functions as the Committee may determine to the extent that such
delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16
of the Exchange Act in respect of the Company. The Committee may appoint agents to assist it in administering the Plan, including, without
limitation, appointing one or more members of the Company’s management, with the power or authority otherwise granted to the Committee
under this Plan with respect to a number of Shares reserved and available for delivery under the Plan, subject to the terms and limitations
of such power or authority as determined by the Committee in its sole and absolute discretion. In no event, however, may an agent appointed
by the Committee to assist it in administering the Plan be permitted to grant Awards to, or exercise any discretion with respect to any
and all other matters relating to Awards previously granted to, such agent appointed by the Committee to assist it in administering the
Plan.
(c) Limitation
of Liability. The Committee and the Board, and each member thereof, shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any officer or Employee, the Company’s independent auditors, Consultants
or any other agents assisting in the administration of the Plan. Members of the Committee and the Board, and any officer or Employee acting
at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made
in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with
respect to any such action or determination.
4. Shares
Subject to Plan.
(a) Limitation on Overall
Number of Shares Available for Delivery Under Plan. Subject to adjustment as provided in Section 9(c) hereof, the aggregate number
of Shares that may be issued under all Awards under the Plan shall be equal to 18,500,000 Shares (the “Share Pool”).
In addition, the Share Pool will automatically increase on January 1st of each year for a period of up to ten years, commencing on the
first January 1 following the Effective Date, in an amount equal to the lesser of (i) five percent (5%) of the total number of Shares
outstanding on such January 1 or (ii) such smaller number of Shares as is determined by the Board (which, for the avoidance of doubt,
may be zero). Any Shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.
(b) Application
of Limitation to Grants of Awards. No Award may be granted if the number of Shares to be delivered in connection with such an
Award exceeds the number of Shares remaining available for delivery under the Plan, minus the number of Shares that would be counted against
the limit upon settlement of then outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting,
avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually
delivered differs from the number of Shares previously counted in connection with an Award.
(c) Availability
of Shares Not Delivered under Awards and Adjustments to Limits.
(i) If
any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for
cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares to which those Awards
were subject, shall, to the extent of such forfeiture, expiration, termination, non-issuance or cash settlement, be added back to the
Share Pool and again be available for delivery with respect to Awards under the Plan.
(ii) Shares
withheld from an Award to satisfy either (i) the exercise price or purchase price of such Award, or (ii) any tax withholding requirements
shall count against the maximum number of Shares remaining available for issuance pursuant to Awards granted under the Plan and, for the
avoidance of doubt, shall be added back to the Share Pool.
(iii) Substitute
Awards shall not reduce the Shares authorized for delivery under the Plan or authorized for delivery to a Participant in any period; provided,
that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding Incentive Stock Options shall
be counted against the aggregate number of Shares available for Awards of Incentive Stock Options under the Plan pursuant to Section 4(c)(v)
herein. Additionally, in the event that an entity acquired by the Company or any Related Entity or with which the Company or any Related
Entity combines has shares available under a pre-existing plan approved by its shareholders and not adopted in contemplation of such acquisition
or combination, the shares available for delivery 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 delivery under the Plan if and to the extent that the use of such Shares would not require
approval of the Company’s shareholders under the rules of the Listing Market. 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 Employees or Directors prior to such acquisition or combination.
(iv) Any
Share that again becomes available for delivery pursuant to this Section 4(c) shall be added back as one (1) Share.
(v) Notwithstanding
anything in this Section 4(c) to the contrary but subject to adjustment as provided in Section 9(c) hereof, the maximum aggregate number
of Shares that may be delivered under the Plan as a result of the exercise of the Incentive Stock Options shall be 18,500,000 Shares.
In no event shall any Incentive Stock Options be granted under the Plan after the tenth anniversary of the date on which the Board adopts
the Plan.
(vi) Notwithstanding
anything in this Section 4 to the contrary, but subject to adjustment as provided in Section 9(c) hereof, in any fiscal year of the Company
during any part of which the Plan is in effect, no Participant who is a Director but is not also an Employee or Consultant may be granted
any Awards that have a “fair value” as of the date of grant, as determined in accordance with FASB ASC Topic 718 (or any other
applicable accounting guidance), that exceeds $250,000 in the aggregate.
5. Eligibility.
Awards may be granted under the Plan only to Eligible Persons.
6. Specific
Terms of Awards.
(a) General.
Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(e) hereof), such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination
of the Participant’s Continuous Service and terms permitting a Participant to make elections relating to his or her Award. Except
as otherwise expressly provided herein, the Committee shall retain full power and discretion to accelerate, waive or modify, at any time,
any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is authorized to require
other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of
(i) prior to the Domestication, the laws of the British Virgin Islands, and (ii) after the Domestication, the laws of the State of Delaware,
no consideration other than services may be required for the grant (as opposed to the exercise) of any Award.
(b) Options.
The Committee is authorized to grant Options to any Eligible Person on the following terms and conditions:
(i) Exercise
Price. Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall be determined
by the Committee, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant
of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option. If an Employee owns
or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such Employee, the exercise price of
such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value
of a Share on the date such Incentive Stock Option is granted. Other than pursuant to Section 9(c)(i) and (ii) of this Plan, the Committee
shall not be permitted to (A) lower the exercise price per Share of an Option after it is granted, (B) cancel an Option when the exercise
price per Share exceeds the Fair Market Value of the underlying Shares in exchange for cash or another Award (other than in connection
with Substitute Awards), (C) cancel an outstanding Option in exchange for an Option with an exercise price that is less than the exercise
price of the original Options or (D) take any other action with respect to an Option that may be treated as a repricing pursuant to the
applicable rules of the Listing Market, without approval of the Company’s shareholders.
(ii) Time
and Method of Exercise. The Committee shall determine the time or times at which or the circumstances under which an Option may
be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the method
by which notice of exercise is to be given and the form of exercise notice to be used, the time or times at which Options shall cease
to be or become exercisable following termination of Continuous Service or upon other conditions, the methods by which the exercise price
may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment,
including, without limitation, cash, Shares (including without limitation the withholding of Shares otherwise deliverable pursuant to
the Award), other Awards or awards granted under other plans of the Company or a Related Entity, or other property (including notes or
other contractual obligations of Participants to make payment on a deferred basis provided that such deferred payments are not in violation
of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder or any other applicable law), and the methods by or
forms in which Shares will be delivered or deemed to be delivered to Participants.
(iii) Form
of Settlement. The Committee may, in its sole discretion, provide that the Shares to be issued upon exercise of an Option shall
be in the form of Restricted Stock or other similar securities.
(iv) Incentive
Stock Options. The Committee shall only grant Incentive Stock Options if (y) with respect to the initial Share Pool set forth
in Section 4(a) and 4(c)(vi), within 12 months of the Effective Date, and/or (z) with respect to any increase in the Share pools set forth
in Sections 4(a) and 4(c)(iv) by an amendment to this Plan, within 12 months of the effective date of any such amendment the Plan or amendment,
whichever applicable, is approved by shareholders of the Company eligible to vote in the election of directors, by a vote sufficient to
meet the requirements of Code Section 422, applicable requirements under the rules of any stock exchange or automated quotation system
on which the Shares may be listed or quoted, and other laws, regulations, and obligations of the Company applicable to the Plan. Incentive
Stock Options may be granted subject to shareholder approval but may not be exercised or otherwise settled in the event the shareholder
approval is not obtained. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options
(including any Stock Appreciation Right issued in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code, unless the Participant has first requested, or consents to, the change that will result in such disqualification. Thus, if
and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the
following special terms and conditions:
(A) the
Option shall not be exercisable for more than ten years after the date such Incentive Stock Option is granted; provided, however, that
if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms
are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term
of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from
the date of grant;
(B) the
aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options granted under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation of
the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) that become exercisable for the first time
by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed $100,000; and
(C) if
Shares acquired by exercise of an Incentive Stock Option are disposed of within two years following the date the Incentive Stock Option
is granted or one year following the transfer of such Shares to the Participant upon exercise, the Participant shall, promptly following
such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding
the disposition as the Committee may reasonably require.
(c) Stock
Appreciation Rights. The Committee may grant Stock Appreciation Rights to any Eligible Person in conjunction with all or part
of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation
Right”), or without regard to any Option (a “Freestanding Stock Appreciation Right”), in each
case upon such terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the
Plan, including the following:
(i) Right
to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation
Right as determined by the Committee. The grant price of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value
of a Share on the date of grant, in the case of a Freestanding Stock Appreciation Right, or less than the associated Option exercise price,
in the case of a Tandem Stock Appreciation Right. Other than pursuant to Section 9(c)(i) and (ii) of the Plan, the Committee shall not
be permitted to (A) lower the grant price per Share of a Stock Appreciation Right after it is granted, (B) cancel a Stock Appreciation
Right when the grant price per Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award (other than
in connection with Substitute Awards), (C) cancel an outstanding Stock Appreciation Right in exchange for a Stock Appreciation Right with
a grant price that is less than the grant price of the original Stock Appreciation Right, or (D) take any other action with respect to
a Stock Appreciation Right that may be treated as a repricing pursuant to the applicable rules of the Listing Market, without shareholder
approval.
(ii) Other
Terms. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under
which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals and/or future
service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable following termination
of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement,
method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right
shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.
(iii) Tandem
Stock Appreciation Rights. Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted
or, for Options that are not Incentive Stock Options, at any time thereafter before exercise or expiration of such Option. Any Tandem
Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value
of the Shares subject to the related Option exceeds the exercise price at which Shares can be acquired pursuant to the Option. In addition,
if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise
or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number
of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option
related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been
exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised.
(d) Restricted
Stock Awards. The Committee is authorized to grant Restricted Stock Awards to any Eligible Person on the following terms and conditions:
(i) Grant
and Restrictions. Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan during the Restriction Period. The terms of any
Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined
by the Committee and not inconsistent with the Plan. The restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise,
as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any
Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a shareholder,
including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee). During the period that the Restricted Stock Award is subject to a risk of forfeiture, subject
to Section 9(b) below and except as otherwise provided in the Award Agreement, the Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the Participant or Beneficiary.
(ii) Forfeiture.
Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable Restriction
Period, the Participant’s Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or otherwise
been satisfied shall be forfeited and reacquired by the Company; provided that, subject to the limitations set forth in Section 6(j) hereof,
the Committee may provide, by resolution or other action or in any Award Agreement, or may determine in any individual case, that forfeiture
conditions relating to Restricted Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock.
(iii) Certificates
for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical
possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted
Stock.
(iv) Dividends
and Splits. As a condition to the grant of a Restricted Stock Award, the Committee shall either (A) require that any cash dividends
paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock, or (B) require that payment
be delayed (with or without interest at such rate, if any, as the Committee shall determine) and remain subject to restrictions and a
risk of forfeiture to the same extent as the Restricted Stock with respect to which such cash dividend is payable, in each case in a manner
that does not violate the requirements of Section 409A of the Code. Unless otherwise determined by the Committee, Shares distributed in
connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a
risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been distributed.
(e) Restricted
Stock Unit Award. The Committee is authorized to grant Restricted Stock Unit Awards to any Eligible Person on the following terms
and conditions:
(i) Award
and Restrictions. Satisfaction of a Restricted Stock Unit Award shall occur upon expiration of the deferral period specified for
such Restricted Stock Unit Award by the Committee (or, if permitted by the Committee, as elected by the Participant in a manner that does
not violate the requirements of Section 409A of the Code). In addition, a Restricted Stock Unit Award shall be subject to such restrictions
(which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately
or in combination, in installments or otherwise, as the Committee may determine. A Restricted Stock Unit Award may be satisfied by delivery
of Shares, cash equal to the Fair Market Value of the specified number of Shares covered by the Restricted Stock Units, or a combination
thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction of a Restricted Stock Unit Award, a
Restricted Stock Unit Award carries no voting or dividend or other rights associated with Share ownership. Prior to satisfaction of a
Restricted Stock Unit Award, except as otherwise provided in an Award Agreement and as permitted under Section 409A of the Code, a Restricted
Stock Unit Award may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant or any Beneficiary.
(ii) Forfeiture.
Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable deferral
period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Restricted Stock Unit
Award), the Participant’s Restricted Stock Unit Award that is at that time subject to a risk of forfeiture that has not lapsed or
otherwise been satisfied shall be forfeited; provided that, subject to the limitations set forth in Section 6(j)(ii) hereof, the Committee
may provide, by resolution or other action or in any Award Agreement, or may determine in any individual case, that forfeiture conditions
relating to a Restricted Stock Unit Award shall be waived in whole or in part in the event of terminations resulting from specified causes,
and the Committee may in other cases waive in whole or in part the forfeiture of any Restricted Stock Unit Award.
(iii) Dividend
Equivalents. As a condition to the grant of a Restricted Stock Unit, the Committee shall require that any cash dividends paid
on a Share attributable to such Restricted Stock Unit be delayed (with or without interest at such rate, if any, as the Committee shall
determine) and remain subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock Unit with respect to
which such cash dividend is payable, in a manner that does not violate the requirements of Section 409A of the Code. Unless otherwise
determined by the Committee, Shares distributed in connection with a stock split or stock dividend, and other property distributed as
a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock Unit with respect to
which such Shares or other property have been distributed.
(f) Bonus
Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Shares to any Eligible Persons as a bonus, or to
grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans or compensatory
arrangements, provided that, in the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains
within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from liability
under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall be determined
by the Committee.
(g) Dividend
Equivalents. The Committee is authorized to grant Dividend Equivalents to any Eligible Person entitling the Eligible Person to
receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of Shares,
or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee
may provide that Dividend Equivalents shall be paid or distributed when accrued, or whether such Dividend Equivalents shall be deemed
to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability
and risks of forfeiture, as the Committee may specify; provided, that in no event shall such Dividend Equivalents be paid out to Participants
prior to vesting of the corresponding Shares underlying the Award. Any such determination by the Committee shall be made at the grant
date of the applicable Award. Notwithstanding the foregoing, Dividend Equivalents credited in connection with an Award that vests based
on the achievement of performance goals shall be subject to restrictions and risk of forfeiture to the same extent as the Award with respect
to which such Dividend Equivalents have been credited.
(h) Performance
Awards. The Committee is authorized to grant Performance Awards to any Eligible Person payable in cash, Shares, or other Awards,
on terms and conditions established by the Committee. The performance criteria to be achieved during any Performance Period and the length
of the Performance Period shall be determined by the Committee upon the grant of each Performance Award. The performance criteria may
consist of the following (determined for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical
units of the Company and/or a Related Entity): (1) earnings per share; (2) revenues or margins; (3) cash flow (including operating cash
flow, free cash flow, discounted return on investment, and cash flow in excess of cost of capital); (4) operating margin; (5) return on
net assets, investment, capital, or equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; earnings
before all or some of the following items: interest, taxes, depreciation, amortization, stock-based compensation, ASC 718 expense, or
any extraordinary or special items; earnings after interest expense and before extraordinary or special items; operating income or income
from operations; income before interest income or expense, unusual items and income taxes, local, state or federal and excluding budgeted
and actual bonuses which might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of fixed costs
or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with
corporate business plans, including strategic mergers, acquisitions or divestitures; (12) total stockholder return; (13) debt reduction;
(14) market share; (15) entry into new markets, either geographically or by business unit; (16) customer retention and satisfaction; (17)
strategic plan development and implementation, including turnaround plans; and/or (18) the Fair Market Value of a Share. Any of the foregoing
criteria may be determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable
by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index, the Nasdaq Composite Index, the Russell
2000 Index, or another group of companies that are comparable to the Company. In determining the achievement of the performance goals,
unless otherwise specified by the Committee at the time the performance goals are set, the Committee shall exclude the impact of (i) restructurings,
discontinued operations, and extraordinary items (as defined pursuant to generally accepted accounting principles), and other unusual
or non-recurring charges, (ii) change in accounting standards required by generally accepted accounting principles; or (iii) such other
exclusions or adjustments as the Committee specifies at the time the Award is granted. Except as may be provided in Section 8 or an Award
Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. The performance goals to be achieved
for each Performance Period, the duration of the Performance Period and the amount of the Award to be distributed, in each case, shall
be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the Committee, on a deferred basis in a manner that does not violate
the requirements of Section 409A of the Code.
(i) Other
Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to any Eligible
Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan. Other Stock-Based Awards may be
granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards shall
also be available as a form of payment in the settlement of other Awards granted under the Plan. Except as otherwise provided in the
last sentence of Section 6(h) hereof, the Committee shall determine the terms and conditions of such Awards. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this Section 6(i) shall be purchased for such consideration,
(including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of Section
13(k) of the Exchange Act or any rule or regulation adopted thereunder or any other applicable law) paid for at such times, by such
methods, and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall
determine.
(j) Minimum
Vesting Conditions. Except for certain limited situations (including death, disability,
retirement, a Change in Control referred to in Section 8, grants to new hires to replace forfeited compensation, grants representing payment
of earned Performance Awards or other incentive compensation, Substitute Awards or grants to Directors), all Awards granted under this
Plan shall be subject to a minimum vesting period of one (1) year (the “Minimum Vesting Condition”);
provided, that such Minimum Vesting Condition will not be required on Awards covering, in the aggregate, a number of Shares not to exceed
5% of the maximum Share pool limit set forth in Section 4(a) hereof (subject to adjustment as provided in Section 9(c) hereof).
7. Certain
Provisions Applicable to Awards.
(a) Stand-Alone,
Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under
another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity, or any
other right of a Participant to receive payment from the Company or any Related Entity. Such additional, tandem, and substitute or
exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award, the
Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. In addition,
Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or
any Related Entity, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for example,
Restricted Stock or Restricted Stock Units), or in which the exercise price, grant price or purchase price of the Award in the
nature of a right that may be exercised is equal to the Fair Market Value of the underlying Shares minus the value of the cash
compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price or grant price
“discounted” by the amount of the cash compensation surrendered), provided that any such determination to grant an Award
in lieu of cash compensation must be made in a manner intended to be exempt from or comply with Section 409A of the Code.
(b) Term of
Awards. The term of each Award shall be for such period as may be determined by the Committee; provided that in no event
shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option
such shorter term as may be required under Section 422 of the Code); provided, however, that in the event that on the last day of
the term of an Option or a Stock Appreciation Right, other than an Incentive Stock Option, (i) the exercise of the Option or Stock
Appreciation Right is prohibited by applicable law, or (ii) Shares may not be purchased, or sold by certain employees or directors
of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in
connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right may be extended by the
Committee for a period of up to thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement,
provided that such extension of the term of the Option or Stock Appreciation Right would not cause the Option or Stock Appreciation
Right to violate the requirements of Section 409A of the Code.
(c) Form and Timing
of Payment Under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made
by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms
as the Committee shall determine, including, without limitation, cash, Shares, other Awards or other property, and may be made in a
single payment or transfer, in installments, or on a deferred basis, provided that any determination to pay in installments or on a
deferred basis shall be made by the Committee at the date of grant. Any installment or deferral provided for in the preceding
sentence shall, however, subject to the terms of the Plan, be subject to the Company’s compliance with the provisions of the
Sarbanes-Oxley Act of 2002, as amended, the rules and regulations adopted by the Securities and Exchange Commission thereunder, all
applicable rules of the Listing Market and any other applicable law, and in a manner intended to be exempt from or otherwise satisfy
the requirements of Section 409A of the Code. Subject to Section 7(e) of this Plan, the settlement of any Award may be accelerated,
and cash paid in lieu of Shares in connection with such settlement, in the sole discretion of the Committee or upon occurrence of
one or more specified events (in addition to a Change in Control). Any such settlement shall be at a value determined by the
Committee in its sole discretion, which, without limitation, may in the case of an Option or Stock Appreciation Right be limited to
the amount if any by which the Fair Market Value of a Share on the settlement date exceeds the exercise or grant price. Installment
or deferred payments may be required by the Committee (subject to Section 7(e) of this Plan, including the consent provisions
thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the
election of the Participant on terms and conditions established by the Committee. The acceleration of the settlement of any Award,
and the payment of any Award in installments or on an deferred basis, all shall be done in a manner that is intended to be exempt
from or otherwise satisfy the requirements of Section 409A of the Code. The Committee may, without limitation, make provision for
the payment or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments denominated in Shares.
(d) Exemptions
from Section 16(b) Liability. It is the intent of the Company that the grant of any Awards to or other transaction by a Participant
who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions
acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award Agreement does
not comply with the requirements of Rule 16b-3 then applicable to any such transaction, such provision shall be construed or deemed amended
to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section
16(b).
(e) Code Section
409A.
(i) The Award Agreement
for any Award that the Committee reasonably determines to constitute a “nonqualified deferred compensation plan” under Section
409A of the Code (a “Section 409A Plan”), and the provisions of the Section 409A Plan applicable to that Award,
shall be construed in a manner consistent with the applicable requirements of Section 409A of the Code, and the Committee, in its sole
discretion and without the consent of any Participant, may amend any Award Agreement (and the provisions of the Plan applicable thereto)
if and to the extent that the Committee determines that such amendment is necessary or appropriate to comply with the requirements of
Section 409A of the Code.
(ii) If
any Award constitutes a Section 409A Plan, then the Award shall be subject to the following additional requirements, if and to the extent
required to comply with Section 409A of the Code:
(A) Payments
under the Section 409A Plan may be made only upon (u) the Participant’s “separation from service”, (v) the date the
Participant becomes “disabled”, (w) the Participant’s death, (x) a “specified time (or pursuant to a fixed schedule)”
specified in the Award Agreement at the date of the deferral of such compensation, (y) a “change in the ownership or effective control
of the corporation, or in the ownership of a substantial portion of the assets” of the Company, or (z) the occurrence of an “unforeseeble
emergency”;
(B) The
time or schedule for any payment of the deferred compensation may not be accelerated, except to the extent provided in applicable Treasury
Regulations or other applicable guidance issued by the Internal Revenue Service;
(C) Any
elections with respect to the deferral of such compensation or the time and form of distribution of such deferred compensation shall comply
with the requirements of Section 409A(a)(4) of the Code; and
(D) In
the case of any Participant who is “specified employee”, a distribution on account of a “separation from service”
may not be made before the date which is six months after the date of the Participant’s “separation from service” (or,
if earlier, the date of the Participant’s death).
For purposes of the foregoing, the terms in quotations
shall have the same meanings as those terms have for purposes of Section 409A of the Code, and the limitations set forth herein shall
be applied in such manner (and only to the extent) as shall be necessary to comply with any requirements of Section 409A of the Code that
are applicable to the Award.
(iii) Notwithstanding
the foregoing, or any provision of this Plan or any Award Agreement, the Company does not make any representation to any Participant or
Beneficiary that any Awards made pursuant to this Plan are exempt from, or satisfy, the requirements of, Section 409A of the Code, and
the Company shall have no liability or other obligation to indemnify or hold harmless the Participant or any Beneficiary for any tax,
additional tax, interest or penalties that the Participant or any Beneficiary may incur in the event that any provision of this Plan,
or any Award Agreement, or any amendment or modification thereof, or any other action taken with respect thereto, is deemed to violate
any of the requirements of Section 409A of the Code.
8. Change
in Control.
(a) Effect of
“Change in Control.” Subject to any limitations or reductions as may be necessary to comply with Section 409A of
the Code, an Award may be subject to acceleration of vesting and exercisability if and only to the extent expressly provided for in
any employment or other agreement between the Participant and the Company or any Related Entity, or in any Award Agreement entered
into prior to the occurrence of a Change in Control (as defined below), or to the extent otherwise determined by the Committee in
its sole discretion and without any requirement that each Participant be treated consistently. Except as otherwise provided in
Section 8(a)(iv) hereof, such Awards shall be treated as follows upon the occurrence of a “Change in Control,” as
defined in Section 8(b):
(i) Any
Option or Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become
immediately vested and exercisable, subject to applicable restrictions set forth in Section 9(a) hereof.
(ii) Any
restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Restricted Stock Unit Award or
an Other Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable
restrictions set forth in Section 9(a) hereof.
(iii) With
respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its
discretion, consider such Awards to have been earned and payable based on actual achievement of performance goals as measured immediately
prior to the consummation of the Change in Control or based upon target performance (either in full or pro-rata based on the portion of
the Performance Period completed as of the Change in Control), except to the extent of any waiver by the Participant and subject to applicable
restrictions set forth in Section 9(a).
(iv) Except
as otherwise provided in any employment or other agreement for services between the Participant and the Company or any Subsidiary, and
unless the Committee otherwise determines in a specific instance, each outstanding Option, Stock Appreciation Right, Restricted Stock
Award, Restricted Stock Unit Award or Other Stock-Based Award shall not be accelerated as described in Sections 8(a)(i), (ii) and (iii),
if either (A) the Company is the surviving entity in the Change in Control and the Option, Stock Appreciation Right, Restricted Stock
Award, Restricted Stock Unit Award or Other Stock-Based Award continues to be outstanding after the Change in Control on substantially
the same terms and conditions as were applicable immediately prior to the Change in Control or (B) the successor company or its parent
company assumes or substitutes for the applicable Award, as determined in accordance with Section 9(c)(ii) of this Plan.
(b) Definition of
“Change in Control”. Unless otherwise specified in any employment or other agreement for services between the
Participant and the Company or any Related Entity, or in an Award Agreement, a “Change in Control” shall
mean the occurrence of any of the following:
(i)
The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
fifty percent (50%) of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”) (the foregoing Beneficial Ownership
hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this Section
9(b), the following acquisitions shall not constitute or result in a Change in Control: (v) any acquisition directly from the Company;
(w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling
Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Entity;
or (z) any acquisition by any entity pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (iii) below;
or
(ii) During
any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on
the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election
by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii) Consummation
of (A) a reorganization, merger, statutory share exchange or consolidation or similar transaction involving (x) the Company or (y) any
one or more Subsidiaries whose combined revenues for the prior fiscal year represented more than 50% of the consolidated revenues of the
Company and its Subsidiaries for the prior fiscal year (the “Major Subsidiaries”), or (B) a sale or other disposition
of all or substantially all of the assets of the Company or the Major Subsidiaries, or the acquisition of assets or equity of another
entity by the Company or any of its Subsidiaries (each of the events referred to in clauses (A) and (B) sometimes hereinafter being referred
to a “Business Combination”), unless, following such Business Combination, (1) all or substantially all
of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable
governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) (the “Continuing Entity”) in substantially the same
proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Voting Securities, (excluding
any outstanding voting securities of the Continuing Entity that such Beneficial Owners hold immediately following the consummation of
the Business Combination as a result of their ownership, prior to such consummation, of voting securities of any company or other entity
involved in or forming part of such Business Combination other than the Company), (2) no Person (excluding any employee benefit plan (or
related trust) of the Company or any Continuing Entity or any entity controlled by the Continuing Entity or any Person that as of the
Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities of the Continuing Entity except to the extent that such ownership
existed prior to the Business Combination, and (3) at least a majority of the members of the Board of Directors or other governing body
of the Continuing Entity were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination.
Notwithstanding anything to the contrary herein,
the term “Change in Control” shall not include the Domestication, nor any sale of assets, a merger or other transaction
effected exclusively for the purpose of changing the domicile of the Company, nor an initial public offering underwritten on a firm commitment
basis pursuant to a registration statement filed with the Securities Exchange Commission. If required for compliance with Section 409A
of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership
or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company
as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
9. General
Provisions.
(a) Compliance With
Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration or qualification
of such Shares or other required action under any federal or state law, rule or regulation, listing or other required action with
respect to the Listing Market, or compliance with any other obligation of the Company, as the Committee, may consider appropriate,
and may require any Participant to make such representations, furnish such information and comply with or be subject to such other
conditions as it may consider appropriate in connection with the issuance or delivery of Shares or payment of other benefits in
compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.
(b) Limits on
Transferability; Beneficiaries. No Award or other right or interest granted under the Plan shall be pledged, hypothecated or
otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by
such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant
or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock
Appreciation Rights in tandem therewith) may be transferred to one or more Beneficiaries or other transferees during the lifetime of
the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent
such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms and
conditions which the Committee may impose thereon), are by gift or pursuant to a domestic relations order, and are to a
“Permitted Assignee” that is a permissible transferee under the applicable rules of the Securities and Exchange
Commission for registration of securities on a Form S-8 registration statement. For this purpose, a Permitted Assignee
shall mean (i) the Participant’s spouse, children or grandchildren (including any adopted and step children or grandchildren),
parents, grandparents or siblings, (ii) a trust for the benefit of one or more of the Participant or the persons referred to in
clause (i), (iii) a partnership, limited liability company or corporation in which the Participant or the persons referred to in
clauses (i) and (ii) are the only partners, members or shareholders, or (iv) a foundation in which any person or entity designated
in clauses (i), (ii) or (iii) above control the management of assets. A Beneficiary, transferee, or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement
applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed
necessary or appropriate by the Committee.
(c) Adjustments.
(i) Adjustments
to Awards. In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or other property),
recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or such other securities of the Company
or any other issuer, then the Committee shall, in such manner as it may deem appropriate and equitable, substitute, exchange or adjust
any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B) the number and
kind of Shares by which annual per-person Award limitations are measured under Section 4 hereof, (C) the number and kind of Shares subject
to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or
make provision for payment of cash or other property in respect of any outstanding Award, and (E) any other aspect of any Award that the
Committee determines to be appropriate in order to prevent the reduction or enlargement of benefits under any Award; provided, that in
the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards
Codification Topic 718 (or any successor pronouncement thereto)), the Committee shall make an equitable or proportionate adjustment to
outstanding Awards to reflect such equity restructuring. Any adjustment under this Section 9(c) shall be conclusive and binding for all
purposes.
(ii) Adjustments
in Case of Certain Transactions. In the event of any merger, consolidation or other reorganization in which the Company does not
survive, or in the event of any Change in Control (and subject to the provisions of Section 8 of this Plan relating to the vesting of
Awards in the event of any Change in Control and subject to any limitations or reductions as may be necessary to comply with Section 409A
of the Code), any outstanding Awards may be dealt with in accordance with any of the following approaches, without the requirement of
obtaining any consent or agreement of a Participant as such, as determined by the agreement effectuating the transaction or, if and to
the extent not so determined, as determined by the Committee: (A) the continuation of the outstanding Awards by the Company, if the Company
is a surviving entity, (B) the assumption or substitution for, as those terms are defined below, the outstanding Awards by the surviving
entity or its parent or subsidiary, (C) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (D) settlement
of the value of the outstanding Awards in cash or cash equivalents or other property followed by cancellation of such Awards, which value,
in the case of Options or Stock Appreciation Rights, shall be measured by the amount, if any, by which the Fair Market Value of a Share
exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the effective date of the transaction, (it being understood
that, in such event, any Option or Stock Appreciation Right having a per Share exercise or grant price equal to, or in excess of, the
Fair Market Value of a Share subject thereto may be canceled and terminated without any payment or consideration therefor). For the purposes
of this Plan, an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based
Award shall be considered assumed or substituted for if following the applicable transaction the Award confers the right to purchase or
receive, for each Share subject to the Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance
Award or Other Stock-Based Award immediately prior to the applicable transaction, on substantially the same vesting and other terms and
conditions as were applicable to the Award immediately prior to the applicable transaction, the consideration (whether stock, cash or
other securities or property) received in the applicable transaction by holders of Shares for each Share held on the effective date of
such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration received in the applicable transaction is not solely common
stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent
or subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit Award, Performance Award or Other Stock-Based Award, for each Share subject thereto, will be solely
common stock of the successor company or its parent or subsidiary substantially equal in fair market value to the per share consideration
received by holders of Shares in the applicable transaction. The determination of such substantial equality of value of consideration
shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. The Committee shall give
written notice of any proposed transaction referred to in this Section 9(c)(ii) a reasonable period of time prior to the closing date
for such transaction (which notice may be given either before or after the approval of such transaction), in order that Participants may
have a reasonable period of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable
(including any Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his or her exercise
of any Awards upon the consummation of the transaction.
(iii) Other
Adjustments. The Committee or the Board is authorized to make adjustments in the terms and conditions of, and the criteria included
in, Awards (including Awards subject to satisfaction of performance goals, or performance goals and conditions relating thereto) in recognition
of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the
Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response to
changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s
assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant.
(d) Award
Agreements. Each Award Agreement shall either be (a) in writing in a form approved by the Committee and executed by the Company
by an officer duly authorized to act on its behalf, or (b) an electronic notice in a form approved by the Committee and recorded by the
Company (or its designee) in an electronic recordkeeping system used for the purpose of tracking one or more types of Awards as the Committee
may provide; in each case and if required by the Committee, the Award Agreement shall be executed or otherwise electronically accepted
by the recipient of the Award in such form and manner as the Committee may require. The Committee may authorize any officer of the Company
to execute any or all Award Agreements on behalf of the Company. The Award Agreement shall set forth the material terms and conditions
of the Award as established by the Committee consistent with the provisions of the Plan.
(e) Taxes.
The Company and any Related Entity are authorized to withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other
taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive
Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations,
either on a mandatory or elective basis in the discretion of the Committee. The amount of withholding tax paid with respect to an
Award by the withholding of Shares otherwise deliverable pursuant to the Award or by delivering Shares already owned shall not
exceed the maximum statutory withholding required with respect to that Award (or such other limit as the Committee shall impose,
including without limitation, any limit imposed to avoid or limit any financial accounting expense relating to the Award).
(f) Changes to the
Plan and Awards. The Board may amend, alter, suspend, discontinue or terminate the Plan, or the Committee’s authority
to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration to the
Plan shall be subject to the approval of the Company’s shareholders not later than the annual meeting next following such
Board action if such shareholder approval is required by any federal or state law or regulation (including, without limitation, Rule
16b-3) or the rules of the Listing Market, and the Board may otherwise, in its discretion, determine to submit other such changes to
the Plan to shareholders for approval; provided that, except as otherwise permitted by the Plan or Award Agreement, without the
consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under
the terms of any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise
provided in the Plan; provided that, except as otherwise permitted by the Plan or Award Agreement, without the consent of an
affected Participant, no such Committee or the Board action may materially and adversely affect the rights of such Participant under
terms of such Award.
(g) Clawback
of Benefits.
(i) The
Company may (A) cause the cancellation of any Award, (B) require reimbursement of any Award by a Participant or Beneficiary, and (C) effect
any other right of recoupment of equity or other compensation provided under this Plan or otherwise in accordance with any Company policies
that currently exist or that may from time to time be adopted or modified in the future by the Company and/or applicable law (each, a
“Clawback Policy”). In addition, a Participant may be required to repay to the Company certain previously paid
compensation, whether provided under this Plan or an Award Agreement or otherwise, in accordance with any Clawback Policy. By accepting
an Award, a Participant is also agreeing to be bound by any existing or future Clawback Policy adopted by the Company, or any amendments
that may from time to time be made to the Clawback Policy in the future by the Company in its discretion (including without limitation
any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and is further agreeing that all
of the Participant’s Award Agreements may be unilaterally amended by the Company, without the Participant’s consent, to the
extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.
(ii) If
the Participant, without the consent of the Company, while employed by or providing services to the Company or any Related Entity or after
termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise
engages in activity that is in conflict with or adverse to the interest of the Company or any Related Entity, as determined by the Committee
in its sole discretion, then (i) any outstanding, vested or unvested, earned or unearned portion of the Award may, at the Committee’s
discretion, be canceled and (ii) the Committee, in its discretion, may require the Participant or other person to whom any payment has
been made or Shares or other property have been transferred in connection with the Award to forfeit and pay over to the Company, on demand,
all or any portion of the gain (whether or not taxable) realized upon the exercise of any Option or Stock Appreciation Right and the value
realized (whether or not taxable) on the vesting or payment of any other Award during the time period specified in the Award Agreement
or otherwise specified by the Committee.
(g) Limitation on
Rights Conferred Under Plan. Neither the Plan nor any action taken hereunder or under any Award shall be construed as (i)
giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of
the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any
Eligible Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or Participant any
claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on
a Participant any of the rights of a shareholder of the Company or any Related Entity including, without limitation, any right to
receive dividends or distributions, any right to vote or act by written consent, any right to attend meetings of shareholders or any
right to receive any information concerning the Company’s or any Related Entity’s business, financial condition, results
of operation or prospects, unless and until such time as the Participant is duly issued Shares on the stock books of the Company or
any Related Entity in accordance with the terms of an Award. None of the Company, its officers or its directors shall have any
fiduciary obligation to the Participant with respect to any Awards unless and until the Participant is duly issued Shares pursuant
to the Award on the stock books of the Company in accordance with the terms of an Award. Neither the Company, nor any Related
Entity, nor any of their respective officers, directors, representatives or agents is granting any rights under the Plan to the
Participant whatsoever, oral or written, express or implied, other than those rights expressly set forth in this Plan or the Award
Agreement.
(h) Unfunded Status
of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award,
nothing contained in the Plan or any Award Agreement shall give any such Participant any rights that are greater than those of a
general creditor of the Company or Related Entity that issues the Award; provided that the Committee may authorize the creation of
trusts and deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet the obligations of the
Company or Related Entity under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded”
status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such
trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and
conditions as the Committee may specify and in accordance with applicable law.
(i) Nonexclusivity
of the Plan. Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other
incentive arrangements as it may deem desirable.
(j) Payments in the
Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an
Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash
or other consideration. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(k) Governing
Law. Except as otherwise provided in any Award Agreement, the validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be determined in accordance with (i) prior to the Domestication, the laws
of the British Virgin Islands, and (ii) after the Domestication, the laws of the State of Delaware, in each case, without giving
effect to principles of conflict of laws, and applicable federal law.
(l) Foreign
Laws. The Committee shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or
desirable to comply with provisions of the laws of foreign countries in which the Company or its Related Entities may operate to
assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the
objectives of the Plan.
(m) Plan Effective
Date; Termination of Plan. The Plan shall become effective on the Effective Date. The Plan shall terminate at the earliest
of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the
tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall remain in effect until they have been
exercised or terminated or have expired.
(n) Construction
and Interpretation. Whenever used herein, nouns in the singular shall include the plural, and the masculine pronoun shall include
the feminine gender. Headings of Articles and Sections hereof are inserted for convenience and reference and constitute no part of the
Plan.
(o) Severability.
If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction,
the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall
remain enforceable in any other jurisdiction.
Exhibit 10.2
NON-EMPLOYEE DIRECTOR FORM
INAUGURAL GRANT FORM
ACUREN Corporation
2024 EQUITY INCENTIVE PLAN
Restricted STOCK
unit AGREEMENT
FOR
[name]
1. Award
of Restricted Stock Units. ACUREN CORPORATION (the “Company”) hereby grants, as of ___________, 20__ (the
“Grant Date”), to [NAME] (the “Recipient”), the right to receive, at the times specified
in Section 2 hereof, [#] Shares of the Company (collectively the “RSUs”). The RSUs
shall be subject to the terms, provisions and restrictions set forth in this Agreement and the Acuren Corporation 2024 Equity Incentive
Plan, as may be amended from time to time (the “Plan”), which is incorporated herein for all purposes. As a
condition to entering into this Agreement, and to the issuance of any Shares, the Recipient agrees to be bound by all of the terms and
conditions herein and in the Plan. Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein
shall have the meanings attributable thereto in the Plan.
2. Vesting
of RSUs.
(a) General
Vesting. Except as provided in Sections 2(b) and 3 of this Agreement, the RSUs shall vest in the following amounts
and the following times (the “Vesting Date”), provided that the Continuous Service of the Recipient continues
through and each such Vesting Date:
| Percentage of RSUs | |
Vesting Date |
| 100% | |
First Anniversary of the Grant Date |
There shall be no proportionate
or partial vesting of the RSUs in or during the months, days or periods prior to each Vesting Date, and except as otherwise provided in
Section 2(b) hereof, all vesting shall occur only on the applicable Vesting Date provided the conditions set forth in this
Section 2 are satisfied. Any portion of the RSUs subject to this Agreement that have become vested pursuant to this Section 2
shall be referred to hereinafter as the “Vested RSUs”, and any portion that have not vested hereunder shall
be referred to as the “Non-Vested RSUs.”
(b) Acceleration
of Vesting Upon Change in Control. In the event that a Change in Control occurs during the Recipient’s Continuous Service, the
Non-Vested RSUs subject to this Agreement shall become immediately vested as of the date of the Change in Control (the “Change
in Control Vesting Date”).
3. Treatment
of RSUs Upon Termination of Continuous Service. If the Recipient’s Continuous Service is terminated for any reason prior to
the earlier of (a) a Vesting Date or (b) a Change in Control Vesting Date, the Non-Vested RSUs granted hereunder shall be immediately
forfeited and revert back to the Company without any payment to the Recipient. The Committee shall have the power and authority to enforce
on behalf of the Company any rights the Company may have with respect to the RSUs under this Agreement in the event of the termination
of the Recipient’s Continuous Service.
4. Settlement
of the RSUs. The Company shall deliver to the Recipient the number of Shares corresponding to the Vested RSUs as soon as practicable
on or after the Vesting Date or Change in Control Vesting Date, whichever applicable, but in no event later than 30 days after such Vesting
Date or Change in Control Vesting Date.
5. Rights
with Respect to RSUs.
(a) No
Rights as Shareholder Until Delivery. Except as otherwise provided in this Section 5 or the Plan, the Recipient shall
not have any rights, benefits or entitlements with respect to the Shares corresponding to the RSUs unless and until those Shares are delivered
to the Recipient. On or after delivery, the Recipient shall have, with respect to the Shares delivered, all of the rights of a holder
of Shares granted pursuant to the articles of incorporation and other governing instruments of the Company, or as otherwise available
at law.
(b) Adjustments
to Stock. If at any time while this Agreement is in effect and before any Shares have been delivered with respect to any RSUs, there
shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend
or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Committee
shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Shares subject to the RSUs then subject
to this Agreement. If any such adjustment shall result in a fractional share, such fraction shall be disregarded.
(c) No
Restriction on Certain Transactions. Notwithstanding any term or provision of this Agreement to the contrary, the existence of this
Agreement, or of any outstanding RSUs awarded hereunder, shall not affect in any manner the right, power or authority of the Company to
make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s
capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer,
issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference
stock that would rank prior to or on parity with the shares of Stock represented by the RSUs and/or that would include, have or possess
other rights, benefits and/or preferences superior to those that such shares includes, has or possesses, or any warrants, options or rights
with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether
of a similar character or otherwise).
6. Transferability.
The RSUs are not transferable unless and until the Shares have been delivered to the Recipient in settlement of the RSUs in accordance
with this Agreement, otherwise than by will or under the applicable laws of descent and distribution. Except as otherwise permitted pursuant
to the first sentence of this Section 6, any attempt to effect a Transfer of any RSUs prior to the date on which the Shares have
been delivered to the Recipient in settlement of the RSUs shall be void ab initio. For purposes of this Agreement, “Transfer”
shall mean any sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary, and including, but not limited to, any disposition by operation
of law, by court order, by judicial process, or by foreclosure, levy or attachment.
7. Tax
Matters.
(a) Withholding.
As a condition to the Company’s obligations with respect to the RSUs (including, without limitation, any obligation to deliver any
Shares) hereunder, if applicable, the Recipient shall make arrangements satisfactory to the Company to pay to the Company any federal,
state or local taxes of any kind required to be withheld with respect to the delivery of Shares corresponding to such RSUs. If the Recipient
shall fail to make the tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct from
any payment of any kind (including the withholding of any Shares that otherwise would be delivered to Recipient under this Agreement)
otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to such Shares.
(b) Satisfaction
of Withholding Requirements. The Recipient may direct the Company to satisfy the withholding requirements with respect to the RSUs
pursuant to the procedures and methods set forth in Section 10(e) of the Plan, including, but not limited to, withholding of Shares
to be delivered and the cash payment by the Company in respect to satisfy the Recipient’s tax obligations.
(c) Recipient’s
Responsibilities for Tax Consequences. The tax consequences to the Recipient (including without limitation federal, state, local and
foreign income tax consequences) with respect to the RSUs (including without limitation the grant, vesting and/or delivery thereof) are
the sole responsibility of the Recipient. The Recipient shall consult with his or her own personal accountant(s) and/or tax advisor(s)
regarding these matters and the Recipient’s filing, withholding and payment (or tax liability) obligations.
(d) Section
280G. If any payment or benefit the Recipient would receive pursuant to this Agreement or pursuant to any other benefit plan, agreement
or arrangement between the Recipient and the Company or any Related Entity (“Payment”) would (i) constitute
a “Parachute Payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to
the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total of the Payment,
whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax
(all computed at the highest applicable marginal rate), results in the Recipient’s receipt, on an after-tax basis, of the greatest
economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments
or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner
that results in the greatest economic benefit for the Recipient to the extent permitted by Section 409A of the Code, to the extent applicable,
and Section 280G of the Code. All determinations under this Section 7(d) will be made by an actuarial firm, accounting firm, law firm,
or consulting firm experienced and generally recognized in 280G matters (the “280G Firm”) that is chosen by
the Company prior to a change in ownership or control of a corporation (within the meaning of Treasury regulations under Section 280G
of the Code). The 280G Firm shall be required to evaluate the extent to which payments are exempt from Section 280G as reasonable compensation
for services rendered before or after the Change in Control. All fees and expenses of the 280G Firm shall be paid solely by the Company
or its successor. The Company and the Recipient shall furnish the 280G Firm such information and documents as the 280G Firm may reasonably
request in order to make its required determination. The 280G Firm will provide its calculations, together with detailed supporting documentation,
to the Company and the Recipient as soon as practicable following its engagement. Any good faith determinations of the 280G Firm made
hereunder will be final, binding and conclusive upon the Company and the Recipient.
8. Amendment,
Modification & Assignment. This Agreement may only be modified or amended in a writing signed by the parties hereto. No promises,
assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express
or implied, with respect to the subject matter hereof, have been made by either party which are not set forth expressly in this Agreement.
Unless otherwise consented to in writing by the Company, in its sole discretion, this Agreement (and Recipient’s rights hereunder)
may not be assigned, and the obligations of Recipient hereunder may not be delegated, in whole or in part. The rights and obligations
created hereunder shall be binding on the executors, administrators, heirs, successors and assigns of the Recipient and on the successors
and assigns of the Company.
9. Complete
Agreement. This Agreement (together with those agreements and documents expressly referred to herein, for the purposes referred to
herein) embody the complete and entire agreement and understanding between the parties with respect to the subject matter hereof, and
supersede any and all prior promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic
or otherwise, and whether express or implied, which may relate to the subject matter hereof in any way.
10. Miscellaneous.
(a) No
Right to (Continued) Employment or Service. This Agreement and the grant of RSUs hereunder shall not confer, or be construed to confer,
upon the Recipient any right to employment or service, or continued employment or service, with the Company or any Related Entity.
(b) No
Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall preclude the Company or any Related Entity from
adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any such plans, agreements and
arrangements may be either generally applicable or applicable only in specific cases or to specific persons.
(c) Severability.
If any term or provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or under
any applicable law, rule or regulation, then such provision shall be construed or deemed amended to conform to applicable law (or if such
provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement and the grant of
RSUs hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the award hereunder shall
remain in full force and effect).
(d) No
Trust or Fund Created. Neither this Agreement nor the grant of RSUs hereunder shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any Related Entity and the Recipient or any other person. To the extent
that the Recipient or any other person acquires a right to receive payments from the Company or any Related Entity pursuant to this Agreement,
such right shall be no greater than the right of any unsecured general creditor of the Company.
(e) Law
Governing. The validity, construction and effect of this Agreement shall be determined in accordance with (i) prior to the Domestication,
the laws of the British Virgin Islands, and (ii) after the Domestication, the laws of the State of Delaware, in each case, without
giving effect to principles of conflict of laws, and applicable federal law.
(f) Interpretation.
The Recipient accepts this award of RSUs subject to all of the terms, provisions and restrictions of this Agreement and the Plan. The
Recipient hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising
under this Agreement or the Plan.
(g) Headings.
Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions
shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision
hereof.
(h) Notices.
Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, by overnight
courier, or by United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s [Chief
Financial Officer] at [●], or if the Company should move its principal office, to such principal office, and, in the case of the
Recipient, to the Recipient’s last permanent address as shown on the Company’s records, subject to the right of either party
to designate some other address at any time hereafter in a notice satisfying the requirements of this Section 10.
(i) Compliance
with Section 409A
(i) General.
It is the intention of both the Company and the Recipient that the benefits and rights to which the Recipient could be entitled pursuant
to this Agreement either comply with or fall within an exception to Section 409A of the Code and the Treasury Regulations and other
guidance promulgated or issued thereunder (“Section 409A”), to the extent that the requirements of Section 409A are applicable
thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention.
(ii) No
Representations as to Section 409A Compliance. Notwithstanding the foregoing, the Company does not make any representation to
the Recipient that the RSUs awarded pursuant to this Agreement are exempt from, or satisfy, the requirements of Section 409A, and
the Company shall have no liability or other obligation to indemnify or hold harmless the Recipient or any Beneficiary for any tax, additional
tax, interest or penalties that the Recipient or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment
or modification thereof or any other action taken with respect thereto is deemed to violate any of the requirements of Section 409A.
(iii) No
Acceleration of Payments. Neither the Company nor the Recipient, individually or in combination, may accelerate any payment
or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of this Agreement, and
no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid without violating Section 409A.
(j) Non-Waiver
of Breach. The waiver by any party hereto of the other party’s prompt and complete performance, or breach or violation, of any
term or provision of this Agreement shall be effected solely in a writing signed by such party, and shall not operate nor be construed
as a waiver of any subsequent breach or violation, and the waiver by any party hereto to exercise any right or remedy which he or it may
possess shall not operate nor be construed as the waiver of such right or remedy by such party, or as a bar to the exercise of such right
or remedy by such party, upon the occurrence of any subsequent breach or violation.
(k) Clawback.
The Company may (i) cause the cancellation of the RSUs, (ii) require reimbursement of any benefit conferred under the RSUs to
the Recipient or Beneficiary, and (iii) effect any other right of recoupment of equity or other compensation provided under the Plan
or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the
future by the Company and/or applicable law (each, a “Clawback Policy”). In addition, the Recipient may be required
to repay to the Company certain previously paid compensation, whether provided under the Plan or an Award Agreement or otherwise, in accordance
with any Clawback Policy. By accepting this Award, the Recipient agrees to be bound by any existing or future Clawback Policy adopted
by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company in its discretion
(including without limitation any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and
further agrees that all of the Recipient’s Award Agreements may be unilaterally amended by the Company, without the Recipient’s
consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.
(l) Counterparts.
This Agreement may be executed in two or more separate counterparts, each of which shall be an original, and all of which together shall
constitute one and the same agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the ___ day of _________, 20__.
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COMPANY: |
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ACUREN CORPORATION |
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By: |
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Name: |
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Title: |
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The Recipient acknowledges receipt of a copy of
the Plan and represents that he or she has reviewed the provisions of the Plan and this Agreement in their entirety, is familiar with
and understands their terms and provisions, and hereby accepts this RSU award subject to all of the terms and provisions of the Plan and
this Agreement. The Recipient further represents that he or she has had an opportunity to obtain the advice of counsel prior to executing
this Agreement.
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RECIPIENT: |
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Name: |
[NAME] |
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Dated: |
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7
Exhibit 10.3
INAUGURAL GRANT
ACUREN Corporation
2024 EQUITY INCENTIVE PLAN
Restricted STOCK
unit AGREEMENT
FOR
[Executive officer]
1. Award
of Restricted Stock Units. ACUREN CORPORATION (the “Company”) hereby grants, as of July 30, 2024 (the “Grant
Date”), to [Recipient] (the “Recipient”), the right to receive, at the times specified in Section 2
hereof, [●] Shares of the Company (collectively the “RSUs”). The RSUs shall be subject to the terms,
provisions and restrictions set forth in this Agreement and the Acuren Corporation 2024 Equity Incentive Plan, as may be amended from
time to time (the “Plan”), which is incorporated herein for all purposes. As a condition to entering into this
Agreement, and to the issuance of any Shares, the Recipient agrees to be bound by all of the terms and conditions herein and in the Plan.
Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributable
thereto in the Plan.
2. Vesting
of RSUs.
(a) General
Vesting. Except as provided in Sections 2(b) and 3 of this Agreement, the following shall apply:
(i) Fifty
percent (50%) of the RSUs (the “Time-Based Units”) shall vest in the following amounts and the following times
(the “Time-Based Vesting Date”), provided that the Continuous Service (as defined below) of the Recipient continues
through and each such Time-Based Vesting Date:
|
Percentage of RSUs |
|
Time-Based Vesting Date |
| |
|
|
| 33 1/3% |
|
First Anniversary of the Grant Date |
| 33 1/3% |
|
Second Anniversary of the Grant Date |
| 33 1/3% |
|
Third Anniversary of the Grant Date |
(ii) Subject
to the VWAP (as defined below) of a Share reaching $20 over a ten (10) consecutive trading day period (the “VWAP Achievement
Period”) at any time during the period commencing on the date on which the Shares are relisted on the New York Stock Exchange
and ending on the fifth (5th) anniversary of the Grant Date, fifty percent (50%) of the RSUs (the “Performance-Based
Units”) shall vest on the later of: (x) the first (1st) anniversary of the Grant Date and (y) the calendar
day following the last day of the VWAP Achievement Period (such vesting date, the “Performance-Based Vesting Date”)
provided that the Continuous Service of the Recipient continues through the Performance-Based Vesting Date. For the avoidance of
doubt, if the Performance-Based Units do not vest by the fifth (5th) anniversary of the Grant Date, then such Performance-Based
Units shall be forfeited and revert back to the Company without any payment to the Recipient.
For purposes of this Agreement, “VWAP”
means, as of any date or relevant period, as applicable, the volume weighted average price for a Share on the New York Stock Exchange
(or such other exchange on which the Company maintains its principal listing) as reported by Bloomberg through its “Volume at Price”
function (or such other data reporting service as may be determined by the Committee in its sole discretion); provided however, if the
Shares do not trade on any exchange, the VWAP will be the last closing trade price of a Share in the over-the-counter market on the electronic
bulletin board for that security as reported by Bloomberg (and if no last closing trade price is reported for a Share by Bloomberg, the
last closing ask price of a Share as reported by Bloomberg). If the VWAP cannot be calculated for a Share on that date on any of the foregoing
bases, the VWAP of a Share on such date will be the fair market value as determined by the Committee.
There shall be no proportionate or partial vesting
of the RSUs in or during the months, days or periods prior to each Time-Based Vesting Date or Performance-Based Vesting Date, whichever
applicable, and except as otherwise provided in Section 2(b) hereof, all vesting shall occur only on the applicable Time-Based
Vesting Date or Performance-Based Vesting Date provided the conditions set forth in this Section 2 are satisfied. Any portion
of the RSUs subject to this Agreement that have become vested pursuant to this Section 2 shall be referred to hereinafter
as the “Vested RSUs”, and any portion that have not vested hereunder shall be referred to as the “Non-Vested
RSUs.”
For purposes of this Agreement,
and notwithstanding anything to the contrary in the Plan, “Continuous Service” shall mean the actual, active
and uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee, Director, Consultant or other
service provider. Continuous Service shall be deemed to include (i) any period of vacation, disability or other leave permitted by legislation,
and (ii) any period constituting the minimum notice of termination period that is required to be provided to a Recipient pursuant to applicable
employment standards legislation (whether or not such notice is actually given or pay in lieu of notice is given), but shall exclude any
period of deemed employment and other period of notice of termination (whether that period arises from a contractual or common law right)
that follows or ought to have followed after the later of (x) the end of the minimum statutory notice period that is required to be provided
to the Recipient under applicable employment standards legislation (if any), or (y) the Recipient’s last day of actually and actively
performing work for the Company or any Related Entity.
(b) Acceleration
of Vesting Upon Change in Control. In the event that a Change in Control occurs during the Recipient’s Continuous Service, the
Non-Vested RSUs subject to this Agreement shall become immediately vested as of the date of the Change in Control (the “Change
in Control Vesting Date”).
3. Treatment
of RSUs Upon Termination of Continuous Service. If the Recipient’s Continuous Service is terminated for any reason (whether
such termination is by way of resignation, with cause, without cause or otherwise) prior to the earlier of (a) a Time-Based Vesting
Date or Performance-Based Vesting Date or (b) a Change in Control Vesting Date, the Non-Vested RSUs granted hereunder shall be immediately
forfeited and revert back to the Company without any payment to the Recipient whatsoever including without any damages or other compensation
for any claim of wrongful termination in respect of any Non-Vested RSUs that may have or would have vested if such termination had not
occurred or if due notice of termination had been given. For certainty, the date of the termination of the Recipient’s Continuous
Service (the “Separation Date”) does not include any notice period or pay in lieu of any notice period,
whether pursuant to contract, at common law or otherwise, except if and then only to the extent required to comply with the minimum standards
of applicable employment standards legislation. The Committee shall have the power and authority to enforce on behalf of the Company any
rights the Company may have with respect to the RSUs under this Agreement in the event of the termination of the Recipient’s Continuous
Service.
4. Settlement
of the RSUs. The Company shall deliver to the Recipient the number of Shares corresponding to the Vested RSUs as soon as practicable
on or after the Time-Based Vesting Date, Performance-Based Vesting Date or Change in Control Vesting Date, whichever applicable, but in
no event later than 30 days after such Time-Based Vesting Date, Performance-Based Vesting Date or Change in Control Vesting Date.
5. Rights
with Respect to RSUs.
(a) No
Rights as Shareholder Until Delivery. Except as otherwise provided in this Section 5 or the Plan, the Recipient shall
not have any rights, benefits or entitlements with respect to the Shares corresponding to the RSUs unless and until those Shares are delivered
to the Recipient. On or after delivery, the Recipient shall have, with respect to the Shares delivered, all of the rights of a holder
of Shares granted pursuant to the articles of incorporation and other governing instruments of the Company, or as otherwise available
at law.
(b) Adjustments
to Stock. If at any time while this Agreement is in effect and before any Shares have been delivered with respect to any RSUs, there
shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend
or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Committee
shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Shares subject to the RSUs then subject
to this Agreement. If any such adjustment shall result in a fractional share, such fraction shall be disregarded.
(c) No
Restriction on Certain Transactions. Notwithstanding any term or provision of this Agreement to the contrary, the existence of this
Agreement, or of any outstanding RSUs awarded hereunder, shall not affect in any manner the right, power or authority of the Company to
make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s
capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer,
issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference
stock that would rank prior to or on parity with the shares of Stock represented by the RSUs and/or that would include, have or possess
other rights, benefits and/or preferences superior to those that such shares includes, has or possesses, or any warrants, options or rights
with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether
of a similar character or otherwise).
6. Transferability.
The RSUs are not transferable unless and until the Shares have been delivered to the Recipient in settlement of the RSUs in accordance
with this Agreement, otherwise than by will or under the applicable laws of descent and distribution. Except as otherwise permitted pursuant
to the first sentence of this Section 6, any attempt to effect a Transfer of any RSUs prior to the date on which the Shares have
been delivered to the Recipient in settlement of the RSUs shall be void ab initio. For purposes of this Agreement, “Transfer”
shall mean any sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary, and including, but not limited to, any disposition by operation
of law, by court order, by judicial process, or by foreclosure, levy or attachment.
7. Tax
Matters.
(a) Withholding.
As a condition to the Company’s obligations with respect to the RSUs (including, without limitation, any obligation to deliver any
Shares) hereunder, if applicable, the Recipient shall make arrangements satisfactory to the Company to pay to the Company any federal,
state or local taxes of any kind required to be withheld with respect to the delivery of Shares corresponding to such RSUs. If the Recipient
shall fail to make the tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct from
any payment of any kind (including the withholding of any Shares that otherwise would be delivered to Recipient under this Agreement)
otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to such Shares.
(b) Satisfaction
of Withholding Requirements. The Recipient may direct the Company to satisfy the withholding requirements with respect to the RSUs
pursuant to the procedures and methods set forth in Section 10(e) of the Plan, including, but not limited to, withholding of Shares
to be delivered and the cash payment by the Company in respect to satisfy the Recipient’s tax obligations.
(c) Recipient’s
Responsibilities for Tax Consequences. The tax consequences to the Recipient (including without limitation federal, state, local and
foreign income tax consequences) with respect to the RSUs (including without limitation the grant, vesting and/or delivery thereof) are
the sole responsibility of the Recipient. The Recipient shall consult with his or her own personal accountant(s) and/or tax advisor(s)
regarding these matters and the Recipient’s filing, withholding and payment (or tax liability) obligations.
(d) Section
280G. If any payment or benefit the Recipient would receive pursuant to this Agreement or pursuant to any other benefit plan, agreement
or arrangement between the Recipient and the Company or any Related Entity (“Payment”) would (i) constitute
a “Parachute Payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to
the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total of the Payment,
whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax
(all computed at the highest applicable marginal rate), results in the Recipient’s receipt, on an after-tax basis, of the greatest
economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments
or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner
that results in the greatest economic benefit for the Recipient to the extent permitted by Section 409A of the Code, to the extent applicable,
and Section 280G of the Code. All determinations under this Section 7(d) will be made by an actuarial firm, accounting firm, law
firm, or consulting firm experienced and generally recognized in 280G matters (the “280G Firm”) that is chosen
by the Company prior to a change in ownership or control of a corporation (within the meaning of Treasury regulations under Section 280G
of the Code). The 280G Firm shall be required to evaluate the extent to which payments are exempt from Section 280G as reasonable compensation
for services rendered before or after the Change in Control. All fees and expenses of the 280G Firm shall be paid solely by the Company
or its successor. The Company and the Recipient shall furnish the 280G Firm such information and documents as the 280G Firm may reasonably
request in order to make its required determination. The 280G Firm will provide its calculations, together with detailed supporting documentation,
to the Company and the Recipient as soon as practicable following its engagement. Any good faith determinations of the 280G Firm made
hereunder will be final, binding and conclusive upon the Company and the Recipient.
8. Restrictive
Covenants. As a condition to the grant of the RSUs hereunder, as well as a condition of receiving any Shares upon settlement of such
RSUs, the Recipient hereby acknowledges and agrees to be bound by the restrictive covenant provisions contained in this Section 8.
The Recipient acknowledges that his or her agreement to this Section 8 constitutes a material inducement to the Company to enter
into this Agreement, and that the Company would not enter into this Agreement absent the Recipient’s agreement to, and compliance
with, the following restrictive covenant provisions, which the Recipient agrees are fair and reasonable:
(a) Non-Solicitation
of Employees. During the Recipient’s Continuous Service and the [twelve/twenty four (12)/(24)] consecutive month period after
the Separation Date, whether Recipient’s termination of employment or service was voluntary or involuntary, lawful or unlawful,
the Recipient will not, directly or indirectly, (i) solicit or induce or attempt to solicit or induce any Restricted Employee to leave
employment with the Company or cease performing services for the benefit of the Company or (ii) hire, recruit or attempt to hire or recruit
any Restricted Employee to provide the same or similar services that they provide to the Company to anyone other than the Company. For
purposes of this Agreement, a “Restricted Employee” means any individual who Recipient knows is an employee
or officer of the Company at the time of contact or solicitation and with whom Recipient had direct contact as a result of employment
with the Company or any of its Related Entities or whose identity Recipient learned as a result of employment with the Company.
(b) Non-Solicitation
of Customers and Interference with Business Relationships. During the Recipient’s Continuous Service and the [twelve/twenty
four (12)/(24)] consecutive month period after the Separation Date, whether Recipient’s termination of employment or service was
voluntary or involuntary, lawful or unlawful, the Recipient will not, other than on behalf of the Company, directly or indirectly, on
the Recipient’s own behalf or on the behalf of any other person, firm or business entity:
| (i) | sell, attempt to sell, or assist in selling any Competitive Products or Services (as defined below) to
any Customer or Active Prospective Customer (as defined below) of the Company; |
| (ii) | have contact with, solicit, or direct or assist in the contact or solicitation of any Customers for the
purpose of selling or providing any Competitive Products or Services; or |
| (iii) | induce or attempt to induce any of the Company’s Customers, vendors, suppliers, or other business
relations to cease doing business with the Company, in whole or in part. |
For purposes of this Agreement,
“Competitive Products or Services” means any services or products competitive with any product or service sold,
offered for sale, or under development by the Company as of the Recipient’s Separation Date.
For purposes of this Agreement,
a “Customer” means any individual or entity that is a customer of the Company with whom Recipient dealt, for
whom Recipient had direct supervisory, sales, or service responsibility, for whom Recipient has knowledge is a customer of the Company,
or about whom Recipient received or had access to Confidential Information as a result of Recipient’s employment at any time during
the last twelve months prior to the Recipient’s Separation Date. An “Active Prospective Customer” means
a potential customer of the Company whom Recipient solicited or helped the Company solicit or about whom Recipient learned Confidential
Information during the last twelve months prior to the Recipient’s Separation Date.
(c) Non-Disclosure of
Confidential Information. The Recipient will keep in strict confidence, and will not, directly or indirectly, at any time during
Recipient’s employment by the Company, or thereafter, access, use or disclose to others any Confidential Information, except as
specifically authorized in a signed writing by the Company or as may be required in the performance of work assigned to Recipient by the
Company. The Recipient shall not access, copy, remove from the premises of the Company, delete, destroy, or retain without prior written
consent of an officer of the Company any written, electronic or other material containing Confidential Information, except in the ordinary
course of business and as may be required in the course of Recipient’s employment with the Company.
For purposes of this Agreement,
“Confidential Information” means all “trade secrets,” as defined under applicable law, and other
information about the Company or any of its respective businesses, disclosed to the Recipient or known by the Recipient as a consequence
of or through the unique position of his or her employment with or services to the Company (including information conceived, originated,
discovered or developed by the Recipient and information acquired by the Company from others) prior to or during the Recipient’s
Continuous Service. Confidential Information includes, but is not limited to, such information related to the Company’s inventions,
ideas, designs, computer programs, circuits, schematics, formulas, algorithms, trade secrets, works of authorship, mask works, developmental
or experimental work, processes, techniques, improvements, methods of manufacturing, know-how, data, financial information and forecasts,
product plans, marketing plans and strategies, price lists, customer lists and contractual obligations and terms thereof, data, documentation
and other information in whatever form disclosed, financial statements, financial projections, business plans, listings and contractual
obligations and terms thereof, components of intellectual property, unique designs, methods of manufacturing or other technology. Confidential
Information does not include: (i) information that is or becomes publicly known to others who are not under any obligation or other duty
of confidentiality to the Company with respect to the information, without breach by the Recipient of this Agreement; (ii) information
already known to the Recipient before obtaining access to Confidential Information; (iii) information provided to the Recipient by a third
party who is not under any obligation or other duty of confidentiality to the Company or others with respect to the information; and (iv)
information that is independently developed by the Recipient without the use of Confidential Information.
Nothing in this Agreement
shall be construed to prohibit Recipient from disclosing information that Recipient is compelled to disclose by law. However, in the event
Recipient becomes legally compelled to disclose Confidential Information pursuant to a subpoena, summons, order, or other judicial or
government process, Recipient shall provide the Company with prompt notice thereof so that the Company may seek a protective order or
other appropriate remedy or waive compliance with the relevant provisions of this Agreement. In the event Recipient does not obtain such
protective order or other remedy or does not grant a waiver, Recipient shall disclose only such Confidential Information as Recipient
is legally required to disclose.
In the case of Recipients
employed in Canada, nothing herein shall be construed to prohibit or restrict the Recipient from filing a charge with an provincial governmental
board or agency or from engaging in concerted union activity as protected by the applicable labour relations legislation
Nothing herein shall be construed
to prohibit or restrict Recipient from filing a charge with the United States Equal Employment Opportunity Commission (“EEOC”)
or other administrative agency or from participating in any proceeding or investigation conducted by the EEOC or any other administrative
agency. Furthermore, nothing herein shall be interpreted or implied as limiting Recipient’s right to engage in concerted activity
as provided by the National Labor Relations Act.
Pursuant to Section 7 of the
Defend Trade Secrets Act of 2016, Recipient is advised that an individual shall not be held criminally or civilly liable under any Federal
or State trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a Federal, State, or local government
official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected
violation of law; or is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
Also pursuant to Section 7 of the Defend Trade Secrets Act of 2016, Recipient is advised that an individual who files a lawsuit for retaliation
by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the
trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does
not disclose the trade secret, except pursuant to court order. In addition, nothing contained in this Agreement (i) limits Recipient’s
right to communicate or cooperate with any federal, state, or local governmental agency or commission or (ii) bars Recipient from responding
to an order, regulation, rule or subpoena of a court or federal, state, or local government agency.
(d) Non-Defamation
by Recipient. Except to the extent allowed under applicable law, Recipient agrees to refrain from making any reckless or malicious
false statements that would constitute defamation, libel, or slander of the Company and its Affiliates including but not limited to Company’s
and its Affiliates’ products, services, finances, financial condition, capabilities, or other aspect of its business, and from acting
in a manner that reasonably may be viewed as detrimental to the Company’s and its Affiliates’ best interests. Recipient agrees
that nothing in this Section shall be deemed to prohibit Recipient from (i) generally describing Recipient’s work responsibilities
at the Company or its Affiliates when seeking future employment, (ii) engaging in activity protected by the National Labor Relations
Act, including the right to discuss terms and conditions of employment with former co-workers, as applicable, or (iii) discussing or disclosing
information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Recipient has reason
to believe is unlawful. Nothing in this Section (or otherwise in this Agreement) is intended or shall be construed to suggest or imply
that Recipient cannot provide truthful information in response to a government investigation, a court and/or administrative agency-issued
subpoena, or other valid legal process. Further, nothing in this Section (or otherwise in this Agreement) prohibits the Recipient from
reporting possible violations of law or regulation to any governmental agency or entity including but not limited to Department of Justice,
the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Commission, and
any Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal, state or local law
or regulation. The Recipient does not need the prior authorization of the Company or its Affiliates to make any such reports or disclosures
and the Recipient is not required to notify the Company or its Affiliates that the Recipient has made such reports or disclosures.
(e) Ownership
of Developments.
(i) Generally.
All processes, concepts, techniques, inventions and works of authorship, including new contributions, improvements, formats, packages,
programs, systems, machines, compositions of matter manufactured, developments, applications and discoveries, and all copyrights, patents,
trade secrets, or other intellectual property rights associated therewith (collectively, “Inventions”) conceived,
invented, made, developed or created by the Recipient during the Recipient’s employment or service with the Company or any of its
Affiliates either (i) during the course of performing work for the Company or any of its Affiliates, or any of their respective clients,
or (ii) which was conceived, invented, developed or created using Confidential Information or other property of the Company or any of
its Affiliates, and all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including damages
and payments for past, present and future infringements relating to any of the foregoing (collectively, the “Work Product”)
shall belong exclusively to the Company and its Affiliates and shall, to the extent possible, be considered a work made by the Recipient
for hire for the Company and its Affiliates within the meaning of Title 17 of the United States Code. To the extent the Work Product may
not be considered work made by the Recipient for hire for the Company and its Affiliates, the Recipient hereby automatically assigns at
the time of creation of the Work Product, or agrees to assign to the extent the Recipient cannot automatically assign at the time of creation
of the Work Product, without any requirement of further consideration, to the Company, or one or more of its designees, any right, title,
or interest the Recipient may have in such Work Product. Recipient agrees the assignment of the Work Product includes all rights of paternity,
integrity, attribution and withdrawal and any other rights known as, or substantially similar to, “moral rights.” To the extent
such moral rights may not be assigned under applicable law, Recipient hereby waives such moral rights and consents to any action in connection
therewith, including any violation of such moral rights, in the absence of such consent. Upon the request of the Company, the Recipient
shall take such reasonable actions, including review, execution and delivery of instruments of conveyance, as may be appropriate to give
full and proper effect to such assignment. The Recipient shall further: (i) promptly disclose the Work Product to the Company; (ii) assign
to the Company or its assignee, without additional compensation, all patent or other rights to such Work Product for the United States
and foreign countries; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of the Recipient’s
inventions of Work Product, all at the sole cost and expense of the Company. If the Company or any of its Affiliates is unable because
of Recipient’s mental or physical incapacity, unavailability, refusal or for any other reason to secure Recipient’s signature
to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Work Product assigned
to the Company or any of its Affiliates as above, then Recipient hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Recipient’s agent and attorney in fact, to act for and in Recipient’s behalf and stead to execute and
file any such applications, execute all required documentation and to do all other lawfully permitted acts to further the prosecution,
issuance and maintenance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the
Recipient. The Recipient understands and agrees that the decision whether or not to use, exploit, commercialize or market any Work Product
developed by the Recipient solely or jointly with others is within the Company’ and its Affiliates’ sole discretion and for
the Company and its Affiliates’ sole benefit and that no royalty or other consideration will be due to Recipient as a result of
the Company or any of its Affiliates’ efforts to use, exploit, commercialize or market any such Work Product. Notwithstanding anything
herein to the contrary, the Recipient is hereby notified the foregoing assignment provision does not apply to an invention for which no
equipment, supplies, facility, or trade secret information of the Company or any of its Affiliates was used and which was developed entirely
on the Recipient’s own time, unless (a) the invention relates (i) to the business of the Company or any of its Affiliates, or (ii)
to the Company’s or any of its Affiliates’ actual or demonstrably anticipated research or development, or (b) the invention
results from any work performed by the Recipient for the Company or any of its Affiliates.
(ii) Records.
The Recipient shall maintain adequate and current written records of all Work Product made by the Recipient (solely or jointly with others)
while the Recipient is employed by or providing services to the Company or any of its Affiliates. Such records will be available to and
remain the sole property of the Company and its Affiliates at all times.
(iii) Prior
Inventions and Other Inventions. The Recipient will not include in any Inventions that the Recipient delivers to the Company or any
of its Affiliates or use on their behalf, without the prior written approval of the Company, any material which is or will be patented,
copyrighted or trademarked by the Recipient or others unless the Recipient provides the Company with the written permission of the holder
of any patent, copyright or trademark owner for the Company to use such material in a manner consistent with then-current Company policy.
If in the course of the Recipient’s employment or service with the Company, the Recipient incorporates or incorporated into a product,
process or service of the Company or any of its Affiliates an Invention which the Recipient has not prepared or originated in the performance
of the Recipient’s services to the Company and its Affiliates, but which the Recipient provides or provided to the Company or its
Affiliates or incorporates or incorporated in any product or system of the Company or any of its Affiliates, and which is owned by the
Recipient or in which the Recipient has an interest (a “Prior Invention”), the Recipient hereby grants to the Company
and its Affiliates a non-exclusive, royalty-free, fully paid-up, irrevocable, transferable, perpetual, worldwide license to make, have
made, modify, use and sell such Prior Invention as part of or in connection with any product, process or service and to practice any method
related thereto.
(f) Cooperation.
Following the Recipient’s Continuous Service, the Recipient shall give his or her assistance and cooperation willingly, upon reasonable
advance notice with due consideration for the Recipient’s other business or personal commitments, in any matter relating to the
Recipient’s position with the Company or any of its Affiliates, or the Recipient’s expertise or experience as the Company
may reasonably request, including his or her attendance and truthful testimony where deemed appropriate by the Company, with respect to
any investigation or the Company’s defense or prosecution of any existing or future claims or litigations or other proceedings relating
to matters in which he or she was involved or potentially had knowledge by virtue of the Recipient’s employment or service with
the Company or any of its Affiliates. In no event shall the Recipient’s cooperation materially interfere with his or her services
for a subsequent employer or other similar service recipient. To the extent permitted by law, the Company agrees that it shall reimburse
the Recipient for the Recipient’s reasonable, documented and pre-approved expenses in connection with the Recipient’s rendering
assistance and/or cooperation under this Section upon presentation of documentation for such expenses.
(g) Acknowledgment
by Recipient. The Recipient acknowledges and confirms that the restrictive covenants contained in this Section 8 (including
the length of the term of the provisions of this Section 8) are reasonably necessary to protect the legitimate business interests
of the Company and its Affiliates. The Recipient further acknowledges and confirms that the compensation payable to the Recipient under
the Agreement is in consideration for the restrictive covenants contained in this Section 8, and that such compensation is sufficient,
fair and reasonable. The Recipient agrees that the restrictive covenants set forth in this Section 8 are required for the protection
of the Company’s and its Affiliate’s legitimate interests, and Recipient further agrees that such restrictive covenants do
not impose an undue hardship on the Recipient. The Recipient confirms that, given Recipient’s general knowledge and experience,
the restrictive covenants will not preclude the Recipient from becoming gainfully employed or from otherwise working elsewhere in the
industry following the Separation Date. The Recipient acknowledges and confirms that the Recipient’s special knowledge of the business
of the Company and its Affiliates is such as would cause the Company and its Affiliates irreparable harm or loss if he or she were to
use such ability and knowledge to the benefit of a competitor or were to compete with the Company or its Affiliates in violation of the
terms of this Section 8. The Recipient further acknowledges that the restrictions contained in this Section 8 are intended
to be, and shall be, for the benefit of and shall be enforceable by, the Company’s successors and assigns. The Recipient expressly
agrees that upon any breach or violation of the provisions of this Section 8, the Company shall be entitled to, in addition to
any other rights or remedies it may have, temporary and/or permanent injunctive relief in any court of competent jurisdiction as described
in the Agreement and such other damages as are provided at law or in equity. The existence of any claim or cause of action against the
Company or its Affiliates, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement of the
restrictions contained in this Section 8.
(h) Reformation
by Court. In the event that a court of competent jurisdiction shall determine that any provision of this Section 8 is invalid
or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Section 8 within
the jurisdiction of such court, such provision shall be interpreted or reformed and enforced as if it provided for the maximum restriction
permitted under such governing law.
(i) Extension
of Time. If the Recipient shall be in violation of any provision of this Section 8, then each time limitation set forth in
this Section 8 shall be extended for a period of time equal to the period of time during which such violation or violations occur.
(j) Injunction. It
is recognized and hereby acknowledged by the parties hereto that a breach by the Recipient of any of the covenants contained in this
Section 8 will cause irreparable harm and damage to the Company, and its Affiliates, the monetary amount of which may be virtually
impossible to ascertain. As a result, the Recipient recognizes and hereby acknowledges that the Company and/or its Affiliates shall be
entitled to a temporary and/or permanent injunction (without a requirement to post bond if permitted by the court in which such action
is brought) from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained
in this Section 8 by the Recipient or any of his or her affiliates, associates, partners or agents, either directly or indirectly,
and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess. Recipient and
the Company agree that the Affiliates are third-party beneficiaries of Recipient’s covenants in this Section 8, and, therefore,
have standing and may bring an action under this Section 8 as though they were parties to the Agreement.
9. Amendment,
Modification & Assignment. This Agreement may only be modified or amended in a writing signed by the parties hereto. No promises,
assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express
or implied, with respect to the subject matter hereof, have been made by either party which are not set forth expressly in this Agreement.
Unless otherwise consented to in writing by the Company, in its sole discretion, this Agreement (and Recipient’s rights hereunder)
may not be assigned, and the obligations of Recipient hereunder may not be delegated, in whole or in part. The rights and obligations
created hereunder shall be binding on the executors, administrators, heirs, successors and assigns of the Recipient and on the successors
and assigns of the Company.
10. Complete
Agreement. This Agreement (together with those agreements and documents expressly referred to herein, for the purposes referred to
herein) embody the complete and entire agreement and understanding between the parties with respect to the subject matter hereof, and
supersede any and all prior promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic
or otherwise, and whether express or implied, which may relate to the subject matter hereof in any way.
11. Miscellaneous.
(a) No
Right to (Continued) Employment or Service. This Agreement and the grant of RSUs hereunder shall not confer, or be construed to confer,
upon the Recipient any right to employment or service, or continued employment or service, with the Company or any Related Entity.
(b) No
Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall preclude the Company or any Related Entity from
adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any such plans, agreements and
arrangements may be either generally applicable or applicable only in specific cases or to specific persons.
(c) Severability.
If any term or provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or under
any applicable law, rule or regulation, then such provision shall be construed or deemed amended to conform to applicable law (or if such
provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement and the grant of
RSUs hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the award hereunder shall
remain in full force and effect).
(d) No
Trust or Fund Created. Neither this Agreement nor the grant of RSUs hereunder shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any Related Entity and the Recipient or any other person. To the extent
that the Recipient or any other person acquires a right to receive payments from the Company or any Related Entity pursuant to this Agreement,
such right shall be no greater than the right of any unsecured general creditor of the Company.
(e) Law
Governing. The validity, construction and effect of this Agreement shall be determined in accordance with (i) prior to the Domestication,
the laws of the British Virgin Islands, and (ii) after the Domestication, the laws of the State of Delaware, in each case, without giving
effect to principles of conflict of laws, and applicable federal law.
(f) Venue.
The Company and Recipient each irrevocably and unconditionally (i) agrees that any suit, action or legal proceeding arising out of or
relating to this Agreement shall be brought in the courts of record of the State of Texas in Harris County or the court of the United
States, Southern District of Texas; (ii) consents to the jurisdiction of each such court in any such suit, action or proceeding; (iii)
waives any objection which it or he may have to the laying of venue of any such suit, action or proceeding in any of such courts; and
(iv) agrees that service of any court papers may be effected on such party by mail, as provided in this Agreement.
(g) Interpretation.
The Recipient accepts this award of RSUs subject to all of the terms, provisions and restrictions of this Agreement and the Plan. The
Recipient hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising
under this Agreement or the Plan.
(h) Headings.
Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions
shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision
hereof.
(i) Notices.
Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, by overnight
courier, or by United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s General
Counsel at 14434 Medical Complex Drive, Suite 100 Tomball, Texas 77377, or if the Company should move its principal office, to such principal
office, and, in the case of the Recipient, to the Recipient’s last permanent address as shown on the Company’s records, subject
to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section 10.
(j) Compliance
with Section 409A
(i) General.
It is the intention of both the Company and the Recipient that the benefits and rights to which the Recipient could be entitled pursuant
to this Agreement either comply with or fall within an exception to Section 409A of the Code and the Treasury Regulations and other
guidance promulgated or issued thereunder (“Section 409A”), to the extent that the requirements of Section 409A are applicable
thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention.
(ii) No
Representations as to Section 409A Compliance. Notwithstanding the foregoing, the Company does not make any representation to
the Recipient that the RSUs awarded pursuant to this Agreement are exempt from, or satisfy, the requirements of Section 409A, and
the Company shall have no liability or other obligation to indemnify or hold harmless the Recipient or any Beneficiary for any tax, additional
tax, interest or penalties that the Recipient or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment
or modification thereof or any other action taken with respect thereto is deemed to violate any of the requirements of Section 409A.
(iii) No
Acceleration of Payments. Neither the Company nor the Recipient, individually or in combination, may accelerate any payment
or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of this Agreement, and
no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid without violating Section 409A.
(k) Non-Waiver
of Breach. The waiver by any party hereto of the other party’s prompt and complete performance, or breach or violation, of any
term or provision of this Agreement shall be effected solely in a writing signed by such party, and shall not operate nor be construed
as a waiver of any subsequent breach or violation, and the waiver by any party hereto to exercise any right or remedy which he or it may
possess shall not operate nor be construed as the waiver of such right or remedy by such party, or as a bar to the exercise of such right
or remedy by such party, upon the occurrence of any subsequent breach or violation.
(l) Clawback.
The Company may (i) cause the cancellation of the RSUs, (ii) require reimbursement of any benefit conferred under the RSUs to
the Recipient or Beneficiary, and (iii) effect any other right of recoupment of equity or other compensation provided under the Plan
or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the
future by the Company and/or applicable law (each, a “Clawback Policy”). In addition, the Recipient may be required
to repay to the Company certain previously paid compensation, whether provided under the Plan or an Award Agreement or otherwise, in accordance
with any Clawback Policy. By accepting this Award, the Recipient agrees to be bound by any existing or future Clawback Policy adopted
by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company in its discretion
(including without limitation any Clawback Policy adopted or amended to comply with applicable laws or stock exchange requirements) and
further agrees that all of the Recipient’s Award Agreements may be unilaterally amended by the Company, without the Recipient’s
consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy.
(m) Counterparts.
This Agreement may be executed in two or more separate counterparts, each of which shall be an original, and all of which together shall
constitute one and the same agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the ___ day of _________, 20__.
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COMPANY: |
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ACUREN CORPORATION |
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By: |
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Name: |
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Title: |
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The Recipient acknowledges receipt of a
copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Agreement in their entirety, is familiar
with and understands their terms and provisions, and hereby accepts this RSU award subject to all of the terms and provisions of the
Plan and this Agreement. The Recipient further represents that he or she has had an opportunity to obtain the advice of counsel prior
to executing this Agreement.
15
Exhibit 10.4
DIRECTOR AND OFFICER
INDEMNIFICATION
AGREEMENT
This Director
and Officer Indemnification Agreement (this “Agreement”), is made and entered into effective this ____ day of
[●] (the “Effective Date”), by and between Acuren Corporation, a company incorporated in the British Virgin Islands
(together with its successors and assigns, the “Company”), and _____________ (“Indemnitee”).
WHEREAS, it is essential to
the Company that it be able to retain and attract as directors and officers the most capable individuals available;
WHEREAS, increased corporate
litigation has subjected directors and officers to litigation risks and expenses, and the limitations on the availability and terms and
conditions of directors’ and officers’ liability insurance have made it increasingly difficult for public companies to attract
and retain as directors and officers the most capable individuals available;
WHEREAS, the Amended and Restated
Memorandum and Articles of Association of the Company (as amended or amended and restated from time to time, the “Memorandum
& Articles”) permit the indemnification of present or former directors of the Company and persons who presently serve or
formerly served as a director of the Company or in any other capacity for another entity at the request of the Company;
WHEREAS, under the BVI Business
Companies Act, 2004 (the “Companies Act”), the indemnification and advancement of expenses provided by, or granted
pursuant to, Section 132 of the Companies Act is not exclusive of any other rights to which the individual seeking indemnification or
advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinterested directors or otherwise,
both as to acting in the individual’s official capacity and as to acting in another capacity while serving as a director of the
Company;
WHEREAS, the Company expects
to change its jurisdiction of incorporation (the “Domestication”) from the British Virgin Islands to the State of Delaware
pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”) and, upon the effectiveness
of such Domestication pursuant to the DGCL, the Company, as a domesticated Delaware corporation, will for all purposes of the laws of
the State of Delaware, be deemed to be the same entity as the Company, as a domesticating British Virgin Islands company, and from and
after the effectiveness of the Domestication pursuant to the DGCL (the “Domestication Effective Time”), references
herein to the Company shall be deemed to be the Company, as a Delaware corporation;
WHEREAS, the Company expects
that the certificate of incorporation of the Company in effect immediately following the Domestication Effective Time (as amended or amended
and restated from time to time after the Domestication Effective Time, the “Charter”), will provide that a director
of the Company (and may provide that an officer of the Company) shall not be liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty except to the extent that such exemption from liability or limitation thereof is not permitted by the DGCL;
WHEREAS, the Company expects
that the bylaws of the Company in effect immediately following the Domestication Effective Time (as amended or amended and restated from
time to time after the Domestication Effective Time, the
“Bylaws”), will provide for the indemnification of and advancement of expenses to the Company’s directors and
officers under certain circumstances;
WHEREAS, under the DGCL, the
Charter and the Bylaws are not exclusive and the Company is permitted to make other or additional indemnification and advancement agreements;
WHEREAS, to promote the Company’s
ability to attract and retain qualified individuals to serve as directors and officers of the Company, the Company maintains, and will
continue to attempt to maintain, directors’ and officers’ liability insurance to protect the Company’s directors and
officers from certain liabilities;
[WHEREAS, Indemnitee
and the Company are parties to that certain Independent Non-Founder Director Letter of Appointment dated May 17, 2023 (the “Letter
of Appointment”), which Indemnitee and the Company desire to terminate immediately prior to the Effective Date;]
WHEREAS, the Company desires
that Indemnitee serve or continue to serve, as applicable, as a director and/or officer, as applicable, of the Company;
WHEREAS, to further promote
the Company’s ability to attract and retain qualified individuals to serve as directors and officers of the Company, the Company
desires to provide Indemnitee with specific contractual assurance of Indemnitee’s rights to indemnification and advancement of expenses
to protect against litigation risks and expenses (regardless, among other things, of any change in the ownership of the Company or the
composition of its Board of Directors); and
WHEREAS, Indemnitee is relying
upon the rights afforded under this Agreement in serving or continuing to serve, as applicable, in Indemnitee’s position as a director
and/or officer, as applicable, of the Company.
NOW, THEREFORE, in consideration
of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a)
“Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended.
(b)
“Board of Directors” shall mean the Board of Directors of the Company.
(c)
“Change in Control” shall mean (i) any merger, consolidation, share exchange or business combination involving
the Company or any Subsidiary (as defined below), in either case, other than a merger, consolidation, share exchange or business combination
(A) of any Subsidiary with and into the Company or (B) in which less than fifteen percent (15%) or more of the voting power of the capital
stock or other securities of the Company or any Subsidiary immediately following such transaction are Beneficially Owned by persons who
did not Beneficially Own capital stock or other securities of the Company or such Subsidiary, as applicable, immediately prior to such
transaction, (ii) any sale, lease, exchange, transfer or other disposition in a single transaction or a series
of related transactions, of fifteen percent (15%) or more of the assets of the Company and the Subsidiaries, taken as a whole, (iii) any
issuance, purchase or sale of shares of capital stock or other securities representing fifteen percent (15%) or more of the voting power
of the capital stock or other securities of the Company or any Subsidiary, including, without limitation, by way of tender or exchange
offer, in a single transaction or a series of related transactions, (iv) any liquidation, dissolution or winding up of the Company, or
(v) any change in the composition of a majority of the Board of Directors in a single transaction or a series of related transactions,
unless, in each case, such transaction described in subsections (i) - (v) hereof was adopted and approved by the members of the Board
of Directors (or new or additional members of the Board of Directors nominated or approved by such directors) in office as of the Effective
Date.
(d)
“Corporate Status” describes the status of an individual who is serving or has served (i) as a director
or officer of the Company, (ii) in any capacity or service with respect to any employee benefit plan of the Company or any one or
more of the Subsidiaries, (iii) as a director, officer, manager, general partner, trustee, employee or agent of any Subsidiary at the
request of the Company while a director or officer of the Company, or (iv) as a director, officer, manager, general partner, trustee,
employee, or agent of any other Entity at the request of the Company while a director or officer of the Company.
(e)
“Court of Chancery” shall mean the Court of Chancery of the State of Delaware.
(f)
“Disinterested Directors” shall mean the directors of the Company who are not and were not parties to the Proceeding
in respect of which indemnification is sought by Indemnitee under this Agreement.
(g)
“Entity” (and more than one, “Entities”) shall mean any corporation, limited liability company,
company limited by shares, partnership (including, without limitation, any general, limited or limited liability partnership), joint venture,
trust, enterprise, non-profit entity, foundation, association, organization or other legal entity.
(h)
“Expenses” shall mean all fees, costs and expenses reasonably incurred in connection with any Proceeding (as
defined below) or any claim, issue or matter involved in any Proceeding, including, without limitation, reasonable attorneys’ fees,
disbursements and retainers, fees, costs, expenses and disbursements of experts or expert witnesses, private investigators and professional
advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, travel expenses (including,
without limitation, the travel expenses of experts or expert witnesses, private investigators and professional advisors), duplicating,
printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services and other disbursements
and expenses.
(i)
“Independent Counsel” shall mean a law firm or a member of a law firm that is of outstanding reputation, experienced
in matters of corporation law and neither is as of the date of selection of such law firm or member of such law firm, nor has been during
the period of three (3) years immediately preceding the date of selection of such law firm or member of such law firm, retained to represent:
(a) the Company or Indemnitee in any material matter (other than with respect to matters concerning Indemnitee
under this Agreement, or of other indemnitees under similar indemnification agreements); or (b) any other party to the Proceeding
or any claim, issue or matter involved in any Proceeding giving rise to a claim for indemnification under this Agreement. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any law firm or member of a law firm that, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee
in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of
the Independent Counsel referred to above and to fully indemnify such counsel against any and all fees, costs and expenses, including,
without limitation, reasonable attorneys’ fees, disbursements and retainers, and Liabilities arising out of or relating to this
Agreement or its engagement pursuant to this Agreement. For purposes of this definition, a “material matter” shall mean any
matter for which billings exceeded or are expected to exceed $100,000.
(j)
“Liabilities” shall mean liabilities, judgments, damages, losses, penalties, excise taxes, fines and amounts paid
in settlement.
(k)
“Proceeding” shall mean any threatened, pending or completed claim, action, suit, proceeding, litigation, arbitration,
mediation, alternate dispute resolution process, investigation, administrative hearing, or appeal, whether civil, criminal, administrative,
arbitrative or investigative, whether formal or informal, including, without limitation, a judicial proceeding or arbitration initiated
by Indemnitee pursuant to Section 11(a) of this Agreement to enforce Indemnitee’s rights under this Agreement.
(l)
“Subsidiary” (and more than one, “Subsidiaries”) shall mean any Entity in which the Company
Beneficially Owns at least fifty percent (50%) of the voting power of the capital stock or other securities of such Entity.
2. Services of
Indemnitee[; Termination of Letter of Appointment].
[(a)] In
consideration of the Company’s covenants and obligations hereunder, Indemnitee agrees to serve or continue to serve, as applicable,
as a director and/or officer, as applicable, of the Company. This Agreement, however, shall not impose any obligation on Indemnitee or
the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by applicable law or by other agreements
or commitments of Indemnitee or the Company, if any.
[(b) In
consideration of the promises and covenants contained herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and Indemnitee hereby terminate the Letter of Appointment effective as of immediately prior
to the Effective Date without any further action on the part of the Company, Indemnitee or any other Entity.]
3. Agreement to
Indemnify and Hold Harmless. Subject to the exceptions contained in Section 4 of this Agreement, if Indemnitee is or
was a party to, or is or was threatened to be made a party to, or is or was otherwise involved in any Proceeding (as a deponent,
witness or otherwise) in, any Proceeding or any claim, issue or matter involved in any Proceeding by reason of Indemnitee’s
Corporate Status, Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified and held harmless by the
Company against all Expenses and Liabilities actually and reasonably incurred or paid by or on behalf of Indemnitee in connection
with such Proceeding or any claim, issue or matter involved in such Proceeding (referred to herein as “Indemnifiable
Expenses” and “Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable
Amounts”).
4. Exceptions to
Indemnification. Indemnitee shall be entitled to the indemnification provided in Section 3 of this Agreement in
all circumstances other than the following:
(a)
If indemnification is sought by Indemnitee under Section 3 of this Agreement and it has been adjudicated finally by
a court of competent jurisdiction evidenced by a final non-appealable order that, in connection with any Proceeding or any claim, issue
or matter involved in any Proceeding out of which the claim for indemnification hereunder has arisen, (i) Indemnitee failed to act in
good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or (ii) with respect
to any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee shall
not be entitled to indemnification of Indemnifiable Amounts hereunder with respect to such Proceeding or such claim, issue or matter,
as applicable;
(b)
If indemnification is sought by Indemnitee under Section 3 of this Agreement and it has been adjudicated finally by a court
of competent jurisdiction evidenced by a final non-appealable order that Indemnitee is liable to the Company with respect to any Proceeding
by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status or any claim, issue
or matter involved in any such Proceeding out of which the claim for indemnification under this Agreement has arisen, Indemnitee shall
not be entitled to Indemnifiable Amounts under this Agreement with respect to such Proceeding or such claim, issue or matter, as applicable,
unless the Court of Chancery or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication
of liability, but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Indemnifiable
Amounts which the Court of Chancery or such other court shall deem proper; and
(c)
If indemnification is sought by Indemnitee under Section 3 of this Agreement and the Company reasonably determines that
indemnification of Indemnitee would violate the securities laws of the United States.
For purposes of this Section 4, including,
without limitation and to the fullest extent permitted by applicable law, in the court adjudication contemplated by this Section 4,
Indemnitee shall be deemed to have acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, or with respect to any criminal Proceeding, without reasonable cause to believe that Indemnitee’s conduct
was unlawful, if Indemnitee’s act or omission is based, in good faith, upon (i) the records of the Company, (ii) such information,
opinions, reports or statements presented to the Company, the Board of Directors or any committee of the Board of Directors by any of
the Company’s officers, employees, directors, other committees of the Board of Directors, legal counsel, professional advisors,
experts or any other person as to matters Indemnitee reasonably believes are within such other person’s professional or expert competence
and who has been selected with reasonable care by or on behalf of the Company, and/or (iii) such information, opinions,
reports or statements presented to an Entity for which Indemnitee has Corporate Status or such Entity’s officers, employees, directors,
committees of such Entity’s board of directors, managers, general partners, trustees, legal counsel, professional advisors, experts
or any other person as to matters Indemnitee reasonably believes are within such other person’s professional or expert competence
and who has been selected with reasonable care by or on behalf of such Entity.
5. Procedure for
Indemnification of Indemnifiable Amounts.
(a)
Indemnitee shall, following the final adjudication by a court of competent jurisdiction evidenced by a final nonappealable order,
submit to the Company a written claim specifying the Indemnifiable Amounts for which Indemnitee seeks indemnification under Section 3
of this Agreement and the basis for such claim. At the reasonable request of the Company, Indemnitee shall furnish such documentation
or information as is reasonably available to Indemnitee and reasonably necessary to establish that Indemnitee is entitled to indemnification
under Section 3 of this Agreement, and the Company shall pay any fees, costs and expenses, including, without limitation, reasonable
attorneys’ fees, disbursements and retainers, duplicating, printing and binding costs, telephone and facsimile transmission charges,
postage, delivery services, secretarial services and other disbursements and expenses actually and reasonably incurred by Indemnitee in
furnishing such documentation or information. Notwithstanding the foregoing provisions of this Section 5(a), Indemnitee shall not
be required to furnish documentation or information where the provision of such documentation or information by Indemnitee reasonably
could be expected to (i) result in the loss of the attorney-client privilege or similar privilege or protection, (ii) be prohibited by
applicable law, or (iii) be prohibited by the terms of any agreement to which Indemnitee is a party.
(b)
Upon submission of a written claim for indemnification of Indemnifiable Amounts pursuant to the first sentence of Section 5(a)
of this Agreement, a determination with respect to Indemnitee’s entitlement to indemnification under Section 3 of this Agreement
shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel (selected as provided in Section
5(c) of this Agreement) in a written opinion directed to the Board of Directors, a copy of which shall be delivered to Indemnitee;
or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors (provided there is a minimum
of three (3) Disinterested Directors), even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated
by a majority vote of the Disinterested Directors (provided there is a minimum of three (3) Disinterested Directors), even though less
than a quorum of the Board of Directors, or (C) if there are less than three (3) Disinterested Directors or, if such Disinterested Directors
so direct, by Independent Counsel (selected as provided in Section 5(c) of this Agreement) in a written opinion directed to the
Board of Directors, a copy of which shall be delivered to Indemnitee. Indemnitee shall reasonably cooperate in the making of a determination
with respect to Indemnitee’s entitlement to indemnification under Section 3 of this Agreement, including, without limitation,
by providing such documentation or information that is reasonably requested in writing by the Company and reasonably available to Indemnitee;
provided, however, that Indemnitee shall not be required to provide documentation or information where the provision of
such documentation or information by Indemnitee reasonably could be expected to (i) result in the loss of the attorney-client privilege
or similar privilege or protection, (ii) be prohibited by applicable law, or (iii) be prohibited by the terms of any agreement to which
Indemnitee is a party.
Any fees, costs and expenses, including, without
limitation, reasonable attorneys’ fees, disbursements and retainers, duplicating, printing and binding costs, telephone and facsimile
transmission charges, postage, delivery services, secretarial services and other disbursements and expenses actually and reasonably incurred
by Indemnitee cooperating as provided in the foregoing sentence shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification under Section 3 of this Agreement) and the Company hereby indemnifies and agrees
to hold Indemnitee harmless therefrom.
(c) If
the determination of entitlement to indemnification under Section 3 of this Agreement is to be made by Independent Counsel
pursuant to Section 5(b) of this Agreement, the Independent Counsel shall be selected as provided in this Section
5(c). If a Change in Control shall have occurred, Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board of Directors, in which event the following sentence shall apply), by
Indemnitee’s provision of written notice to the Company advising the Company of the identity of Independent Counsel within ten
(10) calendar days after the Company’s receipt of a written claim for indemnification pursuant to the first sentence of Section
5(a). If a Change in Control shall not have occurred, Independent Counsel shall be selected by the Board of Directors, by the
Company’s provision of written notice to Indemnitee advising Indemnitee of the identity of Independent Counsel within ten (10)
calendar days after the Company’s receipt of a written claim for indemnification pursuant to the first sentence of Section
5(a) of this Agreement. The Company (in the event of the provision of written notice by Indemnitee as provided in the second
sentence of this Section 5(c)) or Indemnitee (in the event of the provision of written notice by the Company as provided in
the third sentence of this Section 5(c)), as applicable, may object to the selection of Independent Counsel by Indemnitee or
the Company, as applicable, by the provision written notice to Indemnitee or the Company, respectively, of an objection to such
selection within ten (10) calendar days after receipt of written notice of selection of Independent Counsel by Indemnitee or the
Company, as applicable; provided, however, that such objection may be asserted only on the ground that Independent
Counsel selected by Indemnitee (in the event of the provision of written notice by Indemnitee as provided in the second sentence of
this Section 5(c)) or the Company (in the event of the provision of written notice by the Company as provided in the third
sentence of this Section 5(c)) does not meet the requirements of “Independent Counsel” as defined in Section
1 of this Agreement, and the written objection shall set forth with particularity the factual basis of such assertion. Absent
the delivery of a proper and timely objection in accordance with the foregoing sentence, the law firm or the member of a law firm
selected by Indemnitee (in the event of the provision of written notice by Indemnitee as provided in the second sentence of this Section 5(c))
or the Company (in the event of the provision of written notice by the Company as provided in the third sentence of this Section
5(c)) shall act as Independent Counsel; in the event of the delivery of a proper and timely objection in accordance with the
foregoing sentence, the law firm or the member of a law firm selected by Indemnitee (in the event of the provision of written notice
by Indemnitee as provided in the second sentence of this Section 5(c)) or the Company (in the event of the provision of
written notice by the Company as provided in the third sentence of this Section 5(c)) shall not serve as Independent
Counsel unless and until such objection is withdrawn or the Court of Chancery selects such law firm or such member of a law firm as
Independent Counsel as further provided in this Section 5(c). If, within twenty (20) calendar days after the Company’s
receipt of a written claim for indemnification pursuant to the first sentence of Section 5(a) of this Agreement, no
Independent Counsel shall have been selected in accordance with the foregoing provisions of this Section 5(c), then either
the Company or Indemnitee may, at the expense of the Company, petition the Court
of Chancery to select Independent Counsel, and the law firm or the member of a law firm selected by the Court of Chancery shall act as
Independent Counsel. For the avoidance of doubt, the Company shall pay any fees, costs and expenses, including without limitation, reasonable
attorneys’ fees, disbursements and retainers, duplicating, printing and binding costs, telephone and facsimile transmission charges,
postage, delivery services, secretarial services and other disbursements and expenses actually and reasonably incurred (i) by Independent
Counsel in making a determination with respect to Indemnitee’s entitlement to indemnification pursuant to Section 3 of this
Agreement, (ii) by Indemnitee and incident to the notice and objection procedures of this Section 5(c), and (iii) by Indemnitee
and incident to the petitioning of the Court of Chancery and resulting judicial proceeding pursuant to this Section 5(c).
(d)
Subject to Section 4 of this Agreement, the Company shall pay such Indemnifiable Amounts to Indemnitee within thirty (30)
calendar days after receipt of such written claim.
6. Indemnification
for Expenses of a Participant. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is or
was, by reason of his Corporate Status, a participant (as a deponent, witness or otherwise) in any Proceeding to which Indemnitee is
or was not a party or is or was not threatened to be made a party, Indemnitee shall be indemnified as provided in Section 3
of this Agreement.
7. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.
(a)
Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is
or was, by reason of Indemnitee’s Corporate Status, a party to and is or was successful, on the merits or otherwise, as to any Proceeding
or any claim, issue or matter involved in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred with respect to such Proceeding or such claim, issue or matter, as applicable. In furtherance and not in limitation of the foregoing,
and by way of further explanation, if Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise,
as to one or more but less than all claims, issues or matters involved in such Proceeding, the Company shall indemnify Indemnitee against
all Expenses with respect to each successfully resolved claim, issue or matter.
(b)
For purposes of this Section 7, “successful” shall, to the fullest extent permitted by applicable law, include,
but not be limited to, (i) a termination, withdrawal or dismissal (with or without prejudice) of any Proceeding or any claim, issue or
matter involved in any Proceeding, without any express finding of liability or guilt against Indemnitee, (ii) the expiration of one hundred
twenty (120) days after the making of any claim or threat of any Proceeding without the institution of same and without the entering into
of any settlement or compromise with respect to such claim or threat, or (iii) the entering into of any settlement or compromise with
respect to any Proceeding or any claim, issue or matter involved in any Proceeding pursuant to which Indemnitee is obligated to pay or
is found liable for an amount less than $50,000.
8. Effect of Certain
Resolutions; Waiver of Right of Contribution Against Indemnitee. Neither the termination of any Proceeding or any claim,
issue or matter involved in any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contedere or
its equivalent, nor the failure of the Company to award indemnification or to determine that indemnification is payable, shall
create a presumption that Indemnitee is not entitled to indemnification under this Agreement. The Company hereby waives, to the
fullest extent permitted by applicable law, any right of contribution that it may have against Indemnitee with respect to any
Proceeding or any claim, issue or matter involved in any Proceeding in which the Company and Indemnitee are jointly liable.
9. Agreement to
Advance Expenses; Conditions. The Company shall pay to Indemnitee, all Expenses actually and reasonably incurred by
Indemnitee in connection with any Proceeding or any claim, issue or matter involved in any Proceeding, including, without
limitation, a Proceeding by or in the right of the Company and a Proceeding to enforce indemnification and advancement rights under
this Agreement, in advance of the final disposition of such Proceeding or such claim, issue or matter, if Indemnitee furnishes the
Company with a written undertaking to repay the amount of such Expenses advanced to Indemnitee if it is finally determined by a
court of competent jurisdiction evidenced by a final nonappealable order that Indemnitee is not entitled under Section 3 of
this Agreement to indemnification with respect to such Expenses. To the fullest extent permitted by applicable law, such undertaking
shall be an unlimited general obligation of Indemnitee, shall be accepted by the Company without regard to the financial ability of
Indemnitee to make repayment, and shall in no event be required to be secured.
10. Procedure for
Advancement of Expenses. Indemnitee shall submit to the Company a written claim specifying the Expenses for which Indemnitee
seeks advancement under Section 9 of this Agreement, and the basis for such claim, together with documentation evidencing
that Indemnitee has actually and reasonably incurred such Expenses. Notwithstanding the foregoing, Indemnitee shall not be required
to furnish documentation or information where the provision of such documentation or information by Indemnitee reasonably could be
expected to (i) result in the loss of the attorney-client privilege or similar privilege or protection, (ii) be prohibited by
applicable law, or (iii) be prohibited by the terms of any agreement to which Indemnitee is a party. The Company shall advance such
Expenses to Indemnitee or on behalf of Indemnitee within thirty (30) calendar days after receipt of such written claim and
documentation.
11.
Remedies of Indemnitee.
(a) Right
to Petition the Court of Chancery or Initiate Arbitration. In the event that Indemnitee submits to the Company a written claim
for indemnification of Indemnifiable Amounts under Sections 3 and 5 of this Agreement or submits to the Company a
written claim for advancement of Expenses under Sections 9 and 10 of this Agreement, and the Company fails to make
such indemnification or advancement, as applicable, pursuant to the terms of this Agreement, Indemnitee may petition the Court of
Chancery or initiate an arbitration as provided in Section 18(d), as applicable, to enforce the Company’s obligations
under this Agreement.
(b) Burden
of Proof. In any judicial proceeding or arbitration initiated under Section 11(a) of this Agreement, the Company
shall have the burden of proving that Indemnitee is not entitled to indemnification of Indemnifiable Amounts or advancement of
Expenses, as applicable, under Section 3 of this Agreement.
(c) Expenses.
The Company agrees to reimburse Indemnitee in full for any Expenses actually and reasonably incurred by Indemnitee in connection with
investigating, preparing for, litigating, defending, prosecuting or settling any judicial proceeding or arbitration initiated by Indemnitee
under Section 11(a) of this Agreement, except where such judicial proceeding or arbitration or any claim, issue or matter
involved therein is adjudicated finally by a court of competent jurisdiction evidenced by a final nonappealable order in favor of the
Company.
(d) Validity
of Agreement. The Company shall be precluded from asserting in any Proceeding, including, without limitation, any judicial
proceeding or arbitration initiated under Section 11(a) of this Agreement, that the provisions of this Agreement are not
valid, binding and enforceable or that there is insufficient consideration for this Agreement and shall stipulate in such judicial
proceeding or arbitration that the Company is bound by all the provisions of this Agreement.
(e) Failure
to Act Not a Defense. Neither the failure of the Company (including, without limitation, the Board of Directors or any committee
thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of the indemnification of
Indemnifiable Amounts, nor an actual determination by the Company (including, without limitation, the Board of Directors or any
committee thereof, independent legal counsel or the Company’s stockholders) concerning the permissibility of the
indemnification of Indemnifiable Amounts, shall be a defense in any judicial proceeding or arbitration initiated under Section 11(a)
of this Agreement, and neither shall create a presumption that such indemnification is not permissible under this Agreement.
12. Notice By
Indemnitee; Defense of the Underlying Proceeding.
(a) Notice
by Indemnitee. Indemnitee agrees to notify the Company promptly in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information, or other document relating to any Proceeding or any claim, issue or matter involved in
any Proceeding which may result in the indemnification of Indemnifiable Amounts or the advancement of Expenses under this Agreement; provided, however,
that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to receive indemnification of Indemnifiable Amounts or advancement of Expenses under this Agreement, except to the
extent the Company’s ability to defend in such Proceeding or such claim, issue or matter is materially prejudiced thereby.
(b) Defense
by Company. Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) of
this Agreement, the Company shall have the right to defend Indemnitee in any Proceeding or any claim, issue or matter involved in
any Proceeding which may give rise to the indemnification of Indemnifiable Amounts under this Agreement; provided, however,
that the Company shall notify Indemnitee of any such decision to defend within ten (10) calendar days of the Company’s receipt
of notice of any such Proceeding or such claim, issue or matter under Section 12(a) of this Agreement. The Company shall
not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any
settlement or compromise which (i) includes an admission of fault of Indemnitee, or (ii) does not include, as an unconditional term
thereof, the full release of Indemnitee from all liability in respect of such Proceeding or such claim, issue or matter, which
release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a
Proceeding or any claim, issue or matter involved in a Proceeding brought by Indemnitee under Section 5(c) or Section
11(a) of this Agreement or pursuant to Section 20 of this Agreement.
(c) Indemnitee’s
Right to Counsel. Notwithstanding the provisions of Section 12(b) of this Agreement, (i) if in a Proceeding or a
claim, issue or matter involved in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (A)
Indemnitee reasonably concludes that he or she may have separate defenses or counterclaims to assert with respect to such Proceeding
or such claim, issue or matter which are inconsistent with the position of other defendants in such Proceeding or such claim, issue
or matter, as applicable, or (B) a conflict of interest or potential conflict of interest exists between Indemnitee and the Company,
or (ii) if the Company fails to assume the defense of such Proceeding or such claim, issue or matter in a timely manner, Indemnitee
shall be entitled to be represented by separate legal counsel reasonably acceptable to the Company, which separate legal counsel
shall represent other defendants in such Proceeding or such claim, issue or matter that are similarly situated to Indemnitee, at the
expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event
that the Company or any other Entity or individual takes any action to declare this Agreement void or unenforceable, or institutes
any Proceeding or any claim, issue or matter involved in any Proceeding to deny or to recover from Indemnitee the benefits intended
to be provided to Indemnitee under this Agreement, except with respect to any Proceeding or any claim, issue or matter involved in
any Proceeding that is resolved in favor of the Company, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, at the expense of the Company, to represent Indemnitee in connection with any such matter.
(d) Consent
to Judgment or Settlement or Compromise by Indemnitee. Indemnitee shall not, without the prior written consent of the Company
(which consent shall not be unreasonably withheld or delayed), consent to the entry of any judgment against Indemnitee or consent to
or enter into any settlement or compromise with respect to any Proceeding or any claim, issue or matter involved in any Proceeding
with respect to which the Company may have indemnification or advancements obligations to Indemnitee under this Agreement. The
Company shall have no obligation to indemnify Indemnitee under this Agreement with respect to any Proceeding or any claim, issue or
matter involved in any Proceeding for which a judgment, settlement or compromise is consented to or entered into by Indemnitee
without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed).
13. Representations
and Warranties of the Company. The Company hereby represents and warrants to Indemnitee as follows:
(a) Authority.
The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery
and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.
(b) Enforceability.
This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally or equitable principles.
14. Insurance.
From and after the Effective Date and until the sixth (6th) anniversary of Indemnitee’s termination of service as a
director and/or officer of the Company, as applicable, whether by death, resignation, disqualification, removal or otherwise, the
Company shall, to the maximum extent available, cover Indemnitee under any insurance policy secured for the directors and officers
of the Company or other Entity for which Indemnitee has Corporate Status.
15. Contract Rights
Not Exclusive. The rights to indemnification of Indemnifiable Amounts and advancement of Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law or the
Memorandum & Articles, Charter or Bylaws, or any other agreement, vote of stockholders or directors (or a committee of
directors), or otherwise, both as to action (or inaction) in Indemnitee’s official capacity and as to action (or inaction) in
any other capacity as a result of Indemnitee’s serving as a director and/or officer, as applicable, of the Company.
16. Successors.
This Agreement shall be (a) binding upon all successors and assigns of the Company (including, without limitation, to the fullest
extent permitted by applicable law, any transferee of all or a substantial portion of the business, shares or stock and/or assets of
the Company and any direct or indirect successor to the Company by merger or consolidation or otherwise by operation of law), and
(b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee. To
the fullest extent permitted by applicable law, the Company shall cause any successor to the business, stock and/or assets of the
Company or the direct or indirect successor to the Company by merger or consolidation or otherwise by operation of law to assume and
agree to perform this Agreement in the same manner as if no such succession had taken place. This Agreement shall continue for the
benefit of Indemnitee and the heirs, personal representatives, executors and administrators of Indemnitee after Indemnitee has
ceased to have Corporate Status.
17. Other Sources;
Subrogation. The Company’s obligation to indemnify or advance expenses to Indemnitee, if any, under this Agreement
shall be reduced by the amount Indemnitee receives, as indemnification or advancement of expenses from any other Entities or
individuals or any insurance policy. In the event of any indemnification of Indemnifiable Amounts or advancement of Expenses by the
Company under this Agreement, the Company shall, to the fullest extent permitted by applicable law, be subrogated to the extent of
such indemnification or advancement to all of the rights of contribution or recovery of Indemnitee against other Entities or
individuals and have a right of contribution against such other Entities or individuals, and, in furtherance thereof, Indemnitee
shall take, at the request of the Company, all reasonable action necessary to secure such rights, including, without limitation,
securing the execution and delivery by such other Entities or individuals of an agreement as to the division of indemnification and
advancement liabilities as between such other Entities or individuals and the Company, in a manner reasonably acceptable to the
Company prior to the payment by the Company of any such Indemnifiable Amounts or Expenses and/or the execution and delivery of such
documents as are reasonably necessary to enable the Company to bring any action, suit or proceeding to enforce such rights.
18. Governing Law;
Consent to Jurisdiction.
(a) This Agreement shall be
governed by and construed and enforced under the laws of the State of Delaware, without giving effect to the provisions thereof relating
to conflicts of law.
(b)
To the fullest extent permitted by applicable law, and except to the extent permitted by Section 18(d) of this Agreement,
the Company and Indemnitee hereby (i) agree that all claims, controversies or disputes arising out of or relating to this Agreement shall
be exclusively resolved by the Court of Chancery, (ii) irrevocably consent and submit to the exclusive personal jurisdiction of the Court
of Chancery in any action, suit or proceeding in respect of any claim, controversy or dispute arising out of or relating to this Agreement,
(iii) waive and agree not to assert in defense of any claim of improper venue or any claim that the Court of Chancery is an inconvenient
forum in any action, suit or proceeding in respect of any claim, controversy or dispute arising out of or relating to this Agreement,
(iv) appoint, to the extent that the Company or Indemnitee, as applicable, is not otherwise subject to service of process in the State
of Delaware, Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808 (or such other registered agent at such other
registered office in the State of Delaware listed on the records of the Secretary of State of the State of Delaware as the Company’s
agent for service of process in the State of Delaware), and (v) agree that the mailing of process and other papers in connection with
any such action, suit or proceeding in the manner provided in Section 22 of this Agreement or in such other manner as may be permitted
by applicable law, shall be valid and sufficient service thereof.
(c)
EACH OF THE COMPANY AND INDEMNITEE ACKNOWLEDGE AND AGREE THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH OF THE COMPANY AND INDEMNITEE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING
IN RESPECT OF ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE COMPANY AND INDEMNITEE CERTIFIES
AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS MADE IN THIS SECTION 18(c).
(d)
Any claim, controversy or dispute arising out of or relating to this Agreement (other than one for specific performance, injunctive
relief or other equitable relief) may, to the fullest extent permitted by applicable law, be resolved by a binding arbitration to be held
in New York, New York and administered by the American Arbitration Association (the “AAA”) under the then-prevailing
Commercial Arbitration Rules and Mediation Procedures of the AAA. It is the mutual intention of the Company and Indemnitee that the tribunal
of one (1) arbitrator be constituted as such as practicable following the submission of any claim, controversy or dispute arising out
of or relating to this Agreement to arbitration. Once the arbitrator is appointed, except as otherwise agreed in writing by the Company,
on the one hand, and Indemnitee, on the other hand, or as ordered by the arbitrator upon a showing of substantial justification, the hearing
on such claim, controversy or dispute shall be held not later
than sixty (60) days of such appointment. The arbitrator shall render the arbitrator’s final award not later than sixty (60) days
after the hearing on such claim, controversy or dispute, subject to extension by the arbitrator upon a showing of substantial justification.
Any discovery in the arbitration shall be limited to information directly relevant to the claim, controversy or dispute subject to the
arbitration. The judgment on the award rendered by the arbitrator with respect to the claim, controversy or dispute submitted to arbitration
shall, to the fullest extent permitted by applicable law, be final and binding and may be enforced in the Court of Chancery or any other
court having jurisdiction thereof.
19. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in
its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining
provisions and clauses of this Agreement shall remain fully enforceable and binding on the Company and Indemnitee.
20. Indemnitee as
Plaintiff. Except as provided in Section 5(c) or Section 11 of this Agreement and in the next sentence,
Indemnitee shall not be entitled to indemnification of Indemnifiable Amounts or advancement of Expenses with respect to any
Proceeding or any claim, issue or matter involved in any Proceeding brought by Indemnitee against the Company, any Subsidiary, or
any director, manager, general partner or officer of the Company or any such Subsidiary, prior to a Change in Control, unless the
commencement of such Proceeding or such claim, issue or matter by Indemnitee was authorized in the specific case by the Board of
Directors. This Section 20 shall not apply to (a) affirmative defenses asserted by Indemnitee or any compulsory counterclaims
required to be made by Indemnitee in any Proceeding or with respect to any claim, issue or matter involved in any Proceeding brought
against Indemnitee, or (b) any Proceeding or any claim, issue or matter involved in any Proceeding brought by Indemnitee against the
Company, any Subsidiary, or any director, manager, general partner or officer of the Company or any such Subsidiary, from and after
a Change in Control.
21. Modification and
Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both the
Company and Indemnitee. Notwithstanding any other provision of this Agreement or any provision of law to the contrary, to the
fullest extent permitted by applicable law, no supplement, modification or amendment of this Agreement shall adversely affect any
right or protection of Indemnitee in respect of any act or omission occurring prior to the time of such supplement, modification or
amendment. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver.
22. General
Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) when delivered by hand, (b) when transmitted by facsimile or email and receipt is acknowledged, or (c) if mailed
by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it is so
mailed, in each case, to such address as may have been furnished by any party to the other party.
23. Specific
Performance. The Company and Indemnitee acknowledge and 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 or were otherwise breached. The Company
and Indemnitee accordingly agree that each of the Company and Indemnitee shall, to the fullest extent permitted by applicable law,
be entitled to specific performance, injunctive relief or other equitable relief to specifically enforce the provisions of this
Agreement and to prevent breaches of this Agreement in the Court of Chancery without the necessity of proving the inadequacy of
monetary damages as a remedy. To the fullest extent permitted by applicable law, the Company and Indemnitee further (a) waive any
requirement for the securing or posting of any bond in connection with the obtaining of any such specific performance, injunctive
relief or other equitable relief, (b) agree that the right to specific performance, injunctive relief or other equitable relief is
in addition to any other remedy available at law or in equity, and (c) agree that in the event of any action, suit or proceeding for
specific performance, injunctive relief or other equitable relief to enforce the provisions of this Agreement or to prevent breaches
of this Agreement, the Company or Indemnitee, as applicable, will not assert the defense that a remedy of law would be adequate.
24. Counterparts.
This Agreement may be executed in one or more counterparts (including, without limitation, by facsimile or email transmission that
includes a copy of the sending party’s signature), in which event, all of said counterparts shall be deemed to be originals of
this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
hereto have executed this Director and Officer Indemnification Agreement as of the Effective Date.
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THE COMPANY: |
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ACUREN CORPORATION |
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Name: |
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Title: |
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INDEMNITEE: |
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[___________] |
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[Signature
Page to Director and Officer Indemnification Agreement]
Exhibit 10.5
Execution Version
CREDIT AGREEMENT
dated as of July 30, 2024
by and among
AAL
Delaware Holdco, Inc.,
as the Initial Borrower,
ASP ACUREN HOLDINGS, INC.,
as a Borrower,
ACUREN CORPORATION,
as Holdings,
THE GUARANTORS FROM TIME TO TIME PARTY HERETO,
The
Lenders AND L/C ISSUERS FROM TIME TO TIME Party HeretO,
and
JEFFERIES FINANCE LLC,
as Administrative Agent and Collateral Agent
______________________________
JEFFERIES FINANCE LLC
CITIBANK, N.A. and
UBS SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
| |
Page |
| Article I. DEFINITIONS AND ACCOUNTING TERMS |
1 |
| 1.01 Defined Terms |
1 |
| 1.02 Other Interpretive Provisions |
68 |
| 1.03 Accounting Terms |
69 |
| 1.04 Rounding |
69 |
| 1.05 References to Agreements and Laws |
70 |
| 1.06 Times of Day |
70 |
| 1.07 Letter of Credit Amounts |
70 |
| 1.08 Conversion of Foreign Currencies |
70 |
| 1.09 Divisions |
71 |
| 1.10 Limited Condition Transactions |
71 |
| 1.11 Rates |
72 |
| 1.12 Quebec Interpretation |
72 |
| |
|
| Article II. THE COMMITMENTS AND CREDIT EXTENSIONS |
72 |
| 2.01 The Loans |
72 |
| 2.02 Borrowings, Conversions and Continuations of Loans |
73 |
| 2.03 Letters of Credit |
74 |
| 2.04 [Reserved] |
83 |
| 2.05 Prepayments |
84 |
| 2.06 Termination or Reduction of Commitments |
86 |
| 2.07 Repayment of Loans |
87 |
| 2.08 Interest |
88 |
| 2.09 Fees |
88 |
| 2.10 Computation of Interest and Fees |
89 |
| 2.11 Evidence of Indebtedness |
89 |
| 2.12 Payments Generally |
90 |
| 2.13 Sharing of Payments |
92 |
| 2.14 Incremental Facilities |
92 |
| 2.15 Defaulting Lender |
98 |
| 2.16 Extension of Term Loans and Revolving Credit Commitments |
102 |
| 2.17 Interest Act (Canada) |
105 |
| |
|
| Article III. TAXES, YIELD PROTECTION AND ILLEGALITY |
106 |
| 3.01 Taxes |
106 |
| 3.02 Illegality |
107 |
| 3.03 Inability to Determine Rates |
108 |
| 3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Loans |
110 |
| 3.05 Funding Losses |
111 |
| 3.06 Matters Applicable to all Requests for Compensation |
112 |
| 3.07 Pro Rata Treatment |
112 |
| 3.08 Survival |
112 |
| Article IV. GUARANTY |
112 |
| 4.01 The Guaranty |
112 |
| 4.02 Obligations Unconditional |
113 |
| 4.03 Reinstatement |
114 |
| 4.04 Certain Additional Waivers |
114 |
| 4.05 Remedies |
114 |
| 4.06 Rights of Contribution |
114 |
| 4.07 Guarantee of Payment; Continuing Guarantee |
114 |
| 4.08 Keepwell |
114 |
| 4.09 Guarantee Limitations |
115 |
| |
|
| Article V. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS |
115 |
| 5.01 Conditions to Initial Credit Extension |
115 |
| 5.02 Conditions to all Credit Extensions after the Closing Date |
117 |
| |
|
| Article VI. REPRESENTATIONS AND WARRANTIES |
118 |
| 6.01 Existence, Qualification and Power; Compliance with Laws |
118 |
| 6.02 Authorization; No Contravention |
118 |
| 6.03 Governmental Authorization; Other Consents |
119 |
| 6.04 Binding Effect |
119 |
| 6.05 Financial Statements; No Material Adverse Effect |
119 |
| 6.06 Litigation |
120 |
| 6.07 No Default |
120 |
| 6.08 Properties |
120 |
| 6.09 Environmental Compliance |
121 |
| 6.10 Insurance |
122 |
| 6.11 Taxes |
122 |
| 6.12 ERISA Compliance |
122 |
| 6.13 Subsidiaries; Equity Interests |
123 |
| 6.14 Margin Regulations; Investment Company Act |
123 |
| 6.15 Disclosure |
124 |
| 6.16 Compliance with Laws |
124 |
| 6.17 Intellectual Property; Licenses, Etc |
124 |
| 6.18 Solvency |
124 |
| 6.19 Casualty, Etc |
125 |
| 6.20 Perfection, Etc |
125 |
| 6.21 Swap Obligations |
125 |
| 6.22 Labor Matters |
125 |
| 6.23 OFAC, Anti-Terrorism and Anti-Money Laundering Law and Anti-Corruption Laws |
125 |
| 6.24 Senior Indebtedness |
126 |
| 6.25 Canadian Pension Plan Compliance |
126 |
| 6.26 Affected Financial Institutions |
126 |
| |
|
| Article VII. AFFIRMATIVE COVENANTS |
127 |
| 7.01 Financial Statements |
127 |
| 7.02 Certificates; Other Information |
128 |
| 7.03 Notices |
129 |
| 7.04 Payment of Obligations |
130 |
| 7.05 Preservation of Existence, Etc |
130 |
| 7.06 Maintenance of Properties |
130 |
| 7.07 Maintenance of Insurance |
130 |
| 7.08 Compliance with Laws |
131 |
| 7.09 Books and Records |
131 |
| 7.10 Inspection Rights |
131 |
| 7.11 Use of Proceeds |
131 |
| 7.12 Additional Guarantees and Collateral |
131 |
| 7.13 Compliance with Environmental Laws |
135 |
| 7.14 Further Assurances |
135 |
| 7.15 Collateral and Guarantee Limitations |
136 |
| 7.16 Credit Rating |
136 |
| 7.17 Post-Closing Matters |
136 |
| 7.18 OFAC and Anti-Corruption Laws |
136 |
| 7.19 Lender Calls |
137 |
| |
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| Article VIII. NEGATIVE COVENANTS |
137 |
| 8.01 Liens |
137 |
| 8.02 Indebtedness |
140 |
| 8.03 Fundamental Changes |
147 |
| 8.04 Dispositions |
148 |
| 8.05 Restricted Payments |
150 |
| 8.06 Change in Nature of Business |
152 |
| 8.07 Transactions with Affiliates |
152 |
| 8.08 Burdensome Agreements |
154 |
| 8.09 Use of Proceeds |
155 |
| 8.10 Financial Covenant |
155 |
| 8.11 Amendments of Organization Documents and Certain Other Agreements |
157 |
| 8.12 Accounting Changes |
157 |
| 8.13 Sale and Leaseback Transactions |
157 |
| 8.14 No Other “Designated Senior Indebtedness” |
157 |
| 8.15 Holding Covenant |
157 |
| 8.16 Canadian Defined Benefit Pension Plans |
157 |
| |
|
| Article IX. EVENTS OF DEFAULT AND REMEDIES |
157 |
| 9.01 Events of Default |
157 |
| 9.02 Remedies Upon Event of Default |
160 |
| 9.03 Application of Funds |
161 |
| |
|
| Article X. THE AGENTS AND THE ARRANGERS |
162 |
| 10.01 Appointment and Authority |
162 |
| 10.02 Delegation of Duties |
163 |
| 10.03 Rights as a Lender |
163 |
| 10.04 Exculpatory Provisions |
163 |
| 10.05 Reliance by Agents |
164 |
| 10.06 Non-Reliance on Agents and Other Lenders |
164 |
| 10.07 Resignation of Agent |
164 |
| 10.08 Administrative Agent May File Proofs of Claim |
165 |
| 10.09 Collateral and Guaranty Matters |
165 |
| 10.10 No Other Duties, Etc |
166 |
| 10.11 Certain ERISA Matters |
167 |
| 10.12 Intercreditor Agreement |
167 |
| |
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| Article XI. MISCELLANEOUS |
168 |
| 11.01 Amendments, Etc |
168 |
| 11.02 Notices and Other Communications; Facsimile Copies |
170 |
| 11.03 No Waiver; Cumulative Remedies |
171 |
| 11.04 Expenses; Indemnity; Damage Waiver |
172 |
| 11.05 Payments Set Aside |
174 |
| 11.06 Successors and Assigns |
174 |
| 11.07 Confidentiality |
182 |
| 11.08 Setoff |
183 |
| 11.09 Interest Rate Limitation |
183 |
| 11.10 Counterparts |
183 |
| 11.11 Integration |
184 |
| 11.12 Survival of Representations and Warranties |
184 |
| 11.13 Severability |
184 |
| 11.14 Tax Forms |
184 |
| 11.15 Replacement of Lenders |
186 |
| 11.16 Governing Law |
187 |
| 11.17 Binding Effect |
188 |
| 11.18 Waiver of Right to Trial by Jury |
188 |
| 11.19 USA PATRIOT Act Notice |
188 |
| 11.20 Waiver of Notice of Termination |
188 |
| 11.21 Headings |
188 |
| 11.22 Joint and Several Obligations |
188 |
| 11.23 Judgment Currency |
190 |
| 11.24 Acknowledgement and Consent to Bail-In of Affected Financial Institutions |
190 |
| 11.25 Acknowledgement Regarding Any Supported QFCs |
191 |
| 11.26 Canadian AML Legislation |
192 |
| 11.27 No Fiduciary Duty |
192 |
| SCHEDULES |
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| 1.01(c) |
Mortgaged Properties |
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| 1.01(d) |
Existing Investments |
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| 1.01(e) |
Excluded Subsidiaries |
|
| 1.01(f) |
Subsidiary Guarantors |
|
| 1.01(g) |
Immaterial Subsidiaries |
|
| 2.01 |
Commitments and Pro Rata Shares |
|
| 6.06 |
Litigation |
|
| 6.09 |
Environmental Matters |
|
| 6.12 |
ERISA and Canadian Pension Plans |
|
| 6.13 |
Subsidiaries |
|
| 6.17 |
Intellectual Property Matters |
|
| 6.22 |
Labor Matters |
|
| 7.17 |
Post-Closing Matters |
|
| 8.01(c) |
Existing Liens |
|
| 8.02 |
Existing Indebtedness |
|
| 8.04 |
Certain Dispositions |
|
| 11.02 |
Administrative Agent’s Office, Certain Addresses for Notices |
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| EXHIBITS |
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| A |
Assignment and Assumption |
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| B |
Committed Loan Notice |
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| C |
Compliance Certificate |
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| D |
Solvency Certificate |
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| E |
Perfection Certificate |
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| F |
Subsidiary Joinder Agreement |
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| G-1 |
Term Loan Note |
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| G-2 |
Revolving Credit Note |
|
| H |
Prepayment Notice |
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CREDIT AGREEMENT
This Credit Agreement is entered
into as of July 30, 2024, by and among AAL Delaware Holdco, Inc., a Delaware corporation (the “Initial Borrower”),
ASP Acuren Holdings, Inc., a Delaware corporation (“ASP Acuren”; together with the Initial Borrower, the Additional
Borrowers, and any other Subsidiaries of Holdings from time to time party hereto as borrowers, collectively, the “Borrowers”),
Acuren Corporation, a British Virgin Islands company (“Holdings”), the other Guarantors from time to time party
hereto, the lenders from time to time party hereto (collectively, the “Lenders” and, individually, a “Lender”),
the L/C Issuers from time to time party hereto and Jefferies Finance LLC, as administrative agent (in such capacity and together with
its successors, the “Administrative Agent”) and collateral agent (in such capacity and together with its successors,
the “Collateral Agent”).
WHEREAS, Holdings has requested
that substantially simultaneously with the consummation of the Closing Date Acquisition, (a) the Term Loan Lenders extend Initial Term
Loans in an aggregate principal amount of $775,000,000, (b) the Revolving Credit Lenders provide Initial Revolving Credit Commitments
in an aggregate principal amount of $75,000,000 and (c) the L/C Issuers agree to issue Letters of Credit in an aggregate amount available
to be drawn not in excess of the Letter of Credit Sublimit;
WHEREAS, the Lenders and the
L/C Issuers are willing to provide such extensions of credit, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration
of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
Article
I.
DEFINITIONS AND ACCOUNTING TERMS
1.01
Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
“ABR Term SOFR Determination
Day” has the meaning specified in the definition of “Term SOFR”.
“Acquired Business”
means the Initial Borrower and its Subsidiaries.
“Acquired Entity”
has the meaning specified in the definition of “Permitted Acquisition”.
“Acquired Indebtedness”
means with respect to any specified Person
(i)
Indebtedness of any other Person existing at the time such other Person is merged or amalgamated with or into, or became a Subsidiary
of such specified Person, provided such Indebtedness is not incurred (x) in connection with, or in contemplation of, such
other Person merging or amalgamating with or into, or becoming a Subsidiary of, such specified Person or (y) for purposes of financing
the acquisition of such other Person; and
(ii) Indebtedness that is secured
by a Lien encumbering any asset acquired by such specified Person.
“Acquisition Agreement”
means that certain Agreement and Plan of Merger (and the exhibits, schedules and annexes thereto), dated as of May 21, 2024, by and
among Holdings, AAL Merger Sub, Inc., a Delaware corporation, the Acquired Business and ASP Acuren Investco LP, a Delaware limited partnership,
solely in its capacity as the representative of all of the stockholders of the Acquired Business.
“Additional Borrower”
has the meaning specified in Section 2.14(a).
“Administrative
Agent” has the meaning specified in the preamble hereto.
“Administrative
Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02,
or such other address or account as the Administrative Agent may from time to time notify Holdings and the Lenders.
“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial
Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate”
means, with respect to any Person, another Person (other than, in the case of the Loan Parties, a Subsidiary of such Person) that directly,
or indirectly through one or more intermediaries, Governs or is Governed by or is under common Governance with the Person specified. “Govern”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise. “Governance”, “Governing”
and “Governed” have meanings correlative thereto. For purposes of this Agreement and the other Loan Documents,
Jefferies LLC and its Affiliates shall be deemed to be Affiliates of Jefferies Finance LLC and its Affiliates.
“Agent Parties”
has the meaning specified in Section 11.02(c).
“Agents”
has the meaning specified in Section 10.01(b).
“Agreement”
means this Credit Agreement.
“AML Legislation”
has the meaning specified in Section 11.26.
“Anti-Corruption
Laws” means the (i) United States Foreign Corrupt Practices Act of 1977, as amended, (ii) the United Kingdom Bribery Act
of 2010, (iii) the Proceeds of Crime Act and the Corruption of Foreign Public Officials Act (Canada) and (iv) any applicable related provisions
and/or anti-bribery, and corruption and/or anti-money laundering laws, rules, or regulations of any jurisdiction in which a Borrower conducts
business.
“Anti-Terrorism
and Anti-Money Laundering Laws” means any laws or regulations relating to terrorism or money laundering, including the Bank
Secrecy Act of 1990, as amended by the USA PATRIOT ACT, the laws administered by the United States Treasury Department’s Office
of Foreign Assets Control, Canadian Economic Sanctions and Export Control Laws (as any of the foregoing laws may from time to time be
amended, renewed, extended, or replaced), the U.S. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56, the U.S. Currency and Foreign Transaction Reporting Act of 1970, as amended,
the U.S. Money Laundering Control Act of 1986, as amended, the UK Proceeds of Crime Act 2002 and the UK Terrorism Act 2000, as amended.
“Anticipated Cure
Deadline” shall have the meaning assigned to such term in Section 8.10(b).
“Applicable
Rate” means
(a)
with respect to any Initial Term Loan that is (i) a Term SOFR Loan, 3.50% per annum and (ii) a Base Rate Loan, 2.50% per
annum;
(b)
with respect to any Revolving Credit Loan that is (i) a Term SOFR Loan, 3.50% per annum and (ii) a Base Rate Loan, 2.50%
per annum;
(c)
with respect to the Letter of Credit Fees, 3.50% per annum and
(d)
with respect to the Commitment Fees,
(i)
until delivery of a Compliance Certificate for the fiscal quarter ending December 31, 2024, 0.50% per annum and
(ii)
at any time thereafter, (x) 0.50% per annum if the First Lien Net Leverage Ratio as of the most recent determination date
is greater than 3.30 to 1.00 or (y) 0.375% per annum if the First Lien Net Leverage Ratio as of the most recent determination date
is less than or equal to 3.30 to 1.00.
“Approved Fund”
has the meaning specified in Section 11.06(g).
“Approved Member
State” means each of the following: Belgium, Canada, France, Germany, Italy, Luxembourg, The Netherlands, Spain, Sweden
and the United Kingdom.
“Arrangers”
means Jefferies Finance LLC, Citibank, N.A., and UBS Securities LLC.
“ASP Acuren”
has the meaning set forth in the preamble hereto.
“Asset Sale”
means any Disposition by Holdings or any Restricted Subsidiary made pursuant to Section 8.04(d); provided
that any Disposition having a value not in excess of (I) the greater of (x) $20,000,000 and (y) 10% of Consolidated EBITDA as of the last
day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01 in any single
transaction or series of related transactions shall be deemed not to be an “Asset Sale” for purposes of this
Agreement.
“Assignee Group”
means, with respect to any Lender, such Lender’s Affiliates and Approved Funds with respect to such Lender.
“Assignment and
Assumption” means an Assignment and Assumption substantially in the form of Exhibit A or such other form
approved by the Administrative Agent.
“Attorney”
has the meaning specified in Section 10.01(c).
“Attorney Costs”
means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.
“Attributable Indebtedness”
means, on any date, in respect of any Synthetic Lease Obligation, as of any date of determination, the total obligation (discounted to
present value at the rate of interest implicit in the lease included in such transaction) of the lessee for rental payments (other than
accounts required to be paid on account of property taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items which do not constitute payments for property rights) during the remaining portion of the term (including extensions
which are at the sole option of the lessor) of the lease included in such transaction (in the case of any lease which is terminable by
the lessee upon the payment of a penalty, such rental obligation shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which it may be so terminated).
“Audited Financial
Statements” means the Holdings Audited Financial Statements and the Target Audited Financial Statements.
“Auto-Renewal Letter
of Credit” has the meaning specified in Section 2.03(b)(iii).
“Available Amount”
means, on any date of determination (the “Reference Date”), an amount (which shall not be less than zero) determined
on a cumulative basis equal to the sum of (without duplication): an amount equal to
(a)
the greater of (I) $100,000,000 and (II) 50% of Consolidated EBITDA as of the last day of the last Test Period for which financial
statements have been delivered pursuant to Section 7.01 plus
(b)
Net Cash Proceeds from any sale or issuance of Equity Interests of Holdings (excluding Disqualified Stock) to the extent such Net
Cash Proceeds are received by Holdings after the Closing Date (other than any Net Cash Proceeds (w) that are Specified Equity Proceeds,
(x) from any Cure Amount, (y) to the extent such Net Cash Proceeds have been used to build any other basket for the incurrence of Indebtedness
or the making of any Investment or Restricted Payment or (z) from the sale of any Equity Interests to any employee, director, officer,
manager or consultant of Holdings, any direct or indirect parent of Holdings and any Subsidiary of Holdings) which are not Otherwise Applied,
plus
(c)
Net Cash Proceeds of Indebtedness and Disqualified Stock of Holdings, in each case, issued after the Closing Date, which has been
exchanged or converted into Equity Interests (excluding Disqualified Stock) of Holdings (other than with respect to any such exchange
or conversion involving the sale or issuance of Equity Interests to any employee, director, officer, manager or consultant of Holdings,
any direct or indirect parent of Holdings and any Subsidiary of Holdings), plus
(d)
the greatest of (1) the cumulative amount of Excess Cash Flow for all fiscal years of Holdings (commencing with the fiscal year
ending on December 31, 2026) and prior to the Reference Date minus the portion of such Excess Cash Flow that has been
(or will be) after the Closing Date and on or prior to the Reference Date required to be offered to prepay the Loans in accordance with
Section 2.05(b) (without giving effect to any dollar-for-dollar reduction in respect of voluntary prepayments of the
Loans as therein provided), (2) 50% of cumulative Consolidated Net Income for all fiscal quarters ending after the Closing Date and prior
to the Reference Date and (3) 100% of cumulative Consolidated EBITDA for all fiscal quarters ending after the Closing Date and prior to
the Reference Date minus 150% of Consolidated Interest Charges for all fiscal quarters ending after the Closing Date and
prior to the Reference Date, plus
(e)
to the extent not (A) included in Consolidated Net Income or (B) already reflected as a return of capital with respect to such
Investment for purposes of determining the amount of such Investment, the aggregate amount of all cash dividends and other cash distributions
received by Holdings or any Restricted Subsidiary from any Unrestricted Subsidiaries during the period from and including the Business
Day immediately following the Closing Date and prior to the Reference Date in respect of Investments made by Holdings or any Restricted
Subsidiary in reliance on the Available Amount, plus
(f)
to the extent not (A) included in Consolidated Net Income or (B) already reflected as a return of capital with respect to such
Investment for purposes of determining the amount of such Investment, the Investments of Holdings and any Restricted Subsidiary in any
Unrestricted Subsidiary that has been re-designated as a Restricted Subsidiary or that has been merged, amalgamated or consolidated with
or into Holdings or any Restricted Subsidiary (up to the lesser of (x) the fair market value (as determined in good faith by Holdings)
of the investments of Holdings and any Restricted Subsidiary in such Unrestricted Subsidiary at the time of such re-designation or merger,
amalgamation or consolidation and (y) the fair market value (as determined in good faith by Holdings) of the original investments by Holdings
and any Restricted Subsidiary in such Unrestricted Subsidiary) plus
(g)
to the extent not (A) included in Consolidated Net Income, (B) already reflected as a return of capital with respect to such Investment
for purposes of determining the amount of such Investment or (C) required to be applied to prepay the Loans in accordance with Section 2.05(b),
the aggregate amount of all Net Cash Proceeds received by Holdings or any Restricted Subsidiary in connection with the sale, transfer
or other Disposition of its ownership interest in any Unrestricted Subsidiary, to the extent that the original Investments in such Unrestricted
Subsidiary were made in reliance on the Available Amount plus
(h)
the aggregate amount of Retained Declined Proceeds minus
(i)
the sum, without duplication, of the aggregate amount of Restricted Payments made pursuant to Section 8.05(k)
after the Closing Date and on or prior to the Reference Date.
“Available Tenor”
means, as of any date of determination and with respect to any then-current Benchmark for any currency, as applicable, (x) if any then-current
Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y)
otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of
such date.
“Bail-In Action”
means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.
“Bail-In Legislation”
means (a) 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, regulation rule or requirement for such EEA Member Country from time to time
which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom
Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the
resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation,
administration or other insolvency proceedings).
“Base Rate”
means for any day a fluctuating rate per annum equal to the highest of
(a)
the Federal Funds Effective Rate in effect on such day plus ½ of 1.00%,
(b)
the Prime Rate in effect on such day;
(c)
Term SOFR determined on such day for a Term SOFR Loan with a one-month Interest Period plus 1.00%; and
(d)
the Floor.
“Base Rate Loan”
means a Loan that bears interest based on the Base Rate.
“Benchmark”
means, initially, Term SOFR; provided that if a replacement of an initial or subsequent Benchmark has occurred pursuant to Section 3.03(d),
then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such
prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation
thereof.
“Benchmark Replacement”
means, for any Available Tenor, for purposes of clause (f) of Section 3.03, the first alternative set forth below that can be
determined by the Administrative Agent:
(1) solely if the relevant Benchmark
is Term SOFR, the sum of: (i) Daily Simple SOFR and (ii) 0.26161% (26.161 basis points); or
(2) the sum of (a) the alternate
benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the
Administrative Agent and Holdings as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving
or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for syndicated
credit facilities at such time denominated in the applicable currency in the U.S. syndicated loan market;
provided that, if the
Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will
be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement
Conforming Changes” means, with respect to any Benchmark or Benchmark Replacement, any technical, administrative or operational
changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition
of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests
or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions,
the formula for calculating any successor rates identified pursuant to the definition of “Benchmark Replacement”, the formula,
methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative
or operational 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 or of any Benchmark 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 such Benchmark or 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 and the other Loan Documents).
“Benchmark Transition
Event” means, with respect to any then-current Benchmark, the occurrence of one or more of the following events: a public
statement or publication of information by or on behalf of the administrator of any then-current Benchmark, the regulatory supervisor
for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the
central bank for the currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark,
a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or
resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease
on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such
statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b)
all Available Tenors of such Benchmark are or will no longer be representative and that representativeness will not be restored.
“Beneficial Ownership
Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership
Regulation” means 31 C.F.R. § 1010.230.
“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”.
“BHC Act Affiliate”
has the meaning specified in Section 11.25(b).
“Borrower Equity
Contribution” means a contribution by Holdings to the capital of the Initial Borrower in an amount not less than $1,250,000,000.
“Borrower Materials”
has the meaning specified in Section 7.02.
“Borrowers”
and “Borrower” have the respective meanings set forth in the preamble hereto.
“Borrowing”
means each of a Term Loan Borrowing or a Revolving Credit Borrowing, as the context may require.
“Business Day”
means
(a)
any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent’s Office is located and
(b)
if such day relates to any interest rate settings as to a Term SOFR Loan, any fundings, disbursements, settlements and payments
in respect of any such Term SOFR Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Term
SOFR Loan, means a day that is a “U.S. Government Securities Business Day”.
“Canada”
means the country of Canada, and shall include any province or territory thereof, as the context requires.
“Canadian Blocked
Person” means any Person that is a “Designated Person”, “Politically Exposed Foreign Person” or
“Terrorist Entities” as described in any Canadian Economic Sanctions and Export Control Laws.
“Canadian Collateral
Documents” means the Canadian Pledge and Security Agreement, the Canadian Deed of Hypothec and the Canadian IP Security
Agreement.
“Canadian Deed of
Hypothec” means the Deed of Hypothec, dated on or about the Closing Date, executed by each of the Canadian Loan Parties
party thereto and the Administrative Agent, as hypothecary representative, for the benefit of the holders of the Obligations and shall
for certainty include any deed of hypothec executed by any Loan Party after the Closing Date.
“Canadian Defined
Benefit Pension Plan” means a Canadian Pension Plan that contains a “defined benefit provision” as that term
is defined in subsection 147.1(1) of the Canadian ITA.
“Canadian Economic
Sanctions and Export Control Laws” means any Canadian laws, regulations or orders governing transactions in controlled goods
or technologies or dealings with countries, entities, organizations, or individuals subject to economic sanctions and similar measures,
including the Proceeds of Crime Act, the Corruption of Foreign Public Officials Act (Canada), the Special Economic Measures Act (Canada),
the United Nations Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), Part II.1 of the Criminal Code (Canada)
and the Export and Import Permits Act (Canada), and any related regulations.
“Canadian IP Security
Agreement” means each Canadian Patent Security Agreement, Canadian Trademark Security Agreement and Canadian Copyright Security
Agreement to be executed and delivered by a Loan Party, substantially in the form of Exhibits A, B and
C to the Canadian Pledge and Security Agreement, respectively, or such other form approved by the Administrative Agent,
in each case as the same may be amended or supplemented from time to time.
“Canadian ITA”
means the Income Tax Act (Canada), as amended.
“Canadian Loan Parties”
means any Loan Party (as defined herein) incorporated or otherwise organized under the laws of Canada or any province or territory thereof.
“Canadian Multi-Employer
Plan” means a multi-employer pension plan, as such term is defined in the Pension Benefits Act (Ontario) or any similar
plan registered under Canadian Pension Laws to which any of the Loan Parties or any of their respective Subsidiaries, contributes for
its employees or former employees employed in Canada.
“Canadian Pension
Event” means (a) the termination or wind-up in whole or in part of a Canadian Defined Benefit Pension Plan, (b) the occurrence
of any circumstance or event that would provide any basis for a Governmental Authority to take steps to cause the termination or wind-up,
in whole or in part, of any Canadian Defined Benefit Pension Plan, the issuance of a notice (or a notice of intent to issue such a notice)
to terminate in whole or in part any Canadian Defined Benefit Pension Plan or the receipt of a notice of intent from a Governmental Authority
to require the termination in whole or in part of any Canadian Defined Benefit Pension Plan, revoking the registration of same or appointing
a new administrator of such a plan, (c) the non-compliance by a Loan Party or any Subsidiary with any Canadian Pension Laws that individually
or in the aggregate would result in a Material Adverse Effect, and (d) the withdrawal by a Canadian Loan Party or any Affiliate thereof
as a participating employer under any Canadian Multi-Employer Plan, where such Canadian Loan Party or Affiliate thereof is obligated to
provide any contributions or payments in respect of any withdrawal liability.
“Canadian Pension
Laws” means any applicable Canadian laws applying to Canadian Pension Plans.
“Canadian Pension
Plan” means a “registered pension plan”, as that term is defined in subsection 248(1) of the Canadian ITA,
that is required to be registered under any applicable Canadian Pension Laws, whether or not registered under any such Canadian Pension
Laws, which is maintained, which is sponsored, administered or contributed to, or required to be contributed to by, any primary obligor
or under which any primary obligor has any liability, other than any Canadian Multi-Employer Plan or other plans established by statute
(which shall include the Canada Pension Plan maintained by the government of Canada and the Quebec Pension Plan maintained by the Province
of Quebec).
“Canadian Pledge
and Security Agreement” means the Canadian Pledge and Security Agreement, dated as of the Closing Date, executed by each
of the Canadian Loan Parties and the Administrative Agent for the benefit of the holders of the Obligations, as may be further amended
or modified from time to time in accordance with the terms hereof.
“Canadian Subsidiary”
means any Restricted Subsidiary that is incorporated or otherwise organized under the laws of Canada or any province or territory thereof.
“Capital Expenditures”
means, for any period, with respect to any Person, without duplication
(a) the net additions to property,
plant and equipment and other capital expenditures of such Person and its consolidated subsidiaries that are (or should be) set forth
in a consolidated statement of cash flows of such Person for such period prepared in accordance with GAAP and
(b) capital lease obligations
incurred by such Person and its consolidated subsidiaries during such period.
“Captive Insurance
Subsidiary” means a Subsidiary established by Holdings, Borrower
or any of their particular Subsidiaries for the sole purpose of insuring the business, facilities and/or employees of Holdings and/or
any Subsidiary of Holdings.
“Cash Collateralize”
has the meaning specified in Section 2.03(g).
“Cash Equivalents”
means any of the following types of Investments, to the extent owned by Holdings or any Restricted Subsidiary free and clear of all Liens:
(a)
(i) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or Canada
or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided
that the full faith and credit of the United States of America or Canada, as applicable, is pledged in support thereof;
(ii) securities issued
by any state or municipality within the United States of America (or, in the case of securities arising from student loans, approved by
any such state or municipality), or by Canada or any province or territory thereof, that are rated “A-2” or better by S&P
or “P-2” or better by Moody’s or the equivalent rating from any other nationally recognized rating agency; and
(iii) securities issued
or fully guaranteed or insured by any Approved Member State, or an agency or instrumentality thereof (provided, that the
full faith and credit of the applicable Approved Member State is pledged in support of those securities) and having maturities of not
more than one year;
(b)
time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that
(i)
(A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia
or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof
or the District of Columbia, and is a member of the Federal Reserve System,
(ii)
issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition
and
(iii)
has combined capital and surplus of at least $250,000,000, in each case with maturities of not more than one year from the date
of acquisition thereof;
(c)
commercial paper issued by any Person organized under the laws of any state of the United States of America, or in Canada or any
province or territory thereof, and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least
“A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 270 days from the date
of acquisition thereof;
(d)
solely with respect to any Captive Insurance Subsidiary, any investment that a Captive Insurance Subsidiary is not prohibited to
make in accordance with applicable Law; and
(e)
Investments classified in accordance with GAAP as Current Assets of Holdings or any Restricted Subsidiary, in money market investment
programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating
obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality
and maturity described in clauses (a), (b) and (c) of this definition.
“CFC”
means a Foreign Subsidiary that is a controlled foreign corporation as defined in Section 957(a) of the Code and that is not
a Material Canadian Subsidiary.
“CFC Holdco”
has the meaning specified in Section 7.12(a)(i)(C).
“Change of Control”
means, an event or series of events by which:
(a)
a “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, but excluding (x) any employee benefit plan of such Person or its subsidiaries, and any Person or entity acting in its capacity
as trustee, agent or other fiduciary or administrator of any such plan and (y) the Permitted Holders) becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has the fully vested right to acquire, whether
such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly
or indirectly, of 50% of the equity securities of Holdings or any Intermediate Holding Company entitled to vote for members of the board
of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right); or
(b)
any Borrower (other than Holdings, if a Borrower) shall cease to be a Wholly-Owned Restricted Subsidiary of Holdings or any Intermediate
Holding Company or if any Subsidiary of Holdings that directly or indirectly owns any portion of the Equity Interests of any Borrower
shall cease to be a Guarantor;
provided, however, that any
de-listing of the Equity Interests of Holdings on the London Stock Exchange and the contemplated issuance thereof on the New York Stock
Exchange shall not constitute a Change of Control.
“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Credit
Loans or Term Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Credit Commitment
or Term Loan Commitment.
“Closing Date”
means July 30, 2024.
“Closing Date Acquisition”
means the acquisition by Holdings of the Acquired Business pursuant to the Acquisition Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time (unless as specifically provided otherwise).
“Collateral”
means all of the “Collateral” or “Pledged Collateral” referred to in the Collateral
Documents, the Mortgaged Property and all of the other property and assets that are or are intended under the terms of the Collateral
Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.
“Collateral Agent”
has the meaning specified in the preamble hereto.
“Collateral Documents”
means, collectively, the Pledge and Security Agreement, the Canadian Collateral Documents, the Mortgages, the Intellectual Property Security
Agreements, or other similar agreements delivered to the Collateral Agent and the Lenders pursuant to Section 7.12,
and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Collateral Agent
for the benefit of any Secured Party.
“Commitment”
means, with respect to any Lender, such Lender’s Revolving Credit Commitment and Term Loan Commitment.
“Commitment Fee”
has the meaning specified in Section 2.09(a).
“Committed Loan
Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of
Term SOFR Loans pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit B
or such other form approved by the Administrative Agent.
“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.
“Compliance Certificate”
means a certificate substantially in the form of Exhibit C or such other form approved by the Administrative Agent
and acceptable to Holdings.
“Consolidated EBITDA”
means, for any period, Consolidated Net Income for such period plus
(a)
without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of
(i)
Consolidated Interest Charges for such period,
(ii)
consolidated income, capital, federal, state, provincial, franchise, excise and similar taxes, property taxes, foreign withholding
taxes and foreign unreimbursed value added tax expenses for such period,
(iii)
all amounts attributable to depreciation and amortization (including those related to any Receivables Facility), all impairment
charges, and all asset write-offs and/or writedowns for such period,
(iv)
any non-cash charges, expenses or losses (including, but not limited to, non-cash rent expense, impairment of goodwill or other
intangible assets and exchange rate losses) of Holdings or any Restricted Subsidiary for such period (excluding any such charge, expense
or loss incurred that constitutes an accrual of or a reserve for cash charges for any future period or an amortization of a prepaid cash
expense paid in a prior period or writeoff or writedown of reserves with respect to current assets); provided, however,
that cash payments made in such period or in any future period in respect of such non-cash items (excluding any non-cash items to the
extent representing an accrual for a future cash expenditure) shall be subtracted from Consolidated Net Income in calculating Consolidated
EBITDA in the period when such payments are made,
(v)
any extraordinary, unusual, or non-recurring cash charges or expenses for such period (including business optimization expenses
or costs (including charges related to the implementation of cost-savings initiatives, operating expense reductions and other similar
initiatives), restructuring charges, integration, acquisition and disposition (or potential acquisition or disposition) related costs
(whether incurred prior to, or after, the consummation of any such acquisition)) and severance, recruiting, relocation and signing bonuses
and expenses, contract terminations costs, retention bonuses, separation payments or other similar one time compensation payments made
to employees of Holdings or any Restricted Subsidiary or made in connection with a Permitted Acquisition,
(vi) deferred
compensation, stock-option or employee benefits-based and other equity-based compensation expenses for such period,
(vii)
transaction fees and expenses in connection with the Transactions for such period,
(viii)
transaction fees, costs and expenses during such period in connection with any investment (including any Permitted Acquisition),
Disposition, recapitalization or issuance of Equity Interests and incurrence of Indebtedness or similar transactions, in each case, to
the extent permitted under this Agreement and whether or not such investment, Disposition, recapitalization, issuance of Equity Interests
or Indebtedness or acquisition shall have been consummated,
(ix)
losses or price adjustments to the extent reimbursable by third parties in connection with any Permitted Acquisition, as determined
in good faith by Holdings, for such period; provided, however, that if the Administrative Agent, acting reasonably,
determines in such period or the immediately succeeding period that such losses or price adjustments, or any portion thereof (which, in
each case, were included in Consolidated EBITDA in such period or such immediately preceding period pursuant to this clause (ix)),
are no longer reimbursable or are not likely to be reimbursed, then such losses, or any portion thereof, shall be subtracted from Consolidated
Net Income in calculating Consolidated EBITDA in each such applicable period,
(x)
to the extent permitted hereunder, payments to investors and reimbursement of board expenses and compensation payments to board
members during such period,
(xi)
adjustments consistent with Regulation S-X or as set forth in a quality of earnings report from a nationally recognized firm delivered
to the Administrative Agent,
(xii)
unrealized losses in respect of Obligations under Swap Contracts during such period,
(xiii)
any loss or expense during such period from a disposition or discontinued operations or any loss or expense incurred in connection
with the disposal of a business or product line, whether or not treated as discontinued operations in accordance with GAAP (or if not
in accordance with GAAP as otherwise reasonably acceptable to the Administrative Agent) and whether or not such disposition or discontinuance
shall have been consummated or completed,
(xiv)
management, monitoring, consulting, transaction, refinancing and advisory fees (including termination fees) and related indemnities
and expenses paid or accrued to any advisor or any other Permitted Holder or their Affiliates paid pursuant to the Consulting Agreement
in an aggregate amount not to exceed the greater of (I) $5,000,000 and (II) 2.5% of Consolidated EBITDA as of the last day of the last
Test Period for which financial statements have been delivered pursuant to Section 7.01,
(xv)
non-cash charges or amounts recorded in connection with purchase accounting for such period (including any applicable to future
Permitted Acquisitions),
(xvi)
non-cash purchase accounting adjustments during such period relating to the writedown of deferred revenue (whether billed or unbilled)
that are the result of accounting for any acquisition,
(xvii)
fees, costs and expenses incurred under this Agreement for such period,
(xviii)
the cumulative effect of a change in accounting principles for such period and to the extent permitted by Section 1.03(b),
(xix)
expenses during such period in connection with the settlement of any litigation or claim involving Holdings or any Restricted Subsidiary,
(xx)
debt discount and debt issuance costs, fees, charges, commissions or other related or similar costs during such period, in each
case incurred in connection with Indebtedness permitted to be incurred hereunder (whether or not such Indebtedness has been incurred),
(xxi)
the amount of “run rate” net cost savings, “run rate” contract revenue, operating expense reductions, other
operating improvements or initiatives and acquisition synergies projected by the Borrowers in good faith to be realized during such period
(calculated on a Pro Forma Basis as though such items had been realized on the first day of such period) as a result of actions taken
or to be taken in connection with any established cost reduction program, restructuring, acquisition, investment, operation change,
initiative or disposition by Holdings or any Restricted Subsidiary, net of the amount of actual benefits realized during such period that
are otherwise included in the calculation of Consolidated EBITDA from such actions, provided that
(A)
a duly completed certificate signed by a Responsible Officer of the Borrowers shall be delivered to the Administrative Agent together
with the Compliance Certificate required to be delivered pursuant to Section 7.02(a), certifying that
(x) such “run
rate” cost savings, “run rate” contract revenue, operating expense reductions and other operating improvements and synergies
are reasonably expected and factually supportable as determined in good faith by Holdings, and
(y) such actions are
to be taken within 24 months after the consummation or initiation, as the case may be, of the relevant action, which is expected to result
in such cost savings, expense reductions or synergies,
(B)
no “run rate” cost savings, “run rate” contract revenue, operating expense reductions and other operating
improvements and synergies shall be added pursuant to this clause (xxi) to the extent duplicative of any expenses or
charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period,
(C)
projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this clause (xxi)
to the extent occurring more than eight full fiscal quarters after the specified action taken in order to realize such projected cost
savings, operating expense reductions and synergies and
(D)
the aggregate amount of add backs made pursuant to this clause (xxi) shall not exceed an amount equal to 25%
of Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended prior to the determination date (without
giving effect to any adjustments pursuant to this clause (xxi)),
(xxii)
the amount of any expense related to minority interests,
(xxiii)
any loss resulting from the payment of earn-out or contingent consideration obligations, and
(xxiv)
any non-cash expenses or charges recorded in accordance with GAAP relating to currency valuation of foreign denominated debt, and
any non-cash expenses or charges recorded in accordance with GAAP relating to equity interests issued to non-employees in exchange for
services provided in connection with any acquisition or business arrangement (in each case, including any such transaction undertaken
but not completed) minus
(b)
without duplication
(i)
to the extent included in determining such Consolidated Net Income, any extraordinary, unusual, or non-recurring gains or income
and all non-cash items of income or gains for such period, all determined on a consolidated basis in accordance with GAAP,
(ii)
unrealized gains in respect of Obligations under Swap Contracts and
(iii)
any gains resulting from the payment of earn-out obligations;
provided that solely for purposes
of calculating the First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio, the Total Net Leverage Ratio and the Fixed Charge
Coverage Ratio for any period
(A) the
Consolidated EBITDA of any Acquired Entity acquired by Holdings or any Restricted Subsidiary pursuant to a Permitted Acquisition during
such period shall be included on a Pro Forma Basis for such period (assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred as of the first day of such period) and
(B) the
Consolidated EBITDA of any Person or line of business sold or otherwise disposed of by Holdings or any Restricted Subsidiary during such
period shall be excluded for such period (assuming the consummation of such sale or other disposition and the repayment of any Indebtedness
in connection therewith occurred as of the first day of such period).
“Consolidated First
Lien Indebtedness” means Consolidated Indebtedness that is secured by a first priority Lien (other than Permitted Liens)
on assets of Holdings or any Restricted Subsidiary.
“Consolidated Indebtedness”
means, at any time, the aggregate amount of Indebtedness of Holdings and the Restricted Subsidiaries outstanding at such time, in the
amount that would be reflected on a balance sheet prepared at such time on a consolidated basis in accordance with GAAP.
“Consolidated Interest
Charges” means, for any period, the sum of, without duplication,
(a)
the interest expense (including imputed interest expense in respect of capital lease obligations and Synthetic Lease Obligations)
of Holdings and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (including, for
the avoidance of doubt,
(i)
any amounts of premium or penalty payable in connection with the payment of make-whole amounts or other prepayment premiums payable
in connection with any Indebtedness of Holdings or any Restricted Subsidiary, and
(ii)
all commissions, discounts and other fees and charges owed in respect of interest rates to the extent such net costs are allocable
to such period in accordance with GAAP) plus
(b)
any interest accrued during such period in respect of Indebtedness of Holdings or any Restricted Subsidiary that is required to
be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP and minus
(c)
any consolidated interest income of such Persons for such period, in each case as recorded by Holdings pursuant to GAAP. For purposes
of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by Holdings or any Restricted
Subsidiary with respect to interest rate Swap Contracts.
“Consolidated Net
Income” means, for any period, for Holdings and the Restricted Subsidiaries on a consolidated basis, the net income (including,
without duplication, interest income but excluding extraordinary gains and extraordinary losses, including such extraordinary items set
forth in the definition of Consolidated EBITDA) of Holdings and the Restricted Subsidiaries for such period determined before any reduction
in respect of preferred stock dividends; provided that there shall be excluded
(a)
the income or loss of any Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or amalgamated
or consolidated with Holdings or any Restricted Subsidiary or the date that such Person’s assets are acquired by Holdings or any
Restricted Subsidiary; provided, however, that such income or loss of such Person shall be included for such
period to the extent Consolidated Net Income and Consolidated EBITDA are being calculated on a Pro Forma Basis in accordance with this
Agreement,
(b)
the income of any Person (other than a Restricted Subsidiary) in which any other Person (other than a Wholly-Owned Restricted Subsidiary
or any director holding qualifying shares in accordance with applicable Law) has an interest, except to the extent of the amount of dividends
or other distributions actually paid to a Wholly-Owned Restricted Subsidiary by such Person during such period, and
(c)
any net unrealized gain or loss (after any offset) resulting in such period from obligations in respect of Swap Contracts or other
derivative instruments and the application of Statement of Financial Accounting Standards No. 133.
For the avoidance of doubt,
cash amounts used by Holdings or its Subsidiaries to make purchases of debt (including, without limitation, purchases of Term Loans) shall
not reduce Consolidated Net Income, nor will any non-cash gain associated with the cancellation of such purchased debt increase Consolidated
Net Income.
“Consolidated Senior
Secured Debt” means, as at any date of determination, the aggregate principal amount of Consolidated Indebtedness outstanding
on such date that is secured by a Lien (other than Permitted Liens) on assets of Holdings or any Restricted Subsidiary.
“Consolidated Total
Assets” means, as of any date, the total assets of Holdings and the Restricted Subsidiaries, determined in accordance with
GAAP, as set forth on the consolidated balance sheet of Holdings as of such date.
“Consulting Agreement”
means the Consulting Services Agreement, dated as of July 30, 2024 between Holdings and Mariposa Capital, LLC, as amended, restated, supplemented
or otherwise modified from time to time.
“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.
“Covered Entity”
has the meaning specified in Section 11.25(b).
“Covered Party”
has the meaning specified in Section 11.25(a).
“Credit Agreement
Refinancing Indebtedness” means (a) Permitted Equal Priority Refinancing Debt, (b) Permitted Junior Priority Refinancing
Debt or (c) Permitted Unsecured Refinancing Debt; provided that, in each case, such Indebtedness is incurred to refinance,
in whole or in part, existing Term Loans (“Refinanced Debt”); provided, further,
that
(i)
the final maturity date of any such Indebtedness shall be no earlier than the maturity date of the Refinanced Debt,
(ii)
the weighted average life to maturity of any such Indebtedness shall be no shorter than the weighted average life to maturity of
the Refinanced Debt,
(iii)
the borrower under such Indebtedness shall be a borrower under the Refinanced Debt and there shall be no obligors in respect of
any such Indebtedness that are not Loan Parties,
(iv)
the covenants, events of default and other terms and conditions of such Indebtedness (excluding, for the avoidance of doubt, interest
rates, margins and floors, fees, funding discounts, original issue discounts and prepayment or redemption premiums and terms) are, when
taken as a whole, substantially identical in all material respects to, or less favorable to the persons providing any such Indebtedness
than, those applicable to the Refinanced Debt (other than covenants, events of default and other terms and conditions applicable only
to periods after the Latest Maturity Date or added for the benefit of the Secured Parties hereunder),
(v)
except to the extent otherwise permitted under this Agreement (subject to a dollar-for-dollar usage of any other basket set forth
in Section 8.02, if applicable), such Indebtedness shall not have a greater principal amount (or shall not have a greater
accreted value, if applicable) than the principal amount of the Refinanced Debt plus accrued interest, fees and premiums (if any) thereon
and fees and expenses associated with the refinancing and
(vi)
such Refinanced Debt shall be repaid, defeased or satisfied and discharged on a dollar-for-dollar basis, and all accrued interest,
fees and premiums (if any) in connection therewith which shall also be paid, substantially concurrently with the date such Credit Agreement
Refinancing Indebtedness is issued, incurred or obtained (but excluding any non-material fees, charges, expenses or reimbursements, which
may be paid when due prior to or after such date), in each case, in accordance with this Agreement.
“Credit Extension”
means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Cure Amount”
shall have the meaning assigned to such term in Section 8.10(b).
“Cure Right”
shall have the meaning assigned to such term in Section 8.10(b).
“Current Assets”
means, at any time, the consolidated current assets (other than (i) cash and Cash Equivalents and (ii) the current portion of current
and deferred Tax assets) of Holdings and the Restricted Subsidiaries in accordance with GAAP.
“Current Liabilities”
means, at any time, the consolidated current liabilities of Holdings and the Restricted Subsidiaries at such time in accordance with GAAP,
but excluding, without duplication, (a) the current portion of any long-term Indebtedness and any accrued interest thereon (other
than interest expense that is past due and unpaid), (b) outstanding Revolving Credit Loans and any accrued interest thereon (other
than interest expense that is past due and unpaid) and (c) the current portion of current and deferred Tax liabilities.
“Customary Intercreditor
Agreement” means
(a)
in connection with the incurrence of Indebtedness intended to be secured by Liens (other than Permitted Liens) on the Collateral
ranking equal in priority to the Liens on the Collateral securing the Obligations (but without regard to the control of remedies), at
the option of Holdings and the Administrative Agent acting together in good faith, a customary intercreditor agreement, in form and substance
reasonably acceptable to the Administrative Agent and Holdings, which agreement shall, to the extent possible under applicable Laws, provide
that the Liens on the Collateral securing such Indebtedness shall rank equal in priority to the Liens on the Collateral securing the Obligations
(but without regard to the control of remedies) and
(b)
in connection with the incurrence of Indebtedness secured by Liens (other than Permitted Liens) on the Collateral ranking junior
to the Liens on the Collateral securing the Obligations, at the option of Holdings and the Administrative Agent acting together in good
faith, a customary intercreditor agreement, in form and substance reasonably acceptable to the Administrative Agent and the Borrowers,
which agreement shall provide that the Liens on the Collateral securing such Indebtedness shall rank junior to the Liens on the Collateral
securing the Obligations.
“Daily Simple SOFR”
means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent
in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining “Daily Simple SOFR”
for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible
for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.
“Debtor Relief Laws”
means the Bankruptcy Code of the United States, 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, Canada
or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (including, without limitation,
the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and
Restructuring Act (Canada) and the provisions of any applicable corporate legislation pursuant to which proceedings seeking a compromise
or arrangement of, or stay of proceedings to enforce, some or all of the debts of any Person subject to such legislation may be instituted).
“Default”
means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
“Default Rate”
means an interest rate equal to
(a)
the Base Rate plus
(b)
the Applicable Rate applicable to Base Rate Loans plus
(c)
2.0% per annum;
provided, however,
that with respect to a Term SOFR Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2.0% per annum, in each case to the fullest extent permitted by applicable
Laws.
“Default Right”
has the meaning specified in Section 11.25(b).
“Defaulting Lender”
means, subject to Section 2.15(b), any Lender that
(a)
has failed to
(i)
fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless
such Lender notifies the Administrative Agent and Holdings in writing that such failure is the result of such Lender’s good faith
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, or
(ii)
pay to the Administrative Agent, any L/C Issuer or any other Lender any other amount required to be paid by it hereunder (including
in respect of its participation in Letters of Credit) within two Business Days of the date when due,
(b)
has notified Holdings, the Administrative Agent or any L/C Issuer in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (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 good faith 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 Business Days after written request by the Administrative Agent or Holdings, to confirm in writing to
the Administrative Agent and Holdings that it will comply with its prospective funding obligations hereunder (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 Holdings), or
(d)
has, or has a direct or indirect parent company that has,
(i)
become the subject of a proceeding under any Debtor Relief Law or any applicable bankruptcy law,
(ii)
had appointed for it a receiver, receiver and manager, interim receiver, manager, monitor, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including
the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or
(iii)
become the subject of a Bail-In Action;
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 so long as such ownership interest does not result in or provide such Lender with immunity
from the jurisdiction of courts within the United States or Canada or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made
with such Lender.
Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.15(b))
upon delivery of written notice of such determination to Holdings, each L/C Issuer and each Lender.
“Defaulting Revolving
Credit Lender” shall have the meaning assigned to such term in Section 2.15(a)(iv)(C).
“Designated Cash
Management Bank” means any Person that has been designated as a “Designated Cash Management Bank” by written
notice from Borrower to the Administrative Agent in form and detail reasonably satisfactory to the Administrative Agent.
“Designated Cash
Management Obligations” means any Cash Management Obligations that are owed to a Designated Cash Management Bank, provided
that Borrower shall have specified in a written notice to the Administrative Agent, acknowledged by the applicable Designated Cash Management
Bank, the maximum amount of such obligations of such Person being designated as “Designated Cash Management Obligations” (such
maximum amount so specified, such Person’s “Capped Cash Management Amount”), it being understood and agreed
that the amount of Designated Cash Management Obligations of such Person, for all purposes of this Agreement and the other Loan Documents,
including for purposes of the definition of “Obligations”, shall in no event exceed such Capped Cash Management Amount.
“Designated Hedge
Bank” means any Person that has been designated as a “Designated Hedge Bank” by written notice from Borrower
to the Administrative Agent in form and detail reasonably satisfactory to the Administrative Agent.
“Designated Hedge
Obligations” means any Hedge Obligations that are owed to a Designated Hedge Bank, provided that Borrower shall have
specified in a written notice to the Administrative Agent, acknowledged by the applicable Designated Hedge Bank, the maximum amount of
such obligations of such Person being designated as “Designated Hedge Obligations” (such maximum amount so specified, such
Person’s “Capped Hedge Amount”), it being understood and agreed that the amount of Designated Hedge Obligations
of such Person, for all purposes of this Agreement and the other Loan Documents, including for purposes of the definition of “Obligations”,
shall in no event exceed such Capped Hedge Amount.
“Designated Treasury
Counterparty” means any Person that has been designated as a “Designated Treasury Counterparty” by written notice
from Holdings to the Administrative Agent in form and detail reasonably satisfactory to the Administrative Agent.
“Designation Date”
has the meaning set forth in Section 2.16(e).
“Disclosed Litigation”
has the meaning set forth in Section 6.06.
“Disposition”,
“Dispose” or “Disposed” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal,
with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disqualified Institution”
shall mean,
(a)
any Person identified in writing by Holdings to the Arrangers to be a “Disqualified Institution” on or prior to May 21,
2024,
(b)
any Person that is a competitor of Holdings or any of its Subsidiaries, which Person has been designated by Holdings as a “Disqualified
Institution” after the Closing Date by written notice to the Administrative Agent and
(c)
any Affiliate of any Person referred to in clause (a) or (b) above that is identified by Holdings
in writing to the Administrative Agent from time to time or that is readily identifiable solely on the basis of the similarity of such
Affiliate’s name (other than, in the case of an Affiliate of any “competitor”, any Person or investment vehicle that
is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit
in the ordinary course of business which is managed, sponsored or advised by a Person controlling, controlled by or under common control
with such competitor and for which no personnel involved with the management of such competitor
(i)
makes any investment decisions or
(ii)
has access to any information (other than information that is publicly available) relating to the Loan Parties or any entity that
forms a part of the Loan Parties’ business (including their Subsidiaries));
provided that
(x) “Disqualified Institutions”
shall exclude any Person that Holdings has designated as no longer being a “Disqualified Institution” by written notice delivered
to the Administrative Agent from time to time and
(y) the
identification of any Person as a Disqualified Institution after the Trade Date shall not apply to retroactively disqualify any Person
that has previously acquired an assignment or participation interest in the Loans if such Person was not a Disqualified Institution on
the Trade Date.
“Disqualified Stock”
means, with respect to any Person, any Equity Interest that, by its terms (or by the terms of any security into which it is convertible,
or for which it is exchangeable, in each case at the option of the holder of the Equity Interest), or upon the happening of any event
(other than (i) any event solely within the control of the issuer thereof, (ii) a change of control or (iii) the common stock or other
capital stock of Holdings ceasing to be listed for trading on a national securities exchange or ceasing to be traded in contemplation
thereof), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the Latest Maturity Date; provided,
however, that
(a)
only the portion of the Equity Interest that so mature or are mandatorily redeemable, are so convertible or exchangeable, so accrue
dividends, or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock;
(b)
if such Equity Interests are issued to any employee or to any plan for the benefit of employees of Holdings or any Restricted Subsidiary
or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required
to be repurchased by Holdings in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s
termination, death or disability; and
(c)
any class of Equity Interests in such person that by its terms authorizes such person to satisfy its obligations thereunder by
delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.
Notwithstanding the preceding sentence, any Equity
Interest that would constitute Disqualified Stock solely because the holders of the Equity Interest have the right to require Holdings
to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock
if the terms of such Equity Interest provide that Holdings may not repurchase or redeem any such Equity Interest pursuant to such provisions
unless such repurchase or redemption complies with Section 8.05.
“Distribution Amount”
has the meaning set forth in Section 8.05(a).
“Dollar”
and “$” mean lawful money of the United States.
“Dollar Equivalent”
means, on the applicable Valuation Date, (a) with respect to any amount denominated in Dollars, such amount and (b) with respect
to any amount denominated a currency other than Dollars, the equivalent in Dollars of such amount, determined by the Administrative Agent
pursuant to Section 1.08 using the applicable Exchange Rate with respect to such currency at the time in effect on
the Valuation Date under the provisions of such Section 1.08.
“Domestication Merger”
shall have the meaning assigned to such term in Section 8.03(f).
“Dutch Auction”
means an auction conducted by Holdings or any Restricted Subsidiary in order to purchase Term Loans of any Tranche in accordance with
the procedures as may be agreed to between the Administrative Agent and Holdings.
“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 clause (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.
“Eligible Assignee”
has the meaning set forth in Section 11.06(g).
“Enterprise Transformative
Event” means any merger, acquisition, amalgamation or similar investment that is either (i) not permitted by the terms of
the Loan Documents immediately prior to the consummation of such transaction or (ii) if permitted by the terms of the Loan Documents immediately
prior to the consummation of such transaction, would not provide Holdings 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 Holdings acting in good faith.
“Environmental Claim”
means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive,
by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any
Environmental Law, (ii) in connection with any Environmental Liability, or (iii) in connection with any actual or alleged damage, injury,
threat or harm to natural resources or the environment.
“Environmental Laws”
means any and all Laws, judgments, orders, decrees, permits, concessions, grants, franchises, agreements or governmental restrictions
relating to pollution, the protection of human health or the environment, or the Release of any Hazardous Materials into the environment,
including those related to hazardous materials, substances or wastes (including the exposure thereto), air emissions and discharges to
waste or public systems.
“Environmental Liability”
means any liability (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities) of any
Loan Party or any Restricted Subsidiary directly or indirectly resulting from or based upon
(a)
any non-compliance with, or liability pursuant to, any Environmental Law,
(b)
the generation, use, handling, transportation, storage, treatment, disposal or presence of any Hazardous Materials,
(c)
exposure to any Hazardous Materials,
(d)
the Release or threatened Release of any Hazardous Materials or
(e)
any contract, agreement or other consensual arrangement pursuant to which liability is assumed, retained or imposed with respect
to any of the foregoing.
“Environmental Permit”
means any permit, approval, registration, identification number, license or other authorization required under any Environmental Law.
“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership
or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests
are outstanding on any date of determination.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto, and the rules and
regulations promulgated thereunder.
“ERISA Affiliate”
means any trade or business (whether or not incorporated) which, together with any Borrower is treated as a single employer under Section 414(b)
or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code or
Section 302 of ERISA) or Section 4001 of ERISA.
“ERISA Event”
means
(a)
a Reportable Event with respect to a Pension Plan;
(b)
a withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which it 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;
(c)
a complete or partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in “insolvency” (within the meaning of Section 4245 of ERISA), or “endangered” or “critical”
status (within the meaning of Section 432 of the Code or Section 305 of ERISA);
(d)
the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e)
an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Pension Plan or Multiemployer Plan;
(f)
the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, upon any Borrower or any ERISA Affiliate;
(g)
the failure to meet the minimum funding standard of Section 412 or 430 of the Code or Section 302 or 303 of ERISA with
respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA)
or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan;
(h)
a determination that any Pension Plan is, or is expected to be in “at-risk” status (as defined in Section 303(i)
of ERISA or Section 430(i) of the Code);
(i)
the assertion of a material claim (other than routine individual claims for benefits) against any Plan other than a Multiemployer
Plan or the assets thereof, or against any Loan Party or any of their respective ERISA Affiliates in connection with any Plan;
(j)
receipt from the IRS of notice of the failure of any Pension Plan (or any other Plan intended to be qualified under Section 401(a)
of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Code;
(k)
any other event or condition with respect to any Plan that would reasonably be expected to result in material liability of the
Loan Parties, taken as a whole; or
(l)
the conditions for the imposition of a Lien under Section 430(k) of the Code or Section 303(k) of ERISA are met with
respect to any Pension Plan.
“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.
“Event of Default”
has the meaning specified in Section 9.01.
“Excess Cash Flow”
means, for any fiscal year of Holdings,
(a)
the sum, without duplication, of
(i)
Consolidated EBITDA for such fiscal year and
(ii)
reductions to noncash working capital of Holdings and the Restricted Subsidiaries for such fiscal year (i.e., the decrease,
if any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year) including any realized and unrealized
losses relating to mark-to-market of amounts denominated in foreign currencies resulting from the application of FASB ASC 830 (including
realized and unrealized losses from exchange rate fluctuations on intercompany balances and balance sheet items, net of realized and unrealized
gains from related Swap Contracts) (excluding any changes in working capital due to the effects of purchase accounting adjustments)) minus
(b)
the sum, without duplication, of
(i)
the amount of any taxes paid in cash by Holdings and the Restricted Subsidiaries with respect to such fiscal year (including any
franchise taxes imposed in lieu of income taxes),
(ii)
Consolidated Interest Charges with respect to such fiscal year paid in cash,
(iii)
the amount of (a) any Capital Expenditures and the cash used during such period for investments (including any Permitted Acquisition)
made by Holdings and the Restricted Subsidiaries, in each case, to the extent permitted under this Agreement (whether or not such Capital
Expenditure, investment or acquisition shall have been consummated) and that are made in cash during such fiscal year, except to the extent
financed with the proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that would not
be included in Consolidated EBITDA and (b) capitalized software expenses and acquisitions of intellectual property,
(iv)
permanent scheduled repayments of principal of Indebtedness, including any premium, make-whole or penalty payments paid in respect
of such Indebtedness (other than Voluntary Prepayments and mandatory prepayments of the Loans under Section 2.05(b))
made in cash by Holdings and the Restricted Subsidiaries during such fiscal year, but only to the extent that the Indebtedness so prepaid
by its terms cannot be reborrowed or redrawn and such prepayments do not occur in connection with a refinancing of all or any portion
of such Indebtedness,
(v)
the cash amounts added back to Consolidated EBITDA during such fiscal year pursuant to the definition of such term (excluding,
for the avoidance of doubt, amounts added back to Consolidated EBITDA pursuant to clauses (a)(i) and (ii)
in the definition thereof to the extent such amounts are otherwise deducted from Excess Cash Flow pursuant to this clause (b)),
(vi)
additions to noncash working capital with respect to such fiscal year (i.e., the increase, if any, in Current Assets minus
Current Liabilities from the beginning to the end of such fiscal year) including any realized and unrealized gains relating to mark-to-market
of amounts denominated in foreign currencies resulting from the application of FASB ASC 830 (including realized and unrealized gains from
exchange rate fluctuations on intercompany balances and balance sheet items, net of realized and unrealized losses from related Swap Contracts),
(vii)
cash earnout and royalty payments made during such fiscal year to former owners of Acquired Entities that were not deducted as
expenses in determining Consolidated Net Income,
(viii)
the aggregate amount of Restricted Payments made in cash during such fiscal year in accordance with Section 8.05(a),
(ix)
the aggregate amount of any fees and expenses paid in cash during such fiscal year in connection with any Indebtedness permitted
to be incurred pursuant to Section 8.02 (whether or not consummated),
(x)
the amount of cash payments made in respect of pensions and other postemployment benefits paid during such fiscal year, to the
extent not deducted as expenses in determining Consolidated Net Income,
(xi)
cash losses from any sale or disposition outside the ordinary course of business, and
(xii)
cash expenditures in respect of Swap Contracts during such period.
The working capital adjustment in clause (a)(ii)
or (b)(vi) above, as applicable, shall include
(x) with respect to
any Permitted Acquisition of or by a Restricted Subsidiary consummated during such fiscal year, the amount by which the noncash working
capital attributable to such Restricted Subsidiary as of the date of the consummation of such acquisition exceeds (or is less than) the
noncash working capital attributable to such Restricted Subsidiary as of the end of such fiscal year and
(y) with respect to
any disposition of a Restricted Subsidiary (or disposition of all or substantially all of the assets of a Restricted Subsidiary or a line
of business of a Restricted Subsidiary) consummated during such fiscal year, the amount by which the noncash working capital attributable
to such Restricted Subsidiary as of the beginning of such fiscal year exceeds (or is less than) the noncash working capital attributable
to such Restricted Subsidiary as of the date of consummation of such disposition.
“Exchange Rate”
means on any day, with respect to any currency other than Dollars, the rate at which such currency may be exchanged into Dollars, as set
forth at approximately 11:00 a.m. (London time) on such day on the Bloomberg Key Cross-Currency Rates Page for such currency. In
the event that such rate does not appear on any Bloomberg Key Cross-Currency Rates Page, the Exchange Rate shall be determined by reference
to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and Holdings,
or, in the absence of such agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted,
at or about 10:00 a.m. (London time) on such date for the purchase of Dollars for delivery two Business Days later; provided
that, if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent, after consultation
with Holdings, may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent
manifest error.
“Excluded Assets”
has the meaning specified in each applicable Collateral Document.
“Excluded Subsidiary”
means
(i) any
Immaterial Subsidiary,
(ii) any
Unrestricted Subsidiary,
(iii) any
Subsidiary that is a CFC, a Foreign Subsidiary (other than a Material Canadian Subsidiary), or a CFC Holdco,
(iv) any
Non-Wholly Owned Subsidiary (for so long as such Subsidiary remains a Non-Wholly Owned Subsidiary),
(v) any
Subsidiary (other than a Material Canadian Subsidiary) with respect to which Holdings and the Administrative Agent reasonably agree that
because of, (taking into account the present and future direct and indirect costs and/or burden including, without limitation, the cost
of additional Taxes to the Restricted Group) the cost and/or burden of providing a guaranty of the Obligations is excessive in relation
to the benefits accruing to the Lenders,
(vi) any
subsidiary that is prohibited by applicable Law, rule or regulation or by any contractual obligations from guaranteeing the Obligations
or which would require governmental consent, approval, license or authorization to provide a guarantee unless such consent, approval,
license or authorization has been received,
(vii) any
not-for-profit subsidiary,
(viii) any
captive insurance subsidiary,
(ix) any
Receivables Subsidiary, and
(x) solely
in the case of any obligation under any secured hedging agreement that constitutes a “swap” within the meaning of section 1(a)(47)
of the Commodity Exchange Act, any subsidiary that is not an “Eligible Contract Participant” as defined under the Commodity
Exchange Act (after giving effect to the “keepwell provisions”)
provided that no Intermediate Holding
Company shall be an Excluded Subsidiary.
“Excluded Swap Obligation”
means, with respect to any Guarantor,
(a)
as it relates to all or a portion of the Guarantee of such Guarantor, any Swap Obligation if, and to the extent that, such 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 Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the Guarantee of such Guarantor becomes effective with respect to such Swap Obligation or
(b)
as it relates to all or a portion of the grant by such Guarantor of a security interest, any Swap Obligation if, and to the extent
that, such Swap Obligation (or such security interest in respect 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 Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the security interest of such Guarantor becomes effective with respect
to such Swap Obligation.
If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guarantee or security interest is or becomes illegal.
“Excluded Taxes”
means, in the case of the Administrative Agent and each Lender (including the L/C Issuers):
(a) taxes
imposed on or measured by its net income, and franchise taxes imposed on it, in each case, (x) by the jurisdiction (or any political subdivision
thereof) under the Laws of which the Administrative Agent or such Lender (including the L/C Issuers), as the case may be, is organized,
has its principal office, or in the case of any Lender (including an L/C Issuer), has its applicable lending office, or (y) by virtue
of any present or former connection between the Administrative Agent, Lender or L/C Issuer, as applicable, and the jurisdiction imposing
such Tax (other than connections arising solely by virtue of such recipient having executed, delivered, become a party to, performed its
obligations under, received or perfected a security interest under, received payments under, engaged in any other transaction pursuant
to or enforced the Loan Documents, or sold or assigned an interest in any Loan or Loan Document),
(b) branch
profits taxes imposed by a jurisdiction described under clause (a) above,
(c) in
the case of a Foreign Lender with respect to a US Borrower (other than an assignee that acquires its interest in a Loan pursuant to a
request by the Borrowers under Section 11.15), any United States federal withholding tax that is imposed on amounts payable to such Foreign
Lender under the law applicable at the time such Lender becomes a party to this Agreement (or designates a new lending office) except
to the extent that such Lender (or its assignor, if any) was entitled, immediately before designation of a new lending office (or assignment),
to receive additional amounts with respect to such withholding tax pursuant to Section 3.01,
(d) taxes
attributable to the failure to comply with Section 11.14,
(e) any
U.S. federal withholding taxes imposed under FATCA and
(f) in
the case of a Lender with respect to a Borrower that is a Canadian Loan Party (other than an assignee pursuant to a request by the Borrowers
under Section 11.15), any Canadian federal withholding tax that is imposed on or in respect of any amounts payable to or for the benefit
of the Lender arising as a result of such Lender (i) not dealing at arm’s length (within the meaning of the Canadian ITA) with a
Canadian Loan Party, (ii) being a “specified entity” (as defined in the Canadian ITA), in respect of a Canadian Loan Party
or (iii) being a “specified non-resident shareholder” of a Canadian Loan Party or a non-resident person not dealing at arm’s
length with a “specified shareholder” of a Canadian Loan Party (in each case within the meaning of the Canadian ITA), except,
in the case of (i), (ii) or (iii), where the non-arm’s length relationship arises, the Lender is a “specified entity”
in respect of the Canadian Loan Party or the Lender is a “specified non-resident shareholder” or does not deal at arm’s
length with a “specified shareholder” of the Canadian Loan Party, solely as a result of the Lender having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or enforced
this Agreement or any other Loan Document.
“Existing Credit
Agreement” means the Amended and Restated Credit Agreement, dated as of January 23, 2020, by and among Rockwood, as
borrower, ASP Acuren Intermediate Holdings, Inc., as holdings, the lenders and issuing banks party thereto and Bank of America, N.A.,
as administrative agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the
Closing Date.
“Existing Credit
Agreement Refinancing” means the repayment in full of the Indebtedness of Rockwood and its Subsidiaries under the Existing
Credit Agreement and the termination and release of all commitments, security interests and guarantees in connection therewith.
“Existing Loans”
has the meaning specified in Section 2.16(a).
“Existing Revolving
Credit Commitments” has the meaning specified in Section 2.16(a).
“Existing
Revolving Loans” has the meaning specified in Section 2.16(a).
“Existing Revolving
Tranche” has the meaning specified in Section 2.16(a).
“Existing Term Loan
Tranche” has the meaning specified in Section 2.16(a).
“Existing Term Loans”
has the meaning specified in Section 2.16(a).
“Existing Tranche”
has the meaning specified in Section 2.16(a).
“Extended Loans”
has the meaning specified in Section 2.16(a).
“Extended Revolving
Credit Commitments” has the meaning specified in Section 2.16(a).
“Extended Revolving
Credit Loans” has the meaning specified in Section 2.16(a).
“Extended Revolving
Credit Tranche” has the meaning specified in Section 2.16(a).
“Extended Term Loans”
has the meaning specified in Section 2.16(a).
“Extended Term Tranche”
has the meaning specified in Section 2.16(a).
“Extended Tranche”
has the meaning specified in Section 2.16(a).
“Extending Lender”
has the meaning specified in Section 2.16(b).
“Extension”
has the meaning specified in Section 2.16(b).
“Extension Amendment”
has the meaning specified in Section 2.16(c).
“Extension Date”
has the meaning specified in Section 2.16(c).
“Extension Election”
has the meaning specified in Section 2.16(b).
“Extension Request”
has the meaning specified in Section 2.16(a).
“Extension Request
Deadline” has the meaning specified in Section 2.16(b).
“Facility”
means each of
(a)
the Initial Term Loan Facility,
(b)
any New Term Loan Facility,
(c)
the Initial Revolving Credit Facility and
(d)
any New Revolving Credit Facility,
in each case, as the context may require.
“Factoring Agreement”
means a customary market agreement by and between Holdings or a Restricted Subsidiary and a Factoring Company pursuant to which Holdings
or such Restricted Subsidiary shall, pursuant to customary terms for the size and type of transaction involved, sell, transfer and assign
its rights, title and interests in certain accounts receivable, specifically identified therein, to a Factoring Company.
“Factoring Company”
means any counterparty (that is not an Affiliate of Holdings) to any Factoring Agreement to whom Holdings or any Restricted Subsidiary
sells, transfers and assigns its right, title and interests in certain accounts receivable pursuant to the terms of such Factoring Agreement.
“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 and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any
agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted
pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of
the Code.
“Federal Funds Effective
Rate” means, for any day, the rate calculated by the Federal Reserve Bank of New York based on such day’s federal
funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on
its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the
federal funds effective rate; provided, that if the Federal Funds Effective Rate for any day is less than zero, the Federal
Funds Effective Rate for such day will be deemed to be zero.
“First Lien Net
Leverage Ratio” means, as of any date of determination, the ratio of
(a)
Consolidated First Lien Indebtedness as of such date minus the unrestricted cash and Cash Equivalents of Holdings
and the Restricted Subsidiaries as of such date to
(b)
Consolidated EBITDA for the period of the four fiscal quarters most recently ending on such date.
“Fixed Charge Coverage
Ratio” means, as of any date of determination, the ratio of
(a)
Consolidated EBITDA for the period of the four fiscal quarters most recently ending on such date to
(b)
Fixed Charges for the period of the four fiscal quarters most recently ending on such date.
“Fixed Charges”
means, for any period, the sum of
(1) the cash portion of Consolidated
Interest Charges for such period,
(2) all cash dividends or other
distributions paid (excluding items eliminated in consolidation) on any series of preferred stock during such period; and
(3) all cash dividends or other
distributions paid or accrued (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period;
provided that, solely for purposes
of calculating the Fixed Charge Coverage Ratio for any period,
(i) the cash portion of Consolidated
Interest Charges attributable to any Indebtedness repaid during such period shall be excluded for such period (assuming such Indebtedness
had been repaid immediately prior to the beginning of such period) and
(ii) the
cash portion of Consolidated Interest Charges attributable to any Indebtedness incurred during such period shall be annualized for such
period (assuming such Indebtedness had been incurred on the first day of such period).
“Floor”
means 0.00%.
“Foreign Lender”
has the meaning specified in Section 11.14(a).
“Foreign Subsidiary”
means any Restricted Subsidiary that is not a US Subsidiary.
“FRB”
means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure”
means, at any time there is a Defaulting Lender, with respect to each L/C Issuer, such Defaulting Lender’s Pro Rata Share of the
L/C Obligations with respect to Letters of Credit issued by such L/C Issuer other than L/C 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.
“Fully Satisfied”
means, with respect to the Obligations as of any date, that, as of such date,
(a)
all principal of and interest accrued to such date which constitute Obligations shall have been irrevocably paid in full in cash,
(b)
all fees, expenses and other amounts then due and payable which constitute Obligations shall have been irrevocably paid in cash,
(c)
all outstanding Letters of Credit shall have been (i) terminated, (ii) fully irrevocably Cash Collateralized or (iii) secured
by one or more letters of credit on terms and conditions, and with one or more financial institutions, reasonably satisfactory to the
applicable L/C Issuer and
(d)
the Commitments shall have expired or been terminated in full.
“Fund”
has the meaning specified in Section 11.06(g).
“GAAP”
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently applied.
“General Junior
Debt Prepayments Basket” has the meaning specified in Section 8.05(l).
“General Restricted
Payments Basket” has the meaning specified in Section 8.05(j).
“Govern”
has the meaning specified in the definition of “Affiliate.”
“Governmental Authority”
means any nation or government, any state, province or territory or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government including, without limitation, any agency of the European Union or
similar monetary or multinational authority.
“Granting Lender”
has the meaning specified in Section 11.06(b)(vii).
“Guarantee”
means, as to any Person,
(a)
any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness
or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect,
(i)
to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation,
(ii)
to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or
other obligation of the payment or performance of such Indebtedness or other obligation,
(iii)
to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash
flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or
(iv)
entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or
(b)
any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness
or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien).
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 by
the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors”
means a collective reference to Holdings, each Intermediate Holding Company, the Subsidiary Guarantors and, except with respect to their
own respective Obligations, the Borrowers; provided that the Guarantors shall not include any Excluded Subsidiaries.
“Guaranty”
means, collectively, the Guaranty made by the Guarantors in favor of the Administrative Agent and the Lenders pursuant to Article IV.
“Hazardous Materials”
means any material, substance or waste that is listed, regulated, or otherwise defined as hazardous, toxic, radioactive, a pollutant or
a contaminant (or words of similar regulatory intent or meaning) under applicable Environmental Law, or which could give rise to liability
under any Environmental Law, including, but not limited to, all explosive or radioactive substances or wastes, petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and pesticides.
“Hedge Bank”
means (a) any Designated Hedge Bank and (b) any Person that is an Agent, Arranger, Lender or any Affiliate of any of the foregoing, in
each case, at the time the applicable Secured Hedge Agreement is entered into, irrespective of whether such Person ceases to be an Agent,
Arranger, Lender or any Affiliate of any of the foregoing after entering into the applicable Secured Hedge Agreement.
“Holdings”
has the meaning specified in the preamble.
“Holdings Audited
Financial Statements” means the audited consolidated balance sheets of Holdings and its Subsidiaries for the fiscal year
ended November 30, 2023, and, in each case, related consolidated statements of income, stockholders’ equity and cash flows for such
fiscal years.
“Honor Date”
has the meaning specified in Section 2.03(c)(i).
“Immaterial Subsidiary”
means each Restricted Subsidiary designated as such by Holdings to the Administrative Agent in writing that meets all of the following
criteria calculated on a Pro Forma Basis by reference to the most recently delivered set of financial statements delivered pursuant to
Section 7.01(a):
(a)
the consolidated total assets of such Restricted Subsidiary and its Subsidiaries which qualify as Restricted Subsidiaries as of
the date of such financial statements, do not exceed an amount equal to 5.0% of the Consolidated Total Assets of Holdings and the Restricted
Subsidiaries as of such date; and
(b)
the consolidated total assets of all Immaterial Subsidiaries and their respective Subsidiaries, taken as a whole, as of the date
of such financial statements, do not exceed an amount equal to 10.0% of the Consolidated Total Assets of Holdings and the Restricted Subsidiaries
as of such date.
As of the Closing Date, Holdings designates each
of the Restricted Subsidiaries listed on Schedule 1.01(g) hereto as Immaterial Subsidiaries.
“Increased Amount
Date” has the meaning specified in Section 2.14(a).
“Incremental Amendment”
has the meaning specified in Section 2.14(a).
“Incremental Commitment”
means any commitment made by a lender to provide all or any portion of an Incremental Facility or Incremental Loans.
“Incremental Facilities”
has the meaning assigned to such term in Section 2.14(a).
“Incremental Loans”
has the meaning assigned to such term in Section 2.14(a).
“Incremental Revolving
Credit Facility” has the meaning assigned to such term in Section 2.14(a).
“Incremental Revolving
Credit Loans” has the meaning assigned to such term in Section 2.14(a).
“Incremental Term
Facility” has the meaning assigned to such term in Section 2.14(a).
“Incremental Term
Loans” has the meaning assigned to such term in Section 2.14(a).
“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the following:
(a)
all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements, convertible securities (to the extent that they have put provisions that are exercisable during the term of this Agreement)
or other similar instruments;
(b)
all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;
(c)
all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in
the ordinary course of business), including earnout obligations solely to the extent such obligations become a liability on the balance
sheet of such Person in accordance with GAAP;
(d)
indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;
(e)
Synthetic Lease Obligations; and
(f)
all Guarantees of such Person in respect of any of the foregoing; if and to the extent that any of the foregoing Indebtedness (other
than Guarantees, Letters of Credit and Swap Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto)
of such Person prepared in accordance with GAAP.
For all purposes hereof, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse
to such Person. The amount of any Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness
in respect thereof as of such date.
“Indemnified Taxes” means:
(a) 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 clause (a), Other Taxes.
“Indemnitee”
has the meaning specified in Section 11.04(b).
“Information”
has the meaning specified in Section 11.07.
“Informational Website”
has the meaning specified in Section 7.02.
“Initial Availability
Period” means the period from and including the Closing Date to but excluding the earliest of
(a)
the Initial Revolving Credit Maturity Date,
(b)
the date of termination of the Initial Revolving Credit Commitments pursuant to Section 2.06 and
(c)
the date of termination of the commitment of each Initial Revolving Credit Lender to make Initial Revolving Credit Loans and of
the obligation of each L/C Issuer to make L/C Credit Extensions pursuant to Section 9.02.
“Initial Borrower”
has the meaning specified in the preamble hereto.
“Initial Revolving
Credit Commitments” means, as to each Initial Revolving Credit Lender, its obligation to
(a)
make Initial Revolving Credit Loans to a Borrower pursuant to Section 2.01 and
(b)
purchase participations in L/C Obligations,
in each case, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such Initial Revolving Credit Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Revolving Credit Lender becomes a party hereto, as applicable, as such amount
may be adjusted from time to time in accordance with this Agreement. The aggregate amount of Initial Revolving Credit Commitments on the
Closing Date is $75,000,000.
“Initial Revolving
Credit Facility” means the Initial Revolving Credit Commitments and the extensions of credit made thereunder.
“Initial Revolving
Credit Lenders” means, at any time, any Revolving Credit Lender that has an Initial Revolving Credit Commitment or an outstanding
Initial Revolving Credit Loan at such time.
“Initial Revolving
Credit Loan” has the meaning specified in Section 2.01.
“Initial Revolving
Credit Maturity Date” means, with respect to any Initial Revolving Credit Loan, the earlier of
(i) the
fifth anniversary of the Closing Date and
(ii) the
date of termination in whole of the Initial Revolving Credit Commitments and the Letter of Credit Commitments pursuant to Section 2.06
or 9.02.
“Initial Term Loan”
has the meaning specified in Section 2.01.
“Initial Term Loan
Commitment” means, as to each Term Loan Lender, its obligation to make Term Loans to the Borrowers
(i) pursuant
to Section 2.01 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite
such Term Loan Lender’s name on Schedule 2.01 under the caption “Initial Term Loan Commitment”, and
(ii) in
the Assignment and Assumption pursuant to which such Term Loan Lender becomes a party hereto,
in each case, as such amount
may be adjusted from time to time in accordance with this Agreement.
The aggregate amount of Initial
Term Loan Commitments on the Closing Date is $775,000,000.
“Initial Term Loan
Facility” means the Initial Term Loan Commitments and the Initial Term Loans made thereunder.
“Initial Term Loan
Lender” means, at any time, any Lender that has an Initial Term Loan Commitment or an outstanding Initial Term Loan at such
time.
“Initial Term Loan
Maturity Date” means the date that is seven years after the Closing Date, which date is July 30, 2031.
“Intellectual Property
Security Agreement” means each Patent Security Agreement, Trademark Security Agreement and Copyright Security Agreement
to be executed and delivered by a Loan Party, substantially in the form of Exhibits A, B and C
to the Pledge and Security Agreement, respectively, or such other form approved by the Administrative Agent.
“Interest Payment
Date” means,
(a)
as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and in the case of any
Term Loans, the applicable Term Loan Maturity Date, or in the case of Revolving Credit Loans, the applicable Revolving Credit Maturity
Date; provided, however, that if any Interest Period for a Term SOFR Loan exceeds three months, the respective
dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and
(b)
as to any Base Rate Loan, the last Business Day of each March, June, September and December and in the case of any Term Loans,
the applicable Term Loan Maturity Date, or in the case of Revolving Credit Loans, the applicable Revolving Credit Maturity Date.
“Interest Period”
means, as to
(a)
each Term Loan that is a Term SOFR Loan, the period commencing on the date such Term SOFR Loan is disbursed or converted to or
continued as a Term SOFR Loan and ending on the date one, three or six months thereafter (or twelve months or such other period, if agreed
to by all applicable Term Loan Lenders); and
(b)
each Revolving Credit Loan that is a Term SOFR Loan, the period commencing on the date such Term SOFR Loan is disbursed or converted
to or continued as a Term SOFR Loan and ending on the date one, three or six months thereafter (or twelve months or such other period,
if agreed to by all applicable Revolving Credit Lenders);
provided that:
(i) any
Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(ii) any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such
Interest Period; and
(iii) no
Interest Period shall extend beyond, in the case of any Term Loans, the applicable Term Loan Maturity Date, or in the case of Revolving
Credit Loans, the applicable Revolving Credit Maturity Date.
“Intermediate Holding
Company” means any Subsidiary of Holdings that is a direct or indirect parent company of the Borrower, which shall be a
Person organized in the United States.
“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 capital stock or other securities of another Person,
(b)
a loan, advance or capital contribution to, Guarantee or assumption of debt 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 assets of another Person that constitute
a business unit.
For purposes of covenant compliance, the amount
of any Investment shall be the amount actually invested, or the fair market value of non-cash assets (including in the case of legal (but
not beneficial) ownership of assets held as a trustee, a fair market value of zero) contributed without adjustment for subsequent increases
or decreases in the value of such Investment.
“IRS”
means the United States Internal Revenue Service.
“Issuer Documents”
means with respect to any Letter of Credit, the Letter of Credit Application and any other document, agreement and instrument entered
into by the applicable L/C Issuer and any Restricted Subsidiary or in favor of the applicable L/C Issuer and relating to such Letter of
Credit.
“Judgment Currency”
shall have the meaning assigned to such term in Section 11.23(a).
“Judgment Currency
Conversion Date” shall have the meaning assigned to such term in Section 11.23(a).
“Latest Maturity
Date” shall mean, at any date, the latest maturity date of all classes of Loans or Commitments that are outstanding on such
date.
“Laws”
means, collectively, all international, foreign, Federal, state, regional, provincial, territorial, municipal and local laws, statutes,
treaties, rules, regulations or any determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such person or any of its Real Property or personal property or to which such person or any of its property of any
nature is subject.
“L/C Advance”
means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance
with its Pro Rata Share.
“L/C Borrowing”
means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.
“L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase
of the amount thereof.
“L/C Issuer”
means as the context may require, each of Jefferies Finance LLC, Citibank, N.A. and UBS AG, Stamford Branch and any other Revolving Credit
Lender that may become an L/C Issuer pursuant to Section 2.03(m), with respect to Letters of Credit issued by such
Revolving Credit Lender. Any L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by affiliated or
unaffiliated financial institutions of such L/C Issuer, in which case the term “L/C Issuer” shall include any such affiliated
or unaffiliated financial institutions of such L/C Issuer with respect to Letters of Credit issued by such affiliated or unaffiliated
financial institutions of such L/C Issuer.
“L/C Obligations”
means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.
“LCT Election”
means Holdings’ election to exercise its right to designate any acquisition or similar Investment, or repayment, redemption of or
offer to purchase of Indebtedness (in each case the consummation of which is not conditioned on the availability of, or on obtaining,
third party financing) as a Limited Condition Transaction pursuant to the terms of this Agreement.
“LCT Test Date”
means, in respect of any Limited Condition Transaction, the date on which the definitive agreement for any such Limited Condition Transaction
is entered into or, if elected by Holdings in respect of repayment, redemption of or offer to purchase of Indebtedness, the date that
Holdings provides notice to holders of such Indebtedness of such repayment, redemption or offer to purchase.
“Leases”
means any and all leases, subleases, tenancies, options, concession agreements, rental agreements, occupancy agreements, franchise agreements,
access agreements and any other agreements (including all amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter entered into, affecting the use or occupancy of all or any
portion of any Real Property.
“Lender”
has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuers.
“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify Holdings and the Administrative Agent.
“Letter of Credit”
means any letter of credit issued hereunder in Dollars. A Letter of Credit shall be a standby letter of credit.
“Letter of Credit
Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time
to time in use by the applicable L/C Issuer.
“Letter of Credit
Commitment” means the commitment of the L/C Issuers to issue Letters of Credit pursuant to Section 2.03.
“Letter of Credit
Expiration Date” means the day that is five Business Days prior to the Initial Revolving Credit Maturity Date (or, if such
day is not a Business Day, the next preceding Business Day).
“Letter of Credit
Fee” has the meaning specified in Section 2.03(i).
“Letter of Credit
Sublimit” means, as the context may indicate, (x) for the L/C Issuers, collectively, an amount equal to $20,000,000 and
(y) for any L/C Issuer, individually, the amount set forth on Schedule 2.01 or across from such L/C Issuer’s
name. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property, and any financing
lease having substantially the same economic effect as any of the foregoing).
“Limited
Condition Transaction” shall mean any
(i) acquisition or similar Investment
by Holdings or any Restricted Subsidiary of or in any assets, business or Person permitted by this Agreement or
(ii) repayment or redemption
of, or offer to purchase, any indebtedness permitted by this Agreement,
in each case the consummation of which is not
conditioned on the availability of, or on obtaining, third party financing.
“Loan”
means an extension of credit by a Lender to any Borrower under Article II in the form of a Term Loan or a Revolving
Credit Loan.
“Loan Documents”
means, collectively, this Agreement, each Note, each Issuer Document, each joinder agreement referred to in Section 2.14,
each Subsidiary Joinder Agreement and the Collateral Documents.
“Loan Parties”
means, collectively, the Borrowers and the Guarantors.
“Majority Facility
Lenders” means
(a) with respect to the Term
Loan Facility, the holders of a majority of the aggregate unpaid principal amount of the Term Loan Commitments and Term Loans outstanding
under the Term Loan Facility and
(b) with respect to the Revolving
Credit Facility, the holders of a majority of the sum of (i) the unused portion of the Revolving Credit Commitments then in effect and
(ii) the Total Outstandings at such time.
“Market Capitalization”
means, with respect to the making of any Restricted Payment, an amount equal to the product of
(a)
the total number of issued and outstanding shares of common Equity Interests of Holdings on the date of declaration of such Restricted
Payment multiplied by
(b)
the arithmetic mean of the closing prices per share of such Equity Interests on the principal securities exchange on which such
Equity Interests are listed for the 30 consecutive trading days immediately preceding the date of declaration of such Restricted Payment.
“Material Adverse
Effect” means
(a)
a material adverse change in, or a material adverse effect upon, the operations, business, liabilities (actual or contingent) or
condition (financial or otherwise) of Holdings and the Restricted Subsidiaries taken as a whole;
(b)
a material impairment of the rights and remedies of the Administrative Agent or any Lender under the Loan Documents, taken as a
whole; or
(c)
a material adverse effect upon the legality, validity, binding effect or enforceability against Holdings and the Restricted Subsidiaries
taken as a whole of any Loan Document to which they are a party.
“Material Canadian
Subsidiary” means, each Subsidiary of Holdings incorporated or otherwise organized in Canada that is not an Immaterial Subsidiary.
“Material Real Property”
means any parcel of Real Property located in the United States or Canada now or hereafter owned in fee by any Loan Party that,
(a)
is not located in a designated “flood hazard area” in any flood insurance rate map published by the Federal Emergency
Management Agency (or any successor agency) and
(b)
together with any improvements thereon, individually has a fair market value of at least $20,000,000 as at
(i)
(x) the Closing Date, for Real Property owned as of the Closing Date or (y) the date of acquisition for Real Property acquired
after the Closing Date, in each case as reasonably estimated in good faith by Holdings or
(ii)
the time of any material improvement on such Real Property described in clause (i)(y).
“Maximum Rate”
has the meaning specified in Section 11.09.
“MFN Adjustment”
has the meaning specified in Section 2.14(d).
“Minimum Collateral
Amount” means, at any time,
(a)
with respect to cash collateral consisting of cash or deposit account balances, an amount equal to 103% of the Fronting Exposure
of any L/C Issuer with respect to Letters of Credit issued and outstanding at such time and
(b)
for purposes of Section 2.15, an amount reasonably determined by the Administrative Agent and the applicable
L/C Issuer.
“Minimum Extension
Condition” has the meaning specified in Section 2.16(e).
“MIRE Event”
means, if there are any Mortgaged Properties located in the United States of America at such time, any increase, extension or renewal
of any of the Commitments or Loans (including an Incremental Loan or any other Incremental Facilities hereunder, but excluding any continuation
or conversion of borrowings, the making of any Loan or the issuance, renewal or extension of Letters of Credit).
“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage”
means an agreement, including, but not limited to, a fee mortgage, deed of trust, charge, deeds to secure debt, assignment of rents and
leases or any other document, creating and evidencing a Lien on a Mortgaged Property and delivered pursuant to Section 7.12,
as may be amended, modified, supplemented, extended and/or consolidated from time to time, which shall be in form reasonably satisfactory
to the Administrative Agent, with such schedules and including such provisions as shall be necessary to conform such document to applicable
local or foreign law or as shall be customary under applicable local or foreign law.
“Mortgaged Property”
means
(a)
each owned Material Real Property located in the United States of America or Canada and identified as a “Mortgaged Property”
on Schedule 1.01(c) and
(b)
each Material Real Property located in the United States of America or Canada, if any, owned by any Loan Party and which shall
be subject to a Mortgage delivered after the Closing Date pursuant to Section 7.12.
“Multiemployer Plan”
means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding six plan years, has made or been obligated to make contributions,
or has any liability or obligation, whether fixed or contingent.
“Net Cash Proceeds”
means,
(a)
with respect to any Asset Sale or Recovery Event, the excess, if any, of
(i)
the sum of cash and Cash Equivalents received therefrom (including any cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over
(ii)
the sum of
(A)
the principal amount of any Indebtedness that is secured by such asset and that is required to be repaid in connection with the
sale thereof (other than Indebtedness under the Loan Documents),
(B)
the out-of-pocket expenses incurred by Holdings or any Restricted Subsidiary in connection therewith and
(C)
income taxes reasonably estimated to be actually payable as a result of any gain recognized in connection therewith;
provided, however,
that, if
(x) the Borrowers
shall deliver a certificate of a Responsible Officer of the Borrowers to the Administrative Agent at the time of receipt thereof setting
forth the Borrowers’ intent to reinvest such proceeds to acquire, maintain, develop, construct, improve, upgrade or repair productive
assets of a kind then used or usable in the business of Holdings and the Restricted Subsidiaries (including, without limitation, through
a Permitted Investment or Permitted Acquisition) (1) within (A) 18 months of receipt of such proceeds or (B) if the Borrowers enter into
a legally binding commitment to reinvest such proceeds within 18 months following receipt thereof, within the earlier of 180 days following
the date such legally binding commitment is entered into and the date on which such legally binding commitment terminates or is abandoned
without the consummation of the reinvestment contemplated thereby or (2) retroactively apply such proceeds to investments made within
12 months prior to receipt thereof (such applicable period described in clause (1) or (2), the “Reinvestment
Period”) and
(y) no Default or
Event of Default shall have occurred and shall be continuing at the time of such certificate or at the proposed time of the application
of such proceeds, such proceeds shall not constitute Net Cash Proceeds except to the extent not so used at the end of the Reinvestment
Period, at which time such proceeds shall be deemed to be Net Cash Proceeds; provided, further, that any proceeds
of such a Recovery Event (from settlement of insurance or otherwise) shall be remitted to the Borrowers so long as such proceeds are not
deemed to be Net Cash Proceeds; and
(b)
with respect to any issuance or disposition of Indebtedness, the cash proceeds thereof, net of all taxes and reasonable and customary
fees, commissions, costs and other expenses incurred by Holdings or any Restricted Subsidiary in connection therewith.
“New
Incremental Lender” has the meaning specified in Section 2.14(a).
“New Revolving Credit
Facility” has the meaning assigned to such term in Section 2.14(a) of this Agreement.
“New Term Loan Commitments”
mean the commitments in respect of any New Term Loan Facility.
“New Term Loan Facility”
has the meaning assigned to such term in Section 2.14(a) of this Agreement.
“New Term Loan Maturity
Date” means the maturity date or expiration date of any New Term Loan.
“New Term Loans”
means any advance made by a Lender under a New Term Loan Facility.
“Non-Consenting
Lender” has the meaning specified in Section 11.01.
“Non-Extending Lender”
has the meaning specified in Section 2.16(d).
“Non-Wholly Owned
Subsidiary” means any Subsidiary all of the Equity Interests in which are not, at the time, directly or indirectly owned
by Holdings, other than any Subsidiary that becomes a Non-Wholly Owned Subsidiary after the Closing Date as a result of
(A) the
Disposition or issuance of Equity Interests of such Subsidiary, in either case, to a Person that is an Affiliate,
(B) the
issuance of directors’ qualifying shares,
(C) any
transaction entered into primarily for the purpose of such Subsidiary ceasing to constitute a Guarantor or
(D) the
Disposition or issuance of Equity Interests of such Subsidiary for less than the fair market value of such shares (as reasonably determined
by Holdings).
“Nonrenewal Notice
Date” has the meaning specified in Section 2.03(b)(iii).
“Note”
or “Notes” means the Term Loan Notes and/or the Revolving Credit Notes, individually or collectively, as appropriate.
“Obligation Currency”
has the meaning specified in Section 11.23(a).
“Obligations”
means
(a)
all advances to, and debts, liabilities, obligations, covenants and duties of
(i)
any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising including the
obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding,
(ii)
any Loan Party or any Restricted Subsidiary arising under any Secured Hedge Agreement, at the option of the Borrowers at the time
such Loan Party or such Restricted Subsidiary enters into such Secured Hedge Agreement,
(iii)
any Loan Party or any Restricted Subsidiary arising under any Secured Treasury Management Agreement, at the option of the Borrowers
at the time such Loan Party or Restricted Subsidiary enters into such Secured Treasury Management Agreement and
(b)
the obligation of any Loan Party to reimburse any amount in respect of any of the foregoing that any Lender may elect to pay or
advance on behalf of such Loan Party in accordance with the Loan Documents. Notwithstanding anything to the contrary set forth herein,
the “Obligations” shall not include any Excluded Swap Obligations.
“OFAC”
means the Office of Foreign Assets Control of the U.S. Treasury Department or the U.S. Department of State.
“OID”
has the meaning specified in the definition of “Yield”.
“option right”
has the meaning specified in the definition of “Change of Control”.
“Organization Documents”
means,
(a)
with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive
documents with respect to any non-U.S. jurisdiction);
(b)
with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement;
and
(c)
with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and,
if applicable, any certificate or articles of formation or organization of such entity.
“Other Taxes”
has the meaning specified in Section 3.01(b).
“Otherwise Applied”
means, with respect to any Net Cash Proceeds, the amount of such Net Cash Proceeds that were previously applied under the Loan Documents.
“Outstanding Amount”
means
(i) with respect to Revolving
Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or
repayments of Revolving Credit Loans occurring on such date and
(ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on
such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements
of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters
of Credit taking effect on such date.
“Participant”
has the meaning specified in Section 11.06(d).
“Participant Register”
has the meaning specified in Section 11.06(d).
“Patriot Act”
has the meaning specified in Section 11.19.
“Paying Agent”
has the meaning specified in Section 10.07.
“PBGC”
means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan”
means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to either Title IV of ERISA or Section 412 of the Code and is sponsored or maintained by any Borrower or any
ERISA Affiliate or to which any Borrower or any ERISA Affiliate contributes or has an obligation to contribute or under which any Borrower
or ERISA Affiliate has any liability or obligation, whether fixed or contingent, or in the case of a multiple employer or other plan described
in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding six plan years.
“Perfection Certificate”
means the Pre-Closing UCC Diligence Certificate substantially in the form of Exhibit E or such other form approved
by the Administrative Agent.
“Periodic Term SOFR
Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Permitted Acquisition”
means the acquisition by Holdings or any Wholly-Owned Restricted Subsidiary of all or substantially all the assets of a Person or line
of business of such Person or at least a majority of the outstanding Equity Interests of a Person (referred to herein as the “Acquired
Entity”); provided that
(a)
the Acquired Entity shall be a going concern and shall be in a similar or adjacent line of business (or one reasonably ancillary
or complementary thereto, or which is a reasonable extension, development or expansion thereof) as that of the Borrowers and the Restricted
Subsidiaries as conducted during the current and most recently concluded calendar year;
(b)
(A) no Event of Default or Default shall have occurred and be continuing both immediately before and immediately after the execution
of the acquisition agreement by the relevant Restricted Group member and applicable seller(s), and
(B) at the time of
such transaction, Holdings shall be in Pro Forma Compliance with the financial covenant set forth in Section 8.10 (whether
or not such covenant is then applicable);
(c)
unless the Total Net Leverage Ratio is less than or equal to 3.80:1.00 on a Pro Forma Basis, the aggregate amount of the consideration,
not otherwise permitted by the provisions of this Agreement, paid in connection with such acquisition of an Acquired Entity that does
not become a Guarantor and any related acquisitions of an Acquired Entity that does not become a Guarantor (including Indebtedness of
the Acquired Entity that is assumed by or on behalf of Holdings and the Restricted Subsidiaries for any such purchase or other acquisition
of an entity that does not become a Guarantor (including by way of merger or amalgamation) when aggregated with the total cash and noncash
consideration (calculated on the same basis and not otherwise permitted by the provisions of this Agreement) paid by or on behalf of Holdings
and the Restricted Subsidiaries for all other purchases and other acquisitions made by the Borrowers and the Restricted Subsidiaries after
the Closing Date of entities that do not become Guarantors (including by way of merger or amalgamation)), shall not exceed the greater
of (x) $80,000,000 and (y) 40% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been
delivered pursuant to Section 7.01;
(d)
upon the consummation of such Permitted Acquisition, the Acquired Entity shall be a Restricted Subsidiary,
(e)
Holdings and the Restricted Subsidiaries shall not incur or assume any Indebtedness in connection with such acquisition, except
as permitted by Section 8.02; and
(f)
Holdings shall comply, and shall cause the Acquired Entity to comply, with the applicable provisions of Sections 7.12
and 7.14 and the Collateral Documents.
“Permitted Equal
Priority Refinancing Debt” means any secured Indebtedness incurred by any Loan Party in the form of one or more series of
senior secured notes, bonds or debentures or secured loans; provided that
(a)
such Indebtedness is secured by Liens on all or a portion of the Collateral on an equal priority basis with the Liens on the Collateral
securing the Obligations (but without regard to the control of remedies) and is not secured by any property or assets other than the Collateral,
(b)
such Indebtedness satisfies the applicable requirements set forth in the provisos to the definition of “Credit Agreement
Refinancing Indebtedness”,
(c)
such Indebtedness is not at any time guaranteed by any Restricted Subsidiary that is not a Loan Party and
(d)
the holders of such Indebtedness (or their representative) and the Administrative Agent and/or Collateral Agent shall become parties
to a Customary Intercreditor Agreement providing that the Liens on the Collateral securing such obligations shall rank equal in priority
to the Liens on the Collateral securing the Obligations (but without regard to the control of remedies).
“Permitted Holders”
means Martin E. Franklin and/or his Affiliates.
“Permitted Intercompany
Transaction” means
(a)
a merger, amalgamation or consolidation solely of one or more Subsidiaries of Holdings (provided that,
(x) if one of such
Subsidiaries is a Loan Party, the result of such merger, amalgamation or consolidation is that the surviving entity is a Loan Party,
(y) if one of the
Subsidiaries is a Restricted Subsidiary, the result of such merger, amalgamation or consolidation is that the surviving entity is a Restricted
Subsidiary and
(z) if one of such
Subsidiaries is a Borrower, the result of such merger, amalgamation or consolidation is that the surviving entity is a Borrower);
(b)
a transaction consisting of the acquisition (which may, without limitation, occur through the liquidation and/or dissolution of
a Subsidiary) of
(i)
all or substantially all of the Equity Interests of any Subsidiary of Holdings,
(ii)
all or substantially all of the assets of any Subsidiary of Holdings or
(iii)
all or substantially all of the assets constituting the business of a division, branch or other unit operation of any Subsidiary
of Holdings,
in each case, by any one or more Loan Parties
(provided, that if the transaction consists of the acquisition of the Equity Interests, assets or business of a division,
branch or other unit or operation of a Borrower, the acquiring party shall be a Borrower);
(c)
a transaction consisting of the acquisition (which may, without limitation, occur through the liquidation and/or dissolution of
such Subsidiary) of
(i)
all or substantially all of the Equity Interests of any Subsidiary of Holdings that is not a Loan Party,
(ii)
all or substantially all of the assets of any Subsidiary of Holdings that is not a Loan Party,
(iii)
all or substantially all of the assets constituting the business of a division, branch or other unit operation of any Subsidiary
of Holdings that is not a Loan Party or
(iv)
any other similar intercompany transaction by any one or more Subsidiaries of Holdings that is consented to by the Administrative
Agent and is not materially adverse to the Lenders as reasonably determined by the Administrative Agent;
provided that, (x) if the transaction
consists of the acquisition of Equity Interests, assets or business of a division, branch or other unit or operation of a Subsidiary that
is a Restricted Subsidiary, the acquiring party shall be a Restricted Subsidiary and (y) after giving effect to any transaction described
in clauses (a) through (c), the Borrowers shall comply with Section 7.12 to the extent
applicable and,
(d)
the liquidation, wind up, dissolution, deregistration or similar action with respect to any Excluded Subsidiary and
(e)
the Domestication Merger.
“Permitted Investments”
means:
(a)
Investments outstanding as of the Closing Date (such Investments in excess of $10,000,000, individually, are set forth on Schedule 1.01(d))
and refinancings, reborrowings or replacements thereof, to the extent that such refinancings, reborrowings or replacements shall not increase
the amount of such Investment;
(b) (i)
Investments by Holdings and the Restricted Subsidiaries existing on the Closing Date in Holdings or the Restricted Subsidiaries
and
(ii) additional
Investments by Holdings and the Restricted Subsidiaries in the Restricted Subsidiaries; provided that
(A) if such Investment
shall be in the form of an investment in Equity Interests, any such Equity Interests held by a Loan Party shall be pledged pursuant to
the Collateral Documents,
(B)
[reserved],
(C)
unless the Total Net Leverage Ratio is less than or equal to 3.80 to 1.00 on a Pro Forma Basis, the aggregate amount of Investments
under this clause (b)(ii) by Loan Parties in Restricted Subsidiaries that are not Subsidiary Guarantors (other than
(1)
(x) investments in Equity Interests and (y) intercompany loans and advances, in each case, from a Loan Party to a Restricted Subsidiary
that is not a Subsidiary Guarantor the proceeds of which are used solely to finance a Permitted Acquisition and
(2)
intercompany loans and advances from a Loan Party to Restricted Subsidiaries that are not Subsidiary Guarantors having a term not
exceeding 90 days (inclusive of any roll over or extensions of terms) made in the ordinary course of business and consistent with past
practice)
shall not exceed the sum of (I) the greater
of (x) $65,000,000 and (y) 35% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been
delivered pursuant to Section 7.01 at any time outstanding plus (II) an amount equal to any reduction in the amount
of Investments by Loan Parties in Restricted Subsidiaries that are not Subsidiary Guarantors set forth in clause (b)(i)
above after the Closing Date, and
(D)
if such Investment shall be in the form of a loan or advance,
(1)
such loan or advance shall be unsecured,
(2)
in the case of a loan or advance owed by a Loan Party to a Restricted Subsidiary that is not a Loan Party, shall be subordinated
to the Obligations on terms reasonably satisfactory to the Administrative Agent, and
(3)
if such loan or advance shall be made by a Loan Party, shall be evidenced by a promissory note and such promissory note shall be
pledged to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to the Collateral Documents;
(c)
deposits with, or time deposits with, including certificates of deposits issued by,
(i)
any office located in the United States of any bank or trust company that is organized under the laws of the United States or any
state thereof and has capital surplus and undivided profits aggregating at least $100,000,000,
(ii)
any Lender or
(iii)
any foreign bank for which S&P or Moody’s issues a rating of “A” or higher and which has capital surplus
and undivided profits aggregating at least $100,000,000;
(d)
Investments held by Holdings or any Restricted Subsidiary in the form of Cash Equivalents;
(e)
Permitted Acquisitions;
(f)
Investments permitted pursuant to Section 8.02, 8.03, 8.05 or 8.07
(in each case, other than by reference to this definition);
(g)
Investments consisting of Permitted Swap Obligations;
(h)
intercompany loans and advances to Holdings and the Restricted Subsidiaries pursuant to Section 8.02(e); provided
that such intercompany loans and advances
(i)
shall be made for the purposes, and shall be subject to all the applicable limitations set forth in, Section 8.02(e)
and
(ii)
shall be unsecured and subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(i)
advances, loans or extensions of credit to customers and suppliers or to employees, in the ordinary course of business by any Restricted
Subsidiary;
(j)
other Investments in an aggregate amount not to exceed the greater of (x) $150,000,000 and (y) 75% of Consolidated EBITDA as of
the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01 at
any time outstanding plus any unused amount under the General Restricted Payments Basket or General Junior Debt Prepayments Basket
that is reallocated to incur Investments;
(k)
Investments in a Receivables Subsidiary or relating to a Factoring Agreement that, in the good faith determination of Holdings
are necessary or advisable to effect any Receivables Facility or Factoring Agreement incurred in compliance with Section 8.02
hereof or any transaction in connection therewith; provided that such Investment is in the form of a contribution of accounts
receivable and the proceeds thereof and other assets customarily transferred in connection therewith or as equity;
(l)
Investments in joint ventures engaged in any similar or adjacent line of business (or one reasonably ancillary or complementary
thereto, or which is a reasonable extension, development or expansion thereof) in an aggregate amount, taken together with all other Investments
made pursuant to this clause (l) that are at that time outstanding, not to exceed the greater of $50,000,000 and 25%
of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time outstanding;
(m)
Investments in Unrestricted Subsidiaries an aggregate amount not to exceed the greater of (x) $40,000,000 and (y) 20% of Consolidated
EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time outstanding; provided that, notwithstanding anything to the contrary in this Agreement, Investments, Dispositions
and transfers of Unrestricted Subsidiaries shall only be permitted to be made in reliance on this clause (m);
(n)
Investments not to exceed the greater of (x) $40,000,000 and (y) 20% of Consolidated EBITDA as of the last day of the last Test
Period for which financial statements have been delivered pursuant to Section 7.01 in the aggregate consisting of Guarantees in favor
of customers of Holdings, the Restricted Subsidiaries or joint ventures to which Holdings, a Restricted Subsidiary, or such joint venture
is a party;
(o)
Investments consisting of loans or advances to present or former employees, directors, members of management, officers, managers
or consultants or independent contractors of any of any Loan Party, their subsidiaries and/or joint venture to the extent permitted by
Law, in connection with such Person’s purchase of Equity Interests of Holdings or any Intermediate Holding Company, either (i) in
an aggregate principal amount not to exceed the greater of $20,000,000 and 10% of Consolidated Adjusted EBITDA as of the last day of the
most recently ended Test Period at any one time outstanding or (ii) so long as the proceeds of such loan or advance are substantially
contemporaneously contributed to the Borrower for the purchase of such Equity Interests;
(p)
Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant
of trade credit in the ordinary course of business;
(q)
Investments (including debt obligations and Equity Interests) received (i) in connection with the bankruptcy or reorganization
of any Person, (ii) in settlement of delinquent obligations of, or other disputes with, customers, suppliers and other account debtors
arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other transfer of title with
respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration or other
disputes;
(r)
Investments consisting of loans and advances of payroll payments or other compensation to present or former employees, directors,
members of management, officers, managers or consultants of any Loan Party (to the extent such payments or other compensation relate to
services provided to Holdings or an Intermediate Holding Company (but excluding, for the avoidance of doubt, the portion of any such amount,
if any, attributable to the ownership or operations of any subsidiary of Holdings or an Intermediate Holding Company other than the Borrower
and/or its subsidiaries)) in the ordinary course of business;
(s)
Investments to the extent that payment therefor is made solely with Equity Interests (other than Disqualified Stock) of any Loan
Party or any Restricted Subsidiary, in each case, not resulting in a Change of Control;
(t)
Investments in subsidiaries in connection with internal reorganizations and/or restructurings and activities related to tax planning;
provided that, after giving effect to any such reorganization, restructuring or activity, neither the Guaranty, taken as a whole,
nor the security interest of the Administrative Agent in the Collateral, taken as a whole, is materially impaired;
(u)
Investments made in connection with any nonqualified deferred compensation plan or arrangement for any present or former employee,
director, member of management, officer, manager or consultant or independent contractor of any Loan Party; and
(v)
Investments in any Loan Party, Restricted Subsidiary and/or joint venture in connection with intercompany cash management arrangements
and related activities in the ordinary course of business.
For all purposes of this Agreement, the amount
of any Investment shall be the original costs of such Investment plus the cost of all additions thereto, without adjustments for increases
or decreases in value, write-ups, write-downs or write-offs with respect to such Investment, reduced by (without duplication of any reduction
as a result of such Investment (or any portion thereof) deemed to no longer be outstanding as of any date) any dividend, distribution,
interest payment, return of capital, repayment or other amount received in cash by Holdings or a Restricted Subsidiary in respect of such
Investment.
The payment in the ordinary
course of business of a bona fide obligation owed by any Subsidiary to be paid by any other Subsidiary that would be permitted hereunder
without the making of any Investment shall, to the extent effected in the form of an Investment, be deemed to be a Permitted Investment.
“Permitted Junior
Priority Refinancing Debt” means secured Indebtedness incurred by any Loan Party in the form of one or more series of junior
lien secured notes, bonds or debentures or junior lien secured loans; provided that
(a)
such Indebtedness is secured by all or a portion of the Collateral on a junior priority basis to the Liens on the Collateral securing
the Obligations and is not secured by any property or assets other than the Collateral,
(b)
such Indebtedness satisfies the applicable requirements set forth in the provisos in the definition of “Credit Agreement
Refinancing Indebtedness” (provided that such Indebtedness may be secured by a Lien on the Collateral that ranks junior
to the Liens on the Collateral securing the Obligations, notwithstanding any provision to the contrary contained in the definition of
“Credit Agreement Refinancing Indebtedness”),
(c)
the holders of such Indebtedness (or their representative) and the Administrative Agent and/or the Collateral Agent shall become
parties to a Customary Intercreditor Agreement providing that the Liens on the Collateral securing such obligations shall rank junior
to the Liens on the Collateral securing the Obligations and
(d)
such Indebtedness is not at any time guaranteed by any Restricted Subsidiary that is not a Loan Party.
“Permitted Liens”
means:
(a)
in the case of Real Property, rent deposits, easements, rights-of-way, restrictions, protrusions, exceptions, encroachments, reservations,
conditions, licenses, building codes, or defects or irregularities and similar encumbrances which, individually or in the aggregate, do
not materially interfere with the ordinary conduct of the business of Holdings or any Restricted Subsidiary at such Real Property;
(b)
non-consensual Liens, if contested in good faith by appropriate proceedings and appropriate reserves are maintained, in accordance
with GAAP, with respect thereto;
(c)
Liens imposed by Law or Liens on pledges or deposits (or letters of credit or guarantees in respect thereof) to secure obligations
under workmen’s compensation, employment and unemployment insurance and other social security legislation or similar legislation,
or to secure performance in connection with bids, tenders and contracts (other than contracts for the payment of borrowed money) to which
Holdings or any Restricted Subsidiary is a party;
(d)
Liens imposed by Law or Liens on deposits to secure public or statutory obligations of Holdings or any Restricted Subsidiary;
(e)
materialmen’s, landlords’, warehousemens’, mechanics’, carriers’, workmen’s or similar Liens
arising in the ordinary course of business, or deposits of cash or United States obligations to obtain the release of such Liens;
(f)
Liens on deposits made to secure surety, stay, customs, or performance bonds, trade or government contracts and leases (other than
capital leases), indemnity agreements in connection therewith and other obligations of a like nature or appeal bonds in proceedings to
which Holdings or any Restricted Subsidiary is a party;
(g)
Liens for Taxes not yet due and payable or being contested in good faith by appropriate proceedings with adequate reserves on the
books of the applicable Person in accordance with GAAP;
(h)
Leases, subleases or licenses of properties owned, leased or licensed by Holdings or any Restricted Subsidiary, in each case, entered
into in the ordinary course of business so long as such Leases, subleases and licenses are subordinate in all respects to the Liens granted
and evidenced by the Collateral Documents and do not, individually or in the aggregate, (i) interfere in any material respect with the
ordinary conduct of the business of Holdings or any Restricted Subsidiary, or (ii) materially impair the use (for its intended purposes)
or the value of the property subject thereto;
(i)
Liens solely on any cash earnest money deposits made by Holdings or any Restricted Subsidiary in connection with any letter of
intent or purchase agreement permitted hereunder;
(j)
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 in the ordinary course of business;
(k)
non-exclusive licenses of patents, trademarks, trade secrets, and other intellectual property rights granted by Holdings or any
Restricted Subsidiary in the ordinary course of business, which do not interfere in any material respect with the business of Holdings
or any Restricted Subsidiary, taken as a whole;
(l)
[reserved];
(m)
judgment Liens securing judgments not constituting an Event of Default under Article IX;
(n)
Liens arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to, including obligations
in respect of letters of credit or Guarantees, for the benefit of insurance carriers;
(o)
(i) bankers liens, rights of setoff and other similar Liens on deposits in one or more accounts maintained by Holdings or any Restricted
Subsidiary and (ii) Liens that are contractual rights of set off (A) relating to the establishment of depository relations with banks
or other financial institutions not given in connection with the incurrence of Indebtedness, (B) relating to pooled deposit or sweep accounts
of Holdings or any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of
business of such Person; or (C) relating to purchase orders and other agreements of Holdings or any Restricted Subsidiary entered into
with customers of such Person in the ordinary course of its business;
(p)
[reserved];
(q)
[reserved];
(r)
Liens in favor of any Guarantor;
(s)
Liens granted by any Restricted Subsidiary that is not a Loan Party in favor of any Restricted Subsidiary that is not a Loan Party;
and
(t)
precautionary filings of financing statements under the UCC or PPSA in respect of operating leases or consignments entered into
by Holdings or any Restricted Subsidiary.
“Permitted Refinancing
Indebtedness” means Indebtedness issued or incurred (including by means of the extension or renewal of existing Indebtedness)
to the extent used to refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced Indebtedness”);
provided that
(a)
the principal amount of such refinancing, refunding, extending, renewing or replacing Indebtedness is not greater than the principal
amount of such Refinanced Indebtedness plus the amount of any premiums or penalties and accrued and unpaid interest paid thereon and reasonable
fees and expenses, in each case associated with such refinancing, refunding, extension, renewal or replacement,
(b)
such refinancing, refunding, extending, renewing or replacing Indebtedness has a final maturity that is no sooner than, and a weighted
average life to maturity that is no shorter than, such Refinanced Indebtedness,
(c)
if such Refinanced Indebtedness or any Guarantees thereof are subordinated to the Obligations, such refinancing, refunding, extending,
renewing or replacing Indebtedness and any Guarantees thereof remain so subordinated and shall have a lien priority no greater than the
priority of the liens securing the Refinanced Indebtedness to the Liens securing the Obligations in accordance with, and otherwise subject
to, the terms of a Customary Intercreditor Agreement,
(d)
if any Loan Party is an obligor in respect of such Refinanced Indebtedness immediately prior to such refinancing, refunding, extending,
renewing or replacing, any obligors in respect of such refinancing, refunding, extending, renewing or replacing Indebtedness must either
(x) be a Loan Party or (y) have been an obligor in respect of such Refinanced Indebtedness immediately prior to such refinancing, refunding,
extending, renewing or replacing,
(e)
(i) if such Refinanced Indebtedness is secured, such refinancing, refunding, extending, renewing or replacing Indebtedness shall
be (A) secured by only by property that secured such Refinanced Indebtedness (or a subset thereof) or (B) unsecured, (ii) if such Refinanced
Indebtedness is subject to an intercreditor agreement with the Indebtedness hereunder, such refinancing, refunding, extending, renewing
or replacing Indebtedness if secured, shall be subject to a Customary Intercreditor Agreement and (iii) if such Refinanced Indebtedness
is unsecured, such refinancing, refunding, extending, renewing or replacing Indebtedness is unsecured and
(f)
such refinancing, refunding, extending, renewing or replacing Indebtedness contains covenants and events of default and is benefited
by Guarantees, if any, which, taken as a whole, are determined in good faith by a Responsible Officer of the Borrowers to not be materially
less favorable to the Borrowers or the applicable Restricted Subsidiary and the than the covenants and events of default or Guarantees,
if any, in respect of such Refinanced Indebtedness.
“Permitted Sale
Leaseback Transaction” has the meaning specified in Section 8.13.
“Permitted Swap
Obligations” means all obligations (contingent or otherwise) of Holdings or any Restricted Subsidiary existing or arising
under Swap Contracts, provided that such obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated
by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or taking a “market view”.
“Permitted Unsecured
Refinancing Debt” means unsecured Indebtedness incurred by any Loan Party in the form of one or more series of senior unsecured
notes, bonds or debentures or loans; provided that (a) such Indebtedness satisfies the applicable requirements set forth
in the provisos in the definition of “Credit Agreement Refinancing Indebtedness” and (b) such Indebtedness is not at any time
guaranteed by any Restricted Subsidiary that is not a Loan Party.
“Person”
means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
“Personal Property
Security Act” means the Personal Property Security Act (Ontario), provided, that, if perfection or the effect of perfection
or non-perfection or the priority of any Lien created under any other Loan Document on the Collateral is governed by the personal property
security legislation or other applicable legislation with respect to personal property security in effect in a jurisdiction in Canada
other than the Province of Ontario, “PPSA” means the Personal Property Security Act or such other applicable legislation (including the Civil Code
of Quebec) in effect from time to time in such other jurisdiction in Canada for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority, as such legislation may be amended, renamed or replaced from time to time, and includes
all regulations from time to time made under such legislation.
“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA), other than a Multiemployer Plan,
a Canadian Multi-Employer Plan or Canadian Pension Plan, that is established, sponsored, maintained or contributed to by, or under which
Holdings or any Restricted Subsidiary or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of
ERISA, any ERISA Affiliate, in any case, has any liability or obligation, whether fixed or contingent.
“Platform”
has the meaning specified in Section 7.02.
“Pledge and Security
Agreement” means the Pledge and Security Agreement, dated as of the Closing Date, executed by each of the Loan Parties (other
than the Canadian Subsidiaries) and the Administrative Agent for the benefit of the holders of the Obligations, as may be further amended
or modified from time to time in accordance with the terms hereof.
“Pledged Collateral”
has the meaning assigned to it in each applicable Collateral Document.
“primary obligor”
has the meaning specified in the definition of “Guarantee”.
“Prime Rate”
means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street
Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical
Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any
similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined
by the Administrative Agent).
“Proceeds of Crime
Act” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended from time to time and
all regulations thereunder.
“Pro Forma Basis”
means, with respect to compliance with any test or covenant hereunder, compliance with such covenant or test after giving effect to any
proposed incurrence of Indebtedness, Permitted Acquisition, the making of any Restricted Payment, Investment, Disposition or any designation
of any Restricted Subsidiary as an Unrestricted Subsidiary or any Subsidiary Redesignation (including pro forma adjustments arising out
of events which are directly attributable to the proposed transaction, are factually supportable and are expected to have a continuing
impact, in each case which adjustments (a) are based on reasonably detailed written assumptions reasonably acceptable to the Administrative
Agent and (b) are certified by a Responsible Officer of Holdings as having been prepared in good faith based upon reasonable assumptions)
or other payment or event subject to a test or covenant hereunder using, for purposes of determining such compliance, the historical financial
statements of all entities or assets so acquired, sold or otherwise tested hereunder, or to be acquired, sold or tested hereunder, and
the consolidated financial statements of Holdings and the Restricted Subsidiaries which shall be reformulated as if such transaction or
other event subject to testing, and any other such transactions or events subject to testing that have been consummated or occurred during
the period, and any Indebtedness or other liabilities incurred in connection with any such Permitted Acquisitions had been consummated
and incurred at the beginning of such period.
“Pro Forma Compliance”
means, at any date of determination, that Holdings shall be in pro forma compliance with the covenant set forth in Section 8.10
to the extent (unless otherwise stated herein to the contrary) that such covenant shall be applicable to Holdings at such time, as of
the last day of the most recent fiscal quarter end (computed on the basis of (a) balance sheet amounts as of the most recently completed
fiscal quarter, and (b) income statement amounts for the most recently completed period of four consecutive fiscal quarters, in each case,
for which financial statements shall have been delivered to the Administrative Agent and calculated on a Pro Forma Basis in respect of
the event giving rise to such determination).
“Pro Forma Financial
Statements” means a pro forma consolidated balance sheet of Holdings and its Subsidiaries for the 12-month period
ending on March 31, 2024, and the related consolidated statements of income, stockholders’ equity and cash flows for such period,
prepared in good faith after giving effect to the Transactions as if the Transactions had occurred at the beginning of such period, which
shall be prepared on a basis consistent with the historic financial statements used in such Pro Forma Financial Statements and which need
not meet the requirements of Regulation S-X of the Securities Act of 1933 or contain any adjustment for purchase accounting.
“Pro Rata Share”
means,
(a)
with respect to each Term Loan Lender at any time, a percentage (carried out to the ninth decimal place) of the principal amount
of the Term Loans or any Tranche of Term Loans, as the case may be, funded by such Term Loan Lender and
(b)
with respect to each Revolving Credit Lender with respect to the Revolving Credit Loans, or any Tranche thereof, at any time, a
percentage (carried out to the ninth decimal place), the numerator of which is the amount of the Revolving Credit Commitment of such Revolving
Credit Lender at such time and the denominator of which is the amount of the Total Revolving Credit Commitments at such time; provided
that if the commitment of each Revolving Credit Lender to make Loans and the obligation of each L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 9.02, then the Pro Rata Share of each Revolving Credit Lender shall be determined
based on the Pro Rata Share of such Revolving Credit Lender immediately prior to such termination and after giving effect to any subsequent
assignments made pursuant to the terms hereof.
The initial Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable.
“property”
means any right, title or interest in or to property or assets of any kind whatsoever, whether real, immovable, personal, movable or mixed
and whether tangible or intangible and including Equity Interests or other ownership interests of any Person and whether now in existence
or owned or hereafter entered into or acquired, including all Real Property.
“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 specified in Section 7.02.
“QFC”
has the meaning specified in Section 11.25(b).
“QFC Credit Support”
has the meaning specified in Section 11.25.
“Qualified ECP Guarantor”
means, in respect of any Swap Obligations, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee
or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes
an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause
another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II)
of the Commodity Exchange Act.
“Real Property”
means, collectively, all right, title and interest (including any leasehold, mineral or other estate) in and to any and all parcels of
or interests in Real Property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each
case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general
intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.
“Receivables Facility”
means any of one or more customary market receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated
or refunded from time to time, the obligations of which are non-recourse (except for customary representations, warranties, covenants
and indemnities made in connection with such facilities) to Holdings or any Restricted Subsidiary (other than a Receivables Subsidiary)
pursuant to which Holdings or any Restricted Subsidiary sells its accounts receivable to either (a) a Person that is not an Affiliate
of Holdings or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not an Affiliate of Holdings.
“Receivables Subsidiary”
means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities
reasonably related thereto.
“Recovery Event”
means any settlement of or payment in respect of any property or casualty insurance claim or any taking under power of eminent domain
or by condemnation or similar proceeding of or relating to any property or asset of Holdings or any Restricted Subsidiary (excluding,
in each case, business interruption insurance claims); provided that any recovery event described above having a value not
in excess of (I) the greater of (x) $20,000,000 and (y) 10% of Consolidated EBITDA as of the last day of the last Test Period for which
financial statements have been delivered pursuant to Section 7.01 in any single transaction or series of related transactions
shall be deemed not to be a “Recovery Event” for purposes of this Agreement.
“Reference Date”
has the meaning specified in the definition of “Available Amount”.
“Refinanced Debt”
has the meaning specified in the definition of “Credit Agreement Refinancing Indebtedness.”
“Refinanced Indebtedness”
has the meaning specified in the definition of “Permitted Refinancing Indebtedness.”
“Refinancing Incremental
Revolving Credit Commitments” has the meaning assigned to such term in Section 2.14(a).
“Refinancing Incremental
Term Loans” has the meaning assigned to such term in Section 2.14(a).
“Register”
has the meaning set forth in Section 11.06(c).
“Regulation”
means the Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings.
“Reinvestment Period”
has the meaning specified in the definition of “Net Cash Proceeds”.
“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners, directors, shareholders, trustees, officers, employees,
agents, advisors and other representatives of such Person and of such Person’s Affiliates and successors and assigns of any of the
foregoing.
“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into or through the indoor or outdoor environment (including the abandonment or disposal
of any barrels, containers or other closed receptacles containing any Hazardous Materials), including the movement of any Hazardous Materials
through the air, soil, surface water or groundwater. “Released” has a meaning correlative thereto.
“Relevant Governmental
Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee
officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any
successor thereto.
“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.
“Repricing Transaction”
means the prepayment, refinancing, substitution or replacement of all or a portion of the Initial Term Loans (other than prepayments required
by Section 2.05(b)(ii) or (iv) and other than in connection with a Change of Control or an Enterprise
Transformative Event) with the incurrence by Holdings or any Restricted Subsidiary of any new or replacement tranche of first-lien term
loans bearing interest at a Yield that is less than the Yield of such Initial Term Loans, including as may be effected through any amendment
to this Agreement relating to the “effective” interest rate of such Initial Term Loans.
“Request for Credit
Extension” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Committed Loan Notice and (b) with
respect to an L/C Credit Extension, a Letter of Credit Application.
“Required Lenders”
means, as of any date of determination, Lenders having more than 50% of the sum of (a) the Term Loans, (b) the Total Outstandings (with
the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held”
by such Lender for purposes of this definition) and (c) the aggregate unused Revolving Credit Commitments; provided that
the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall
be excluded for purposes of making a determination of Required Lenders.
“Required Prepayment
Percentage” means
(a)
in the case of any Asset Sale or Recovery Event, 100% or, if on the date of the applicable prepayment, the First Lien Net Leverage
Ratio is less than or equal to 3.55 to 1.00 but greater than 3.05 to 1.00, 50%, or if on the date of the applicable prepayment, the First
Lien Net Leverage Ratio is less than or equal to 3.05 to 1.00, 0%;
(b)
in the case of any issuance or other incurrence of Indebtedness (except as incurred pursuant to Section 8.02),
100%; and
(c)
in the case of any Excess Cash Flow, 50%, or, if on the date of the applicable prepayment, the First Lien Net Leverage Ratio is
less than or equal to 3.30 to 1.00 but greater than 2.80 to 1.00, 25%, or if on the date of the applicable prepayment, the First Lien
Net Leverage Ratio is less than or equal to 2.80 to 1.00, 0%.
“Resolution Authority”
means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”
means the chief executive officer, president, chief financial officer, chief operating officer, vice president, treasurer or assistant
treasurer or corporate 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.
“Restricted Group”
means, collectively, Holdings and the Restricted Subsidiaries.
“Restricted Group
Reconciliation Statement” means, with respect to any consolidated balance sheet or statement of income, stockholders equity
and cash flows of Holdings and its Subsidiaries, such financial statement (in substantially the same form) prepared on the basis of consolidating
the accounts of Holdings and the Restricted Subsidiaries and treating Subsidiaries other than Restricted Subsidiaries as if they were
not consolidated with Holdings and otherwise eliminating all accounts of Subsidiaries other than Restricted Subsidiaries, together with
an explanation of reconciliation adjustments in reasonable detail.
“Restricted Payment”
means
(a)
any dividend or other payment or distribution (except dividends or distributions payable solely in shares of such Person’s
common stock or to Holdings or any Restricted Subsidiary) with respect to any capital stock or other Equity Interest of Holdings 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, defeasance, acquisition, cancellation or termination of any such capital stock or
other Equity Interest (other than any such capital stock or other Equity Interest owned by Holdings or any Restricted Subsidiary), or
on account of any return of capital to the stockholders, partners or members (or the equivalent Persons thereof) of any Restricted Subsidiary,
(b)
any Investment other than a Permitted Investment and
(c)
any prepayment, redemption, purchase, defeasance or other satisfaction prior to the scheduled maturity thereof in any manner, or
payment in violation of any applicable subordination terms, in each case, with respect to (i) any Indebtedness that is secured by a second
priority Lien on the assets of Holdings or any Restricted Subsidiary and (ii) any Indebtedness that is subordinated in right of payment
to the Obligations.
“Restricted Subsidiary”
means any Subsidiary of Holdings (including any Intermediate Holding Company) that is not an Unrestricted Subsidiary.
“Retained Declined
Proceeds” has the meaning specified in Section 2.05(b)(vii).
“Revolving Credit
Borrowing” means a Revolving Credit Borrowing in respect of the Initial Revolving Credit Commitments or any borrowing under
any Extended Revolving Credit Tranche consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Term SOFR
Loans, having the same Interest Period.
“Revolving Credit
Commitment” means the Initial Revolving Credit Commitment and any Extended Revolving Credit Commitments, as the context
may require, and “Revolving Credit Commitments” means all of them, collectively.
“Revolving Credit
Facility” means the Initial Revolving Credit Facility and any Extended Revolving Credit Tranche, as the context may require.
“Revolving Credit
Lender” means, at any time, any Lender that has a Revolving Credit Commitment or an outstanding Revolving Credit Loan at
such time.
“Revolving Credit
Loan” means the Initial Revolving Credit Loans and any Extended Revolving Credit Loans, as the context may require.
“Revolving Credit
Maturity Date” means, with respect to any Initial Revolving Credit Loan, the Initial Revolving Credit Maturity Date, and
with respect to any Revolving Credit Loan under any Extended Revolving Credit Tranche, the earlier of the maturity date set forth in the
applicable Extension Amendment and the date of termination in whole of the Extended Revolving Credit Commitments in respect of such Extended
Revolving Credit Tranche and the Letter of Credit Commitments pursuant to Section 2.06 or 9.02.
“Revolving
Credit Note” has the meaning specified in Section 2.11(a).
“Rockwood”
means Rockwood Service Corporation, a Delaware corporation.
“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.
“Sanctioned Country”
means any country or territory that may, from time to time, be the target of Sanctions (presently, Cuba (in respect of the US Borrower
and US Subsidiaries only), Iran, North Korea, Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic or the
so-called Luhansk People’s Republic).
“Sanctioned Person”
means any Person that is the target of Sanctions, including: (a) any Person listed in any list of designated Persons maintained by OFAC
or other applicable U.S. or non-U.S. authority under Sanctions; (b) any Canadian Blocked Person; (c) any Person 50% or more
owned or, where relevant under applicable Sanctions, controlled by any such Person or Persons or acting for or on behalf of such Person;
or (d) any person organized or ordinarily resident in a Sanctioned Country.
“Sanctions”
means comprehensive economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the
U.S. government, including those administered by the OFAC, (b) the United Nations Security Council, the European Union or Her Majesty’s
Treasury of the United Kingdom or (c) the government of Canada (including, without limitation, Global Affairs Canada and Public Safety
Canada).
“Scheduled Unavailability
Date” has the meaning specified in Section 3.03(b).
“SEC”
means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Second Lien Indebtedness”
has the meaning specified in Section 8.01(h).
“Section 2.16
Additional Amendment” has the meaning specified in Section 2.16(c).
“Secured Hedge Agreement”
means any Swap Contract that is entered into by and between any Loan Party or any Restricted Subsidiary and any Hedge Bank.
“Secured Parties”
means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the L/C Issuers, the Hedge Banks, the Treasury Counterparties,
each co-agent or sub-agent appointed by the Agents from time to time pursuant to Section 10.01(b) and any other Persons
the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.
“Secured Treasury
Management Agreement” any Treasury Management Agreement that is entered into by and between any Loan Party or any Restricted
Subsidiary and any Treasury Counterparty.
“Senior Secured
Net Leverage Ratio” means as of any date of determination, the ratio of
(a)
Consolidated Senior Secured Debt as of such date minus the unrestricted cash and Cash Equivalents of Holdings and the Restricted
Subsidiaries as of such date to
(b)
Consolidated EBITDA for the period of the four fiscal quarters most recently ending on such date.
“Significant Subsidiary”
means, at any date of determination, any Restricted Subsidiary that, either individually or together with its subsidiaries which qualify
as Restricted Subsidiaries, taken as a whole, has
(a)
revenues in an amount equal to at least 10% of the consolidated revenues of Holdings and its Subsidiaries for the most recently
completed fiscal quarter for which the Lenders have received financial statements of Holdings and its Subsidiaries pursuant to Section 7.01(a)
or 7.01(b),
(b)
assets in an amount equal to at least 10% of the Consolidated Total Assets of Holdings and its Subsidiaries as of the last day
of the most recently completed fiscal quarter for which the Lenders have received financial statements of Holdings and its Subsidiaries
pursuant to Section 7.01(a) or 7.01(b), or
(c)
earnings in an amount equal to at least 10% of the consolidated net earnings of Holdings and its Subsidiaries for the most recently
completed fiscal quarter for which the Lenders have received financial statements of Holdings and its Subsidiaries pursuant to Section 7.01(a)
or 7.01(b), in each case determined in accordance with GAAP for such period.
“SOFR”
means a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New
York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently
at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator
of the secured overnight financing rate from time to time).
“Solvent”
and “Solvency” mean, with respect to any Person on any date of determination, that on such date
(a)
the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person,
(b)
the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured,
(c)
such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability
to pay such debts and liabilities as they mature, and
(d)
such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital.
The amount of contingent liabilities
at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
“SPC”
has the meaning specified in Section 11.06(b)(vii).
“Specified Acquisition
Agreement Representations” means the representations made with respect to the Acquired Business in the Acquisition Agreement
as are material to the interests of the Lenders, but only to the extent that Holdings has (or Holdings’ Affiliate has) the right
(taking into account any applicable cure provisions) to terminate Holdings’ (or its Affiliate’s) obligations to consummate
the Closing Date Acquisition (or to decline to consummate the Closing Date Acquisition) under the Acquisition Agreement as a result of
a breach of such representations.
“Specified Equity
Proceeds” means any equity proceeds received in connection with the Transactions.
“Specified Existing
Tranche” has the meaning specified in Section 2.16(a).
“Specified Representations”
means the representations and warranties set forth in Sections 6.01(a), 6.01(b) (solely as to the requisite
power and authority to enter into the Loan Documents), 6.02 (solely as to due authorization), 6.02(a), 6.04,
6.14, 6.18, 6.20 (subject to the proviso at the end of Section 5.01(b)),
6.23(a) (solely as to the use of proceeds of the Loans on the Closing Date and compliance with the Patriot Act), 6.23(c)
(solely as to the use of proceeds of the Loans on the Closing Date) and 6.24.
“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability company, unlimited liability company or other business
entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or
other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the
time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries”
shall refer to a Subsidiary or Subsidiaries of Holdings.
“Subsidiary Guarantor”
means, collectively, the Restricted Subsidiaries listed on Schedule 1.01(f) and each other Restricted Subsidiary that
shall be required to execute and deliver a Subsidiary Joinder Agreement pursuant to Section 7.12.
“Subsidiary Joinder
Agreement” means a joinder agreement substantially in the form of Exhibit F or such other form approved
by the Administrative Agent, executed and delivered by a Restricted Subsidiary in accordance with the provisions of Section 7.12.
“Subsidiary Redesignation”
has the meaning set forth in the definition “Unrestricted Subsidiary”.
“Successor Company”
has the meaning specified in Section 8.03(f).
“Successor Rate”
has the meaning specified in Section 3.03(b).
“Successor Rate
Conforming Changes” has the meaning specified in Section 3.03(d).
“Supported QFC”
has the meaning specified in Section 11.25.
“Survey”
means a survey of any Mortgaged Property (and all improvements thereon) which is
(a)
(i) prepared by a surveyor or engineer licensed to perform surveys in the jurisdiction where such Mortgaged Property is located,
(ii)
dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall have occurred within six
months prior to such date of delivery any exterior construction on the site of such Mortgaged Property or any easement, right of way or
other interest in the Mortgaged Property has been granted or become effective through operation of law or otherwise with respect to such
Mortgaged Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall be dated (or
redated) after the completion of such construction or if such construction shall not have been completed as of such date of delivery,
not earlier than 20 days prior to such date of delivery, or after the grant or effectiveness of any such easement, right of way or
other interest in the Mortgaged Property,
(iii)
certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent, the Collateral
Agent and the Title Company,
(iv)
complying in all material respects with the minimum detail requirements of the American Land Title Association as such requirements
are in effect on the date of preparation of such survey and
(v)
sufficient for the Title Company to remove all standard survey exceptions from the title insurance policy (or commitment) relating
to such Mortgaged Property and issue the endorsements of the type required by Section 7.12(b) or
(b)
otherwise reasonably acceptable to the Collateral Agent.
“Swap Contract”
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 swaps and 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.
“Swap Obligation”
means, with respect to Holdings or any Restricted Subsidiary, any obligation to pay or perform under any agreement, contract or transaction
that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts,
(a)
for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith,
such termination value(s), and
(b)
for any date prior to the date referenced in the preceding clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment).
“Tax Compliance
Certificate” has the meaning specified in Section 11.14(a).
“Target”
means Acuren Holdings, Inc., a Delaware corporation.
“Target Audited
Financial Statements” means the audited consolidated balance sheets of Rockwood and its Subsidiaries for the fiscal years
ended December 31, 2022, and December 31, 2023, and, in each case, related consolidated statements of income, stockholders’
equity and cash flows for such fiscal years.
“Target Companies”
means, collectively, the Target and its Subsidiaries.
“Target Unaudited
Financial Statements” means the unaudited consolidated balance sheet of Rockwood and its Subsidiaries for fiscal quarter
ending on March 31, 2024 and the related consolidated statements of income and cash flows for such period and, with respect to the
fiscal quarter ending on June 30, 2024, the unaudited, individual
balance sheets of Rockwood and its Subsidiaries, together with the related individual statements of income and cash flows for such period.
“Taxes”
has the meaning specified in Section 3.01(a).
“Term Loan”
means an Initial Term Loan, a New Term Loan and/or an Extended Term Loan, as the context may require.
“Term Loan Borrowing”
means a Borrowing comprised of Initial Term Loans or New Term Loans, as the context may require.
“Term Loan Commitment”
means an Initial Term Loan Commitment or a New Term Loan Commitment, as the context may require.
“Term Loan Facility”
means the Initial Term Loan Facility or any New Term Loan Facility, as the context may require.
“Term Loan Lender”
means an Initial Term Loan Lender or a Lender in respect of a New Term Loan Facility, as the context may require.
“Term Loan Maturity
Date” means the Initial Term Loan Maturity Date, any New Term Loan Maturity Date or, with respect to any Extended Term Loan,
the maturity date set forth in the applicable Extension Amendment, as the case may be.
“Term Loan Note”
has the meaning specified in Section 2.11(a).
“Term SOFR” means,
(a) for
any calculation with respect to a Term SOFR Loan on any day, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest
Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government
Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided,
however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference
Rate for the applicable tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate
for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which
such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government
Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination
Day, and
(b) for
any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day,
the “ABR Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to
such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00
p.m. (New York City time) on any ABR Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published
by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator
on the first preceding U.S. Government Securities Business Day for which the Term SOFR Reference Rate for such tenor was published
by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3)
U.S. Government Securities Business Days prior to such ABR Term SOFR Determination Day; provided that
if Term SOFR as so determined shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.
“Term SOFR Administrator”
means the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate).
“Term SOFR Loan”
means a Loan that bears interest at a rate based on Term SOFR, other than pursuant to clause (c) of the definition of “Base
Rate”.
“Term SOFR Reference
Rate” means the forward-looking term rate based on SOFR.
“Test Period”
means a period of four consecutive fiscal quarters.
“Threshold Amount”
means the aggregate amount up to the greater of (i) $40,000,000 and (ii) 20% of Consolidated EBITDA.
“Title Company”
means Chicago Title Insurance Company or any other title insurance company as shall be retained by Borrowers and reasonably acceptable
to the Administrative Agent.
“Title Policy”
shall have the meaning assigned to such term in Section 7.12(b)(i).
“Total Net Leverage
Ratio” shall mean, on any date of determination, the ratio of
(a)
Consolidated Indebtedness on such date minus the unrestricted cash and Cash Equivalents of Holdings and the Restricted Subsidiaries
as of such date to
(b)
Consolidated EBITDA for the period of four fiscal quarters most recently ending on such date.
“Total Outstandings”
means the aggregate Outstanding Amount of all Revolving Credit Loans and all L/C Obligations.
“Total Revolving
Credit Commitment” means, at any time, the aggregate amount of the Revolving Credit Commitments, as in effect at such time.
The aggregate amount of Total Revolving Credit Commitment on the Closing Date is $75,000,000.
“Trade Date”
has the meaning specified in Section 11.06(b)(vi)(B).
“Tranche”
means (a) with respect to Term Loans or commitments, refers to whether such Term Loans or commitments are (1) Initial Term Loans or Initial
Term Loan Commitments, (2) New Term Loans with the same terms and conditions made on the same day and increased from time to time or (3)
Extended Term Loans (of the same Extended Tranche) and (b) with respect to Revolving Credit Loans or commitments, refers to whether such
Revolving Credit Loans or commitments are (1) Initial Revolving Credit Commitments or Initial Revolving Credit Loans or (2) Extended Revolving
Credit Loans or Extended Revolving Credit Commitments (of the same Extended Tranche).
“Transactions”
means (a) the borrowing of the Loans on the Closing Date, (b) the Borrower Equity Contribution, (c) the Closing Date Acquisition, (d)
the Existing Credit Agreement Refinancing and (e) the payment of fees, costs and expenses in connection therewith (this clause (e),
the “Transaction Costs”).
“Treasury Counterparty”
means (a) any Designated Treasury Counterparty and (b) any Person that is an Agent, Arranger or Lender or any Affiliate of any of the
foregoing, in each case, at the time the applicable Secured Treasury Management Agreement is entered into, irrespective of whether such
Person ceases to be an Agent, Arranger, Lender or any Affiliate of any of the foregoing after entering into the applicable Secured Treasury
Management Agreement.
“Treasury Management
Agreement” means any agreement governing the provision of treasury or cash management services, including deposit accounts,
pool accounts, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation, credit cards, debit cards, p-cards (including, without limitation, purchasing cards and commercial cards)
and reporting and trade finance services.
“Triggering Event”
shall have the meaning set forth in Section 8.10(a).
“Type”
means, with respect to a Loan, its character as a Base Rate Loan or a Term SOFR Loan.
“UK Financial Institution”
means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated
by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates
of such credit institutions or investment firms.
“UK Resolution Authority”
means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unaudited Financial
Statements” means the Target Unaudited Financial Statements.
“Uniform Commercial
Code” and “UCC” mean (i) the Uniform Commercial Code as the same may from time to time be in effect
in the State of New York or (ii) the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may
be required to apply to any item or items of Collateral. References in this Agreement and the other Loan Documents to specific sections of
the Uniform Commercial Code are based on the Uniform Commercial Code as in effect in the State of New York on the Closing Date. In the
event such Uniform Commercial Code is amended or another Uniform Commercial Code described in clause (ii) is applicable, such section reference
shall be deemed to be references to the comparable section in such amended or other Uniform Commercial Code.
“United States”
and “U.S.” mean the United States of America.
“Unreimbursed Amount”
has the meaning set forth in Section 2.03(c)(i).
“Unrestricted Subsidiary”
means
(a)
any Subsidiary of Holdings designated by Holdings as an Unrestricted Subsidiary hereunder by written notice to the Administrative
Agent; provided that Holdings shall only be permitted to so designate an Unrestricted Subsidiary after the Closing Date
and so long as
(i)
no Default or Event of Default has occurred and is continuing or would result therefrom,
(ii)
immediately after giving effect to such designation, Holdings shall be in Pro Forma Compliance with the financial covenant set
forth in Section 8.10 (whether or not such covenant is then applicable),
(iii)
such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by Holdings or any Restricted Subsidiary) through
Investments as permitted by, and in compliance with, Section 8.05,
(iv)
without duplication of the preceding clause (iii), any assets owned by such Unrestricted Subsidiary at the time of
the initial designation thereof shall be treated as Investments pursuant to Section 8.05, and
(v)
Holdings shall have delivered to the Administrative Agent a certificate executed by a Responsible Officer of Holdings, certifying
compliance with the requirements of the preceding clauses (i) through (v), and containing the calculations
required by the preceding clause (ii) and
(b)
any Subsidiary of an Unrestricted Subsidiary.
Holdings may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary for purposes of this Agreement by written notice to the Administrative Agent (each, a “Subsidiary
Redesignation”); provided that
(A) no
Default or Event of Default has occurred and is continuing or would result therefrom,
(B) immediately
after giving effect to such Subsidiary Redesignation, Holdings shall be in Pro Forma Compliance with the financial covenant set forth
in Section 8.10 (whether or not such covenant is then applicable),
(C) any
Indebtedness of the applicable Subsidiary and any Liens encumbering its property existing as of the time of such Subsidiary Redesignation
shall be deemed newly incurred or established, as applicable, at such time, and
(D) Holdings
shall have delivered to the Administrative Agent a certificate executed by a Responsible Officer of Holdings, certifying compliance with
the requirements of the preceding clauses (A) and (B), and containing the calculations required by the
preceding clause (B).
Notwithstanding the foregoing, any Unrestricted
Subsidiary that has been re-designated a Restricted Subsidiary may not be subsequently re-designated as an Unrestricted Subsidiary. No
Borrower or any Intermediate Holding Company may be designated as an Unrestricted Subsidiary. No Unrestricted Subsidiary shall own any
intellectual property that is used in and material to the operation of the business of any of the Loan Parties. Notwithstanding any provision
of the Loan Documents, actions taken directly by an Unrestricted Subsidiary will not be deemed to have been taken, directly or indirectly,
by Holdings or any Restricted Subsidiary.
“U.S. Government
Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry
and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes
of trading in United States government securities.
“U.S. Special
Resolution Regimes” has the meaning specified in Section 11.25.
“US Borrower”
means any Borrower that is treated as a United States person within the meaning of Section 7701(a)(30) of the Code.
“US Subsidiary”
means any Restricted Subsidiary that is organized under the laws of any political subdivision of the United States.
“Valuation Date”
means (i) in connection with borrowing any Revolving Credit Loan, the date two Business Days prior to the making, continuing or converting
of any Revolving Credit Loan, (ii) in connection with the repayment of any Revolving Credit Loan, the date of such repayment and (iii)
in connection with any other determination of the Dollar Equivalent of any amount, the date of such determination.
“Voluntary Prepayment”
means a prepayment of principal of Term Loans pursuant to Section 2.05(a) in any year to the extent that such prepayment
reduces the scheduled installments of principal due in respect of Term Loans as set forth in Section 2.07 in any subsequent
year.
“Wholly-Owned Restricted
Subsidiary” means any Restricted Subsidiary all of the Equity Interests in which (except directors’ qualifying shares)
are, at the time, directly or indirectly owned by Holdings.
“Write-Down and
Conversion Powers” means, (a) 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, and (b) with respect to the United Kingdom, any powers of the applicable
Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution
or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations
of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised
under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related
to or ancillary to any of those powers.
“Yield”
means, with respect to any Term Loan or New Term Loan, as the case may be, on any date of determination as reasonably determined by the
Administrative Agent in consultation with Holdings and consistent with generally accepted financial practices, the sum of (x) any interest
rate margin applicable to such Indebtedness, (y) if such Indebtedness is initially issued at a discount or the lenders making the same
receive up-front fees (other than any arrangement, commitment, underwriting, structuring, agency or other similar fees payable in connection
therewith (regardless of whether any such fees are paid to or shared in whole or in part with such lenders thereunder), consent fees for
amendments (if applicable), and other fees that are not shared with all providers of such Indebtedness) directly or indirectly from or
on behalf of the borrower thereunder for doing so (the amount of such discount or fee, expressed as a percentage of the applicable Indebtedness,
being referred to herein as “OID”), the amount of such OID divided by the lesser of (A) the average life to
maturity of such Indebtedness and (B) four and (z) Term SOFR (or a Benchmark Replacement in respect thereof) or Base Rate “floor”.
“Yield Differential”
has the meaning specified in Section 2.14(d).
1.02 Other
Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or
in such other Loan Document:
(a)
The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(b) (i)
The words “herein,” “hereto,” “hereof” and “hereunder”
and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular
provision thereof.
(ii)
Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.
(iii)
The term “including” is by way of example and not limitation.
(iv)
The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or electronic form.
(c)
In the computation of periods of time from a specified date to a later specified date, the word “from” means
“from and including;” the words “to” and “until” each mean “to but excluding;”
and the word “through” means “to and including.”
(d)
Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms.
(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 on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in
preparing the Holdings Audited Financial Statements.
(b)
If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document,
and either Holdings or the Required Lenders shall so request, the Administrative Agent, the Lenders and Holdings shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) Holdings shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Any change in GAAP occurring after,
but not including, December 31, 2018 that would require on or after January 1, 2019 a lease liability of Holdings for operating
leases to be treated as a capital lease or an on-balance sheet asset or on-balance sheet liability shall be disregarded for the purposes
of determining Indebtedness and any financial ratio or compliance or covenant requirement contained in any Loan Document.
1.04 Rounding.
Any financial ratios required to be maintained by Holdings 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).
1.05
References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
1.06
Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time
(daylight or standard, as applicable).
1.07
Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed
to be the available amount of such Letter of Credit at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer 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 available amount of such Letter of
Credit after giving effect to all such increases, whether or not such maximum amount may be drawn immediately at such time.
1.08
Conversion of Foreign Currencies.
(a)
For purposes of determining compliance as of any date after the Closing Date with Section 2.14, Article VII,
Article VIII (other than Section 8.10 and the calculation of the First Lien Net Leverage Ratio in
connection therewith), Article IX or for any other calculation or determination hereunder, any relevant amount (including
any amount of Indebtedness incurred or outstanding) that is denominated in any currency other than Dollars shall be translated into Dollars
at the currency exchange rates for corresponding items used in preparing Holdings’ financial statements for the last Test Period
for which financial statements have been delivered pursuant to Section 7.01 and will, in the case of Indebtedness,
reflect the currency translation effects, determined in accordance with GAAP. For purposes of Section 8.10 and the
calculation of compliance with the First Lien Net Leverage Ratio for purposes of taking any action thereunder, on any relevant date of
determination, amounts denominated in currencies other than Dollars shall be translated into Dollars at the applicable currency exchange
rate used in preparing the financial statements delivered pursuant to Sections 7.01(a) or (b), as applicable, for the
relevant Test Period.
(b)
For the avoidance of doubt, no Default or Event of Default shall be deemed to have occurred solely as a result of a change in the
rate of currency exchange occurring after the time of any relevant transaction so long as such relevant transaction was permitted at the
time incurred, made, acquired, or entered into (subject to Section 1.10) as set forth in clause (a) of this Section 1.08.
(c)
Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from
time to time specify with Holdings’ consent to appropriately reflect a change in currency of any country and any relevant market
convention or practice relating to such change in currency. The Administrative Agent shall determine the Dollar Equivalent of any amount
as of each Valuation Date (whether to determine compliance with any covenants specified herein or otherwise, subject to clause (b)
of this Section 1.08), and a determination thereof by the Administrative Agent shall be conclusive absent manifest
error. Such determination shall become effective as of such Valuation Date. The Administrative Agent may, but shall not be obligated to,
rely on any determination made by any Loan Party in any document delivered to the Administrative Agent. The Administrative Agent may determine
or redetermine the Dollar Equivalent of any amount on any date either in its reasonable discretion or upon the reasonable request of any
Lender or L/C Issuer.
(d)
The Administrative Agent may set up appropriate rounding off mechanisms or otherwise round-off amounts hereunder to the nearest
higher or lower amount in whole Dollar or cent to ensure amounts owing by any party hereunder or that otherwise need to be calculated
or converted hereunder are expressed in whole Dollars or in whole cents, as may be necessary or appropriate.
1.09
Divisions. Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, 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), as if it were a merger, transfer,
consolidation, amalgamation, consolidation, assignment, sale 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, Restricted Subsidiary, Unrestricted Subsidiary, joint venture or any other like term shall also constitute such
a Person or entity). For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law
(or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person
becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original
Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized
on the first date of its existence by the holders of its Equity Interests at such time.
1.10
Limited Condition Transactions. For purposes of (a) determining compliance with any provision of this Agreement which
requires the calculation of the First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio, the Total Net Leverage Ratio or
the Fixed Charge Coverage Ratio, (b) testing availability under any basket (including any basket measured as a percentage of Consolidated
EBITDA or Consolidated Total Assets) or (c) determining compliance with the accuracy of any representations and warranties or the absence
of any Default or Event of Default, in each case, in connection with a Limited Condition Transaction, if Holdings makes an LCT Election,
the date of determination for calculation of any such ratios or baskets shall be deemed to be the LCT Test Date and if, after giving pro
forma effect to the 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) as if they had occurred at the beginning of the most recent test period ending
prior to the LCT Test Date, Holdings or any Restricted Subsidiary could have taken such action on the relevant LCT Test Date in compliance
with such ratio or basket, such ratio or basket shall be deemed to have been complied with. For the avoidance of doubt, if Holdings has
made an LCT Election and any of the ratios or baskets for which compliance was determined or tested as of the LCT Test Date are exceeded
as a result of fluctuations in any such ratio or basket, including fluctuations in Consolidated EBITDA or Consolidated Total Assets of
Holdings or the target Person(s) subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction
or action, such baskets or ratios will not be deemed to have been exceeded as a result of such fluctuations. If Holdings has made an LCT
Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio or basket availability
on or following the relevant LCT Test Date and prior to the earlier of (i) the date on which such Limited Condition Transaction is consummated
or (ii) 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 (other than, in the period prior to funding of a Permitted Acquisition
financed with any Incremental Facilities, any basket measured as a percentage of Consolidated EBITDA) 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) have been consummated.
1.11 Rates.
The Administrative Agent does
not warrant or accept any responsibility for, and shall not have any liability with respect to any Benchmark or with respect to any alternative
or successor rate thereto, or replacement rate thereof including, without limitation, (i) any such alternative, successor or replacement
rate implemented pursuant to Section 3.03 upon the occurrence of a Benchmark Transition Event and (ii) the implementation
of any Benchmark Replacement Conforming Changes pursuant to Section 3.03 including without limitation, whether the
composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same
value or economic equivalence of, the Benchmark or have the same volume or liquidity as did the London interbank offered rate prior to
its discontinuance or unavailability.
1.12
Quebec Interpretation.
For purposes of any Collateral
located in the Province of Québec or charged by the Canadian Deed of Hypothec and for all other purposes pursuant to which the
interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a court or tribunal exercising
jurisdiction in the Province of Quebec, (a) “priority” shall be deemed to include “rank” or “prior claim”,
as applicable, (b) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”,
(c) “fee owned” shall be deemed to include “owned”, (d) “leasehold interest” and “leasehold
rights” shall be deemed to include “rights resulting from a lease”, (e) “lease” shall be deemed to include
a “contract of leasing (crédit-bail)”, (f) “personal property” shall be deemed to include “movable
property”, (g) “real property” shall be deemed to include “immovable property”, (h) “tangible property”
shall be deemed to include “corporeal property”, (i) “intangible property” shall be deemed to include “incorporeal
property”, (j) “security interest”, “lien” and “mortgage” shall be deemed to include a “hypothec”,
“prior claim”, “reservation of ownership” and a “resolutory clause”, as applicable, (k) all references
to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code of Quebec, (l)
all references to “perfection” of or “perfected” liens shall be deemed to include a reference to the “opposability”
of such liens against third parties, (m) any “right of offset”, “right of setoff” or similar expression shall
be deemed to include a “right of compensation”, (n) “goods” shall be deemed to include “corporeal movable
property” other than chattel paper, documents of title, instruments, money and securities, (o) an “agent” shall be deemed
to include a “mandatary”, (p) a “deposit account” shall be deemed to include a “financial account”
(within the meaning of Article 2713.6 of the Civil Code of Quebec) and (q) “joint and several” shall be deemed to include
“solidary”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection
with the transactions contemplated herein be drawn up in the English language only and that all other documents contemplated thereunder
or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment
que c’est leur volonté que la présente convention et les autres documents qui y sont afférents soient rédigés
en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par la présente convention soient
également rédigés en la langue anglaise seulement.
Article
II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01
The Loans.
(a)
Subject to the terms and conditions set forth herein, each Initial Term Loan Lender severally agrees to make term loans (each such
loan, an “Initial Term Loan”) to the Initial Borrower on the Closing Date in Dollars in the aggregate amount
of such Term Loan Lender’s Term Loan Commitment. Amounts repaid or prepaid in respect of Term Loans may not be reborrowed. Term
Loans may be Base Rate Loans or Term SOFR Loans, as further provided herein.
(b)
Subject to the terms and conditions set forth herein, each Initial Revolving Credit Lender severally agrees to make revolving
loans (each such loan, an “Initial Revolving Credit Loan”) in Dollars to the Borrowers from time to time, on
any Business Day during the Initial Availability Period, in an aggregate amount up to, at any time outstanding, such Initial Revolving
Credit Lender’s Initial Revolving Credit Commitment; provided, however, that after giving effect to
any Revolving Credit Borrowing, the Total Outstandings shall not exceed the Total Revolving Credit Commitments. Within the limits of each
Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, a Borrower may borrow
under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.
Revolving Credit Loans may be Base Rate Loans or Term SOFR Loans, as further provided herein. Each Revolving Credit Borrowing (including
any deemed Revolving Credit Borrowings made pursuant to Section 2.03) shall be allocated pro rata among the outstanding
Tranches of Revolving Credit Commitments.
2.02
Borrowings, Conversions and Continuations of Loans.
(a)
Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Term SOFR Loans shall be made upon
any Borrower’s irrevocable notice to the Administrative Agent which may be given by telephone (confirmed promptly by delivery of
a written notice to the Administrative Agent); provided that such notice may state that such notice is conditioned upon
the receipt of proceeds of any refinancing facilities, the effectiveness of other credit facilities or the consummation of an acquisition
or sale, in which case such notice may be revoked by the Borrowers by notice to the Administrative Agent on or prior to the specified
effective date if such condition is not satisfied. Each such notice must be received by the Administrative Agent not later than (i) 1:00
p.m. on the third Business Day (or, in the case of a proposed Loan to be made on the Closing Date, one Business Day) prior to the date
of the proposed Loans in the case of Term SOFR Loans or (ii) 11:00 a.m. on the same Business Day of the proposed Loans in the case of
Base Rate Loans. The applicable Borrower shall deliver such notice to the Administrative Agent in the form of a written Committed Loan
Notice or by telephone (confirmed promptly by delivery of a Committed Loan Notice), appropriately completed and signed by a Responsible
Officer of the applicable Borrower. Each Borrowing of, conversion to or continuation of Term SOFR Loans shall be in a principal amount
of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Section 2.03(c), each Borrowing
of or conversion to Base Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof.
Each Committed Loan Notice shall specify (i) whether such Borrower is requesting a Borrowing of Term Loans, a Revolving Credit Borrowing,
a conversion of Loans from one Type to the other, or a continuation of Term SOFR Loans, (ii) the requested date of the Borrowing, conversion
or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued and location of the account to which funds are to be disbursed, (iv) the Type of Loans to be borrowed or to which existing Tranche
are to be converted and (v) if applicable, the duration of the Interest Period with respect thereto. If such Borrower fails to specify
a Type of Loan in a Committed Loan Notice or if such Borrower fails to give a timely notice requesting a conversion or continuation, then
Loans shall be made as, or converted to, Base Rate Loans (other than in the case of Loans bearing interest based on Daily Simple SOFR,
which shall be continued as Loans bearing interest based on Daily Simple SOFR). Any such automatic conversion to Base Rate Loans shall
be effective as of the last day of the Interest Period then in effect with respect to the applicable Term SOFR Loans. If such Borrower
fails to specify an Interest Period with respect to a Term SOFR Loan, it will be deemed to have specified an Interest Period of one month.
Any Lender may make, carry or transfer Term SOFR Loans at, to or for the account of any of its branch offices or the office of any Affiliate
of such Lender.
(b)
Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each applicable Lender of the amount
of its Pro Rata Share of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the applicable Borrower,
the Administrative Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in Section 2.02(a). Each Lender shall make the amount of its Loan
available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m.
on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02,
the Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative
Agent by wire transfer of such funds, in accordance with instructions provided to the Administrative Agent by such Borrower in the Committed
Loan Notice.
(c)
Except as otherwise provided herein, a Term SOFR Loan may be continued or converted only on the last day of an Interest Period
for such Term SOFR Loan. Upon notice to Holdings from the Administrative Agent given at the request of the Required Lenders, during the
existence of a Default, Loans may not be requested as, converted to or continued as Term SOFR Loans without the consent of the Required
Lenders; provided, however, that Revolving Credit Loans may be continued as Term SOFR Loans with an Interest
Period of one month.
(d)
The Administrative Agent shall promptly notify the Borrowers and the Lenders of the interest rate applicable to any Interest Period
for Term SOFR Loans upon determination of such interest rate. The determination of Term SOFR by the Administrative Agent shall be conclusive
in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrowers
and the Lenders of any change in the Prime Rate used in determining the Base Rate promptly following the announcement of such change.
(e)
After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the
same Type, there shall not be more than ten Interest Periods in effect.
(f)
The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.
2.03
Letters of Credit.
(a)
The Letter of Credit Commitment.
(i)
Subject to the terms and conditions set forth herein,
(A)
each L/C Issuer agrees, in reliance upon (among other things) the agreements of the other Revolving Credit Lenders set forth in
this Section 2.03,
(1)
from time to time on any Business Day during the period from the Closing Date until the day that is five Business Days prior to
the Initial Revolving Credit Maturity Date, to issue Letters of Credit denominated in Dollars for the account of each Borrower (but the
Letter of Credit may contain a statement that it is being issued for the benefit of a Subsidiary), and to amend or extend Letters of Credit
previously issued by it, in accordance with Section 2.03(b), and
(2)
to honor drawings under the Letters of Credit; and
(B)
the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of each Borrower or any
of its Restricted Subsidiaries on a pro rata basis in accordance with their
respective Pro Rata Share of the Total Revolving Credit Commitments;
provided that,
(I) that
any Letter of Credit issued on behalf of any Restricted Subsidiary shall be issued naming the applicable Borrower as the account party
on any such Letter of Credit, but such Letter of Credit may contain a statement that it is being issued for the benefit of such Restricted
Subsidiary;
(II) that
no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit, if, as of the date of such L/C
Credit Extension,
(w) the amount available
to be drawn under Letters of Credit issued by such L/C Issuer would exceed such L/C Issuer’s Letter of Credit Sublimit (provided
that for the avoidance of doubt, such L/C Issuer shall be permitted to exceed such L/C Issuer’s Letter of Credit Sublimit),
(x) the aggregate
Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender plus such Revolving Credit Lender’s Pro Rata
Share of the Outstanding Amount of all L/C Obligations would exceed such Revolving Credit Lender’s Revolving Credit Commitment,
(y) the Total Outstandings
would exceed the Total Revolving Credit Commitments or
(z) the Outstanding
Amount of all L/C Obligations would exceed the Letter of Credit Sublimit.
Each request by a Borrower for the issuance
or amendment of a Letter of Credit shall be deemed to be a representation by a Borrower that the L/C Credit Extension so requested complies
with the conditions set forth in the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof,
each Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly each such Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii)
No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A)
any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such
L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer
with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;
(B)
subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last extension (or as otherwise agreed by the Administrative Agent and such L/C Issuer);
(C)
the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all of the Lenders
have approved such expiry date or the L/C Issuer has approved such expiry date and such requested Letter of Credit has been Cash Collateralized
by the applicant requesting such Letter of Credit in accordance with Section 2.03(g) at least five Business Days prior
to the Letter of Credit Expiration Date;
(D)
the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;
(E)
except as otherwise agreed by the applicable L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000;
(F)
any Lender is at such time a Defaulting Lender hereunder, unless such L/C Issuer has entered into satisfactory arrangements with
the Borrowers or such Lender to eliminate such L/C Issuer’s risk with respect to such Lender or reallocate such risk pursuant to
Section 2.15(a)(v); or
(G)
if it is determined that the applicant or the account party or the beneficiary of the Letter of Credit is considered an “affiliate”
of L/C Issuer as such term is defined in Regulation W of the Federal Reserve.
(iii)
No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation
at such time to issue such Letter of Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.
(iv)
Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Agents in Article X
with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed
to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Agents” as used in Article X
included the L/C Issuers with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C
Issuers.
(b)
Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit.
(i)
Each Letter of Credit shall be issued or amended, as the case may be, upon the request of each Borrower by telephone, confirmed
by delivery to the applicable L/C Issuer (with a copy to the Administrative Agent) of a Letter of Credit Application and including agreed-upon
draft language for such Letter of Credit reasonably acceptable to the applicable L/C Issuer, appropriately completed and signed by a Responsible
Officer of the applicable Borrower. Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative
Agent not later than 1:00 p.m. at least three Business Days (or such earlier date and time as the applicable L/C Issuer may agree
in a particular instance in its reasonable discretion) prior to the proposed issuance date or date of amendment, as the case may be. In
the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the applicable L/C Issuer:
(A)
the proposed issuance date of the requested Letter of Credit (which shall be a Business Day);
(B)
the amount thereof;
(C)
the expiry date thereof;
(D)
the name and address of the beneficiary thereof;
(E)
the documents to be presented by such beneficiary in case of any drawing thereunder;
(F)
the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and
(G)
such other matters as the applicable L/C Issuer may reasonably require.
In the case of a request for an amendment
of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable
L/C Issuer
(A) the
Letter of Credit to be amended;
(B) the
proposed date of amendment thereof (which shall be a Business Day);
(C) the
nature of the proposed amendment; and
(D) such
other matters as the applicable L/C Issuer may reasonably require.
Additionally, the Borrowers shall furnish
to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of
Credit issuance or amendment, including any Issuer Documents, as the applicable L/C Issuer or the Administrative Agent may reasonably
require.
(ii)
Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent
(in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and,
if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by such L/C Issuer of confirmation from
the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of such Borrower or
enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the applicable L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Pro Rata Share times the amount of such Letter of Credit; provided that the aggregate
Outstanding Amount of the Revolving Credit Loans of such Revolving Credit Lender plus such Revolving Credit Lender’s Pro Rata Share
of the Outstanding Amount of all L/C Obligations
would not exceed such Revolving Credit Lender’s Revolving Credit Commitment.
(iii)
If any Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”);
provided that any such Auto-Renewal Letter of Credit must permit the applicable L/C Issuer to prevent any such renewal at
least once in each 12-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the “Nonrenewal Notice Date”) in each such 12-month period to be agreed upon at
the time such Letter of Credit is issued. Unless otherwise directed by the applicable L/C Issuer, the Borrowers shall not be required
to make a specific request to such L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Revolving
Credit Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the renewal of such Letter
of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date (or any later date if the Borrowers have agreed
to Cash Collateralize such Letter of Credit prior to the Letter of Credit Expiration Date for such Letter of Credit); provided,
however, that the applicable L/C Issuer (A) shall have no obligation to permit any such extension if such L/C Issuer has
determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by
reason of the provisions of Section 2.03(a)(ii) or otherwise), and (B) shall not permit any such extension if it has
not received notice (in writing) on or before the day that is five Business Days before the Nonrenewal Notice Date (1) from the Administrative
Agent that the Majority Facility Lenders in respect of the Revolving Credit Facility have elected not to permit such renewal or (2) from
the Administrative Agent, any Revolving Credit Lender or any Borrower that one or more of the applicable conditions specified in Section 5.02
is not then satisfied and in each such case directing the L/C Issuer not to permit such extension.
(iv)
Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the applicable Borrower and the Administrative Agent a true
and complete copy of such Letter of Credit or amendment.
(c)
Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt
from the beneficiary of any Letter of Credit of drawing documents under such Letter of Credit, the applicable L/C Issuer shall examine
drawing documents within the period stipulated by the Terms and Conditions of the Letter of Credit. After such examination, the L/C Issuer
shall notify the applicable Borrower and the Administrative Agent thereof. Not later than 1:00 p.m. on the date immediately following
any payment by the applicable L/C Issuer under a Letter of Credit (such date, an “Honor Date”), such Borrower
shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing for a Letter of Credit
issued on its behalf. If such Borrower fails to so reimburse the applicable L/C Issuer by such time, the Administrative Agent shall promptly
notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”),
and the amount of such Revolving Credit Lender’s Pro Rata Share thereof. In such event, such Borrower shall be deemed to have requested
a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without
regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject
to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 5.02
(other than the delivery of a Committed Loan Notice). Any notice given by the applicable L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) must be in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
(ii)
Each Revolving Credit Lender (including the Lender acting as the applicable L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office
in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such
notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit
Lender that so makes funds available shall be deemed to have made a Base Rate Loan to such Borrower in such amount. The Administrative
Agent shall remit the funds so received to the applicable L/C Issuer.
(iii)
With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because
the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the applicable Borrower shall
be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable within one Business Day of demand (together with interest) and, if not paid when due, shall
bear interest at the Default Rate. In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account
of such L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such
L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.
(iv)
Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c)
to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro
Rata Share of such amount shall be solely for the account of such L/C Issuer.
(v)
Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse the applicable L/C
Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender
may have against such L/C Issuer, any Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c)
is subject to the conditions set forth in Section 5.02 (other than delivery by any Borrower of a Committed Loan Notice)
and that the obligations of the Borrowers pursuant to this Section 2.03(c) shall survive termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder. No such making of an L/C Advance shall relieve or otherwise impair
the obligation of the Borrowers to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C Issuer under any
Letter of Credit issued to such Borrower, together with interest as provided herein.
(vi)
If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the applicable L/C Issuer
any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Revolving Credit Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required
to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the Federal
Funds Effective Rate and a rate determined by such L/C Issuer in accordance
with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such
L/C Issuer in connection with the foregoing. If such Revolving Credit Lender pays such amount (with interest and fees as aforesaid), the
amount so paid shall constitute such Lender’s Revolving Credit Loan included in the relevant Borrowing or L/C Advance in respect
of the relevant L/C Borrowing, as the case may be. A certificate of the applicable L/C Issuer submitted to any Revolving Credit Lender
(through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive
absent manifest error.
(d)
Repayment of Participations.
(i)
At any time after the applicable L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit
Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative
Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether
directly from any Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Revolving Credit Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii)
If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i)
is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement
entered into by the applicable L/C Issuer in its discretion), each Revolving Credit Lender shall pay to the Administrative Agent for the
account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Revolving Credit Lender, at a rate per annum equal to the Federal Funds Effective Rate
from time to time in effect. The obligations of the Revolving Credit Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.
(e)
Obligations Absolute. The obligation of each Borrower to reimburse the applicable L/C Issuer for each drawing under each
Letter of Credit issued on behalf of such Borrower and to repay each such L/C Borrowing shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i)
any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii)
the existence of any claim, counterclaim, setoff, defense or other right that any Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable
L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit
or any agreement or instrument relating thereto, or any unrelated transaction;
(iii)
any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv)
any payment by the applicable L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law;
(v)
any exchange, release or non-perfection of any Collateral, or any release or amendment or waiver of or consent to departure from
the Guaranty or any other guarantee, for all or any of the Obligations of any Borrower in respect of such Letter of Credit; or
(vi)
any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge of, any Borrower.
Any Borrower shall promptly
examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of non-compliance
with Holdings’ instructions or other irregularity, Holdings will promptly, upon knowledge, notify the applicable L/C Issuer. Holdings
shall be conclusively deemed to have waived any such claim against the applicable L/C Issuer and its correspondents unless such notice
is given as aforesaid.
(f)
Role of L/C Issuers. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the applicable
L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the
Person executing or delivering any such document. None of the applicable L/C Issuer, the Administrative Agent, any of their respective
Related Parties nor any of the respective correspondents, participants or assignees of such L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct (as determined by a court of competent
jurisdiction by final and non-appealable judgment); or (iii) the due execution, effectiveness, validity or enforceability of any document
or instrument related to any Letter of Credit or Letter of Credit Application. Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that
this assumption is not intended to, and shall not, preclude any Borrower’s pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. None of the applicable L/C Issuer, the Administrative Agent, any of
their respective Related Parties, nor any of the respective correspondents, participants or assignees of such L/C Issuer, shall be liable
or responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(e);
provided, however, that anything in such clauses to the contrary notwithstanding, a Borrower may have
a claim against such L/C Issuer, and such L/C Issuer may be liable to such Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuer’s
willful misconduct or gross negligence (as determined by a court of competent jurisdiction by final and non-appealable judgment) or such
L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of documents strictly
complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the applicable L/C
Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a 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.
(g)
Cash Collateral. Upon the request of the Administrative Agent, (i) if the applicable L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of
Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrowers shall, in each case, within one Business
Day, Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to 103% of such Outstanding Amount determined
as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be).
For purposes of this Section 2.03,
Section 2.05 and Section 9.02(c), “Cash Collateralize” means to pledge
and deposit with or deliver to the Collateral Agent, for the benefit of the L/C Issuers and the Revolving Credit Lenders, as collateral
for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the
Collateral Agent and such L/C Issuer (which documents are hereby consented to by the Revolving Credit Lenders) or to otherwise backstop
(with a letter of credit on customary terms or otherwise) such L/C Obligations to the applicable L/C Issuer’s and the Administrative
Agent’s reasonable satisfaction. Derivatives of such term have corresponding meanings. The Borrowers hereby grant to the Collateral
Agent, for the benefit of the L/C Issuers and the Revolving Credit Lenders, a security interest in all such cash, deposit accounts and
all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked deposit accounts with the Collateral
Agent. If at any time the Administrative Agent or the Collateral Agent determines that any funds held as Cash Collateral are subject to
any right or claim of any Person other than the Collateral Agent or that the total amount of such funds is less than 103% of the aggregate
Outstanding Amount of all L/C Obligations, the Borrowers will, forthwith within one Business Day of demand by the Collateral Agent, pay
to the Collateral Agent, as additional funds to be deposited and held in the deposit accounts with the Collateral Agent as aforesaid,
an amount equal to the excess of (a) 103% of such aggregate Outstanding Amount over (b) the total amount of funds, if any, then
held as Cash Collateral that the Administrative Agent or the Collateral Agent determines to be free and clear of any such right and claim.
Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent
permitted under applicable Law, to reimburse the applicable L/C Issuer.
(h)
Applicability of ISP98. Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrowers, when a Letter
of Credit is issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall be stated therein to apply to each
Letter of Credit.
(i)
Letter of Credit Fees. The Borrowers shall
pay to the Administrative Agent, for the account of each Revolving Credit Lender in accordance
with its Pro Rata Share, a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal
to the Applicable Rate times the daily maximum amount available to be drawn under such Letter of Credit. For purposes of computing
the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.07. Such letter of credit fees shall be computed on a quarterly basis in arrears. Letter of Credit Fees
shall be (i) due and payable on the last Business Day of each March, June, September and December, commencing with the first such date
to occur after the issuance of such Letter of Credit, on the date on which the Revolving Credit Commitment of each Revolving Credit
Lender shall be terminated as provided herein, on the Letter of Credit Expiration Date and thereafter
on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the
daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.
(j)
Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The Borrowers
shall pay directly to the applicable L/C Issuer, for
its own account, a fronting fee with respect to each Letter of Credit at a rate per annum equal to 0.125% unless as otherwise agreed with
such L/C Issuer, computed on the daily amount available to be drawn under each Letter of Credit on a quarterly basis in arrears. Such
fronting fees shall be due and payable on the last Business Day of each March, June, September and December in respect of the most recently-ended
quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance
of such Letter of Credit, on the date on which the Revolving Credit Commitments shall be terminated as provided herein, on the Letter
of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter
of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. In addition, the Borrowers
shall pay directly to the applicable L/C Issuer for
its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such
L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and
payable within five Business Days of demand and are nonrefundable.
(k)
Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document,
the terms hereof shall control.
(l)
Resignation or Removal of L/C Issuers. Any L/C Issuer may
resign at any time by giving 30 days’ prior written notice to the Administrative Agent, the Revolving Credit Lenders and the Borrowers.
Any L/C Issuer may be removed at any time by written agreement among the Borrowers, the Administrative Agent and such L/C Issuer; provided
that such L/C Issuer shall not be required to execute or deliver any written agreement if such L/C Issuer has no Letters of Credit or
reimbursement obligations with respect thereto outstanding. At the time such removal or resignation shall become effective, the Borrowers
shall pay all accrued and unpaid fees pursuant to Section 2.03(j). After the resignation or removal of any L/C Issuer
hereunder, such L/C Issuer shall remain a party hereto and shall continue to have all the rights and obligations of an L/C Issuer under
this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation or removal, but shall
not be required, and shall be discharged from its obligations, to issue additional Letters of Credit or to extend or increase the amount
of Letters of Credit then outstanding.
(m)
Additional L/C Issuers. The Borrowers may, at any time and from time to time, designate one or more additional Revolving
Credit Lenders to act as an L/C Issuer under the terms of this Agreement with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Revolving Credit Lender. Any Revolving Credit Lender so designated shall be deemed to be an “L/C
Issuer” (in addition to being a Revolving Credit Lender) in respect of Letters of Credit issued or to be issued by such Revolving
Credit Lender, and, with respect to such Letters of Credit, the term “L/C Issuer” shall thereafter apply to the other L/C
Issuers and such Revolving Credit Lender. The acceptance of any designation as an L/C Issuer hereunder by a Revolving Credit Lender shall
be evidenced by an agreement entered into by such Revolving Credit Lender, in a form satisfactory to the Borrowers and the Administrative
Agent, and, from and after the effective date of such agreement, (i) such Revolving Credit Lender shall have all the rights and obligations
of an L/C Issuer under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan Documents to the term
“L/C Issuer” shall be deemed to refer to such Revolving Credit Lender in addition to any other L/C Issuers, as the context
shall require.
2.04
[Reserved].
2.05
Prepayments.
(a)
Optional.
(i)
the Borrowers may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay any Tranche or
Tranches of Loans, in whole or in part, without premium or penalty (other than as set forth in Section 2.05(a)(iv));
provided that (1) such notice must be received by the Administrative Agent not later than 1:00 p.m. (A) three Business Days
prior to any date of prepayment of Term SOFR Loans, and (B) one Business Day prior to the date of prepayment of Base Rate Loans; (2) any
prepayment of Term SOFR Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; (3) any
prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof or, in each
case, if less, the entire principal amount thereof then outstanding; and (4) such notice may be expressly conditioned in writing upon
the consummation of any transaction or event, in which case, such notice shall be revoked or extended if such event or transaction does
not occur or is delayed. Each such notice shall be substantially in the form of Exhibit H and shall specify the date
and amount of such prepayment, the Class, Tranche(s) and the Type(s) of Loans to be prepaid, and if Term SOFR Loans are to be prepaid,
the Interest Period(s) of such Loans (except that if the class of Loans to be prepaid includes both Base Rate Loans and Term SOFR Loans,
absent direction by the Borrowers, the applicable prepayment shall be applied first to Base Rate Loans to the full extent thereof before
application to Term SOFR Loans, in each case in a manner that minimizes the amount payable by the Borrowers in respect of such prepayment
pursuant to Section 3.05). The Administrative Agent will promptly notify each applicable Lender of its receipt of each
such notice and of the amount of such Lender’s Pro Rata Share of such prepayment, if any. If such notice is given by Holdings, the
Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Term SOFR Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required
pursuant to Section 3.05.
(ii)
[reserved]
(iii)
The Borrowers may voluntarily prepay any Tranche of Term Loans selected by Holdings; provided that, other than with
respect to any optional prepayment made solely with the proceeds of long-term Indebtedness permitted to be incurred under Section 8.02
(including Refinancing Incremental Term Loans), if the Tranche of Term Loans selected by Holdings has a final maturity date that is later
than the final maturity date of any other Tranche of Term Loans then outstanding, then such optional prepayment shall be made on a pro
rata basis among the Tranche of Term Loans selected by Holdings and each such other earlier-maturing Tranche of Term Loans. Optional prepayments
of any Tranche of Term Loans selected by Holdings shall be applied on a pro rata basis in direct order of maturity to the remaining scheduled
installments of principal due in respect of such Tranche of Term Loans pursuant to Section 2.07. Optional prepayments
of any Tranche of Revolving Credit Loans selected by Holdings shall be made on a pro rata basis among the outstanding Revolving Credit
Loans of such Tranche.
(iv)
In the event that, on or prior to the date that is six months after the Closing Date, any Borrower (x) prepays, refinances,
substitutes or replaces any Initial Term Loans in connection with a Repricing Transaction (including, for avoidance of doubt, any prepayment
made pursuant to Section 2.05(b)(iii) that constitutes a Repricing Transaction), or (y) effects any amendment
of this Agreement resulting in a Repricing Transaction with respect to the Initial Term Loans, as applicable, the Borrowers shall pay
to the Administrative Agent, for the ratable account of each of the applicable Initial Term Loan Lenders, (I) in the case of clause (x),
a prepayment premium of 1.00% of the aggregate principal amount
of the applicable Initial Term Loans so prepaid, refinanced, substituted or replaced and (II) in the case of clause (y),
a fee equal to 1.00% of the aggregate principal amount of the applicable Initial Term Loans outstanding immediately prior to such amendment.
Such amounts shall be due and payable on the date of effectiveness of such Repricing Transaction. As a condition to effectiveness of any
replacement of a Non-Consenting Lender pursuant to Section 11.15 in respect of any amendment of this Agreement effective
on or prior to the date that is six months after the Closing Date, the Borrowers shall pay to the applicable Non-Consenting Lender a premium
equal to the premium that would apply if such Non-Consenting Lender’s applicable Initial Term Loans being assigned were being prepaid
and subject to the premium set forth in this Section 2.05(a) for such Initial Term Loans.
(b)
Mandatory.
(i)
In the event of any termination of any Tranche of Revolving Credit Commitments, the Borrowers shall, on the date of such termination,
repay or prepay all outstanding Revolving Credit Loans of such Tranche and replace all outstanding Letters of Credit and/or Cash Collateralize
the L/C Obligations in a cash collateral account established with the Collateral Agent for the benefit of the Secured Parties in the manner
described in Section 2.03(g). If for any reason the Outstanding Amount of Revolving Credit Loans of any Tranche of
Revolving Credit Commitments at any time exceeds the amount of Revolving Credit Commitments of such Tranche then in effect, the Borrowers
shall immediately prepay all outstanding Revolving Credit Loans of such Tranche and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrowers shall not be required to Cash Collateralize
the L/C Obligations pursuant to this Section 2.05(b)(i) unless, after the prepayment in full of the Revolving Credit
Loans of the applicable Tranche, the Total Outstandings exceeds the Total Revolving Credit Commitments then in effect. Mandatory prepayments
of any Tranche of Revolving Credit Loans shall be made on a pro rata basis among the outstanding Revolving Credit Loans of such Tranche.
(ii)
Not later than the fifth Business Day following the completion of any Asset Sale and/or not later than the tenth Business Day following
the occurrence of any Recovery Event and, in each case, the receipt of Net Cash Proceeds resulting therefrom by any Loan Party or any
Restricted Subsidiary, Holdings shall apply the Required Prepayment Percentage of such Net Cash Proceeds received with respect thereto
to prepay outstanding Term Loans and/or Cash Collateralize Letters of Credit in accordance with Section 2.05(b)(vi).
(iii)
In the event that any Restricted Subsidiary shall receive Net Cash Proceeds from the issuance or incurrence of any Indebtedness
of any Restricted Subsidiary, in each case, that is not permitted pursuant to Section 8.02, the Borrowers shall, substantially
simultaneously with (and in any event not later than the fifth Business Day next following) the receipt of such Net Cash Proceeds by such
Borrower or such Restricted Subsidiary, apply an amount equal to the Required Prepayment Percentage of such Net Cash Proceeds to prepay
outstanding Loans and/or Cash Collateralize Letters of Credit in accordance with Section 2.05(b)(vi).
(iv)
Commencing with the fiscal year of Holdings ending on December 31, 2026, no later than the date that is five Business Days
after the date on which the financial statements referred to in Section 7.01(a) are required to be delivered for such fiscal
year, the Borrowers shall prepay outstanding Loans and/or Cash Collateralize Letters of Credit in accordance with Section 2.05(b)(vi),
in an aggregate principal amount equal to the Required Prepayment Percentage of Excess Cash Flow for the fiscal year then ended less
the aggregate amount of all Voluntary Prepayments during such fiscal year; provided that such prepayment shall only be required
under this clause (iv)
if the net amount required to be prepaid in any fiscal year is greater than or equal to the greater of (x) $20,000,000 and (y) 10.00%
of Consolidated EBITDA.
(v)
Holdings shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.05(b),
(i) a certificate signed by a Responsible Officer of the Borrowers setting forth in reasonable detail the calculation of the amount of
such prepayment and (ii) to the extent practicable, at least three Business Days prior written notice of any prepayment pursuant
to Section 2.05(b)(i) and at least ten Business Days prior written notice of any prepayment pursuant to Section 2.05(b)(ii),
(iii) or (iv) (and, in each case, the Administrative Agent shall promptly notify each Lender). Each notice
of prepayment shall be substantially in the form of Exhibit H and shall specify the prepayment date, the Class, Tranche
and Type of each Loan being prepaid and the principal amount of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings
pursuant to this Section 2.05(b) shall be subject to Section 3.05, but shall otherwise be without
premium or penalty (except for Section 2.05(b)(iii) to the extent set forth in Section 2.05(a)(iv)).
(vi)
Mandatory prepayments under Sections 2.05(b)(ii), (iii) and (iv) shall be applied
to prepay outstanding Term Loans on a pro rata basis, subject to the provisions of sub-paragraph (vii) below and
any re-offer described therein. Any remaining amount of such prepayment shall be retained by the Borrowers to be used in accordance with
the provisions of this Agreement.
(vii)
Mandatory prepayments of outstanding Term Loans under this Agreement shall be applied pro rata against the remaining
scheduled installments of principal due in respect of the Term Loans pursuant to Section 2.07. Such mandatory
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 Base Rate Loans or Term SOFR Loans; provided that if no Lenders decline a given
mandatory prepayment of the Term Loans as described below, then, with respect to such mandatory prepayment, the amount of such
mandatory prepayment shall be applied in the case of the applicable principal amount of such Tranche of the Term Loans being so
prepaid, first to Term Loans that are Base Rate Loans to the full extent thereof before application to Term Loans that are Term SOFR
Loans in a manner that minimizes the amount of any payments required to be made by the Borrowers pursuant to Section 3.05.
Notwithstanding anything set forth herein to the contrary, any Term Loan Lender may elect, by notice to the Administrative Agent by
facsimile at least eight Business Days prior to the applicable prepayment date, to decline all of any prepayment of its Term Loans
pursuant to Section 2.05(b)(ii), (iii) or (iv), in which case the aggregate amount of
the prepayment that would have been applied to prepay such Term Loans but was so declined shall be retained by the Borrowers (such
retained amounts, the “Retained Declined Proceeds”) to be used in accordance with the provisions of this
Agreement.
(c)
Prepayments to Include Accrued Interest, Etc. All prepayments (other than prepayments
of Revolving Credit Loans that are Base Rate Loans that are not made in connection with the termination or permanent reduction of the
Revolving Credit Commitments) under this Section 2.05 shall be made together
with (i) accrued and unpaid interest to the date of such prepayment on the principal amount so prepaid and (ii) in the case
of any such prepayment of a Term SOFR Loan on a date other than the last day of an Interest Period therefor, any amounts owing in respect
of such Term SOFR Loan pursuant to Section 3.05.
2.06
Termination or Reduction of Commitments.
(a)
Optional. Holdings may, upon notice to the Administrative Agent (provided that such notice may state that
such notice is conditioned upon the receipt of proceeds of any refinancing facilities, the effectiveness of other credit facilities or
the consummation of an acquisition or sale, in which case such notice may be revoked by the Borrowers by notice
to the Administrative Agent on or prior to the specified effective date if such condition is not satisfied), terminate the unused portion
of the Letter of Credit Sublimit, the unused Revolving Credit Commitments or the unused Term Loan Commitments, or from time to time permanently
reduce the unused portion of the Letter of Credit Sublimit, the unused Revolving Credit Commitments or the unused Term Loan Commitment;
provided that (i) any such notice shall be received by the Administrative Agent not later than 1:00 p.m. three Business
Days prior to the date of termination or reduction (or such shorter period as the Administrative Agent may determine in its reasonable
discretion), (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in
excess thereof and (iii) the Borrowers shall not terminate or reduce the unused portion of the Letter of Credit Sublimit or the unused
Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings at any
time would exceed the Total Revolving Credit Commitments then in effect. Optional reductions of the unused Revolving Credit Commitments
shall be made on a pro rata basis among the outstanding Tranches of Revolving Credit Commitments.
(b)
Mandatory.
(i)
Unless previously terminated in accordance with the terms hereof,
(1) the Initial Term
Loan Commitments in effect as of the Closing Date shall automatically terminate at 5:00 p.m. on the Closing Date,
(2) the Initial Revolving
Credit Commitments shall automatically terminate on the Initial Revolving Credit Maturity Date and
(3) the Commitments
in respect of any Tranche of Incremental Term Loans shall automatically terminate on the date set forth in the applicable Incremental
Amendment or other document reasonably satisfactory to the Administrative Agent, the applicable Borrower(s) and the applicable Term Loan
Lender(s).
(ii)
If after giving effect to any reduction or termination of unused Commitments under this Section 2.06, any L/C
Issuer’s Letter of Credit Sublimit exceeds the amount of the Total Revolving Credit Commitments, such L/C Issuer’s Letter
of Credit Sublimit shall be automatically reduced by the amount of such excess.
(c)
Application of Commitment Reductions; Payment of Fees. The Administrative Agent will promptly notify the Lenders of any
termination or reduction of the unused portions of the Letter of Credit Sublimit, the unused Revolving Credit Commitments or the unused
Term Loan Commitments under this Section 2.06. Upon any reduction of unused Revolving Credit Commitments or unused
Term Loan Commitments, the Revolving Credit Commitments or Term Loan Commitments, as applicable, of each Lender shall be reduced by such
Lender’s Pro Rata Share of the amount by which the applicable Facility is reduced. Optional reductions of the unused Revolving Credit
Commitments shall be made on a pro rata basis among the outstanding Tranches of Revolving Credit Commitments. All Commitment Fees accrued
until the effective date of any termination of the Total Revolving Credit Commitments shall be paid on the effective date of such termination.
2.07
Repayment of Loans.
(a)
Term Loans.
(i)
On the last Business Day of each fiscal quarter of the Borrowers commencing with the fiscal quarter ending December 31, 2024,
the Borrowers shall pay to the Administrative Agent, for the account of the Initial Term Loan Lenders, a principal amount of the Initial
Term Loans (as adjusted from time to time pursuant to Sections 2.05 and 2.06(b)) equal to 0.25% of the
aggregate principal amount of the Initial Term Loans as of the Closing Date. To the extent not previously paid, prepaid, refinanced, substituted
or replaced, all Initial Term Loans shall be due and payable on the Initial Term Loan Maturity Date, together with accrued and unpaid
interest and fees on the principal amount to be paid up to but excluding the date of payment.
(ii)
All repayments pursuant to this Section 2.07(a) shall be subject to Section 3.05, but shall
otherwise be without premium or penalty.
(b)
Revolving Credit Loans. The Borrowers shall repay to the Administrative Agent for the ratable account of the Revolving Credit
Lenders on the applicable Revolving Credit Maturity Date the aggregate principal amount of all Revolving Credit Borrowings outstanding
on such date.
2.08
Interest.
(a)
Subject to the provisions of Section 2.08(b) and Section 2.10, (i) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate and (ii) each Term SOFR Loan shall bear interest on the outstanding principal amount thereof for
the applicable Interest Period at a rate per annum equal to Term SOFR for such Interest Period plus the Applicable Rate.
(b)
If any amount payable by any Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Furthermore, upon the request of
the Required Lenders, while any Event of Default exists, the Borrowers shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable
Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c)
Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto. Interest hereunder
shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law.
2.09
Fees.
In addition to certain
fees described in Sections 2.03(i) and (j):
(a)
Commitment Fees. The Borrowers shall pay to the Administrative Agent (x) for the account of each Revolving Credit Lender
in accordance with its Pro Rata Share, (i) a commitment fee equal to the Applicable Rate times the average daily unused amount
of the Revolving Credit Commitments of such Revolving Credit Lender during the preceding quarter (or other period commencing with and
including the Closing Date or ending with but excluding the applicable Revolving Credit Maturity Date or the date on which the Commitments
of such Revolving Credit Lender shall expire or be terminated) (the “Commitment Fee”); provided,
however, that any Commitment Fee accrued with respect to any of the Revolving Credit Commitments of a Defaulting Lender
during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrowers
so long as such Lender shall be a Defaulting Lender except to
the extent that the Commitment Fee shall otherwise have been due and payable by the Borrowers prior to such time; provided,
further, that no Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall
be a Defaulting Lender. The Commitment Fee shall accrue at all times during the Initial Availability Period (and thereafter so long as
any Revolving Credit Loans or L/C Obligations remain outstanding), including at any time during which one or more of the conditions in
Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the Closing Date, and to but excluding the last day of the
Initial Availability Period (and, if applicable, thereafter on demand). The Commitment Fee shall be calculated quarterly in arrears. For
the avoidance of doubt, for purposes of computing the Commitment Fee, Revolving Credit Commitments shall be deemed to be used to the extent
of the Outstanding Amount of the Revolving Credit Loans and the Outstanding Amount of all L/C Obligations.
(b)
Other Fees.
(i)
The Borrowers shall pay to the Agents for their own respective accounts such fees as shall have been separately agreed upon in
writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason
whatsoever.
(ii)
The Borrowers shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the
times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2.10
Computation of Interest and Fees. All computations of interest for Base Rate Loans in respect of which the rate of interest
is calculated on the basis of the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results
in more fees or interest, as applicable, being paid than if calculated on the basis of a 365-day year). Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and
binding for all purposes, absent manifest error.
2.11
Evidence of Indebtedness.
(a)
The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest
and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of
the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrowers so notified shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence
such Lender’s Loans in addition to such accounts or records. Each such Note shall (i) in the case of Term Loans, be in the form
of Exhibit G-1 (a “Term Loan Note”) and (ii) in the case of Revolving Credit Loans, be in
the form of Exhibit G-2 (a “Revolving Credit Note”). Each Lender may attach schedules to
its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
(b)
In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative
Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations
in Letters of Credit. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence
of manifest error.
(c)
Entries made in good faith by the Administrative Agent in the Register pursuant to Section 2.11(b), and by each
Lender in its account or accounts pursuant to Section 2.11(a), shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the Borrowers to, in the case of the Register, each Lender and,
in the case of such account or accounts, such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided
that the failure of the Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in the Register
or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement and the other Loan
Documents.
2.12
Payments Generally.
(a)
All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment
or setoff. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in U.S. Dollars
and in immediately available funds not later than 2:00 p.m. on the date specified herein. 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 in like
funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00
p.m. may be deemed in the Administrative Agent’s sole discretion received on the next succeeding Business Day and any applicable
interest or fees shall continue to accrue thereon. Except as otherwise provided herein, if any payment to be made by the Borrowers shall
come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall
be reflected in computing interest or fees, as the case may be; provided, however, that, if such extension
would cause payment of interest on or principal of Term SOFR Loans to be made in the next succeeding calendar month, such payment shall
be made on the immediately preceding Business Day. Notwithstanding anything to the contrary set forth herein, to the extent the Administrative
Agent receives a payment or other amount after such payment or other amount is due and payable, the Administrative Agent may, in its sole
discretion, pay such payment or other amount to the appropriate Lender or other person of record as of the date such payment is received.
(b)
(i) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of
Term SOFR Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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 Section 2.02 (or, in the case of a Borrowing
of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02)
and may, in reliance upon such assumption, make available to the Borrowers 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 and the applicable
Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date
of payment to the Administrative Agent, at (A) in the case of a payment to be made by 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, plus any administrative, processing or similar fees customarily charged
by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest
rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same
or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers
for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrowers shall be without prejudice to any claim the
Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii)
Unless the Administrative Agent shall have received notice from the Borrowers prior to the time at which any payment is due to
the Administrative Agent for the account of the Lenders or the L/C Issuers hereunder that the Borrowers will not make such payment, the
Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuers, as the case may be, the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders or the L/C Issuers, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds 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.
A notice of the Administrative Agent to any Lender
or the Borrowers with respect to any amount owing under this Section 2.12(b) shall be conclusive, absent manifest error.
(c)
If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the Borrowers by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance
with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without
interest.
(d)
The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and to make payments pursuant
to Section 11.04(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 11.04(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 make its payment under Section 11.04(c).
(e)
Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(f)
The Borrowers hereby authorize each Lender, if and to the extent payment owed to such Lender is not made when due hereunder or,
in the case of a Lender, under the Note held by such Lender, to charge from time to time against any or all of the Borrowers’ accounts
with such Lender any amount so due.
(g)
Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient
to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other
Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and
the Lenders in the order of priority set forth in Section 9.03.
2.13
Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the
Loans or any Tranche of the Loans made by it, or the participations in L/C Obligations, any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such
Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans or any Tranche of Loans made by them and/or such sub-participations in the participations in L/C Obligations held by them,
as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them (or other share contemplated hereunder); provided, however,
that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described
in Section 11.05 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying
Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) (or other share contemplated hereunder)
of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrowers agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of setoff, but subject to Section 11.08) with respect
to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation. The Administrative
Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this
Section 2.13 and will in each case notify the Lenders following any such purchases or repayments. Each Lender that
purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the Obligations purchased.
2.14
Incremental Facilities.
(a)
The Borrowers or any Guarantor (any such Guarantor, for so long as loans or commitments remain outstanding under the applicable
Incremental Facility, an “Additional Borrower”) may, by written notice to the Administrative Agent, request
the establishment of one or more new tranches of term facilities denominated in Dollars or any other currency agreed to by the applicable
Borrower, the Administrative Agent and the Lenders providing such New Term Loan Facility (each, a “New Term Loan Facility”)
and/or increase the principal amount of the Initial Term Loans, any Incremental Term Loans or any Extended Term Loans by requesting new
term loan commitments to be added to such Loans (together with any New Term Loan Facility, an “Incremental Term Facility”
and, any Loans made pursuant to an Incremental Term Facility, “Incremental Term Loans”) and/or request the establishment
of one or more new tranches of Revolving Credit Commitments (each, a “New Revolving Credit Facility”) and/or
request an increase in any Tranche of Revolving Credit Commitments (together with any New Revolving Credit Facility, an “Incremental
Revolving Credit Facility” and, together with any Incremental Term Facility, “Incremental Facilities”
and, the loans thereunder, “Incremental Revolving Credit Loans” and, together with any Incremental Term Loans,
“Incremental Loans”), in an aggregate amount not in excess of the sum of,
(x) the
sum of (i) the greater of (A) $200,000,000 (or a principal amount equal to the Dollar Equivalent of $200,000,000) and (B) 100%
of Consolidated EBITDA on a Pro Forma Basis and (ii) any unused amount under the General Debt Basket, less any amount of Indebtedness
incurred pursuant to clause (i)(D)(x)(1) of Section 8.02(p), and
(y) an
unlimited amount if, after giving effect to the incurrence of such amount,
(i) in
case of Incremental Facilities that are secured on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio is less
than or equal to 4.20 to 1.00 on a Pro Forma Basis,
(ii) in
case of Incremental Facilities that are secured on a junior basis to the Obligations, the Senior Secured Net Leverage Ratio is less than
or equal to 4.05 to 1.00 on a Pro Forma Basis, and
(iii) in
case of Incremental Facilities that are unsecured, either (x) the Fixed Charge Coverage Ratio is greater than or equal to 2.00 to 1.00
on a Pro Forma Basis or (y) the Total Net Leverage Ratio is less than or equal to 4.30 to 1.00 on a Pro Forma Basis
(in each case, assuming (A) the Indebtedness being
incurred as of such date of determination would be included in the definition of Consolidated Indebtedness, whether or not such Indebtedness
would otherwise be included, (B) any Incremental Facilities are fully drawn and (C) the proceeds held as cash or Cash Equivalents thereof
or of other Indebtedness incurred substantially concurrently therewith are not netted for the purposes of calculating the First Lien Net
Leverage Ratio, the Senior Secured Net Leverage Ratio and the Total Net Leverage Ratio) and, in each instance, for an amount not less
than $5,000,000 (or a principal amount equal to the Dollar Equivalent of $5,000,000) individually (or such lesser amount which shall be
approved by the Administrative Agent);
provided that
no existing Lender will have an obligation to make any Incremental Facility, nor will any Borrower have any obligation to approach any
existing Lender to provide any Incremental Facility;
provided, further, that Incremental
Facilities
(1) shall
be incurred pursuant to clause (y) above prior to utilization of any capacity pursuant to clause (x)
above,
(2) amounts
incurred in reliance on clause (x) above concurrently with amounts incurred in reliance on clause (y)
above shall not be included as Indebtedness in the First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio, the Total Net
Leverage Ratio or the Fixed Charge Coverage Ratio, as applicable, for purposes of calculating any amounts that may be incurred pursuant
to clause (y) above on the same day and
(3) if
all or any portion of any Incremental Facility was originally incurred or issued in reliance on clause (x) above and
thereafter such amount could have been incurred pursuant to clause (y) above, such amount of such Incremental Facility
shall be reclassified, as the applicable Borrower may elect from time to time, as having been incurred pursuant to clause (y)
above and thereafter shall not count as utilization of clause (x) above;
provided, further,
that, notwithstanding the foregoing or anything to the contrary set forth herein,
(1) Incremental
Term Loans may be incurred without regard to any of the foregoing limits to the extent that the Net Cash Proceeds of such Incremental
Term Loans are used on or about the date of incurrence to permanently prepay and refinance Term Loans of any Tranche selected by the applicable
Borrower on a dollar-for-dollar basis, and any such Incremental Term Loans (the “Refinancing Incremental Term Loans”)
shall be deemed to have been incurred pursuant to this proviso, and
(2) New
Revolving Credit Facilities may be incurred without regard to the foregoing limits to the extent that such New Revolving Credit Facilities
are used on or about the date of incurrence to refinance and permanently reduce Revolving Credit Commitments of any Tranche selected by
the applicable Borrower on a dollar-for-dollar basis, and any such Revolving Credit Commitments thereunder (the “Refinancing
Incremental Revolving Credit Commitments”) shall be deemed to have been incurred pursuant to this proviso.
Each such notice shall specify
(i)
the date (each, an “Increased Amount Date”) on which the applicable Borrower proposes that the applicable
Incremental Facility shall be effective, which shall be a date not less than ten Business Days after the date on which such notice is
delivered to the Administrative Agent (or such shorter period otherwise agreed to by the Administrative Agent in its reasonable discretion),
(ii)
the identity of each Lender or Affiliate or other Person that is consented to by the Administrative Agent (which consent shall
not be unreasonably withheld) and by the L/C Issuer to the extent such consent, if any, would be required under Section 11.06
for an assignment of Loans or Revolving Credit Commitments (any such Affiliate or other Person, a “New Incremental Lender”)
to whom the Borrowers propose any portion of such Incremental Facility be allocated and the amounts of such allocations and
(iii)
whether such Incremental Facility is to be an Incremental Term Facility or Incremental Revolving Credit Facility. Such Incremental
Facility shall become effective as of such Increased Amount Date;
provided that
(A) subject
to Section 1.10, no Event of Default or Default shall exist on such Increased Amount Date before or after giving effect
to such Incremental Facility,
(B) each
of the conditions set forth in Section 5.02 (and in the cases of Sections 5.02(a) and (b),
subject to Section 1.10)) shall be satisfied and all fees and expenses owing in respect of such increase to the Administrative
Agent and the Lenders shall have been paid (or Administrative Agent shall be satisfied with the arrangements made in respect of such payment);
(C) any
Incremental Facility provided by any New Incremental Lender shall be effected pursuant to one or more joinder agreements (an “Incremental
Amendment”) in form and substance satisfactory to the Administrative Agent and executed and delivered by a Borrower (or
Additional Borrower, if applicable) and the Administrative Agent, each of which shall be recorded in the Register; and
(D) to
the extent reasonably requested by the Administrative Agent, the Borrowers shall deliver or cause to be delivered (1) customary legal
opinions, (2) resolutions and officers’ certificates consistent with those delivered on the Closing Date, and (3) reaffirmation
agreements and/or amendments to the Collateral Documents as may be necessary to ensure that the enforceability of the Collateral Documents
and the perfection and priority of the Liens thereunder are preserved and maintained.
(b)
The creation or provision of any Incremental Facility or Incremental Loan (and, in connection therewith, any amendment to the terms
of this Agreement that is necessary or appropriate to implement the provisions thereof or that is favorable to the then-existing Lenders,
in each case, as reasonably determined by the Administrative Agent in consultation with the Borrowers) shall not require the approval
of any existing Lender other than any existing Lender providing all or part of any Incremental Commitment.
(c)
The terms and provisions of any New Revolving Credit Facility (other than pricing, maturity and fees) shall be, except as otherwise
set forth herein or in the joinder agreement set forth in Section 2.14(a), substantially identical to the existing
Revolving Credit Facility; provided that,
(i)
no New Revolving Credit Facility shall mature earlier than, or require any scheduled amortization or mandatory commitment reduction
prior to, the Revolving Credit Maturity Date of any Tranche of Revolving Credit Loans (or, in the case of Refinancing Incremental Revolving
Credit Commitments, the final maturity date of the Tranche of Revolving Credit Commitments that are being refinanced),
(ii)
any borrower in respect of any New Revolving Credit Facility shall be a Borrower and any guarantor of any New Revolving Credit
Facility shall also be a Guarantor,
(iii)
if secured, such New Revolving Credit Facility shall not be secured by any assets that do not constitute Collateral and may not
be secured pursuant to security documentation that is materially more restrictive, when taken as a whole, to the Loan Parties than the
Loan Documents,
(iv)
each New Revolving Credit Facility shall rank pari passu or junior in right of payment and pari passu or junior with
respect to security with the Obligations or may be unsecured (and to the extent junior in right of payment or security, shall be subject
to intercreditor arrangements reasonably satisfactory to the Administrative Agent),
(v)
each New Revolving Credit Facility established under the Loan Documents shall provide that
(A)
the borrowing and repayment (except for (1) repayments required upon the maturity of any Revolving Credit Loan or Incremental Revolving
Credit Loan and (2) repayment made in connection with a permanent repayment and termination of commitments (subject to clause (B)
below)) under Incremental Revolving Credit Facilities after the date of obtaining any Incremental Revolving Credit Facility shall be made
on a pro rata basis with the Revolving Credit Facilities and
(B)
the permanent repayment of Incremental Revolving Credit Loans, and termination of commitments, under Incremental Revolving Credit
Facilities after the date of obtaining any Incremental Revolving Credit Facility shall be made on a pro rata basis with the Revolving
Credit Facilities, except that any Borrower shall be permitted to permanently repay and terminate commitments under any Revolving Credit
Facility or Incremental Revolving Credit Facility
on a better than pro rata basis as compared to any such facility with a later maturity date; and
(vi)
the covenants and events of default of such New Revolving Credit Facility (excluding pricing and optional prepayment or redemption
terms and covenants applicable only to periods after the Latest Maturity Date) shall be either substantially identical to, or no more
favorable (taken as a whole) to the lenders providing such New Revolving Credit Facility than those of the existing Revolving Credit Facility.
(d)
The terms and provisions of any Incremental Term Loans shall be, if such Incremental Term Loans are not Initial Term Loans, except
as otherwise set forth herein or in the joinder agreement set forth in Section 2.14(a), substantially identical to
the Initial Term Loans, as applicable; provided that, except as otherwise set forth herein or in the joinder agreement set
forth in Section 2.14(a), then
(i)
the weighted average life to maturity of any New Term Loan Facility shall be no shorter than the weighted average life to maturity
of any then outstanding Term Loans, (or, in the case of any New Term Loans that are Refinancing Incremental Term Loans, the weighted average
life to maturity of the Tranche of Term Loans that are being refinanced),
(ii)
the final maturity date with respect to any New Term Loans shall be no earlier than the maturity date of any then outstanding Term
Loans (or, in the case of any New Term Loans that are refinancing Incremental Term Loans, the final maturity date of the Tranche of Term
Loans that are being refinanced),
(iii)
if the Yield on any New Term Loans which are (a) incurred hereunder no later than 12 months after the Closing Date and (b) are
secured on a pari passu basis with the Initial Term Loans exceeds by more than 50 basis points (the amount of such excess above 50
basis points being referred to herein as the “Yield Differential”) the Applicable Rate then in effect for any
Initial Term Loans, then the Applicable Rate (together with, as provided in the proviso below, Term SOFR (or a Benchmark Replacement thereof)
or Base Rate floor) then in effect for Initial Term Loans shall automatically be increased by the Yield Differential, effective upon the
making of the New Term Loans (and if the margins on the New Term Loans are subject to a leveraged-based pricing grid, appropriate increases
to the Applicable Rates for the Initial Term Loans, consistent with the foregoing, shall be made); provided that, (x) if
any New Term Loans include Term SOFR (or a Benchmark Replacement thereof) or Base Rate floor that is greater than Term SOFR (or a Benchmark
Replacement thereof) or Base Rate floor then applicable to any Initial Term Loans, such differential between interest rate floors shall
be included in the calculation of Yield for purposes of this clause (iii), but only to the extent an increase in Term SOFR
(or a Benchmark Replacement thereof) or Base Rate floor applicable to such Initial Term Loans would cause an increase in the interest
rate then in effect thereunder, and in such case Term SOFR (or a Benchmark Replacement thereof) and Base Rate floors (but not the Applicable
Rate) applicable to the Term Loans shall be increased to the extent of such differential between interest rate floors and (y) for the
avoidance of doubt, any spread adjustment applicable to any Benchmark Replacement shall not be deemed to be part of the “Applicable
Rate” (this clause (iii), the “MFN Adjustment”); provided that the MFN
Adjustment shall not apply to New Term Loan Facilities (A) in an aggregate amount not to exceed the greater of (x) $100,000,000 and (y)
50% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time outstanding, (B) incurred in connection with a Permitted Acquisition or (C) incurred in reliance on Section 2.14(a)(x),
(iv)
any guarantor of any New Term Loan Facility shall also be a Guarantor,
(v)
if secured, such New Term Loan Facility shall not be secured by any assets that do not constitute Collateral and may not be secured
pursuant to security documentation that is more restrictive to the Loan Parties than the Loan Documents,
(vi)
each New Term Loan Facility shall rank pari passu or junior in right of payment and pari passu or junior with respect
to security with the Obligations or may be unsecured (and to the extent subordinated in right of payment or security, shall be subject
to intercreditor arrangements reasonably satisfactory to the Administrative Agent), and
(vii)
the covenants and events of default of such New Term Loan Facility (excluding pricing and optional prepayment or redemption terms
and covenants applicable only to periods after the Latest Maturity Date) shall be either substantially identical to, or no more favorable
(taken as a whole) to the lenders providing such New Term Loan Facility than those of the existing Term Loans.
Each joinder agreement referred to in Section 2.14(a)
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, as reasonably determined by the Administrative Agent, to effect the provision of this Section 2.14.
(e)
Each of the parties hereto hereby agrees that the Administrative Agent may take any and all reasonable action as may be necessary
to ensure that all Incremental Loans that are to be additional Term Loans or Revolving Credit Loans, as applicable, and when originally
made, are included in each Borrowing of outstanding Term Loans or Revolving Credit Loans, as applicable, on a pro rata basis. This may
be accomplished at the reasonable discretion of the Administrative Agent by requiring each outstanding Term SOFR Loan to be converted
into a Base Rate Loan on the date of each such Incremental Loan, or by allocating a portion of each such Incremental Loan to each outstanding
applicable Term SOFR Loans on a pro rata basis, even though as a result thereof such Incremental Loan may effectively have a shorter Interest
Period than the Loans included in the Borrowing of which they are a part (and notwithstanding any other provision of this Agreement that
would prohibit such an initial Interest Period). Any conversion of Term SOFR Loans to Base Rate Loans made pursuant to the preceding sentence
shall be subject to Section 3.05. If any Incremental Loan is to be allocated to an existing Interest Period for a Term
SOFR Loan then, subject to Section 2.08(b), the interest rate applicable to such Incremental Loan for the remainder
of such Interest Period shall equal Term SOFR for a period approximately equal to the remainder of such Interest Period (as determined
by the Administrative Agent two Business Days before the date such Incremental Loan is made) plus the Applicable Rate then in effect.
In addition, to the extent any Incremental Term Loans are to be additional Term Loans, the applicable scheduled amortization payments
under Section 2.07 required to be made after the making of such Incremental Term Loans shall be ratably increased by
the aggregate principal amount of such Incremental Term Loans.
(f)
Prior to the Increased Amount Date, if the Restricted Subsidiary incurring the Incremental Facility is an Additional Borrower,
such Subsidiary shall deliver to the Lenders providing the Incremental Facility (including any New Incremental Lender) and the Administrative
Agent, such documentation and other information reasonably requested by such Lenders or the Administrative Agent for purposes of complying
with all necessary “know-your-customer” or other similar checks under all applicable Laws and regulations and no written objection
submitted by any of the Lenders or the Administrative Agent within five Business Days of the date of receipt of such documentation and
other information shall have been given by such Lenders or the Administrative Agent.
Any obligations in respect of borrowings by
any Borrower or any Additional Borrower under this Agreement will constitute “Obligations” for all purposes of the Loan
Documents. If the Incremental Facility is incurred in a currency other than Dollars, this Agreement may be amended to reflect such
new currency hereunder, which amendment must be mutually agreed to by the Administrative Agent and Holdings.
(g)
For the avoidance of doubt, no amendment, waiver or consent pursuant to Section 11.01 shall impose any greater
restriction on the ability of any Lender to assign any of its rights or obligations hereunder with respect to any New Term Loan Facility
without the written consent of the holders of a majority of the aggregate unpaid principal amount of such Term Loan Commitments and New
Term Loans outstanding under such New Term Loan Facility.
(h)
Any Incremental Facility that is secured on a junior lien basis to the Obligations or is unsecured shall be established pursuant
to separate documentation from the Loan Documents.
For the avoidance of doubt,
any prepayment of Loans with the proceeds received in connection with the incurrence of Incremental Term Loans pursuant to this Section 2.14
shall be deemed an optional prepayment under Section 2.05(a).
2.15 Defaulting
Lender.
(a)
Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
(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 the definition of Required Lenders and in Section 11.01.
(ii) Defaulting
Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account
of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or
received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08 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 such Defaulting Lender to the Administrative Agent hereunder;
second, to
the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuers hereunder;
third, to cash
collateralize the L/C Issuers’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15(d);
fourth, as
the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;
fifth, if so
determined by the Administrative Agent and Holdings, to be held in a deposit account and released pro rata in order to (x) satisfy such
Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize the
L/C Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters
of Credit issued under this Agreement, in accordance with Section 2.15(d);
sixth, to the
payment of any amounts owing to the Lenders or the L/C Issuers as a result of any judgment of a court of competent jurisdiction obtained
by any Lender or the L/C Issuers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations
under this Agreement;
seventh, so
long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court
of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach
of its obligations under this Agreement; and
eighth, to
such Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
provided that if (x) such
payment is a payment of the principal amount of any Loans or L/C Borrowing in respect of which such Defaulting Lender has not fully funded
its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth
in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Borrowings
owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Borrowings owed
to, such Defaulting Lender until such time as all Loans and L/C Exposure are held by the Lenders pro rata in accordance with the Commitments
under the applicable Facility without giving effect to Section 2.15(a)(v). 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 this Section 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.
(iii)
Subject to Section 11.06(b)(viii) hereof, the failure of any Defaulting
Lender to make the Loan to be made by it as part of any Borrowing shall constitute a material breach
by such Defaulting Lender of this Agreement and, to the extent such Defaulting Lender fails to cure the default pursuant to
Section 2.15(b) hereof within five Business Days shall entitle the Borrowers to replace the Defaulting Lender with
one or more substitute Lenders, and the Defaulting Lender shall have no right to refuse to be replaced hereunder. The notice
from the Borrowers to the Administrative Agent and such Defaulting Lender being replaced shall specify an effective date for such
replacement, which date shall be at least two Business Days, but not later than fifteen Business Days, after the date such notice is given.
Prior to the effective date of such replacement, the Defaulting Lender shall execute and deliver an Assignment and Assumption,
subject only to the Defaulting Lender being repaid its share of the outstanding Obligations without any premium or penalty of
any kind whatsoever. If the Defaulting Lender shall refuse or fail to execute and deliver any such Assignment and Assumption
prior to the effective date of such replacement, the Defaulting Lender shall be deemed to have executed and delivered such Assignment
and Assumption. The replacement of any Defaulting Lender shall be made in accordance with the terms of Section 11.15.
(iv) Certain
Fees.
(A) No Defaulting
Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrowers
shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(B)
Each Revolving Credit Lender that is a Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during
which that Lender is a Defaulting Lender only to the extent allocable to its Pro Rata Share of the available amount of Letters of Credit
for which it has provided cash collateral pursuant to Section 2.15(d).
(C)
With respect to any Letter of Credit Fees not required to be paid to any Revolving Credit Lender that is a Defaulting Lender (as
“Defaulting Revolving Credit Lender”) pursuant to clause (B) above, the Borrowers shall (x)
pay to each non-Defaulting Revolving Credit Lender that portion of any such fee otherwise payable to such Defaulting Revolving Credit
Lender with respect to such Defaulting Revolving Credit Lender’s obligation to fund participations in respect of Letters of Credit
that have been reallocated to such non-Defaulting Revolving Credit Lender pursuant to Section 2.15(a)(v) below, (y) pay
to each L/C Issuer the amount of any such fee otherwise payable to such Defaulting Revolving Credit Lender to the extent allocable to
such L/C Issuer’s Fronting Exposure to such Defaulting Revolving Credit Lender and (z) not be required to pay the remaining amount
of any such fee.
(v) Reallocation
of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Revolving Credit Lender’s obligation to
fund participations in respect of Letters of Credit shall be reallocated among the non-Defaulting Revolving Credit Lenders in
accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting Revolving Credit Lender’s
Revolving Credit Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are
satisfied at the time of such reallocation (and, unless the Borrowers shall have otherwise notified the Administrative Agent at such
time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) the
Outstanding Amount of each non-Defaulting Revolving Credit Lender’s Revolving Credit Loans and L/C Obligations (with the
aggregate amount of each Revolving Credit Lender’s funded participations in L/C Obligations (prior to giving effect to such
reallocation) being deemed ‘held’ by such Revolving Credit Lender for this purpose) do not exceed the Revolving Credit
Commitment of such non-Defaulting Revolving Credit Lender. Subject to Section 11.23, no reallocation hereunder
shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s
increased exposure following such reallocation.
(vi) Cash
Collateral. If the reallocation described in clause (v) above cannot, or can only partially, be effected, the
Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, cash collateralize any L/C
Issuer’s Fronting Exposure (after giving effect to any partial reallocation pursuant to clause (v) above)
in accordance with the procedures set forth in Section 2.15(d) for so long as such Obligations are
outstanding.
(b) Defaulting Lender
Cure. If the Borrowers, the Administrative Agent and each L/C Issuer agree in writing that a Lender is no longer 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), that Lender will,
to the extent applicable, purchase at par 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 Letters of Credit to
be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.15(a)(v)),
whereupon such 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 any Borrower while that Lender was a Defaulting Lender; 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.
(c)
New Letters of Credit. So long as any Revolving Credit Lender is a Defaulting Lender, no L/C Issuer shall be required to
issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect
thereto (determined after giving effect to Section 2.15(a)(v) and any cash collateral provided by such Defaulting Lender).
(d) Cash
Collateral.
(i)
At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative
Agent or any L/C Issuer (with a copy to the Administrative Agent) the Borrowers shall cash collateralize such L/C Issuer’s Fronting
Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.15(a)(v) and any cash
collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
(ii)
The Borrowers, and to the extent provided by any Defaulting Revolving Credit Lender, such Defaulting Revolving Credit Lender, hereby
grant to the Administrative Agent, for the benefit of each L/C Issuer, and agrees to maintain, a first priority security interest in all
such cash collateral as security for the Defaulting Revolving Credit Lender’s obligation to fund participations in respect of Letters
of Credit, to be applied pursuant to clause (iii) below. If at any time the Administrative Agent determines that cash collateral
is subject to any right or claim of any Person other than the Administrative Agent and such L/C Issuer as herein provided (other than
Permitted Liens), or that the total amount of such cash collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly
upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional cash collateral in an amount sufficient
to eliminate such deficiency (after giving effect to any cash collateral provided by the Defaulting Revolving Credit Lender).
(iii)
Notwithstanding anything to the contrary contained in this Agreement, cash collateral provided under this Section 2.15
in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Revolving Credit Lender’s obligation to fund
participations in respect of Letters of Credit (including, as to cash collateral provided by a Defaulting Revolving Credit Lender, any
interest accrued on such obligation) for which the cash collateral was so provided, prior to any other application of such property as
may otherwise be provided for herein.
(iv)
Cash collateral (or the appropriate portion thereof) provided to reduce any L/C Issuer’s Fronting Exposure shall no longer
be required to be held as cash collateral pursuant to this Section 2.15 following (i) the elimination of the applicable
Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the
Administrative Agent and such L/C Issuer that there exists excess cash collateral; provided that, subject to this Section 2.15
the Person providing cash collateral and such L/C Issuer may agree that cash collateral shall be held to support future anticipated Fronting
Exposure or other obligations; provided, further, that to the extent that such cash collateral was provided
by a Borrower, such cash collateral shall remain subject to the security interest granted pursuant to the Loan Documents.
2.16 Extension of
Term Loans and Revolving Credit Commitments.
(a)
The Borrowers may at any time and from time to time request that all or a portion of the (i) Term Loans of one or more Tranches
existing at the time of such request (each, an “Existing Term Loan Tranche”, and the Term Loans of such Tranche,
the “Existing Term Loans”) or (ii) Revolving Credit Commitments and Revolving Credit Loans of one or more Tranches
existing at the time of such request (each, an “Existing Revolving Tranche” and together with the Existing Term
Loan Tranches, each an “Existing Tranche”, and the Revolving Credit Commitments of such Existing Revolving Tranche,
the “Existing Revolving Credit Commitments”, and the Revolving Credit Loans of such Existing Revolving Tranche,
the “Existing Revolving Loans” and, together with the Existing Term Loans, the “Existing Loans”),
in each case, be converted to extend the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any
principal amount of any Existing Tranche (any such Existing Tranche which has been so extended, an “Extended Term Tranche”
or “Extended Revolving Credit Tranche”, as applicable, and each an “Extended Tranche”,
and the Term Loans, Revolving Credit Commitments or Revolving Credit Loans, as applicable, of such Extended Tranches, the “Extended
Term Loans”, “Extended Revolving Credit Commitments” or “Extended Revolving Credit
Loans”, as applicable and, collectively, the “Extended Loans”) and to provide for other terms
consistent with this Section 2.16; provided that
(i)
no Event of Default pursuant to Section 9.01(a), (f) or (g) shall have occurred
and be continuing at the time of such extension or would exist after giving effect to such extension,
(ii)
any such request shall be made by Holdings to all Lenders within any one or more Tranches of Term Loans or Revolving Credit Commitments
and Revolving Credit Loans, as applicable, (whether under one or more Tranches) on a pro rata basis (based on the aggregate outstanding
principal amount of the applicable Term Loans or on the aggregate Revolving Credit Commitments within any one or more Tranches, as applicable)
and
(iii)
any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrowers in their sole discretion.
In order to establish any Extended Tranche, the
Borrowers shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable
Existing Tranche) (an “Extension Request”) setting forth the proposed terms of the Extended Tranche to be established,
which terms shall be substantially similar, when taken as a whole, to those applicable to the Existing Tranche from which they are to
be extended (the “Specified Existing Tranche”), except
(x) all
or any of the final maturity dates of such Extended Tranches may be delayed to later dates than the final maturity dates of the Specified
Existing Tranche,
(y) (A)
the interest margins with respect to the Extended Tranche may be higher or lower than the interest margins for the Specified Existing
Tranche and/or (B) additional fees may be payable to the Lenders providing such Extended Tranche in addition to or in lieu of any
increased margins contemplated by the preceding clause (A) and
(z) in the
case of an Extended Term Tranche, so long as the weighted average life to maturity of such Extended Tranche would be no shorter than
the remaining weighted average life to maturity of the Specified Existing Tranche, amortization rates with respect to the Extended
Term Tranche may be higher or lower than the amortization rates for the Specified Existing Tranche, in each case to the extent
provided in the applicable Extension Amendment;
provided that, notwithstanding anything to the contrary set forth in
this Section 2.16 or otherwise, assignments and participations of Extended Tranches shall be governed by the same
or, at the Borrowers’ discretion, more restrictive assignment and participation provisions applicable to Initial Term Loans or
Initial Revolving Credit Commitments, as applicable, set forth in Section 11.06. No Lender shall have any
obligation to agree to have any of its Existing Loans converted into an Extended Tranche pursuant to any Extension Request. Any
Extended Tranche shall constitute a separate Tranche of Loans from the Specified Existing Tranches and from any other Existing
Tranches (together with any other Extended Tranches so established on such date).
(b)
The Borrowers shall provide the applicable Extension Request at least ten (10) Business Days (or such shorter period as the Administrative
Agent may agree in its reasonable discretion) prior to the date on which Lenders under the applicable Existing Tranche or Existing Tranches
are requested to respond. Any Lender (an “Extending Lender”) wishing to have all or a portion of its Specified
Existing Tranche converted into an Extended Tranche shall notify the Administrative Agent (each, an “Extension Election”)
on or prior to the date specified in such Extension Request of the amount of its Specified Existing Tranche that it has elected to convert
into an Extended Tranche. In the event that the aggregate amount of the Specified Existing Tranche subject to Extension Elections exceeds
the amount of Extended Tranches requested pursuant to the Extension Request, the Specified Existing Tranches subject to Extension Elections
shall be converted to Extended Tranches on a pro rata basis based on the amount of Specified Existing Tranches included in each such Extension
Election. In connection with any extension of Loans pursuant to this Section 2.16 (each, an “Extension”),
the Borrowers shall agree to such procedures regarding timing, rounding and other administrative adjustments to ensure reasonable administrative
management of the credit facilities hereunder after such Extension, as may be established by, or acceptable to, the Administrative Agent,
in each case acting reasonably to accomplish the purposes of this Section 2.16. The Borrowers may amend, revoke or
replace an Extension Request pursuant to procedures reasonably acceptable to the Administrative Agent at any time prior to the date (the
“Extension Request Deadline”) on which Lenders under the applicable Existing Term Loan Tranche or Existing Term
Loan Tranches are requested to respond to the Extension Request. Any Lender may revoke an Extension Election at any time prior to 5:00
p.m. on the date that is two Business Days prior to the Extension Request Deadline, at which point the Extension Request becomes irrevocable
(unless otherwise agreed by Borrower). The revocation of an Extension Election prior to the Extension Request Deadline shall not prejudice
any Lender’s right to submit a new Extension Election prior to the Extension Request Deadline.
(c) Extended Tranches
shall be established pursuant to an amendment (an “Extension Amendment”) to this Agreement (which may
include amendments to provisions related to maturity, interest margins or fees referenced in clauses (x) and (y)
of Section 2.16(a), or, in the case of Extended Term Tranches, amortization rates referenced in clause (z)
of Section 2.16(a), or amendments to any other terms (including representations and warranties, conditions,
prepayments, covenants or events of default) that are necessary or appropriate to implement the provisions thereof or that are
favorable to the then-existing Lenders, as reasonably determined by the Administrative Agent, and which, in each case, except to the
extent expressly contemplated by the last sentence of this Section 2.16(c) and notwithstanding anything to the
contrary set forth in Section 11.01, shall not require the consent of any Lender other than the Extending Lenders
with respect to the Extended Tranches established thereby and any L/C Issuers with respect to the Extended Tranches established
thereby) executed by the Loan Parties, the Administrative Agent, the Extending Lenders with respect to the Extended Tranches and any
L/C Issuers with respect to the Extended Tranches. Subject to the requirements of this Section 2.16 and without
limiting the generality or applicability of Section 11.01 to any Section 2.16 Additional
Amendments, any Extension Amendment may provide for additional terms and/or additional amendments other than those referred to or
contemplated above (any such additional amendment, a “Section 2.16 Additional Amendment”) to this
Agreement and the other Loan Documents; provided that such Section 2.16 Additional Amendments do not become
effective prior to the time that such Section 2.16 Additional Amendments have been consented to (including, without limitation,
pursuant to consents applicable to holders of any Extended Tranches provided for in any Extension Amendment) by such of the Lenders,
Loan Parties and other parties (if any) as may be required in order for such Section 2.16 Additional Amendments to become
effective in accordance with Section 11.01; provided, further, that no Extension
Amendment may provide for (i) any Extended Tranche to be secured by any Collateral or other assets of any Loan Party that does not
also secure the applicable Existing Tranches or be guaranteed by any Person other than the Guarantors and (ii) so long as any
Existing Term Loan Tranches are outstanding, any mandatory prepayment provisions that do not also apply to the Existing Term Loan
Tranches (other than Existing Term Loan Tranches secured on a junior basis by the Collateral or ranking junior in right of payment,
which shall be subject to junior prepayment provisions) on a pro rata or otherwise more favorable basis. Notwithstanding anything to
the contrary set forth in Section 11.01, any such Extension Amendment may, without the consent of any other
Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the reasonable judgment of Holdings and
the Administrative Agent, to effect the provisions of this Section 2.16; provided that the
foregoing shall not constitute a consent on behalf of any Lender to the terms of any Section 2.16 Additional Amendment.
Notwithstanding anything to the contrary contained in this Agreement, on any date on which any Existing Tranche is converted to
extend the related scheduled maturity date(s) in accordance with Section 2.16(a) (an “Extension
Date”), in the case of the Specified Existing Tranche of each Extending Lender, the aggregate principal amount of such
Specified Existing Tranche shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Tranche so
converted by such Lender on such date, and such Extended Tranches shall be established as a separate Tranche from the Specified
Existing Tranche and from any other Existing Tranches (together with any other Extended Tranches so established on such date).
(d)
If, in connection with any proposed Extension Amendment, any Lender declines to consent to the applicable extension on the terms
and by the deadline set forth in the applicable Extension Request (each such other Lender, a “Non-Extending Lender”)
then the Borrowers may, on notice to the Administrative Agent and the Non-Extending Lender, replace such Non-Extending Lender by causing
such Lender to (and such Lender shall be obligated to) assign pursuant to Section 11.06 (with the assignment fee and
any other costs and expenses to be paid by the Borrowers in such instance) all of its rights and obligations under this Agreement to one
or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Borrowers
to find a replacement Lender; provided, further, that the applicable assignee shall have agreed to provide
Extended Loans on the terms set forth in such Extension Amendment; provided, further, that all obligations
of the Borrowers owing to the Non-Extending Lender relating to the Existing Loans so assigned shall be paid in full by the assignee Lender
to such Non-Extending Lender concurrently with such Assignment and Assumption. In connection with any such replacement under this Section 2.16,
if the Non-Extending Lender does not execute and deliver to the Administrative Agent a duly completed Assignment and Assumption by the
later of (A) the date on which the replacement Lender executes and delivers such Assignment and Assumption and (B) the date as of
which all obligations of the Borrowers owing to the Non-Extending Lender relating to the Existing Loans so assigned shall be paid in full
by the assignee Lender to such Non-Extending Lender, then such Non-Extending Lender shall be deemed to have executed and delivered
such Assignment and Assumption as of such date and Holdings shall be entitled (but not obligated) to execute and deliver such Assignment
and Assumption on behalf of such Non-Extending Lender.
(e) Following any
Extension Date, with the written consent of Holdings, any Non-Extending Lender may elect to have all or a portion of its Existing
Loans deemed to be an Extended Loan under the applicable Extended Tranche on any date (each date a “Designation
Date”) prior to the maturity date of such Extended Tranche; provided that such Lender shall have
provided written notice to Holdings and the Administrative Agent at least ten (10) Business Days prior to such Designation Date (or
such shorter period as the Administrative Agent may agree in its reasonable discretion); provided, further,
that no greater amount shall be paid by or on behalf of Holdings or any of its Affiliates to any such Non-Extending Lender as
consideration for its extension into such Extended Tranche than was paid to any Lender in respect of such Extended Tranche as
consideration for its Extension into such Extended Tranche. Following a Designation Date, the Existing Loans held by such Lender so
elected to be extended will be deemed to be Extended Loans of the applicable Extended Tranche, and any Existing Loans held by such
Lender not elected to be extended, if any, shall continue to be “Existing Loans” of the applicable Tranche.
With respect to all Extensions
consummated by the Borrowers pursuant to this Section 2.16, (i) such Extensions shall not constitute optional
or mandatory payments or prepayments for purposes of Sections 2.05(a) and (b) and (ii) no Extension Request
is required to be in any minimum amount or any minimum increment, provided that Holdings may elect to specify as a condition
(a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined
and specified in the relevant Extension Request in the Borrowers’ sole discretion and may be waived by the Borrowers) of Existing
Loans of any or all applicable Tranches be extended. The Administrative Agent and the Lenders hereby consent to the transactions contemplated
by this Section 2.16 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of
any Extended Loans on such terms as may be set forth in the relevant Extension Request) and hereby waive the requirements of any provision
of this Agreement (including, without limitation, Sections 2.05(a) and (b) and Section 2.07)
or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 2.16.
For the avoidance of doubt,
the provisions of Section 2.13 shall not be construed to apply to any Extension in accordance with this Section 2.16.
For the avoidance of doubt,
any prepayment of Loans with the proceeds received in connection with the incurrence of Term Loans and Revolving Credit Commitments pursuant
to this Section 2.16 shall be deemed an optional prepayment under Section 2.05(a).
2.17 Interest
Act (Canada).
(a)
For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder
or in connection herewith is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the
rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Agreement are nominal rates,
and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this
Agreement.
(b)
Each Canadian Loan Party acknowledges and confirms that:
(i)
clause (a) above satisfies the requirements of Section 4 of the Interest Act (Canada) to the extent it applies to the
expression or statement of any interest payable under any Loan Document; and
(ii)
such Canadian Loan Party is able to calculate the yearly rate or percentage of interest payable under any Loan Document based upon
the methodology set out in clause (a) above.
(c) Any provision of
this Agreement that would oblige a Canadian Loan Party to pay any fine, penalty or rate of interest on any arrears of principal or
interest secured by a mortgage on real property or hypothec on immovables that has the effect of increasing the charge on arrears
beyond the rate of interest payable on principal money not in arrears shall not apply to such Canadian Loan Party, which shall be
required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears.
(d)
If any provision of this Agreement would oblige a Canadian Loan Party to make any payment of interest or other amount payable to
any Secured Party in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Secured Party
of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding
such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by applicable Law or so result in a receipt by that Secured Party of “interest”
at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:
(i)
first, by reducing the amount or rate of interest; and
(ii)
thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would constitute
interest for purposes of section 347 of the Criminal Code (Canada).
Article
III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a)
Except as required by applicable Law, any and all payments by or on behalf of any Loan Party to or for the account of the Administrative
Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings (including back-up withholding) or similar charges imposed by any
Governmental Authority, and all interest, penalties or other liabilities with respect thereto (hereinafter referred to as “Taxes”).
If any Taxes are required by any applicable Law to be deducted or withheld from or in respect of any sum payable by or on behalf of any
Loan Party under any Loan Document to the Administrative Agent or any Lender,
(i)
the applicable withholding agent shall make such deductions or withholdings,
(ii)
the applicable withholding agent shall pay the full amount deducted or withheld to the relevant taxation authority or other authority
in accordance with applicable Laws,
(iii)
if such Tax is an Indemnified Tax, the sum payable by the Loan Party shall be increased as necessary so that after making all required
deductions and withholding (including deductions and withholdings applicable to additional sums payable under this Section 3.01),
each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions or
withholdings been made,
(iv)
as soon as practicable after the date of such payment by a Loan Party, such Loan Party shall furnish to the Administrative Agent
(which shall forward the same to such Lender) or Lender (as the case may be) the original or a certified copy of a receipt evidencing
payment thereof to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory
to the Administrative Agent.
(b) In addition, each
Loan Party agrees to pay any and all present or future stamp, court or documentary, intangible, recording, filing or similar taxes
and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or
from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document,
excluding any such taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 11.15)
(hereinafter referred to as “Other Taxes”).
(c)
Each Loan Party agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of any Indemnified Taxes and
Other Taxes (including any Indemnified Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 3.01)
payable or paid by the Administrative Agent and such Lender or required to be withheld or deducted from a payment to such party and (ii)
any reasonable expenses arising therefrom or with respect thereto, in each case whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority, except for any interest and penalties with respect to
Indemnified Taxes or Other Taxes to the extent such Indemnified Taxes or Other Taxes are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of the Administrative Agent or such
Lender. Payment under this Section 3.01(c) shall be made within 30 days after the date such Lender or the Administrative
Agent makes a demand therefor. A certificate as to the amount of such payment or liability delivered to the Loan Party by a Lender (with
a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.
(d)
If any Lender (including any L/C Issuer) or the Administrative Agent is entitled to a refund, as determined by such indemnified
party in its sole discretion exercised in good faith (including any credit in lieu of a refund) of any Taxes with respect to which it
has been indemnified pursuant to this Section 3.01 (including by the payment of additional amounts pursuant to this
Section 3.01), such indemnified party shall pay over such refund to the applicable Loan Party (but only to the
extent of amounts paid by the Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund),
net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the Loan Party, upon the request of such indemnified
party, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such indemnified party in the event such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary set forth in this paragraph (d), in no event will the indemnified party
be required to pay any amount to an indemnifying party pursuant to this paragraph (d) the payment of which would place the
indemnified party in a less favorable net after-Tax position than the indemnified party 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. This paragraph shall not be construed to require any Lender to make available its tax returns
(or any other information relating to its Taxes which it deems confidential) to any Loan Party or any other Person.
(e)
For purposes of this Section 3.01, the term “Lender” includes any L/C Issuer.
3.02 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 or its applicable Lending Office to make, maintain or fund Term SOFR Loans, or to determine or charge interest rates
based upon Term SOFR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the applicable interbank market then, on notice thereof by such Lender to the Borrowers
through the Administrative Agent, any obligation of such Lender to make or continue Term SOFR Loans in the affected currency or
currencies or to convert Base Rate Loans to Term SOFR Loans and the calculation of Base Rate based upon Term SOFR shall be suspended
until such Lender notifies the Administrative Agent and the Borrowers that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, each Loan Party shall prepay such Term SOFR Loans or, if applicable and such Loans are
denominated in Dollars, convert all Term SOFR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if any, if such Lender may lawfully continue to maintain such Term SOFR Loans to such day, or immediately, if no Interest
Period applies or if such Lender may not lawfully continue to maintain such Term SOFR Loans. Upon any such prepayment or conversion,
the applicable Loan Party shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a
different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
3.03 Inability
to Determine Rates.
(a)
If the Required Lenders reasonably determine that
(i)
for any reason adequate and reasonable means do not exist for determining Term SOFR for any requested Interest Period with respect
to a proposed Term SOFR Loan (including because Term SOFR is not available or published on a current basis), or
(ii)
Term SOFR for any Interest Period for such Loans will not adequately reflect the cost to such Required Lenders of making, funding
or maintaining their respective Term SOFR Loans for such Interest Period,
thereafter, the obligation of the Lenders to make
or maintain Term SOFR Loans and the calculation of Base Rate based upon Term SOFR, as applicable, shall be suspended until the Administrative
Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may revoke any pending
request for a Borrowing of, conversion to or continuation of Term SOFR Loans or, failing that, in the case of Term SOFR Loans will be
deemed to have converted such request into a request for a Borrowing of Base Rate Loans in Dollars in the amount specified therein. Any
then outstanding Term SOFR Loans shall be converted to Base Rate Loans at the end of the relevant Interest Period, if applicable, or immediately.
(b) Solely with respect
to the Initial Term Loans, notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, if the
Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Required Lenders notify the
Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined, that (i) adequate and reasonable means
do not exist for ascertaining Term SOFR for any requested Interest Period, including, without limitation, because Term SOFR is not
available or published on a current basis and such circumstances are unlikely to be temporary; or (ii) the supervisor for the
administrator of the Term SOFR or a Governmental Authority having jurisdiction over the Administrative Agent has made a public
statement identifying a specific date after which Term SOFR shall no longer be made available, or used for determining the interest
rate of loans (such specific date, the “Scheduled Unavailability Date”), then, after such determination by
the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the
Borrowers may amend this Agreement to replace Term SOFR with an alternate benchmark rate (including any mathematical or other
adjustments to the benchmark (if any) incorporated therein) that has been broadly accepted by the syndicated loan market in the
United States in lieu of Term SOFR (it being agreed that such rate shall at no time be less than the Floor) (any such proposed rate,
a “Successor Rate”), together with any proposed Successor Rate Conforming Changes and, notwithstanding
anything to the contrary set forth in Section 11.01, any such amendment shall become effective at 5:00 p.m. (New
York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the
Borrowers unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent notice that
such Required Lenders do not accept such amendment.
(c)
Solely with respect to the Initial Term Loans, “Successor Rate Conforming Changes” as used in this Section 3.03,
means, with respect to any proposed Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and
frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the reasonable
discretion of the Administrative Agent, to reflect the adoption of such Successor Rate and to permit the administration thereof by the
Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption
of any portion of such market practice is not administratively feasible or that no market practice for the administration of such Successor
Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrower).
(d)
Benchmark Replacement Setting.
Other than with respect to
the Initial Term Loans, notwithstanding anything to the contrary herein or in any other Loan Document:
(i) [Reserved.]
(ii) Replacing
Benchmarks. Upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement will replace such Benchmark for
all purposes hereunder and under any Loan Document in respect of any such Benchmark setting at or after 5:00 p.m. on the fifth (5th)
Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further
action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not
received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders of
each affected Class. At any time that the administrator of any then-current Benchmark has permanently or indefinitely ceased to
provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator or the administrator
of such Benchmark pursuant to public statement or publication of information to be no longer representative and will not be
restored, (x) with respect to amounts denominated in Dollars, the Borrowers may revoke any request for a borrowing of, conversion to
or continuation of Loans to be made, converted or continued that would bear interest by reference to such Benchmark until the
Borrower’s receipt of notice from the Administrative Agent that a Benchmark Replacement has replaced such Benchmark, and,
failing that, the Borrowers will be deemed to have converted any such request into a request for a borrowing of or conversion to
Base Rate Loans and (y) with respect to amounts denominated in any currency other than Dollars, the obligation of the Lenders to
make or maintain Loans referencing such Benchmark in the affected currency shall be suspended (to the extent of the affected amounts
or Interest Periods (as applicable)) and any outstanding loans in such currency shall immediately or, in the case of a term rate at
the end of the applicable Interest Period, be prepaid in full. During the period referenced in the foregoing sentence, if a
component of Base Rate is based upon the Benchmark, such component will not be used in any determination of Base Rate.
(iii) Benchmark
Replacement Conforming Changes. In connection with the implementation and administration of any Benchmark or 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.
(iv) Notices;
Standards for Decisions and Determinations. The Administrative Agent will promptly notify Holdings and the Lenders of (A)
the implementation of any Benchmark Replacement and (B) the effectiveness of any Benchmark Replacement Conforming Changes. For the
avoidance of doubt, any notice required to be delivered by the Administrative Agent as set forth in this Section 3.03(d)
may be provided, at the option of the Administrative Agent (in its sole discretion), in one or more notices and may be delivered
together with, or as part of any amendment which implements any Benchmark Replacement or Benchmark Replacement Conforming Changes.
Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of
Lenders) pursuant to this Section 3.03(d), 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 reasonable discretion and without
consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 3.03(d).
(v) Unavailability
of Tenor of Benchmark. At any time (including in connection with the implementation of any Benchmark Replacement), (A) if
the then-current Benchmark is a term rate (including Term SOFR), then the Administrative Agent may remove any tenor of such
Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (B) the
Administrative Agent may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.
(vi) Disclaimer.
The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (A) the
administration, submission or any other matter related to Term SOFR or with respect to any alternative or successor rate thereto, or
replacement rate thereof (including, without limitation any Benchmark Replacement implemented hereunder), (B) the composition or
characteristics of any such Benchmark Replacement, including whether it is similar to, or produces the same value or economic
equivalence to Term SOFR or any other Benchmark or have the same volume or liquidity as did Term SOFR or any other Benchmark, (C)
any actions or use of its discretion or other decisions or determinations made with respect to any matters covered by this Section 3.03(d) including,
without limitation, whether or not a Benchmark Transition Event has occurred, the removal or lack thereof of unavailable or
non-representative tenors, the implementation or lack thereof of any Benchmark Replacement Conforming Changes, the delivery or
non-delivery of any notices required by clause (iv) above or otherwise in accordance herewith, and (D) the effect of any of the
foregoing provisions of this Section 3.03(d).
3.04 Increased
Cost and Reduced Return; Capital Adequacy; Reserves on Loans.
(a) If any Lender
determines that as a result of the introduction of or any change in or in the interpretation of any Law, in each case after the
Closing Date, or such Lender’s compliance therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Term SOFR Loans or (as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of
this Section 3.04(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes or
Other Taxes, in each case, addressed by Section 3.01, (ii) Excluded Taxes, and (iii) reserve requirements
contemplated by Section 3.04(c)), then from time to time upon demand of such Lender (with a copy of such demand
to the Administrative Agent), the Borrowers shall pay to such Lender such additional amounts as will compensate such Lender for such
increased cost or reduction.
(b)
If any Lender determines that the introduction of any Law regarding capital adequacy or liquidity or any change therein or in the
interpretation thereof, in each case after the Closing Date, or compliance by such Lender (or its Lending Office) therewith, has the effect
of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender’s
obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender’s desired return
on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrowers
shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.
(c)
Failure or delay on the part of any Lender, any L/C Issuer or the Administrative Agent to demand compensation pursuant to this
Section 3.04 shall not constitute a waiver of such Lender’s, such L/C Issuer’s or the Administrative Agent’s
right to demand such compensation; provided that the Borrowers shall not be under any obligation to compensate any Lender,
any L/C Issuer or the Administrative Agent under Section 3.04(a) or (b) for increased costs or reductions
with respect to any period prior to the date that is 120 days prior to such request if such Lender, such L/C Issuer or the Administrative
Agent knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions and of
the fact that such circumstances would result in a claim for increased compensation by reason of such increased costs or reductions; provided,
further, that the foregoing limitation shall not apply to any increased costs or reductions arising out of the retroactive
application of any change in law within such 120-day period. The protection of this Section 3.04 shall be available
to each Lender, each L/C Issuer and the Administrative Agent regardless of any possible contention of the invalidity or inapplicability
of the change in law that shall have occurred or been imposed.
(d)
Notwithstanding anything set forth herein to the contrary, for purposes of this Section 3.04, (x) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith
and (y) all requests, rules, guidelines or directives promulgated by the Bank for 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” or “change in the interpretation of law”, regardless
of the date enacted, adopted or issued.
3.05 Funding
Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a)
any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan or any Loan bearing interest based
on Daily Simple SOFR on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);
(b)
any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan or any Loan bearing interest based on Daily Simple SOFR on the date or in the amount notified
by any Borrower;
(c)
any assignment of a Term SOFR Loan on a day other than the last day of the Interest Period therefor as a result of a request by
any Borrower pursuant to Section 11.15; or
(d)
any payment by the Borrowers of the principal of or interest on any Revolving Credit Loan (or interest due thereon) denominated
in a different currency from the currency in which the applicable Revolving Credit Loan is denominated;
including any loss of anticipated profits and
any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to
terminate the deposits from which such funds were obtained. The Borrowers shall also pay any customary administrative fees charged by
such Lender in connection with the foregoing.
3.06 Matters
Applicable to all Requests for Compensation.
(a)
A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting
forth the additional amount or amounts to be paid to it hereunder and the calculation thereof in reasonable detail shall be conclusive
in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging
and attribution methods.
(b)
Upon any Lender’s making a claim for compensation under Section 3.01 or 3.04, the Borrowers
may replace such Lender in accordance with Section 11.15.
3.07 Pro Rata
Treatment. Except as required under Section 3.02 or otherwise in this Agreement, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of the Commitment Fees,
each reduction of the Term Loan Commitments or Revolving Credit Commitments and each conversion of any Borrowing to or continuation
of any Borrowing as a Borrowing of any Type shall be allocated pro rata among the Lenders within the Tranche or particular Borrowing
being paid or prepaid, as the case may be, in accordance with the terms of this Agreement, in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal
amounts of their outstanding Loans). Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount.
3.08 Survival.
All of the obligations under this Article III shall survive the resignation or replacement of the Administrative
Agent or any assignment of rights by, or the replacement of, a Lender, termination of the Term Loan Commitments, the Total Revolving
Credit Commitments and repayment, satisfaction or discharge of all other Obligations hereunder.
Article
IV.
GUARANTY
4.01 The
Guaranty.
(a) Each of the
Guarantors hereby jointly and severally guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties, as
hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any setoff, counterclaim, demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
(b)
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents, the obligations of each Guarantor
under this Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the largest amount as will result in
such obligations with respect hereto and thereto not constituting a fraudulent transfer or conveyance after giving full effect to the
liability under such guarantee set forth in Article IV hereof and its related contribution rights but before taking
into account any liabilities under any other guarantee by such Guarantor.
4.02 Obligations
Unconditional.
(a)
The obligations of the Guarantors under Section 4.01(a) are joint and several, absolute and unconditional, irrespective
of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents or any other agreement or instrument referred
to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and,
to the fullest extent permitted by applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.02(a) that
the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances (including, without limitation,
any Benchmark Replacement Conforming Changes or any other modifications or other amendments delivered or otherwise implemented or effected
(automatically or otherwise) in accordance with or in furtherance of Section 3.03(f)). Each Guarantor agrees that such Guarantor,
as applicable, shall have no right of subrogation, indemnity, reimbursement or contribution against any Loan Party for amounts paid under
this Article IV until such time as the Obligations have been paid in full.
(b)
Without limiting the generality of Section 4.02(a), it is agreed that, to the fullest extent permitted by law,
the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder which shall remain
absolute and unconditional as described above:
(i)
at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the
Obligations shall be extended, or such performance or compliance shall be waived;
(ii)
any of the acts mentioned in any of the provisions of any of the Loan Documents or any other agreement or instrument referred to
in the Loan Documents shall be done or omitted;
(iii)
the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended
in any respect, or any right under any of the Loan Documents or any other agreement or instrument referred to in the Loan Documents shall
be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole
or in part or otherwise dealt with;
(iv)
any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor);
or
(v)
any law or regulation of any jurisdiction or any other event affecting any term of the Obligations.
(c)
With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against any Person under any of the Loan Documents or any other agreement or instrument referred to in the Loan Documents or against any
other Person under any other guarantee of, or security for, any of the Obligations.
4.03 Reinstatement.
The obligations of the Guarantors under this Article IV shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise
restored by any holder of any of the Obligations whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, and each Guarantor agrees that it will indemnify the Arrangers, the Administrative Agent, the Collateral Agent, each L/C
Issuer and each Lender on demand for all reasonable costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by such Persons in connection with such rescission or restoration, including any such reasonable costs and
expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
4.04 Certain
Additional Waivers. Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the
Obligations except through the exercise of rights of subrogation pursuant to Section 4.02 and through the
exercise of rights of contribution pursuant to Section 4.06.
4.05 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors on the one hand, and the Administrative
Agent, for the ratable benefit of the Secured Parties on the other hand, the Obligations may be declared to be forthwith due and
payable as provided in Section 9.02 (and shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9.02) for purposes of Section 4.01(a) notwithstanding any
stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and
payable by the Guarantors for purposes of Section 4.01(a).
4.06 Rights of
Contribution. The Guarantors hereby agree as among themselves that, in connection with payments made hereunder, each
Guarantor shall have a right of contribution from each other Guarantor with respect to the Obligations in accordance with applicable
Law. Such contribution rights shall be subordinate and subject in right of payment to the Obligations until such time as the
Obligations have been Fully Satisfied, and none of the Guarantors shall exercise any such contribution rights until the Obligations
have been paid in full.
4.07 Guarantee of
Payment; Continuing Guarantee. The guarantee given by the Guarantors in this Article IV is a guaranty of
payment and not of collection, is a continuing guarantee, and shall apply to all Obligations, whenever arising.
4.08 Keepwell.
Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this
Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only
be liable under this Section 4.08 for the maximum amount of such liability that can be hereby incurred without
rendering its obligations under this Section 4.08, or otherwise under this Guaranty, as it relates to such Loan
Party, voidable under applicable Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until a Discharge of
Guaranteed Obligations. Each Qualified ECP Guarantor intends that this Section 4.08 constitute, and this Section 4.08
shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for
all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
4.09 Guarantee
Limitations. With respect to any Restricted Subsidiary, the guarantee, indemnity and other obligations expressed to be
assumed in this Article IV are further subject to any limitations as set out in the Subsidiary Joinder Agreement applicable to
that Restricted Subsidiary.
Article
V.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01 Conditions to
Initial Credit Extension. The obligation of each Lender to honor any Request for Credit Extension on the Closing Date is
subject only to the following conditions precedent:
(a)
The Administrative Agent shall have received from each Loan Party that is a party hereto a counterpart of this Agreement signed
on behalf of such party.
(b)
The Administrative Agent shall have received: (i) from the Loan Parties, executed counterparts of each applicable Collateral Document
and the Perfection Certificate, (ii) with respect to (x) each Loan Party (including Holdings) that is not a Canadian Subsidiary, UCC-1
financing statements, as applicable, in a form appropriate for filing in the state of organization or formation, the jurisdiction in which
its chief executive office is located or the jurisdiction in which its assets are located, as the case may be, of such Loan Party and
for Holdings, the District of Columbia and (y) each Loan Party that is a Canadian Subsidiary, evidence of filing of financing statements
(or the equivalent perfection filing) under the PPSA in each jurisdiction of organization or formation, the jurisdiction in which its
chief executive office, registered office or domicile is located and the jurisdictions in which its tangible assets are located, (iii) executed
Intellectual Property Security Agreements and Canadian IP Security Agreements as required pursuant to the Collateral Documents, (iv) delivery
of certificates for certificated Equity Interests that constitute Collateral, together with appropriate instruments of transfer endorsed
in blank, and (v) all agreements or instruments representing or evidencing the Collateral accompanied by instruments of transfer and stock
powers undated and endorsed in blank; provided that, to the extent any Collateral may not be perfected by (A) the filing
of a UCC financing statement or PPSA financing statement or (B) taking delivery and possession of a certificate for a certificated Equity
Interest that constitutes Collateral (provided that in the case of Equity Interests in Subsidiaries of the Initial Borrower,
such certificates shall be required to be delivered on the Closing Date only to the extent delivered to Holdings or the Initial Borrower
on or prior to the Closing Date), if the perfection of the Collateral Agent’s security interest in such Collateral may not be accomplished
on or prior to the Closing Date, then the perfection of the security interest in such Collateral shall not constitute a condition precedent
to the availability of the Facilities on the Closing Date but, instead, may be accomplished within 90 days of the Closing Date, or such
longer period as the Administrative Agent may agree.
(c) The Administrative
Agent shall have received a customary closing certificate from a secretary, assistant secretary or similar officer or authorized
representative of each Loan Party that is a party hereto, in each case, certifying as to (i) resolutions duly adopted by the board
of directors (or equivalent governing body) of each such Loan Party authorizing the execution, delivery and performance of this
Agreement (and the Loan Documents or other documents executed in connection herewith or therewith), (ii) the accuracy and
completeness of copies of the certificate or articles of incorporation, continuation, amalgamation, association or organization (or
memorandum of association or other equivalent thereof) of each such Loan Party certified by the relevant authority of the
jurisdiction of organization of each such Loan Party and copies of the by-laws or operating, management, partnership,
shareholders or similar agreement of each such Loan Party and that such documents or agreements have not been amended (except as
otherwise attached to such certificate and certified therein as being the only amendments thereto as of such date), (iii) incumbency
(to the extent applicable) and specimen signatures of each officer, director or authorized representative executing any Loan
Document on behalf of each such Loan Party and (iv) the good standing (or subsistence or existence) of each such Loan Party from the
Secretary of State (or similar official) of the state or other jurisdiction of such Loan Party’s organization (to the extent
relevant and available in the jurisdiction of organization of such Loan Party).
(d)
The Initial Borrower shall have paid or caused to have been paid to the Administrative Agent and the Collateral Agent all reasonable
out-of-pocket costs and expenses of the Administrative Agent required in connection with this Agreement, including expenses associated
with the arrangement, negotiation and preparation of this Agreement, and the reasonable and documented fees, disbursements and other charges
of Latham & Watkins LLP and one firm of local counsel to the Secured Parties in any material relevant jurisdiction (in each case to
the extent invoiced at least three Business Days prior to the Closing Date).
(e)
The Administrative Agent shall have received the executed legal opinions of (i) Greenberg Traurig LLP, counsel to the Initial Borrower
and the other Loan Parties party hereto, (ii) Stikeman Elliott LLP, Canadian counsel to the Loan Parties, (iii) McInnes Cooper, Canadian
local counsel to the Loan Parties, in each case, as customary for transactions of this type.
(f)
Each Lender shall have received, if requested at least five Business Days in advance of the Closing Date, a Note, payable to such
Lender, duly executed by the Initial Borrower.
(g)
To the extent requested at least ten Business Days prior to the Closing Date, the Lenders shall have received (i) all documentation
and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering
rules and regulations, including, without limitation, the Patriot Act and the Proceeds of Crime Act, and (ii) a Beneficial Ownership Certification
in relation to any Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, in each
case, at least three Business Days prior to the Closing Date.
(h)
The Administrative Agent shall have received a Request for Credit Extension in accordance with Section 2.02(a) requesting
that each Lender make the Loans on the requested funding date and specifying the amount to be borrowed.
(i)
The Administrative Agent shall have received a certificate from a financial officer of Holdings substantially in the form attached
hereto as Exhibit D, to the effect that, immediately after giving effect to the Transactions contemplated hereby, Holdings
and its Subsidiaries, taken as a whole, are Solvent.
(j)
(i) The Specified Representations shall be true and correct in all material respects as of the Closing Date (except to the extent
such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material
respects as of such earlier date) (and in each case, all respects if qualified by “materiality”, “Material Adverse Effect”
or other similar qualifier) and (ii) subject to Section 1.10, the Specified Acquisition Agreement Representations
shall be true and correct. The Administrative Agent shall have received a customary certificate from a Responsible Officer of the Initial
Borrower as to the matters set forth in this clause (j).
(k)
The Administrative Agent shall have received the Audited Financial Statements, the Target Audited Financial Statements, the Unaudited
Financial Statements for the fiscal quarter ending on March 31, 2024, and the Pro Forma Financial Statements.
(l)
The Arrangers shall have received all fees due and payable by Holdings on the Closing Date as separately agreed to by such parties
and Holdings shall have paid or, substantially concurrently with the initial Credit Extension, shall pay on the Closing Date any other
fees separately agreed that are due and payable on the Closing Date.
(m)
The Borrower Equity Contribution shall have been made or will be made concurrently with the Closing Date. The Closing Date Acquisition
shall have been consummated or will be consummated concurrently with the initial funding under the applicable Facilities in accordance
with the Acquisition Agreement; provided that no amendment, modification or waiver of any term thereof or any condition
to Holding’s obligation to consummate the Closing Date Acquisition thereunder (other than any such amendment, modification or waiver
that is not materially adverse to any interest of the Arrangers) shall be made or granted, as the case may be, without the prior written
consent of the Arrangers (such consent not to be unreasonably withheld) (it being understood that (x) any decrease in the purchase price
of the Closing Date Acquisition will be deemed not to be materially adverse to the interests of the Arrangers so long as such decrease
is allocated first to reduce the Initial Term Loans until the Term Loan Facility has been reduced to $675,000,000 and thereafter to reduce
the Initial Term Loans and the Borrower Equity Contribution on a pro rata, dollar-for-dollar basis (or, at the option of Holdings in its
sole discretion, to reduce the Initial Term Loans first and to reduce the Borrower Equity Contribution on a less than pro rata basis),
(y) any increase in the purchase price of the Closing Date Acquisition will be deemed not to be materially adverse to the interests
of the Arrangers so long as such increase is funded by amounts permitted to be drawn under the Revolving Credit Facility (subject to the
limitation on the maximum amount of Revolving Credit Loans available on the Closing Date pursuant to Section 7.11)
or proceeds of common equity (or other equity on terms reasonably satisfactory to the Arrangers) and (z) any change to the definition
of “Material Adverse Effect” shall be deemed to be materially adverse to the interests of the Arrangers). The Borrower Equity
Contribution shall be applied to finance the Closing Date Acquisition, the Existing Credit Agreement Refinancing and/or the costs of the
Transactions.
(n)
After giving effect to the Transactions, the Existing Credit Agreement Refinancing will be consummated and any other existing third-party
indebtedness for borrowed money of Holdings, the Acquired Business and their respective Subsidiaries shall have been refinanced.
(o) Since
the date of the Acquisition Agreement, there has not been a “Material Adverse Effect” as defined in the Acquisition Agreement.
For purposes of determining
compliance with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to a Lender.
5.02
Conditions to all Credit Extensions after the Closing Date. Subject to Section 1.10, the obligation of
each Lender to honor any Request for Credit Extension after the Closing Date (other than a Committed Loan Notice requesting only a conversion
of Loans to the other Type, or a continuation of Term SOFR Loans) is subject to the following conditions precedent:
(a)
The representations and warranties of each Loan Party contained in Article VI or any other Loan Document shall
be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such
earlier date; provided that any representation and warranty that is qualified as to “materiality”, “Material
Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects
on such respective dates.
(b)
No Default or Event of Default shall exist, or would result from such proposed Credit Extension or from the application of the
proceeds therefrom.
(c)
The Administrative Agent and, if applicable, the L/C Issuer shall have received a Request for Credit Extension in accordance with
the requirements hereof.
Each Request for Credit Extension
(other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Term SOFR Loans) submitted
by any Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit Extension.
Article
VI.
REPRESENTATIONS AND WARRANTIES
Each Loan Party jointly and
severally represents and warrants to the Arrangers, the Administrative Agent, the Collateral Agent, the L/C Issuers and the Lenders (as
of the date such Loan Party becomes a Loan Party and each date such Loan Party is deemed to make such representations and warranties thereafter)
that:
6.01 Existence,
Qualification and Power; Compliance with Laws. Each Loan Party
(a)
is duly organized or formed, validly existing and in good standing (to the extent such concepts are applicable in such Loan Party’s
jurisdiction of organization) under the Laws of the jurisdiction of its incorporation or organization,
(b)
has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own
or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents and each
other agreement or instrument contemplated hereby or thereby to which it is a party,
(c)
is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification or license, and
(d)
is in compliance with all Laws; except in each case referred to in clause (b)(i) (other than with respect to
any Borrower), (c) or (d), to the extent that failure to do so would not reasonably be expected to have a
Material Adverse Effect.
6.02 Authorization;
No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is
or is to be a party, and the consummation of the Transactions (only to the extent such Loan Party was a Loan Party on the effective
date thereof) are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or
other organizational action, and do not and will not
(a)
contravene the terms of any of such Person’s Organization Documents;
(b) conflict with or
result in any breach or contravention of, or the creation of any material Lien under, or require any material payment to be made
under (i) any material Contractual Obligation to which such Person is a party or affecting such Person or the properties of such
Person or any Restricted Subsidiary (other than the creation of the Liens under the Loan Documents) or (ii) any order, injunction,
writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is unless, in each case of
the foregoing clauses (i) and (ii), the same does not or would not reasonably be expected to have a
Material Adverse Effect; or
(c)
violate any Law that would adversely affect the rights of the Lenders, the Administrative Agent or the Collateral Agent under the
Loan Documents.
6.03 Governmental
Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with any Governmental Authority or any other Person is necessary or required in connection with
(i)
the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document,
or for the consummation of the Transactions (to the extent such Loan Party was a Loan Party on the effective date thereof),
(ii)
the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii)
the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof,
subject to Liens permitted by this Agreement and the Collateral Documents to have priority over the Liens of the Collateral Agent in the
Collateral) or
(iv)
the exercise by the Administrative Agent, the Collateral Agent or any Lender of its rights under the Loan Documents or the remedies
in respect of the Collateral pursuant to the Collateral Documents;
except, in each case of the
foregoing clauses (i) through (iv), (a) approvals, consents, exemptions, authorizations, or other actions,
notices, or filings that have been (or contemporaneously herewith will be) obtained, taken, given, or made; (b) filings necessary to maintain
the perfection or priority of the Liens created by the Loan Documents; and (c) approvals, consents, exemptions, authorizations, or other
actions, notices, or filings the failure of which to obtain or perform would not reasonably be expected to have a Material Adverse Effect.
6.04 Binding
Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party hereto and thereto. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is
party hereto and thereto in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
6.05 Financial
Statements; No Material Adverse Effect.
(a)
The Holdings Audited Financial Statements delivered to the Administrative Agent
(i)
were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein;
(ii) fairly
present, in all material respects, the financial condition of Holdings and its Subsidiaries as of the date thereof and their results
of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and
(iii)
show all material indebtedness and other liabilities, direct or contingent, of Holdings and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness, to the extent required by GAAP; subject, in the case of the Unaudited
Financial Statements, to (x) the absence of footnote disclosures and other presentation items and (y) changes resulting from normal year-end
adjustments.
(b)
The Target Audited Financial Statements and the Target Unaudited Financial Statements delivered to the Administrative Agent
(i)
were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein;
(ii)
fairly present, in all material respects, the financial condition of the Target Companies as of the date thereof and their results
of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein; and
(iii)
show all material indebtedness and other liabilities, direct or contingent, of the Target Companies as of the date thereof, including
liabilities for taxes, material commitments and Indebtedness, to the extent required by GAAP; subject, in the case of the Unaudited Financial
Statements, to (x) the absence of footnote disclosures and other presentation items and (y) changes resulting from normal year-end adjustments.
(c)
The Pro Forma Financial Statements have been prepared in good faith, based on assumptions believed by Holdings to be reasonable
as of the date of delivery thereof.
(d)
No event, change or condition has occurred since December 31, 2023, that has had, or would reasonably be expected to have, a Material
Adverse Effect.
6.06 Litigation.
There are no actions, suits, proceedings, investigations, claims or disputes pending or, to the knowledge of the Loan Parties after
due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority,
by or against any Loan Party or any Restricted Subsidiary or against any of their properties or revenues that (a) purport to affect
or pertain to this Agreement, any other Loan Document or the consummation of the transactions contemplated by this Agreement or any
other Loan Document, or (b) except as specifically disclosed on Schedule 6.06 (the “Disclosed
Litigation”), either individually or in the aggregate, if determined adversely, would reasonably be expected to have a
Material Adverse Effect.
6.07 No
Default. Neither any Loan Party nor any Restricted Subsidiary is in default under or with respect to, or a party to, any
Contractual Obligation that would, either individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
6.08 Properties.
(a) Except as would not
reasonably be expected to have a Material Adverse Effect, each Loan Party and each Restricted Subsidiary have good record, valid and
marketable title in fee simple to, or valid leasehold interests in (to the extent such ownership or leasing concepts are applicable
to such property in the jurisdiction in which it resides), all Material Real Property necessary in the ordinary conduct of its
business, free and clear of all Liens except for Permitted Liens. The
property of each Loan Party and each Restricted Subsidiary, taken as
a whole, (i) is in good operating order, condition and repair (ordinary wear and tear excepted) and (ii) constitutes all
the property which is necessary for the business and operations of the Loan Parties as presently conducted except to the extent that
any failure would not reasonably be expected to result in a Material Adverse Effect.
(b)
Section II.C to the Perfection Certificate dated the Closing Date contains, in all material respects, a true and complete
list of each interest in Material Real Property located in the United States owned by a Loan Party as of the Closing Date.
6.09 Environmental
Compliance.
(a)
Each Loan Party and each Restricted Subsidiary is in compliance
with Environmental Laws except to the extent that any failure to comply would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(b)
Except as otherwise set forth on Schedule 6.09 or otherwise would not reasonably be expected to result in a Material
Adverse Effect, Hazardous Materials have not been Released and are not present at, on, under, in, or about any of the properties currently
or formerly owned, leased or operated by any Loan Party or any Restricted Subsidiary in a quantity, manner or condition which would reasonably
be expected to (i) require investigation, removal, or remediation by any Loan Party under Environmental Law or otherwise give rise to
Environmental Liability of any Loan Party, (ii) interfere with any Loan Party’s continued operations or (iii) impair the fair saleable
value of any Collateral.
(c)
Except as otherwise set forth on Schedule 6.09, all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently owned or operated by any Loan Party or any Restricted Subsidiary have been properly
stored, handled, recycled, re-used or disposed of in a manner that would not reasonably be expected to cause a Material Adverse Effect.
(d)
Except as otherwise set forth on Schedule 6.09, there is no site to which any Loan Party or any Restricted Subsidiary
has transported or arranged for the transport of Hazardous Materials that is the subject of any Environmental Liabilities or Environmental
Claims which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(e)
Except as otherwise set forth on Schedule 6.09, neither any Loan Party nor any Restricted Subsidiary is subject to
any pending or threatened Environmental Claims or Environmental Liabilities which would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(f)
Each Loan Party and each Restricted Subsidiary are in compliance with, and possesses all Environmental Permits required
pursuant to, Environmental Laws, except to the extent such non-compliance or failure to possess would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(g)
No Loan Party or Restricted Subsidiary has entered into or agreed to any consent decree, order, or settlement or other agreement,
or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute
resolution, relating to compliance with Environmental Law or any Environmental Liability that individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
(h)
To each Loan Party’s knowledge, no Loan Party nor Restricted Subsidiary has assumed or retained, by contract or operation
of law, any Environmental Liabilities that individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.
6.10 Insurance.
The properties of the Loan Parties and the Restricted Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of any Loan Party or a Captive Insurance Subsidiary, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where
the applicable Loan Party or Restricted Subsidiary operates, provided that no coverage in respect of terrorism shall
be required. As of the Closing Date, such insurance is in full force and effect and all premiums have been duly paid.
6.11 Taxes. Each
Loan Party and each Restricted Subsidiary have (a) filed all material Federal, state, provincial, territorial, foreign and
other tax returns and reports required to be filed, and (b) have paid all Federal, state, foreign and other taxes, assessments, fees
and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have
been provided in accordance with GAAP or to the extent that failure to pay such amounts could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. To the knowledge of the Loan Parties, there is no proposed tax
assessment against any Loan Party or any Restricted Subsidiary that would, if made, have a Material Adverse Effect.
6.12 ERISA
Compliance.
(a)
Except as would not reasonably be expected to have a Material Adverse Effect, (i) each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state Laws and the Borrowers and all applicable ERISA Affiliates
have performed in all material respects their obligations with respect to each Plan; and (ii) each Loan Party and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 or 430 of the Code (except where such would not result in
material liability), and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of
the Code or Section 303 of ERISA has been made with respect to any Plan. Each Plan that is intended to be qualified under Section 401
of the Code has received a favorable determination letter, opinion letter or advisory letter upon which the Loan Parties are entitled
to rely under IRS pronouncements, that such Plan is so qualified under Section 401(a) of the Code, and to the knowledge of the Loan
Parties, nothing has occurred with respect to any such Plan since the date of its most recent determination letter, opinion letter or
advisory letter which would reasonably be expected to adversely affect its qualification.
(b)
There are no pending or, to the best knowledge of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no non-exempt
“prohibited transaction” within the meaning of Section 4975 of the Code or Section 406 or 407 of ERISA or violation
of the fiduciary responsibility rules with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.
(c)
Except as would not reasonably be expected to have a Material Adverse Effect:
(i)
no ERISA Event has occurred or is reasonably expected to occur;
(ii)
no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA);
(iii)
no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan;
(iv)
no Loan Party nor any ERISA Affiliate has engaged in a transaction that could reasonably be expected to be subject to Sections 4069
or 4212(c) of ERISA; and
(v)
except to the extent required under Section 4980B of the Code or any applicable state or local law, no Plan provides health
or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Parties or any of
their respective ERISA Affiliates.
(d)
As of the most recent valuation date for any Pension Plan that precedes the Closing Date, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefits liabilities) to the extent that any such Pension Plan exists
with respect to a Loan Party or any Restricted Subsidiary, if any, would not reasonably be expected to have a Material Adverse Effect.
(e)
As of the Closing Date, for each Multiemployer Plan for which an actuarial report has been provided to Holdings and with respect
to which a complete withdrawal is reasonably expected to occur, the potential liability of the Loan Parties and their respective ERISA
Affiliates for such complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when aggregated
with such potential liability for such complete withdrawal from all such Multiemployer Plans with respect to which a complete withdrawal
is reasonably expected to occur, would not reasonably be expected to have a Material Adverse Effect.
6.13 Subsidiaries;
Equity Interests. As of the Closing Date, no Loan Party (to the extent such Loan Party was a Loan Party on the Closing Date)
has any Subsidiaries other than those specifically disclosed in Schedule 6.13, and all of the outstanding Equity
Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are directly or indirectly owned by a
Loan Party (except for certain immaterial director’s qualifying shares) free and clear of all Liens except those created under
the Collateral Documents and as otherwise disclosed in Schedule 6.13. All of the outstanding Equity Interests in each
Loan Party and its Subsidiaries have been validly issued, are fully paid and non-assessable (to the extent such concepts are
applicable in such Loan Party’s jurisdiction of organization).
6.14 Margin
Regulations; Investment Company Act.
(a)
The Borrowers are not engaged, nor will they engage, principally or as one of their important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock and no proceeds of any Borrowings or drawings under any Letter of Credit will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.
(b)
No Loan Party nor any Restricted Subsidiary is or is required to be registered as an “investment company” under the
Investment Company Act of 1940, as amended. Neither the making of any Loan, nor the issuance of any Letters of Credit, nor the application
of the proceeds or repayment thereof by any Borrower, nor the consummation of the other transactions contemplated by the Loan Documents,
will violate any provision of any such Act or any rule, regulation or order of the SEC thereunder.
6.15 Disclosure.
(a)
Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions
to which it or any Restricted Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect. All written information heretofore furnished by any Restricted Subsidiary
to the Administrative Agent or any Lender for purposes of or in connection with this Agreement, the Transactions or any other transaction
contemplated hereby is, and all such information hereafter furnished by or on behalf of any Loan Party to the Administrative Agent or
any Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified; provided,
that with respect to projected financial information and pro forma financial information, the Loan Parties represent only that such information
was prepared in good faith based upon assumptions believed to be reasonable at the time; it being understood and agreed that (i) any financial
or business projections furnished by the Loan Parties are subject to significant uncertainties and contingencies, which may be beyond
the control of the Loan Parties, (ii) no assurance is given by the Loan Parties that the results or forecast in any such projections will
be realized and (iii) the actual results may differ from the forecast results set forth in such projections and such differences may be
material..
(b)
As of the Closing Date, the information included in the Beneficial Ownership Certification, if applicable, is true and correct
in all material respects.
6.16 Compliance
with Laws. Except as otherwise provided in the representations above, Holdings and each Restricted Subsidiary is in
compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to
it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
6.17 Intellectual
Property; Licenses, Etc. Each Loan Party and each Restricted Subsidiary own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents and all other intellectual property rights that are used or held for use
in the operation of the businesses of the Loan Parties and Restricted Subsidiaries, except to the extent that individually, or, in
the aggregate, it would not reasonably be expected to have a Material Adverse Effect. To the best knowledge of each Loan Party,
neither (a) the operation of the businesses of the Loan Parties and the Restricted Subsidiaries, nor (b) any slogan or other
advertising device, product, process, method, substance, part or other material now employed by any Loan Party or any Restricted
Subsidiary, infringes upon, misappropriates, or otherwise violates any rights held by any other Person except where such
infringement would not reasonably be expected to have a Material Adverse Effect. Except as disclosed on Schedule 6.17,
no claim or litigation regarding any of the foregoing is pending or, to the best knowledge of each Loan Party, threatened, which,
either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
6.18 Solvency.
Immediately after the consummation of the Transactions to occur on the Closing Date, Holdings and its Subsidiaries, on a
consolidated basis, are Solvent.
6.19 Casualty, Etc.
Neither the business nor the properties of any Loan Party or any Restricted Subsidiary are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could be reasonably likely to have a Material Adverse Effect.
6.20 Perfection,
Etc. Except as permitted under the Collateral Documents, the Collateral Documents create in favor of the Collateral Agent
for the benefit of the Secured Parties a valid and, upon the filing or recordation with the appropriate Governmental Authority of
financing statements and other filings in appropriate form describing the Collateral with respect to which a security interest may
be perfected by filing or recordation and upon the taking of possession or control by the Collateral Agent of the Collateral with
respect to which a security interest may be perfected by possession or control, perfected security interest in the Collateral
(subject to Liens permitted under the Loan Documents), with the priority required under the Loan Documents, securing the payment of
the Obligations. The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the Loan Documents.
Notwithstanding anything set
forth herein (including this Section 6.20) or in any other Loan Document to the contrary, neither the Borrowers nor
any other Loan Party makes any representation or warranty as to the pledge or creation of any security interest, or the effects of perfection
or non-perfection, the priority or enforceability of any pledge or security interest to the extent not required on the Closing Date pursuant
to the proviso to Section 5.01(b) until required pursuant to Section 5.01(b), 7.12
or 7.14.
6.21 Swap
Obligations. Neither Holdings nor any Restricted Subsidiary has incurred any outstanding obligations under any Swap
Contracts, other than Permitted Swap Obligations.
6.22 Labor
Matters. As of the Closing Date, there are no strikes, lockouts or slowdowns against Holdings or any Restricted Subsidiary
pending or, to the knowledge of Holdings, threatened, except as would not reasonably be expected to result in a Material Adverse
Effect. Except as provided on Schedule 6.22, the hours worked by and payments made to employees of Holdings and the
Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act, the Employment Standards Act, 2000(Ontario) or
any other applicable Federal, state, provincial, territorial, local or foreign law dealing with such matters, except for such
violations that would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. All
payments due from Holdings or any Restricted Subsidiary, or for which any claim may be made against Holdings or any Restricted
Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of Holdings or any Restricted Subsidiary, except for such failures that would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. Except as would not reasonably be expected to result in a
Material Adverse Effect, the consummation of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement to which Holdings or any Restricted Subsidiary is
bound.
6.23 OFAC,
Anti-Terrorism and Anti-Money Laundering Law and Anti-Corruption Laws.
(a) Neither Holdings nor
its Subsidiaries, nor their respective directors, officers, employees, or, to the knowledge of the Borrowers and their Subsidiaries,
their agents, is (i) a Sanctioned Person; (ii) operating, organized or ordinarily resident in a Sanctioned Country; or (iii)
engaged, directly or knowingly indirectly, in dealings or transactions involving Sanctioned Persons or Sanctioned Countries, in each
of clauses (i), (ii), and (iii), such that would cause the Borrowers or any of their Subsidiaries to be in
violation of Sanctions except to the extent that any such violation would not reasonably be expected to cause a Material Adverse
Effect. The Borrowers and their Subsidiaries will not use the proceeds of the Loans, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner, or other Person to fund activities or business of or with any Sanctioned
Person or Sanctioned Country in violation of Sanctions, or in violation of Anti-Terrorism and Anti-Money Laundering Laws. The
foregoing representations in this Section 6.23(a) will not apply to any Person that qualifies as a corporation that is registered or
incorporated under the laws of Canada or any province or territory thereof and that carries on business in whole or in part in
Canada within the meaning of Section 2 of the Foreign Extraterritorial Measures (United States) Order, 1992 passed under the Foreign
Extraterritorial Measures Act (Canada) in so far as such representations would result in a violation of or conflict with the Foreign
Extraterritorial Measures Act (Canada) or any similar law.
(b)
Holdings, the Borrowers, their Subsidiaries and their respective directors, officers and employees and, to the knowledge of the
Borrowers and their Subsidiaries, their agents, are and for the past five years have been in compliance with Sanctions, Anti-Corruption
Laws and Anti-Terrorism and Anti-Money Laundering Laws, except to the extent that failure to comply would not reasonably be expected to
result in a Material Adverse Effect.
(c)
No part of the proceeds of the loans will be used by Holdings or any of its Subsidiaries and to the knowledge of Holding or its
Subsidiaries, their respective directors, officers, employees or agents, in violation of Anti-Corruption Laws.
(d)
Holdings and its Subsidiaries have instituted and will continue to maintain policies and/or procedures reasonably designed to promote
compliance by Holdings, its Subsidiaries, and their respective directors, officers, employees and agents with Anti-Corruption Laws to
the extent required in each relevant jurisdiction, except to the extent such failure would not reasonably be expected to result in a Material
Adverse Effect.
6.24 Senior
Indebtedness. The Obligations under the Facilities constitute “senior debt”, “senior indebtedness”,
“guarantor senior debt”, “senior secured financing” and “designated senior indebtedness” (or any
comparable term) under the documentation for all Indebtedness that is subordinated in right of payment to the Obligations (if
applicable).
6.25 Canadian
Pension Plan Compliance.
(a)
no Canadian Pension Event has occurred which, when taken together with all other such Canadian Pension Events for which liability
is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Event;
(b)
each Canadian Pension Plan is in compliance in all material respects with Canadian Pension Laws, except where any failure to comply
would not reasonably be expected to result in a Material Adverse Effect;
(c)
as of the Closing Date, no Loan Party or Subsidiary maintains, contributes to, or has any liability under (currently or in the
past five years), any Canadian Defined Benefit Pension Plan; and
(d)
no lien has arisen, choate or inchoate, in respect of any Loan Party or Subsidiary or their property in connection with any Canadian
Pension Plan (except for contribution amounts not yet due).
6.26 Affected
Financial Institutions. No Loan Party is an Affected Financial Institution.
Article
VII.
AFFIRMATIVE
COVENANTS
So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder, other than contingent indemnification obligations for which no
claim has been asserted, which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless Cash Collateralized or backstopped on terms reasonably satisfactory to the L/C Issuer), each Loan Party shall, and shall (except
in the case of the covenants set forth in Sections 7.01, 7.02 and 7.03) cause each Restricted
Subsidiary to:
7.01 Financial
Statements. Deliver to the Administrative Agent, who will deliver the same to each Lender, in form and detail reasonably
satisfactory to the Administrative Agent:
(a)
within 90 days after the end of each fiscal year of Holdings, a consolidated balance sheet of Holdings and its Subsidiaries as
at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows
for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail
and prepared in accordance with GAAP and, to the extent there are any Unrestricted Subsidiaries at such time, the Restricted Group Reconciliation
Statement, audited and accompanied by:
(i)
a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, 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 (other than any such exception or explanatory paragraph
that is expressly solely with respect to, or expressly resulting solely from, an upcoming maturity date under the Facilities that is scheduled
to occur within one year from the time such report and opinion are delivered) or any qualification or exception as to the scope of such
audit that would be material to Holdings and its Subsidiaries, taken as a whole,
(ii)
to the extent filed with the SEC, a copy of the attestation report filed with the SEC of such independent certified public accountant
of nationally recognized standing as to Holdings’ internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
and
(iii)
customary management discussion and analysis;
(b)
(i) with respect to the Target Unaudited Financial Statements for the fiscal quarter ending June 30, 2024, no later than September
15, 2024, and (ii) commencing with the fiscal quarter ending September 30, 2024, within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of Holdings, a consolidated balance sheet of Holdings and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter
and for the portion of Holdings’ fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified
by a Responsible Officer of Holdings as fairly presenting in all material respects the consolidated financial condition, results of operations,
shareholders’ equity and cash flows of Holdings and its Subsidiaries in accordance with GAAP and, to the extent there are any Unrestricted
Subsidiaries at such time, the Restricted Group Reconciliation Statement, subject only to normal year-end audit adjustments and the absence
of footnotes; and
(c) no later than 120
days after the end of each fiscal year of Holdings, a consolidated budget for such fiscal year (including a projected consolidated
balance sheet and related statements of projected operations and cash flows as of the end of and for such following fiscal year and
setting forth the assumptions used for purposes of preparing such budget) in form that is either (i) consistent with past practice
of Holdings or (ii) reasonably satisfactory to the Administrative Agent; provided that it is understood and agreed
that (A) any financial or business projections furnished by Holdings are subject to significant uncertainties and contingencies,
which may be beyond the control of Holdings, (B) no assurance is given by Holdings that the results or forecast in any such
projections will be realized and (C) the actual results may differ from the forecast results set forth in such projections and such
differences may be material.
7.02 Certificates;
Other Information. Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative
Agent:
(a)
concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of Holdings, which shall, among other things,
(i)
specify whether a Triggering Event has occurred during the preceding fiscal quarter,
(ii)
in the case of a certificate delivered with the financial statements required by Section 7.01(a) above, (i)
beginning with the fiscal year ending December 31, 2024, set forth Holdings’ calculation of in reasonable detail the Available
Amount as at the end of the fiscal year to which such financial statements relates and (ii) beginning with the fiscal year ending December 31,
2026, set forth Holdings’ calculation of Excess Cash Flow, and
(iii)
a list of each Subsidiary of a Borrower that identifies such Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary
as of the date of delivery of such Compliance Certificate or a confirmation that there is no change in such information since the later
of the Closing Date and the date of the last such list;
(b)
promptly upon receipt thereof, copies of all notices, requests and other documents received by Holdings or any Restricted Subsidiary
under or pursuant to any indenture, loan or credit or similar agreement, in each case, that relates to Indebtedness in excess of the Threshold
Amount, regarding or related to any breach or default by any party thereto or any other event that would reasonably be expected to have
a Material Adverse Effect;
(c)
promptly after the assertion or occurrence thereof, written notice of any Environmental Claim against, of any Environmental Liability
incurred by, or of any non-compliance by, Holdings or any Restricted Subsidiary with any Environmental Law or Environmental Permit that
would reasonably be expected to have a Material Adverse Effect;
(d)
promptly after written request, such additional information regarding the business, financial or corporate affairs of Holdings
or any Restricted Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time
to time reasonably request, including with respect to applicable “know-your-customer” and anti-money laundering rules and
regulations;
(e)
simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 7.01(a)
and 7.01(b) above, the related consolidating financial statements reflecting the adjustments necessary to eliminate the
accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements if material; and
(f)
promptly upon written request of the Administrative Agent, a copy of the most recent actuarial valuation report filed with the
applicable governmental authorities in respect of each Canadian Defined Benefit Pension Plan which is permitted hereunder, and any other
documentation or filings with respect thereto which are requested by the Administrative Agent, acting reasonably.
The Borrowers hereby acknowledge
that (a) the Administrative Agent will make available to the Lenders and the L/C Issuers materials and/or information provided by or on
behalf of any Borrower hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrowers or their Subsidiaries
or their respective securities) (each, a “Public Lender”). The Borrowers hereby agree that (w) all Borrower
Materials that are to be made available to Public Lenders 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,”
the Borrowers shall be deemed to have authorized the Administrative Agent and the Lenders to treat such Borrower Materials as not containing
any material non-public information with respect to the Borrowers or their Subsidiaries or their respective securities for purposes of
United States federal and state securities laws (provided, however, that to the extent such Borrower Materials
constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated as “Public Investor;” and (z) the Administrative
Agent 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 marked as “Public Investor.” Notwithstanding the foregoing, the following Borrower Materials
shall be deemed to be marked “PUBLIC”, unless the Borrowers notify the Administrative Agent promptly that any such document
contains material non-public information: (1) the Loan Documents, (2) notification of changes in the terms of the Facilities, and (3)
all information delivered pursuant to Sections 7.01(a) and (b).
Each document required to
be delivered pursuant to Section 7.01(a) or (b) shall be deemed to have been delivered on the date on
which Holdings posts such document on the SEC’s website at www.sec.gov or on the Holdings website (each of the foregoing, an “Informational
Website”). Holdings shall notify the Administrative Agent promptly upon posting to such Informational Website.
7.03 Notices.
Promptly notify the Administrative Agent and each Lender:
(a)
and in any event within 10 Business Days after any Responsible Officer of Holdings obtains actual knowledge of the occurrence of
any Default;
(b)
and in any event within 10 Business Days after any Responsible Officer of Holdings obtains actual knowledge of any matter that
has resulted or would reasonably be expected to result in a Material Adverse Effect;
(c)
of the occurrence of or the reasonably expected occurrence of any ERISA Event or Canadian Pension Event that would reasonably be
expected to result in liability to any Loan Party in excess of the Threshold Amount and provide a written notice specifying the nature
thereof, what action the Loan Party or its ERISA Affiliates has taken, is taking or proposes to take with respect thereof and, when known,
any action taken or threatened by the IRS, the U.S. Department of Labor, the PBGC or any similar Governmental Authority with respect
thereto and with reasonable promptness, copies of the following to the extent requested by the Administrative Agent: (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by Loan Parties or any of their respective ERISA Affiliates with
the IRS with respect to each Pension Plan; and (ii) copies of such other documents or governmental reports or filings relating to any
Plan as the Administrative Agent shall reasonably request;
(d)
of all notices received by the Loan Parties and any of their respective ERISA Affiliates from a Multiemployer Plan concerning
an ERISA Event or a Canadian Pension Event that would reasonably be anticipated to have a Material Adverse Effect and provide copies of
such notices; and
(e)
the filing or commencement of, or any written threat or written notice of intention of any Person to file or commence, any action,
suit or proceeding, whether at law or in equity or by or before any arbitrator or Governmental Authority, against Holdings or any Restricted
Subsidiary that would reasonably be expected to result in a Material Adverse Effect.
Each notice pursuant to this
Section 7.03 shall be accompanied by a statement of a Responsible Officer of Holdings setting forth details of the
occurrence referred to therein and stating what action the Borrowers have taken and proposes to take with respect thereto. Each notice
pursuant to Section 7.03(a) shall describe with particularity any and all provisions of this Agreement and any other
Loan Document that have been breached.
7.04 Payment of
Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including all
tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being
maintained by Holdings or any Restricted Subsidiary unless such liabilities, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
7.05 Preservation
of Existence, Etc.
(a)
Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction
of its organization except in a disposition, merger, amalgamation, consolidation, dissolution or other transaction permitted by Section 8.03
or 8.04;
(b)
take all commercially reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary in the normal
conduct of its business, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect;
and
(c)
preserve or renew all of its registered or applied for patents, patent applications, industrial designs, copyrights, trademarks,
trade names and service marks, the non-preservation of which would reasonably be expected to have a Material Adverse Effect.
7.06 Maintenance
of Properties. Maintain, preserve and protect all of its material tangible properties and equipment useful and
necessary in the operation of its business, ordinary wear and tear and casualty and condemnation excepted, unless such failure to
maintain, preserve and protect such properties and equipment would not reasonably be expected to have a Material Adverse Effect.
7.07 Maintenance
of Insurance.
(a)
Maintain with financially sound and reputable insurance companies not Affiliates of any Loan Party, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar circumstances by such other Persons, provided
that insurance coverage in respect of terrorism shall not be required. Notwithstanding the foregoing, Holdings and the Restricted Subsidiaries
may self-insure with Captive Insurance Subsidiaries or other means, in each case to the extent deemed commercially reasonable in the good
faith judgment of the management of Holdings.
(b)
With respect to each Mortgaged Property located in the United States, obtain flood insurance in such total amount reasonably satisfactory
to the Administrative Agent and as otherwise sufficient to comply in all material respects with all applicable rules and regulations promulgated
pursuant to the Flood Laws, if at any time the area in which any improvements located on any Mortgaged Property is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), and
otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from
time to time.
7.08 Compliance
with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply
therewith would not reasonably be expected to have a Material Adverse Effect.
7.09 Books and
Records. Maintain proper books of record and account, in which full, true and correct entries, in all material
respects, in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets
and business of Holdings or any Restricted Subsidiary, as the case may be.
7.10 Inspection
Rights. No more frequently than once per fiscal year, unless an Event of Default has occurred and is continuing, permit
representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its officers, employees and independent public accountants (with an authorized representative of Holdings entitled to
be present during any such discussion), all at such reasonable times during normal business hours and not to materially interfere
with the conduct of Holdings or any Restricted Subsidiary’s business, upon reasonable advance notice to Holdings.
Notwithstanding anything to the contrary in this Section 7.10, neither Holdings nor any Restricted Subsidiary will be
required to disclose or permit the inspection or discussion of, any document, information or other matter (a) that constitutes trade
secrets or proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their
representatives or contractors) is prohibited by law, fiduciary duty or any binding agreement or (c) that is subject to
attorney-client or similar privilege or constitutes attorney work product.
7.11 Use of
Proceeds.
(a)
Use the proceeds of the Initial Term Loans incurred on the Closing Date solely to finance the Transactions and pay the Transaction
Costs.
(b)
Use the proceeds of the Revolving Credit Loans for general corporate purposes; provided that the aggregate amount
of Revolving Credit Loans drawn on the Closing Date shall not exceed $10,000,000. The Borrowers shall be entitled to request the issuance
of Letters of Credit to support payment obligations incurred in the ordinary course of business by Holdings, Borrowers, or the Restricted
Subsidiaries.
7.12 Additional
Guarantees and Collateral.
(a) Upon
the formation or acquisition of any new direct or indirect US Subsidiary or Canadian Subsidiary (other than an Excluded Subsidiary); provided
that (i) any Subsidiary Redesignation resulting in an Unrestricted Subsidiary becoming a Restricted Subsidiary and (ii) any Excluded
Subsidiary ceasing to be an Excluded Subsidiary but remaining a Restricted Subsidiary shall be deemed to constitute the acquisition
of a Restricted Subsidiary for all purposes of this Section 7.12) by any Loan Party or upon a Restricted Subsidiary becoming a Guarantor pursuant
to Section 7.12(d), the Borrowers shall, in each case, at the Borrowers’ sole expense:
(i)
within 90 days after such formation or acquisition of such Restricted Subsidiary (or such longer period as may be agreed to by
the Administrative Agent in its reasonable discretion) cause each such Subsidiary, and cause each direct and indirect parent of such Subsidiary
(if it has not already done so), to duly execute and deliver to the Administrative Agent
(A)
a Subsidiary Joinder Agreement or such other joinder agreement, in each case, in form and substance reasonably satisfactory to
the Administrative Agent, guaranteeing the Borrowers’ obligations under the Loan Documents,
(B)
a joinder to the Pledge and Security Agreement (or, in respect of a Canadian Subsidiary, a joinder to the Canadian Pledge and Security
Agreement (or a Canadian Deed of Hypothec)) in form and substance reasonably satisfactory to the Administrative Agent,
(C)
(x) in the case of a US Subsidiary, Uniform Commercial Code financing statements and (y) in the case of a Canadian Subsidiary,
PPSA financing statements (or other perfection filings) in order to, with respect to such Subsidiary, perfect and protect the first priority
liens and security interests created under the Collateral Documents, certificates, if any, representing the Pledged Collateral of such
Subsidiary and such parent referred to in the Pledge and Security Agreement (or, in respect of a Canadian Subsidiary, the Canadian Pledge
and Security Agreement) accompanied by undated stock powers, endorsements and/or transfer powers, as applicable, executed in blank and
evidence that all other actions that the Administrative Agent may deem reasonably necessary in order to perfect and protect the liens
and security interests created under the relevant Collateral Document have been taken, subject to the terms thereof, provided that,
(A) if such new property is voting Equity Interests in a CFC owned directly by any Loan Party, only 65% of such voting Equity Interests
and 100% of such non-voting Equity Interests shall be pledged in favor of the Secured Parties and (B) if such new property is voting Equity
Interests in a Subsidiary (other than voting Equity Interests in a Material Canadian Subsidiary) that has no material assets other than
(i) direct or indirect Equity Interests (including, for this purpose, any debt or any instrument treated as equity for U.S. federal income
tax purposes) in one or more CFCs and (ii) cash and Cash Equivalents and other assets being held incidental to the holding of assets described
in clause (i) of this clause (B) (such entity a “CFC Holdco”), only 65% of such
voting Equity Interests and 100% of such non-voting Equity Interests shall be pledged in favor of the Secured Parties,
(D)
the results of a recent Lien and judgment search in each relevant jurisdiction (and such other Lien searches to the extent applicable
and customary in such jurisdiction) with respect to such Subsidiary and such parent, which such search shall reveal no Liens on any of
the assets of such Subsidiary except for Liens permitted by Section 8.01 or other Liens reasonably acceptable to the
Collateral Agent and except for Liens to be discharged on or prior to such Subsidiary’s and such parent’s execution of the
documents referred to in this clause (i), pursuant to documentation reasonably satisfactory to the Collateral Agent,
(E) such
certificates of resolutions or all necessary corporate or other organizational action, incumbency certificates and/or other
certificates of Responsible Officers of such Subsidiary (and any approvals or consents of work councils or other similar bodies) as
the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Subsidiary
is a party or is to be a party and
(F)
such documents and certifications as the Administrative Agent may reasonably require to evidence that such Subsidiary is duly organized
or formed, and that such Subsidiary is validly existing and in good standing in its state of incorporation or formation (or such other
security documents in form and substance satisfactory to the Administrative Agent); and
(ii)
within 90 days after such formation or acquisition of such Restricted Subsidiary (or such longer period as may be agreed to by
the Administrative Agent in its reasonable discretion) deliver to the Administrative Agent, upon the request of the Administrative Agent
in its reasonable discretion, a signed copy of a favorable opinion of counsel to the Loan Parties (or, as and if customary in the relevant
jurisdiction, counsel for the Administrative Agent) with respect to such Subsidiary, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent.
(b)
Within 90 days (or such longer period as may be agreed to by the Administrative Agent in its reasonable discretion) of (x) the
Closing Date with respect to Material Real Property in the United States or Canada held by any Loan Party as of the Closing Date or (y)
the acquisition of either Material Real Property in the United States or Canada or a Restricted Subsidiary which holds Material Real Property
in the United States or Canada and is contemplated to become a Loan Party hereunder, promptly grant to the Collateral Agent a security
interest in and Mortgage on each Material Real Property owned in fee (or such other similar ownership interest as recognized by local
law) by such Loan Party, as additional security for the Obligations, in each case, unless, with respect to Material Real Property in the
United States, the Administrative Agent determines in its reasonable discretion that, with respect to any such property that is located
in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards within the
meaning of the National Flood Insurance Act of 1968, the costs of creating or perfecting such security interests are excessive in relation
to the benefits accruing to the Lenders. Such Mortgages shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and the Collateral Agent and shall constitute valid and enforceable perfected Liens subject only
to Permitted Liens, Liens pursuant to Section 8.01(g) or other Liens reasonably acceptable to the Collateral Agent.
Such Mortgages or instruments related thereto shall be duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Mortgages
and all taxes, fees and other charges payable in connection therewith shall be paid in full. With respect to each Mortgage, except as
may be agreed to by Collateral Agent, in its reasonable discretion, the applicable Subsidiary shall deliver:
(i)
a mortgagee’s policy of title insurance, if available, (or marked up unconditional signed title insurance commitment or pro
forma for such insurance having the effect of a policy of title insurance) insuring the Lien of such Mortgage as a valid first mortgage
Lien on the Mortgaged Property and fixtures described therein in the amount equal to 110% of the fair market value of such Mortgaged Property
and fixtures (but not to exceed 100% of the fair market value of such Mortgaged Property in jurisdictions that impose mortgage or intangibles
recording tax), which fair market value is delivered to the Collateral Agent in writing by a Responsible Officer of the applicable Loan
Party, which policy (or marked up unconditional signed title insurance commitment or pro forma for such insurance having the effect of
a policy of title insurance) (each, a “Title Policy”) shall
(A)
be issued by the Title Company,
(B)
to the extent necessary and available, include such reinsurance arrangements (with provisions for direct access, if necessary)
as shall be reasonably acceptable to the Collateral Agent,
(C)
name the Collateral Agent and each of the other Secured Parties as insureds thereunder,
(D)
be in the form of ALTA Loan Policy - 2006 (or equivalent policies) where available,
(E)
contain a “tie-in” or “cluster” endorsement, if available under applicable Law (i.e., policies which
insure against losses regardless of location or allocated value of the insured property up to a stated maximum coverage amount),
(F)
have been supplemented by such endorsements and affirmative coverage as shall be reasonably requested by the Collateral Agent (including,
but not limited to, endorsements on matters relating to usury, first loss, last dollar, zoning (unless the cost of obtaining such zoning
endorsement is prohibitive or Collateral Agent receives a zoning letter reasonably acceptable to Collateral Agent), contiguity, revolving
credit/future advance, doing business, non-imputation, public road access, survey, variable rate, environmental lien, subdivision, mortgage
recording tax, separate tax lot and so-called comprehensive coverage over covenants and restrictions, to the extent such endorsements
are available in the jurisdiction), and
(G)
contain no exceptions to title other than Permitted Liens, and other exceptions reasonably acceptable to the Collateral Agent;
(ii)
Surveys with respect to each Mortgaged Property, other than as agreed by the Administrative Agent or the Title Company; and
(iii)
Upon the request of the Administrative Agent in its reasonable discretion, an opinion of counsel for the Loan Parties in each state
or other jurisdiction in which a Mortgaged Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded
in such state and such other matters as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory
to Collateral Agent, it being understood that the requirements of this Section 7.12(b)(iii) shall not apply to amendments
to this Agreement.
Notwithstanding anything set
forth in this Agreement or any Loan Document to the contrary, the Loan Parties shall not be required to (i) execute and deliver to the
Collateral Agent Mortgages with respect to any fee owned real property in the United States or Canada other than a Material Real Property,
or (ii) pledge or grant security interests in any of their property or assets if, in the reasonable judgment of Collateral Agent, the
costs of creating or perfecting such pledges or security interests in such property or assets are excessive in relation to the benefits
to the Secured Parties. The Borrowers shall use commercially reasonable efforts at least seven Business Days prior to the occurrence of
a MIRE Event to provide to Administrative Agent and each Revolving Credit Lender (x) a completed Flood Certificate from a third party
vender in respect of each then-existing Mortgaged Property in the United States and (y) an updated list of owned-real property in the
United States after giving effect to such MIRE Event (or a confirmation that the most-recently provided list of owned-real property remains
accurate). At least fifteen Business Days prior to the recording of a Mortgage, notice will
be provided to the Revolving Credit Lenders identifying the real property to be subject to such Mortgage.
(iv)
[Reserved].
(c)
The Borrowers may, at their option, cause any Restricted Subsidiary (other than an Excluded Subsidiary) to become a Guarantor in
accordance with this Section 7.12 whether or not such Restricted Subsidiary is otherwise required to become a Guarantor
in accordance with this Section 7.12.
7.13 Compliance
with Environmental Laws.
(a)
Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with
all applicable Environmental Laws and Environmental Permits;
(b)
obtain and renew all Environmental Permits necessary for its operations and properties;
(c)
take any and all actions necessary to (i) cure any violation of applicable Environmental Laws and (ii) cure and have dismissed
with prejudice any Environmental Claim against Holdings or any Restricted Subsidiary and discharge any obligations it may have to any
Person thereunder; and
(d)
if required by Environmental Law, conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial
or other action necessary to remove and clean up all Hazardous Materials from any of its current or former properties, in accordance with
the requirements of all Environmental Laws;
except in each case of clauses (a),
(b), (c) and/or (d) above, where such non-compliance, failure to obtain Environmental Permits,
Environmental Claims or requirements of Environmental Law does not or could not be reasonably expected to have a Material Adverse Effect;
provided, however, that no Loan Party nor any Restricted Subsidiary shall be required to undertake any such
compliance, to obtain any such Environmental Permits, to cure any such Environmental Claims or to perform any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate
financial reserves are being maintained with respect to such circumstances.
7.14 Further
Assurances.
(a)
Promptly upon request by the Administrative Agent or the Collateral Agent, (i) correct any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (ii) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent or Collateral Agent may reasonably require from time to time in order to implement the provisions
of the Loan Documents.
(b)
Each Loan Party shall (and Holdings shall procure that each member of the Restricted Group shall) take all such action as is available
to it (including making all filings and registrations) as may be necessary for the purpose of creation, perfection, protection or maintenance
of any Lien conferred or intended to be conferred on the Collateral Agent or the Secured Parties by or pursuant to the Loan Documents.
7.15 Collateral and
Guarantee Limitations.
(a)
Notwithstanding anything to the contrary set forth in Article IV, Sections 7.12 and 7.14
or any Loan Document, the requirements of such Sections shall not apply to any assets or new Subsidiary created or acquired after
the Closing Date, as applicable, if, in the judgment of the Administrative Agent, the costs of creating or perfecting such pledges or
security interests in such assets (including any mortgage, stamp or other similar tax) are (taking into account the present and future
direct and indirect cost and/or burden to the Restricted Group) excessive in relation to the benefits accruing to the Lenders.
(b) Sections 7.12 and 7.14
or any Loan Document need not be satisfied with respect to any Excluded Assets. In addition, notwithstanding anything to the
contrary herein or in any other Loan Document, the Collateral and Guarantee requirement and the provisions of the Loan Documents
shall not require (i) any account control agreements, lockbox arrangements or the taking of any other actions to perfect by control
any security interest in any deposit accounts, securities accounts or commodities accounts or (ii) any collateral access agreements
(including, without limitation, any access, waiver, subordination, or other agreement from any landlord, bailee, consignee,
warehousemen, customs broker, or other Person in possession of any Collateral).
Notwithstanding anything to
the contrary set forth in this Agreement or any other Loan Document, (i) the Administrative Agent may grant extensions of time for
or waivers of the requirements of creating or perfecting security interests in or the obtaining of title insurance, legal opinions, appraisals,
flood insurance and surveys with respect to particular assets (including extensions beyond the Closing Date for the perfection of security
interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with Holdings, that perfection
or obtaining of such items cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be
required by this Agreement or the other Loan Documents, (ii) Liens required to be granted from time to time pursuant to this Agreement
and the Collateral Documents shall be subject to exceptions and limitations set forth in the Collateral Documents and (iii) the Administrative
Agent and Holdings may make such modifications to the Mortgages, and execute and/or consent to such easements, covenants, rights of way
or similar instruments (and Administrative Agent may agree to subordinate the lien of any Mortgage to any such easement, covenant, right
of way or similar instrument of record or may agree to recognize any tenant pursuant to an agreement in a form and substance reasonably
acceptable to the Administrative Agent), as are reasonable or necessary and otherwise permitted by this Agreement and the other Loan Documents.
7.16 Credit Rating.
The Borrowers at all times shall use commercially reasonable efforts to cause to be maintained (a) a corporate rating for Holdings from
S&P, (b) a corporate family rating for Holdings from Moody’s and (c) a rating for each of the Facilities from each of S&P
and Moody’s.
7.17 Post-Closing
Matters. Holdings shall, and shall cause each Restricted Subsidiary to, take all necessary actions to satisfy the
requirements set forth on Schedule 7.17 within such periods as specified on such schedule or such longer period as
agreed by the Administrative Agent in its reasonable discretion.
7.18 OFAC and
Anti-Corruption Laws. The Borrowers agree that so long as any amount payable by any Borrower hereunder remains unpaid or the
Commitments have not been terminated, Holdings will, and will cause each Restricted Subsidiary to, unless the Required Lenders shall
otherwise consent in writing:
(a)
use the proceeds of the Loans in accordance with Section 7.11, but in no event for any purpose that would be
contrary to Section 6.23; provided that the foregoing will not apply to any Person that qualifies as a corporation
that is registered or incorporated under the laws of Canada or any province or territory thereof and that carries on business in whole
or in part in Canada within the meaning of Section 2 of the Foreign Extraterritorial Measures (United
States) Order, 1992 passed under the Foreign Extraterritorial Measures Act (Canada) in so far as such representations would result in
a violation of or conflict with the Foreign Extraterritorial Measures Act (Canada) or any similar law; and
(b)
furnish to the Lenders such other information respecting the condition, operations or business, financial or otherwise, of the
Borrowers or any of Subsidiary as any Lender, through the Administrative Agent, may from time to time reasonably request (including any
information that any Lender reasonably requests in order to comply with its obligations under any “know-your-customer” or
anti-money laundering laws or regulations, including the Patriot Act, the Beneficial Ownership Regulation) and the Proceeds of Crime Act.
7.19 Lender
Calls. Holdings shall conduct, if requested by the Administrative Agent by written notice, which may be given in the form of
an email, not more than one conference call per fiscal quarter that the Lenders may attend to discuss the financial condition and
results of operations of Holdings and the Restricted Subsidiaries for the most recently ended measurement period for which financial
statements have been delivered pursuant to Section 7.01, at a date and time to be reasonably determined by
Holdings in consultation with the Administrative Agent, provided, however, that so long as Holdings has
publicly listed debt or equity securities and regularly holds customary earnings calls, the foregoing lender call requirements shall
not apply.
Article
VIII.
NEGATIVE COVENANTS
So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder, other than contingent indemnification obligations for which no
claim has been asserted, which is accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless Cash Collateralized or otherwise backstopped on terms reasonably satisfactory to the L/C Issuer), no Loan Party shall, nor shall
it permit any Restricted Subsidiary to, directly or indirectly:
8.01 Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter
acquired, or sign or file or suffer to exist under the Uniform Commercial Code or PPSA of any jurisdiction a financing statement
that names the Loan Party or any Restricted Subsidiary as debtor, or sign or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any accounts or other right to receive income, other than the
following:
(a)
Liens pursuant to
(i)
any Loan Document and
(ii)
any document governing any Credit Agreement Refinancing Indebtedness (other than Permitted Unsecured Refinancing Debt);
provided that in the case of this clause (ii),
(A)
such Liens do not extend to any assets that are not Collateral and
(B)
the applicable parties to such Credit Agreement Refinancing Indebtedness (or a representative thereof on behalf of such holders)
shall have entered into with the Administrative Agent and/or the Collateral Agent a Customary Intercreditor Agreement, which agreement
shall provide either that the Liens on the Collateral securing such Credit Agreement Refinancing Indebtedness shall have either (x) the
same priority ranking as the Liens on the Collateral securing the Obligations (but without regard to control of remedies) or (y) shall rank junior to the Liens
on the Collateral securing the Obligations; without any further consent of the Lenders, the Administrative Agent and the Collateral Agent
shall be authorized to negotiate, execute and deliver on behalf of the Secured Parties any Customary Intercreditor Agreement or any amendment
(or amendment and restatement) to the Collateral Documents or a Customary Intercreditor Agreement to the extent necessary to effect the
provisions contemplated by this Section 8.01(a)(ii);
(b)
Permitted Liens;
(c)
Liens existing on the Closing Date and listed on Schedule 8.01(c) and any replacements, modifications, renewals,
refinancings, or extensions thereof, provided that the property covered thereby is not expanded in any material respect
and any replacement, modification, renewal, refinancing, or extension of the obligations secured or benefited thereby is permitted by
Section 8.02(c);
(d)
Liens securing Factoring Agreements and Receivables Facilities incurred pursuant to Section 8.02 hereof in an
aggregate amount up to the greater of (x) $70,000,000 and (y) 35% of Consolidated EBITDA as of the last day of the last Test Period for
which financial statements have been delivered pursuant to Section 7.01 at any time outstanding;
(e)
Liens securing Indebtedness permitted by Section 8.02(m);
(f)
Liens securing Indebtedness or any other obligations in an aggregate amount up to the greater of (i) $150,000,000 and (ii) 75%
of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time outstanding;
(g)
(A) Liens securing Indebtedness that is permitted by Section 8.02(g); provided that
(i) such
security interests are incurred, and the Indebtedness secured thereby is created,
(ii) the
Indebtedness secured thereby, at the time of incurrence thereof, does not exceed the lesser of the cost of such real property, improvements
or equipment at the time of such acquisition (or construction) and any replacements, accessions, additions and improvements thereto or
proceeds and products thereof and related property; and
(iii) such
security interests do not apply to any other property or assets of Holdings or any Restricted Subsidiary (other than the proceeds of the
property or assets subject to such security interests) and
(B) any
Lien securing the renewal, extension, refinancing or refunding of any such Indebtedness without a change in the assets subject to such
Lien and to the extent that such renewal, refinancing or refunding is permitted by Section 8.02(g) and
(C) Liens
arising out of Permitted Sale Leaseback Transactions permitted under Section 8.13, so long as such Liens attach only
to the property sold and being leased in such transaction and any accessions and additions thereto or proceeds and products thereof and
related property;
(h)
Liens granted to secure Indebtedness permitted to be secured by Section 8.02 (the “Second Lien Indebtedness”)
which Liens are junior to the Liens securing the Obligations; provided that
(i)
on the date such Second Lien Indebtedness is incurred, the Senior Secured Net Leverage Ratio on a consolidated basis for Holdings
and the Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such Second Lien Indebtedness is incurred shall not exceed 4.05 to 1.00, determined on a Pro Forma
Basis (including a pro forma application of the net proceeds therefrom (but assuming (A) the Indebtedness being incurred as of such date
of determination would be included in the definition of Consolidated Indebtedness, whether or not such Indebtedness would otherwise be
included, (B) any commitments in respect thereof are fully drawn and (C) the proceeds held as cash or Cash Equivalents thereof or of other
Indebtedness incurred substantially concurrently therewith are not netted for the purposes of calculating the Senior Secured Net Leverage
Ratio), as if the Second Lien Indebtedness had been incurred at the beginning of such four quarter period and
(ii)
the agent, trustee or similar person party to such Second Lien Indebtedness shall enter into a Customary Intercreditor Agreement
in form and substance reasonably satisfactory to the Administrative Agent;
(i)
Liens securing Indebtedness permitted by Section 8.02(l), (o) or (p) to the extent
permitted to be secured, so long as the agent, trustee or similar Person party to such Indebtedness shall enter into a Customary Intercreditor
Agreement in form and substance reasonably satisfactory to the Administrative Agent;
(j)
Liens existing on assets acquired by Holdings or any of its Subsidiaries pursuant to any Permitted Acquisition; provided
that
(i)
such Liens secure Indebtedness permitted pursuant to Section 8.02,
(ii)
such Liens attach at all times only to the same assets to which such Liens attached (and after-acquired property that is affixed
or incorporated into the property covered by such Lien), and secure only the same Indebtedness or obligations that such Liens secured
immediately prior to such Permitted Acquisition (or any Permitted Refinancing Indebtedness in respect thereof) and
(iii)
such Liens were not created in connection with, or in contemplation of, such Permitted Acquisition;
(k)
Liens under any escrow arrangement holding the proceeds of any Indebtedness incurred in accordance with Section 8.02
to finance a Permitted Acquisition or other transaction; provided, that such Liens shall terminate and otherwise be discharged
upon the consummation of the applicable Permitted Acquisition or other transaction;
(l)
[reserved];
(m)
in the case of any Non-Wholly Owned Subsidiary or joint venture, any put and call arrangements or restrictions on disposition related
to its Equity Interests set forth in its organizational documents or any related joint venture or similar agreement;
(n)
Liens securing Permitted Swap Obligations and Liens securing Secured Hedge Agreements;
(o)
Liens on cash in an aggregate amount up to greater of (x) $40,000,000 and (y) 20% of Consolidated EBITDA as of the last day of
the last Test Period for which financial statements have been delivered pursuant to Section 7.01
pledged in lieu of issuance of a Letter of Credit in favor of an insurance company;
(p)
Liens on cash and Cash Equivalents securing letters of credit permitted pursuant to Section 8.02(q).
(q)
[reserved];
(r)
Liens on Indebtedness consisting of the financing of insurance premiums permitted under Section 8.02(j);
(s)
Liens on Indebtedness of Foreign Subsidiaries permitted under Section 8.02(k); provided that such Indebtedness
is not secured by the Collateral;
(t)
Liens on Indebtedness permitted under Section 8.02(d)(iii); and
(u)
Liens that do not secure Indebtedness for borrowed money and are consistent with the customary operation of the business of the
Loan Parties.
For purposes of determining
compliance with this Section 8.01,
(A) a Lien securing
an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described
in Sections 8.01(a) through (n) but may be permitted in part under any combination thereof and
(B) in the event
that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted
Liens (or any portion thereof) described in Sections 8.01(a) through (p), the Borrowers may, in their
sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such Lien securing
such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 8.01 and will be entitled
to only include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of
the above clauses and such Lien securing such item of Indebtedness (or portion thereof) will be treated as being incurred or existing
pursuant to only such clause or clauses (or any portion thereof) without giving pro forma effect to such item (or portion thereof)
when calculating the amount of Liens or Indebtedness that may be incurred pursuant to any other clause.
8.02 Indebtedness.
Directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, in the case of Holdings, issue any shares of
Disqualified Stock or, in the case of any Restricted Subsidiary, issue any shares of Disqualified Stock or preferred stock,
except:
(a)
Indebtedness under this Agreement and the other Loan Documents and Credit Agreement Refinancing Indebtedness incurred to refinance
(in whole or in part) such Indebtedness;
(b)
[reserved];
(c)
Indebtedness (including, without limitation, credit lines) outstanding on the Closing Date and listed on Schedule 8.02
and any Permitted Refinancing Indebtedness incurred to refinance such Indebtedness;
(d)
Indebtedness consisting of Guarantees of Holdings or any Restricted Subsidiary with respect to:
(i)
Indebtedness of Holdings or any Restricted Subsidiary to the extent that such Indebtedness is permitted to be incurred pursuant
to this Section 8.02 (other than this Section 8.02(d));
(ii)
Indebtedness of any Person that is not a Restricted Subsidiary, provided that the aggregate principal amount of such
Indebtedness shall not at any time exceed $40,000,000 (without giving effect to any write-offs or write-downs of such Indebtedness); and
(iii)
Indebtedness not to exceed the greater of (x) $20,000,000 and (y) 10% of Consolidated EBITDA as of the last day of the last Test
Period for which financial statements have been delivered pursuant to Section 7.01 and in the aggregate consisting of Guarantees
in favor of customers of Holdings, the Restricted Subsidiaries or joint ventures to which Holdings, a Borrower or a Restricted Subsidiary
is a party;
(e)
intercompany loans
(i)
between the Loan Parties,
(ii)
from an Immaterial Subsidiary to a Loan Party,
(iii)
from any Loan Party to an Immaterial Subsidiary, to the extent such loans are permitted under the definition of “Permitted
Investments”,
(iv)
between Restricted Subsidiaries that are not Loan Parties,
(v)
from a Restricted Subsidiary that is not a Loan Party to a Loan Party, to the extent such loans are permitted under the definition
of “Permitted Investments” and
(vi)
from a Loan Party to a Restricted Subsidiary that is not a Loan Party, to the extent such loans are permitted under the definition
of “Permitted Investments”,
(f)
Indebtedness consisting of Permitted Swap Obligations;
(g)
(i) mortgage financings, industrial revenue bonds or purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of design, development, construction or improvement of property, plant or equipment used
in the business of Holdings or any Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 8.02(g), not to exceed
the greater of (x) $100,000,000 and (y) 50.0% of Consolidated EBITDA as of the last day of the last Test Period for which financial
statements have been delivered pursuant to Section 7.01 at any time outstanding and
(ii) any
Indebtedness incurred by Holdings or a Restricted Subsidiary arising from any Permitted Sale Leaseback Transaction that is permitted under
Section 8.13 and Permitted Refinancing Indebtedness in respect thereof in an amount not to exceed the greater of (x)
$20,000,000 and (y) 10% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been delivered
pursuant to Section 7.01 at any time outstanding;
(h)
Acquired Indebtedness (and any Permitted Refinancing Indebtedness in respect thereof) in an aggregate principal amount not to
exceed the greater of (x) $50,000,000 and (y) 25% of Consolidated EBITDA as of the last day of the last Test Period for which financial
statements have been delivered pursuant to Section 7.01 at any time outstanding;
(i)
Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished
within ten Business Days of its incurrence;
(j)
Indebtedness consisting of the financing of insurance premiums in the ordinary course of business;
(k)
Indebtedness of Foreign Subsidiaries (other than Canadian Subsidiaries) in an aggregate principal amount not to exceed the greater
of (x) $100,000,000 and (y) 50.0% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements
have been delivered pursuant to Section 7.01 at any time outstanding;
(l)
the incurrence of additional Indebtedness (including Acquired Indebtedness) by
(A) Holdings
or any Restricted Subsidiary or
(B) Persons
that are acquired by or merged or amalgamated with or into Holdings or any Restricted Subsidiary in accordance with the terms of this
Agreement and in each case, incurred to finance a Permitted Acquisition or any other acquisition of any Acquired Entity by any Borrower
or any Wholly-Owned Restricted Subsidiary;
provided, in each case, that, at
the time such additional Indebtedness is incurred, (1) if such Indebtedness is secured on a pari passu basis with the Obligations, the
First Lien Net Leverage Ratio is less than or equal to 4.20 to 1.00, (2) if such Indebtedness is secured on a junior basis to the Obligations,
the Senior Secured Net Leverage Ratio is less than or equal to 4.05 to 1.00 and (3) if such Indebtedness is unsecured, either (x) the
Fixed Charge Coverage Ratio is greater than or equal to 2.00 to 1.00 or (y) the Total Net Leverage Ratio is less than or equal to 4.30
to 1.00, in each case calculated on a consolidated basis for Holdings’ and the Restricted Subsidiaries’ most recently ended
four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness
is incurred, determined on a Pro Forma Basis (including a pro forma application of the net proceeds thereof and assuming (a) the Indebtedness
being incurred as of such date of determination would be included in the definition of Consolidated Indebtedness, whether or not such
Indebtedness would otherwise be included, (b) any commitments in respect thereof are fully drawn and (c) the proceeds held as cash or
Cash Equivalents thereof or of other Indebtedness incurred substantially concurrently therewith are not netted for the purposes of calculating
the First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio and the Total Net Leverage Ratio), as if the additional Indebtedness
had been incurred at the beginning of such four-quarter period;
provided that, solely with respect
to the incurrence of additional Indebtedness in the form of customary term loans or high-yield notes (other than Acquired Indebtedness),
such additional Indebtedness
(1) will
have a maturity date that is no earlier than the date that is six months after the Initial Term Loan Maturity Date;
(2) does
not provide for any required, scheduled or mandatory prepayment on account of principal (including amortization or otherwise, but excluding
a customary offer to redeem or repay with asset sale proceeds or following
a Change of Control) prior to the Initial Term Loan Maturity Date;
(3) has terms (other than with
respect to pricing, premiums, optional prepayment or redemption terms and maturity), when taken as a whole, that are not more favorable
to the holders thereof than those applicable to the holders of Term Loans; and
(4) if
secured, such Indebtedness is not secured by any property or assets other than the Collateral and the holders of such Indebtedness (or
their representative) and the Administrative Agent and/or Collateral Agent shall become parties to a Customary Intercreditor Agreement;
(m)
Indebtedness in an amount not to exceed the greater of (x) $20,000,000 and (y) 10% of Consolidated EBITDA as of the last day of
the last Test Period for which financial statements have been delivered pursuant to Section 7.01 outstanding at any one time for the repurchase,
redemption, acquisition or retirement of Equity Interests of Holdings held in a Plan or otherwise held by employees or independent contractors
as permitted under this Agreement;
(n)
Indebtedness (in addition to the allowances in the other subsections of this Section 8.02) in an aggregate
principal amount at any time outstanding not to exceed the greater of (x) $150,000,000 and (y) 75% of Consolidated EBITDA as
of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time outstanding minus any amounts reallocated to incur Incremental Facilities pursuant to Section 2.14(a)(x)(ii)
(this clause (n), the “General Debt Basket”); provided that Holdings and the
Restricted Subsidiaries shall not be permitted to incur additional Indebtedness under this Section 8.02(n) during the
existence of an Event of Default or if an Event of Default would occur after giving effect to the incurrence of such Indebtedness;
(o)
Indebtedness or Disqualified Stock issued or incurred by Holdings or any Restricted Subsidiary; provided that
(i)
such Indebtedness will have a maturity date that is no earlier than the date that is six months after the Initial Term Loan Maturity
Date,
(ii)
such Indebtedness does not provide for any required, scheduled or mandatory prepayment on account of principal (including amortization
or otherwise, but excluding a customary offer to redeem or repay with asset sale proceeds or following a Change of Control) prior to the
Initial Term Loan Maturity Date,
(iii)
after giving effect to such incurrence and the application of proceeds therefrom, no Default or Event of Default shall have occurred
and be continuing or would result therefrom,
(iv)
at the time such Indebtedness is incurred or issued, as applicable, (A) if such Indebtedness is secured on a pari passu basis with
the Obligations, the First Lien Net Leverage Ratio is less than or equal to 4.20 to 1.00, (B) if such Indebtedness is secured on a junior
basis to the Obligations, the Senior Secured Net Leverage Ratio is less than or equal to 4.05 to 1.00 and (C) if such Indebtedness is
unsecured, either (x) the Fixed Charge Coverage Ratio is greater than or equal to 2.00 to 1.00 or (y) the Total Net Leverage Ratio is
less than or equal to 4.30 to 1.00, in each case calculated on a Pro Forma Basis (assuming (a) the Indebtedness being incurred as of such
date of determination would be included in the definition of Consolidated Indebtedness, whether or not such Indebtedness would otherwise
be included, (b) any commitments in respect thereof are fully drawn and (c) the proceeds held as cash or Cash Equivalents thereof or of
other Indebtedness incurred substantially concurrently
therewith are not netted for the purposes of calculating the First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio and
the Total Net Leverage Ratio),
(v)
the terms and provisions of the documentation governing such Indebtedness are not more restrictive, when taken as a whole, on Holdings
and the Restricted Subsidiaries than the terms and provisions of this Agreement; and
(vi)
if secured, such Indebtedness is not secured by any property or assets other than the Collateral and the holders of such Indebtedness
(or their representative) and the Administrative Agent and/or Collateral Agent shall become parties to a Customary Intercreditor Agreement;
(p)
(i) additional Indebtedness (including Acquired Indebtedness) of Holdings or any Restricted Subsidiary (and any Permitted Refinancing
Indebtedness in respect thereof); provided that
(A)
immediately prior to and after giving effect thereto, no Default or Event of Default shall exist or result therefrom,
(B)
such additional Indebtedness
(1)
will not mature prior to the date that is six months after the Initial Term Loan Maturity Date,
(2)
has no scheduled amortization or payments of principal prior to the Initial Term Loan Maturity Date and
(3)
has terms (other than with respect to pricing, premiums, optional prepayment or redemption terms and maturity), when taken as a
whole, that are not more favorable to the holders thereof than those applicable to the holders of Term Loans,
(C)
after giving effect to the incurrence or issuance of such additional Indebtedness on the date thereof, either
(x) the
principal amount of such Indebtedness shall not exceed the sum of
(1) the
greater of (I) $200,000,000 and (II) 100% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements
have been delivered pursuant to Section 7.01 at any time outstanding less the amount of Incremental Facilities
and/or Incremental Loans incurred pursuant to Section 2.14(a)(x) and
(2) an
unlimited amount if, after giving effect to the incurrence of such Indebtedness,
(X) if
such Indebtedness is secured on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio is less than or equal to 4.20
to 1.00 on a Pro Forma Basis,
(Y) if such Indebtedness is
secured on a junior basis to the Obligations, the Senior Secured Net Leverage Ratio is less than or equal to 4.05 to 1.00 on a Pro Forma
Basis and
(Z) if such Indebtedness is
unsecured, either (x) the Fixed Charge Coverage Ratio is greater than or equal to 2.00 to 1.00 on a Pro Forma Basis or (y) the Total Net
Leverage Ratio is less than or equal to 4.30 to 1.00 on a Pro Forma Basis
(in each case, assuming (a) the Indebtedness being
incurred as of such date of determination would be included in the definition of Consolidated Indebtedness, whether or not such Indebtedness
would otherwise be included, (b) any commitments in respect thereof are fully drawn and (c) the proceeds held as cash or Cash Equivalents
thereof or of other Indebtedness incurred substantially concurrently therewith are not netted for the purposes of calculating the First
Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio and the Total Net Leverage Ratio) or
(y) all of the Net Cash Proceeds
(or such lesser amount that would permit the remaining Indebtedness to be permitted hereunder) of any such Indebtedness are used on the
date of incurrence to permanently prepay and refinance Term Loans on a dollar-for-dollar basis; and
(D) if secured, such Indebtedness
is not secured by any property or assets other than the Collateral and the holders of such Indebtedness (or their representative) and
the Administrative Agent and/or Collateral Agent shall become parties to a Customary Intercreditor Agreement; or
(ii) Guarantee Obligations of
any Subsidiary Guarantor in respect of such Indebtedness of the Borrowers under this clause (p);
(q) Indebtedness arising under any performance
or surety bond or obligations in respect of letters of credit related thereto, in each case entered into in the ordinary course of business,
which for the avoidance of doubt includes for purposes of this section, but is not limited to, bonding provided with respect to contracts
and projects, including to support contracts and projects of permitted joint ventures of Holdings and its Restricted Subsidiaries, and
where Holdings or any Restricted Subsidiary is co-bonding a project where a Restricted Subsidiary or permitted joint venture is a subcontractor
on the contract or project;
(r) Indebtedness arising under
Factoring Agreements and/or in respect of any Receivables Facilities in an aggregate outstanding principal amount not to exceed the greater
of (x) $70,000,000 and (y) 35% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been
delivered pursuant to Section 7.01 at any time outstanding;
(s) Indebtedness of Holdings or
any Restricted Subsidiary
(i) pursuant to tenders,
statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return
of money bonds or other similar obligations incurred in the ordinary course of business and
(ii) in respect of letters of
credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(t) Contingent liabilities in respect
of any indemnification obligation, adjustment of purchase price, earn-out, non-compete, or similar obligation of the Borrowers or the
applicable Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions or Dispositions permitted hereunder
or any acquisition or disposition consummated prior to the Closing Date; and
(u) (i) Indebtedness, whether or not secured,
in respect of customary cash management, operating account arrangements and bank services, including those involving pooled accounts and
arrangements entered into in the ordinary course of business and (ii) Indebtedness constituting Designated Cash Management Obligations;
(v) unsecured Indebtedness in the amount
of 200% of the Net Cash Proceeds from any sale or issuance of Equity Interests of Holdings (excluding Disqualified Stock) to the extent
such Net Cash Proceeds are received by Holdings after the Closing Date (other than any Net Cash Proceeds (w) that are Specified Equity
Proceeds, (x) from any Cure Amount, (y) to the extent such Net Cash Proceeds have been used to build any other basket for the incurrence
of Indebtedness or the making of any Investment or Restricted Payment or (z) from the sale of any Equity Interests to any employee, director,
officer, manager or consultant of Holdings, any direct or indirect parent of Holdings and any Subsidiary of Holdings) which are not Otherwise
Applied;
(w) Indebtedness arising from any
agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations)
in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or
any other purchase of assets or Equity Interests, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety
bonds, performance bonds or similar instruments securing the performance of any Loan Party or any Restricted Subsidiary pursuant to any
such agreement;
(x) (i) guaranties by any Loan Party and/or
any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary
course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of any Loan Party and/or any
Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services
and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting
trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(y) Indebtedness of any Loan Party and/or
any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale,
vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(z) Indebtedness of any Loan Party and/or
any Restricted Subsidiary consisting of take-or-pay obligations contained in supply arrangements in the ordinary course of business;
(aa) Indebtedness of any Loan Party
and/or any Restricted Subsidiary representing (i) deferred compensation to current or former directors, officers, employees, members of
management, managers and consultants thereof in the ordinary course of business and (ii) deferred compensation or similar arrangements
in connection with the Transactions or any Permitted Acquisition or other Investment permitted hereby; and
(bb) customer deposits and advance
payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business.
(A) Indebtedness need not be
permitted solely by reference to one category of permitted Indebtedness (or any portion thereof) described in this Section 8.02
but may be permitted in part under any combination thereof and
(B) in the event that an item
of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness (or any portion
thereof) described in this Section 8.02, the Borrowers may, in their sole discretion, classify or reclassify, or later
divide, classify or reclassify (as if incurred at such later time), such item of Indebtedness (or any portion thereof) in any manner that
complies with this Section 8.02 and will be entitled to only include the amount and type of such item of Indebtedness
(or any portion thereof) in one of the above clauses (or any portion thereof) and such item of Indebtedness (or any portion thereof)
shall be treated as having been incurred or existing pursuant to only such clause or clauses (or any portion thereof) without
giving pro forma effect to such item (or portion thereof) when calculating the amount of Indebtedness that may be incurred pursuant to
any other clause; provided, that all Indebtedness outstanding on the Closing Date under this Agreement shall at all times
be deemed to have been incurred pursuant to clause (a) of this Section 8.02.
Notwithstanding the foregoing, the aggregate
amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties shall not exceed the greater of (x) $50,000,000 and
(y) 25% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant
to Section 7.01 at any time outstanding.
Accrual of interest or dividends, the
accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional
Indebtedness and the payment of dividends in the form of additional Disqualified Stock or preferred stock, as applicable, will in each
case not be deemed to be an incurrence of Indebtedness or Disqualified Stock or preferred stock for purposes of this Section 8.02.
For the avoidance of doubt, for the purposes
of this Section 8.02, the term “Indebtedness” shall be deemed to include, in the case of Holdings, the
issuance of any shares of Disqualified Stock or, in the case of any Restricted Subsidiaries, the issuance of any shares of Disqualified
Stock or preferred stock, in each case, to the extent that any of the foregoing would appear as a liability upon a balance sheet (excluding
the footnotes thereto) of such Person prepared in accordance with GAAP.
Notwithstanding any other provision of
this Section 8.02, the maximum amount of Indebtedness that Holdings or any Restricted Subsidiary may incur pursuant
to this Section 8.02 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency
values.
8.03 Fundamental Changes.
Merge into or amalgamate or consolidate with any other Person, or permit any other Person to merge into or amalgamate or consolidate with
it, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets of Holdings or any
Restricted Subsidiary on a consolidated basis, taken as a whole, to any other Person, except that, so long as no Default exists or would
result therefrom:
(a) Holdings or any Restricted Subsidiary
may merge or amalgamate with or acquire another Person engaged in a similar or adjacent line of business as that Holdings and the Restricted
Subsidiaries have conducted during the current and most recently concluded calendar year, through a stock, asset or any other similar
transaction (or any business reasonably ancillary or complementary thereto, or which is a reasonable extension, development or expansion
thereof), if
(i) Holdings or such
Restricted Subsidiary is the surviving entity,
(ii) such acquisition is friendly
and is done with the recommendation of the acquiree’s board of directors or similar governing body and
(iii) such acquisition constitutes
a Permitted Acquisition;
(b) any Restricted Subsidiary may merge
or amalgamate with a Loan Party or a Wholly-Owned Restricted Subsidiary if (i) such Loan Party or such Wholly-Owned Restricted Subsidiary,
as the case may be, is the surviving entity of such merger or amalgamation (provided that, if such merger or amalgamation
involves (x) a Subsidiary Guarantor, the surviving entity of such merger or amalgamation shall be a Subsidiary Guarantor and (y) any Borrower,
the surviving entity of such merger or amalgamation shall be the Borrower) and (ii) immediately after giving effect to such merger or
amalgamation, no Default shall have occurred or be continuing;
(c) Holdings or any of its Subsidiaries
may enter a Permitted Intercompany Transaction;
(d) Any Restricted Subsidiary may merge,
amalgamate or consolidate with any other Person in order to effect an Investment permitted pursuant to Section 8.05
(other than Investments permitted pursuant to clause (f) of the definition of “Permitted Investments”);
provided that the continuing or surviving Person shall be a Restricted Subsidiary (and, if such merger, amalgamation or
consolidation involves a Borrower, the continuing or surviving Person shall be such Borrower) and shall have complied with the applicable
provisions of Sections 7.12 and 7.14 and the Collateral Documents;
(e) any Immaterial Subsidiary
may be liquidated or dissolved; and
(f) Holdings may (x)
merge or consolidate with an entity organized under the laws of the State of Delaware, (y) reorganize in the State of Delaware or (z)
“continue” as a Delaware corporation pursuant to Section 388 of the General Corporation Law of the State of Delaware
(clauses (x), (y) and (z) collectively, the “Domestication Merger”), in each case
for the purpose of changing the jurisdiction of organization of Holdings; provided that, in the event of the Domestication
Merger, (i) Holdings shall be the continuing or surviving Person or (ii) if the Person formed by or surviving the Domestication Merger
is not Holdings (any such Person, the “Successor Company”), (A) the Successor Company shall be an entity organized
or existing under the laws of the State of Delaware and (B) the Successor Company shall expressly assume all the obligations of Holdings
under this Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto or thereto reasonably satisfactory
to the Administrative Agent and the Collateral Agent; provided, further that, in the event of the Domestication
Merger, at the request of the Administrative Agent, Holdings or the Successor Company, as applicable, shall enter into such documentation
as the Administrative Agent reasonably determines is necessary or desirable to grant and perfect the Collateral Agent’s Lien on
the Equity Interests of the Initial Borrower in accordance with the requirements of Section 7.12 (as if Holdings or
such Successor Company were a newly formed or acquired US Subsidiary) and Section 7.14 hereof.
8.04 Dispositions. Make
any Disposition, except:
(a) Dispositions of obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of assets in the ordinary
course of business or disposition of assets outside of the ordinary course of business having a fair market value in excess of $10,000,000
in a single transaction or a series of related transactions;
(c) Dispositions (i) by Holdings or any
Restricted Subsidiary to any Loan Party (other than Holdings) and (ii) by any Restricted Subsidiary that is not a Loan Party to another
Restricted Subsidiary that is not a Loan Party;
(d) other Dispositions
(i) for fair market value
and for consideration at least 75% of which is cash or Cash Equivalents; provided that such Cash Equivalents shall mature
within 180 days after the date of such Disposition,
(ii) the proceeds of which shall
be reinvested into the business of Holdings and the Restricted Subsidiaries, including through a Permitted Investment or Permitted Acquisition,
within the Reinvestment Period or applied in accordance with Section 2.05 if and to the extent required thereby,
(iii) the liquidation or dissolution
of a Restricted Subsidiary if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the
Borrower, is not materially disadvantageous to the Lenders (taken as a whole) and the Borrower or a Restricted Subsidiary receives the
assets (if any) of the relevant dissolved or liquidated Restricted Subsidiary; provided that in the case of any liquidation
or dissolution of any Loan Party that results in a distribution of assets to any Restricted Subsidiary that is not a Loan Party, such
distribution shall be treated as an Investment and shall comply with Section 8.05.
(iv) so long as the Loan
Parties are in Pro Forma Compliance;
(e) the dissolution of any Restricted
Subsidiary that (i) is not a Loan Party and (ii) is not material to the business of Holdings and the Restricted Subsidiaries, taken as
a whole;
(f) Dispositions set forth on Schedule 8.04;
(g) other Dispositions in an aggregate
amount not to exceed $15,000,000 during any fiscal year;
(h) any issuance or sale of Equity Interests
in, or sale of Indebtedness or other securities of, an Unrestricted Subsidiary (other than Unrestricted Subsidiaries, the primary assets
of which are cash and Cash Equivalents);
(i) Mergers, amalgamations and
consolidations permitted by Section 8.03;
(j) the lease or sublease of Real
Property not constituting Indebtedness and not constituting a sale and leaseback transaction;
(k) assignments, licenses, sublicenses,
leases and subleases of intellectual property in the ordinary course of business, which do not interfere in any material respect with
the business of Holdings and the Restricted Subsidiaries;
(l) Dispositions in connection
with Factoring Agreements and/or Receivables Facilities permitted by Section 8.02;
(m) Dispositions of cash and cash
equivalents in the ordinary course of business;
(n) the granting of Liens permitted pursuant
to Section 8.01;
(o) terminations or unwinds of derivative
transactions;
(p) Dispositions constituting Restricted
Payments permitted by Section 8.05 and Dispositions constituting Permitted Investments;
(q) to the extent that (i) the relevant
property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of the relevant Disposition
are promptly applied to the purchase or such replacement property;
(r) Dispositions of Investments
in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between joint venture or similar parties set forth
in the relevant joint venture arrangements and/or similar binding arrangements;
(s) Dispositions and/or terminations
of leases, subleases, licenses or sublicenses (including the provision of software under any open source license), (i) the Disposition
or termination of which will not materially interfere with the business of the Borrower and its Restricted Subsidiaries, (ii) which relate
to the closed facilities or the discontinuation of any product line or (iii) which, in the reasonable judgment of the Borrower are (A)
no longer useful in its business (or in the business of any Restricted Subsidiary of the Borrower) or (B) no longer economical to maintain
in light of the use of intellectual property rights or other rights leased, subleased, licensed or sublicensed hereunder;
(t) Dispositions of property subject
to foreclosure, casualty, eminent domain or condemnation proceedings (including in lieu thereof or any similar proceeding);
(u) Dispositions or consignment of equipment,
inventory or other assets (including leasehold interests in real property) with respect to facilities that are temporarily not in use,
held for sale or closed; and
(v) Dispositions of non-core assets acquired
in connection with any acquisition permitted hereunder and sales of real property assets acquired in any acquisition permitted hereunder
which, within 90 days of the date of such acquisition, are designated in writing to the Administrative Agent as being held for sale and
not for the continued operation of the Borrower or any of its Restricted Subsidiaries or any of their respective businesses; provided
that no Event of Default exists on the date on which the definitive agreement governing the relevant Disposition is executed.
8.05 Restricted Payments.
Declare or make, directly or indirectly, any Restricted Payment, except:
(a) so long as no Event of Default shall
have occurred and be continuing or would result therefrom, any Loan Party may repurchase its Equity Interests owned by employees of such
Loan Party (or held by any Plans maintained by the foregoing) or make payments to employees of Holdings or any Restricted Subsidiary
upon termination of employment in connection with the exercise of stock options, stock appreciation rights or similar equity incentives
or equity based incentives pursuant to management incentive plans or other Plans or in connection with the death or disability of such
employees in an aggregate amount not to exceed the greater of (x) $40,000,000 and (y) 20% of Consolidated EBITDA as of the last
day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01 in any fiscal
year (excluding any net repurchases or payments over issuances of such Equity Interests in such fiscal year to such employees) plus
(x) the amount of net proceeds of any key-man life insurance policies received during such fiscal year and (y) the amount of any
cash bonuses otherwise payable to members of management, directors or consultants that are foregoing in return for the receipt of Equity
Interests (the “Distribution Amount”); provided, that the amount of permitted distributions pursuant
to this Section 8.05(a) shall be increased by (A) the unused Distribution Amount for the immediately preceding fiscal
year less (B) an amount equal to the unused Distribution Amount carried forward to such preceding fiscal year;
(b) the redemption, retirement or defeasance
of any Indebtedness of Holdings or any Restricted Subsidiaries with the Net Cash Proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(c) the payment of any dividend or distribution
by a Restricted Subsidiary to the holders of its Equity Interests on a pro rata basis in connection with a bona fide joint venture;
(d) so long as no Event of Default shall
have occurred and be continuing or would result therefrom, dividends or distributions by Holdings at the times due and in an amount necessary
to make payments in accordance with and to the extent permitted by Section 8.07(f);
(e) dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of any Borrower;
(f) in addition to the foregoing
and following Restricted Payments, any Loan Party may make additional Restricted Payments, directly or indirectly, to any other Loan Party;
(g) repurchases of Equity Interests deemed
to occur upon the “cashless exercise” of stock options or warrants or upon the vesting of restricted stock units if such Equity
Interests represents the exercise price of such options or warrants or represents withholding taxes due upon such exercise or vesting
shall be permitted;
(h) [reserved];
(i) Restricted Payments for amounts
to be paid under employee stock ownership plans;
(j) so long as no Default or Event
of Default shall have occurred and be continuing or would result therefrom, Restricted Payments in an aggregate amount not to exceed the
greater of (x) $100,000,000 and (y) 50% of Consolidated EBITDA as of the last day of the last Test Period for which financial statements
have been delivered pursuant to Section 7.01 at any time outstanding minus any amounts reallocated to make Investments
pursuant to clause (j) of the definition of “Permitted Investments” (this clause (j),
the “General Restricted Payments Basket”);
(k) so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom, Restricted Payments in an aggregate amount not to exceed an amount
(which shall not be less than zero) equal to the portion, if any, of the Available Amount on the date of such election that the Borrowers
elect to apply to this Section 8.05(k), which election shall be specified in a written notice of a Responsible Officer
of Holdings calculating in reasonable detail the amount of Available Amount immediately prior to such election and the amount thereof
elected to be so applied;
(l) so long as no Default or Event
of Default shall have occurred and be continuing or would result therefrom, Restricted Payments set forth in clause (c)
of the definition thereof in an aggregate amount not to exceed the greater of (x) $100,000,000 and (y) 50% of Consolidated EBITDA as of
the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01 at
any time outstanding minus any amounts reallocated to make Investments pursuant to clause (j) of the definition
of “Permitted Investments” (this clause (l), the “General Junior Debt Prepayments Basket”);
(m) so long as no Default or Event
of Default shall have occurred and be continuing or would result therefrom, Restricted Payments by Holdings or any Restricted Subsidiary
to the holders of its Equity Interests in an aggregate amount per annum not to exceed 7.0% of Market Capitalization;
(n) additional Restricted Payments if,
after giving effect thereto, the First Lien Net Leverage Ratio is less than or equal to (x) in the case of any Restricted Payment set
forth in clause (a) of the definition thereof, 3.30 to 1.00, (y) in the case of any Restricted Payment set forth in
clause (b) thereof, 3.80 to 1.00 and (z) in the case of any Restricted Payment set forth in clause (c)
thereof, 3.55 to 1.00, in each case, on a Pro Forma Basis; provided that no Default or Event of Default shall have occurred
and be continuing or would result therefrom;
(o) to pay customary salary, bonus, severance
and other benefits payable to current or former directors, officers, members of management, managers, employees or consultants of any
parent company (or any immediate family member of any of the foregoing) to the extent such salary, bonuses, severance and other benefits
are attributable and reasonably allocated to the operations of Holdings and/or the Restricted Subsidiaries, in each case, so long as such
parent company applies the amount of any such Restricted Payment for such purpose; and
(p) Restricted Payments for earn-out and
holdback payments (i) required pursuant to existing agreements as set forth on Schedule 8.02 and (ii) required pursuant
to Permitted Acquisitions;
Further, for purposes of determining compliance
with this Section 8.05, (A) Restricted Payments need not be permitted solely by reference to one category of permitted
Restricted Payments (or any portion thereof) described in this Section 8.05 above or Permitted Investments described
in the definition thereof but may be permitted in part under any combination thereof and (B) in the event that a Restricted Payment (or
any portion thereof) or Permitted Investment meets the criteria of one or more of the categories of permitted Restricted Payments (or
any portion thereof) described in this Section 8.05 above or Permitted Investment, the Borrowers may, in their sole
discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such Restricted Payment
(or any portion thereof) in any manner that complies with this Section 8.05 or falls within the definition of a Permitted
Investment and will be entitled to only include the amount and type of such Restricted Payment (or any portion thereof) in one of the
above clauses (or any portion thereof) or within the definition of Permitted Investment (or any portion thereof) and such Restricted
Payment (or any portion thereof) or Permitted Investment shall be treated as having been incurred or existing pursuant to only such clause or
clauses (or any portion thereof) without giving pro forma effect to such item (or portion thereof) when calculating the amount of
the Restricted Payment that may be incurred pursuant to any other clause.
8.06 Change in Nature of Business.
Engage in any material line of business substantially different from those lines of business conducted by Holdings and the Restricted
Subsidiaries on the Closing Date or any business substantially related or incidental thereto or reasonably ancillary or complementary
thereto.
8.07 Transactions with Affiliates.
Enter into any transaction of any kind involving aggregate consideration in excess of the greater of (x) $10,000,000 and (y) 5% of Consolidated
EBITDA as of the last day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01
at any time with any Affiliate of Holdings, whether or not in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to Holdings or such Restricted Subsidiaries as would be obtainable by Holdings or such Restricted Subsidiaries
at such time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that the foregoing
restriction shall not apply to:
(a) participation by Holdings or any Restricted
Subsidiary in, or effecting any transaction in connection with, any joint enterprise or other joint arrangement with any Affiliate if
Holdings or such Restricted Subsidiary, as applicable, participates in the ordinary course of its business and on a basis no less advantageous
than the basis on which such Affiliate participates;
(b) loans and other transactions among
the Loan Parties to the extent permitted by this Article VIII;
(c) any payment from any Restricted Subsidiary
to any Borrower;
(d) intercompany Indebtedness permitted
under Section 8.02, Restricted Payments permitted under Section 8.05 and Permitted Investments;
(e) compensation arrangements with directors
and employees entered into in the ordinary course of business;
(f) indemnification costs and expenses
and fees paid (and expenses reimbursed) not to exceed the greater of (x) $5,000,000 and (y) 2.5% of Consolidated EBITDA as of the last
day of the last Test Period for which financial statements have been delivered pursuant to Section 7.01 at any time,
pursuant to and in accordance with the Consulting Agreement as such agreement is in effect on the Closing Date as the same may be amended,
restated, supplemented or otherwise modified from time to time on the same or substantially similar terms;
(g) issuance of Equity Interests (other
than Disqualified Stock) of Holdings;
(h) customary agreements, covenants and
restrictions contained in agreements relating to the sale of assets or Equity Interests of Subsidiaries of the Borrowers;
(i) transactions between Holdings
or any Restricted Subsidiary and any person, a director of which is also a director of Holdings or any direct or indirect parent company
of Holdings; provided, however, that (A) such director abstains from voting as a director of Holdings or such
direct or indirect parent company, as the case may be, on any matter involving such other person and (B) such person is not an Affiliate
of Holdings for any reason other than such director’s acting in such capacity;
(j) transactions for the purchase
or sale of goods, equipment, products, parts and services entered into in the ordinary course of business;
(k) transactions pursuant to any Factoring
Agreements permitted under Section 8.02;
(l) sales of accounts receivable,
or participations therein, in connection with any Receivables Facility permitted under Section 8.02;
(m) transactions in existence on the Closing
Date and any amendment, modification or extension thereof to the extent such amendment, modification or extension, taken as a whole, is
not
(i) materially adverse to the Lenders or (ii) more disadvantageous to the Lenders than the relevant transaction in existence on the Closing
Date;
(n) ordinary course compensation to Affiliates
in connection with financial advisory, financing, underwriting or placement services or in respect of other investment banking activities
and other transaction fees, which payments are approved by the majority of the members of the board of directors (or similar governing
body) or a majority of the disinterested members of the board of directors (or similar governing body) of the Borrower in good faith;
and
(o) any transaction that is approved by
the majority of the disinterested members of the board of directs (or similar governing body) of the Borrower in good faith.
8.08 Burdensome Agreements.
Create, enter into or permit to exist any Contractual Obligation (other than this Agreement, any other Loan Document or any Permitted
Refinancing Indebtedness incurred to refinance any such Indebtedness) that limits the ability (i) except as permitted under Section 8.01
or the documentation governing any Credit Agreement Refinancing Indebtedness, of Holdings or any Restricted Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person to secure the Obligations or any refinancing thereof or (ii) of Holdings or
any Restricted Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans
or advances, in each case, to Holdings or any Restricted Subsidiary or to Guarantee Indebtedness of Holdings or any Restricted Subsidiary;
provided that the foregoing restrictions in Section 8.08(x) shall not apply to:
(a) customary restrictions and conditions
contained in agreements relating to the sale of a Restricted Subsidiary or Unrestricted Subsidiary pending such sale; provided
that such restrictions and conditions apply only to the Restricted Subsidiary or Unrestricted Subsidiary (or any Equity Interests therein)
that is to be sold and such sale is permitted hereunder;
(b) customary restrictions and conditions
contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Borrowers
or any Restricted Subsidiaries are a party and was entered into in the ordinary course of business; provided that such agreement
prohibits the encumbrance of solely the property or assets of such Borrower or such Restricted Subsidiary that are the subject to such
agreement;
(c) Contractual Obligations which impose
(x) restrictions described in clause (i) above, but only to the extent that such restrictions do not materially adversely
affect the value of the Collateral granted to secure the Obligations or (y) restrictions described in clause (ii) above,
but only to the extent that such restrictions do not materially adversely affect the consolidated cash position of the Loan Parties;
(d) any agreement or other instrument
(including an instrument governing Indebtedness) of a Person acquired by Holdings or any Restricted Subsidiary in existence at the time
of such acquisition or at the time it merges or amalgamates with or into Holdings or any Restricted Subsidiary or assumed in connection
with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property
or assets of the Person and its Subsidiaries, so acquired or the property or assets so assumed;
(e) any restrictions created in connection
with any Factoring Agreement or Receivables Facility incurred pursuant to Section 8.02 that, in the good faith determination
of Holdings are necessary or advisable to effect the transactions contemplated under such Factoring Agreement or Receivables Facility;
(f) any contractual encumbrances or restrictions
imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of
the agreements referred to in Section 8.08(d); provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Borrowers, not materially
more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or refinancing;
(g) customary restrictions on leases,
subleases, licenses or sublicenses or sales otherwise permitted hereby so long as such restrictions relate to the assets subject thereto;
(h) customary provisions in joint venture
agreements and other similar agreements applicable to joint ventures permitted under this Agreement;
(i) customary provisions restricting
assignment of any agreement entered into in the ordinary course of business;
(j) restrictions on cash or other
deposits under contracts entered into in the ordinary course of business;
(k) Contractual Obligations which arise
under applicable Laws or any applicable rule, regulation or order;
(l) any agreement or instrument
governing Equity Interests of any Person that is acquired;
(m) restrictions and conditions
on any Restricted Subsidiary organized in jurisdictions where such restrictions are customary, including the People’s Republic of
China, or any state or other political subdivision thereof;
(n) provisions in any customary indenture
in connection with Indebtedness permitted hereunder, and any Contractual Obligations relating thereto;
(o) restrictions on Liens in favor of
any holder of Indebtedness permitted under Section 8.02(g)(i) (solely to the extent such restriction relates to assets
the acquisition, construction, repair, replacement, lease or improvement of which was financed by such Indebtedness), Section 8.02(h)
(solely to the extent such restriction relates to assets acquired in connection with the Acquired Indebtedness referred to in Section 8.02(h))
or Section 8.02(l) (solely to the extent such restriction relates to assets acquired in connection with the Permitted
Acquisition financed by such Indebtedness);
(p) restrictions that are binding on a
Foreign Subsidiary (other than a Canadian Subsidiary) pursuant to Indebtedness of a Foreign Subsidiary (other than a Canadian Subsidiary)
which is permitted by Section 8.02; or
(q) restrictions in a surety or performance
bond entered into in the ordinary course of business.
8.09 Use of Proceeds. Use
the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund Indebtedness originally incurred for such purpose.
8.10 Financial Covenant.
(a) Solely in respect of the
Revolving Credit Facility, permit the First Lien Net Leverage Ratio as of the last day of any such fiscal quarter of Holdings to
exceed 5.85 to 1.00; provided that, notwithstanding the foregoing, the financial covenant set forth in this Section 8.10
shall be tested as of the last day of any such fiscal quarter only in the event that, on the last day of such fiscal quarter, the
Total Outstandings (excluding undrawn Letters of Credit up to $10,000,000 and any Letters of Credit that have been cash
collateralized or backstopped) is greater than 35.0% of the Total Revolving Credit Commitments (such occurrence, a
“Triggering Event”).
(b) Right to Cure. Notwithstanding
anything to the contrary contained in Section 9.01 or 9.02, in the event that the Borrowers fail to comply
with the requirements of the financial covenant set forth in Section 8.10(a) at any time when Holdings is required
to comply with such financial covenant, pursuant to the terms thereof, then (A) until the expiration of the fifteenth Business Day subsequent
to the date the relevant financial statements are required to be delivered pursuant to Section 7.01(a) or (b)
(the last day of such period being the “Anticipated Cure Deadline”), Holdings shall have the right to issue
or obtain a contribution to its equity (which shall be in the form of common equity or otherwise in a form reasonably acceptable to the
Administrative Agent and which are not Otherwise Applied (but which shall not include the Specified Equity Proceeds)) for cash (the “Cure
Right”), and upon the receipt by Holdings of such cash (the “Cure Amount”), pursuant to the exercise
Holdings of such Cure Right, the calculation of Consolidated EBITDA as used in the financial covenant set forth in Section 8.10(a)
shall be recalculated giving effect to the following pro forma adjustments:
(i) Consolidated EBITDA
shall be increased, solely for the purpose of measuring the financial covenant set forth in Section 8.10(a) and not
for any other purpose under this Agreement (including but not limited to determining the availability or amount of any covenant baskets
or carve-outs (including the determination of the Available Amount) or determining the Applicable Rate), by an amount equal to the Cure
Amount; provided that (1) the receipt by Holdings of the Cure Amount pursuant to the Cure Right shall be deemed to
have no other effect whatsoever under this Agreement (including but not limited to determining the availability or amount of any covenant
baskets or carve-outs or determining the Applicable Rate) and (2) no Cure Amount shall reduce Indebtedness (including as unrestricted
cash or Cash Equivalents of Holdings and the Restricted Subsidiaries) on a Pro Forma Basis for the applicable fiscal quarter for which
such Cure Amount was contributed for purposes of calculating the financial covenant set forth in Section 8.10(a);
(ii) If, after giving effect
to the foregoing recalculations, the Borrowers shall then be in compliance with the requirements of the financial covenant set forth in
Section 8.10(a), the Borrowers shall be deemed to have satisfied the requirements of the financial covenant set forth
in Section 8.10(a) 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 of the financial covenant set forth in Section 8.10(a)
that had occurred shall be deemed cured for the purposes of this Agreement; and
(iii) upon receipt by the Administrative
Agent of written notice, on or prior to the Anticipated Cure Deadline, that the Borrowers intend to exercise the Cure Right in respect
of a fiscal quarter, the Lenders shall not be permitted to accelerate Loans held by them or to exercise remedies against the Collateral
on the basis of a failure to comply with the requirements of the financial covenant set forth in Section 8.10(a), unless
such failure is not cured pursuant to the exercise of the Cure Right on or prior to the Anticipated Cure Deadline. For the avoidance of
doubt, the Borrowers shall not be able to obtain any Credit Extension hereunder until receipt by the Administrative Agent of the Cure
Amount.
Notwithstanding anything set forth herein
to the contrary, (i) in each four consecutive fiscal-quarter period there shall be at least two fiscal quarters in respect of which the
Cure Right is not exercised, (ii) there can be no more than five fiscal quarters in respect of which the Cure Right is exercised during
the term of this Agreement and (iii) for purposes of this Section 8.10(b), the Cure Amount utilized shall be no greater
than the minimum amount required to remedy the applicable failure to comply with the financial covenant set forth in Section 8.10(a).
8.11 Amendments of Organization
Documents and Certain Other Agreements. Amend, modify or otherwise alter (a) any of its Organization Documents in any manner that
would conflict with its obligations under the Loan Documents or (b) the instrument or agreement governing any Indebtedness that is subordinated
to the Obligations if such amendment, modification or alteration is in violation of the Customary Intercreditor Agreement entered into
with respect thereto.
8.12 Accounting Changes.
Make any (a) significant change in a manner adverse to the Lenders in accounting policies or reporting practices, except as permitted
or required by GAAP, or (b) change its fiscal year.
8.13 Sale and Leaseback Transactions.
Enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any 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
which it intends to use for substantially the same purpose or purposes as the property being sold or transferred unless (A) (i) the sale
of such property is permitted by Section 8.04 and (ii) any capital lease obligations or Liens arising in connection
therewith not prohibited by Sections 8.02 and 8.01, respectively or (B) in respect of property acquired
after the Closing Date, such transaction (a “Permitted Sale Leaseback Transaction”) is consummated within 365
days of such acquisition of property.
8.14 No Other “Designated
Senior Indebtedness”. No Borrower shall designate, nor permit the designation of, any Indebtedness (other than under this
Agreement or the other Loan Documents) as “Designated Senior Indebtedness” or any other similar term for the purpose of the
definition of the same or the subordination provisions contained in the documentation for all Indebtedness that is subordinated in right
of payment to the Obligations (if applicable) or any Permitted Refinancing Indebtedness in respect thereof.
8.15 Holding Covenant. Holdings
shall not have any direct Subsidiary other than the Initial Borrower or any Intermediate Holding Company.
8.16 Canadian Defined Benefit Pension
Plans. Except with the prior written consent of the Administrative Agent, sponsor, maintain, contribute to or otherwise incur
liability under any Canadian Defined Benefit Pension Plan, or acquire an interest in any Person that sponsors, maintains, contributes
to or otherwise has incurred liability under any Canadian Defined Benefit Pension Plan.
Article IX.
EVENTS OF DEFAULT AND REMEDIES
9.01 Events of Default.
Any of the following shall constitute an Event of Default:
(a) Non-Payment. Any Loan Party
fails to pay
(i) when and as required
to be paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within five Business Days
after the same becomes due, any interest on any Loan or on any L/C Obligation, or any Commitment Fee or other fee due hereunder or
(iii) within five Business Days
after the same becomes due, any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Loan
Party fails to perform or observe any term, covenant or agreement contained in any of
(i) Section 7.01
or 7.03(a), if such failure continues for three Business Days or
(ii) Section 7.05,
7.11, 7.17, 7.18 or Article VIII; provided that, any Event of Default
under Section 8.10 shall not constitute an Event of Default with respect to any Term Loan Facility until the date on
which the Administrative Agent or the Revolving Credit Lenders exercise any remedies with respect to the Revolving Credit Facility in
accordance with Section 9.02; provided, further, that the Financial Covenant is subject
to cure pursuant to Section 8.10(b) and no Event of Default shall arise under Section 8.10(a) until the Anticipated
Cure Deadline (and then, only if such Financial Covenant default has not been cured by such time); provided, further, that
any Event of Default under Section 8.10 may be waived, amended or otherwise modified from time to time pursuant to
clause (i) of Section 11.01; or
(c) Other Defaults. Any Loan Party
fails to perform or observe any other covenant or agreement (not specified in Section 9.01(a) or (b)
above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days of the earlier of
(i) a Responsible Officer of any Loan Party has knowledge of such failure or (ii) receipt by Holdings of notice from the Administrative
Agent or the Required Lenders of such default; or
(d) Representations and Warranties.
Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party herein, in any
other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading, in each case in
any material respect (or, in the case of any representation and warranty that is qualified as to “materiality,” “Material
Adverse Effect” or similar language, shall be incorrect or misleading in any respect after giving effect to such qualifier), when
made or deemed made; or
(e) Cross-Default.
(i) Any Loan Party or
any Significant Subsidiary (or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary)
(A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder, Indebtedness under Swap Contracts and with respect to surety or performance bonds in respect of commercial
contracts entered into in the ordinary course of business (for the avoidance of doubt, not in respect of debt for borrowed money)) having
an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or Guarantee (other than with respect to surety or
performance bonds in respect of commercial contracts entered into in the ordinary course of business (for the avoidance of doubt,
not in respect of debt for borrowed money)) in excess of the Threshold Amount or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) or the holders of any mandatory preferred stock to cause, with the
giving of notice if required, such Indebtedness or such mandatory preferred stock (other than the conversion of any mandatory
preferred stock to common stock in accordance with its terms not as the result of a default) to be demanded or to become due or to
be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem
such Indebtedness or such mandatory preferred stock to be made, prior to its stated maturity, or such Guarantee to become payable or
cash collateral in respect thereof to be demanded;
(ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from
(A) any event of default
under such Swap Contract as to which Holdings or any Restricted Subsidiary is the Defaulting Party (as defined in such Swap Contract)
or
(B) any Termination Event
(as so defined) under such Swap Contract as to which Holdings or any Restricted Subsidiary is an Affected Party (as defined in such Swap
Contract) and, in either event, the Swap Termination Value owed by Holdings or such Restricted Subsidiary as a result thereof is greater
than the Threshold Amount; or
(f) Insolvency Proceedings,
Etc. Any Loan Party or any Significant Subsidiary (or any group of Restricted Subsidiaries that, when taken together, would constitute
a Significant Subsidiary) institutes or consents to the institution of any proceeding or proposal under any Debtor Relief Law, or makes
an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, receiver and manager, interim
receiver, manager, monitor, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, receiver and manager, interim receiver, manager, monitor, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged
or unstayed for 60 days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues undismissed or unstayed for 60 days, or an order for relief is
entered in any such proceeding.
(g) Inability to Pay Debts; Attachment.
(i) Any Loan Party or
any Significant Subsidiary (or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary)
becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or any material part of the material property of any Loan Party
or any Significant Subsidiary and is not released, vacated or fully bonded within 60 days after its issue or levy; or
(h) Judgments. There is entered
against any Loan Party or any Restricted Subsidiary
(i) a final judgment
or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer is rated at least “A” by A.M. Best Borrower and does not dispute coverage), or
(ii) any one or more non-monetary
final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and,
in either case, (A) enforcement proceedings are commenced
by any creditor upon such judgment or order, or (B) there is a period of 60 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA and Canadian Pension
Plans.
(i) One or more ERISA
Events or Canadian Pension Events occur with respect to a Pension Plan, Multiemployer Plan, Canadian Multi-Employer Plan or Canadian Defined
Benefit Pension Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect,
(ii) any Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA in an aggregate amount in excess of the Threshold Amount, or
(iii) any Lien arises (except
for contribution amounts not yet due) in connection with a Canadian Pension Plan, which has resulted or could reasonably be expected to
result in a Material Adverse Effect; or
(j) Invalidity of Loan Documents.
Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests
in any manner the validity or enforceability of any material provision of any Loan Document; or any Loan Party denies that it has any
or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs
any Change of Control; or
(l) Collateral Documents.
Any Collateral Document after delivery thereof shall for any reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority lien on and security interest in the Collateral purported to be covered thereby (subject to Liens expressly
permitted under the Loan Documents) (other than by reason of the failure of the Collateral Agent to retain possession of Collateral physically
delivered to it (other than due to any act or failure to act by Holdings or any of its Subsidiaries)) or the failure of the Collateral
Agent to timely file Uniform Commercial Code or PPSA financing statements or continuation statements or other perfection filings (other
than due to any act or failure to act by Holdings or any of its Subsidiaries) and is not, upon the written request of an Agent, promptly
corrected.
9.02 Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent may, and at the request of the Required Lenders, shall take
any or all of the following actions (it being understood that during any period during which an Event of Default under Section 8.10
exists solely with respect to the Revolving Credit Facility, the Administrative Agent may, and at the request of the Majority Facility
Lenders in respect of the Revolving Credit Facility, shall take any of the actions described below solely as they relate to the Revolving
Credit Facility):
(a) declare the commitment of each Lender
to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation
shall be terminated;
(b) declare the unpaid principal amount
of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby
expressly waived by each Borrower;
(c) require that the Borrowers Cash Collateralize
the L/C Obligations (in an amount equal to 103% the then Outstanding Amount thereof); and
(d) exercise, on behalf of itself, the
Lenders and the L/C Issuers all rights and remedies available to it, the Lenders and the L/C Issuers under the Loan Documents or applicable
Law;
provided, however, that upon the
occurrence of an event with respect to any Borrower described in Section 9.01(f), the obligation of each Lender to
make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount
of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation
of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case, without further
act of the Administrative Agent or any Lender.
9.03 Application of Funds.
After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02),
any amounts received on account of the Obligations shall, subject to the provisions of Section 2.16, be applied by
the Administrative Agent in the following order:
First, to payment of that portion
of the Obligations constituting reasonable fees, indemnities, expenses and other amounts (including reasonable Attorney Costs and amounts
payable under Article III) payable to each Agent in its capacity as such;
Second, to payment of that portion
of the Obligations constituting reasonable fees, indemnities and other amounts (other than principal and interest) payable to the Lenders
(including reasonable Attorney Costs and amounts payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;
Third, to (a) payment of that portion
of the Obligations constituting accrued and unpaid interest on the Loans and L/C Borrowings, and (b) periodic payments due under any Secured
Hedge Agreement, ratably among the Lenders and the Hedge Banks, respectively, in proportion to the respective amounts described in this
clause Third payable to them;
Fourth, to (a) payment of that
portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, (b) payment of breakage, termination or other
payments, and any interest accrued thereon, not otherwise paid pursuant to clause Third, due under any Secured Hedge Agreement, (c) payments
of amounts due under any Secured Treasury Management Agreement, ratably among the Lenders, the L/C Issuers, Hedge Banks and the Treasury
Counterparties in proportion to the respective amounts described in this clause Fourth payable to or held by them and (d) to the
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize 103% of that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit;
Fifth, to the payment of all other
Obligations of the Loan Parties owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and
the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative
Agent and the other Secured Parties on such date; and
Last, the balance, if any, after
all of the Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Law.
Subject to Section 2.03(c),
amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after
all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any,
in the order set forth above.
Article X.
THE AGENTS AND THE ARRANGERS
10.01 Appointment and Authority.
(a) Each of the Lenders, the L/C Issuers,
each Treasury Counterparty and each Hedge Bank hereby irrevocably appoints Jefferies Finance LLC to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article X are solely for the benefit of the Administrative Agent,
the Lenders, the L/C Issuers, the Treasury Counterparties, and the Hedge Banks, and no Loan Party shall have rights as a third party beneficiary
of any of such provisions.
(b) Each of the Lenders (in its capacities
as a Lender and potential Hedge Bank) and the L/C Issuers hereby irrevocably appoints Jefferies Finance LLC to act on its behalf as the
Collateral Agent (for purposes of this Article X, the Administrative Agent and the Collateral Agent are referred to
collectively as the “Agents”) hereunder and hereby authorizes the Collateral Agent to acquire, hold and enforce
any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such actions and powers
as are reasonably incidental thereto. In this connection, the Collateral Agents and any co-agents, sub-agents and attorneys-in-fact appointed
by the Collateral Agent pursuant to Section 10.02 for purposes of holding or enforcing any Lien on the Collateral (or
any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of
the Collateral Agent, shall be entitled to the benefits of all provisions of this Article X and Article XI
(including Section 11.04(c), 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.
(c) As part of its duties as Collateral
Agent, for the purposes of holding the Canadian Deed of Hypothec, each of the Secured Parties hereby irrevocably appoints and authorizes
the Collateral Agent and, to the extent necessary, ratifies the appointment and authorization of the Collateral Agent, to act as the
hypothecary representative of the creditors as contemplated under Article 2692 of the Civil Code of Quebec (in such capacity, the “Attorney”),
and to enter into, to take and to hold on their behalf, and for their benefit, the Canadian Deed of Hypothec, and to exercise such powers
and duties that are conferred upon the Attorney thereunder. The Attorney shall: (a) have the sole and exclusive right and authority to
exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to the Attorney pursuant
to the Canadian Deed of Hypothec and applicable Law, and (b) benefit from and be subject to all provisions hereof with respect to the
Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility
to and indemnification by the Secured Parties and Loan Parties. Any person who becomes a Secured Party shall, by its execution of an
Assignment and Assumption, be deemed to have consented to and confirmed the Attorney as the person acting as hypothecary representative
holding the Canadian Deed of Hypothec as aforesaid and to have ratified, as of the date it becomes a Secured Party, all actions taken
by the Attorney in such capacity. Any substitution of the Collateral Agent hereunder shall also constitute the substitution of the Attorney.
10.02 Delegation of Duties.
Each 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 such Agent. Each 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 X
shall apply to any such sub-agent and to the Related Parties of each 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 such Agent.
10.03 Rights as a Lender.
The Person serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving as an Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, 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 or any of its Subsidiaries or other Affiliate thereof as if such Person were
not an Agent hereunder and without any duty to account therefor to the Lenders.
10.04 Exculpatory Provisions.
No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting
the generality of the foregoing, no Agent:
(a) shall be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is continuing;
(b) shall 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 such 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 such Agent shall
not be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary
to any Loan Document or applicable Law; and
(c) shall, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall be liable for the failure to disclose, any information relating
to any Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as such Agent or any of its Affiliates
in any capacity.
Each Agent shall not be liable for any
action taken or not taken by it (i) with the consent, at the request of or ratified by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided
in Sections 11.01 and 9.02) or (ii) in the absence of its own gross negligence or willful misconduct.
Each Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until written notice specifying that it
is a “notice of default or event of default” and describing such Default or Event of Default, as applicable, is given to such
Agent by any Borrower, any Lender or any L/C Issuer.
No Agent shall 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, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the
creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency
of any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to such Agent.
(d) No Agent shall be responsible or have
any liability for, or have any duty to ascertain, inquire into, monitor or enforce compliance with the provisions hereof relating to Disqualified
Institutions. Without limiting the generality of the foregoing, no Agent shall (x) be obligated to ascertain, monitor or inquire as to
whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (y) have any liability with respect
to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.
10.05 Reliance by Agents.
Each 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. Each 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 L/C Issuer, an Agent may presume that such condition is satisfactory
to such Lender or such L/C Issuer unless such Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior
to the making of such Loan or the issuance of such Letter of Credit. Each Agent may consult with legal counsel (who may be counsel for
Holdings or any Restricted Subsidiary), 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.
10.06 Non-Reliance on Agents and
Other Lenders. Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Agents, the Arrangers,
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 L/C Issuer also acknowledges that it will, independently
and without reliance upon the Agents, the Arrangers 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.
10.07 Resignation of
Agent. Each Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Borrowers. Upon
receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint
a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank 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 30 days after the retiring Agent gives notice of its resignation, then such retiring Agent may on behalf of the Lenders
and the L/C Issuers, appoint a successor Agent meeting the qualifications set forth above; provided that if such Agent
shall notify the Borrowers and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and, subject to the last sentence of this Section 10.07,
(a) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Collateral Agent on behalf of the Lenders or the L/C Issuers under any of
the Loan Documents, the retiring Collateral Agent shall continue to hold such collateral security until such time as a successor
Collateral Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through
such Agent shall instead be made by or to each Lender and L/C Issuer directly, until such time as the Required Lenders appoint a
successor Agent as provided for above in this Section 10.07. Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section 10.07).
The fees payable by the Borrowers to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the retiring Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article X and Section 11.04 shall continue in effect for the benefit of
such retiring 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 Agent was acting as Agent. In addition, notwithstanding the effectiveness of a resignation by the
Administrative Agent hereunder, (a) the retiring Administrative Agent may, in its sole discretion, continue to provide the services
of the Administrative Agent solely with respect to administering, collecting and delivering any payments of principal, interest,
fees, premium or other amounts in respect of the Loans and maintaining the books and records relating thereto (such Administrative
Agent acting in such capacity, the “Paying Agent”), (b) the term “Administrative Agent” when
used in connection with any such functions shall be deemed to mean such retiring Administrative Agent in its capacity as the Paying
Agent and (c) such retiring Administrative Agent shall, in its capacity as the Paying Agent, continue to be vested with and
enjoy all of the rights and benefits of an Administrative Agent hereunder.
10.08 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 L/C Obligation 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, L/C Obligations and all other 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 L/C
Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the
Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the
L/C Issuers and the Administrative Agent under Sections 2.03(i) and (j) and 2.09) 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, receiver and manager, interim
receiver, manager, monitor, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Lender and each L/C Issuer 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 L/C Issuers, 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 Section 2.09.
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 L/C Issuer any plan
of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any L/C Issuer to authorize
the Administrative Agent to vote in respect of the claim of any Lender or any L/C Issuer or in any such proceeding.
10.09 Collateral and Guaranty Matters.
The Lenders, the L/C Issuers, the Treasury Counterparties, and the Hedge Banks irrevocably authorize the Collateral Agent, at its option
and in its discretion (provided, that the Collateral Agent shall take such action at the request of Holdings),
(a) to release any Lien on any property
granted to or held by the Collateral Agent under any Loan Document (i) upon termination of the Total Revolving Credit Commitments and
payment in full of all Obligations (other than (x) contingent indemnification obligations not yet accrued and payable and (y) obligations
in respect of Secured Treasury Management Agreements and Secured Hedge Agreements) and each Letter of Credit having been backstopped or
Cash Collateralized, in each case, in amounts and pursuant to documentation in form and substance reasonably satisfactory to the Administrative
Agent and the relevant L/C Issuer, (ii) that is Disposed or to be Disposed of as part of or in connection with any transaction permitted
hereunder or under any other Loan Document, (iii) subject to Section 11.01, if approved, authorized or ratified in
writing by the Required Lenders or (iv) that is on or with respect to Mortgaged Property which is not Material Real Property;
(b) to release any Subsidiary Guarantor
from its obligations under the Guaranty if such Person ceases to be a Restricted Subsidiary or otherwise becomes an Excluded Subsidiary
as a result of a designation of a Restricted Subsidiary as an Unrestricted Subsidiary or transaction permitted hereunder or the application
of clause (v) of the definition of Excluded Subsidiary thereto; provided that the release of a Non-Wholly
Owned Subsidiary from its obligations under the Guaranty shall only be permitted if at the time such Non-Wholly Owned Subsidiary becomes
an Excluded Subsidiary, after giving pro forma effect to such release and consummation of the transaction that causes such Person to be
an Excluded Subsidiary of such type, Holdings shall be deemed to have made a new Investment in such person on the date of such release
in an amount equal to the portion of the fair market value of the net assets of such Person attributable to Holdings’ or any Restricted
Subsidiary’s Equity Interest therein that resulted from Investments made by Holdings or its Restricted Subsidiaries in such Non-Wholly
Owned Subsidiary during such time that it was a Guarantor and such Investment is a permitted as an Investment by Loan Parties in Restricted
Subsidiaries that are not Guarantors hereunder; and
(c) to subordinate any Lien on any property
granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien permitted by Section 8.01(g) if such Lien
secures purchase money Indebtedness permitted by Section 8.02(g)(i).
Upon request by the Collateral Agent at
any time, the Required Lenders will confirm in writing the Collateral Agent’s authority to release its interest in particular types
or items of property or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 10.09.
In each case as specified in this Section 10.09, the Collateral Agent will, at the Borrowers’ expense, execute
and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item
of Collateral from the assignment and security interest granted under the Collateral Documents, to release such Guarantor from its obligations
under the Guaranty, or to effect such subordination referred to in Section 10.09(c), in each case in accordance with the
terms of the Loan Documents and this Section 10.09.
10.10 No Other Duties,
Etc. Anything herein to the contrary notwithstanding, none of the Arrangers listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable,
as an Agent, a Lender or a L/C Issuer hereunder.
10.11 Certain ERISA Matters.
(a) 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 any Loan Party, that at least one of the following is and will be true:
(i) such Lender is not
using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or Section 4975
of the Code) 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,
(ii) 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 so as to exempt from the prohibitions of Section 406 of ERISA and Section 4975 of the Code such Lender’s
entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii) (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 subsections (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
(iv) such other representation,
warranty and covenant as may be agreed in writing between the Administrative Agent (in its sole discretion) and such Lender.
(b) In addition, unless either (1) Section 10.11(a)(i)
is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with Section 10.11(a)(iv),
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 any 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).
10.12 Intercreditor Agreement
The Administrative Agent and the Collateral
Agent are irrevocably authorized and instructed by the Lenders and other Secured Parties, to the extent required by the terms of the Loan
Documents, without any further consent of any Lender or any other Secured Party, to enter into (or acknowledge and consent to) or amend,
renew, extend, supplement, restate, replace, waive, or otherwise modify any Customary Intercreditor Agreement in accordance with the terms
hereof. Each Lender and other Secured Party (a) hereby agrees that it will be bound by and will take no actions contrary to the provisions
of any Customary Intercreditor Agreement (if entered into) and (b) hereby agrees that in connection with the entry into any Customary
Intercreditor Agreement that the Administrative Agent and the Collateral Agent may rely exclusively on a certificate of a Responsible
Officer of Holdings as to whether the relevant Liens and/or Indebtedness are permitted and whether any such Customary Intercreditor Agreement
or such amendment, renewal, extension, supplement, restatement, replacement, waiver, or other modification thereto is in accordance with
the terms hereof.
Article XI.
MISCELLANEOUS
11.01 Amendments, Etc. No
amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders and Holdings or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a) extend or increase the Commitment
of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of such
Lender;
(b) postpone any date scheduled for any
payment of principal or interest under Sections 2.07 or 2.08, or any date fixed in writing by the Administrative
Agent for the payment of fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(c) reduce the principal of, or the rate
of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this
Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders
shall be necessary to amend the definition of “Default Rate” or to waive any obligation of any Borrower to pay interest at
the Default Rate;
(d) amend or modify the pro rata requirements
of Section 3.07 or Section 9.03, change the provision in Section 11.06(a)(i),
change any provision of this Section 11.01 or the definitions of “Required Lenders” or “Majority
Facility Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;
(e) change the provisions of any Loan
Document in a manner that by its terms materially and adversely affects the rights in respect of payments due to Lenders holding Loans
of one Class differently from the rights of Lenders holding Loans of any other Class without the prior written consent of Lenders holding
a majority in interest of the outstanding Loans and unused Commitments of each materially and adversely affected Class;
(f) release all or substantially
all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;
(g) release any Borrower or all or substantially
all of the Subsidiary Guarantors, from its or their obligations under the Loan Documents without the written consent of each Lender;
(h) impose any greater restriction on
the ability of any Lender to assign any of its rights or obligations hereunder with respect to any Facility without the written consent
of the Majority Facility Lenders then in effect in respect of such Facility; provided, for purposes of this clause, the
aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations shall be deemed to be held by such
Lender;
(i) amend, waive or otherwise modify
any of the terms and provisions (and related definitions) of Section 8.10 (even if the effect of such amendment would
be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder) or any of the terms and provisions
of the proviso set forth in Section 9.01(b), without the written consent of the Majority Facility Lenders in respect
of the Revolving Credit Facility, and, notwithstanding anything else set forth in this Agreement to the contrary, any such amendment,
waiver or other modification shall be effective for all purposes of this Agreement with the written consent of only the Majority Facility
Lenders in respect of the Revolving Credit Facility (or the Administrative Agent with the prior written consent thereof), on the one hand,
and Holdings, on the other hand;
(j) modify the protections afforded
to an SPC pursuant to the provisions of Section 11.06(b)(vii) without the written consent of such SPC, or
(k) contractually subordinate the Obligations
in right of payment or the Liens securing the Obligations to other Indebtedness (other than (x) in respect of any “debtor-in-possession”
facility or (y) to the extent a Borrower has offered each Lender directly affected thereby an opportunity on a pro rata basis to participate
in the applicable Indebtedness on the same terms as the other lenders participating in such transaction) without the written consent of
each Lender,
provided, further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the L/C Issuers in addition to the Lenders required above, affect
the rights or duties of the L/C Issuers under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued
by it and (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the
Lenders required above, affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent under this Agreement
or any other Loan Document. Notwithstanding anything to the contrary set forth herein, no Defaulting Lender shall have any right to approve
or disapprove any amendment, waiver or consent hereunder, except that (i) the Commitment of such Lender may not be increased or extended
without the consent of such Lender and (ii) any waiver, amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the
consent of such Defaulting Lender.
Notwithstanding anything to the
contrary set forth herein, if the Administrative Agent and the Borrowers have jointly identified any ambiguity, mistake, defect,
inconsistency, obvious error, omission or any other error or omission of a technical nature, in each case, in any provision of any
Loan Document, the Borrowers and the Administrative Agent shall be permitted to effect amendments to this Agreement or any other
Loan Document, as applicable, solely to address such matter and such amendment shall become effective without the consent of any
other party to this Agreement so long as, in each case, the Lenders shall have received at least ten Business Days’ prior
written notice thereof and the Administrative Agent shall not have received, within ten Business Days of the date of such notice to
the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.
If, in connection with any proposed change,
waiver, discharge or termination of or to any of the provisions of this Agreement and/or any other Loan Document as contemplated by Section 11.01,
the consent of each Lender, each Lender or each affected Lender, as applicable, is required and the consent of the Required Lenders at
such time is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each such other
Lender, a “Non-Consenting Lender”) then the Borrowers may, on notice to the Administrative Agent and the Non-Consenting
Lender, (A) replace such Non-Consenting Lender in accordance with Section 11.15 or (B) prepay the Loans and, if applicable,
terminate the commitments of such Non-Consenting Lender, in whole or in part, without premium or penalty.
11.02 Notices and Other Communications;
Facsimile Copies.
(a) Notices Generally. Except as
provided in Section 11.02(b), 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 telecopier as follows:
(i) if to the Borrowers,
the Agents or the L/C Issuers, to the address, telecopier number or electronic mail address specified for such Person on Schedule 11.02;
and
(ii) if to any other Lender,
to the address, telecopier number or electronic mail address specified in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier 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 delivered through electronic communications to the extent
provided in Section 11.02(b) below shall be effective as provided in such Section 11.02(b).
(b) Electronic Communications.
Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Article II if such Lender
or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article II
by electronic communication. The Administrative Agent or the Borrowers may, in its and their discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval
of such procedures may be limited to particular notices or communications.
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 any Borrower, any Lender, any L/C Issuer, any Arranger or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any 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 any Borrower, any Lender, any L/C Issuer, any Arranger 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 the Borrowers, the Agents and the L/C Issuers may change its address or telecopier number for notices and other communications hereunder
by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrowers, the Agents, and the L/C Issuers. 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,
telecopier 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 Agents, L/C Issuers
and Lenders. The Agents, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices purportedly given by or
on behalf of the Borrowers 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 Borrowers shall indemnify the Agents, each L/C Issuer, each Lender and the Related Parties of each of them 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 Borrowers.
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.
11.03 No Waiver; Cumulative Remedies.
No failure by any Lender or the Agents to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or 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.
11.04 Expenses; Indemnity; Damage
Waiver.
(a) Costs and Expenses. The Loan
Parties shall
(i) reimburse from time
to time, upon presentation of a reasonably detailed statement all reasonable and documented out-of-pocket expenses incurred by the Agents,
the Arrangers, each Lender, each L/C Issuer and their respective Affiliates (including the fees and expenses, to one primary counsel and,
if reasonably necessary, to one local counsel in each appropriate jurisdiction and one special counsel and, solely in the case of an actual
or perceived conflict of interest, one or more additional counsel for each affected group), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated);
(ii) all reasonable and documented
out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit
or any demand for payment thereunder and
(iii) reimburse from time to
time, upon presentation of a reasonably detailed statement, all reasonable and documented out-of-pocket expenses incurred by the Agents,
the Arrangers, any L/C Issuer, any Lender (including the reasonable fees and expenses to one primary counsel and, if reasonably necessary,
to one local counsel in each appropriate jurisdiction and one special counsel and, solely in the case of an actual or perceived conflict
of interest, one or more additional counsel for each affected group), in connection with the enforcement or protection of its rights (A)
in connection with this Agreement and the other Loan Documents, including its rights under this Section 11.04, or (B)
in connection with Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrowers.
The Borrowers shall indemnify the Agents (and any sub-agent thereof), the Arrangers, each Lender, each L/C Issuer 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 related expenses (including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Loan Party
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 agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby
or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of
this Agreement and the other Loan Documents,
(ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by any L/C Issuer 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 of Hazardous Materials on or from any property currently or formerly owned or operated by Holdings or any Restricted
Subsidiary, or any other Environmental Claim or Environmental Liability related in any way to Holdings or any Restricted 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 any Loan Party or any of such Loan Party’s directors, shareholders or creditors, 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 or related expenses (x) are determined
by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee or (y) other than in respect of the Administrative Agent or Collateral Agent in its capacity as such, result from
a claim brought by any Loan Party against an Indemnitee for a material breach of such Indemnitee’s obligations hereunder or under
any other Loan Document, in each case of clauses (x) and (y), if such Loan Party has obtained a final
and non-appealable judgment in its favor on such claim as determined by a court of competent jurisdiction. Paragraph (b) of this Section
11.04 shall not apply with respect to taxes other than any taxes that represent losses, claims, damages, etc. arising from any
non-tax claim.
(c) Reimbursement by Lenders. To
the extent that any Borrower for any reason fails to indefeasibly pay any amount required under Section 11.04(a) or
11.04(b) to be paid to the Agents (or any sub-agent thereof), the Arrangers, the L/C Issuers or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Agents (or any such sub-agent), the Arrangers, the L/C Issuers or such Related
Party, 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 Agents (or any such sub-agent), the Arrangers or the L/C
Issuers in their capacity as such, or against any Related Party of any of the foregoing acting for the Agents (or any such sub-agent),
the Arrangers or the L/C Issuers in connection with such capacity. The obligations of the Lenders under this Section 11.04(c)
are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages,
Etc. To the fullest extent permitted by applicable Law, no party hereto shall assert, and each party hereto hereby waives, any claim
against any other party hereto, on any theory of liability, for special, indirect, consequential 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, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof; provided that such waiver of special, indirect, consequential or punitive damages shall not limit the indemnification
obligations of the Borrowers under Section 11.04(b). No party hereto shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed to such unintended recipients by such party hereto through
telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents
or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful
misconduct of such party hereto as determined by a final and non-appealable judgment of a court of competent jurisdiction.
(e) Payments. All amounts due under
this Section 11.04 shall be payable not later than 20 Business Days after written demand therefor.
(f) Survival. The agreements
in this Section 11.04 shall survive the resignation of the Administrative Agent and any L/C Issuer, the replacement
of any Lender, the termination of the Total Revolving Credit Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
11.05 Payments Set Aside.
To the extent that any payment by or on behalf of any Borrower is made to the Agents or any Lender, or the Agents or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required (including pursuant to any settlement entered into by the Agents or such Lender in its discretion)
to be repaid to a trustee, receiver, receiver and manager, interim receiver, monitor or any other party, in connection with any proceeding
under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such setoff had not occurred, and
(b) each Lender severally agrees to pay
to the Agents upon demand their applicable share of any amount so recovered from or repaid by the Agents, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in
effect.
11.06 Successors and Assigns.
(a) Successors and Assigns Generally.
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, except that
(i) no Loan Party may
assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent,
each L/C Issuer and each Lender (and any attempted assignment without such consent shall be null and void) and
(ii) no Lender may assign or
otherwise transfer any of its rights or obligations hereunder, except
(A) to an assignee in accordance
with the provisions of Section 11.06(b) or Section 11.06(i),
(B) by way of participation
in accordance with the provisions of Section 11.06(d), or
(C) by way of pledge or
assignment of a security interest subject to the restrictions of Section 11.06(f) (and any other attempted assignment
or transfer shall be null and void).
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, Participants
to the extent provided in Section 11.06(d) and, to the extent expressly contemplated hereby, the Related Parties of
each of the Agents, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
Each party to this Agreement agrees that
in case of an assignment or transfer pursuant to this Section 11.06 and for the purpose of (and to the extent possible
under) any applicable Law, the Liens and the guarantees granted by each Loan Party under the Loan Documents shall be preserved for the
benefit of the Collateral Agent, the assignee Lender, the other Secured Parties and all other beneficiaries thereof.
(b) Assignments by Lenders. Any
Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment(s) and the Loans (including for purposes of this Section 11.06(b), participations
in L/C Obligations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) no minimum amount need
be assigned in the case of (x) an assignment of the entire remaining amount of the assigning Lender’s Commitment under any Facility
and the Loans at the time owing to it under such Facility and (y) an assignment by a Lender to any other Lenders, Affiliates and Approved
Funds; and
(B) in
any case not described in Section 11.06(b)(i)(A), the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall
not be less than, in the case of any Facility, $1,000,000, in the case of any assignment under such Facility, unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, Holdings otherwise
consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group with respect to any Lender and concurrent assignments from members of an Assignee Group with
respect to any Lender to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as
a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts.
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 with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not prohibit
any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;
(iii) Required Consents.
No consent shall be required for any assignment except to the extent required by Section 11.06(b)(i)(B) and, in addition:
(A) the consent of Holdings
(such consent not to be unreasonably withheld or delayed) shall be required unless
(1) an Event of Default has
occurred and is continuing at the time of such assignment,
(2) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund, or
(3) such assignment is during
the primary syndication of the Loans and Commitments to Persons identified by the Administrative Agent to Holdings on or prior to the
Closing Date;
provided, that if Holdings has not given
the Administrative Agent written notice of its objection to such assignment within ten (10) Business Days after written notice to Holdings,
Holdings shall be deemed to have consented to such assignment;
(B) the consent of the
Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of
(i) any Term Loan Commitment
or Revolving Credit Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable Facility,
an Affiliate of such Lender or an Approved Fund with respect to such Lender or
(ii) any Term Loan to a Person
that is not a Lender, an Affiliate of a Lender or an Approved Fund; and
(C) the consent of the
L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Revolving
Credit Facility.
(iv) Assignment
and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption
(such Assignment and Assumption to be delivered via an electronic settlement system reasonably acceptable to the Administrative Agent
(or, if previously agreed with the Administrative Agent, manually)), and shall pay to the Administrative Agent a processing and recordation
fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent); provided that only
one such fee shall be payable in the event of simultaneous assignments to or from two or more Approved Funds by a single Lender and no
fee shall be payable for assignments among related funds or among any Lender and any of its Affiliates. The assignee, if it shall not
be a Lender immediately prior to the assignment, shall deliver to the Administrative Agent an Administrative Questionnaire and applicable
tax forms required by Section 11.14. Subject to acceptance and recording thereof
by the Administrative Agent pursuant to Section 11.06(c), from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party to this Agreement 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 Sections 3.01, 3.04,
3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment).
Upon request, the applicable Borrower (at its sole expense) shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 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 Section 11.06(d);
(v) No such assignment shall
be made to Holdings or any of its Affiliates or any Restricted Subsidiary, except as set forth in Section 11.06(i);
(vi) Prohibited
Assignees.
(A) No such assignment
shall be made to a natural person (or a holding company, investment vehicle or trust for, or owned and operated by or for the primary
benefit of one or more natural persons);
(B) No assignment or participation
shall be made to any Person that was a Disqualified Institution as of the date on which the assigning Lender entered into a binding agreement
to sell and assign all or a portion of its rights and obligations under this Agreement to such Person (unless Holdings has consented to
such assignment in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution
for the purpose of such assignment or participation). For the avoidance of doubt, with respect to any assignee that becomes a Disqualified
Institution after the entry into such binding agreement (the date of such agreement, the “Trade Date”) (including
as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Disqualified
Institution”), such assignee shall not retroactively be disqualified from becoming a Lender.
(C) If any assignment or
participation is made to any Disqualified Institution without Holdings’ prior written consent in violation of Section 11.06(b)(vi)(B)
above, or if any Person becomes a Disqualified Institution after the applicable Trade Date, the Borrowers may, at their sole expense and
effort, upon notice to the applicable Disqualified Institution and the Administrative Agent, in accordance with and subject to the provisions
of Section 11.15, require such Disqualified Institution to assign all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an Eligible Assignee.
(D) Notwithstanding anything
to the contrary contained in this Agreement, Disqualified Institutions
(A) will not
(x) have the right to receive
information, reports or other materials provided to Lenders by the Borrowers, the Administrative Agent or any other Lender,
(y) attend or participate in meetings
attended by the Lenders and the Administrative Agent or the Collateral Agent or
(z) access any electronic site
established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent, the Collateral
Agent or the Lenders and
(B) (x) for purposes of any
consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent,
the Collateral Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan
Document, each Disqualified Institution will be deemed to have consented in the same proportion as the Lenders that are not Disqualified
Institutions consented to such matter, and
(y) for purposes of voting on
any bankruptcy plan, each Disqualified Institution party hereto hereby agrees
(1) not to vote on such bankruptcy
plan,
(2) if such Disqualified Institution
does vote on such bankruptcy plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed
not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar
provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the applicable class has accepted
or rejected such bankruptcy plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other
Debtor Relief Laws) and
(3) not to contest any request
by any party for a determination by court of competent jurisdiction effectuating the foregoing clause (2).
(E) The Administrative Agent shall
have the right, and the Borrowers hereby expressly authorize the Administrative Agent, to (A) post the list of Disqualified Institutions
and any updates thereto from time to time on the Platform, including that portion of the Platform that is designated for Public Lenders
and/or (B) provide such list to each Lender requesting the same.
(vii) SPC.
(A) Notwithstanding anything
to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle
(an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent
and the Borrowers, the option to provide to the Borrowers all or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrowers pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of
such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof.
(B) The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting
Lender.
(C) Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender).
(D) In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date
that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC,
it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.
(E) In addition, notwithstanding
anything to the contrary contained in this Section 11.06(b)(vii), any SPC may (i) with notice to, but without
the prior written consent of, Holdings and the Administrative Agent and without paying any processing fee therefor, assign all or a portion
of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by Holdings and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose
on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of
any surety, guarantee or credit or liquidity enhancement to such SPC;
(viii) No Assignment to
Defaulting Lender. No such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon
becoming a Lender hereunder, would constitute a Defaulting Lender; and
(ix) 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 sub-participations, or other compensating actions, including funding, with the consent of Holdings 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, each L/C Issuer, each other Lender hereunder (and interest accrued thereon) and the Borrowers, and
(y) acquire (and fund as appropriate) its full pro rata share of all outstanding Term Loans and/or Revolving Credit Commitments, as applicable,
and all participations in Letters of Credit. 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.
(c) Register.
The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at the
Administrative Agent’s Office 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 Commitments of, and principal amounts (and stated interest) of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). Upon its receipt of, and consent to, a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above, if applicable,
and the written consent of the Administrative Agent and, if required, Holdings and each
L/C Issuer to such assignment and any applicable tax forms required by Section 11.14, the Administrative Agent shall
(i) accept such Assignment and Assumption and (ii) promptly record the information contained therein in the Register. No assignment
shall be effective unless it has been recorded in the Register as provided in this Section 11.06(c).
The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may 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. The Register shall be available for inspection by the Borrowers, any Lender (with respect to
any entry relating to such Lender’s Commitment or Loans) and any L/C Issuer, at any reasonable time and from time to time upon
reasonable prior notice. This Section 11.06(c) and Section 2.11 shall be construed so that all Loans are
at all times maintained in “registered form” within the meaning of Section 163(f), 871(h)(2) and 881(c)(2) of the Code
and any related United States Treasury Regulations (or any other relevant or successor provisions of the Code or of such Treasury
Regulations).
(d) Participations.
(i) Any Lender may at
any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than
a natural person (or a holding company, investment vehicle or trust for, or owned and operated by or for the primary benefit of one or
more natural persons) or Holdings or any of its Affiliates or any Restricted Subsidiary) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans (including such Lender’s participations in L/C Obligations) 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) the Borrowers, the
Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.
(ii) 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 to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification
described in Section 11.01(b), (c), (d), (f) or (g) that affects
such Participant.
(iii) Subject to Section 11.06(e),
the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and
3.05, and subject to the provisions of Section 11.15 and Section 11.14 (it being understood
that the documentation required under Section 11.14 shall be delivered to the participating Lender), to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b).
(iv) To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a Lender.
(v) Each Lender that sells
a participation, and any Granting Lender, shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain
a register on which it enters the name and address of each Participant and SPC and the principal amounts (and stated interest) of
each Participant’s of SPC’s interest in the Loans or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to disclose all
or any portion of the Participant Register (including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) or Proposed Section 1.163-5(b) of the United States Treasury
Regulations (or any amended or successor version).
(vi) The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender 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.
(e) Limitations upon Participant
Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04
than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, except to the
extent such entitlement to receive a greater payment results from a change in Law that occurs after the Participant acquired the applicable
participation. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless such Participant agrees, for the benefit of the applicable, to comply with Section 11.14 as though it were a
Lender (it being understood that the documentation required under Section 11.14 shall be delivered to the participating
Lender).
(f) Certain Pledges.
Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under
its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms
have the following meanings:
“Approved Fund”
means any Fund that is administered 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.
“Eligible Assignee”
means any Person that meets the requirements to be an assignee under Sections 11.06(b)(iii), (v) and
(vi) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).
“Fund”
means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course.
(h) Electronic Execution of Assignments.
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.
(i) Notwithstanding anything to
the contrary set forth herein, any Lender may assign all or any portion of its Term Loans hereunder to Holdings or any of its Subsidiaries,
but only if:
(i) (A) such assignment
is made pursuant to a Dutch Auction open to all Lenders holding Term Loans of the specified Tranche on a pro rata basis or (B) such assignment
is made as an open market purchase;
(ii) no Default or Event of
Default has occurred and is continuing or would result therefrom;
(iii) any such Term Loans shall
be automatically and permanently cancelled immediately upon acquisition thereof by Holdings or any of its Subsidiaries; and
(iv) Holdings and its
Subsidiaries do not use the proceeds of any Revolving Credit Facility (whether or not the Revolving Credit Facility has been increased
pursuant to Section 2.14 or extended pursuant to Section 2.16) to acquire such Term Loans.
11.07 Confidentiality. Each
Agent, each Lender and each L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information
may be disclosed
(a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, trustees, officers, employees, agents, advisors (including accountants, legal counsel
and other advisors) and representatives (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);
(b) to the extent requested by any regulatory
authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners);
(c) to the extent required by applicable
Laws or regulations or by any subpoena or similar legal process;
(d) to any other party to this Agreement;
(e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement, any suit, any other Loan
Document or the enforcement of rights hereunder or thereunder;
(f) subject to an agreement containing
provisions substantially the same as those of this Section 11.07, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the obligations of the Loan Parties;
(g) with the consent of Holdings;
(h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 11.07 or (ii) becomes available to each
Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a non-confidential basis from a source other than Holdings
or any of its Restricted Subsidiaries; or
(i) to any rating agency when required
by it (it being understood that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any
Information relating to the Loan Parties received by it from such Lender).
In addition, each Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending
industry, and service providers to each Agent and the Lenders in connection with the administration, settlement and management of
this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. “Information” means
all information received from any Loan Party or any Restricted Subsidiary relating to any Loan Party or any Restricted Subsidiary or
their respective businesses, other than any such information that is available to any Agent, any Lender or any L/C Issuer on a
non-confidential basis prior to disclosure by any Loan Party or any Restricted Subsidiary, provided that, in the case
of information received from any Loan Party or any Restricted 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 11.07 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.
Each Agent, each Lender and each L/C Issuer
acknowledges that (a) the Information may include material non-public information concerning a Borrower or any of its Subsidiaries, (b)
it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including federal and state securities Laws.
11.08 Setoff. In addition
to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default and
the making of the request or the granting of the consent specified by Section 9.02 to authorize the Administrative
Agent to declare the Loans due and payable pursuant to the provisions of Section 9.02, each Lender and each of their
respective Affiliates is authorized at any time and from time to time, without prior notice to any Loan Party, any such notice being waived
by each Loan Party 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) at any time held by, and other Indebtedness at any time owing by, such Lender to or for the credit or the account
of the respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now or
hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement
or any other Loan Document and although such Obligations may be contingent or unmatured or denominated in a currency different from that
of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any
such set-off and application made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of the Administrative Agent and each Lender and their respective
Affiliates under this Section 11.08 are in addition to other rights and remedies (including, without limitation, other
rights of setoff) that the Administrative Agent, such Lender and their respective Affiliates may have.
11.09 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 Borrowers. In determining whether the
interest contracted for, charged, or received by an 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.
11.10 Counterparts.
This Agreement and each other Loan Document may be executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. To the extent permitted under applicable Law, delivery by
telecopier or e-mail of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be
effective as delivery of an original executed counterpart of this Agreement and such other Loan Document. The Administrative Agent
may also require that any such documents and signatures delivered by telecopier be confirmed by a manually-signed original thereof; provided
that the failure to request or deliver the same shall not limit the effectiveness of any document or signature delivered by
telecopier.
11.11 Integration. This
Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter
hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between
the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided
that the inclusion of supplemental rights or remedies in favor of the Agents or the Lenders in any other Loan Document shall not be deemed
a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.
11.12 Survival of Representations
and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations
and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the
Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any
other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
11.13 Severability. If any
provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and
(b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of
a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11.14 Tax Forms.
(a) (i) Each Lender with respect to
a Loan or Commitment extended to a US Borrower, if such Lender is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code (a “Foreign Lender”) shall, to the extent it is legally able to do so, deliver to the Administrative
Agent and the Borrowers, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an
interest herein), two duly signed completed copies of either IRS Form W-8BEN or IRS Form W-8BEN-E or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on payments to be made to such Foreign Lender
by the Borrowers pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to payments to be made to such Foreign
Lender by the Borrowers pursuant to this Agreement) and such other applicable evidence satisfactory to the Borrowers and the Administrative
Agent that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax (including, in the case of
a Foreign Lender claiming any exemption pursuant to Section 881(c) of the Code, a certificate to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Borrowers within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” related to any
Borrower described in Section 881(c)(3)(C) of the Code) (each a “Tax Compliance Certificate”).
(ii) Each Foreign Lender with respect
to a Loan or Commitment extended to a US Borrower, to the extent it is not the beneficial owner or does not act or ceases to act for
its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example,
in the case of a typical participation by such Lender), shall, to the extent that it is legally able to do so, deliver to the
Administrative Agent and the Borrowers prior to receipt of any payment subject to withholding under the Code (or upon accepting an
assignment of an interest herein) or, if later, on the date when such Foreign Lender ceases to act for its own account with respect
to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the
Administrative Agent and the Borrowers (in the reasonable exercise of their discretion), (A) two duly signed completed copies of the
forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax, and (B) two
duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with IRS Form W-8ECI, IRS Form W-8BEN, IRS Form
W-8BEN-E, Tax Compliance Certificates and/or any other certificate or statement of exemption from each beneficial owner required
under the Code, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect
partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a Tax Compliance
Certificate on behalf of each such direct and indirect partner.
(b) Each Lender with respect to a Loan
or Commitment extended to a US Borrower, if such Lender is a “United States person” within the meaning of Section 7701(a)(30)
of the Code, shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9 or otherwise establish an exemption
from United States back-up withholding tax.
(c) If a payment made to a 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 Borrowers and the Administrative Agent at the time or times prescribed by law and at such time or times
reasonably requested by the Borrowers 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 Borrowers or the Administrative
Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine
whether such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold
from such payment. Solely for purposes of this Section 11.14(c), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement.
(d) To the extent required by any
applicable Laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable
withholding tax. Without limiting or expanding the provisions of Section 3.01, each Lender shall indemnify and
hold harmless the Administrative Agent against, and shall make payable in respect thereof (but only to the extent that the Loan
Party has not already indemnified the Administrative Agent for any Indemnified Taxes pursuant to Section 3.01 and
without limiting the obligation of the Loan Party to do so) within 10 days after demand therefor, any and all taxes and any and all
related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative
Agent) incurred by or asserted against the Administrative Agent by the IRS or any other Governmental Authority as a result of the
failure of the Administrative Agent to properly withhold tax from amounts paid to or for the account of such Lender for any reason
(including, without limitation, because the appropriate form was not delivered or not properly 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). 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 the Administrative
Agent under this Section 11.14(d). The agreements in this Section 11.14(d) 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 the Total Revolving Credit Commitments, repayment, satisfaction or discharge of all other Obligations hereunder and
the resignation of the Administrative Agent.
(e) Each Lender that is entitled to an
exemption from or reduction of withholding Tax with respect to payments hereunder shall deliver to the Borrowers, at the time or times
reasonably requested by the Borrowers, such properly completed and executed documentation reasonably requested by the Borrowers as will
permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding the foregoing, other than with
respect to the documentation described in clauses (a), (b), and (c) of this Section 11.14, the completion, execution and
submission of such documentation 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.
(f) Each Lender agrees that if
any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form
or certification or promptly notify the Administrative Agent and the Borrowers in writing of its legal inability to do so.
11.15 Replacement of Lenders.
(a) Under any circumstances set forth
herein providing that the Borrowers shall have the right to replace a Lender as a party to this Agreement, the Borrowers may, upon notice
to such Lender and the Administrative Agent, replace such Lender by causing such Lender to assign all of its interests, rights and obligations,
with the assignment fee to be paid by the Borrowers in such instance, pursuant to Section 11.06(b) to one or more other
Lenders or Eligible Assignees procured by the Borrowers; provided, however, that if the Borrowers elect to
exercise such right with respect to (i) any Lender pursuant to Section 3.06(b), it shall be obligated to replace all
Lenders that have made similar requests for compensation pursuant to Section 3.01 or 3.04 or (ii) any
Non-Consenting Lender, the applicable assignee shall have agreed to the applicable change, waiver, discharge or termination of this Agreement
and/or the other Loan Documents.
(b) The Borrowers shall
(x) pay in full all principal,
interest, fees and other amounts owing to such Lender through the date of replacement (including any amounts payable pursuant to Section 3.05
or 2.05(a)(iv), as applicable),
(y) provide appropriate assurances
and indemnities (which may include letters of credit) to each L/C Issuer as it may reasonably require with respect to any continuing obligation
to fund participation interests in any L/C Obligations then outstanding, and
(z) release such Lender from
its obligations under the Loan Documents.
(c) Any Lender being replaced shall execute
and deliver an Assignment and Assumption with respect to such Lender’s Commitment and outstanding Loans and participations in L/C
Obligations.
(d) Each Lender hereby grants to the Administrative
Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor,
any Assignment and Assumption necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated
by this Section 11.15.
11.16 Governing Law.
(a) THIS AGREEMENT and
any other loan document (EXCEPT AS OTHERWISE EXPRESSED IN SUCH LOAN DOCUMENT) AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR any other loan document (WHETHER ARISING IN CONTRACT,
TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE
UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS); PROVIDED,
HOWEVER, THAT THE INTERPRETATION OF THE DEFINITION OF “MATERIAL ADVERSE EFFECT” (AS DEFINED IN THE ACQUISITION AGREEMENT
AND USED HEREIN) AND THE DETERMINATION OF THE ACCURACY OF THE SPECIFIED ACQUISITION AGREEMENT REPRESENTATIONS AND WHETHER AS A RESULT
OF ANY INACCURACY THEREOF the INITIAL borrower (OR ANY OF ITS AFFILIATES) HAS THE RIGHT TO TERMINATE ITS (OR THEIR) OBLIGATIONS UNDER
THE ACQUISITION AGREEMENT OR DECLINE TO CONSUMMATE THE CLOSING DATE ACQUISITION, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
(b) EACH LOAN PARTY HEREBY, EXPRESSLY,
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS (EXCEPT IF SPECIFIED
OTHERWISE THEREIN), OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH PARTY HERETO IRREVOCABLY WAIVES (I) ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO AND (II) THEIR RIGHTS
TO ANY OTHER JURISDICTION THAT MAY APPLY BY VIRTUE OF THEIR PRESENT OR ANY OTHER FUTURE DOMICILE OR FOR ANY OTHER REASON. EACH PARTY HERETO
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
(c) EACH LOAN PARTY HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY WITH OFFICES ON THE DATE HEREOF IN NEW YORK, NEW YORK (OR
SUCH OTHER AGENT TO RECEIVE SERVICE OF PROCESS IN NEW YORK, NEW YORK AS IS REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT), AS
ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON
SUCH DESIGNEE, APPOINTEE, AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH LOAN PARTY AGREES TO DESIGNATE A NEW DESIGNEE,
APPOINTEE AND AGENT IN NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER
THIS AGREEMENT. EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH LOAN PARTY
AT ITS ADDRESS SET FORTH ON SCHEDULE 11.02, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWERS IN ANY
OTHER JURISDICTION.
11.17 Binding Effect. This
Agreement shall become effective when it shall have been executed by each of the parties hereto and thereafter shall be binding upon and
inure to the benefit of each of the parties hereto and their respective successors and assigns, except that the Loan Parties shall not
have the right to assign their rights hereunder or any interest herein without the prior written consent of the Administrative Agent,
the L/C Issuers and the Lenders.
11.18 Waiver of Right to Trial by
Jury. 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 THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
11.19 USA PATRIOT Act Notice.
The Administrative Agent (for itself and not on behalf of any Lender) and each Lender hereby notifies the Borrowers that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)) (the “Patriot
Act”), the Beneficial Ownership Regulation and the Proceeds of Crime 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
the Administrative Agent or such Lender, as applicable, to identify each Loan Party in accordance with the Patriot Act, the Beneficial
Ownership Regulation and the Proceeds of Crime Act, as applicable.
11.20 Waiver of Notice of Termination.
Those Lenders party hereto which are also party to the Existing Credit Agreement hereby waive any prior notice requirement under the Existing
Credit Agreement with respect to the termination of commitments thereunder and the making of any prepayments thereunder.
11.21 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
are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
11.22 Joint and Several
Obligations. Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents, the
Secured Hedge Agreements and the Secured Treasury Management Agreements in consideration of the financial accommodation to be
provided by the Lenders, the L/C Issuers, any Agent, Arranger or Lender or any Affiliate of any of the foregoing and the Hedge Banks
under this Agreement, the other Loan Documents, the Secured Hedge Agreements and the Secured Treasury Management Agreements, for the
mutual benefit, directly and indirectly, of the other Borrower and in consideration of the undertakings of the other Borrower to
accept joint and several liability for such Borrower. Each Borrower jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrower with respect to the
payment and performance of all of the Obligations, it being the intention of the parties hereto that all the Obligations shall be
the joint and several obligations of each of the Borrowers without preferences or distinction between them. If and to the extent
that any Borrower shall fail to make any payment with respect to any Obligation as and when due or to perform any Obligation in
accordance with the terms thereof, then in each such event, the other Borrower will make such payment with respect to, or perform,
such Obligation. The obligations of each Borrower under the provisions of this Section 11.22 constitute full
recourse obligations of such Borrower, enforceable against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other circumstances whatsoever. The provisions of this Section
11.22 supplement, and are not in limitation of, the provisions of Article IV hereof as they apply to each
Borrower as a Guarantor (except as to its own primary Obligations) of the Obligations of each other Loan Party.
Each Borrower hereby waives, to the maximum
extent permitted by applicable Law, notice of acceptance of its joint and several liability. Each Borrower hereby waives, to the maximum
extent permitted by law, notice of any Loan made under this Agreement, notice of occurrence of any Default or Event of Default or of any
demand for any payment under this Agreement, notice of any action at any time taken or omitted by any Lender under or in respect of any
of the Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection
with this Agreement. Each Borrower hereby assents to, and waives notice of, to the maximum extent permitted by applicable Law, any extension
or postponement of the time for the payment of any Obligation, the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by any Lender at any time or times in respect of any default by the other Borrower in the performance or satisfaction
of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by any Lender in respect of
any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security
for any Obligation or the addition, substitution or release, in whole or in part, of the other Borrower. Without limiting the generality
of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including,
without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with the applicable
Laws or regulations thereunder which might, but for the provisions of this Section 11.22, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 11.22,
it being the intention of each Borrower that, so long as any Obligation remains unsatisfied, the obligations of such Borrower under this
Section 11.22 shall not be discharged except by performance or payment and then only to the extent of such performance
or payment. The obligations of each Borrower under this Section 11.22 shall not be diminished or rendered unenforceable
by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower or any
Lender. The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any
Lender.
The provisions of this Section 11.22 are
made solely for the benefit of the Administrative Agent and the other Secured Parties and their respective successors and assigns,
and may be enforced by any such Person from time to time against any Borrower as often as occasion therefor may arise and without
requirement on the part of the Administrative Agent or any other Secured Party first to marshal any of its claims or to exercise any
of its rights against the other Borrower or to exhaust any remedies available to it against the other Borrower or to resort to any
other source or means of obtaining payment of any Obligation or to elect any other remedy. If at any time, any payment, or any part
thereof, made in respect of any Obligation, is rescinded or must otherwise be restored or returned by the Administrative Agent or
any other Secured Party upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 11.22 will
forthwith be reinstated in effect, as though such payment had not been made.
Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, to the extent the joint and several obligations of any Borrower shall be adjudicated to
be invalid or unenforceable for any reason (including because of any applicable state, provincial or federal law relating to fraudulent
conveyances or transfers) then the obligations of such Borrower hereunder shall be limited to the maximum amount that is permissible under
applicable Law (whether federal, state or provincial and including, without limitation, Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Debtor Relief Laws), after taking into account, among other things, such Borrower’s
right of contribution and indemnification from each other Loan Party under applicable Law.
11.23 Judgment Currency.
(a) The obligations of the Borrowers or
any Additional Borrower under the Loan Documents to make payments in Dollars(the “Obligation Currency”), shall
not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent
or a Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent or Lender under the Loan
Documents. If, for the purpose of obtaining or enforcing judgment against any Loan Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as
the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made, at the Dollar
Equivalent of such amount, in each case, as of the date immediately preceding the day on which the judgment is given (such Business Day
being hereinafter referred to as the “Judgment Currency Conversion Date”).
(b) If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrowers covenant
and agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce
the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. The Borrowers shall indemnify and save
the Administrative Agent and the Lenders harmless from and against all loss or damage arising as a result of such deficiency. This indemnity
shall constitute an obligation separate and independent from the other obligations contained in this Agreement and the other Loan Documents,
shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Administrative
Agent from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect
of an amount due under this Agreement or any other Loan Document or under any judgment or order.
For purposes of determining the Dollar
Equivalent, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.
11.24 Acknowledgement and
Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary set forth 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 Affected 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 the applicable 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 the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any
party hereto that is an Affected 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 Affected 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 the applicable Resolution Authority.
11.25 Acknowledgement Regarding
Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Secured Hedge
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 or such QFC Credit Support)
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 11.25,
the following terms have the following meanings:
(i) “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.
(ii) “Covered Entity”
means any of the following:
(A) a “covered entity”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(B) a “covered bank”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(C) a “covered FSI”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
(iii) “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.
(iv) “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).
11.26 Canadian AML Legislation.
(a) Each Canadian Loan Party acknowledges
that, pursuant to the Proceeds of Crime Act and other applicable anti-money laundering, anti-terrorist financing, government sanction
and “know your client” Laws, whether within Canada or elsewhere (collectively, including any guidelines or orders thereunder,
“AML Legislation”), the Lenders and the Administrative Agent may be required to obtain, verify and record information
regarding the Borrowers, their directors, authorized signing officers, direct or indirect shareholders or other Persons in control of
such Borrower, and the transactions contemplated hereby. Each Canadian Loan Party shall promptly provide all such information, including
supporting documentation and other evidence, as may be reasonably requested by any Lender or the Administrative Agent, or any prospective
assign or participant of a Lender or the Administrative Agent, in order to comply with any applicable AML Legislation, whether now or
hereafter in existence.
(b) If the Administrative Agent has ascertained
the identity of a Canadian Loan Party or any authorized signatories of such Canadian Loan Party for the purposes of applicable AML Legislation,
then the Administrative Agent:
(i) shall be deemed to
have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between
each Lender and the Administrative Agent within the meaning of applicable AML Legislation; and
(ii) shall provide to each Lender
copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise
be agreed in writing, each of the Lenders agrees that the Administrative Agent has no obligation to ascertain the identity of a Canadian
Loan Party or any authorized signatories of such Canadian Loan Party on behalf of any Lender, or to confirm the completeness or accuracy
of any information it obtains from such Canadian Loan Party or any such authorized signatory in doing so.
11.27 No Fiduciary Duty.
Each of the Agents, the Arrangers, the Lenders, the L/C Issuers and their respective Affiliates (collectively, solely for purposes of
this paragraph, the “Credit Parties”), may have economic interests that conflict with those of the Loan Parties,
their stockholders and/or their respective affiliates. Each Loan Party agrees that nothing in the Loan Documents or any course of dealing
thereunder will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Credit
Party, on the one hand, and such Loan Party, its respective stockholders or its respective affiliates, on the other. Each Loan Party acknowledges
and agrees that: (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Credit Parties, on the one hand, and the Loan Parties, on the other,
and (ii) in connection therewith and with the process leading thereto, (x) no Credit Party, in its capacity as such, has assumed an advisory
or fiduciary responsibility in favor of any Loan Party, its respective stockholders or its respective affiliates with respect to the transactions
contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether
any Credit Party has advised, is currently advising or will advise any Loan Party, its respective stockholders or its respective Affiliates
on other matters) or any other obligation to any Loan Party except the obligations expressly set forth in the Loan Documents and (y) each
Credit Party, in its capacity as such, is acting solely as principal and not as the agent or fiduciary of such Loan Party, its respective
management, stockholders, creditors or any other Person. Each Loan Party acknowledges and agrees that such Loan Party has consulted its
own legal, tax and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment
with respect to such transactions and the process leading thereto.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above
written.
| |
AAL DELAWARE HOLDCO, INC., as the Initial Borrower |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President and CEO |
| |
|
|
| |
ASP ACUREN HOLDINGS, INC., as a Borrower |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
ACUREN CORPORATION, as Holdings |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
Chief Executive Officer |
| |
ASP ACUREN
INTERMEDIATE HOLDINGS, INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name: |
Talman
Pizzey |
| |
|
Title:
|
President |
| |
|
|
| |
ROCKWOOD
SERVICE CORPORATION, as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name:
|
Talman
Pizzey |
| |
|
Title:
|
President |
| |
|
|
| |
ACUREN
USA, INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name:
|
Talman
Pizzey |
| |
|
Title:
|
President |
| |
|
|
| |
ACUREN
WIND US INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name:
|
Talman
Pizzey |
| |
|
Title:
|
President |
| |
|
|
| |
ACUREN
INSPECTION, INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name:
|
Talman
Pizzey |
| |
|
Title:
|
President |
| |
CENTURY INSPECTION, INC., as a Guarantor |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
ADV INTEGRITY, INC., as a Guarantor |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
HT ENGINEERING, INC., as a Guarantor |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
ECHO NDE USA, INC., as a Guarantor |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
GBOG HOLDING CORPORATION, as a Guarantor |
| |
|
| |
By: |
/s/ Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
VERSA
INTEGRITY GROUP, INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
TEI
ANALYTICAL SERVICES, INC., as a Guarantor |
| |
|
| |
By: |
/s/
Talman Pizzey |
| |
|
Name: |
Talman Pizzey |
| |
|
Title: |
President |
| |
|
|
| |
ROCKWOOD
CANADA HOLDINGS LIMITED, as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ROCKWOOD
CANADA INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
BAKOSNDT
LTD., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
ECHO
NDE INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
NEXTGEN
TANK INSPECTION INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
TRIQUEST
NONDESTRUCTIVE TESTING CORP., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
2471981
ALBERTA LTD., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ACUREN
INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
ACUREN
GROUP INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ACUREN
INDUSTRIAL HOLDINGS INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ACUREN
ÉOLIENNE CANADA INC. / ACUREN WIND CANADA INC.,
as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ECLIPSE
SCIENTIFIC PRODUCTS INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
TACTEN
INDUSTRIAL INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
CAMBRIDGE
MATERIALS TESTING LIMITED, as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
|
|
| |
ROCKWOOD
CANADA SHARED SERVICES INC., as a Guarantor |
| |
|
| |
By: |
/s/
Fiona Sutherland |
| |
|
Name: |
Fiona Sutherland |
| |
|
Title: |
Secretary |
| |
JEFFERIES
FINANCE LLC, as Administrative Agent, Collateral Agent, Revolving Credit Lender and L/C Issuer |
| |
|
| |
By: |
/s/
John Koehler |
| |
|
Name: |
John Koehler |
| |
|
Title: |
Managing Director |
| |
|
|
| |
CITIBANK,
N.A., as a Revolving Credit Lender and L/C Issuer |
| |
|
| |
By: |
/s/
Michael Braganza |
| |
|
Name: |
Michael Braganza |
| |
|
Title: |
Authorized |
| |
|
|
| |
UBS
AG, STAMFORD BRANCH, as a Revolving Credit Lender and L/C Issuer |
| |
|
| |
By: |
/s/
Muhammad Afzal |
| |
|
Name: |
Muhammad Afzal |
| |
|
Title: |
Director |
| |
|
|
| |
By: |
/s/
Danielle Calo |
| |
|
Name: |
Danielle Calo |
| |
|
Title: |
Associate Director |
Exhibit 10.6
Execution Version
PLEDGE AND SECURITY
AGREEMENT
made by
AAL DELAWARE HOLDCO,
INC.,
ASP ACUREN HOLDINGS,
INC.,
and
ACUREN CORPORATION,
and
THE GRANTORS FROM
TIME TO TIME PARTY HERETO
in favor of
JEFFERIES FINANCE
LLC, as Collateral Agent
dated as of July
30, 2024
TABLE
OF CONTENTS
| |
Page |
| SECTION 1. |
DEFINED TERMS |
1 |
| |
|
|
| 1.01 |
Definitions |
1 |
| 1.02 |
Other Definitional Provisions |
9 |
| |
|
|
| SECTION 2. |
GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL |
10 |
| |
|
|
| SECTION 3. |
REPRESENTATIONS AND WARRANTIES |
13 |
| |
|
|
| 3.01 |
Title; No Other Liens |
13 |
| 3.02 |
Perfected First Priority Liens |
13 |
| 3.03 |
Name; Jurisdiction of Organization, etc. |
14 |
| 3.04 |
Inventory and Equipment |
14 |
| 3.05 |
Farm Products |
14 |
| 3.06 |
Investment Property |
14 |
| 3.07 |
Receivables |
15 |
| 3.08 |
Intellectual Property |
16 |
| 3.09 |
Letters of Credit and Letter-of-Credit-Rights |
18 |
| 3.10 |
Commercial Tort Claims |
19 |
| 3.11 |
Contracts |
19 |
| |
|
|
| SECTION 4. |
COVENANTS |
19 |
| |
|
|
| 4.01 |
Covenants in Credit Agreement |
19 |
| 4.02 |
Delivery and Control of Instruments, Chattel Paper, Negotiable Documents and Investment Property |
19 |
| 4.03 |
Maintenance of Insurance |
20 |
| 4.04 |
BVI Security Arrangements |
21 |
| 4.05 |
Maintenance of Perfected Security Interest; Further Documentation |
21 |
| 4.06 |
Changes in Locations, Name, Jurisdiction of Incorporation, etc. |
22 |
| 4.07 |
Notices |
22 |
| 4.08 |
Investment Property |
22 |
| 4.09 |
Receivables |
24 |
| 4.10 |
Intellectual Property |
24 |
| 4.11 |
Contracts |
27 |
| 4.12 |
Commercial Tort Claims |
27 |
| |
|
|
| SECTION 5. |
REMEDIAL PROVISIONS |
27 |
| |
|
|
| 5.01 |
Certain Matters Relating to Receivables |
27 |
| 5.02 |
Communications with Obligors; Grantors Remain Liable |
27 |
| 5.03 |
Pledged Securities |
28 |
| 5.04 |
Proceeds to be Turned Over To Collateral Agent. |
29 |
| 5.05 |
Application of Proceeds |
29 |
| 5.06 |
Code and Other Remedies |
29 |
| 5.07 |
Registration Rights |
30 |
| 5.08 |
Deficiency |
31 |
| 5.09 |
Non-Judicial Enforcement |
31 |
| |
|
|
| SECTION 6. |
THE COLLATERAL AGENT |
32 |
| |
|
|
| 6.01 |
Collateral Agent’s Appointment as Attorney-in-Fact, etc. |
32 |
| 6.02 |
Duty of Collateral Agent |
34 |
| 6.03 |
Filing of Financing Statements |
34 |
| 6.04 |
Authority of Collateral Agent |
35 |
| 6.05 |
Appointment of Co-Collateral Agents |
35 |
| |
|
|
| SECTION 7. |
MISCELLANEOUS |
35 |
| |
|
|
| 7.01 |
Amendments in Writing |
35 |
| 7.02 |
Notices |
35 |
| 7.03 |
No Waiver by Course of Conduct; Cumulative Remedies |
36 |
| 7.04 |
Enforcement Expenses; Indemnification |
36 |
| 7.05 |
Successors and Assigns |
36 |
| 7.06 |
Set-Off |
37 |
| 7.07 |
Counterparts |
37 |
| 7.08 |
Severability |
37 |
| 7.09 |
Section Headings |
37 |
| 7.10 |
Integration |
37 |
| 7.11 |
APPLICABLE LAW |
38 |
| 7.12 |
Submission to Jurisdiction; Waivers |
38 |
| 7.13 |
Acknowledgments |
39 |
| 7.14 |
Additional Grantors |
39 |
| 7.15 |
Releases |
39 |
| 7.16 |
WAIVER OF JURY TRIAL |
40 |
| 7.17 |
Reinstatement |
40 |
| Exhibits: |
|
| |
|
| Exhibit A |
Form of Trademark Security Agreement |
| Exhibit B |
Form of Copyright Security Agreement |
| Exhibit C |
Form of Patent Security Agreement |
| |
|
| Annex: |
|
| |
|
| Annex 1 |
Form of Assumption Agreement |
| |
|
| Schedules: |
|
| |
|
| Schedule 3.02 |
Filings and Other Actions Required to Perfect Security Interests |
| Schedule 3.03 |
Organizational Information |
| Schedule 3.06(a) |
Description of Equity Instruments |
| Schedule 3.06(b) |
Description of Pledged Debt Instruments |
| Schedule 3.08(a) |
Intellectual Property |
| Schedule 3.08(b) |
Subsistence; Expiration; Abandonment |
| Schedule 3.08(c) |
Licenses, etc. |
| Schedule 3.08(d) |
Validity and Enforceability |
| Schedule 3.08(e) |
Actions and Proceedings; Misappropriations, Infringements; Dilutions and Other Violations |
| Schedule 3.08(g) |
Fees and Taxes |
| Schedule 3.08(i) |
Filings and Recordations |
| Schedule 3.09 |
Letter of Credit Rights |
| Schedule 3.10 |
Commercial Tort Claims |
PLEDGE
AND SECURITY AGREEMENT, dated as of July 30, 2024, made by each of the signatories hereto (together with any other entity that may become
a party hereto as provided herein, including each Grantor) in favor of JEFFERIES FINANCE LLC, as collateral agent (in such capacity and
together with its successors, the “Collateral Agent”) for (i) the banks and other financial institutions or entities
(the “Lenders”) from time to time parties to the Credit Agreement, dated as of July 30, 2024 (as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among AAL DELAWARE
HOLDCO, INC., a Delaware Corporation, as the Initial Borrower, ASP ACUREN HOLDINGS, INC., a Delaware corporation, as a Borrower, and together
with the Initial Borrower, the Borrowers, ACUREN CORPORATION, a British Virgin Islands company, as Holdings, the Lenders party thereto
and JEFFERIES FINANCE LLC, as administrative agent (in such capacity and together with
its successors, the “Administrative Agent”) and as Collateral Agent and (ii) the other Secured Parties (as hereinafter
defined).
W
I T N E S S E T H:
WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject
to the conditions set forth therein;
WHEREAS,
the Borrowers are members of an affiliated group of companies that includes each other Grantor;
WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrowers to make valuable transfers
to one or more of the other Grantors in connection with the operation of their respective businesses;
WHEREAS,
the Borrowers and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of
the Secured Parties;
NOW,
THEREFORE, in consideration of the premises and to induce the Administrative Agent, the Collateral Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Grantor
hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:
SECTION
1. DEFINED TERMS
1.01 Definitions.
(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the New York UCC (and if defined in more than one
Article of the New York UCC, such terms shall have the meanings given in Article 9 thereof): Accounts, Account Debtor, As-Extracted
Collateral, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Deposit Account, Electronic Chattel Paper, Equipment, Farm Products, Financial Asset, Fixtures, Negotiable
Document, Goods, Instruments, Inventory, Letter of Credit, Letter of Credit Rights, Money, Payment Intangibles, Securities Account,
Securities Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper and Uncertificated
Security.
(b) The
following terms shall have the following meanings:
“Administrative
Agent” shall have the meaning assigned to such term in the preamble.
“After-Acquired
Intellectual Property” shall have the meaning assigned to such term in Section 4.10(k).
“Agreement”
shall mean this Pledge and Security Agreement, as the same may be amended, supplemented, replaced or otherwise modified from time to time.
“BCA”
shall have the meaning assigned to such term in Section 4.04(a).
“Business
Day” shall mean any day other than a Saturday, Sunday or day on which commercial banks in New York City are authorized or required
by law to close.
“Closing
Date” shall mean the date hereof.
“Collateral”
shall have the meaning assigned to such term in Section 2.
“Collateral
Account” shall mean (i) any collateral account established by the Collateral Agent as provided in Section 5.01 or 5.04
or (ii) any cash collateral account established as provided in Section 2.03(g) of the Credit Agreement.
“Collateral
Account Funds” shall mean, collectively, the following: all funds (including all trust monies), investments (including all Permitted
Investments) credited to, or purchased with funds from, any Collateral Account and all certificates and instruments from time to time
representing or evidencing such investments; all notes, certificates of deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Collateral Agent for or on behalf of any Grantor in substitution for, or in addition to, any
or all of the Collateral; and all interest, dividends, cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the items constituting Collateral.
“Collateral
Agent” shall have the meaning assigned to such term in the preamble.
“Contracts”
shall mean all contracts and agreements between any Grantor and any other person (in each case, whether written or oral, or third party
or intercompany) as the same may be amended, extended, restated, supplemented, replaced or otherwise modified from time to time including
(i) all rights of any Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of
any Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto, (iii) all rights of any Grantor
to damages arising thereunder, and (iv) all rights of any Grantor to terminate and to perform and compel performance of, such contracts
and to exercise all remedies thereunder.
“Copyright
Licenses” shall mean all agreements, whether written or oral, providing for the grant by or to any Grantor of any right in,
to or under any Copyrights, including the grant of rights to reproduce, distribute, perform, publicly display, and make derivative works
of any work protected by copyright, including any Exclusive Copyright Licenses.
“Copyrights”
shall mean (i) all copyrights arising under the laws of the United States, any other country, or union of countries, or any political
subdivision of any of the foregoing, whether registered or unregistered and whether published or unpublished, all registrations and recordings
thereof, and all applications in connection therewith and rights corresponding thereto throughout the world, including all registrations,
recordings and applications in the United States Copyright Office, including the registered copyrights and applications therefor listed
in Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time), (ii) the right to, and to obtain, all
extensions and renewals thereof, (iii) the right to sue or otherwise recover for past, present and future infringements of any of
the foregoing, and (iv) all Proceeds of the foregoing, including license fees, royalties, income, payments, claims, damages, and proceeds
of suit.
“Credit
Agreement” shall have the meaning assigned to such term in the preamble.
“dollars”
or “$” shall mean lawful money of the United States of America.
“Excluded
Account” shall mean any Deposit Account (a) used for trust, payroll, payroll taxes and other employee wage and benefit payments
to or for the benefit of any Loan Party or any Subsidiary, (b) used for Taxes required to be collected, remitted or withheld, (c) used
for cash collateral required for letters of credit (other than Letters of Credit) to the extent permitted under the Credit Agreement,
(d) used for holding funds required to be held in escrow, trust, or similar arrangements for the benefit of an unaffiliated third party
in connection with an Investment permitted by the Credit Agreement.
“Excluded
Assets” shall mean (i) all leasehold interests; (ii) all cars, trucks, trailers, construction, special purpose and other Vehicles
and Equipment covered by a certificate of title of any state or of the United States of America and all appurtenants to any of the foregoing
(except to the extent perfection can be obtained by filing of UCC financing statements); (iii) any leases, licenses, permits or agreements
with respect to any purchase money indebtedness (or similar arrangement, in each case, to the extent permitted under the Credit Agreement)
to the extent, and so long as, a grant of a security interest therein, or in the property or assets that secure the underlying obligations
with respect thereto (A) is prohibited by applicable law other than to the extent such prohibition is rendered ineffective under the UCC,
the PPSA or other applicable law notwithstanding such prohibition or (B) would violate or invalidate such lease, license, permit or agreement,
or create a right of termination in favor of, or require the consent of, any other party thereto (other than Holdings and its Restricted
Subsidiaries) (in each case, other than the proceeds thereof, and only to the extent that, and for so long as such limitation on such
pledge or security interest is otherwise permitted under the Credit Agreement) in each case described in clauses (A) and (B), (x) other
than Proceeds thereof and receivables with respect thereto and (y) only after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity; provided,
however, that the Collateral shall include (and such security interest shall attach and the definition of Excluded Assets shall
not then include) immediately at such time as the contractual or legal provisions or the condition causing such violation, invalidation,
right of termination, prohibition or restriction referred to in the foregoing clauses (A) and (B) shall no longer be applicable and to
the extent severable, and shall attach immediately to any portion of such lease, license, contract, property, right, agreement or other
asset not subject to the provisions specified above; (iv) any “intent-to-use” application for registration of a Trademark
filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant
to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect
thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein
would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal
law; (v) any assets (other than Equity Interests in Material Canadian Subsidiaries) if Holdings and the Collateral Agent reasonably agree
that the costs (including tax costs) of creating or perfecting such pledges or security interests in such assets are excessive in relation
the benefits to the Lenders; (vi) any Excluded Account; (vii) Margin Stock; (viii) any asset if the granting of a security interest therein
could reasonably be expected to result in a material adverse tax consequence to such Grantor as determined in good faith by Holdings;
(ix) any asset if the granting of a security interest in such asset would be prohibited by enforceable anti-assignment provisions of permitted
contracts (after giving effect to relevant provisions of the UCC or the PPSA) or such security interest is restricted by applicable laws
or the pledge or creation of a security interest in which would require governmental consent, approval, license or authorization, other
than to the extent such prohibition or limitation is rendered ineffective under the UCC, the PPSA or other applicable law notwithstanding
such prohibition; (x) any real property that is not Material Real Property, (xi) governmental licenses, state, provincial, territorial
or local franchises, charters and authorizations and any other property and assets to the extent that the Collateral Agent may not validly
possess a security interest therein or such security interest is restricted by applicable laws (including, without limitation, rules and
regulations of any governmental authority or agency) or the pledge or creation of a security interest in which would require governmental
consent, approval, license or authorization or would otherwise require consent thereunder (solely to the extent such consent has not been
obtained after the use of commercially reasonable efforts), other than to the extent such prohibition or limitation is rendered ineffective
under the UCC, the PPSA or other applicable law notwithstanding such prohibition (but excluding proceeds of any such governmental license),
(xii) Equity Interests in any person (other than a wholly owned Restricted Subsidiary) to the extent a security interest in not permitted
to be granted by the terms of such person’s organizational documents or joint venture documents, so long as such prohibition was
not created in contemplation hereof (xiii) Commercial Tort Claims with a value of less than $20,000,000 for all such Commercial Tort Claims
in the aggregate, and (xiv) subject to Section 2(a) hereof, the capital stock of any Excluded Subsidiary.
“Excluded
Equity Interests” shall have the meaning assigned to such term in Section 2(a) hereof.
“Exclusive
Copyright Licenses” shall mean all agreements, whether written or oral, providing for the grant to any Grantor of any exclusive
right in, to or under any United States registered Copyright that is material to such Grantor’s business, including any of the foregoing
listed on Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time).
“General
Intangibles” shall mean all “general intangibles” as such term is defined in Article 9 of the New York UCC and,
in any event, including with respect to any Grantor, all rights of such Grantor to receive any tax refunds, all Swap Contracts and all
contracts, agreements, instruments and indentures and all licenses, permits, concessions, franchises and authorizations issued by Governmental
Authorities in any form, and portions thereof, to which such Grantor is a party or under which such Grantor has any right, title or interest
or to which such Grantor or any property of such Grantor is subject, as the same may from time to time be amended, supplemented, replaced
or otherwise modified, including (i) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto,
(iii) all rights of such Grantor to damages arising thereunder and (iv) all rights of such Grantor to terminate and to perform and compel
performance and to exercise all remedies thereunder.
“Grantors”
means Holdings, each Intermediate Holding Company, each of the Borrowers, each of the Subsidiary Guarantors and any other entity that
becomes a Grantor hereunder pursuant to Section 7.14.
“Immaterial
Intellectual Property” means Intellectual Property owned by or licensed to a Grantor which is registered, issued or applied
for and that is, to such Grantor’s knowledge, immaterial to the business of such Grantor and, together with all other Immaterial
Intellectual Property of the Grantors, does not support or relate to services or products contributing at least 3% of worldwide sales
of the Borrowers and their respective Subsidiaries.
“Insurance”
shall mean (i) all property and casualty insurance policies covering any or all of the Collateral (regardless of whether the Collateral
Agent is the loss payee thereof) and (ii) any key man life insurance policies.
“Intellectual
Property” shall mean the collective reference to all rights, priorities and privileges relating to any intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including all Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets and Trade Secret Licenses, together with URLs, domain names, content of
websites and databases, and all rights to sue at law or in equity for any past, present and future infringement, misappropriation, dilution
or other violation of any of the foregoing, and the right to receive all Proceeds therefrom, including license fees, royalties, income,
payments, claims, damages and proceeds of suit.
“Intellectual
Property Collateral” shall mean that portion of the Collateral that constitutes Intellectual Property.
“Investment
Property” shall mean the collective reference to (i) all “investment property” as such term is defined in Section
9-102(a)(49) of the New York UCC including all Certificated Securities and Uncertificated Securities, all Security Entitlements, all Securities
Accounts, all Commodity Contracts and all Commodity Accounts, (ii) security entitlements, in the case of any United States Treasury
book-entry securities, as defined in 31 C.F.R. section 357.2, or, in the case of any United States federal agency book-entry securities,
as defined in the corresponding United States federal regulations governing such book-entry securities, and (iii) whether or not
otherwise constituting “investment property,” all Pledged Notes, all Pledged Equity Interests, all Pledged Security Entitlements
and all Pledged Commodity Contracts.
“Issuers”
shall mean the collective reference to each issuer of a Pledged Security.
“Lenders”
shall have the meaning assigned to such term in the preamble.
“Licensed
Intellectual Property” shall have the meaning assigned to such term in Section 3.08(a).
“Material
Contract” shall mean each agreement, contract or license (including any license of Intellectual Property) or other arrangement
(a) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to the Grantors
and their Subsidiaries; (b) which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase
price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $5,000,000; (c) which contains
any provision that would by its terms restrict or alter the conduct of business of, or purport to restrict or alter the conduct of business
of, the Grantors or any of their Subsidiaries; or (d) which by its terms calls for aggregate payments by the Grantors or any of their
Subsidiaries of more than $5,000,000 over the remaining term of such agreement, contract, license or other arrangement except for any
such agreement contract or license or other arrangement that may be canceled, without any material penalty or other liability to the Grantors
or any of their Subsidiaries, upon notice of 90 days or less.
“New
York UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.
“Obligations”
shall have the meaning assigned to such term in the Credit Agreement.
“Owned
Intellectual Property” shall have the meaning assigned to such term in Section 3.08(a).
“Patent
License” shall mean all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture,
use, import or sell any invention or design covered by any Patents.
“Patents”
shall mean (i) all letters of patent of the United States, any other country, union of countries or any political subdivision of
any of the foregoing, all reissues and extensions thereof, including any of the foregoing listed in Schedule 3.08(a) (as such schedule
may be amended or supplemented from time to time), (ii) all applications for letters of patent of the United States or any other country
or union of countries or any political subdivision of any of the foregoing and all divisions, continuations and continuations-in-part
thereof, including any of the foregoing listed in Schedule 3.08(a) (as such schedule may be amended or supplemented from time to
time), (iii) the right to, and to obtain, any reissues or extensions of the foregoing, (iv) the right to sue or otherwise recover for
past, present and future infringement of any of the foregoing, and (v) all Proceeds of the foregoing, including license fees, royalties,
income, payments, claims, damages and proceeds of suit.
“Payment
in Full of the Obligations” shall mean the payment in full of the Obligations as determined in accordance with Section 1.02(d).
“person”
shall mean any natural person, institution, sole proprietorship, unincorporated organization, public benefit corporation, corporation,
trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental
Authority or other entity.
“Pledged
Alternative Equity Interests” shall mean all interests of any Grantor in participation or other interests in any equity or profits
of any business entity and the certificates, if any, representing such interests and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such interests and any other warrant, right or option to acquire any of the foregoing; provided,
however, that Pledged Alternative Equity Interests shall not include any Pledged Stock, Pledged Partnership Interests, Pledged
LLC Interests, Pledged Trust Interests or Excluded Equity Interests.
“Pledged
Collateral” shall mean the collective reference to the Pledged Commodity Contracts, the Pledged Securities and the Pledged Security
Entitlements.
“Pledged
Commodity Contracts” shall mean all Commodity Contracts to which any Grantor is party from time to time.
“Pledged
Debt Securities” shall mean all debt securities now owned or hereafter acquired by any Grantor, including the debt securities
listed on Schedule 3.06(b), (as such schedule may be amended or supplemented from time to time), together with any other certificates,
options, rights or security entitlements of any nature whatsoever in respect of the debt securities of any person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect.
“Pledged
Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests
and Pledged Alternative Equity Interests.
“Pledged
LLC Interests” shall mean all interests of any Grantor now owned or hereafter acquired in any limited liability company, including
all limited liability company interests listed on Schedule 3.06(a) hereto under the heading “Pledged LLC Interests”
(as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such limited liability
company interests and any interest of such Grantor on the books and records of such limited liability company and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited liability company interests and any other warrant, right or option
to acquire any of the foregoing; provided, that Pledged LLC Interests shall not include any Excluded Equity Interests.
“Pledged
Notes” shall mean all promissory notes now owned or hereafter acquired by any Grantor, including those listed on Schedule 3.06(b)
(as such schedule may be amended or supplemented from time to time).
“Pledged
Partnership Interests” shall mean all interests of any Grantor now owned or hereafter acquired in any general partnership, limited
partnership, limited liability partnership or other partnership, including all partnership interests listed on Schedule 3.06(a) hereto
under the heading “Pledged Partnership Interests” (as such schedule may be amended or supplemented from time to time) and
the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and records of such partnership
and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other
warrant, right or option to acquire any of the foregoing; provided, that Pledged Partnership Interests shall not include any Excluded
Equity Interests.
“Pledged
Securities” shall mean the collective reference to the Pledged Debt Securities, the Pledged Notes and the Pledged Equity Interests.
“Pledged
Security Entitlements” shall mean all Security Entitlements of any Grantor.
“Pledged
Stock” shall mean all shares of capital stock now owned or hereafter acquired by any Grantor, including all shares of capital
stock listed on Schedule 3.06(a) hereto under the heading “Pledged Stock” (as such schedule may be amended or supplemented
from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in the entries on the books
of the issuer of such shares and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property
or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares
and any other warrant, right or option to acquire any of the foregoing; provided, that Pledged Stock shall not include any Excluded
Equity Interests.
“Pledged
Trust Interests” shall mean all interests of any Grantor now owned or hereafter acquired in a Delaware business trust or other
trust, including all trust interests listed on Schedule 3.06(a) hereto under the heading “Pledged Trust Interests” (as such
schedule may be amended or supplemented from time to time) and the certificates, if any, representing such trust interests and any interest
of such Grantor on the books and records of such trust or on the books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange for any or all of such trust interests and any other warrant,
right or option to acquire any of the foregoing; provided, that Pledged Trust Interests shall not include Excluded Equity Interests.
“Proceeds”
shall mean all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include
all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.
“Receivable”
shall mean all Accounts and any other right to payment for goods or other property sold, leased, licensed or otherwise disposed of or
for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper or classified as a Payment Intangible
and whether or not it has been earned by performance. References herein to Receivables shall include any Supporting Obligation or collateral
securing such Receivable.
“Register
of Charges” shall have the meaning assigned to such term in Section 4.04(a).
“Registry”
shall have the meaning assigned to such term in Section 4.04(a).
“Secured
Hedge Agreement” shall have the meaning assigned to such term in the Credit Agreement.
“Secured
Parties” shall have the meaning assigned to such term in the Credit Agreement.
“Secured
Treasury Management Agreement” shall have the meaning assigned to such term in the Credit Agreement.
“Securities
Act” shall mean the Securities Act of 1933, as amended.
“Subsidiary”
shall mean any subsidiary of Holdings.
“Syndication
Agent” shall have the meaning assigned to such term in the preamble.
“Trademark
License” shall mean any agreement, whether written or oral, providing for the grant by or to any Grantor of any right in, to
or under any Trademark.
“Trademarks”
shall mean (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles,
service marks, logos, designs and other source or business identifiers, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country, union of countries, or any political subdivision of any of the foregoing, or otherwise, and all
common-law rights related thereto, including any of the foregoing listed in Schedule 3.08(a) (as such schedule may be amended or
supplemented from time to time), (ii) the right to, and to obtain, all renewals thereof, (iii) the goodwill of the business connected
with the use of and symbolized by the foregoing, (iv) the right to sue or otherwise recover for past, present and future infringements
or dilution of any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing, including license fees, royalties,
income, payments, claims, damages and proceeds of suit.
“Trade
Secret License” shall mean any agreement, whether written or oral, providing for the grant by or to any Grantor of any right
in, to or under any Trade Secret.
“Trade
Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how, whether or not
reduced to a writing or other tangible form, including all documents and things embodying, incorporating or describing any of the foregoing,
together with (i) the right to sue or otherwise recover for past, present and future misappropriation of any of the foregoing and
(ii) all proceeds of the foregoing, including license fees, royalties, income, payments, claims, damages and proceeds of suit.
“ULC”
means an unlimited company, an unlimited liability company or an unlimited liability corporation organized under or otherwise governed
by a ULC Law.
“ULC
Laws” means the Companies Act (Nova Scotia), the Business Corporations Act (Alberta), the Business Corporations Act (British
Columbia) and any other present or future laws governing ULCs.
“ULC
Shares” means shares or other equity interests in the capital stock of a ULC.
“Vehicles”
shall mean all cars, trucks, trailers, construction and earth moving equipment and other Equipment of any nature covered by a certificate
of title law of any jurisdiction and all tires and other appurtenances to any of the foregoing.
1.02 Other
Definitional Provisions.
(a) The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule
references are to the specific provisions of this Agreement unless otherwise specified.
(b) The
meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c) Where
the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to the property
or assets such Grantor has granted as Collateral or the relevant part thereof.
(d) The
expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein or in any
other document with respect to the Obligations shall mean the unconditional, final and irrevocable payment in full, in immediately available
funds, of all of the Obligations (unless otherwise specified, other (x) than indemnification and other contingent obligations not then
due and payable, (y) any Obligations in respect of Letters of Credit (as defined in the Credit Agreement) which have been backstopped
or Cash Collateralized, in each case, in amounts and pursuant to documentation in form and substance satisfactory to the Administrative
Agent and the L/C Issuer and (z) Obligations under Secured Hedge Agreements and in respect of Secured Treasury Management Agreements not
then due and payable) and all commitments under the Credit Agreement have expired or terminated.
(e) The
words “include,” “includes” and “including,” and words of similar import, shall not be limiting and
shall be deemed to be followed by the phrase “without limitation.”
(f) All
references to the Lenders herein shall, where appropriate, include any Lender, the Administrative Agent, the Collateral Agent, the Arranger,
the Bookrunner, or, in the case of any Secured Hedge Agreement or Secured Treasury Management Agreement, any Lender Counterparty thereto.
SECTION
2. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL
(a) Each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in all of the personal
property of such Grantor, including the following property, in each case, wherever located and now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (the “Collateral”),
as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations:
| (ii) | all As-Extracted Collateral; |
| (iv) | all Commercial Tort Claims from time to time specifically described
on Schedule 3.10; |
| (vi) | all Deposit Accounts; |
| (x) | all General Intangibles; |
| (xiv) | all Intellectual Property; |
| (xvi) | all Investment Property and all Pledged Equity Interests; |
| (xvii) | all letters of credit and all Letter-of-credit-rights; |
| (xix) | all Securities Accounts; |
| (xx) | all Collateral Accounts and all Collateral Account Funds; |
| (xxi) | all Receivables and all Receivables records; |
(xxii) all
books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software,
computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any
time pertain to any of the Collateral or are otherwise required in the collection thereof or realization thereupon; and
(xxiii) to
the extent not otherwise included, all other property, whether tangible or intangible, of such Grantor and all Proceeds, products, accessions,
rents and profits of any and all of the foregoing and all collateral security, Supporting Obligations and guarantees given by any person
with respect to any of the foregoing;
provided
that, notwithstanding any other provision set forth in this Section 2, this Agreement shall not, at any time, constitute a grant of a
security interest in any property that is, at such time, an Excluded Asset and no lien granted herein attach to, any Excluded Asset; provided,
however, that the Collateral shall include (i) any Proceeds, substitutions or replacements of any Excluded Asset (unless such Proceeds,
substitutions or replacements would independently constitute an Excluded Asset) and (ii) the outstanding capital stock, limited liability
interests, partnership interests, trust interests or other equity interests in an Excluded Subsidiary which is an Excluded Subsidiary
solely because it is a Foreign Subsidiary; provided, that with respect to any such Excluded Subsidiary that is a CFC, no more than 65%
of the voting stock and 100% of the non-voting stock of any such Excluded Subsidiary shall be required to be pledged (the “Excluded
Equity Interests”), and provided further that, for the avoidance of doubt, the grant of a security interest herein shall not
be deemed to be an outright assignment of Intellectual Property rights owned by the Grantors.
(b) Notwithstanding
anything herein to the contrary, (i) each Grantor shall remain liable for all obligations under and in respect of the Collateral and nothing
contained herein is intended or shall be a delegation of duties to the Collateral Agent or any other Secured Party, (ii) each Grantor
shall remain liable under each of the agreements included in the Collateral, including any Receivables, any Contracts and any agreements
relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all
in accordance with and pursuant to the terms and provisions thereof and neither the Collateral Agent nor any other Secured Party shall
have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related
hereto nor shall the Collateral Agent nor any other Secured Party have any obligation to make any inquiry as to the nature or sufficiency
of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included
in the Collateral, including any agreements relating to any Receivables, any Contracts or any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests and (iii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, including any agreements
relating to any Receivables, any Contracts and any agreements relating to Pledged Partnership Interests or Pledged LLC Interests.
(c) Each
Grantor acknowledges that certain of the Pledged Collateral of such Grantor may now or in the future consist of ULC Shares, and that it
is the intention of the Collateral Agent and each Grantor that neither the Collateral Agent nor any other Secured Party should under any
circumstances prior to realization thereon be held to be a “member” or a “shareholder”, as applicable, of a ULC
for the purposes of any ULC Laws. Therefore, notwithstanding any provisions to the contrary contained in this Agreement, the Credit Agreement
or any other Loan Document, where a Grantor is the registered owner of ULC Shares which are Pledged Collateral of such Grantor, such Grantor
will remain the sole registered owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name
of the Collateral Agent, any other Secured Party, or any other person on the books and records of the applicable ULC. Accordingly, each
Grantor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, in respect of such
ULC Shares (except for any dividend or distribution comprised of Security Certificates pledged by such Grantor, which shall be delivered
to the Collateral Agent to hold hereunder) and shall have the right to vote such ULC Shares and to control the direction, management and
policies of the applicable ULC to the same extent as such Grantor would if such ULC Shares were not pledged to the Collateral Agent pursuant
hereto. Nothing in this Agreement, the Credit Agreement or any other Loan Document is intended to, and nothing in this Agreement, the
Credit Agreement or any other Loan Document shall, constitute the Collateral Agent, any other Secured Party, or any other person other
than the applicable Grantor, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered
or beneficial), until such time as notice is given to such Grantor and further steps are taken pursuant hereto or thereto so as to register
the Collateral Agent, any other Secured Party, or such other person, as specified in such notice, as the holder of the ULC Shares. To
the extent any provision hereof would have the effect of constituting the Collateral Agent or any other Secured Party as a member or a
shareholder, as applicable, of any ULC prior to such time, such provision shall be severed herefrom and shall be ineffective with respect
to ULC Shares which are Pledged Collateral of any Grantor without otherwise invalidating or rendering unenforceable this Agreement or
invalidating or rendering unenforceable such provision insofar as it relates to Pledged Collateral of any Grantor which is not ULC Shares.
Except upon the exercise of rights of the Collateral Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with this
Agreement, each Grantor shall not cause or permit, or enable an Issuer whose securities are pledged hereunder that is a ULC to cause or
permit, the Collateral Agent or any other Secured Party to: (a) be registered as a shareholder or member of such Issuer; (b) have any
notation entered in their favor in the share register of such Issuer; (c) be held out as shareholders or members of such Issuer; (d) receive,
directly or indirectly, any dividends, property or other distributions from such Issuer by reason of the Collateral Agent holding a Lien
over the ULC Shares; or (e) act as a shareholder of such Issuer, or exercise any rights of a shareholder including the right to attend
a meeting of shareholders of such Issuer or to vote its ULC Shares.
SECTION
3. REPRESENTATIONS AND WARRANTIES
To
induce the Administrative Agent, the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to
make their respective extensions of credit to the Borrowers thereunder, each Grantor hereby represents and warrants to the Secured Parties
that, as of the Closing Date:
3.01 Title;
No Other Liens.
Such
Grantor owns each item of the Collateral granted by it free and clear of any and all Liens or claims, including Liens arising as a result
of such Grantor becoming bound (as a result of merger or otherwise) as grantor under a security agreement entered into by another person,
except for Permitted Liens and other Liens expressly permitted by Section 8.01 of the Credit Agreement. No financing statement, mortgage
or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except (a) financing
statements for which duly authorized and proper termination statements have been delivered to the Collateral Agent for filing and (b)
such as have been filed in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to this Agreement or
as is expressly permitted by Section 8.01 of the Credit Agreement.
3.02 Perfected
First Priority Liens.
The
security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule
3.02 (as such schedule may be amended or supplemented from time to time with respect to after-acquired property consistent with Section
7.12 of the Credit Agreement) (all of which, in the case of all filings and other documents referred to on said Schedule, have been delivered
to the Collateral Agent in duly completed and duly executed form, as applicable, except as permitted by Sections 5.01(b), 7.12, 7.15 and
7.17 of the Credit Agreement) and payment of all filing fees, will constitute valid perfected security interests in all of the Collateral
in which a security interest may be perfected by way of such filings or any other actions specified thereon in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, as collateral security for such Grantor’s Obligations enforceable in accordance
with the terms hereof, except as may be required under the laws of any jurisdiction outside of the United States or Canada (or with respect
to Holdings, the British Virgin Islands) in order to perfect the Collateral Agent’s Lien on the Collateral created under the laws
of such jurisdiction and (b) are prior to all other Liens on the Collateral, except for Permitted Liens expressly permitted to be
senior to the security interests granted pursuant to this Agreement by Section 8.01 of the Credit Agreement. Notwithstanding anything
to the contrary herein, no Grantor shall be required to take any action under the laws of any jurisdiction other than the United States,
Canada (or with respect to Holdings, the British Virgin Islands) (or any political subdivision of any of the foregoing) and their respective
territories and possessions for the purpose of perfecting a security interest in any Collateral, unless an Event of Default has occurred
and is continuing, in which case such Grantor agrees, upon the request of the Collateral Agent, to execute and deliver any and all instruments
and documents and take such other actions that are necessary or appropriate to perfect, record or evidence the security interest granted
herein to the Collateral Agent, for the ratable benefit of the Secured Parties, in any jurisdiction. Without limiting the foregoing but
subject to any limitations on such requirement expressly provided herein, including Section 4.02 hereof, or Sections 7.15 and 7.17
of the Credit Agreement, each Grantor has taken or will take all actions necessary or, in the Collateral Agent’s reasonable judgment,
desirable, to (i) establish the Collateral Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of
the New York UCC) over any portion of the Investment Property constituting Certificated Securities and Uncertificated Securities, (ii)
establish the Collateral Agent’s “control” (within the meaning of Section 9-107 of the New York UCC) over all Letter
of Credit Rights, (iii) establish the Collateral Agent’s control (within the meaning of Section 9-105 of the New York UCC) over
all Electronic Chattel Paper and (iv) establish the Collateral Agent’s “control” (within the meaning of Section 16 of
the Uniform Electronic Transaction Act as in effect in the applicable jurisdiction “UETA”) over all “transferable records”
(as defined in UETA).
3.03 Name;
Jurisdiction of Organization, etc.
On
the date hereof, such Grantor’s exact legal name (as indicated on the public record of such Grantor’s jurisdiction of formation
or organization, which shows such Grantor to have been formed or organized), jurisdiction of formation or organization, organizational
identification number, if any, and the location of such Grantor’s chief executive office are specified on Schedule 3.03 (as
such schedule may be amended or supplemented from time to time). Each Grantor is organized solely under the law of the jurisdiction so
specified and has not filed any certificates of domestication, transfer or continuance in any other jurisdiction. Except as otherwise
indicated on Schedule 3.03 (as such schedule may be amended or supplemented from time to time), the jurisdiction of each such Grantor’s
organization or formation is required to maintain a public record showing such Grantor to have been organized or formed. Except as specified
on Schedule 3.03 (as such schedule may be amended or supplemented from time to time by notice given in accordance with Section
4.06(a)), no such Grantor has changed its name, jurisdiction of organization, chief executive office or its corporate structure in
any way (e.g., by merger, consolidation, change in corporate form or otherwise) within the past five years.
3.04 Inventory
and Equipment.
Any
Inventory now or hereafter produced by any Grantor included in the Collateral has been and will be produced in compliance in all material
respects with the requirements of all applicable laws and regulations, including the Fair Labor Standards Act.
3.05 Farm
Products.
To
the knowledge of the Grantors, none of the Collateral constitutes, or is the Proceeds of, Farm Products.
3.06 Investment
Property.
(a) Schedule
3.06(a) hereto (as such schedule may be amended or supplemented from time to time) sets forth under the headings “Pledged Stock,”
“Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged Trust Interests,” respectively,
all of the Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor in its
subsidiaries and such Pledged Equity Interests constitute the percentage of issued and outstanding shares of stock, percentage of membership
interests, percentage of partnership interests or percentage of beneficial interest of the respective issuers thereof indicated on such
schedule. Schedule 3.06(b) (as such schedule may be amended or supplemented from time to time) sets forth under the heading “Pledged
Debt Securities” or “Pledged Notes” all of the Pledged Debt Securities and Pledged Notes owned by any Grantor and, to
such Grantor’s knowledge, all of such Pledged Debt Securities and Pledged Notes have been duly authorized, authenticated or issued,
and delivered and is the legal, valid and binding obligation of the issuers thereof enforceable in accordance with their 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, and is not in default and constitutes
all of the issued and outstanding inter-company indebtedness evidenced by an instrument or certificated security of the respective issuers
thereof owing to such Grantor. Each Grantor is the sole entitlement holder or customer of each such account, and no Grantor has consented
to or is otherwise aware of any person having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the New
York UCC) over, or any other interest in, any such Securities Account, Commodity Account or Deposit Account, in each case in which such
Grantor has an interest, or any securities, commodities or other property credited thereto.
(b) The
shares of Pledged Equity Interests pledged by such Grantor hereunder constitute all of the issued and outstanding shares of all classes
of Equity Interests in each Issuer owned by such Grantor (other than any Excluded Equity Interests).
(c) All
the shares of the Pledged Equity Interests have been duly and validly issued and are fully paid and nonassessable.
(d) The
terms of any uncertificated Pledged LLC Interests and Pledged Partnership Interests do not provide that they are securities governed by
Article 8 of the Uniform Commercial Code in effect from time to time in the “issuer’s jurisdiction” of each Issuer thereof
(as such term is defined in the Uniform Commercial Code in effect in such jurisdiction). There shall be no Pledged LLC Interests or Pledged
Partnership Interests which provide that they are securities governed by Article 8 of the Uniform Commercial Code in effect from time
to time in the “issuer’s jurisdiction” of each Issuer thereof, unless the same are certificated and all certificates
relating thereto have been delivered to the Collateral Agent pursuant to the terms hereof.
(e) Such
Grantor is the record and beneficial owner of, and has good and defeasible title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other person, except Permitted Liens and other Liens expressly permitted
by Section 8.01 of the Credit Agreement, and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting
trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of,
any Pledged Equity Interests.
3.07 Receivables
(a) To
the knowledge of the Grantors, none of the obligors on any material Receivables that are included in the Collateral is a Governmental
Authority.
(b) Each
Receivable in excess of $500,000 that is included in the Collateral, to such Grantor’s knowledge (i) is and will be the legal, valid
and binding obligation of the Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor, (ii) is
and will be enforceable in accordance with its terms, subject to the 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, (iii) is not and will not be subject to any setoffs, defenses, taxes, counterclaims (except with respect
to setoffs in accordance with the Credit Agreement, Permitted Liens and refunds, returns and allowances in the ordinary course of business
with respect to damaged merchandise) and (iv) is and will be in compliance with all applicable material laws and regulations, except where
the failure to have such rights in subsection (i) through (iv) above would not reasonably be expected to have a Material Adverse Effect.
3.08 Intellectual
Property
(a) Schedule
3.08(a) (as such schedule may be amended or supplemented from time to time) lists all Intellectual Property (other than Excluded Assets)
which is, as of the Closing Date, registered with or issued by a Governmental Authority or is the subject of an application for registration
or issuance, in each case which is owned by such Grantor in its own name, except as set forth on Schedule 3.08(a) (as such schedule
may be amended or supplemented from time to time), on the date hereof (collectively, the “Owned Intellectual Property”)
and all Exclusive Copyright Licenses. As of the Closing Date, except as set forth in Schedule 3.08(a) (as such schedule may be
amended or supplemented from time to time), such Grantor is the exclusive owner of the entire and unencumbered right, title and interest
in and to all such Owned Intellectual Property and is otherwise so entitled to use, and grant to others the right to use, all such Owned
Intellectual Property subject only to the license terms of the licensing or franchise agreements referred to in paragraph (c) below, Permitted
Liens and other Liens expressly permitted by Section 8.01 of the Credit Agreement, except where the failure to be entitled would not reasonably
be expected to have a Material Adverse Effect. To such Grantor’s knowledge, such Grantor has a valid and enforceable right to use
all Intellectual Property which it uses in its business, but does not own (collectively, the “Licensed Intellectual Property”),
except where the failure to have such rights would not reasonably be expected to have a Material Adverse Effect.
(b) Except
as set forth in Schedule 3.08(b), to the knowledge of such Grantor as of the date hereof, all Owned Intellectual Property, is subsisting,
unexpired and has not been abandoned, except where such subsistence, expiration or abandonment would not have a Material Adverse Effect.
To such Grantor’s knowledge, all Owned Intellectual Property is valid and enforceable, except for any items the invalidity or unenforceability
of which would not have a Material Adverse Effect. To such Grantor’s knowledge, except as disclosed on Schedule 3.08(e),
neither the operation of such Grantor’s business as currently conducted nor the use of Owned Intellectual Property in connection
therewith infringes, misappropriates, dilutes or otherwise violates the rights in any Intellectual Property of any other person, except
where such infringement, misappropriation, dilution, or violation would not reasonably be expected to have a Material Adverse Effect.
(c) Except
as set forth in Schedule 3.08(c) (as such schedule may be amended or supplemented from time to time), on the date hereof none of
the Intellectual Property owned by such Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor, other than industry standard licensing or franchising agreements entered into in the ordinary course of
business.
(d) Except
as set forth in Schedule 3.08(d) (as such schedule may be amended or supplemented from time to time), to such Grantor’s knowledge,
no holding, decision or judgment has been rendered by any Governmental Authority or arbitrator in the United States or outside the United
States which would limit or cancel the validity or enforceability of, or such Grantor’s rights in, any Owned Intellectual Property,
except where the same would not reasonably be expected to have a Material Adverse Effect. Such Grantor is not aware of any uses of any
item of Owned Intellectual Property that could reasonably be expected to lead to such item becoming invalid or unenforceable including
unauthorized uses by third parties and uses which were not supported by the goodwill of the business connected with the use of and symbolized
by any Trademarks owned by a Grantor, except where the same would not reasonably be expected to have a Material Adverse Effect.
(e) Except
as set forth in Schedule 3.08(e) (as such schedule may be amended or supplemented from time to time), no action or proceeding is
pending, or, to such Grantor’s knowledge, threatened against any Grantor, on the date hereof (i) seeking to limit or cancel any
Owned Intellectual Property or, to such Grantor’s knowledge, Licensed Intellectual Property, other than in non-final office actions
issued in the course of prosecution of applications for registration or issuance, except as would not reasonably be expected to have a
Material Adverse Effect, (ii) alleging that any services provided by, processes used by, or products manufactured or sold by such
Grantor infringe, misappropriate, dilute or otherwise violate any Intellectual Property rights of any other person, except as would not
reasonably be expected to have a Material Adverse Effect, or (iii) alleging that any Intellectual Property owned by any Grantor is being
licensed, sublicensed or used in violation of any Intellectual Property right of any other person, except where such violation would not
reasonably be expected to have a Material Adverse Effect. To such Grantor’s knowledge, no person is engaging in any activity that
infringes upon, misappropriates, dilutes or is otherwise an unauthorized use of, any material Intellectual Property owned by such Grantor
or the rights of such Grantor therein, except where such action would not reasonably be expected to have a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement (including the enforcement of remedies in accordance with the terms hereof)
will not result in the termination or impairment of any of the Intellectual Property owned or used by such Grantor, except where such
termination or impairment would not reasonably be expected to have a Material Adverse Effect.
(f) With
respect to each Copyright License, Trademark License, Trade Secret License and Patent License, the loss of which could have a Material
Adverse Effect: (i) such license is a valid and binding obligation of such Grantor and, to such Grantor’s knowledge, the other
parties thereto, and is in full force and effect; (ii) such license will not cease to be valid and binding and in full force and
effect on terms substantially similar, when taken as a whole, to those currently in effect as a result of the rights and interests granted
herein, nor will the grant of such rights and interests constitute a breach or default under such license or otherwise give the licensor
or licensee a right to terminate such license; (iii) such Grantor has not received any notice of termination or cancellation under
such license; (iv) such Grantor has not received any notice of a breach or default under such license, which breach or default has
not been cured; and (v) to such Grantor’s knowledge, such Grantor is not in breach or default in any material respect, and
no event has occurred that, with notice and/or lapse of time, would constitute such a breach or default or permit termination, modification
or acceleration under such license.
(g) Except
as set forth in Schedule 3.08(g) (as such schedule may be amended or supplemented from time to time), such Grantor has performed
all acts and has paid all required fees and taxes to maintain each and every item of Owned Intellectual Property (other than Immaterial
Intellectual Property) in full force and effect except for any such items of Owned Intellectual Property (other than Immaterial Intellectual
Property) that such Grantor in its reasonable business judgment determines have no commercial value to the business of such Grantor or
otherwise to the extent such action would not reasonably be expected to have a Material Adverse Effect.
(h) To
such Grantor’s knowledge, (i) no material Trade Secrets owned by such Grantor has been misappropriated by any other person; (ii)
no employee, independent contractor or agent of such Grantor has misappropriated any material Trade Secrets of any other person in the
course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor; and (iii) no employee,
independent contractor or agent of such Grantor is in default or breach of any term of any employment agreement, non-disclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in any way to the protection, ownership, development, use
or transfer of such Grantor’s Intellectual Property, except, in each of clauses (i), (ii) and (iii) hereof, to the extent not reasonably
expected to have a Material Adverse Effect.
(i) Except
as set forth in Schedule 3.08(i) (as such schedule may be amended or supplemented from time to time), such Grantor has made all
filings and recordations necessary to evidence its ownership interest in the Owned Intellectual Property which is the subject of a registration
or application, and with the United States Patent and Trademark Office, the United States Copyright Office and in corresponding national
and international patent, trademark and copyright offices, except where the failure to make such filings or recordations would not reasonably
be expected to have a Material Adverse Effect.
(j) Such
Grantor has taken commercially reasonable steps to use consistent standards of quality in the manufacture, distribution and sale of all
products sold and provision of all services provided under or in connection with any Trademarks used in the business of such Grantor and
has taken reasonable steps to ensure that all its licensed users of its Trademarks use such consistent standards of quality.
3.09 Letters
of Credit and Letter-of-Credit-Rights.
No
Grantor is a beneficiary or assignee under any Letter of Credit individually or in the aggregate in excess of $5,000,000 other than the
letters of credit described on Schedule 3.09 (as such schedule may be amended or supplemented from time to time).
3.10 Commercial
Tort Claims.
No
Grantor has any Commercial Tort Claims, individually or in the aggregate, in excess of $20,000,000, except as specifically described on
Schedule 3.10 (as such schedule may be amended or supplemented from time to time).
3.11 Contracts.
(a) Each
Material Contract is valid and binding on each Grantor and any of its Subsidiaries, as applicable, and in full force and effect, except
where the failure to be valid, binding and in full force and effect, either individually or in the aggregate, would not have a Material
Adverse Effect;
(b) Each
Grantor and each of its Subsidiaries have in all material respects performed all obligations required to be performed by them to date
under each Material Contract, except where such noncompliance, either individually or in the aggregate, would not have a Material Adverse
Effect; and
(c) No
Grantor nor any of its Subsidiaries has received written notice of, or otherwise has knowledge of, the existence of any event or condition
which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of such Grantor or any of
its Subsidiaries under any such Material Contract, except where such default, either individually or in the aggregate, would not have
a Material Adverse Effect.
SECTION
4. COVENANTS
Each
Grantor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations shall have
been paid in full, and all commitments to extend credit under the Credit Agreement shall have expired or been terminated:
4.01 Covenants
in Credit Agreement.
Each
Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case
may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such
Grantor or any of its Subsidiaries.
4.02 Delivery
and Control of Instruments, Chattel Paper, Negotiable Documents and Investment Property
(a) Without
limiting Section 4.08, if any of the Collateral which fair market value is in excess of $5,000,000 individually or in the
aggregate is or shall become evidenced or represented by any Instrument, Certificated Security, Negotiable Document or Tangible Chattel
Paper, then such Instrument (other than checks received in the ordinary course of business), Certificated Security, Negotiable Documents
or Tangible Chattel Paper shall be, as promptly as reasonably practicable, delivered to the Collateral Agent, duly endorsed in a manner
reasonably satisfactory to the Collateral Agent, to be held as Collateral pursuant to this Agreement, and all of such property owned by
any Grantor as of the Closing Date shall be delivered on the Closing Date, except as permitted by Section 7.17 of the Credit Agreement.
(b) If
any of the Collateral is or shall become “Electronic Chattel Paper,” such Grantor shall ensure that (i) a single authoritative
copy exists which is unique, identifiable, unalterable (except as provided in clauses (iii), (iv) and (v) of this paragraph), (ii) such
authoritative copy identifies the Collateral Agent as the assignee and is communicated to and maintained by the Collateral Agent or its
designee, (iii) copies or revisions that add or change the assignee of the authoritative copy can only be made with the participation
of the Collateral Agent, (iv) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.
(c) Reserved.
(d) Reserved.
(e) Reserved.
(f) Reserved.
(g) In
the case of any transferable Letter of Credit Rights individually or in the aggregate in excess of $5,000,000, each Grantor shall use
commercially reasonable efforts to obtain the consent of any issuer thereof to the transfer of such Letter of Credit Rights to the Collateral
Agent. In the case of any other Letter of Credit Rights individually or in the aggregate in excess of $5,000,000, each Grantor shall use
commercially reasonable efforts to obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the
proceeds of the related Letter of Credit in accordance with Section 5-114(c) of the New York UCC.
4.03 Maintenance
of Insurance
(a) Such
Grantor will maintain, with reputable insurance companies, insurance on all its property (including all Inventory, Equipment and Vehicles)
in compliance with the covenants relating to insurance set forth in Section 7.07 of the Credit Agreement; and furnish to the Collateral
Agent with copies for each Secured Party, upon written request, full information as to the insurance carried. All insurance shall provide
that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least 30 days after
receipt by the Collateral Agent of written notice thereof.
(b) Such
Grantor will deliver to the Collateral Agent on behalf of the Secured Parties, (i) on or prior to the Closing Date (or such later date
as set forth in Section 5.01(b) of the Credit Agreement or on Schedule 7.17 of the Credit Agreement), certificates showing the amount
and types of insurance coverage as of such date (provided that the Collateral Agent shall be named as additional insured on all such liability
insurance policies of such Grantor and named as loss payee on all property and casualty insurance policies of such Grantor), (ii) promptly
following receipt of notice from any insurer, a copy of any notice of cancellation or material change in coverage from that existing on
the Closing Date, (iii) promptly following receipt of notice of any cancellation or nonrenewal of coverage by such Grantor and (iv) promptly
after such information is available to such Grantor, full information as to any claim for an amount in excess of $3,000,000 with respect
to any property and casualty insurance policy maintained by such Grantor.
(c) Upon
the request of the Collateral Agent, Holdings shall deliver to the Secured Parties a report of a reputable insurance broker with respect
to such insurance and such supplemental reports with respect thereto as the Collateral Agent may from time to time reasonably request.
4.04 BVI
Security Arrangements
(a) Holdings
shall promptly after the execution of this Agreement (or such later time as agreed to by the Collateral Agent), instruct its registered
agent to create and maintain a Register of Charges (“Register of Charges”) and to enter particulars of the security
created pursuant to this Agreement in such Register of Charges, and Holdings shall further instruct its registered agent to effect registration
of particulars of this Agreement at the Registry of Corporate Affairs in the British Virgin Islands (the “Registry”)
pursuant to section 163 of the BVI Business Companies Act (as amended) (the “BCA”).
(b) Holdings
shall promptly and in any event within three (3) Business Days from and including the date of execution of this Agreement (or such later
time as agreed to by the Collateral Agent), deliver or procure to be delivered to the Collateral Agent a certified copy of the updated
Register of Charges recording the particulars of the security created pursuant to this Agreement and a confirmation in writing from the
registered agent of Holdings that the relevant application form to register the security created pursuant to this Agreement with the Registry
has been filed with the Registry pursuant to section 163 of the BCA.
(c) promptly
and in any event within three (3) Business Days from and including the date of receipt of the same from the Registry (or such later time
as agreed to by the Collateral Agent), deliver or procure to be delivered to the Collateral Agent the certificate of registration of charge
issued by the Registry and a Registry stamped copy of the Register of Charges recording the particulars of the security created pursuant
to this Agreement.
4.05 Maintenance
of Perfected Security Interest; Further Documentation.
(a)
Such Grantor shall maintain each of the security interests created by this Agreement as a perfected security interest having at least
the priority described in Section 3.02 and shall defend such security interest against the claims and demands of all persons whomsoever,
subject to the provisions of Section 7.15 of the Credit Agreement.
(b) Such
Grantor shall furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the assets and property of such Grantor as the Collateral Agent may reasonably request, all
in reasonable detail.
(c) At
any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor
shall as promptly as reasonably practicable duly authorize, execute and deliver, and have recorded, such further instruments and documents
and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including, the filing of any financing or continuation statements under
the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby
and in the case of Investment Property and any other relevant Collateral for which perfection by control is otherwise required hereunder,
taking any actions necessary to enable the Collateral Agent to obtain “control” (within the meaning of the applicable Uniform
Commercial Code) with respect thereto, subject to the provisions of Section 7.15 of the Credit Agreement.
4.06 Changes
in Locations, Name, Jurisdiction of Incorporation, etc.
No
Grantor shall, except upon 60 days’ written notice after such change (or such later time as agreed to by the Collateral Agent),
in each case, to the Collateral Agent and delivery to the Collateral Agent of duly authorized and, where required, executed copies of
all additional financing statements and other documents reasonably requested by the Collateral Agent to maintain the validity, perfection
and priority of the security interests provided for herein:
(a) change
its legal name or jurisdiction of organization (or, if not a registered organization, the location of its chief executive office) from
that referred to in Section 3.03;
(b) change
its identity or structure to such an extent that any financing statement filed by the Collateral Agent in connection with this Agreement
would become misleading; or
(c) change
its address to such an extent that any financing statement filed by the Collateral Agent in connection with this Agreement would become
ineffective.
4.07 Notices.
Such
Grantor shall advise the Collateral Agent as promptly as reasonably practicable, in reasonable detail, of:
(a) any
Lien (other than Permitted Liens or any Lien expressly permitted by Section 8.01 of the Credit Agreement) on any of the Collateral; and
(b) the
occurrence of any other event which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the Collateral
or on the security interests created hereby.
4.08 Investment
Property
(a) If
such Grantor shall become entitled to receive or shall receive any stock or other ownership certificate (including any certificate representing
a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights in respect of the Equity Interests in any Issuer which constitutes Collateral,
whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of or other ownership interests in the
Pledged Securities, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Secured Parties, hold the
same in trust for the Secured Parties and deliver the same forthwith to the Collateral Agent in the exact form received, duly endorsed
by such Grantor to the Collateral Agent, if required, together with an undated stock power or similar instrument of transfer covering
such certificate duly executed in blank by such Grantor and with, if the Collateral Agent so requests, signature guaranteed, to be held
by the Collateral Agent, subject to the terms hereof, as additional collateral security for the Obligations. If an Event of Default has
occurred and is continuing, any sums paid upon or in respect of the Pledged Securities upon the liquidation or dissolution of any Issuer
shall be paid over to the Collateral Agent to be held by it hereunder as additional collateral security for the Obligations, and in case
any distribution of capital shall be made on or in respect of the Pledged Securities or any property shall be distributed upon or with
respect to the Pledged Securities pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the
reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral
Agent, be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Obligations. If an Event
of Default has occurred and is continuing, if any sums of money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, hold
such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional collateral security
for the Obligations.
(b) Without
the prior written consent of the Collateral Agent, such Grantor shall not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock, partnership interests, limited liability company interests or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or exchange for any stock, partnership interests, limited liability
company interests or other equity securities of any nature of any Issuer (except, in each case, pursuant to a transaction not prohibited
by the Credit Agreement), (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of
the Investment Property or Proceeds thereof or any interest therein (except, in each case, pursuant to a transaction not prohibited by
the Credit Agreement), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any person with respect
to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement,
any Permitted Liens or any Lien expressly permitted thereon pursuant to Section 8.01 of the Credit Agreement, (iv) enter into any agreement
or undertaking restricting the right or ability of such Grantor or the Collateral Agent to sell, assign or transfer any of the Investment
Property or Proceeds thereof or any interest therein (except, in each case, pursuant to a transaction not prohibited by the Credit Agreement)
or (v) cause or permit any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes
of the New York UCC) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the New York UCC; provided, however, notwithstanding the foregoing,
if any issuer of any Pledged Partnership Interests or Pledged LLC Interests takes any such action in violation of the provisions in this
clause (v), such Grantor shall notify the Collateral Agent as promptly as reasonably practicable in writing of any such election or action
and, in such event, shall take all steps necessary or advisable to establish the Collateral Agent’s “control” thereof.
(c) In
the case of each Grantor which is an Issuer, such Issuer agrees that (i) it shall be bound by the terms of this Agreement relating to
the Pledged Securities issued by it and shall comply with such terms insofar as such terms are applicable to it, (ii) it shall notify
the Collateral Agent as promptly as reasonably practicable in writing of the occurrence of any of the events described in Section 4.08(a)
with respect to the Pledged Securities issued by it and (iii) the terms of Sections 5.03(c) and 5.07 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.03(c) or 5.07 with
respect to the Pledged Securities issued by it. In addition, each Grantor which is either an Issuer or an owner of any Pledged Security
hereby consents to the grant by each other Grantor of the security interest hereunder in favor of the Collateral Agent and to the transfer
of any Pledged Security to the Collateral Agent or its nominee following an Event of Default and to the substitution of the Collateral
Agent or its nominee as a partner, member or shareholder of the Issuer of the related Pledged Security.
4.09 Receivables
(a) Other
than in a manner consistent with its past practice or in the ordinary course of business, such Grantor shall not (i) grant any material
extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any person liable for the payment of any Receivable, (iv) allow any material credit or discount
on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could adversely affect the value thereof.
(b) Reserved.
(c) Each
Grantor shall perform and comply in all material respects with all of its obligations with respect to the Receivables.
4.10 Intellectual
Property
(a) Such
Grantor shall, and shall use commercially reasonable efforts to cause its licensees to, (i) continue to use each Trademark included in
the Owned Intellectual Property in order to maintain such Trademark in full force free from any claim of abandonment for non-use, unless
Grantor makes a good faith business decision to discontinue the applicable line of business in one or more jurisdictions, change the name
of the applicable goods or services, or such abandonment is permitted by Section 4.10(i), (ii) take commercially reasonable steps
to maintain the quality of products and services offered under any of its Trademarks and take all commercially reasonable steps to ensure
that all its licensed users of such Trademarks maintain such quality, except to the extent it abandons or is in the process of discontinuing
such product or service in the ordinary course of business; (iii) not adopt or use any mark which is confusingly similar or a colorable
imitation of a Trademark owned by such Grantor (which is not Immaterial Intellectual Property) unless the Collateral Agent, for the ratable
benefit of the Secured Parties, shall obtain a perfected security interest in such mark (if not Immaterial Intellectual Property) pursuant
to this Agreement and the Trademark Security Agreement, and (iv) take commercially reasonable actions to not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby a Trademark owned by such Grantor may become invalidated
or impaired in any way, but subject to Grantor’s rights to discontinue or abandon its rights under Section 4.10(i).
(b) Such
Grantor (either itself or through licensees) shall not knowingly do any act, or knowingly omit to do any act, whereby any Patent owned
by such Grantor may become forfeited, abandoned or dedicated to the public, except as permitted under Section 4.10(i).
(c) Such
Grantor shall not (and shall not knowingly permit any licensee or sublicensee thereof to) knowingly do any act or knowingly omit to do
any act whereby any Copyrights included in the Owned Intellectual Property may become invalidated. Such Grantor shall not (either itself
or through licensees) knowingly do any act whereby any material Copyrights owned by such Grantor may fall into the public domain, except
as permitted under Section 4.10(i).
(d) Reserved.
(e) Such
Grantor shall take commercially reasonable steps, and shall take commercially reasonable steps to require its licensees, to use Intellectual
Property owned by such Grantor (other than Immaterial Intellectual Property) with the applicable statutory notices provided for under
applicable law and all other notices and legends required by applicable Requirements of Law, consistent with industry practices.
(f) Such
Grantor shall notify the Collateral Agent as promptly as reasonably practicable if it knows, that any application or registration relating
to any Owned Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination or development
in any proceeding (including the institution of, or any such determination or development in, any proceeding in the United States Patent
and Trademark Office, the United States Copyright Office except for non-final office actions issued in the course of prosecution of applications
for registration, but not including any statutory expiration of the Owned Intellectual Property) regarding such Grantor’s ownership
of, or the validity of, any Owned Intellectual Property or such Grantor’s right to register the same or to own and maintain the
same, except to the extent that Grantor is abandoning such Owned Intellectual Property as permitted under Section 4.10(i) or to the extent
not reasonably expected to have a Material Adverse Effect.
(g) In
the event that such Grantor shall file with the United States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof an application for the registration of any Copyrights (other than Immaterial Intellectual Property),
such Grantor shall report such filing of such application, to the Collateral Agent within 60 days after the end of each fiscal quarter
during which such filing occurred. Upon request of the Collateral Agent, if such Copyright application is filed with the United States
Copyright Office, such Grantor shall execute and deliver, to the Collateral Agent, a Copyright Security Agreement in the form set forth
in Exhibit B.
(h) In
the event that such Grantor shall file with the United States Patent and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof an application for the registration of any Patent or any Trademark (other than Excluded Assets),
such Grantor shall report such filing of such application, to the Collateral Agent within 60 days after the end of each fiscal quarter
during which such filing occurred. Upon request of the Collateral Agent, if such Patent or Trademark application is filed with the
United States Patent and Trademark Office, such Grantor shall execute and deliver, to the Collateral Agent, a Patent Security Agreement
in the form set forth in Exhibit C or a Trademark Security Agreement in the form set forth in Exhibit A, as applicable.
(i) Such
Grantor (either itself or through licensees) shall not knowingly discontinue use of or otherwise abandon any of its Owned Intellectual
Property, or abandon any application or any right to file an application for any Patent, Trademark, or Copyright, unless in such Grantor’s
reasonable business judgment such use or the pursuit or maintenance of such Owned Intellectual Property is no longer desirable in the
conduct of such Grantor’s business and that the loss thereof could not reasonably be expected to have a Material Adverse Effect.
(j) In
the event that any Intellectual Property owned by such Grantor and material to its business is, to the Grantor’s knowledge, infringed,
misappropriated or diluted by a third party, such Grantor shall take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect and enforce such Intellectual Property.
(k) Such
Grantor agrees that, should it obtain an ownership interest in any item of Intellectual Property, other than Excluded Assets, which is
not, as of the Closing Date, a part of the Intellectual Property Collateral (including any intent-to-use Trademark applications that are
no longer Excluded Assets) (the “After-Acquired Intellectual Property”), (i) the provisions of Section 2 shall automatically
apply thereto; (ii) any such After-Acquired Intellectual Property, and in the case of Trademarks, the goodwill of the business connected
therewith and symbolized thereby, shall automatically become part of the Intellectual Property Collateral; (iii) with respect to any such
After-Acquired Intellectual Property consisting of U.S. registered Copyrights, Patents or Trademarks (or applications therefor) or Exclusive
Copyright Licenses, such Grantor shall report such After-Acquired Intellectual Property to the Collateral Agent within 60 days after the
end of each fiscal quarter during which such acquisition occurred or such later time as agreed by the Collateral Agent; and (iv) upon
request of the Collateral Agent, such Grantor shall execute and deliver, to the Collateral Agent,
a Copyright Security Agreement in the form set forth in Exhibit B, a Patent Security Agreement in the form set forth in Exhibit
C and/or a Trademark Security Agreement in the form set forth in Exhibit A, as applicable; provided that, in the event
of any Intellectual Property covered by such Copyright Security Agreement, Patent Security Agreement and/or Trademark Security Agreement
(i) shall be deemed invalidated or rejected by the applicable Governmental Authority or (ii) shall have an incomplete chain of title or
other title defect, then the applicable Grantor shall not be required to take any remedial steps with respect thereto so long as such
Intellectual Property is Immaterial Intellectual Property; provided further that, the applicable Grantor shall not be required
to take any perfection actions with respect to Immaterial Intellectual Property to the extent that, in the reasonable judgment of the
Collateral Agent, the costs of perfecting such Immaterial Intellectual Property is excessive in relation to the benefit to the Secured
Parties.
(l) Such
Grantor agrees to execute upon the Closing Date, a Trademark Security Agreement, in substantially the form of Exhibit A, a Copyright
Security Agreement, in substantially the form of Exhibit B, and a Patent Security Agreement, in substantially the form of Exhibit
C, as applicable, in order to record the security interest granted herein to the Collateral Agent for the ratable benefit of the Secured
Parties with the United States Patent and Trademark Office, the United States Copyright Office, and any other applicable Governmental
Authority.
(m) Such
Grantor shall take all steps it deems in its reasonable business judgment to be necessary to protect the secrecy of all Trade Secrets
owned by such Grantor and material to its business, including advising employees of the confidentiality of company proprietary information
and labeling and restricting access to secret information and documents, consistent with past practice.
4.11 Contracts
(a) Such
Grantor shall perform and comply in all material respects with all its obligations under the Material Contracts if failure to do so could
reasonably be expected to have a Material Adverse Effect.
(b) Such
Grantor shall not amend, modify, terminate, waive or fail to enforce any provision of any Material Contract in any manner which could
reasonably be expected to materially adversely affect the value of the Collateral or otherwise have a Material Adverse Effect.
4.12 Commercial
Tort Claims.
Such
Grantor shall advise the Collateral Agent as promptly as reasonably practicable of any Commercial Tort Claim held by such Grantor individually
or in the aggregate in excess of $20,000,000 and shall promptly execute a supplement to this Agreement in form and substance reasonably
satisfactory to the Collateral Agent to grant a security interest in such Commercial Tort Claim to the Collateral Agent for the ratable
benefit of the Secured Parties.
SECTION
5. REMEDIAL PROVISIONS
5.01 Certain
Matters Relating to Receivables
(a) If
required by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables,
when collected by any Grantor, (i) shall be promptly (and, in any event, within two Business Days) deposited by such Grantor in the exact
form received, duly endorsed by such Grantor to the Collateral Agent if required, in a Collateral Account maintained under the sole dominion
and control of the Collateral Agent, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided
in Section 5.05, and (ii) until so turned over, shall be held by such Grantor in trust for the Secured Parties, segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(b) If
an Event of Default has occurred and is continuing, at the Collateral Agent’s request, each Grantor shall deliver to the Collateral
Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables
that are included in the Collateral, including all original orders, invoices and shipping receipts.
5.02 Communications
with Obligors; Grantors Remain Liable.
(a) The
Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event
of Default communicate with obligors under the Receivables and parties to the Contracts to verify with them to the Collateral Agent’s
satisfaction the existence, amount and terms of any Receivables or Contracts.
(b) The
Collateral Agent may at any time after the occurrence and continuance of an Event of Default notify, or require any Grantor to so notify,
the Account Debtor or counterparty on any Receivable or Contract of the security interest of the Collateral Agent therein. In addition,
after the occurrence and during the continuance of an Event of Default, the Collateral Agent may upon written notice to the applicable
Grantor, notify, or require any Grantor to notify, the Account Debtor or counterparty to make all payments under the Receivables and/or
Contracts directly to the Collateral Agent.
(c) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving
rise thereto. No Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) or Contract
by reason of or arising out of this Agreement or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured
Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time
or times.
5.03 Pledged
Securities
(a) Unless
an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Grantor of
the Collateral Agent’s intent to exercise its corresponding rights pursuant to Section 5.03(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Equity Interests and all payments made in respect of the Pledged Notes, in
each case paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate rights with respect to the Pledged Securities; provided, however,
that no vote shall be cast or corporate or other ownership right exercised or other action taken which, in the Collateral Agent’s
reasonable judgment, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the
Credit Agreement, this Agreement or any other Loan Document.
(b) If
an Event of Default shall occur and be continuing: (i) all rights of each Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon
become vested in the Collateral Agent who shall thereupon have the sole right, but shall be under no obligation, to exercise or refrain
from exercising such voting and other consensual rights and (ii) the Collateral Agent shall have the right, without notice to any Grantor,
to transfer all or any portion of the Investment Property to its name or the name of its nominee or agent. In addition, the Collateral
Agent shall have the right, at any time, without notice to any Grantor, to exchange any certificates or instruments representing any Investment
Property for certificates or instruments of smaller or larger denominations. If an Event of Default has occurred and is continuing, in
order to permit the Collateral Agent to exercise the voting and other consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder each Grantor shall execute and
deliver (or cause to be executed and delivered) as promptly as reasonably practicable to the Collateral Agent all proxies, dividend payment
orders and other instruments as the Collateral Agent may from time to time reasonably request and each Grantor acknowledges that the Collateral
Agent may utilize the power of attorney set forth herein; provided that, immediately upon waiver or cure of such Event of Default,
all such rights shall, automatically and without further action by any party hereto, revert to such Grantor.
(c) Each
Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor and each
Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) upon any such instruction following the occurrence
and during the continuance of an Event of Default, pay any dividends or other payments with respect to the Investment Property, including
Pledged Securities, directly to the Collateral Agent.
5.04 Proceeds
to be Turned Over To Collateral Agent.
In
addition to the rights of the Secured Parties specified in Section 5.01 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, at the request of the Collateral Agent, all Proceeds received by any Grantor consisting of cash,
cash equivalents, checks and other near-cash items shall be held by such Grantor in trust for the Secured Parties, segregated from other
funds of such Grantor and shall promptly upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received
by such Grantor (duly endorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder
shall be held by the Collateral Agent in a Collateral Account maintained under its sole dominion and control. All Proceeds while held
by the Collateral Agent in a Collateral Account (or by such Grantor in trust for the Secured Parties) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 5.05.
5.05 Application
of Proceeds.
If
an Event of Default shall have occurred and be continuing, at any time at the Collateral Agent’s election, the Collateral Agent
may apply all or any part of the net Proceeds (after deducting fees and expenses as provided in Section 5.06) constituting
Collateral realized through the exercise by the Collateral Agent of its remedies hereunder, whether or not held in any Collateral Account
in payment of the Obligations in accordance with Section 9.03 of the Credit Agreement.
5.06 Code
and Other Remedies
(a) If
an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating
to the Obligations, all rights and remedies of a secured party under the New York UCC (whether or not the New York UCC applies to the
affected Collateral) or its rights under any other applicable law or in equity. Without limiting the generality of the foregoing, the
Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, license, assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales,
at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Each Secured
Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to be made may constitute reasonable notification. The Collateral
Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. The Collateral Agent may sell the Collateral without giving any warranties
as to the Collateral. The Collateral Agent may specifically disclaim or modify any warranties of title or the like. This procedure will
not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Each Grantor agrees that it would not
be commercially unreasonable for the Collateral Agent to dispose of the Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that
match buyers and sellers of assets. Each Grantor hereby waives any claims against the Collateral Agent arising by reason of the fact that
the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at
a public sale, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree.
Each Grantor further agrees, if reasonably requested by the Collateral Agent, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Collateral Agent shall have the right to enter onto the property where any Collateral is located and take possession thereof with
or without judicial process.
(b) The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 5.06, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of the Secured Parties hereunder, including reasonable attorneys’ fees and disbursements,
to the payment in whole or in part of the Obligations and only after such application and after the payment by the Collateral Agent of
any other amount required by any provision of law, including Section 9-615(a) of the New York UCC, need the Collateral Agent account for
the surplus, if any, to any Grantor. If the Collateral Agent sells any of the Collateral upon credit, the applicable Grantor will be credited
only with payments actually made by the purchaser and received by the Collateral Agent and applied to indebtedness of the purchaser. In
the event the purchaser fails to pay for the Collateral, the Collateral Agent may resell the Collateral and the applicable Grantor shall
be credited with proceeds of the sale. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands
it may acquire against any Secured Party arising out of the exercise by them of any rights hereunder.
(c) In
the event of any disposition of any of the material Trademarks, the goodwill of the business connected with the use of and symbolized
by any material Trademarks subject to such Disposition shall be included, and with respect to any Intellectual Property Collateral, the
applicable Grantor shall supply the Collateral Agent or its designee with such Grantor’s know-how and expertise, and with records,
documents and things embodying the same, relating to the manufacture, distribution, advertising and sale of products or the provision
of services relating to such Intellectual Property Collateral subject to such disposition, and such Grantor’s customer lists pertaining
thereto, subject to appropriate confidentiality undertakings on the part of any person receiving such proprietary information.
(d) The
Collateral Agent shall have no obligation to marshal any of the Collateral.
(e) For
the purpose of enabling the Collateral Agent, after the occurrence and during the continuance of an Event of Default, to exercise rights
and remedies under Section 5 hereof at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent, an irrevocable (during the continuance of an Event
of Default), non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case
of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such
Trademarks, to use, license or sublicense any of the Intellectual Property of such Grantor, wherever the same may be located. Such license
shall include access to all media in Grantor’s possession or control in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout thereof. Such license shall automatically terminate with the payment
in full of the Obligations.
5.07 Registration
Rights
(a) If
the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Equity Interests or the Pledged Debt Securities
pursuant to Section 5.06, and if in the opinion of the Collateral Agent it is necessary or advisable to have the Pledged Equity Interests
or the Pledged Debt Securities, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant
Grantor shall cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Collateral
Agent, necessary or advisable to register the Pledged Equity Interests or the Pledged Debt Securities, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use commercially reasonable efforts to cause the registration statement relating thereto
to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Equity
Interests or the Pledged Debt Securities or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Collateral Agent, are reasonably necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the SEC applicable thereto. Each Grantor agrees to use commercially reasonable
efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions
which the Collateral Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each
Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Equity Interests or the Pledged
Debt Securities by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and
may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among
other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.
Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Equity Interests or the Pledged
Debt Securities for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree to do so.
(c) Each
Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Equity Interests or the Pledged Debt Securities pursuant to this Section 5.07
valid and binding and in compliance with any and all other applicable Law. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 5.07 will cause irreparable injury to the Secured Parties, that the Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 5.07 shall
be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing under the Credit
Agreement or a defense of payment.
5.08 Deficiency.
Each
Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by any Secured Party to collect such deficiency.
5.09 Non-Judicial
Enforcement.
The
Collateral Agent may enforce its right hereunder without prior judicial process or judicial hearing and, to the extent permitted by law,
each Grantor expressly waives any and all legal rights which may otherwise require the Collateral Agent to enforce its rights by judicial
process or judicial hearing.
SECTION
6. THE COLLATERAL AGENT
6.01 Collateral
Agent’s Appointment as Attorney-in-Fact, etc.
(a) The
Collateral Agent has been appointed to act as Collateral Agent hereunder by Lenders and, by their acceptance of the benefits hereof, the
other Secured Parties. The Collateral Agent shall be obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including, without limitation, the release
or substitution of Collateral), solely in accordance with this Agreement and the Credit Agreement. In furtherance of the foregoing provisions
of this Section 6.01, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually
to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder
may be exercised solely by the Collateral Agent for the benefit of the Secured Parties in accordance with the terms of this Section
6.01. Subject to the appointment and acceptance of a successor Collateral Agent as provided in this paragraph, the Collateral Agent
may resign at any time in accordance with Section 10.07 of the Credit Agreement. Upon any such resignation, the Required Lenders shall
have the right, with the consent (not to be unreasonably withheld or delayed) of Holdings, to appoint a successor; provided that
during the existence and continuance of an Event of Default no such consent of Holdings shall be required. If no successor shall have
been so appointed by the Required Lenders, as the case may be, and shall have accepted such appointment within 30 days after the
retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may, on behalf of the Lenders, appoint a
successor Collateral Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance
of its appointment as Collateral Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall, as promptly as reasonably practicable,
(i) transfer to such successor Collateral Agent all sums, Securities and other items of Collateral held hereunder, together with all records
and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under
this Agreement, and (ii) execute and deliver to such successor Collateral Agent or otherwise authorize the filing of such amendments to
financings statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor
Collateral Agent of the security interests created hereunder, whereupon such retiring Collateral Agent shall be discharged from its duties
and obligations hereunder. After any Collateral Agent’s resignation hereunder, the provisions of this Agreement shall continue in
effect for the benefit of such retiring Collateral Agent in respect of any actions taken or omitted to be taken by any of them while acting
as Collateral Agent.
(b) Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name
of such Grantor or in its own name, such appointment being coupled with an interest, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or, in the
Collateral Agent’s reasonable judgment, desirable to accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor without notice to or assent
by such Grantor to do any or all of the following:
(i) in
the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any Receivable or Contract or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for
the purpose of collecting any and all such moneys due under any Receivable or Contract or with respect to any other Collateral whenever
payable;
(ii) in
the case of any Owned Intellectual Property constituting Collateral, execute and deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence the Secured Parties’ security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
(iii) pay
or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for
by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;
(iv) execute,
in connection with any sale provided for in Section 5.07 or 5.08, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1)
direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3)
sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce
any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along with the goodwill of the business
to which any such Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Collateral
Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes,
and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things
which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
Anything
in this Section 6.01 to the contrary notwithstanding, the Collateral Agent agrees that, except as provided in Section 6.01(b),
it will not exercise any rights under the power of attorney provided for in this Section 6.01(b) unless an Event of Default shall
have occurred and be continuing.
(c) If
an Event of Default has occurred and is continuing, if any Grantor fails to perform or comply with any of its agreements contained herein,
the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance,
with such agreement; provided, however, that the Collateral Agent shall not exercise this power without first making demand
on such Grantor and such Grantor failing to immediately comply therewith.
(d) The
reasonable and documented out-of-pocket expenses of the Collateral Agent incurred in connection with actions undertaken as provided in
this Section 6.01 shall be payable by such Grantor to the Collateral Agent on demand.
(e) Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
6.02 Duty
of Collateral Agent.
The
Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, nor any other Secured Party nor any of their respective officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or affiliates shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other person or to take any other action whatsoever with regard to the Collateral or
any part thereof. The powers conferred on the Secured Parties hereunder are solely to protect the Secured Parties’ interests in
the Collateral and shall not impose any duty upon any Secured Party to exercise any such powers. The Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or affiliates shall be responsible to any Grantor for any
act or failure to act hereunder, except to the extent that any such act or failure to act is found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from their own gross negligence, bad faith, or willful misconduct in breach of a
duty owed to such Grantor.
6.03 Filing
of Financing Statements.
Each
Grantor acknowledges that pursuant to Section 9-509(b) of the New York UCC and any other applicable law, each Grantor authorizes the Collateral
Agent to file or record financing or continuation statements, and amendments thereto, and other filing or recording documents or instruments
with respect to the Collateral, without the signature of such Grantor in such form and in such offices as the Collateral Agent reasonably
determines appropriate to perfect or maintain the perfection of the security interests of the Collateral Agent under this Agreement. Each
Grantor agrees that such financing statements may describe the collateral in the same manner as described in the Collateral Documents
or as “all assets” or “all personal property,” whether now owned or hereafter existing or acquired or such other
description as the Collateral Agent, in its sole judgment, determines is necessary or advisable. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording
in any jurisdiction.
6.04 Authority
of Collateral Agent.
Each
Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken
by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other
Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
6.05 Appointment
of Co-Collateral Agents.
At
any time or from time to time, in order to comply with any applicable requirement of law, the Collateral Agent may appoint another bank
or trust company or one of more other persons, either to act as co-agent or agents on behalf of the Secured Parties with such power and
authority as may be necessary for the effectual operation of the provisions hereof and which may be specified in the instrument of appointment
(which may, in the discretion of the Collateral Agent, include provisions for indemnification and similar protections of such co-agent
or separate agent).
SECTION
7. MISCELLANEOUS
7.01 Amendments
in Writing.
None
of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument
executed by each affected Grantor and the Collateral Agent, subject to any consents required under Section 11.01 of the Credit Agreement;
provided that any provision of this Agreement imposing obligations on any Grantor may be waived by the Collateral Agent in a written
instrument executed by the Collateral Agent.
7.02 Notices.
All
notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 11.02 of the Credit Agreement.
7.03 No
Waiver by Course of Conduct; Cumulative Remedies.
No
Secured Party shall by any act (except by a written instrument pursuant to Section 7.01), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which such Secured Party would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided
by law.
7.04 Enforcement
Expenses; Indemnification
(a) The
parties hereto agree that the Collateral Agent and the other Secured Parties shall be entitled to reimbursement of their expenses incurred
hereunder as provided in Section 11.04 of the Credit Agreement.
(b) Each
Grantor agrees to pay, and to hold the Collateral Agent and each other Secured Party harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement, except Other Taxes
covered in Section 3.01 of the Credit Agreement.
(c) Each
Grantor agrees to pay, and to hold the Collateral Agent and each other Secured Party harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this Agreement to the extent any Borrower would be required
to do so pursuant to Section 11.04 of the Credit Agreement.
(d) The
agreements in this Section 7.04 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement
and the other Loan Documents.
7.05 Successors
and Assigns.
This
Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Secured Parties and their
successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Collateral Agent, and any attempted assignment without such consent shall be null and void.
7.06 Set-Off.
Each Grantor hereby irrevocably authorizes each Secured Party at any time and from time to time, while an Event of Default shall
have occurred and be continuing, with notice to such Grantor or any other Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by
such Secured Party to or for the credit or the account of such Grantor or any part thereof in such amounts as such Secured Party may
elect, against and on account of the obligations and liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any currency, whether arising hereunder, under the Credit
Agreement, or any other Loan Document, as such Secured Party may elect, whether or not any Secured Party has made any demand for
payment and although such obligations, liabilities and claims may be contingent or unmatured. Each Secured Party shall notify such
Grantor as promptly as reasonably practicable of any such set-off and the application made by such Secured Party of the proceeds
thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The
rights of each Secured Party under this Section 7.06 are in addition to other rights and remedies (including other rights of
set-off) which such Secured Party may have.
7.07 Counterparts.
This
Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile
and electronic PDF delivery), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. The
words “execution,” “signed,” “signature,” and words of like import in this Agreement 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.
7.08 Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
7.09 Section
Headings.
The
Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken
into consideration in the interpretation hereof.
7.10 Integration.
This
Agreement and the other Loan Documents represent the agreement of the Grantors, the Collateral Agent and the other Secured Parties with
respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any Secured
Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.
7.11 APPLICABLE
LAW.
THIS
AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE)
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO
THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).
7.12 Submission
to Jurisdiction; Waivers.
(a)
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
(b)
EACH GRANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY WITH OFFICES ON THE DATE HEREOF IN NEW YORK,
NEW YORK (OR SUCH OTHER AGENT TO RECEIVE SERVICE OF PROCESS IN NEW YORK, NEW YORK AS IS REASONABLY ACCEPTABLE TO THE COLLATERAL AGENT),
AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE, AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GRANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE
AND AGENT IN NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE COLLATERAL AGENT UNDER THIS AGREEMENT. EACH
GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS SET FORTH ON SCHEDULE
11.02 OF THE CREDIT AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
COLLATERAL AGENT UNDER THIS AGREEMENT OR ANY SECURED PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GRANTORS IN ANY OTHER JURISDICTION.
7.13 Acknowledgments.
Each
Grantor hereby acknowledges that:
(a) it
has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) no
Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no
joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among
the Secured Parties or among the Grantors and the Secured Parties.
7.14 Additional
Grantors.
Each
Subsidiary of Holdings that is required to become a party to this Agreement pursuant to Section 7.12 of the Credit Agreement shall become
a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of
Annex 1 hereto.
7.15 Releases
(a) At
such time as the Loans and the other Obligations shall have been paid in full and the commitments under the Credit Agreement have been
terminated or expired, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery
of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held
by the Collateral Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
(b) If
any of the Collateral shall be sold or otherwise disposed of by any Grantor (other than to another Grantor) in a transaction permitted
by the Credit Agreement, then the Collateral Agent, at the request and sole expense of such Grantor shall execute and deliver to such
Grantor all releases or other documents reasonably necessary for the release of the Liens created hereby on such Collateral. At the request
and sole expense of the Borrowers, a Grantor (other than a Borrower) shall be released from its obligations hereunder in the event that
(x) all the Equity Interests in such Grantor shall be sold or otherwise disposed of in a transaction permitted by the Credit Agreement
or (y) such Grantor ceases to be a Restricted Subsidiary or otherwise becomes an Excluded Subsidiary as a result of a transaction permitted
by the Credit Agreement; provided that Holdings shall have delivered to the Collateral Agent, at least ten Business Days (or such
shorter time as the Collateral Agent may agree) prior to the date of the proposed release, a written request for such release identifying
the relevant Grantor and the terms of the relevant sale or other disposition in reasonable detail, including the price thereof and any
expenses incurred in connection therewith, together with a certification by Holdings stating that such transaction is in compliance with
the Credit Agreement and the other Loan Documents.
(c) Each
Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any
financing statement originally filed in connection herewith without the prior written consent of the Collateral Agent, subject to such
Grantor’s rights under Section 9-509(d)(2) of the New York UCC.
(d) Notwithstanding
any of the foregoing, any release of Collateral or Grantors effected in the manner permitted by the Credit Agreement or any other Loan
Document shall not require the consent of holders of obligations under Secured Hedge Agreements or Secured Treasury Management Agreements.
7.16 WAIVER
OF JURY TRIAL.
EACH GRANTOR AND THE COLLATERAL
AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
7.17 Reinstatement.
This
Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for
liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors
or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective
or be reinstated, as the case be, if at any time payments and performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned by any oblige of the Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
[Remainder
of page intentionally left blank]
IN WITNESS WHEREOF,
each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
| |
AAL Delaware Holdco, Inc. |
| |
|
|
| |
By: |
/s/ Talman Pizzey |
| |
Name: |
Talman Pizzey |
| |
Title: |
President and CEO |
| |
|
|
| |
ASP Acuren Holdings, Inc. |
| |
|
|
| |
By: |
/s/ Talman Pizzey |
| |
Name: |
Talman Pizzey |
| |
Title: |
President |
| |
|
|
| |
Acuren Corporation |
| |
|
|
| |
By: |
/s/ Talman Pizzey |
| |
Name: |
Talman Pizzey |
| |
Title: |
Chief Executive Officer |
Signature Page to Pledge and Security Agreement
| |
GRANTORS: |
| |
|
|
| |
ASP Acuren Intermediate Holdings, Inc. |
| |
Rockwood Service Corporation |
| |
Acuren USA, Inc. |
| |
Acuren Wind US Inc. |
| |
Acuren Inspection, Inc. |
| |
Century Inspection, Inc. |
| |
ADV Integrity, Inc. |
| |
HT Engineering, Inc. |
| |
Echo NDE USA, Inc. |
| |
GBOG Holding Corporation |
| |
Versa Integrity Group, Inc. |
| |
TEI Analytical Services, Inc. |
| |
|
|
| |
By: |
/s/ Talman Pizzey |
| |
Name: |
Talman Pizzey |
| |
Title: |
President |
Signature Page to Pledge and Security Agreement
| |
JEFFERIES FINANCE LLC |
| |
as Collateral Agent |
| |
|
| |
By: |
/s/ John Koehler |
| |
Name: |
John Koehler |
| |
Title: |
Managing Director |
Exhibit 10.7
CONSULTING SERVICES AGREEMENT
This CONSULTING SERVICES AGREEMENT
(this “Agreement”), dated and effective as of July 30, 2024 (the “Effective Date”), is entered into
by and between Acuren Corporation (f/k/a Admiral Acquisition Limited) (the “Company”), and Mariposa Capital, LLC, a
Delaware limited liability company (“Consultant”).
WHEREAS, the Company desires
to receive from Consultant, and Consultant desires to provide to the Company, the Services (as defined below) pursuant to the terms and
conditions set forth in this Agreement; and
WHEREAS, the compensation
arrangements set forth in this Agreement are designed to compensate Consultant for providing such Services to the Company.
NOW, THEREFORE, in consideration
of the mutual agreements hereinafter set forth, the parties hereto agree as follows:
1. Agreement;
Term.
(a) The
Company hereby retains Consultant to perform, and Consultant agrees to render to the Company and its direct and indirect subsidiaries
(“Subsidiaries”), on the terms herein set forth, the following services (collectively, the “Services”):
| (i) | corporate development and consulting services; |
| (ii) | consulting services with respect to mergers and acquisitions; |
| (iii) | investor relations services; |
| (iv) | strategic planning consulting services; |
| (v) | capital expenditure allocation consulting services; |
| (vi) | strategic treasury consulting services (including without limitation advice regarding financings, equity
offerings, global cash planning and other related services); and |
| (vii) | such other services relating to the Company and its Subsidiaries as may from time to time be mutually
agreed to among the parties. |
(b) It
is expressly understood and agreed that Consultant shall devote only so much time, and shall consult with and advise the officers and
directors of the Company only to such extent and, at such times and places, as may be mutually convenient to the Company and Consultant.
Consultant shall be free to provide similar services to such other business enterprises or activities as Consultant may deem fit without
any limitation or restriction whatsoever.
(c) The
initial term of this Agreement shall commence as of the Effective Date and shall terminate on the first anniversary of the Effective Date
(the “Initial Term”). The Initial Term shall be automatically renewed for successive one-year terms (each, a “Renewal
Term”) unless either party notifies the other party in writing of its intention not to renew the Agreement no later than ninety
(90) days prior to the expiration of the Initial Term or a Renewal Term, as the case may be. This Agreement may only be terminated by
the Company upon a vote of a majority of the Company’s directors. In the event that this Agreement is terminated by the Company,
the effective date of the termination shall be six (6) months following the expiration of the Initial Term or a Renewal Term, as the case
may be.
2. Compensation
and Expenses.
(a) For
the Services to be rendered by Consultant hereunder, Consultant shall receive an annual fee (the “Management Fee”)
equal to $2,000,000.00. The Company shall pay the Management Fee in quarterly installments, in advance, equal to $2,000,000.00. Within
ten (10) days of the date hereof, the Company shall pay Consultant an amount representing the pro rata portion of the Management Fee for
the quarter ending September 30, 2024.
(b) The
Company shall reimburse Consultant for the cost of all reasonable out-of-pocket fees and expenses incurred by Consultant and its affiliates
in the performance of the Services hereunder and all matters related thereto. The aforementioned expenses will be payable by the Company
to Consultant or its designee promptly following presentation by Consultant of invoices for such expenses.
3. Relationship
of the Parties. Consultant is providing the Services hereunder as an independent contractor. Nothing in this Agreement shall be deemed
to constitute the parties hereto as joint venturers, alter egos, partners or participants in an unincorporated business or other separate
entity, nor in any manner create any employer-employee or principal-agent relationship between the Company and/or any of its Subsidiaries
on the one hand, and Consultant or any of Consultant’s members, advisors, officers or employees on the other hand (notwithstanding
the fact that the Company and Consultant may have in common any officers, directors, stockholders, members, managers, employees, or other
personnel).
4. Directors
and Officers. Nothing in this Agreement shall be construed to relieve the directors or officers of the Company and its Subsidiaries
from the performance of their respective duties or limit the exercise of their powers in accordance with the Company’s and its Subsidiaries’
charter, bylaws, operating agreement, other constituent documents, applicable law, or otherwise. The activities of the Company and its
Subsidiaries shall at all times be subject to the control and direction of their respective directors and officers. The Company and its
Subsidiaries reserve the right to make all decisions with regard to any matter upon which Consultant has rendered its advice and consultation.
The Company, its Subsidiaries and Consultant expressly acknowledge and agree that Consultant is being engaged by the Company and its Subsidiaries
to provide the Services to the Company and its Subsidiaries, for which Consultant will be compensated pursuant to the terms of this Agreement.
Consultant shall not, and shall have no authority to, control the Company or its Subsidiaries or the Company’s or its Subsidiaries’
day-to-day operations, whether through the performance of Consultant’s duties hereunder or otherwise. Moreover, although the Company
and/or its Subsidiaries may grant to Consultant authority to sign, review or approve the Company’s and/or its Subsidiaries’
checks, payments, expenditures, transfers and/or conveyances, any such grant of authority shall be made by the Company or its Subsidiaries,
as applicable, and accepted by Consultant with the express understanding and limitation that Consultant shall possess and exercise such
authority solely in its capacity as a provider of the Services pursuant to the terms of this Agreement, and in no other capacity, and
that no inference shall be drawn therefrom as to any ability of Consultant to control the Company or its Subsidiaries or the Company’s
or its Subsidiaries’ day-to-day operations or any liability or responsibility therefor. The Company’s and its Subsidiaries’
directors, officers and employees shall retain all responsibility for the Company, its Subsidiaries and their operations as and to the
extent required by the Company’s and its Subsidiaries’ charter, bylaws, operating agreement, other constituent documents,
and applicable law.
5. Limitation
of Liability. Neither Consultant nor any of its affiliates, nor any of their respective members, managers, partners, directors, officers,
employees, agents and/or controlling persons, nor any successor by operation of law (including by merger) of any such person, nor any
entity that acquires all or substantially all of the assets of any such person in a single transaction or series of related transactions
(all of the foregoing, collectively, the “Consultant Indemnitees”) shall be liable to the Company or any of its Subsidiaries
or affiliates or any of the security holders or creditors of the Company or any of its affiliates for (i) any damage, loss, liability,
deficiency, diminution in value, action, suit, claim, proceeding, investigation, audit, demand, assessment, fine, judgment, cost or other
expense (including, without limitation, legal fees and expenses) (collectively “Liabilities”) directly or indirectly
(whether direct or indirect, in contract or tort or otherwise) arising out of, related to, caused by, based upon or in connection with
the performance of the Services contemplated by this Agreement unless such Liability shall be proven to result directly and primarily
from the willful misconduct of such person or (ii) any Outside Activities (as defined below). Consultant makes no representations or warranties,
express or implied, in respect of the Services provided by any Consultant Indemnitee. In no event will any Consultant Indemnitee be liable
to the Company (x) for any special, indirect, punitive, incidental or consequential damages, including, without limitation, loss of profits
or savings or lost business, whether or not such damages are foreseeable or such Consultant Indemnitee has been advised of the possibility
of such damages or (y) in respect of any Liabilities relating to any third party claims (whether based in contract, tort or otherwise),
except as set forth in Section 6 below. Under no circumstances will the aggregate of any and all Liabilities of Consultant Indemnitees
exceed, in the aggregate, the fees actually paid to Consultant hereunder.
6. Indemnification.
The Company and its Subsidiaries shall jointly and severally reimburse, defend, indemnify and hold Consultant Indemnitees, and each of
them, harmless from and against any Liabilities arising out of, related to, caused by, based upon or in connection with (a) any act or
omission of, or on behalf of, the Company, any of its Subsidiaries, Consultant or any of Consultant Indemnitees, except to the extent
proven to result directly and primarily from the willful misconduct of the person seeking indemnification, or (b) any act or omission
made at the direction of the Company or any of its Subsidiaries (collectively, “Claims”). The Company and its Subsidiaries
and affiliates shall jointly and severally defend at their own cost and expense any and all suits or actions (just or unjust) which may
be brought against the Company, its Subsidiaries or any of their affiliates, or any Consultant Indemnitee or in which any Consultant Indemnitee
may be impleaded with others upon any Claims, or upon any matter, directly or indirectly arising out of, related to, caused by, based
upon or in connection with this Agreement or the performance (or failure of performance) hereof by any Consultant Indemnitee.
7. Notices.
All notices, requests, demands or other communications permitted or required to be given hereunder shall be given or made in writing and
shall be (i) delivered personally (including delivery by commercial courier), (ii) sent by registered or certified airmail, postage prepaid,
or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as
ay be designated by notice from such party hereunder:
To the Company:
Acuren Corporation
14434 Medical Complex Drive, #100
Tomball, Texas 77377
Attention: Fiona E. Sutherland
Email: fiona.sutherland@acuren.com
To Consultant:
Mariposa Capital, LLC
500 South Pointe Drive
Suite 240
Miami Beach, Florida 33139
Attention: Desiree DeStefano
Email: ddestefano@marcapllc.com
Any notice, request, demand
or other communication permitted or required to be given hereunder shall be deemed conclusively to have been given: (a) on the first business
day following the day timely deposited with a nationally recognized overnight delivery service with an order for next-day delivery, with
the cost of delivery prepaid for the account of the sender; (b) on the fifth business day following the day duly sent by certified or
registered United States mail, postage prepaid and return receipt requested; or (c) if delivered by other means, when actually received
by the addressee on a business day (or on the next business day if received after the close of normal business hours or on any non-business
day).
8. Assignment;
Successors and Assigns. This Agreement and the rights, duties and obligations of the Company and its Subsidiaries hereunder may not
be assigned or delegated by the Company or its Subsidiaries without the prior written consent of Consultant. This Agreement and the rights,
duties and obligations of Consultant hereunder may not be assigned or delegated by Consultant, other than to an affiliate of Consultant,
without the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned). All covenants,
promises and agreements by or on behalf of the parties contained in this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, legal representatives, successors and assigns.
9. Amendments.
No amendment, supplement or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed
by Consultant and the Company (in the case of an amendment or supplement) or by the waiving party (in the case of a waiver).
10. Applicable
Law; WAIVER OF JURY TRIAL. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State
of Delaware, without giving effect to principles of conflicts of law or choice of law that would compel the application of the substantive
laws of any other jurisdiction. EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT THEREOF.
11. Section
Headings. The headings of each section are contained herein for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
12. Entire
Agreement. This Agreement sets forth the entire agreement of the parties hereto with regard to the subject matter hereof and supersedes
and replaces all prior agreements, understandings and representations, oral or written, with regard to such matters.
13. Severability.
If any provision of this Agreement or application thereof under any circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or
application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances,
it shall nevertheless remain in full force and effect in all other circumstances.
14. Counterparts.
This Agreement may be executed in counterparts, each of which shall be an original, and both of which together shall constitute one and
the same document. Any counterpart may be executed by PDF or facsimile signature and such PDF or facsimile signature shall be deemed an
original.
15. Further
Assurances. Each party hereto agrees to use all reasonable efforts to obtain all consents and approvals, and to do all other things,
necessary for the transactions contemplated by this Agreement. The parties agree to take such further action and to deliver or cause to
be delivered any additional agreements or instruments as any of them may reasonably request for the purpose of carrying out this Agreement
and the agreements and transactions contemplated hereby.
16. Attorneys’
Fees. If any action at law or in equity is necessary or desirable to enforce or interpret the terms of this Agreement, to protect
the rights obtained hereunder, or where any provision hereof is validly asserted as a defense, then Consultant shall be entitled to recover
from the Company its reasonable attorneys’ fees incurred in connection therewith, including attorneys’ fees on appeal, and
all costs and disbursements, in addition to any other available relief or remedy to which it may be entitled.
17. Outside
Activities. The Company hereby acknowledges and agrees that one or more of Consultant Indemnitees have had, and from time to time
may have, outside activities or interests that conflict or may conflict with the best interests of the Company, its Subsidiaries or any
of their affiliates (collectively, “Outside Activities”), including (without limitation) investment opportunities or
investments in, ownership of, or participation in entities that are or could be complementary to, or competitive with, the Company, its
Subsidiaries or any of their affiliates. The Company hereby consents to all such Outside Activities, and no Consultant Indemnitee shall
be liable to the Company, its Subsidiaries or any of their affiliates for breach of any duty (contractual or otherwise), including without
limitation any fiduciary duties, by reason of any such activities or of such person’s participation therein. In the event that any
Consultant Indemnitee acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both the Company,
its Subsidiaries or any of their affiliates, on the one hand, and any Consultant Indemnitee, on the other hand, or any other person, no
Consultant Indemnitee shall have any duty (contractual or otherwise), including without limitation any fiduciary duties, to communicate,
present or offer such corporate opportunity to the Company, its Subsidiaries or any of their affiliates and, notwithstanding any provision
of this Agreement to the contrary, shall not be liable to the Company, its Subsidiaries or any of their affiliates for breach of any duty
(contractual or otherwise), including without limitation any fiduciary duties, by reason of the fact that any Consultant Indemnitee directly
or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present or communicate
such opportunity to the Company, its Subsidiaries or any of their affiliates, even though such corporate opportunity may be of a character
that, if presented to the Company, its Subsidiaries or any of their affiliates, could be taken by the Company, its Subsidiaries or any
of their affiliates, as applicable. The Company hereby renounces any interest, right, or expectancy in any such opportunity not offered
to it by Consultant Indemnitees to the fullest extent permitted by law. For the avoidance of doubt, the provisions of this Section
17 shall not limit in any respect the provisions of Section 4 of this Agreement.
18. Construction.
The construction of this Agreement shall not take into consideration the party who drafted or whose representative drafted any portion
of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties
have executed this Consulting Services Agreement as of the date first above written.
| |
COMPANY: |
| |
|
|
| |
ACUREN CORPORATION |
| |
|
|
| |
By: |
/s/ Robert A.E. Franklin |
| |
Name: |
Robert A.E. Franklin |
| |
Title: |
Director |
| |
CONSULTANT: |
| |
|
|
| |
MARIPOSA CAPITAL, LLC |
| |
|
|
| |
By: |
/s/ Desiree DeStefano |
| |
Name: |
Desiree DeStefano |
| |
Title: |
Chief Financial Officer |
7
Exhibit 10.8
17
May 2023
ADMIRAL
ACQUISITION LIMITED
and
THE
DIRECTORS OF ADMIRAL ACQUISITION LIMITED
and
IAN
G.H. ASHKEN
and
JAMES
E. LILLIE
and
DESIREE
DESTEFANO
and
MICHAEL
E. FRANKLIN
and
MARIPOSA
ACQUISITION IX, LLC
and
JEFFERIES
INTERNATIONAL LIMITED
and
JEFFERIES
GMBH
and
UBS
AG LONDON BRANCH
Herbert
Smith Freehills LLP
TABLE
OF CONTENTS
| Clause |
|
Headings |
|
Page |
| 1. |
|
Definitions and Interpretation |
|
2 |
| 2. |
|
ApplicationS for Admission and Appointments |
|
10 |
| 3. |
|
Agreement to Issue and Sell Shares AND WARRANTS |
|
11 |
| 4. |
|
Approval, Release and Delivery of Documents |
|
13 |
| 5. |
|
Pre-Closing Obligations |
|
15 |
| 6. |
|
Closing |
|
17 |
| 7. |
|
Conditions |
|
18 |
| 8. |
|
undertakings |
|
20 |
| 9. |
|
Commissions, Costs and Expenses |
|
20 |
| 10. |
|
Transfer Taxes |
|
23 |
| 11. |
|
Warranties |
|
24 |
| 12. |
|
IndemnitIES and Waiver of Claims |
|
26 |
| 13. |
|
Termination |
|
33 |
| 14. |
|
Withholding, TAXES and Gross-Up |
|
35 |
| 15. |
|
Notices |
|
35 |
| 16. |
|
General |
|
37 |
| 17. |
|
APPOINTMENT OF PROCESS AGENT |
|
41 |
| 18. |
|
Governing Law, Jurisdiction and Service of Process |
|
42 |
| Schedule 1 DIRECTORS |
|
43 |
| Schedule 2 PLACING BANKS |
|
44 |
| Schedule 3 WARRANTIES OF THE COMPANY, THE FOUNDERS AND THE FOUNDER ENTITY |
|
45 |
| Schedule 4 DOCUMENTS IN THE AGREED FORM |
|
|
| Schedule 5 DOCUMENTS TO BE DELIVERED |
|
|
| Schedule 6 UNDERTAKINGS |
|
57 |
| Schedule 7 Certificates |
|
|
| Schedule 8 SELLING RESTRICTIONS |
|
|
| Schedule 9 PlacING ALLOCATION tABLE |
|
68 |
| Schedule 10 FORM OF LOCK-UP DEED |
|
|
| Schedule 11 FORM OF PURCHASERS’ LETTER |
|
|
| Schedule 12 AI PLACEES |
|
|
| Schedule 13 Mariposa Investors |
|
|
THIS
AGREEMENT is made on 17 May 2023
BETWEEN:
| 1. | ADMIRAL
ACQUISITION LIMITED, a limited liability company incorporated under the laws of the British
Virgin Islands with registered number 2114331 whose registered office is situated at Ritter
House, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands (the “Company”); |
| 2. | THE
PERSONS whose names and addresses are set out in Part A and Part B of Schedule 1
(the “Directors”) and Part C of Schedule 1 (the “Founder
Non-Directors”); |
| 3. | MARIPOSA
ACQUISITION IX, LLC, a limited liability company formed in the State of Delaware (file
number 7071155) whose registered office is situated at 251 Little Falls Drive, Wilmington,
Delaware, 19808 (“Founder Entity”); |
| 4. | JEFFERIES
INTERNATIONAL LIMITED, a company incorporated and registered in England and Wales with
registered number 01978621 whose registered office is situated at 100 Bishopsgate, London,
United Kingdom, EC2N 4JL (“Jefferies International”); |
| 5. | JEFFERIES
GMBH, a company incorporated and registered in Germany with registered number 108812
whose registered office is situated at Bockenheimer Landstrasse 24, 60323, Frankfurt am Main,
Germany (“Jefferies GmbH”); and |
| 6. | UBS
AG LONDON BRANCH, a branch registered in England and Wales with UK establishment number
BR004507 whose registered office is situated at 5 Broadgate, London, United Kingdom, EC2M
2QS (“UBS”) (each of Jefferies International, Jefferies GmbH and UBS being
a “Placing Bank” and together, the “Placing Banks”), |
(together
the “parties”).
WHEREAS:
| (A) | The
Company was incorporated and registered in the British Virgin Islands under the BVI Companies
Act (as defined below) on 15 December 2022. |
| (B) | The
Company will apply to the Financial Conduct Authority for approval of the Final Prospectus
(as defined below) and for the admission of all of its ordinary shares and the Warrants (as
defined below) to the standard listing segment of the Official List (as defined below) and
to the London Stock Exchange for the whole of its ordinary share capital and the Warrants
to be admitted to trading on the main market for listed securities. |
| (C) | In
connection with the Offer (as defined below) and the Company’s application for Admission
(as defined below), the Preliminary Prospectus (as defined below), the Disclosure Package
(as defined below) and the Final Prospectus (as defined below) have been prepared. |
| (D) | The
Company proposes to issue the New Ordinary Shares (as defined below) (with Matching Warrants
(as defined below)) at the Offer Price (as defined below) by means of the Offer pursuant
to the terms of this Agreement and under the terms set out in the Final Prospectus or any
other arrangements or transactions contemplated by the Final Prospectus or this Agreement. |
| (E) | The
Founder Entity (as defined below) will subscribe for (i) New Ordinary Shares (with Matching
Warrants) at the Offer Price and (ii) Founder Preferred Shares (with Warrants issued on the
basis of one Warrant per Founder Preferred Share) at $10.50 per Founder Preferred Share,
pursuant to the terms of this Agreement and under the terms set out in the Final Prospectus
or any other arrangements or transactions contemplated by the Final Prospectus or this Agreement. |
| (F) | The
Offer is being made outside the United States pursuant to Regulation S under the Securities
Act (as defined below). In so far as Shares (as defined below) and/or Warrants are to be
made available in the United States in connection with these arrangements, they are to be
made available only to QIBs (as defined below) or to a limited number of accredited investors
(as defined below) pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Neither the Shares (as defined below) nor
the Warrants shall be registered under the Securities Act. |
| (G) | References
in this Agreement to “Jefferies” shall refer to both Jefferies International
and Jefferies GmbH. The division of services between Jefferies International and Jefferies
GmbH shall be determined at Jefferies’ absolute discretion, whereby regulated services with
respect to member states of the European Economic Area and investors located in such jurisdictions
shall be undertaken by Jefferies GmbH only. |
IT
IS AGREED as follows:
| 1. | Definitions
and Interpretation |
In
this Agreement (including the Recitals and Schedules to it) the following expressions have the respective meanings set out below, unless
the contrary intention appears:
“Accounts
Date” means 15 December 2022;
“Accounts
Publication Date” means the day falling three months after publication of the Company’s annual financial report for the year
ending 30 November 2023;
“accredited
investor” has the meaning given in Rule 501(a) of Regulation D;
“Acquisition”
means the initial acquisition by the Company or by any subsidiary thereof (which may be in the form of a merger, capital stock exchange,
asset acquisition, stock purchase, scheme of arrangement, reorganisation or similar business combination) of an interest in an operating
company or business as described in Part I (Investment Opportunity and Strategy) of the Final Prospectus (and, in the context of the
Acquisition, references to a company without reference to a business and references to a business without reference to a company shall
in both cases be construed to mean both a company or a business);
“Acquisition
Announcement” has the meaning given to it in paragraph 2.4 of Schedule 6;
“Acquisition
Closing Date” means the date of the completion of the Acquisition;
“Acquisition
Documents” has the meaning given to it in clause 12.1(b).
“Administrator”
means Oak Fund Services (Guernsey) Limited;
“Administration
Agreement” means the corporate administration agreement, in the agreed form, duly executed by the Company and the Administrator
dated on or about the date of this Agreement;
“Admission”
means admission of all of the Shares and the Warrants, issued and to be issued in connection with the Offer, to the standard listing
segment of the Official List becoming effective in accordance with the Listing Rules and to trading on the London Stock Exchange’s main
market for listed securities becoming effective in accordance with the Admission and Disclosure Standards;
“Admission
and Disclosure Standards” means the requirements contained in the edition of the Admission and Disclosure Standards of the London
Stock Exchange that is most current at the date of this Agreement, containing, among other things, the admission requirements to be met
by companies seeking admission to trading on the London Stock Exchange’s main market for listed securities, as amended from time to time;
“Affiliate”
has the meaning given to it in Rule 405 under the Securities Act and “Affiliates” shall be construed accordingly;
“Agent”
has the meaning given to it in clause 17.2;
“Agreed
Rate” means the rate of 2% per annum above the base rate set by the Bank of England from time to time;
“AI
Placee” means each investor whose name, contact details and allocation of New Ordinary Shares and Matching Warrants is set out
in Schedule 12 (together, the “AI Placees”);
“Applicable
Time” means 7.00 a.m. on 17 May 2023, or such other time as agreed by the Company and the Placing Banks;
“Articles
of Association” means the articles of association of the Company from time to time;
“associate”
has the meaning given to it by section 345 of the Companies Act;
“Auditors”
means the auditors of the Company, being Grant Thornton UK LLP, whose address is 30 Finsbury Square, London, United Kingdom, EC2A 1AG;
“Authorisation”
has the meaning given to it in paragraph 61 of Schedule 3;
“Belief
Statement Schedule” means the schedule, in the agreed form, prepared by the Company’s Counsel and comprising a list of belief,
intention and expectation statements contained in the Preliminary Prospectus, the Disclosure Package and the Final Prospectus approved
by the Directors;
“Board
of Directors” means the board of directors of the Company (or a duly constituted and authorised committee thereof);
“Business
Day” means a day other than a Saturday or Sunday on which trading banks are open for general banking business in London;
“BVI
Companies Act” means the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands;
“Chairman”
means Rory Cullinan, or such other person who is the chairman of the Board of Directors from time to time, provided that such other person
was considered by the Board of Directors to be independent on appointment for the purposes of the Corporate Governance Code;
“CJA”
means the Criminal Justice Act 1993;
“Claims”
has the meaning given to it in clause 12.1;
“Closing
Date” means 22 May 2023 or such other date which the Company, the Founders and the Placing Banks may agree in writing for settlement
of subscriptions for the Offer, being no later than 6 June 2023;
“Companies
Act” means the Companies Act 2006;
“Company’s
Counsel” means:
| ● | as
to English law, Greenberg Traurig, LLP, 8th Floor, The Shard, 32 London Bridge Street, London, United Kingdom SE1 9SG; |
| ● | as
to US law, Greenberg Traurig, LLP, One Vanderbilt Avenue, New York, NY 10017, United States; and |
| ● | as
to British Virgin Islands law, Carey Olsen (Guernsey) LLP, Carey House, Les Banques, St Peter Port, Guernsey GY1 4BZ; |
“Competent
Authority” has the meaning given to it in the Listing Rules;
“Completion”
has the meaning given to it in clause 11.2(d)(i);
“Conditions”
means the conditions set out in clause 7.1;
“Corporate
Governance Code” means the UK Corporate Governance Code published by the Financial Reporting Council;
“CREST”
means the computer-based system and procedures which enable title to units of a security to be evidenced and transferred in dematerialised
form (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
“CREST
Nominee” means UBS AG London Branch with Designation/Account ID PRI and Participant ID 002;
“CREST
Regulations” means the Uncertificated Securities Regulations 2001;
“CTA
09” means the Corporation Tax Act 2009;
“CTA
10” means the Corporation Tax Act 2010;
“Deed
Poll” means the deed poll, in the agreed form, duly executed by the Depositary on 5 May 2023;
“Default
AI Shares” has the meaning given in clause 5.4;
“Default
Institutional Shares” means the Underwritten Shares, less the aggregate number of New Ordinary Shares (with Matching Warrants)
set out in Schedule 12, less the Subscribed Shares;
“Default
Shares” means the Default AI Shares plus the Default Institutional Shares;
“Depositary”
means the depositary from time to time under the Deed Poll which at the date of this Agreement is Computershare Investor Services PLC;
“Depositary
Agreement” means the depositary agreement, in the agreed form, duly executed by the Company and the Depositary dated 9 May 2023;
“Depositary
Interests” means depositary interests representing one Share or one Warrant (as the case may be) and issued by the Depositary
from time to time pursuant to the Deed Poll;
“Directors”
means the persons whose names and addresses are set out in Part A and Part B of Schedule 1;
“Directors’
Questionnaire” means the questionnaire, in the agreed form, and answers to it, completed by each of the Directors and the Founder
Non-Directors duly signed and dated;
“Directors’
Responsibility Statements” means the letters completed by each of the Directors and addressed to the Company and the Placing
Banks, in the agreed form, among other things, accepting responsibility for the information contained in the Preliminary Prospectus,
the Disclosure Package, the Final Prospectus and any Supplementary Prospectus, duly signed by, or on behalf of, each Director on or prior
to the date of this Agreement;
“Disclosure
Guidance and Transparency Rules” or “DTRs” means the disclosure guidance and transparency rules produced by
the FCA and forming part of the FCA Handbook of rules and guidance, as from time to time amended;
“Disclosure
Package” means the Preliminary Prospectus (as amended or supplemented at the Applicable Time) together with the placing announcement
dated 17 May 2023 announcing, among other things, the size of the Offer;
“Disposal”
has the meaning given to it in paragraph 4.1.5 of Schedule 6;
“Encumbrance”
means any pledge, lien, security interest, claim, equity, mortgage, charge, encumbrance or third party right or interest of any nature
whatsoever and including for the avoidance of doubt any pre-emptive or similar right;
“ERISA”
means the US Employee Retirement Income Security Act of 1974;
“Euroclear”
means Euroclear UK & International Limited;
“EUWA”
means the European Union (Withdrawal) Act 2018 (as amended and supplemented);
“Exchange
Act” means the United States Securities Exchange Act of 1934;
“FCA”
means the Financial Conduct Authority of the United Kingdom;
“FCA
Handbook” means the Financial Conduct Authority Handbook of Rules and Guidance and all other rules and regulations made by the
FCA under FSMA;
“FCPA”
has the meaning given to it in paragraph 92 of Schedule 3;
“Final
Prospectus” means the final prospectus of the Company in the agreed form to be published on the date of this Agreement in connection
with the Offer;
“Founder
Directors” means each of the Directors listed in Part A of Schedule 1;
“Founder
Entity” means Mariposa Acquisition IX, LLC;
“Founder
Non-Directors” means each of the persons whose name and address is set out in Part C of Schedule 1;
“Founder
Preferred Shares” means the convertible preferred shares in the capital of the Company;
“Founders”
means the Founder Directors and the Founder Non-Directors (and “Founder” shall mean any one of them);
“FSMA”
means the Financial Services and Markets Act 2000;
“Governmental
Agency” has the meaning given to it in paragraph 61 of Schedule 3;
“Indemnified
Person” has the meaning given to it in clause 12.21;
“Independent
Non-Founder Directors” means Thomas V. Milroy and Melanie Stack or such other non-executive directors of the Company from time
to time considered by the Board of Directors to be independent for the purposes of the Corporate Governance Code;
“Insider
Letters” means the letters, in the agreed form, addressed to the Company and the Placing Banks duly executed by each of: (a)
the Founders and the Founder Entity; and (b) each Non-Founder Director, on or prior to the date of this Agreement and in each case acknowledged
and agreed by the Company;
“Investment
Company Act” means the United States Investment Company Act of 1940;
“Judgment
Currency” has the meaning given to it in clause 16.21;
“Letters
of Undertaking” means the letters, in the agreed form, addressed to the Chairman and each of the Independent Non-Founder Directors,
duly executed by the Founders on or prior to the date of this Agreement;
“Listing
Condition” means the condition set out in clause 7.1(h);
“Listing
Rules” means the Listing Rules of the FCA made under Part VI of FSMA and forming part of the FCA’s Handbook of rules and guidance;
“Lock-up
Period” has the meaning given to it in paragraph 4.1 of Schedule 6;
“London
Stock Exchange” means London Stock Exchange plc;
“Losses”
has the meaning given to it in clause 12.1;
“LPDT
Rules” means the Listing Rules, the Prospectus Regulation Rules and the Disclosure Guidance and Transparency Rules;
“Mariposa
Advisory Agreement” means the agreement dated 17 May 2023 between the Company and Mariposa Capital, LLC;
“Mariposa
Investor” means each investor whose name, contact details and allocation of New Ordinary Shares and Matching Warrants is set
out in Schedule 13;
“Market
Abuse Regulation” or “MAR” means the UK version of Regulation (EU) No 596/2014 of the European Parliament and
of the Council of 16 April 2014 on market abuse which is part of UK law by virtue of the EUWA;
“Matching
Warrants” means the 53,950,000 Warrants proposed to be issued to subscribers of New Ordinary Shares in the Offer on the basis
of one Warrant per New Ordinary Share;
“Material
Adverse Change” means any material adverse change, or any development involving a prospective material adverse change, in the
condition (financial, operational, legal or otherwise), or in the earnings, business affairs, solvency or prospects of the Company, whether
or not arising in the ordinary course of business;
“Memorandum
of Association” means the memorandum of association of the Company from time to time;
“Money
Laundering Laws” has the meaning given to it in paragraph 91 of Schedule 3;
“New
Ordinary Shares” means the 53,950,000 new Shares proposed to be issued by the Company as part of the Offer;
“New
Securities” has the meaning given to it in paragraph 23 of Schedule 6;
“No
Significant Change Letter” means the comfort letter, in the agreed form, relating to there having been no significant change
in the financial or trading position of the Company since the Accounts Date, from the Reporting Accountants and addressed to the Directors
and the Placing Banks and dated the date of the Final Prospectus;
“Non-Founder
Directors” means each of the Directors listed in Part B of Schedule 1;
“OECD
Convention” has the meaning given to it in paragraph 92 of Schedule 3;
“OFAC”
means the Office of Foreign Assets Control of the US Department of the Treasury;
“Offer”
means an offering of New Ordinary Shares (with Matching Warrants): (i) to certain investors in the United Kingdom and elsewhere outside
the United States pursuant to Regulation S under the Securities Act; and (ii) in the United States only to QIBs and accredited investors
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and which, in
each case, shall be made pursuant to the terms of this Agreement and under the terms set out in the Final Prospectus;
“Offer
Documents” means the Prospectuses, the Press Releases, the Roadshow Materials and any amendments or supplements to any of the
foregoing and any other document published or otherwise distributed to investors by or on behalf of the Company, the Founders or the
Founder Entity or their respective Affiliates in connection with the Offer or Admission and any supplements or amendments thereto;
“Offer
Price” means US$ 10.00 per New Ordinary Share (with one Matching Warrant);
“Official
List” means the official list maintained by the FCA pursuant to Part VI of FSMA;
“payee”
has the meaning given to it in clause 9.4(b);
“payer”
has the meaning given to it in clause 9.4(b);
“Placing
Banks’ Counsel” means Herbert Smith Freehills LLP, Exchange House, Primrose Street, London, United Kingdom EC2A 2EG;
“Plan
Asset Regulations” means the regulations promulgated by the US Department of Labor at 29 CFR 2510.3-101, as modified by section
3(42) of ERISA;
“Plan
Investor” means: (i) any “employee benefit plan” that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii)
a plan, individual retirement account or other arrangement that is subject to section 4975 of the US Internal Revenue Code of 1986, (iii)
entities whose underlying assets are considered to include “plan assets” of any plan, account or arrangement described in preceding
paragraph (i) or (ii), or (iv) any governmental plan, church plan, non-US plan or other investor whose purchase or holding of Shares
would be subject to any state, local, non-US or other laws or regulations similar to Part 4 of Subtitle B of Title I of ERISA or section
4975 of the US Internal Revenue Code of 1986, or that would have the effect of the Plan Asset Regulations;
“Preliminary
Prospectus” means the preliminary prospectus of the Company dated 10 May 2023;
“Press
Releases” means the press releases, in the agreed form, to be issued: (i) on or about the date of this Agreement relating to
the publication of the Final Prospectus, and (ii) any other press release relating to the Offer (including any press release issued in
connection with the publication of any Supplementary Prospectus), the issue of which is authorised by the Company;
“Prospectuses”
means the Preliminary Prospectus, the Disclosure Package, the Final Prospectus and any Supplementary Prospectus;
“Prospectus
Regulation Rules” means the Prospectus Regulation Rules of the FCA contained in the FCA’s Prospectus Regulation Rules Sourcebook,
made under Part VI of FSMA, as amended from time to time;
“Publicity
Guidelines” means the publicity guidelines dated 8 June 2022, prepared by the Company’s Counsel in connection with the Offer;
“QIBs”
means qualified institutional buyers within the meaning of Rule 144A under the Securities Act;
“Register
of Members” means the register of members in relation to the Shares and the register of warrantholders in relation to the Warrants
maintained by the Registrar;
“Registrar
of Companies” means the Registrar of Corporate Affairs in the British Virgin Islands;
“Registrar”
means Computershare Investor Services (BVI) Limited of Woodbourne Hall, PO Box 3162, Road Town, Tortola, British Virgin Islands, acting
as registrar in connection with the Offer;
“Registrar
Agreement” means the agreement, in the agreed form, duly executed by the Company and the Registrar on 10 May 2023;
“Regulation
D” means Regulation D under the Securities Act;
“Regulation
S” means Regulation S under the Securities Act;
“Regulatory
Information Service” means a regulatory information service authorised by the FCA to receive, process and disseminate regulatory
information in respect of listed companies;
“Relevant
Persons” has the meaning given to it in paragraph 9 of Schedule 6;
“Relevant
Sum” has the meaning given to it in clause 9.4(c);
“Reporting
Accountants” means Grant Thornton UK LLP, whose address is 30 Finsbury Square, London, United Kingdom EC2A 1AG;
“Restricted
Announcement” has the meaning given to it in paragraph 2.1 of Schedule 6;
“Restricted
Period” has the meaning given to it in paragraph 2.1 of Schedule 6;
“Roadshow
Materials” means the presentation, in the agreed form, prepared by the Company and used during the course of presentations in
connection with the Offer;
“Rule
144A” means Rule 144A under the Securities Act;
“Sanctions”
has the meaning given to it in paragraph 93 of Schedule 3;
“Securities
Act” means the United States Securities Act of 1933;
“Settlement
Bank” means UBS AG London Branch;
“Share
Option Deeds” means the option deeds entered into between the Company and each Non-Founder Director granting each Non-Founder
Director the option to acquire Shares;
“Shares”
means ordinary shares of no par value of the Company excluding, for the avoidance of doubt, the Founder Preferred Shares;
“Subscribed
Shares” has the meaning given in clause 6.2(a)(ii);
“Supplementary
Prospectus” means any prospectus supplementary to the Final Prospectus published by the Company in accordance with section 87G
of FSMA;
“Taxation”
or “tax” means all taxes, levies, imposts, duties, charges or withholdings of any nature whatsoever imposed by a tax
authority of any jurisdiction, together with all penalties, charges and interest relating to any of the foregoing and regardless of whether
the Company, or a Placing Bank or any other person concerned is primarily or directly liable or not and regardless of whether or not
such taxes, levies, imposts, duties, charges, withholdings, penalties and interest are attributable directly or primarily to the Company
or a Placing Bank or any other person concerned, including (without limitation) corporation tax, advance corporation tax, income tax,
capital gains tax, VAT, duties of customs and excise, national insurance contributions, capital duty, stamp duty, stamp duty reserve
tax, stamp duty land tax and any other transfer tax or duty, all taxes, duties or charges replaced by or replacing any of them, and all
other taxes on gross or net income, profits or gains, distributions, receipts, importations, sales, use, occupation, franchise, value
added, and personal property;
“Transaction
Agreements” means this Agreement, the Deed Poll, the Depositary Agreement, the Registrar Agreement, the Warrant Instrument,
the Administration Agreement and any amendment or supplement to any of the foregoing;
“Transfer
Taxes” means stamp duty, stamp duty reserve tax, capital duty or any similar issuance or transfer tax or duty and any related
costs, fines, penalties or interest (if any) whether of the United Kingdom or elsewhere;
“UK
Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the EUWA;
“Underwriting
Proportion” means in relation to Jefferies 50 per cent. and in relation to UBS 50 per cent.;
“Underwritten
Shares” means 45,000,000 New Ordinary Shares (with Matching Warrants) and excludes for the avoidance of doubt the New Ordinary
Shares (with Matching Warrants) to be subscribed by the Founder Entity pursuant to clause 3.3;
“United
States” and “US” means the United States of America, its territories and possessions, any state of the United
States and the District of Colombia;
“US
GAAP” means United States Generally Accepted Accounting Principles;
“US
Treasuries” means securities issued by the United States Department of the Treasury;
“VAT”
means value added tax chargeable under or pursuant to the Value Added Tax Act 1994 or the EC Council Directive 2006/112/EC on the common
system of value added tax and any other sales, purchase or turnover tax of a similar nature, whether imposed in the United Kingdom or
elsewhere;
“Verification
Bundles” means the materials, in the agreed form, prepared by the Company’s Counsel and comprising information provided by the
Company in order to verify material statements and information contained in the Roadshow Materials and the Prospectuses;
“Verification
Notes” means the notes, in the agreed form, prepared by the Company’s Counsel and comprising information provided by the Company
in order to verify material statements and information contained in the Roadshow Materials and the Prospectuses together with the supporting
materials thereto;
“Warrant
Instrument” means the deed poll entered into by the Company on or about the date of this Agreement setting out the rights and
interests of the registered holders of the Warrants for the time being and to afford protection for such rights and interests;
“Warrants”
means the warrants to subscribe for Shares proposed to be issued by the Company pursuant to the Warrant Instrument;
“Warranties”
means the representations, warranties and undertakings of the Company, the Founders and the Founder Entity set out in Schedule 3
and “Warranty” means any one of them; and
“Warrantor”
means, in relation to any Warranty, the party expressed in this Agreement to be giving the Warranty in the terms of that Warranty.
Any
reference to a document being “in the agreed form” means in the form of the draft or proof thereof signed or initialled for
the purpose of identification by the Placing Banks’ Counsel and the Company’s Counsel, or as otherwise evidenced as being in the agreed
form by communications between the Placing Banks’ Counsel and the Company’s Counsel as the case may be, with such alterations (if any)
as may subsequently be agreed by or on behalf of the Placing Banks, the Founders, the Founder Entity, the Directors and the Company (as
the case may be). A complete list of documents in the agreed form as at the date of this Agreement is set out in Schedule 4.
| 1.3 | Subordinate
legislation |
References
to a statutory provision include any subordinate legislation made from time to time under that provision.
| 1.4 | Modification
and re-enactment |
References
to a statutory provision include that provision as from time to time amended, modified or re-enacted so far as such amendment, modification
or re-enactment applies or is capable of applying to any transactions entered into in accordance with this Agreement.
The
expressions “company”, “holding company”, “subsidiary undertaking” and “subsidiary”
shall have the same meanings in this Agreement as in the Companies Act.
Expressions
defined or used in the CREST Regulations shall have the same meanings in this Agreement (except where the context otherwise requires).
| 1.7 | Recitals,
Clauses and Schedules |
References
in this Agreement to recitals, clauses and schedules are, unless otherwise specified, to the recitals and clauses of and schedules to
this Agreement.
Headings
shall be ignored in construing this Agreement.
References
to time of day are to London, United Kingdom, time.
| 1.10 | References
to “includes” or “including” |
References
to “includes” or “including” shall mean “includes without limitation” or “including without limitation”.
Words
in the singular shall include the plural and vice versa.
References
to one gender include other genders.
| 1.13 | References
to a person |
A
reference to a person shall include a reference to a firm, a body corporate, an unincorporated association, a partnership or to an individual’s
executors or administrators.
| 1.14 | Analogous
legal terms |
References
to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any
legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates the
English legal term in that jurisdiction and references to any English statute or enactment shall be deemed to include any equivalent
or analogous laws or rules in any other jurisdiction.
| 1.15 | References
to this Agreement |
References
to this Agreement include this Agreement as amended or supplemented in accordance with its terms.
| 2. | APPLICATIONS
FOR ADMISSION AND APPOINTMENTS |
| 2.1 | Applications
for Admission |
| (a) | The
Company undertakes to apply or procure the application as soon as practicable after the date
of this Agreement, to: |
| (i) | the
FCA for admission of the Shares and Warrants to the standard listing segment of the Official
List; |
| (ii) | the
London Stock Exchange for admission of the Shares and Warrants to trading on its main market
for listed securities; and |
| (iii) | Euroclear
for admission of the Depositary Interests as participating securities (as defined in the
CREST Regulations) in CREST. |
| (b) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors severally
undertakes that it will (in the case of each of the Founder Entity, the Directors and the
Founder Non-Directors so far as is within its power) duly perform all of its respective obligations
in connection with the Offer and Admission and will use all reasonable endeavours to execute
or cause to be executed all such documents, provide or cause to be provided all such information,
and do or cause to be done all such things as may be required by or are necessary to comply
with the requirements of the FCA, the London Stock Exchange, Euroclear and all other applicable
legislation and regulation, in each case in connection with such applications and the Offer. |
| (c) | The
Company and the Directors undertake to apply to the FCA for formal approval of the Final
Prospectus for the purposes of, and in accordance with, the Listing Rules and the Prospectus
Regulation Rules and shall use all reasonable endeavours to obtain such approval as soon
as practicable and in any event before publishing the Final Prospectus. |
| (d) | The
Company and the Directors shall use all reasonable endeavours to secure Admission by not
later than 8.00 a.m. on the Closing Date (or such other time and/or date as the Company and
the Placing Banks agree). |
| 2.2 | Appointment
of the Placing Banks as agents of the Company |
| (a) | The
Company confirms its appointment of (i) each of Jefferies International and UBS as joint
global coordinator, joint bookrunner and placing agent to the Offer and (ii) Jefferies GmbH
as placing agent to the Offer, and each Placing Bank confirms its acceptance of such appointment,
subject to the terms of this Agreement. |
| (b) | The
appointments under clause 2.2(a) confer on each Placing Bank all powers, authorities and
discretions which are necessary for, or incidental to, the performance by each Placing Bank
of its functions as a joint global coordinator, joint bookrunner and placing agent (as applicable)
to the Offer (including, without limitation, the power to appoint sub-agents or to delegate
the exercise of any of its powers, authorities or discretions to such persons as each Placing
Bank sees fit, including the appointment of selling agents who are registered broker-dealers
in the United States to offer, sell and effect transactions in the United States and the
appointment of its subsidiaries or associates to offer, sell and effect transactions outside
the United States, provided that no Placing Bank shall appoint any such person who is not
an Affiliate of that Placing Bank without the prior written consent of the Company (such
consent not to be unreasonably withheld or delayed)). The Company agrees to ratify all actions
which each Placing Bank and its sub-agents and delegates lawfully take pursuant to this appointment. |
| 2.3 | Assistance
to the Placing Banks |
| (a) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors severally
undertakes to each of the Placing Banks that it or they will at all times provide to each
Placing Bank all information and assistance and take all actions (including, in the case
of the Company only, paying all relevant fees) reasonably requested by them or that may be
required by them to satisfy their obligations under or in connection with this Agreement,
the Offer, the LPDT Rules, the Admission and Disclosure Standards, the rules and regulations
of the London Stock Exchange and Euroclear, MAR and/or all applicable laws and regulations
in connection with the Offer including (without limitation) to provide the FCA with any such
information or explanation the FCA may require for the purpose of verifying whether the Listing
Rules, the Prospectus Regulation Rules, the DTRs, MAR and/or all applicable laws and regulations
in connection with the Offer are being, and have been, complied with by the Company. |
| (b) | The
Company authorises each of the Placing Banks to give to the Registrar and/or to Euroclear
any instructions consistent with this Agreement and/or the Offer Documents that it reasonably
considers to be necessary for, or incidental to, the performance of its functions as a joint
global coordinator, joint bookrunner and placing agent (as applicable) in connection with
the Offer, Admission and the applications for the Depositary Interests to be transferred
through and held in dematerialised form through CREST (including, without limitation, delivery
to Euroclear of the letter referred to in clause 7.1(j)). |
| (c) | The
Company, the Founder Entity, the Directors and the Founder Non-Directors each undertake to
the Placing Banks not to revoke the appointments, authorities or instructions contained in
this clause 2 before the earlier of: (i) the termination of this Agreement and (ii) the Closing
Date. |
| (d) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors consents
to each of the Placing Banks disclosing to the FCA at any time before or after Admission
any information which the relevant Placing Bank in its absolute discretion deems: (i) to
relate to the Company, the Offer or Admission; and (ii) to relate to compliance with the
LPDT Rules. Nothing in this Agreement shall require a Placing Bank to do anything inconsistent
with, or restrict a Placing Bank from complying with, its legal or regulatory responsibilities,
duties or obligations. |
| 3. | Agreement
to Issue and Sell Shares AND WARRANTS |
| 3.1 | Issue
and allotment by the Company |
| (a) | Subject
to the satisfaction (or waiver, if capable of waiver) of the Conditions (other than the Listing
Condition) and to this Agreement not having been terminated under clause 13, the Company
undertakes to the Placing Banks that it will prior to 8.00 a.m. on the Closing Date, against
the undertaking to make payment pursuant to clause 6.2 (Payment), allot and issue, in accordance
with the terms and conditions of the Offer, New Ordinary Shares and Matching Warrants as
directed by the Placing Banks. |
| (b) | The
Company undertakes to the Placing Banks that it will (a) allot and issue all New Ordinary
Shares to be allotted and issued by it pursuant to clause 3.1(a) fully paid up in cash at
the Offer Price, free from all Encumbrances and (b) allot and issue all Matching Warrants
to be allotted and issued by it pursuant to clause 3.1(a) in compliance with the Warrant
Instrument and free of any payment and free from all Encumbrances. |
| (c) | The
Company undertakes to the Placing Banks that it will, in accordance with the terms and conditions
of the Warrant Instrument, allot and issue Shares on any valid exercise of Warrants, fully
paid up in cash and free from all Encumbrances. |
Subject
to the terms of this Agreement and relying on the covenants, undertakings, representations and warranties contained in this Agreement,
and subject to the satisfaction (or waiver, if capable of waiver) of the Conditions and subject to this Agreement not having been terminated
under clause 13, each of Jefferies and UBS severally, and not jointly nor jointly and severally, agrees that it will in each case at
the Offer Price use reasonable endeavours to procure subscribers for its Underwriting Proportion of the Underwritten Shares, or failing
which itself subscribe on the Closing Date for its Underwriting Proportion of the Default Shares, provided that nothing in this Agreement
shall require the Placing Banks to purchase, procure subscribers for, or failing which subscribe for, any New Ordinary Shares (with Matching
Warrants) or Founder Preferred Shares with Warrants that are to be subscribed for by the Founder Entity pursuant to clause 3.3.
| 3.3 | Commitment
of the Founder Entity |
| (a) | Subject
to the terms of this Agreement the Founder Entity agrees that: |
| (i) | as
soon as practicable on the Closing Date, it shall subscribe for 999,999 Founder Preferred
Shares (with 1,000,000 Warrants being issued to the Founder Entity on the basis of one Warrant
per Founder Preferred Share) at $10.50 per Founder Preferred Share and undertakes to pay
to the Company an amount equal to the aggregate subscription price for such Founder Preferred
Shares in cleared funds as soon as reasonably practicable on the Closing Date; and |
| (ii) | it
shall subscribe for the number of New Ordinary Shares (with Matching Warrants) set forth
against its name in Schedule 9 at the Offer Price as soon as reasonably practicable
on the Closing Date and in accordance with paragraph 25 of Schedule 6. |
| (b) | The
Founders represent and warrant that the Founder Entity has sufficient assets to meet its
obligations under this Agreement and that the Founder Entity has been funded exclusively
by way of equity investment. |
| 3.4 | Non-binding
indications of interest |
It
is acknowledged by each of the Company, the Founders, the Founder Entity and the Non-Founder Directors that any information it or they
may receive or have received regarding the identity of persons expressing an interest in subscribing for or purchasing New Ordinary Shares
(with Matching Warrants) in the Offer and the prices at which they may be willing to do so will be based on non-binding indications of
interest from such persons and that there can be no assurance that such persons will, or that there will be any obligation on such persons,
to subsequently agree to acquire any New Ordinary Shares (with Matching Warrants) or to acquire the number of New Ordinary Shares (with
Matching Warrants) indicated or at the prices so indicated. Each of the Company, the Founders, the Founder Entity and the Non-Founder
Directors agrees that any such information obtained or received by it or him or any of such person’s officers or employees will be held
in confidence and recognises that such information may constitute inside information in relation to the Company and/or its securities
for the purposes of the CJA and the Market Abuse Regulation and that use of such information may constitute market abuse for the purposes
of the Market Abuse Regulation. Each of the Company, the Founders, the Founder Entity and the Non-Founder Directors severally agrees
to conduct itself and, where relevant, direct its officers and employees to conduct themselves so as to avoid an offence under the CJA
or a breach of the legislation and rules in relation to market abuse by reference to such information.
It
is acknowledged by the Company, the Founder Entity, the Directors and the Founder Non-Directors that the Placing Banks have (to the extent
permitted by law and subject to confidentiality restrictions) discussed with them the principles for allocation, the identity of potential
subscribers in the Offer, the factors all parties believe to be relevant to the allocation of the New Ordinary Shares (with Matching
Warrants) and have agreed the objectives and process for the allocation.
| 3.6 | Contents
of the Offer Documents |
The
Company, the Founder Entity, the Directors and the Founder Non-Directors acknowledge that the Placing Banks are not responsible for and
have not authorised and will not authorise the contents of the Prospectuses or any other Offer Document for the purposes of section 90
of FSMA and the Prospectus Regulation Rules or otherwise and that none of the Placing Banks have been requested to verify, nor is, nor
shall be, responsible for verifying, the accuracy, completeness or fairness of any information in any of the Offer Documents (or any
supplement or amendment to any of the foregoing).
| 4. | Approval,
Release and Delivery of Documents |
| (a) | The
Company confirms to each Placing Bank that a meeting (or meetings) of the Board of Directors
has (or have) been held which has (or have): |
| (i) | authorised
the Company to enter into and perform its obligations under this Agreement; |
| (ii) | (i)
ratified or approved the content and form, and taken responsibility for; and (ii) authorised
and ratified or approved the publication of each of the Offer Documents, as appropriate; |
| (iii) | approved
the making of the Offer and the applications for Admission; |
| (iv) | approved
the making of an application to Euroclear for admission of the Depositary Interests as participating
securities (as defined in the CREST Regulations) in CREST; and |
| (v) | authorised
all necessary steps to be taken by the Company in connection with each of the above matters. |
| (b) | Each
of the Founders and the Founder Entity confirms to each Placing Bank and the Company that
it has approved the Roadshow Materials. |
| (c) | The
Company and each of the Directors confirms that all necessary resolutions of the Company
and its shareholders (and any necessary resolutions of any members of their subsidiary undertakings
or associates) are passed to authorise the Shares and Warrants being held by the Depositary
or its nominated custodian whereby the Depositary will issue Depositary Interests which shall
be admitted as participating securities (as defined in the CREST Regulations) in CREST. |
| (d) | The
Company and each of the Directors confirms that all necessary resolutions have been passed
by and/or consents obtained from the Company’s shareholders to enable the Company to give
effect to its obligations under this Agreement and the terms of the Offer. |
| 4.2 | Publication
of Offer Documents |
| (a) | The
Company shall publish the Final Prospectus in a form satisfactory to each of the Placing Banks and furnish promptly to each of the Placing
Banks, in such quantities as they may request, copies of the Final Prospectus and any Supplementary Prospectus together with any other
documentation relating to the Offer as they may reasonably request from time to time, and procure that each of the Offer Documents is
approved, filed, published and/or made available or issued in accordance with, and complies with, the LPDT Rules (as applicable) and
that: |
| (i) | a
press release, in the agreed form, is delivered to a Regulatory Information Service in time for release no later than 8.00 a.m.
on the date of this Agreement; |
| (ii) | sufficient
copies of the Final Prospectus and any Supplementary Prospectus are made available at the
appropriate times to the public and/or to subscribers for the New Ordinary Shares (with Matching
Warrants); |
| (iii) | sufficient
copies of any Final Prospectus and Supplementary Prospectus are made available at the registered
office of the Company, the offices of the Registrar and the Document Viewing Facility (as
defined in the Listing Rules) and on the Company’s website, in accordance with the requirements
of the Prospectus Regulation Rules; and |
| (iv) | the
documents described in the Final Prospectus and any Supplementary Prospectus as being available
for inspection are made available as described in the Final Prospectus or any such Supplementary
Prospectus. |
| (a) | Immediately
following execution of this Agreement, each of the Company and the Directors (as applicable)
shall deliver, or procure to be delivered, to the Placing Banks, to the extent not previously
delivered, the documents listed in Part A of Schedule 5 (save that the documents
listed in paragraph 2 thereof shall be delivered promptly following FCA approval thereof)
and the Directors shall deliver the Insider Letters to be entered into by each such person. |
| (b) | Immediately
following execution of this Agreement, (i) the Founder Entity, each Director and each Founder
Non-Director shall deliver, or procure to be delivered, to the Placing Banks, to the extent
not previously delivered, the Insider Letters to be entered into by each of them and (ii)
each of the Founders shall deliver, or procure to be delivered, to the Placing Banks, to
the extent not previously delivered, the Letters of Undertaking. |
| (c) | Prior
to the publication of any Supplementary Prospectus, each of the Company, the Founders, the
Founder Entity and the Directors (as applicable) shall deliver or procure to be delivered,
to the Placing Banks, the documents listed in Part B of Schedule 5. |
| (d) | Each
of the Company, the Founders, the Founder Entity and the Directors (as applicable) shall,
no later than noon on the Business Day prior to the Closing Date deliver or procure to be
delivered to the Placing Banks, the documents listed in Part C of Schedule 5. |
| 5. | Pre-Closing
Obligations |
| 5.1 | Admission
of Depositary Interests to CREST |
Each
of the Company, the Founders, the Founder Entity and the Directors shall procure that on or before Admission:
| (a) | all
necessary filings have been made with the Registrar and Registrar of Companies to facilitate
the transfer of Depositary Interests through CREST; |
| (b) | securities
application forms (in connection with the Shares and the Warrants) are submitted by the Company
to Euroclear; |
| (c) | the
Registrar confirms to Euroclear that it is the registrar for all of the Shares and Warrants;
and |
| (d) | the
Registrar and the Depositary take all necessary steps and give all necessary instructions
to Euroclear to allow the Depositary Interests to be held in dematerialised form as at and
from Admission. |
| 5.2 | Determination
of the Allocations |
Allocations
under the Offer will be determined in accordance with clause 3.5.
| 5.3 | Notification
of details for delivery of New Ordinary Shares and Matching Warrants |
No
later than 5.00 p.m. on the second Business Day prior to the Closing Date, the Placing Banks shall notify the Company and the Registrar
of the number of New Ordinary Shares and Matching Warrants to be issued and in each case delivered on the Closing Date and the names,
addresses and, if relevant, custodial details of the persons to whom such New Ordinary Shares and Matching Warrants are to be issued
and delivered, together with the relevant number of New Ordinary Shares and Matching Warrants to be delivered to each such person.
| 5.4 | Settlement
by the Company in respect of AI Placees |
The
Company shall arrange, with the assistance of the relevant Placing Bank as applicable, to settle directly with AI Placees in respect
of New Ordinary Shares (with Matching Warrants) to be subscribed for by AI Placees pursuant to the Offer as set forth in Schedule 12,
and such arrangements shall include the requirement that no New Ordinary Shares or Matching Warrants shall be allotted or issued to an
AI Placee unless and until cleared funds in respect of the New Ordinary Shares (with Matching Warrants) to be subscribed for by such
AI Placee, as set forth against its name in Schedule 12 and a letter in the form of Schedule 11 duly executed by the AI Placee,
have been received. The Company shall notify the Placing Banks, or, as applicable, the relevant Placing Bank shall notify the Company
and the other Placing Bank, by no later than 10.00 a.m. on the Closing Date of any AI Placee who has defaulted on its obligation to pay
the subscription price due from it or to provide such a letter (the aggregate of all such New Ordinary Shares (with Matching Warrants)
in relation to which such default has occurred being the “Default AI Shares”) with full supporting information.
| 5.5 | Calculation
of estimated net proceeds and invoice of expenses |
No
later than 5.00 p.m. on the Business Day immediately prior to the Closing Date, the Placing Banks shall deliver to the Company (including
via email):
| (a) | an
estimate of the amount to be paid by the Placing Banks on the Closing Date in accordance
with the provisions of clause 6.2(a); and |
| (b) | an
invoice in respect of the costs and expenses payable by the Company pursuant to clause 9.3
(to the extent that such costs and expenses are known to the Placing Banks at that time), |
provided
that, for the avoidance of doubt, nothing in this clause 5.5 shall alter the amount the Placing Banks are required to pay under clause
6.2(a) or preclude the Placing Banks from seeking payments for amounts they are entitled to recover under clause 9.3.
| 5.6 | Allotment
of New Ordinary Shares and Matching Warrants |
| (a) | The
Company and, so far as each Director has the power to do so, each Director will procure that
on or before the Business Day prior to the Closing Date, the Board of Directors passes appropriate
resolutions and takes all other necessary steps to allot and issue on the Closing Date, conditional
only on Admission, (i) the New Ordinary Shares fully paid up at the Offer Price and (ii)
the Matching Warrants, to subscribers in the proportions and as otherwise directed by the
Placing Banks. |
| (b) | The
Company will arrange to issue the New Ordinary Shares and Matching Warrants to the Depositary
or its nominated custodian and for the Depositary to issue Depositary Interests in respect
thereof to the CREST Nominee, which will hold such Depositary Interests as nominee for the
persons entitled thereto, and for such Depositary Interests to be credited to the CREST account
of the CREST Nominee. |
| 6.1 | Issue
of Shares and Warrants |
Upon
satisfaction or waiver (if capable of waiver) of the Conditions (other than the Listing Condition in the case of clause 6.1(a)) and subject
to this Agreement not having been terminated in accordance with clause 13, the Company undertakes to the Placing Banks that by 8.00 a.m.
on the Closing Date:
| (a) | Issue
of New Ordinary Shares and Matching Warrants |
conditional
on Admission and (in respect of New Ordinary Shares and Matching Warrants subscribed for by AI Placees) against the amounts received
by the Company referred to in clause 5.4, and (in respect of New Ordinary Shares and Matching Warrants subscribed for otherwise than
by AI Placees) against the undertaking to make payment pursuant to clause 6.2, it will issue the New Ordinary Shares and Matching Warrants
to be issued pursuant to the Offer to the Depositary or its nominated custodian, procure that the Depositary Interests in respect of
such New Ordinary Shares and Matching Warrants are credited to the CREST account of the CREST Nominee, instruct the CREST Nominee to
hold such Depositary Interests as nominee for the persons entitled thereto (as directed by the Placing Banks), and instruct the Registrar
to register the Depositary or its nominated custodian as the holder of such New Ordinary Shares and Matching Warrants in the Register
of Members; and
immediately
following Admission, it will notify CREST that the Conditions have been satisfied or waived (as the case may be).
| (a) | Following
satisfaction or waiver (if capable of waiver) of the Conditions on the Closing Date and against
compliance by the Company, the Founder Entity, each of the Directors and the Founder Non-Directors
with its or his obligations under clauses 4 and 5 and this clause 6, the Settlement Bank
shall make or procure payment to the Company of an amount equal to the aggregate of: |
| (i) | any
monies received by it from the Founder Entity for New Ordinary Shares (with Matching Warrants)
in accordance with paragraph 24.2 of Schedule 6; |
| (ii) | the
Offer Price multiplied by the number of New Ordinary Shares (with Matching Warrants) in relation
to which subscribers have been procured and monies received by the Settlement Bank (the aggregate
of the number of shares (with Matching Warrants) referred to in this clause 6.2(a)(ii) and
in clause 6.2(b)(i) being “Subscribed Shares”); |
| (iii) | the
Settlement Bank’s Underwriting Proportion of the Default Shares multiplied by the Offer Price;
and |
| (iv) | any
monies received by the Settlement Bank from Jefferies pursuant to clause 6.2(b), |
less:
| I | the
commission payable to the Placing Banks by the Company pursuant to clause 9.1; |
| II | the
costs and expenses payable to the Placing Banks by the Company pursuant to clause 9.3; |
| III | any
amount in respect of VAT payable to the Placing Banks by the Company pursuant to clause 9.4;
and |
| IV | an
amount equal to the aggregate of any amounts payable to the Placing Banks by the Company
pursuant to clause 10.1. |
| (b) | Following
satisfaction or waiver (if capable of waiver) of the Conditions on the Closing Date and against
compliance by the Company, the Founder Entity, each of the Directors and the Founder Non-Directors
with its or his obligations under clauses 4 and 5 and this clause 6, Jefferies shall make
or procure payment to the Settlement Bank of an amount equal to the aggregate of: |
| (i) | the
Offer Price multiplied by the number of New Ordinary Shares (with Matching Warrants) in relation
to which subscribers have been procured and monies received by Jefferies (other than those
AI Placees listed in Schedule 12 who will be settled directly by the Company in accordance
with clause 5.4); and |
| (ii) | Jefferies’
Underwriting Proportion of the Default Shares multiplied by the Offer Price. |
| (c) | Any
payment of monies under clause 6.2(a) shall be made by wire transfer by the Settlement Bank
in United States dollars on the Closing Date to the account notified by the Company to the
Settlement Bank no later than two Business Days prior to the Closing Date (it being acknowledged
that the bank with which the account is held and the jurisdiction in which it is located
must be reasonably acceptable to the Settlement Bank and it being further acknowledged that
depending on the location of such account, the monies may not be received on the day of transfer),
evidence of such payment taking the form of a confirmation from the Settlement Bank that
it has made the relevant payment to the Company and the compliance by each Placing Bank with
its obligations under this clause 6 will be a complete discharge of its obligations under
this Agreement. |
| 6.3 | Exercise
by Placing Banks of Company’s rights |
The
Company acknowledges and agrees that, subject to compliance by the Placing Banks with this clause 6, the Placing Banks may exercise any
and all rights which the Company may have against any person who for any reason whatsoever has failed to pay for any New Ordinary Shares
(with Matching Warrants). For the avoidance of doubt, and without limitation to the generality of the foregoing, in the event that any
AI Placee fails to pay any amount due from it in respect of any New Ordinary Shares and Matching Warrants in accordance with clause 5.4
or fails to provide a duly executed letter in the form of Schedule 11 on a timely basis (or the contents of such letter are inaccurate)
or otherwise fails to comply with the terms and conditions of the Offer, the Placing Banks may re-allocate and place with other investors
such New Ordinary Shares and Matching Warrants or exercise such other rights or take such other actions as the Placing Banks deem appropriate
in their sole discretion.
| 7.1 | Conditions
to this Agreement |
The
obligations of the Placing Banks under this Agreement are subject to the following conditions:
the
Warranties being true and accurate and not misleading in each case as at the Applicable Time, the date of this Agreement, the date of
any Supplementary Prospectus and the Closing Date as though, in each such case, they had been given and made on such date and time by
reference to the facts and circumstances then subsisting;
the
Company, the Founder Entity, each of the Directors and the Founder Non-Directors having complied with all their respective obligations
under this Agreement and having satisfied all the Conditions to be satisfied by any of them, in each case under this Agreement or under
the terms and conditions of the Offer, which fall to be performed or satisfied on or prior to Admission;
no
matter having arisen prior to Admission which in the opinion of the Placing Banks might reasonably be expected to give rise to a Claim
under clause 12;
| (d) | Approval
of Final Prospectus |
the
Final Prospectus having been approved by the FCA and being filed with the FCA in accordance with the Prospectus Regulation Rules and
FSMA not later than 3.00 p.m. on the date of this Agreement (or such later time or date as the Placing Banks may agree with the Company);
| (e) | Publication
of the Final Prospectus |
the
Final Prospectus being published and made available to the public in accordance with the Prospectus Regulation Rules not later than 3.00
p.m. on the date of this Agreement (or such later time or date as the Placing Banks may agree with the Company);
delivery
of the documents referred to in clause 4.3 in accordance with the terms set out in clause 4.3 and of the other documents set out in Schedule 5
in accordance with the requirements thereof;
| (g) | Amendments
and Supplements |
no
event referred to in section 87G of FSMA arising between the date of publication of the Final Prospectus and Admission and no Supplementary
Prospectus being published by or on behalf of the Company, the Founders and/or the Founder Entity prior to Admission;
Admission
occurring not later than 8.00 a.m. on the Closing Date (or such later time and/or date as the Company and the Placing Banks may agree
(the “Listing Condition”));
| (i) | Depositary
Interests, Registrar Agreement and Administration Agreement |
the
Company and the Depositary having entered into the Depositary Agreement, the Depositary having entered into the Deed Poll, the Company
and the Registrar having entered into the Registrar Agreement, and the Company and the Administrator having entered into the Administration
Agreement, and each such document not having been amended and the obligations in each such document being legal, valid, binding and enforceable
and not having been breached;
the
delivery to the Placing Banks on or before at least one Business Day before Admission of a letter or letters from the Depositary addressed
to Euroclear dated the date of Admission confirming to Euroclear that all the outstanding conditions for the admission of all of the
Depositary Interests to CREST have been satisfied;
| (k) | Material
Adverse Change |
there
not having occurred in the opinion of the Placing Banks, acting in good faith, any Material Adverse Change (whether or not foreseeable);
| (l) | Subscription
by the Founder Entity |
the
Founder Entity (i) paying in cleared funds for the New Ordinary Shares (with Matching Warrants) set out against its name in Schedule 9
as soon as reasonably practicable on the Closing Date, (ii) complying with its obligations in paragraph 24 of Schedule 6, and (iii)
subscribing for the New Ordinary Shares (with Matching Warrants) set out against its name in Schedule 9 as soon as reasonably practicable
on the Closing Date;
| (m) | Entry
into the Warrant Instrument |
the
Warrant Instrument having been executed by the Company and remaining in full force and effect, and not having been amended, terminated
or breached prior to Admission; and
| (n) | Entry
into of the Insider Letters |
each
of the Insider Letters being entered into and not having been amended and the obligations in such letters being legal, valid, binding
and enforceable and not having been breached,
(together,
clauses 7.1(a) to (n) (inclusive) being the “Conditions” and each a “Condition”).
| 7.2 | Non
satisfaction or waiver |
| (a) | If
any of the Conditions having fallen due for satisfaction (each Condition being due for satisfaction
by the time and date specified therein or, where no such time or date is specified, by Admission)
or waiver (if capable of waiver) have not been fulfilled or waived in writing by the Placing
Banks (in their absolute discretion) or have become incapable of being satisfied by the relevant
time and date, then this Agreement and all the obligations of the parties hereunder shall,
except as provided in clause 13.3, forthwith cease to have effect. |
| (b) | The
Placing Banks may not waive the Conditions set out in clauses 7.1(d), 7.1(e) and 7.1(h). |
| 8.1 | The
provisions of Schedule 6 shall have effect as undertakings to each of the Placing Banks. |
| 8.2 | In
connection with the Offer, the Placing Banks agree to comply with the selling restrictions
set out in Schedule 8. |
| 9. | Commissions,
Costs and Expenses |
| (a) | Subject
to the satisfaction (or waiver if capable of waiver) of the Conditions and to this Agreement
not having been terminated under clause 13 prior to Admission on the Closing Date, the Company
undertakes to pay to the Placing Banks on the Closing Date a commission of: |
| (i) | 1
per cent. of an amount equal to the Offer Price multiplied by the aggregate number of New
Ordinary Shares (with Matching Warrants) subscribed for by the Mariposa Investors as set
out in Schedule 13; and |
| (ii) | 2.5
per cent. of an amount equal to the Offer Price multiplied by the number of New Ordinary
Shares equal to the number of Underwritten Shares less the aggregate number of New Ordinary
Shares (with Matching Warrants) subscribed for by the Mariposa Investors as set out in Schedule 13,
|
(together
with any amounts in respect of VAT properly chargeable in respect of the relevant supply payable in accordance with clause 9.4).
| (b) | For
the avoidance of doubt, commissions shall not be payable on any New Ordinary Shares (with
Matching Warrants) or Founder Preferred Shares (with Warrants issued on the basis of one
Warrant per Founder Preferred Share) subscribed for by the Founder Entity. |
| (c) | The
commission payable pursuant to clause 9.1(a) shall be allocated between the Placing Banks
in accordance with their Underwriting Proportions. |
Payment
of commission in accordance with clause 9.1 (including any VAT chargeable thereon) shall be made in cleared funds on the Closing Date
by deduction of the amount of such commission (including any VAT chargeable thereon) from the payment to be made by the Settlement Bank
pursuant to clause 6.2.
| 9.3 | Company
costs and expenses |
| (a) | In
addition to the commissions referred to in clause 9.1 the Company undertakes to pay or cause
to be paid (whether or not the obligations of the Placing Banks under this Agreement become
unconditional or are terminated) all costs, charges, fees and expenses (including, without
limitation, such part of any such costs, charges, fees and expenses as relates to VAT, as
the case may be, chargeable on any supply or supplies for which such costs, charges, fees
and expenses are all or any part of the consideration, such VAT, as the case may be, to be
payable in accordance with clause 9.4) in connection with or incidental to the Offer, Admission
and the arrangements referred to or described in the Transaction Agreements including, without
limitation: |
| (i) | all
fees and expenses payable to the FCA (including fees payable pursuant to the Listing Rules),
the London Stock Exchange or in respect of CREST; |
| (ii) | all
costs and expenses payable in connection with the preparation, printing, distribution and
filing of the Offer Documents; |
| (iii) | all
costs and expenses payable in connection with the Transaction Agreements, any closing documents
and any other documents in connection with the Offer and the offering, allotment, subscription,
issue, purchase, sale, transfer and delivery of the Shares and Warrants in connection with
the Offer and/or the arrangements contemplated by the Transaction Agreements; |
| (iv) | all
costs and expenses incurred by the Placing Banks and their Affiliates in connection with
the offer of New Ordinary Shares and Matching Warrants to AI Placees (including, without
limitation, all costs and expenses incurred in relation to the qualification of the Shares
and Warrants under applicable state securities and “blue sky” laws); |
| (v) | the
cost of preparing and despatching certificates to represent the Shares and Warrants; |
| (vi) | the
costs and expenses of the Registrar and the Depositary; |
| (vii) | the
fees, disbursements and expenses of the Company’s Counsel, the Reporting Accountants, counsel
in any other jurisdiction and any other experts or advisers retained by the Company; |
| (viii) | the
fees, disbursements and expenses of the Placing Banks’ Counsel (including, without limitation,
the fees, disbursements and expenses of any overseas legal counsel instructed by the Placing
Banks) such fees not to exceed any cap agreed between the Placing Banks and the Company (and
for the avoidance of doubt such cap excludes any applicable VAT, disbursements or expenses
of: (i) the Placing Banks’ Counsel; and (ii) the fees, disbursements and expenses and any
applicable VAT of any overseas legal counsel instructed by the Placing Banks); |
| (ix) | such
Transfer Taxes paid or payable by the Company pursuant to clause 10.1; |
| (x) | printing,
public relations, marketing, advertising, courier, postage and telecommunications expenses; |
| (xi) | the
costs and expenses relating to investor presentations, roadshows or other meetings with prospective
investors undertaken in connection with the marketing of the Offer (including, without limitation,
the cost of hiring the venues, travel and accommodation expenses, the cost of NetRoadshow
and any other electronic distribution methods and Dealogic expenses); |
| (xii) | all
travel and out-of-pocket expenses properly incurred by each Placing Bank in connection with
the Offer, Admission and the arrangements referred to in, or contemplated by, the Transaction
Agreements; |
| (xiii) | all
filing fees and similar expenses in connection with the qualification of the Shares and Warrants
for offering and sale in any jurisdiction agreed between the Placing Banks and the Company
or contemplated by the Offer Documents; and |
| (xiv) | all
other costs and expenses properly incurred by each of the Placing Banks in connection with
the Offer or the performance of their obligations under this Agreement. |
| (b) | The
Company undertakes upon request by any of the Placing Banks from time to time to promptly
pay to or to reimburse to them the amount of any such costs, charges, fees and expenses referred
to in this clause 9.3 which any of them may have properly paid or incurred. |
| (c) | Without
prejudice to their right to receive payment directly from the Company pursuant to this clause
9.3, the Placing Banks shall be entitled and are authorised to deduct some or all of such
costs, charges, fees and expenses payable pursuant to this clause 9.3 from any payment to
be made by the Placing Banks to the Company under this Agreement. Deduction of these amounts
under this clause 9.3 will discharge the Company’s obligations to pay those amounts, but
only to the extent of the amounts deducted and no further. Any further amounts payable will
be paid promptly on demand. |
| (a) | Amounts
payable by the Company to any of the Placing Banks for any supply (for VAT purposes) made
by the Placing Banks under or pursuant to this Agreement are expressed exclusive of amounts
payable in respect of VAT. |
| (b) | If
the performance by any of the Placing Banks (for the purposes of this clause 9.4 only, each
a “payee”) of any of its obligations under this Agreement shall represent
for VAT purposes the making by a payee of any supply to the Company (for the purposes of
this clause 9.4 only, the “payer”) that is subject to VAT at a positive
rate, the payer shall pay in addition to such consideration (if any) payable for the supply
an amount equal to any VAT properly chargeable on such supply (if any) within 14 days of
presentation of a valid VAT invoice in respect of such supply. |
| (c) | Subject
to clause 9.4(d), where a sum (a “Relevant Sum”) is payable or is to be
reimbursed by the payer to a payee in respect of any cost, charge, fee or expense, and such
cost, charge, fee or expense includes an amount in respect of VAT, which is borne by the
relevant payee on the supply or supplies for which the cost, charge, fee or expense in question
is all or any part of the consideration, the payer shall pay to the relevant payee in respect
of such VAT an amount equal to the amount of such VAT which the relevant payee certifies
is not recoverable by it (or by the representative member of a VAT group of which it is a
member) by repayment or credit (such certificate to be conclusive in the absence of manifest
error) such payment to be made within 14 days of the later of: |
| (i) | the
date upon which payment of VAT in respect of the Relevant Sum has been made by the relevant
payee; and |
| (ii) | the
date on which certification in accordance with this clause 9.4(c) is produced to the payer. |
| (d) | If
the Relevant Sum constitutes for VAT purposes the reimbursement of costs, charges, fees or
expenses incurred by a payee as agent of the payer excluding where the relevant payee acts
as an agent for the payer within the meaning of sections 47(2A) or 47(3) of the Value Added
Tax Act 1994 (or an equivalent provision in another relevant jurisdiction), the payer shall
pay to the relevant payee an amount equal to the element included in the costs, charges,
fees or expenses in respect of VAT (that is to say the part of the costs, charges, fees or
expenses which relates to the VAT chargeable on any supply or supplies for which such costs,
charges, fees or expenses are all or any part of the consideration) provided that in such
case the relevant payee shall use its reasonable endeavours to procure that, as soon as reasonably
practicable, the person making the supply or supplies in respect of which the costs, charges,
fees or expenses are incurred, issues a valid VAT invoice to the payer, that names the payer
as the recipient of the relevant supply or supplies. |
| 10.1 | Transfer
Taxes to be paid by the Company |
The
Company shall be liable to pay and reimburse the Placing Banks in respect of all Transfer Taxes which may arise in connection with the
execution, delivery and performance of this Agreement and/or Admission and/or the issue, subscription or delivery of the New Ordinary
Shares or Warrants (or Depositary Interests in respect of the foregoing) to the initial subscribers thereof (including, if applicable,
to the Placing Banks), including but not limited to any Transfer Taxes arising in respect of any issue, transfer or agreement to transfer
to or by the Depositary or its nominated custodian or the CREST Nominee or acquisition or agreement to acquire from or by the Depositary
or its nominated custodian or the CREST Nominee, New Ordinary Shares or Warrants. For the avoidance of doubt, the Company shall not be
liable under this clause 10.1 to pay to and reimburse the Placing Banks in respect of any Transfer Taxes in respect of any subsequent
sale of New Ordinary Shares or Warrants by subscribers procured by the Placing Banks to any other person or, in circumstances where a
Placing Bank has subscribed for New Ordinary Shares or Warrants as principal, in respect of any subsequent sale of such Shares or such
Warrants by a Placing Bank to any other person.
Any
amount payable by the Company pursuant to clause 10.1 shall be paid as follows:
| (a) | by
a Placing Bank deducting from the amount payable to the Company pursuant to clause 6.2 any
sum payable by the Company pursuant to clause 10.1. Such deduction may include the Placing
Banks’ reasonable estimate of the maximum amount of such Transfer Taxes (if any) payable
by the Company pursuant to clause 10.1; |
| (b) | to
the extent that the actual amount in respect of Transfer Taxes or any related costs, fines,
penalties or interest actually payable by the Company pursuant to clause 10.1 exceeds the
amount deducted by the Placing Banks in respect thereof from the payment made by the Placing
Banks to the Company pursuant to clause 10.2(a) above, the Company shall on demand pay to
the Placing Banks, a sum equal to the excess and the Company will indemnify the Placing Banks
against all Claims and Losses suffered or incurred by any Placing Bank in connection with
enforcing its rights against the Company under this clause 10.2(b); and |
| (c) | to
the extent that the actual amount in respect of Transfer Taxes or any related costs, fines,
penalties or interest actually payable by the Company to the Placing Banks pursuant to clause
10.1 is less than the amount deducted by the Placing Banks from the payment to the Company
pursuant to clause 10.2(a) above, the excess or amount of recovery will be promptly repaid
or paid to the Company on discovery of that fact (or, if such sum has been accounted for
to the relevant tax authority, the Placing Banks shall, subject to having such security in
respect of costs and expenses as it may require, take all reasonable steps as may be required
to obtain a refund of such sum (together, where relevant, with interest at the appropriate
rate from the relevant tax authority) and shall on receipt thereof pay any such amounts recovered
to the Company after deduction of any costs and expenses properly incurred by the Placing
Banks). |
| 11.1 | Warranties
by the Company, the Founders and the Founder Entity |
Each
of the Company, the Founders and the Founder Entity severally represents and warrants to the Placing Banks in the terms of the Warranties
set out in Schedule 3.
| 11.2 | Repetition
of Warranties |
| (a) | Each
of the Warranties are given as at the Applicable Time and the date of this Agreement and
shall be deemed to be repeated and given as of the date that any Supplementary Prospectus
is published by the Company and on the Closing Date, in each case, by reference to the facts
and circumstances subsisting at such time. |
| (b) | Each
of the certificates to be delivered pursuant to paragraphs 5, 6 and 7 of Part B of Schedule 5
and paragraphs 6, 7 and 8 of Part C of Schedule 5 will have effect as a representation
and warranty, as of their date, by the Company, the Founders and the Founder Entity as the
case may be, to the Placing Banks as to the matters contained therein. |
| (c) | Each
of the Company, the Founders and the Founder Entity acknowledges that each of the Placing
Banks is entering into this Agreement in reliance on the Warranties and that each Warranty
shall be separately construed and shall not be limited by reference (express or implied)
to the terms of any other Warranty or any other term of this Agreement. |
| (d) | Each
party giving a Warranty under this Agreement severally undertakes to each Placing Bank: |
| (i) | not
to do, or omit to do, anything which would or might cause any Warranty given by it to become
untrue, inaccurate, misleading or breached at any time (by reference to the facts and circumstances
existing at that time) between the date of this Agreement and the closing on the Closing
Date (“Completion”); and |
| (ii) | promptly
to give notice to each of the Placing Banks if it becomes aware of a fact or circumstance
which constitutes a breach of any of the Warranties given by it or has caused or would or
might cause any Warranty given by it to become untrue, inaccurate or misleading at any time
(by reference to the facts and circumstances existing at that time) before the Completion
or if it becomes aware, before the Completion, of a fact or circumstance which would or might
give rise to a claim under any of the indemnities as contained in, or given pursuant to,
clause 12 or any other provision of this Agreement. |
| (a) | If,
at any time prior to the Completion, any of the Placing Banks: |
| (i) | receives
notice of the type referred to in clause 11.2(d)(ii); or |
| (ii) | becomes
aware that any of the Warranties was, is, has become or is reasonably likely to become untrue,
inaccurate, misleading or breached in any respect, |
each
of the Placing Banks may (without prejudice to its right to terminate this Agreement pursuant to clause 13 and without prejudice to the
Conditions and the determination of the Placing Banks whether or not to waive such Conditions) require the Company, at its own expense,
to amend, update or supplement the Final Prospectus (such amendment or supplement to be in a form approved by the Placing Banks) and/or
require the Company, at its own expense, to make such announcements and/or despatch such communications and/or take such other steps
as the Placing Banks consider necessary or desirable in connection with the untruth, inaccuracy or misleading nature of the representation,
warranty or undertaking concerned.
| (b) | If
the Company fails to comply with any such requirement, the Placing Banks may require that
the Company shall: |
| (i) | cease
to communicate any Offer Document which contains any reference to the Placing Banks; and/or |
| (ii) | notify
any person to whom any Offer Document has been despatched and any other person known to be
relying on any Offer Document, of the relevant circumstances which render such Offer Document
untrue, inaccurate or misleading or not in compliance with applicable legal or regulatory
requirements. |
| 11.4 | Maximum
liability of the Founders and the Founder Entity |
| (a) | The
aggregate liability of Martin E. Franklin pursuant to this Agreement shall not exceed US$
100,000, save to the extent that any such liability arises as a result of the gross negligence,
fraud or wilful default of Martin E. Franklin. |
| (b) | The
aggregate liability of James E. Lillie pursuant to this Agreement shall not exceed US$ 100,000,
save to the extent that any such liability arises as a result of the gross negligence, fraud
or wilful default of James E. Lillie. |
| (c) | The
aggregate liability of Ian G.H. Ashken pursuant to this Agreement shall not exceed US$ 100,000,
save to the extent that any such liability arises as a result of the gross negligence, fraud
or wilful default of Ian G.H. Ashken. |
| (d) | The
aggregate liability of Desiree DeStefano pursuant to this Agreement shall not exceed US$
100,000, save to the extent that any such liability arises as a result of the gross negligence,
fraud or wilful default of Desiree DeStefano. |
| (e) | The
aggregate liability Robert A.E. Franklin pursuant to this Agreement shall not exceed US$
100,000, save to the extent that any such liability arises as a result of the gross negligence,
fraud or wilful default of Robert A.E. Franklin. |
| (f) | The
aggregate liability of Michael E. Franklin pursuant to this Agreement shall not exceed US$
100,000, save to the extent that any such liability arises as a result of the gross negligence,
fraud or wilful default of Michael E. Franklin. |
| (g) | The
aggregate liability of the Founder Entity pursuant to this Agreement shall not exceed US$
30 million, save to the extent that any such liability arises as a result of the gross negligence,
fraud or wilful default of the Founder Entity. |
| (h) | For
the avoidance of doubt, the limitations in this clause 11.4 shall not apply in relation to
clause 3.3 and paragraph 25 of Schedule 6. |
| 11.5 | Maximum
Liability of the Non-Founder Directors |
The
aggregate liability of each Non-Founder Director pursuant to this Agreement shall not exceed the amount set out opposite his name in
Part B of Schedule 1, save to the extent that any such liability arises as a result of the gross negligence, fraud or wilful
default of such Non-Founder Director.
| (a) | Subject
to clause 11.6(b), no claim shall be brought against any Founder Entity, Director or Founder
Non-Director in respect of any breach of this Agreement (other than in relation to paragraphs
4.1, 7.3, 19, 21 and 24 of Schedule 6) unless notice in writing of the claim (giving
reasonable details of the claim) has been given to the relevant Founder Entity, Director
or Founder Non-Director by no later than the Accounts Publication Date, and, in relation
to any claim which may be outstanding on the Accounts Publication Date, unless court proceedings
have been instituted or commenced against the relevant Founder Entity, Director or Founder
Non-Director in a court of competent jurisdiction prior to the date falling 12 months after
the Accounts Publication Date. |
| (b) | The
limitation in clause 11.6(a) shall not apply in relation to any claim: |
| (i) | arising
as a result of the Warranties set out in paragraphs 1, 2 and 3 of Schedule 3 being untrue,
inaccurate, misleading or breached in any respect; or |
| (ii) | resulting
from gross negligence, fraud or wilful default, in each case in respect of or on the part
of the person for whose benefit the limitation would have otherwise applied. |
| 11.7 | All
representations, warranties and undertakings given or deemed to be given under this Agreement
or any document delivered under it shall remain in full force and effect notwithstanding
the completion of the subscription and purchase of the New Ordinary Shares and Matching Warrants,
the completion of the Offer and all other matters and arrangements referred to or contemplated
by this Agreement. |
| 11.8 | Where
any of the Warranties are qualified by reference to awareness and/or knowledge and/or information
and/or belief, that reference shall be deemed to include a statement to the effect that the
relevant Warranty has been given by the Warrantor after making all reasonable enquiries (unless
expressly stated to the contrary, as when the word “actual” is used). |
| 12. | IndemnitIES
and Waiver of Claims |
| 12.1 | Indemnity
by the Company |
The
Company undertakes to indemnify and hold harmless each of the Indemnified Persons against all claims, actions, proceedings, investigations,
demands, judgments and awards (together “Claims”, and each a “Claim”) which may be brought, made, threatened
or alleged against or otherwise involve all or any of the Indemnified Persons and against all losses, liabilities, damages, costs, charges,
duties, expenses (including legal expenses) and Taxation (together “Losses” and each a “Loss”), on
demand, whether joint or several, which may be suffered or incurred by any of the Indemnified Persons (including, without limitation,
all Losses which all or any of the Indemnified Persons may incur in investigating, preparing for, disputing or defending, or providing
evidence in connection with, any such Claims (whether or not the Indemnified Person is an actual or potential party to such Claims) or
Losses or in establishing any Claim or mitigating any Loss on its part or otherwise enforcing its rights under this clause 12) which
arise, directly or indirectly, out of, or are attributable to, or connected with anything done or omitted to be done by any person (including
the relevant Indemnified Person) in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents (or
any of them), or the Transaction Agreements (or any of them), or an Acquisition, or the financing thereof or other transactions relating
thereto, irrespective of any Placing Bank’s involvement (if any) in any such transaction, or any other agreement relating to any of the
above (or any amendment or supplement to any of them), including but not limited to:
| (a) | any
and all Losses or Claims in connection with or arising out of the Offer Documents (or any
of them) not containing or fairly presenting, or being alleged not to contain or fairly present,
all information required to be contained therein or any statement therein being or being
alleged to be in any respect untrue, inaccurate or misleading or not based on reasonable
grounds or an untrue or alleged untrue statement of a material fact contained in any Offer
Document or any omission or alleged omission in any Offer Document to state a material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading; |
| (b) | any
and all Losses or Claims in connection with or arising out of any prospectus, announcement,
press release, presentation materials or any other document published or otherwise distributed
to investors in connection with the Acquisition, the financing thereof and other transactions
relating thereto (collectively, the “Acquisition Documents”) not containing
or fairly presenting, or being alleged not to contain or fairly present, all information
required to be contained therein or any statement therein being or being alleged to be in
any respect untrue, inaccurate or misleading or not based on reasonable grounds or an untrue
or alleged untrue statement of a material fact contained in any of the Acquisition Documents
or any omission or alleged omission in any of the Acquisition Documents to state a material
fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading; |
| (c) | any
and all Losses or Claims in connection with or arising out of any breach or alleged breach
by the Company, the Founder Entity, any Director or any Founder Non-Director of any of their
respective obligations (including, without limitation, the Warranties given by them pursuant
to clause 11 and the undertakings given by them pursuant to clause 8) in this Agreement or
in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents
(or any of them), the Acquisition Documents (or any of them) or the Transaction Agreements
(or any of them), or an Acquisition, the financing thereof and other transactions relating
thereto, irrespective of any Placing Bank’s involvement (if any) in any such transaction,
or any other agreement relating to any of the above (or any amendment or supplement to any
of them); |
| (d) | any
and all Losses or Claims in connection with or arising out of the publication, distribution
or issue of the Offer Documents (or any of them), the Acquisition Documents (or any of them),
or any other documents or materials relating to the Offer, Admission or the Acquisition,
the financing thereof and other transactions relating thereto, irrespective of any Placing
Bank’s involvement (if any) in any such transaction; |
| (e) | any
and all Losses or Claims in connection with or arising out of any failure or alleged failure
by the Company or any of the Directors or any of the Company’s Affiliates, agents, employees
or advisers (in each case other than the relevant Indemnified Person) to comply with FSMA,
the LPDT Rules, the Admission and Disclosure Standards or any other applicable legal or regulatory
requirements in any jurisdiction in relation to the Offer, Admission, or an Acquisition,
the financing thereof and other transactions relating thereto, irrespective of any Placing
Bank’s involvement (if any) in any such transaction, or to the arrangements contemplated
by the Offer Documents (or any of them), the Acquisition Documents (or any of them) or the
Transaction Agreements (or any of them) or any other agreement relating to any of the above
(or any amendment or supplement to any of them); |
| (f) | any
and all Losses or Claims whatsoever suffered or incurred by such Indemnified Person as a
person who has communicated or approved the contents of any financial promotion made in connection
with the Offer or the application for Admission for the purpose of section 21 of FSMA; |
| (g) | any
and all Losses or Claims in connection with or arising out of the carrying out (whether as
an agent to the Company or otherwise) by an Indemnified Person of any of its obligations
or services under or in connection with the Offer, Admission, or an Acquisition, the financing
thereof and other transactions relating thereto, irrespective of any Placing Bank’s involvement
(if any) in any such transaction, or the arrangements contemplated by the Offer Documents
(or any of them), the Acquisition Documents (or any of them) or the Transaction Agreements
(or any of them) or any other agreement relating to any of the above (or any amendment or
supplement to any of them) either before, on or after the date of this Agreement; and |
| (h) | any
and all Losses or Claims whatsoever suffered or incurred by any Indemnified Person in connection
with or arising out of any failure by any AI Placee listed in Part A of Schedule 12
to pay, in full and on a timely basis, all amounts due from it in respect of any New Ordinary
Shares and Matching Warrants for which it has agreed to subscribe as set out in Schedule 12
or any failure by any AI Placee listed in Part A of Schedule 12 to provide a duly
executed letter in the form of Schedule 11 on a timely basis (or the contents of such
letter are inaccurate) or to otherwise comply with the terms and conditions of the Offer. |
| (a) | The
indemnity contained in clause 12.1 shall not apply to any Claims or Losses: |
| (i) | (otherwise
than in connection with the matters referred to in clauses 12.1(a), 12.1(b), 12.1(c) 12.1(d),
12.1(e) and 12.1(h)) to the extent finally judicially determined by a court of competent
jurisdiction to have arisen primarily out of the gross negligence, fraud or wilful default
on the part of such Indemnified Person; or |
| (ii) | comprising
a decline in the market value of the New Ordinary Shares which is suffered or incurred by
an Indemnified Person as a result of it having been required to subscribe for New Ordinary
Shares pursuant to clause 3.2 (save with respect to New Ordinary Shares and Matching Warrants
referred to in clause 12.1(h)) unless such decline is caused by or results from or is attributable
to or would not have arisen but for (in each case directly or indirectly) the negligence
or default of the Company or any breach by the Company of its obligations under the Transaction
Agreements (or any of them) or any other agreement relating to the Offer (or any amendment
or supplement to any of them), including without limitation a breach of the Warranties or
any circumstance which constitutes such a breach. |
| (b) | The
indemnity contained in clause 12.1 shall be superseded by, and shall be of no further force
and effect with respect to any Claims of Losses which arise, directly or indirectly, out
of, or are attributable to, or connected with anything done or omitted to be done by any
person (including the relevant Indemnified Person) in connection with an Acquisition, or
the financing thereof or other transactions relating thereto or any other agreement relating
to an Acquisition (or any amendment or supplement to any of them): |
| (i) | with
respect to UBS and their Indemnified Persons upon the execution by UBS or any of their Indemnified
Persons of a separate engagement letter or agreement relating to the provision of any services
in connection with an Acquisition, the financing thereof or other related transactions; and |
| (ii) | with
respect to Jefferies and their Indemnified Persons upon the execution by Jefferies or any
of their Indemnified Persons of a separate engagement letter or agreement relating to the
provision of any services in connection with an Acquisition, the financing thereof or other
related transactions. |
| 12.3 | Notification
and conduct of claims |
| (a) | If
any Indemnified Person becomes aware of any Claim against it in respect of which indemnification
under this clause 12 may be sought, that Indemnified Person (or, if the Indemnified
Person is not a party to this Agreement and an associated Indemnified Person who is a party
to this Agreement so elects, that Indemnified Person who is a party to this Agreement) shall
as soon as reasonably practicable notify the Company. It is agreed that failure by the Indemnified
Person to so notify the Company shall not relieve the Company from any liability set out
in this clause 12 or otherwise. |
| (b) | In
case any such Claim is brought against any Indemnified Person, the Company shall, unless
the Indemnified Person elects to assume the defence themselves, assume the defence thereof
and appoint counsel satisfactory to the Indemnified Person and shall be liable to pay the
fees and expenses of such counsel related to such Claim. In any Claim, any Indemnified Person
shall have the right to retain its own counsel and assume the defence themselves, but the
fees and expenses of such counsel shall be at the expense of the Indemnified Person unless: |
| (i) | the
Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; |
| (ii) | representation
of both the Company and the Indemnified Persons by the same counsel (in the absolute discretion
of the Indemnified Person) would be or becomes inappropriate due to actual or potential differing
interests between them; |
| (iii) | pursuant
to this clause 12.3(b), the Indemnified Person has elected to assume the defence itself or
the Company has failed to appoint counsel satisfactory to the Indemnified Person; or |
| (iv) | the
relevant Indemnified Person’s insurers confirm that rights under its policies of insurance
may be prejudiced. |
| (c) | It
is understood that the Company shall reimburse such fees and expenses as they are incurred
in respect of clause 12.3(b). |
| (d) | The
Company agrees that if it becomes aware of any Claim relevant for the purpose of this clause
12 or any matter which may give rise to any such Claim, it shall promptly notify the Placing
Banks thereof and shall promptly provide the Placing Banks with such information and copies
of such documents relating to such Claim as they may reasonably request. |
| 12.4 | Claims
by the Company, the Founder Entity, the Directors or the Founder Non-Directors |
| (a) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors agrees not
to (and shall procure that none of its Affiliates nor any persons asserting claims on behalf
of or in right of such person shall) bring, make, threaten or allege any Claims against or
otherwise involve any Indemnified Person to recover any Losses which the Company, the Founder
Entity, the Directors or the Founder Non-Directors may suffer or incur (including, without
limitation, all Losses which such person may incur in investigating, preparing for, disputing
or defending, or providing evidence in connection with, any such Claims or Losses or in establishing
any Claims or mitigating any Loss on its part) by reason of, or arising out of, directly
or indirectly, attributable to, or in connection with, the carrying out or the performance
by any Indemnified Persons, or on their behalf, of their obligations or services under or
in connection with the Offer, Admission or the arrangements contemplated by the Offer Documents
(or any of them) or the Transaction Agreements (or any of them) or any other agreement relating
to the Offer (or any amendment or supplement to any of them) on, before or after the date
of this Agreement unless and to the extent that such Claims or Losses (otherwise than in
connection with the matters referred to in clauses 12.1(a), 12.1(b), 12.1(c), 12.1(d), 12.1(e)
and 12.1(h) are finally judicially determined by a court of competent jurisdiction to have
arisen primarily out of the gross negligence, fraud or wilful default on the part of such
Indemnified Person. |
| (b) | Notwithstanding
any rights or claims which the Company, the Founders, the Founder Entity or any of their
respective subsidiaries, Affiliates or any of the directors, officers or employees of any
of them may have or assert against a Placing Bank in connection with the Offer, Admission
or the arrangements contemplated by the Offer Documents (or any of them) or the Transaction
Agreements (or any of them) or any other agreement relating to the Offer (or any amendment
or supplement to any of them), no claim will be brought by any such person against any director
or any other officer or employee of any Indemnified Person in respect of any conduct, action
or omission by the individual concerned in connection with the Offer, Admission or the arrangements
contemplated by the Offer Documents (or any of them) or the Transaction Agreements (or any
of them) or any other agreement relating to the Offer (or any amendment or supplement to
any of them). |
The
Company agrees that it will not, without the prior written consent of the relevant Indemnified Person(s), settle or compromise or consent
to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any Governmental Agency, commenced,
pending or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this clause
12 (whether or not the Indemnified Persons are actual or potential parties thereto) unless such settlement, compromise or consent:
| (a) | includes
an unconditional release of each Indemnified Person from all liability arising out of such
litigation, investigation, proceeding or claim; and |
| (b) | does
not include a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Person. |
| 12.6 | Proportionate
liability |
If
the Company enters into any agreement or arrangement with any adviser or any other person for the purpose of or in connection with the
Offer, the terms of which provide that the liability of the adviser or such other person to the Company or any other person, or the liability
of the Company to any other person, is excluded or limited in any manner, and any Indemnified Person may have joint or joint and several
liability with such adviser or such other person to the Company or to any other person arising out of the performance of its duties under
this Agreement, the Company shall:
| (a) | not
be entitled to recover any amount from an Indemnified Person in respect of any Loss suffered
by the Company, in excess of the proportion of such Loss equal to the proportion of that
Indemnified Person’s contribution to the overall fault for such Loss, as agreed between the
relevant parties or, in the absence of agreement, as determined by a court of competent jurisdiction
and in any such event (but without prejudice to the foregoing) the Company shall not be entitled
to recover more from an Indemnified Person than would have been recoverable had such agreement
or arrangement not been entered into; |
| (b) | indemnify
the Indemnified Person in respect of any increased liability to any third party which would
not have arisen in the absence of such exclusion or limitation; and |
| (c) | take
such other action as the Indemnified Person may require to ensure that the Indemnified Person
is not prejudiced as a consequence of such agreement or arrangement. |
| 12.7 | Regulatory
obligations |
Nothing
in this Agreement shall exclude or restrict any duty or liability of any Indemnified Person which it has under FSMA or under the regulatory
system (as defined in the FCA Handbook) to the extent such exclusion or restriction is prohibited by the FCA Handbook.
Without
prejudice to the generality of clause 16.10 each of the sub-clauses in this clause 12 and each of the exclusions of liability and indemnities
within those sub-clauses is and shall be construed as separate and severable and in the event that any such sub-clause, exclusion of
liability or indemnity is determined by any court to be unenforceable in whole or in part for any reason, such unenforceability shall
not affect or impair the enforceability of the other sub-clauses or the remainder of any sub-clause as appropriate and any such other
sub-clauses or parts thereof, as appropriate, shall continue to bind the parties.
| 12.9 | Rights
in addition to others |
The
indemnities contained in this clause 12 are in addition to any rights which any Indemnified Person may have at common law or otherwise,
including but not limited to any right of contribution and the provisions of this clause 12 shall remain in full force and effect
notwithstanding the completion of all matters and arrangements referred to in or contemplated by this Agreement or any termination of
this Agreement.
| 12.10 | Discretion
of Indemnified Persons |
Each
of the Placing Banks shall have an absolute discretion whether or not to exercise or enforce any right under this Agreement, shall be
free to deal with its rights under this Agreement without regard to the interests of any Indemnified Person and shall not be required
to account to any Indemnified Person in respect of any amount which it receives under this Agreement and shall not be liable to any Indemnified
Person for any loss arising from any act or omission with respect to this Agreement.
| 12.11 | Discretion
of Placing Banks |
Each
of the Placing Banks shall be entitled to take, in their absolute discretion, any and all steps (including, without limitation, instituting
proceedings) against the Company in relation to any Claims and Losses which may arise under this Agreement.
| 12.12 | Unavailability
or inadequacy of indemnities |
In
the event that the indemnity provided in clause 12.1 is unavailable, or insufficient, to hold harmless an Indemnified Person in respect
of any Claims or Losses (save where no amounts would have been payable in any case in respect of such Claims or Losses by virtue of clause
12.2), in either such case as a result of any rule of law or other limit on their validity or effectiveness (other than a limit provided
in this Agreement) then in lieu of indemnifying such Indemnified Person thereunder, the Company shall contribute to the aggregate amount
of such Claims or Losses incurred or suffered by any such Indemnified Person, as incurred:
| (a) | in
such proportion as is appropriate to reflect the relative benefits (as described in clause
12.13) received from the Offer by the Company on the one hand, and each of the Placing Banks
on the other hand; or |
| (b) | if
the allocation provided by clause 12.12(a) is not permitted by any applicable law or regulation,
in such proportion as is appropriate to reflect not only the relative benefits referred to
in clause 12.12(a) but also the relative fault (as described in clause 12.14) of the Company
on the one hand, and each of the Placing Banks on the other hand, in connection with any
of the acts or statements or omissions which resulted in such Claims or Losses, as well as
any other relevant equitable considerations. |
The
relative benefits received by the Company on the one hand, and each of the Placing Banks on the other hand, from the Offer, shall be
deemed to be in the same respective proportions as the total gross proceeds from the Offer (before deducting expenses) received by the
Company and the total commissions received by the Placing Banks bear to the total gross proceeds from the Offer.
| 12.14 | Determination
of fault |
The
relative fault of the Company on the one hand, and each of the Placing Banks on the other hand, shall be determined by reference to,
among other things, whether any untrue statement or alleged untrue statement in the Offer Documents or any omission or alleged omission
from the Offer Documents relates to information supplied by the Company on the one hand, or any of the Placing Banks on the other hand,
and by the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the publication of such untrue
statement or alleged untrue statement or such omission or alleged omission.
| 12.15 | Obligation
to contribute |
The
Company agrees that it would not be just and equitable if contributions pursuant to clause 12.12 to clause 12.18 were determined by pro
rata allocation (even if the Placing Banks were treated as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in clauses 12.12 to clause 12.18. The aggregate amount of any Claims
or Losses incurred by an Indemnified Person shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified
Person in investigating, preparing for, defending, or providing evidence in connection with any litigation, or any investigation or proceeding
by any Governmental Agency, commenced or threatened, or any Claim or Loss which arise, directly or indirectly, out of or are attributable
to or connected with anything done or omitted to be done by any person (including by the relevant Indemnified Person) in connection with
the Offer, Admission or the arrangements contemplated by the Offer Documents, or any of them (or any amendment or supplement to any of
them), or this Agreement or any other agreement relating to the Offer (or any amendment or supplement to any of them), including but
not limited to those based on any untrue statement or alleged untrue statement or omission or alleged omission.
| 12.16 | Limit
on contribution |
Notwithstanding
any other provision of clause 12.12 to clause 12.18, none of the Placing Banks shall be required to contribute any amount in excess of
the placing commissions received by it pursuant to this Agreement and any obligation to contribute under clause 12.12 is several in proportion
to their respective placing obligations and not joint nor joint and several.
| 12.17 | Effect
of fraud – obligation to contribute |
Notwithstanding
clause 12.12, no person guilty of fraud or fraudulent misrepresentation (within the meaning of section 11(f) of the Securities Act) will
be entitled to contribution from any person who was not guilty of such fraud or fraudulent misrepresentation.
| 12.18 | Right
of Indemnified Persons to contribution |
For
the purposes of clauses 12.12 to clause 12.18, each Indemnified Person shall have the same rights to contribution as each of the Placing
Banks.
| 12.19 | Contracts
(Rights of Third Parties) Act 1999 |
| (a) | Each
Indemnified Person shall have the right under the Contracts (Rights of Third Parties) Act
1999 (which shall apply to this Agreement only to the extent provided in this clause 12.19)
to enforce its rights against the Company under this clause 12 provided that, save to the
extent notified in writing to the relevant Indemnified Person, Jefferies International (without
obligation) will have the sole conduct of any action to enforce such rights on behalf of
an Indemnified Person connected with Jefferies and UBS (without obligation) will have the
sole conduct of any action to enforce such rights on behalf of an Indemnified Person connected
with it. |
| (b) | Save
as provided in this clause 12.19, Indemnified Persons other than the relevant Placing Bank
will not be entitled directly to enforce their rights against the Company under this Agreement
under the Contracts (Rights of Third Parties) Act 1999 or otherwise. The parties to this
Agreement may agree to terminate this Agreement or vary any of its terms without the consent
of any Indemnified Person and the Placing Banks will have no responsibility to any Indemnified
Person under or as a result of this Agreement. |
No
claim under this clause 12 shall be made in respect of:
| (a) | Taxation
(which includes, for the avoidance of doubt, Transfer Taxes) which an Indemnified Person
is compensated for under clause 9.4 or clause 10 of this Agreement, or would have been compensated
for under clause 9.4 or clause 10 of this Agreement but was not so compensated solely because
one of the exclusions in clause 9.4 or clause 10 of this Agreement applied; |
| (b) | Taxation
incurred by an Indemnified Person on its net income, profit or gains from acquisition, holding
or disposal of Underwritten Shares; and/or |
For
the purposes of this clause 12, the expression “Indemnified Person” shall include in the case of each Placing Bank:
| (a) | that
Placing Bank and each of its subsidiaries, branches and Affiliates; |
| (b) | a
person who is, on or at any time after the date of this Agreement, a director, officer, partner,
employee or agent of an undertaking specified in clause 12.21(a) above; and |
| (c) | its
selling agents and each person, if any, who controls such Placing Bank within the meaning
of section 15 of the Securities Act or section 20 of the Exchange Act and such Placing Bank’s
Affiliates, subsidiaries, associates and branches and agents of the foregoing persons and
holding companies and the subsidiaries of such subsidiaries, branches, Affiliates, associates
and holding companies and each of such person’s respective directors, officers, employees
and agents, |
(each
an “Indemnified Person”).
If
at any time before Admission:
| (a) | there
shall have been a breach by the Company, the Founder Entity, any of the Directors or any
of the Founder Non-Directors of any of the Warranties contained in this Agreement or any
other provision of this Agreement or any of the Warranties is not or has ceased to be, true,
accurate and not misleading; |
| (b) | any
Condition has not been satisfied by the time and date it is required to have been satisfied
or waived (if capable of waiver) by the Placing Banks or if any matter or circumstance arises
as a result of which it is reasonable to expect that any of the Conditions will not be satisfied
at the required time(s) (if any) and continue to be satisfied at Admission; |
| (c) | any
statement contained in any Offer Document is or has become or has been discovered to be untrue,
inaccurate or misleading in any material respect, or any matter has arisen which would, if
any of the Offer Documents were to be issued at that time, constitute a material omission
from the Offer Document; |
| (d) | a
matter has arisen which in the opinion of the Placing Banks acting in good faith might reasonably
be expected to give rise to a claim under clause 12; |
| (e) | in
the opinion of the Placing Banks acting in good faith, a Material Adverse Change has occurred
or is likely to occur (whether or not foreseeable at the date of this Agreement); |
| (f) | a
Supplementary Prospectus has been published or, in the opinion of the Placing Banks acting
in good faith, a Supplementary Prospectus is required to be published and made available
pursuant to section 87G of FSMA; |
| (g) | an
application of the Company for Admission is withdrawn or refused by the FCA or the London
Stock Exchange; |
| (h) | there
having occurred or it being likely that there will occur, in each case, in the opinion of
the Placing Banks: |
| (i) | any
material adverse change in the financial markets in the United States, the United Kingdom,
the British Virgin Islands or in any member or associate member of the European Union or
the international financial markets, any outbreak or escalation of hostilities, war, act
of terrorism, declaration of emergency or martial law or other calamity or crisis or event
or any change or development involving a prospective change in national or international
political, financial, economic, monetary or market conditions (primary or secondary) or currency
exchange rates or controls; |
| (ii) | (a)
a suspension or material limitation of (i) trading of any securities of the Company on the
London Stock Exchange or on any exchange or over-the-counter market, or (ii) trading generally
on the London Stock Exchange, the New York Stock Exchange, the NASDAQ Stock Market or any
over-the-counter market; (b) a fixing of or minimum or maximum prices for trading, or the
imposition of a requirement for maximum ranges for prices, by any of said exchanges or by
such system or by order of any governmental authority; or (c) a material disruption in commercial
banking or securities settlement or clearance services in the United States or in the United
Kingdom or in the British Virgin Islands or in a member or associated member of the European
Union; |
| (iii) | any
actual adverse or prospective adverse change or development in United States or United Kingdom
or the British Virgin Islands taxation or taxation in a member or associate member of the
European Union, materially and adversely, affecting the Company, the New Ordinary Shares
or Warrants or the transfer thereof or exchange controls have been imposed by the United
States or the British Virgin Islands or the United Kingdom; or |
| (iv) | a
banking moratorium has been declared by the United States or the United Kingdom or the British
Virgin Islands or a member or associate member of the European Union, |
then
each of the Company, the Founder Entity, the Directors and the Founder Non-Directors will inform each of the Placing Banks forthwith
of any such event (to the extent that they are aware of such event) and (whether or not the Placing Banks are so informed) each of the
Placing Banks may in its absolute discretion give notice to the Company (copied to each other party to this Agreement) to terminate this
Agreement on behalf of all parties, in each case except to the extent specified in clause 13.3.
| 13.2 | Withdrawal
of applications for Admission |
If
any notice is given by any of the Placing Banks to the Company pursuant to this clause 13 or the Agreement terminates pursuant to clause
7 before Admission, the Placing Banks shall, on behalf of the Company, withdraw the applications for Admission.
| 13.3 | Effect
of termination |
If
this Agreement is terminated either in full or in part, pursuant to the provisions of this clause 13, clause 7 or otherwise:
| (a) | such
termination shall be without prejudice to any accrued rights or obligations of any party
under this Agreement; and |
| (b) | the
provisions of clauses 1, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 and, to the extent applicable,
paragraphs 2.2 and 2.4 of Schedule 6 shall remain in full force and effect. |
| 14. | Withholding,
TAXES and Gross-Up |
All
sums payable to the Placing Banks or to any other Indemnified Person under this Agreement shall be paid free and clear of all deductions
or withholdings unless the deduction or withholding is required by law, in which event the relevant person making the payment shall pay
such additional amount as shall be required to ensure that the net amount received by the Placing Banks or any other Indemnified Person
will equal the full amount which would have been received by it had no such deduction or withholding been made. If a party makes an increased
payment under this clause 14.1 and the payee subsequently obtains a refund of tax or obtains and utilises a credit against tax by reason
of the deduction or withholding in respect of which an increased payment has been made under this clause 14.1, then the payee shall pay
to the party which made such increased payment an amount which such payee reasonably determines shall leave it in no better or worse
position than it would have been in had there been no such deduction or withholding.
If
HM Revenue & Customs or any other tax authority brings into charge to tax (or into any computation of income, profit or gains for
the purposes of any charge to tax or would do so but for the utilisation of any tax relief) any sum payable to the Placing Banks or any
other Indemnified Person under this Agreement (other than any remuneration paid pursuant to this Agreement including the commissions
due under clause 9.1) then the person liable to make such payment shall pay such additional amount as shall be required to ensure that
the total amount paid, less the tax chargeable thereon or that which would be so chargeable but for the availability of relief in respect
of that charge to tax is equal to the amount that would otherwise be so received under this Agreement (any such additional payments being
made on demand of the Placing Banks or the Indemnified Person concerned).
| 14.3 | Effect
of certification |
The
recipient Placing Bank or other Indemnified Person shall certify to the Company that the original payment received by the relevant recipient
is subject to tax, that certificate to be conclusive save in the case of manifest error.
| 15.1 | Written
communications |
Save
as otherwise provided in this Agreement, a notice (including any approval, consent or other communication) in connection with this Agreement:
| (a) | must
be in writing in the English language; and |
| (b) | in
the case of a notice to any of the Placing Banks, must be sent via e-mail to the e-mail address
of the addressee which is specified in Schedule 2; and |
| (c) | must
be left at the address of the addressee or sent by pre-paid first class post to the address
of the addressee which is specified in this clause 15 in relation to the party to whom the
notice is addressed, and marked for the attention of the person so specified, or to such
other address in England or Wales, and/or marked for the attention of such other person as
the relevant party may from time to time specify by notice given in accordance with this
clause 15. |
The
relevant details of each party at the date of this Agreement are:
If
to the Company or any Director to: |
Address:
c/o
Oak Fund Services (Guernsey) Limited, Oak House, Hirzel Street,
St Peter Port,
Guernsey GY1 2NP |
| |
|
| |
For
the attention of: The Company Secretary of Admiral Acquisition Limited |
| |
|
| If
to Rory Cullinan, Thomas V. Milroy or Melanie Stack: |
The
address set out against that person’s name in Part B of Schedule 1 |
| |
|
| If
to the Founder Entity to: |
Address:
500
South Pointe Drive
Suite 240
Miami Beach, FL 33139 |
| |
|
| |
For
the attention of: Desiree DeStefano |
| |
|
| If
to the Founder Non-Directors to: |
Address:
500 South Pointe Drive
Suite 240
Miami Beach, FL 33139 |
| |
|
| |
For
the attention of: Desiree DeStefano |
| |
|
| If
to any of the Placing Banks to: |
The
contact details set out against that person’s name in Schedule 2 |
In
the absence of evidence of earlier receipt, any notice shall take effect from the time that it is deemed to be received in accordance
with clause 15.3 below.
Subject
to clause 15.4 below, a notice is deemed to be received:
| (a) | in
the case of a notice left at the address of the addressee, upon delivery at that address;
and |
| (b) | in
the case of a posted letter, on the third day after posting or, if posted to or from a place
outside the United Kingdom, the seventh day after posting. |
A
notice received or deemed to be received in accordance with clause 15.3 on a day which is not a Business Day or after 5.00 p.m. on any
Business Day according to local time in the place of receipt, shall be deemed to be received on the next following Business Day.
Each
party undertakes to notify all of the other parties by notice served in accordance with this clause 15 if the address specified herein
is no longer an appropriate address for the service of notices.
| 16.1 | Acknowledgement
of no duty |
| (a) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors agrees and
acknowledges that each Indemnified Person is acting solely pursuant to a contractual relationship
with the Company on an arm’s length basis with respect to the Offer (including in connection
with determining the terms of the Offer), and on the terms, and with the obligations and
duties expressly stated in this Agreement and that such person is not acting as a financial
adviser or fiduciary to the Company, the Founder Entity, the Directors, the Founder Non-Directors
or any other person in respect of the Offer. It is acknowledged by all parties that: |
| (i) | the
Indemnified Persons may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, the Founder Entity, the Directors, the Founder Non-Directors
or any other person and the Indemnified Persons may take into account any factors (including
those solely in its interest) they consider appropriate in performing duties or exercising
rights under this Agreement; and |
| (ii) | no
Indemnified Person has advised as to, or is required to give, the Company, the Founder Entity,
the Directors, the Founder Non-Directors or any other person, any general financial or strategic
advice or any legal, tax, investment, accounting, regulatory or other specialist or technical
advice in connection with the Offer in any jurisdiction, and the Company, the Founder Entity,
the Directors, the Founder Non-Directors and any such other person have consulted their own,
and will rely on their own expertise and that of, specialist legal, tax, investment, accounting
or regulatory advisers to the extent they deem appropriate, and in respect of the due diligence
investigations in connection with the Offer and no Indemnified Person shall have any responsibility
to the Company, the Founder Entity, the Directors, the Founder Non-Directors or any other
person with respect thereto. |
| (b) | No
Placing Bank shall have any liability for any claims brought against any person (and the
Company, the Founder Entity, the Directors and the Founder Non-Directors confirm they will
not make any claim against any of the Placing Banks) in respect of the timing, terms and
structure of the Offer, or that the Offer Price was set at a level that is too high or too
low, or with respect to any sales of any New Ordinary Shares or Warrants by investors following
allocation to them of such New Ordinary Shares or Warrants. |
| (c) | The
parties further agree that it is not their intention to create a fiduciary relationship between
the Company, the Founder Entity, the Directors and the Founder Non-Directors on the one hand
and any of the Placing Banks on the other. |
| (d) | The
Company, the Founder Entity, the Directors and the Founder Non-Directors acknowledge and
agree: |
| (i) | each
of the Placing Banks is and has been acting for the Company and no one else in connection
with the Offer and the Admission and will not regard, and have not regarded, any other person
as their client and have not been and will not be responsible to anyone other than the Company
for providing the protections afforded to clients of each of the Placing Banks nor for providing
advice in relation to the Offer, the Admission or any of the transactions contemplated by
this Agreement; |
| (ii) | any
advice, whether written or oral, given by a Placing Bank to the Company, or any communications
between a Placing Bank and the Company, may not be used or relied upon by any third party
and may not be disclosed to any third party without the prior written approval of the relevant
Placing Bank (other than the Company’s professional advisers who may place no reliance on
such advice); |
| (iii) | each
of the Placing Banks is a full service securities firm and they, along with their respective
Affiliates, are engaged in various activities, including securities trading, investment management,
financing and brokerage activities and financial planning and benefits counselling for both
companies and individuals; |
| (iv) | in
the ordinary course of the activities referred to in clause 16.1(d)(iii), each of the Placing
Banks and their respective Affiliates may actively trade the debt and equity securities (or
related derivative securities) of the Company and its related bodies corporate for their
own account and for the accounts of their customers and may at any time hold long and short
positions in such securities; |
| (v) | no
Placing Bank is obliged to disclose to the Company, the Founder Entity, the Directors, the
Founder Non-Directors or utilise for the benefit of the Company, the Founder Entity, the
Directors or the Founder Non-Directors any non-public information which a Placing Bank obtains
in the course of its business; |
| (vi) | each
of the Placing Banks will use and rely on information provided by or on behalf of the Company
in performing their obligations under this Agreement, without having independently verified
the information, and the Placing Banks do not assume responsibility for the accuracy and
completeness of the information or any other information on which it may rely in connection
with this Agreement; |
| (vii) | that
the Placing Banks will treat the Company as a “professional client” within the
meaning and for the purpose of the FCA Handbook; |
| (viii) | that
Jefferies International is authorised and regulated in the United Kingdom by the Financial
Conduct Authority; |
| (ix) | that
Jefferies GmbH is authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht
in Germany; and |
| (x) | that
UBS is authorised and regulated by the Financial Market Supervisory Authority in Switzerland
and authorised by the Prudential Regulation Authority and subject to regulation by the Financial
Conduct Authority and limited regulation by the Prudential Regulation Authority in the United
Kingdom. |
| 16.2 | No
Additional Services by the Placing Banks |
The
Company does not have any expectation, understanding or agreement with any Placing Bank for such Placing Bank to provide any additional
services to the Company after the completion of the Offer relating to an Acquisition, the financing thereof or other related transactions.
The provision of any such additional services by any Placing Bank in connection with an Acquisition, the financing thereof or other related
transactions will require the Company’s separate engagement of such Placing Bank and the entry by such Placing Bank and the Company into
a separate agreement or agreements acceptable to both such Placing Bank and the Company to be mutually agreed in good faith setting forth
the terms and conditions of the additional services to be provided by such Placing Bank to the Company, including, without limitation,
appropriate indemnification provisions and the delivery of customary comfort letters, legal opinions and negative assurance letters to
such Placing Bank. The Company does not intend to pay, and, in accordance with the terms and conditions of this Agreement, the Placing
Banks are not entitled to, any deferred broking fees in connection with the Offer payable on the date of, and conditioned upon, the completion
of the Acquisition.
The
obligations of each of the Placing Banks under this Agreement are several and not joint or joint and several. Other than as expressly
set out in this Agreement, nothing contained or implied in this Agreement constitutes a Placing Bank the partner, agent or representative
of any other Placing Bank for any purpose or creates any partnership, agency or trust between them and none of them has the authority
to bind the others in any way. No Placing Bank is liable to any other person for the acts or omissions of, advice given by or failure
or default of another Placing Bank.
Any
agreement, covenant, representation, warranty or undertaking pursuant to this Agreement on the part of two or more parties shall, save
where the contrary is expressly provided, be deemed to be made on a several basis. Other than where joint action is expressly provided
for, each of the Placing Banks and the Indemnified Persons shall (except as otherwise agreed among them) have the right to protect and
enforce each of its rights without joining any of the others in any proceedings.
This
Agreement will operate for the benefit of and be binding upon (as appropriate) the parties hereto and the Indemnified Persons under clause
12 and their respective successors or legal personal representatives. No subscriber or purchaser of any of the New Ordinary Shares or
Warrants from the Placing Banks shall be deemed as successor or assignor by reason merely of such subscription or purchase.
| 16.6 | Release,
compromise, etc. |
Any
liability to a Placing Bank, Director, Founder Entity, Founder Non-Director or the Company under this Agreement may in whole or in part
be released, compounded or compromised and time or indulgence may be given by such Placing Bank, Director, Founder Entity, Founder Non-Director
or the Company in its absolute discretion as regards any person under such liability without in any way prejudicing or affecting the
rights of such Placing Bank, Director, Founder Entity, Founder Non-Director or the Company against any other person under the same or
a similar liability, whether joint and several or otherwise.
The
rights and remedies of the parties to this Agreement or any Indemnified Person shall not be affected by any failure to exercise or delay
in exercising any right or remedy or by the giving of any indulgence by any other party or by anything whatsoever except a specific waiver
or release in writing and any such waiver or release shall not prejudice or affect any other rights or remedies of the parties or any
Indemnified Person. No single or partial exercise of any right or remedy shall prevent any further or other exercise thereof or the exercise
of any other right or remedy.
Any
date or period specified in this Agreement may be postponed or extended by mutual agreement in writing between the Company (for itself
and on behalf of the Founder Entity, the Directors and the Founder Non-Directors) and the Placing Banks but, as regards any date or period
originally fixed or any date or period so postponed or extended, time shall be of the essence.
This
Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which when so executed
and delivered shall be an original, but all the counterparts shall together constitute one and the same document.
If
any provision in or part of this Agreement is void or unenforceable due to any applicable law, it shall be deemed deleted and the remaining
provisions of this Agreement shall continue in full force and effect.
At
any time after the date of this Agreement the Company shall, and shall use all reasonable endeavours to procure that any necessary third
party shall, at the cost of the Company, execute such documents and do such acts and things as the Placing Banks may reasonably require
for the purpose of giving full effect to all the provisions of this Agreement by which he, she or it is bound.
| 16.12 | Survival
of representations, warranties and obligations |
Each
of the representations, warranties, agreements, undertakings and indemnities set out in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any Placing Bank and notwithstanding the issue, sale, transfer or delivery
of and payment for the New Ordinary Shares or Warrants or completion of the Offer.
None
of the rights or obligations under this Agreement may be assigned or transferred without the written consent of the other parties. Notwithstanding
the foregoing, the Company shall, if it or a successor entity will not remain as the public entity following an Acquisition, include
in any acquisition agreement entered into by the Company and one or more business combination targets, pursuant to which the Company
will consummate the Acquisition, a covenant for the assignment and assumption, by the public entity resulting from the Acquisition, of
all of the Company’s indemnification obligations under clause 12.1 hereof.
No
variation of this Agreement (or any document referred to herein) shall be effective unless it is in writing (which for this purpose does
not include email) signed by or on behalf of each of the parties to this Agreement. The expression “variation” includes any
variation, supplement, deletion or replacement however effected.
| 16.15 | Contracts
(Rights of Third Parties) Act 1999 |
| (a) | Save
as provided in clause 12.19, a person who is not a party to this Agreement has no rights
under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement
but this does not affect any right or remedy of a third party which exists or is available
apart from that Act. |
| (b) | Notwithstanding
clause 12.19, this Agreement may be varied or terminated without the consent from and without
reference to persons entitled to enforce the terms of this Agreement by virtue of the Contracts
(Rights of Third Parties) Act 1999. |
| 16.16 | Indemnities
without prejudice |
The
indemnities set out or referred to in this Agreement shall be in addition to and shall not limit, affect or prejudice any other right,
relief or remedy available to any Indemnified Person.
| 16.17 | Remedies
cumulative with those at law |
The
powers, rights and remedies conferred on the parties herein and each Indemnified Person pursuant to clause 12 shall be in addition and
without prejudice to all other powers, rights and remedies available to the parties and each Indemnified Person by law.
Interest
shall run (before and after judgment) on any sums due and payable hereunder from the due date for payment thereof until the date of actual
payment at the Agreed Rate.
| 16.19 | Without
prejudice to liabilities |
The
provisions of this Agreement are without prejudice to any liabilities which any of the parties may have under any rule of law or equity
(including without limitation the Companies Act, FSMA and the Securities Act) to the extent they cannot be excluded or restricted as
provided under this Agreement.
Save
under any applicable policy of insurance lawfully maintained by the Company, no Director shall seek to recover any amount from the Company
or any of its officers or employees, other than each other, in connection with any claim or matter arising out of this Agreement or seek
to set off against, or withhold from, any sum owing to the Company or any of its or their officers or employees any amount owing by the
Company or its or their officers or employees in connection with such claim or matter.
The
Company, the Founders and the Founder Entity agree to indemnify each Placing Bank against any loss incurred by such Placing Bank as a
result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid
in a currency (the “Judgment Currency”) other than pounds sterling and as a result of any variation between: (i) the
rate of exchange at which the pounds sterling amount is converted into Judgment Currency for the purpose of such judgment or order; and
(ii) the rate of exchange at which such Placing Bank is able to purchase pounds sterling, at the business day nearest the date of judgment,
with the amount of the Judgment Currency actually received by the relevant Placing Bank. The foregoing indemnity shall constitute a separate
and independent obligation of the Company, the Founders and the Founder Entity and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term “rate of exchange” shall include any premium and costs of exchange payable
in connection with the purchase of or conversions into the relevant currency.
| 17. | APPOINTMENT
OF PROCESS AGENT |
| 17.1 | Each
of the Company, the Founders, the Founder Entity and the Directors (except Rory Cullinan
and Melanie Stack) shall maintain an agent for service of process in England. |
| 17.2 | Each
of the Company, the Founders, the Founder Entity and the Directors (except Rory Cullinan
and Melanie Stack) confirm that they have appointed Law Debenture Corporate Services Limited
of Fifth Floor, 100 Wood Street, London EC2V 7EX as a process agent in the UK (the “Agent”),
to act as their agent to accept service of process in England in any legal action or proceedings
arising out of or in connection with this Agreement and shall procure that the Agent will,
prior to Admission on the Closing Date, confirm in writing to the Placing Banks its acceptance
of such appointment. All correspondence with the Agent shall be delivered in accordance with
clause 15. |
| 17.3 | If
the Agent appointed under clause 17.2 ceases to be able to act as such or to have an address
in England, each of the Company, the Founders, the Founder Entity and the Directors (except
Rory Cullinan and Melanie Stack) irrevocably agrees to appoint a new process agent having
an address in England and to deliver to the Placing Banks within 10 Business Days a copy
of a written acceptance of appointment by the new process agent. If any of the Company, the
Founders, the Founder Entity and the Directors (except Rory Cullinan and Melanie Stack) do
not make such an appointment within 10 Business Days of such cessation, then the Placing
Banks, acting reasonably, may do so on behalf of the Company, the Founders, the Founder Entity
and the Directors (except Rory Cullinan and Melanie Stack) and at the cost of the Company,
the Founders, the Founder Entity and the Directors (except Rory Cullinan and Melanie Stack)
and shall notify the Company, the Founders, the Founder Entity and the Directors (except
Rory Cullinan and Melanie Stack) if they do so. |
| 17.4 | Each
party agrees that without preventing any other mode of service, any document in an action
(including, but not limited to, a claim form or any other document to be served under the
Civil Procedure Rules) may be served on any party by being delivered to or left for that
party at its address for service of notices under clause 15 or, in the case of each of the
Company, the Founders, the Founder Entity and the Directors (except Rory Cullinan and Melanie
Stack), by being delivered to the Agent. |
| 18. | Governing
Law, Jurisdiction and Service of Process |
This
Agreement and any dispute or claim arising out of or in connection with it or its subject matter, existence, negotiation, validity, termination
or enforceability (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law.
| 18.2 | Submission
to jurisdiction |
| (a) | Each
party irrevocably agrees for the benefit of each of the Placing Banks that the courts of
England have exclusive jurisdiction in relation to any dispute or claim arising out of or
in connection with this Agreement or its subject matter, existence, negotiation, validity,
termination or enforceability (including non-contractual disputes or claims). |
| (b) | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors irrevocably
waives any right that it may have to object to an action being brought in any such court
as is referred to in clause 18.2(a) on the grounds of inconvenient forum or otherwise as
regards proceedings in connection with this Agreement and further irrevocably agrees that
a judgment or order of any such court in connection with this Agreement shall be conclusive
and binding on it and may be enforced against it in the courts of any other jurisdiction. |
| (c) | Regardless
of whether the courts of any country other than England have jurisdiction to consider a dispute
falling within clause 18.2(a) of this Agreement, the Company irrevocably undertakes that
it will neither issue nor cause to be issued originating or other process in respect to such
a dispute in any jurisdiction other than England. |
| (d) | The
submission to the jurisdiction of the courts of England shall not (and shall not be construed
so as to) limit the right of the Placing Banks to bring legal proceedings in any other court
of competent jurisdiction including, without limitation, the courts having jurisdiction by
reason of any other party’s domicile. Legal proceedings by the Placing Banks in any one or
more jurisdictions shall not preclude legal proceedings by either of them in any other jurisdiction,
whether by way of substantive action, ancillary relief, enforcement or otherwise. |
Each
party agrees that, without preventing any other mode of service, any document in an action (including, but not limited to, a claim form
or any other document to be served under the Civil Procedure Rules) may be served on any party by being delivered to or left for that
party at its address for service of notices under clause 15.1 or, in the case of each of the Company, the Founders, the Founder Entity
and the Directors (except Rory Cullinan and Melanie Stack) by being delivered to the Agent. Each party undertakes to either maintain
such an address at all times in the United Kingdom or maintain the appointment of an Agent (as applicable) and to notify the other parties
in advance of any change from time to time of the details of such address in accordance with the manner prescribed for service of notices
under clause 15.3.
IN
WITNESS WHEREOF this Agreement has been entered into the day and year first above written.
Schedule 1
DIRECTORS
Part A
FOUNDER Directors
Name |
|
Address |
| |
|
|
| Sir
Martin E. Franklin |
|
xxxxxx
xxxxxx
xxxxxx |
| |
|
|
| Robert
A.E. Franklin |
|
xxxxxx
xxxxxx
xxxxxx |
Part B
NON-FOUNDER DIRECTORS
Name |
|
Address |
|
Maximum
Liability in US dollars |
| |
|
|
|
|
| Rory
Cullinan |
|
xxxxxx
xxxxxx |
|
US$
100,000 |
| |
|
|
|
|
| Thomas
V. Milroy |
|
xxxxxx |
|
US$
75,000 |
| |
|
|
|
|
| Melanie
Stack |
|
xxxxxx |
|
US$
75,000 |
Part C
FOUNDER NON-DIRECTORS
|
Name |
|
Address |
| |
|
|
| Ian
G.H. Ashken |
|
xxxxxx |
| |
|
|
| James
E. Lillie |
|
xxxxxx |
| |
|
|
| Desiree
DeStefano |
|
xxxxxx |
| |
|
|
| Michael
E. Franklin |
|
xxxxxx |
Schedule 2
PLACING BANKS
| Name |
|
Address
and contact |
| |
|
|
| Jefferies
International Limited |
|
Address:
100
Bishopsgate
London, United Kingdom
EC2N 4JL
For
the attention of: IB Legal
E-mail
address: IB_LN_Legal@jefferies.com |
| |
|
|
| Jefferies
GmbH |
|
Address:
Bockenheimer
Landstrasse 24
60323
Frankfurt am Main
Germany
For
the attention of: IB Legal
E-mail
address: IB_LN_Legal@jefferies.com |
| |
|
|
| UBS
AG London Branch |
|
Address:
5
Broadgate
London, United Kingdom
EC2M 2QS
For
the attention of: Thomas Raynsford
E-mail
address: ol-project-admiral@ubs.com |
Schedule 3
WARRANTIES OF THE COMPANY, THE FOUNDERS AND THE FOUNDER ENTITY
Offer
Documents and listing
| 1. | Each
of the Offer Documents is true and accurate in all material respects and not misleading and
each of: (i) the Offer Documents taken together; and (ii) the Preliminary Prospectus, the
Disclosure Package and the Final Prospectus, fairly presents (or when issued and published
will fairly present) the information contained therein and does not or, when made, will not
contain any untrue statement of any material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. All forecasts, estimates and expressions of opinion, intention,
belief or expectation contained in the Offer Documents are and will be, at their respective
dates, truly and honestly held and have been made on reasonable grounds and after due and
careful enquiry. |
| 2. | Each
of: (1) the Offer Documents taken together; and (2) the Prospectuses contains (or will when
published contain) all particulars and information required by, and comply with (and, to
the extent applicable, will comply with), the Companies Act, FSMA, the CJA, the LPDT Rules,
the Admission and Disclosure Standards, the rules and regulations of the London Stock Exchange,
the CREST Regulations and all other applicable laws and regulations. Each of the Preliminary
Prospectus, the Disclosure Package and the Final Prospectus contains (or will when published
contain), having regard to the particular nature of the Shares and Warrants and the Company,
the information necessary to enable investors to make an informed assessment of: (a) the
assets and liabilities, financial position, profits and losses and prospects of the Company;
and (b) the rights attaching to the Shares and Warrants and such information is in a form
which is comprehensible and easy to analyse. |
| 3. | There
are no facts or matters known, or which could have been known, to the Warrantor omitted from
any of the Offer Documents as at their respective dates (following publication, if applicable),
the omission of which would make any statement of a material fact or expression of opinion,
intention or expectation contained in any of the Offer Documents misleading in any respect. |
| 4. | The
section in the Final Prospectus entitled “Summary” is written in a clear, concise
and comprehensible manner and in non-technical language and its content (i) provides the
key information that investors need in order to understand the nature and risks of the Company
and of the securities concerned and (ii) provides, in conjunction with the Final Prospectus,
appropriate information about essential elements of the securities concerned, in each case
in order to aid investors when considering whether to invest in such securities. |
| 5. | There
are no matters other than those disclosed in the Final Prospectus or otherwise in writing
to the FCA or the London Stock Exchange (copies of such letters have been provided to each
of the Placing Banks) which the Warrantor considers should be taken into account by the FCA
or the London Stock Exchange in considering the applications for Admission. |
| 6. | The
statements set forth in Part VII (Taxation), in Part VIII (Additional Information) of the
Disclosure Package and the Final Prospectus under the headings: “Share Capital”,
“Memorandum and Articles of Association of the Company”, “Directors’ Letters
of Appointment and Option Deeds”, “City Code”, “Material contracts”
and “BVI Law”, in Part IX (Terms and Conditions of the Warrants), and in Part XI
(Depositary Interests) insofar as they purport to constitute a summary of the laws and documents
referred to therein, are true, accurate and complete in all material respects and not misleading
in any material respect. |
| 7. | All
statements made or information provided by or on behalf of the Company to the FCA (including
in connection with any application for certain information to be omitted from the Final Prospectus)
are (or, when made, will be) true and accurate in all material respects and are not (or,
when made, will not be) misleading in any material respect and there are no facts which have
not been disclosed to the FCA in connection therewith which by their omission make any such
statements misleading or which are otherwise material for disclosure to the FCA. |
Verification
and due diligence
| 8. | The
Verification Notes have been read by the Directors and approved by them and have been prepared
in good faith with due care and the replies given have been prepared or approved by persons
having appropriate knowledge and responsibility to enable them properly to provide such replies.
There are no facts which are known to any of the Directors which materially adversely affect
(whether by omission or otherwise) the accuracy or completeness of any of the replies contained
in the Verification Notes. The Belief Statement Schedule has been approved by the Directors
and has been prepared in good faith with due care. The contents of the Belief Statement Schedule
are truly and honestly held and have been made on reasonable grounds and after due and careful
enquiry. |
| 9. | The
Verification Bundles have been approved by the Directors and have been prepared in good faith
with due care. There are no facts which are known to any of the Directors which materially
adversely affect (whether by omission or otherwise) the accuracy or completeness of any of
the information contained in the Verification Bundles. |
| 10. | All
information provided by or on behalf of the Company to any of the Placing Banks in connection
with their due diligence enquiries or similar requests for information in connection with
the Offer has been supplied in good faith and such information was, when supplied, true and
accurate in all material respects and did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make any of the statements contained
therein in light of the circumstances under which such statements were made, not misleading. |
Offering
materials
| 11. | There
has been no distribution of any offering material in connection with the Offer other than
the Offer Documents. |
| 12. | There
is no material information disclosed in the Roadshow Materials, the Preliminary Prospectus
or the Disclosure Package which is not disclosed in the Final Prospectus which would be material
for disclosure. |
Directors
| 13. | The
Placing Banks have been furnished in writing with all material information relating to the
Directors which has been requested by them. |
| 14. | Each
of the Directors has full power and authority to enter into and perform their obligations
pursuant to this Agreement and this Agreement constitutes a valid and legally binding agreement
enforceable against each of the Directors in accordance with its terms. |
| 15. | Each
of the Directors has had explained to him or her and understands his or her responsibilities
and obligations as a director of a listed company under the LPDT Rules, MAR, the Financial
Services Act 2012, FSMA and the BVI Companies Act. |
| 16. | The
answers given to the Directors’ Questionnaire by each of (i) in relation to the Warranty
given by the Company, the Directors and (ii) in relation to the Warranty given by the Founders
and the Founder Entity, the Founder Directors, were when given, and remain true, accurate
and complete and not misleading either by omission or misstatement. |
| 17. | The
information contained in the Directors’ Responsibility Statements of (i) in relation to the
Warranty given by the Company, the Directors and (ii) in relation to the Warranty given by
the Founders and the Founder Entity, the Founder Directors, is complete and accurate in all
respects and not misleading in any respect and the Directors have read and approved the contents
of the Final Prospectus. |
Corporate
organisation and business
| 18. | The
Company is a company with limited liability, duly incorporated and validly existing under
the laws of the British Virgin Islands, with full power and authority under its Articles
of Association and otherwise to conduct its business as described in the Final Prospectus
and to enter into and perform its obligations pursuant to the Offer, this Agreement and any
other agreement to be entered into by it in connection with the Offer (including, without
limitation, the power to pay commissions, fees, costs and expenses provided for in this Agreement). |
| 19. | The
Company does not have any subsidiaries nor will it have any subsidiaries prior to completion
of the Offer. |
| 20.1 | in
violation of its Articles of Association or other governing or constitutional documents (which
are in full force and effect on Admission), the violation of any of which would, singly or
in aggregate, be material; or |
| 20.2 | in
breach or default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, any document of title or in any bond, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument
to which the Company is a party or by which the Company may be bound, or to which any of
their properties or assets is subject, the breach or default of any of which, singly or in
aggregate, would be material and the Company is not aware of any circumstances likely to
give rise to such a breach or default; or |
| 20.3 | in
violation of any applicable law, statute, rule, licence regulation, judgment, order, writ,
claim form or decree of any government, government instrumentality or court having jurisdiction
over the Company or any of their assets or properties, the violation of any of which would,
singly or in aggregate, be material. |
Share
capital
| 21. | The
issued shares of the Company as at the date of the Final Prospectus is as described in paragraph
3.1 of Part VIII (Additional Information) of the Final Prospectus, and all of the issued
shares of the Company (including, for the avoidance of doubt, the New Ordinary Shares and
the Founder Preferred Shares (as described in paragraph 4.3 of Part VIII (Additional Information)
of the Final Prospectus)) have been, or when issued will be, duly and validly authorised
and issued, are, or when issued will be, fully paid and are not, or when issued will not
be, subject to calls for further payment or otherwise assessable and are, or when issued
will be, free from all Encumbrances (save for the Founders’ and the Founder Entity’s rights
in respect of the Founder Preferred Shares as described in paragraph 4.3 of Part VIII (Additional
Information) of the Final Prospectus) and will conform upon Admission to the descriptions
thereof contained in the Final Prospectus. |
| 22. | Save
as fairly disclosed in paragraphs 4.3, 9 and 14.7 of Part VIII (Additional Information) and
Part IX (Terms and Conditions of the Warrants) of the Final Prospectus, there are no rights
(conditional or otherwise) to require the issue of any shares or other securities (including
without limitation any loan capital) or securities convertible into or exchangeable for,
or warrants, rights or options to purchase, or obligations, commitments or intentions to
create the same which are outstanding and in force. |
| 23. | The
New Ordinary Shares will, upon issue, be free from all Encumbrances and will rank pari passu
in all respects and will conform to the description thereof in the Final Prospectus. |
| 24. | The
New Ordinary Shares are freely issuable by the Company to or for the account of the subscribers
procured by the Placing Banks (or to the Placing Banks themselves) and there are no restrictions
on voting or transfer of the Shares under the laws of the British Virgin Islands or upon
declaration or payment of any dividend or distribution thereon. |
Warrants
| 25. | All
of the Warrants, when issued, will be duly and validly authorised and issued and are not,
or when issued will not be, subject to calls for further payment or otherwise assessable
and are, or when issued will be, free from all Encumbrances and will conform upon Admission
to the descriptions thereof contained in the Final Prospectus. |
| 26. | The
Warrants are freely issuable by the Company to or for the account of the subscribers procured
by the Placing Banks (or to the Placing Banks themselves) and there are no restrictions on
voting or transfer of the Warrants under the laws of the British Virgin Islands. |
Compliance
and corporate governance
| 27. | The
Directors have established procedures which, as at and from Admission, enable the Company
to comply with the LPDT Rules, the Admission and Disclosure Standards and MAR on an ongoing
basis. The Company does not have an external management company as defined in the Listing
Rules and the discretion of the Directors to make strategic decisions on behalf of the Company
has not been limited or transferred to another person and the Directors have the capability
to act on key strategic matters in the absence of a recommendation from any other person. |
| 28. | The
Company has reviewed the compliance of the Company with the provisions of the Corporate Governance
Code and as at the date of Admission, save as fairly disclosed in the Final Prospectus in
Part III (The Company, its Board and the Acquisition Structure) under the heading “Corporate
governance”, will be in compliance with the provisions of the Corporate Governance Code
and has established procedures to enable the Company, following Admission, to comply with
its provisions. |
| 29. | Each
of the Directors has the benefit of an indemnity provided by the Company indemnifying the
Director against liabilities incurred in his or her office as director, in terms that are
in accordance with the BVI Companies Act. |
| 30. | There
are no shadow directors of the Company. |
No
dividends
| 31. | Since
incorporation of the Company, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its shares. |
CREST
| 32. | The
Depositary Interests are eligible for admission to, and will be freely transferable in, CREST
and the terms of issue of the Depositary Interests and the Articles of Association comply
with all the requirements of Euroclear, the CREST Regulations, the Depositary Agreement and
the Deed Poll. The Depositary Interests do not contravene the laws of the British Virgin
Islands and will, when issued be freely convertible into Shares or Warrants (as applicable).
The holders of Depositary Interests will, on issue of the Depositary Interests, benefit from
all the rights attaching to the Shares or Warrants (as applicable), including voting rights
and, in the case of Shares, dividends and participation in corporate actions. |
Financial
information
| 33. | The
financial information included in section (B) of Part VI (Historical Financial Information
on the Company) of the Final Prospectus: |
| 33.1 | has
been prepared and presented in conformity with US GAAP, applied and in a form consistent
with that which will be adopted in the Company’s next published financial statements; |
| 33.2 | gives
a true and fair view of the state of affairs and financial condition of the Company as at
the dates stated; and |
| 33.3 | has
been prepared after due and careful enquiry by the Company and is presented on the basis
set out in the Final Prospectus consistently with the accounting policies of the Company. |
| 34. | The
Company does not have any off-balance sheet arrangements, investment or liability. |
Information
provided to the Reporting Accountants
| 35. | All
information supplied by or on behalf of the Company to the Reporting Accountants for the
purposes of preparing the No Significant Change Letter and any of the Reporting Accountants’
other reports and comfort letters in connection with the Offer, and in respect of any updates
to such, has been supplied in good faith after due and careful enquiry; such information
was when supplied and remains true and accurate in all respects and was not by itself or
by omission misleading in any respect and no further information has been withheld which
might reasonably have affected the contents of such reports in any respect. |
Working
capital
| 36. | The
Company has sufficient working capital for its present requirements, that is, for at least
12 months from the date of the Final Prospectus. |
Auditors
| 37. | The
Auditors who audited the financial statements of the Company included in the Final Prospectus
are independent auditors in respect of the Company. |
Financial
reporting procedures
| 38. | The
Directors have established procedures which provide a reasonable basis for them to make proper
judgments on an ongoing basis as to the financial position and prospects of the Company and
the Company maintains a system of internal financial and accounting controls sufficient to
provide reasonable assurance that: |
| 38.1 | transactions
are executed in accordance with management’s general or specific authorisations; |
| 38.2 | transactions
are recorded as necessary to permit the preparation of returns and reports which are complete
and accurate in all material respects to regulatory bodies as and when required by them and
the preparation of financial statements in accordance with US GAAP and the BVI Companies
Act and to maintain accountability for assets; and |
| 38.3 | the
Company’s asset records are compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. |
| 39. | There
are no weaknesses in the Company’s internal control over financial reporting (whether or
not remedied) of the Company and there has been no fraud that involves any member of management
or any other employee of the Company. |
No
significant change
| 40. | Save
as set out in paragraph 11 of Part VIII (Additional Information) of the Final Prospectus,
since the Accounts Date, there has been no significant change in the financial or trading
position of the Company and there has been no Material Adverse Change or circumstances likely
to lead to a Material Adverse Change since the Accounts Date. |
No
Trading
| 41. | Since
the date of its incorporation, the Company has not conducted any business or traded. |
Borrowings
and obligations
| 42. | Save
as fairly disclosed in the Final Prospectus in Part V (Share Capital, Liquidity and Capital
Resources and Accounting Policies) under the heading “Indebtedness”, the Company
has not entered into nor is bound by any material obligation, agreement, covenant, contract
or instrument and other than fees and expenses payable in connection with the Offer and any
indemnities given by the Company pursuant to this Agreement neither the Company nor any person
acting on its behalf has entered into or assumed any note, debenture, guarantee or indemnity,
material liability (including, without limitation, material contingent liability) or other
indebtedness in the nature of borrowing. |
Insolvency
| 43.1 | is,
and immediately after the Closing Date will be, solvent as such term is understood under
the laws of the British Virgin Islands and it will not be unable to pay its debts within
the meaning of section 123 of the Insolvency Act 1986 or any analogous law or regulation; |
| 43.2 | has
not had a controller appointed or is in liquidation, in provisional liquidation, under administration
or is being wound up or has had a receiver appointed to any part of its property; |
| 43.3 | is
not subject to any arrangement, assignment, moratorium or composition, protected from creditors
under any statute or being dissolved (in each case, other than to carry out a reconstruction
or amalgamation while solvent on terms approved by the other parties to this Agreement); |
| 43.4 | has
not had an application or order made (and in the case of an application, which has not been
stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put forward,
or any other action taken which is preparatory to or could result in the events described
in paragraphs 43.1 to 43.3 above; |
| 43.5 | is
otherwise able to pay its debts when they fall due; and |
| 43.6 | is
not subject to any other proceedings with a substantially similar effect to 43.1 to 43.4
under the law of any jurisdiction. |
| 44. | The
Company has not taken any action (including, but not limited to, the convening of meetings
to vote on relevant resolutions), nor have any other steps been taken or legal proceedings
commenced or been threatened against the Company for its winding-up or dissolution or for
any similar or analogous proceeding in any jurisdiction or for the Company to enter into
any arrangement or composition for the benefit of creditors or for the appointment of a receiver,
administrator, provisional liquidator or similar officer. |
| 45. | There
is not outstanding any liability, obligation or commitment of any kind on the part of the
Directors or the Company in relation to any current or pending insolvency proceedings in
relation to the Company. |
Arrangements
with Directors and Shareholders
| 46. | There
are no loans made by the Company to, nor are there any debts owing to the Company from, any
of the shareholders of the Company and/or any of the Directors of the Company and/or any
associate of any of them save, in each case, to the extent (individually or in aggregate)
that would not be and would not be reasonably likely to be, material in the context of the
Offer or Admission. |
| 47. | Save
as fairly disclosed in Part VIII (Additional Information) of the Final Prospectus: |
| 47.1 | there
are no existing material contracts or engagements to which the Company is a party and in
which any of the Directors or any associate of any of them is interested; and |
| 47.2 | no
shareholder has any rights, in his capacity as such, in relation to the Company. |
| 48. | For
the purposes of paragraphs 46 and 47 above, associate has the meaning: |
| 48.1 | in
the case of an individual, given to the “connected person” under sections 252 to
254 of the Companies Act; and |
| 48.2 | in
the case of a body corporate, given to “associated company” in section 449 of the
CTA 10. |
Tax
| 49. | The
Company is not subject to tax on its income, profits or gains (if any) in the British Virgin
Islands and is not, and never has been, treated as resident in any other jurisdiction for
tax purposes (including for the purposes of any double tax arrangement or treaty). The Company
is not, and never has been, subject to tax in any jurisdiction outside the British Virgin
Islands by virtue of having a permanent establishment in that jurisdiction. |
| 50. | Except
as fairly disclosed in the sections headed “British Virgin Islands taxation” and
“United Kingdom taxation” of Part VII (Taxation) of the Final Prospectus, no ad
valorem stamp duty, stamp duty reserve tax, capital duty or other issue, documentary or similar
tax are payable under the laws of the United Kingdom or the British Virgin Islands in connection
with the allotment, issue or delivery by the Company of the New Ordinary Shares, Founder
Preferred Shares or Matching Warrants (or Depositary Interests in respect of the same) to
or for the account of the Placing Banks or the subscribers thereof. |
| 50.1 | The
Company is, to the extent required, registered for the purposes of VAT and has complied with
the terms of legislation relating to VAT. |
| 50.2 | The
Company is not nor has it been treated as a member of a group for the purposes of VAT legislation
with any company and has not applied for such treatment. |
| 51. | No
register of Shares, Founder Preferred Shares, Warrants or Depository Interests is kept by
or on behalf of the Company outside the British Virgin Islands. |
| 52.1 | the
Company has not been involved in any transaction which has given or may give rise to a liability
to tax (or would have given or might have given rise to such a liability but for the availability
of any relief) other than tax in respect of normal trading income or receipts arising from
transactions entered into by it in the ordinary course of business; |
| 52.2 | no
disposal has taken place or other event occurred which has or may have the effect of crystallising
a liability to tax; and |
| 52.3 | no
accounting period (as defined in section 9 of the CTA 09 or equivalent legislation of the
BVI) of the Company has ended as referred to in section 10(1) of that Act or equivalent legislation
of the BVI. |
| 53. | Since
incorporation the Company has not incurred any liability to tax on its income, profits or
gains (if any), and, to the best of the Warrantor’s knowledge, nothing has happened which
would cause the Company to become liable to tax on its income, profits or gains. |
| 54. | Since
incorporation the Company has not paid or become liable to pay, and there are no circumstances
by reason of which it is likely to become liable to pay, to any tax authority any penalty,
fine, surcharge or interest in respect of tax (including, without limitation, in respect
of any failure to make any return, give any notice or supply any information to any relevant
tax authority, or any failure to pay tax on the due date for payment). |
| 55. | All
transactions between the Company and any third party have been and are on fully arm’s length
terms. To the best of the Warrantor’s knowledge, there are no circumstances in existence
which are likely to cause any tax authority to make any adjustment for tax purposes to the
terms on which any transaction between the Company and any third party is treated as taking
place and no such adjustment has been made or asserted against the Company in writing by
any tax authority. |
Compliance
with laws and regulations
| 56. | The
Company has established procedures to ensure compliance with all applicable regulatory requirements
in the British Virgin Islands and other relevant jurisdictions. |
| 57. | In
relation to (i) the Warranty given by the Company, the Company and the Directors, and (ii)
the Warranty given by the Founders and the Founder Entity, the Company and the Founder Directors,
have at all times complied with all applicable laws and regulations of the United Kingdom
(including, without limitation, FSMA, the LPDT Rules, the Admission and Disclosure Standards,
the CJA, MAR and the Companies Act) and of the British Virgin Islands (including the BVI
Companies Act), and with the provisions of the Company’s Memorandum of Association and Articles
of Association and have or will have the right, power and authority under the Articles of
Association of the Company to enter into and perform this Agreement (including, without limitation,
the power to pay commissions, fees, costs and expenses provided for in this Agreement), to
make the Offer, to allot and issue the New Ordinary Shares and Matching Warrants in certificated
and uncertificated form, to issue the Offer Documents in the manner proposed and, subject
to approval of the Final Prospectus by the FCA, and Admission, there are no other consents,
authorisations or approvals required by the Company in connection with the entering into
and the performance of this Agreement and the actions referred to in this paragraph 57 of
Schedule 3 which have not been irrevocably and unconditionally obtained. |
| 58. | The
statutory books, books of accounts and other records legally required to be kept by the Company
are up-to-date, complete and accurate in all material respects and no notice or allegation
that any of such books or records is incorrect or should be rectified has been received.
All accounts, documents and returns required by law to be delivered or made to the Registrar
of Companies or any other authority have been duly and correctly delivered or made without
material omission or default. |
| 59. | Neither
(i) in relation to the Warranty given by the Company, the Company, nor the Founders, nor
the Founder Entity, nor the Directors, nor (ii) in relation to the Warranty given by the
Founders and the Founder Entity, the Company nor the Founders nor the Founder Entity, nor
in the case of each of (i) and (ii) its or their Affiliates nor any person acting on its
or their behalf (other than the Placing Banks and their respective Affiliates, as to whom
each of the Company, the Founders and the Founder Entity makes no representation) has done
or engaged in, or will do or engage in, directly or indirectly, any act or any course of
conduct in relation to the Offer in breach of the CJA or sections 89 or 90 of the Financial
Services Act 2012 or constituting market abuse under MAR, in each case including any regulations
made pursuant thereto, or the equivalent provisions under the securities laws applicable
in any other relevant jurisdiction. |
| 60. | Neither
(i) in relation to the Warranty given by the Company, the Company nor the Founders, nor the
Founder Entity, nor the Directors, nor (ii) in relation to the Warranty given by the Founders
and the Founder Entity, the Company nor the Founders nor the Founder Entity, nor in the case
of each of (i) and (ii) its or their Affiliates nor any person acting on its or their behalf
(other than the Placing Banks and their respective Affiliates, as to whom each of the Company
and the Founders and the Founder Entity makes no representation) has done or engaged in,
or will do or engage in, directly or indirectly, any action designed to stabilise, maintain
or manipulate, or which has constituted or which might reasonably be expected to cause or
result in the stabilisation, maintenance or manipulation of the price of any security of
the Company or any instrument evidencing rights to Shares or Warrants or any other such security. |
Consents,
authorisations and approvals
| 61. | All
consents, approvals, authorisations, filings, orders, registrations, notifications, permits,
certificates, licences, concessions, clearances and qualifications (each an “Authorisation”)
of or with any court or governmental, supranational, regulatory, self-regulatory, taxation
or stock exchange authority, agency, institution, or body including but not limited to the
Competition and Markets Authority and the Commission of the European Union (each a “Governmental
Agency”) having jurisdiction over the Company or any Affiliate of the Company or
any of their properties or any stock exchange authorities: |
| 61.1 | required
by the Company for the issue and sale of the New Ordinary Shares and Matching Warrants (and
the Depositary Interests in respect thereof) and for this Agreement or any of the agreements
in the agreed form to be duly and validly authorised, executed and delivered, to give effect
to the arrangements contemplated therein and to perform any obligations, referred to in or
contemplated by this Agreement or the Offer Documents; or |
| 61.2 | necessary
to conduct the business of the Company: (i) have been made or obtained and are in full force
and effect, or will be in full force and effect prior to Admission and the Company is in
compliance with all relevant Authorisations; or (ii) have been fulfilled and performed except
where the failure of such Authorisations to be in full force and effect, or the failure of
the Company to be in compliance with them, would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Change. |
No
event has occurred which allows, or after notice or lapse of time would allow, revocation or termination of any Authorisation where such
revocation or termination would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Change or results
or would result in any other impairment of the rights of the holder of any such Authorisation.
The
Offer, the allotment, issue and sale of the New Ordinary Shares and Matching Warrants (and the Depositary Interests in respect thereof),
the distribution of the Offer Documents and any other documents in connection with the Offer and the Admission, the compliance by the
Company with the provisions of this Agreement and the consummation of the transactions contemplated herein will not result in any review,
revocation or termination of any Authorisation.
| 62. | The
making of the Offer, the allotment, issue and sale of the New Ordinary Shares and Matching
Warrants (and the Depositary Interests in respect thereof), the distribution of the Offer
Documents and any other documents in connection with the Offer and Admission, the execution,
delivery and performance by the Company of this Agreement and all other agreements to be
entered into in connection with the Offer and the consummation of the other transactions
contemplated in this Agreement: |
| 62.1 | have
been or will prior to Admission have been duly authorised, executed and delivered by the
Company; |
| 62.2 | will
not: (i) conflict with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, (ii) result in any third party being capable of terminating,
or constitute a repayment event under, or (iii) result in the creation or imposition of any
Encumbrance upon any property or assets of the Company pursuant to, any agreement, any indenture,
mortgage, deed of trust or loan agreement or other instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets of the Company
is subject; and |
| 62.3 | will
not result in any violation of the provisions of the Articles of Association of the Company
which are in force at the relevant time or, to the extent material, any statute or any order,
rule or regulation of any Governmental Agency having jurisdiction over the Company or any
of its properties. |
| 63. | There
are no outstanding, pending, threatened or imminent actions, suits, proceedings, claims,
reviews, reports, adjudications, penalties, fines, complaints, sanctions or investigations
of any Governmental Agency in relation to the Company or in relation to any Authorisations. |
| 64. | The
Company has fulfilled and followed all relevant industry best practice relating to the Authorisations,
including, but not limited to, compliance with all relevant codes, guidance, codes of practice
and practice notes issued by any Governmental Agency or in association with the Authorisations. |
Related
party transactions
| 65. | Save
as fairly disclosed in paragraph 15 of Part VIII (Additional Information) of the Final Prospectus
under the heading “Related party transactions”, the Company has not entered and
will not enter into any related party transaction (within the meaning set out in IFRS) in
the period covered by the financial information contained in the Final Prospectus and up
to, and including, the Closing Date. |
Contracts
| 66. | Save
as fairly disclosed in paragraph 14 of Part VIII (Additional Information) of the Final Prospectus
under the heading “Material contracts”, since its incorporation the Company has
not entered into: (a) any material contract outside the ordinary course of its business;
or (b) any contract or commitment outside the ordinary course of its business which contains
any provision under which the Company has any entitlement or obligation which is material
to the Company as of the date hereof; or (c) any contract or commitment of an unusual or
onerous nature which, in the context of the issue and sale of the New Ordinary Shares or
Matching Warrants, might be material to the conduct of the business of the Company. |
| 67. | Each
of the material contracts (being the contracts fairly disclosed in paragraph 14 of Part VIII
(Additional Information) of the Final Prospectus under the heading “Material contracts”
(the “Material Contracts”)) has been duly authorised, executed and delivered
by the Company and constitutes a valid, subsisting and legally binding agreement, enforceable
in accordance with its respective terms except that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganisation, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and general principles of equity. |
| 68. | The
summary of those Material Contracts contained in the Disclosure Package and the Final Prospectus
is accurate and complete in all material respects and not misleading. |
Litigation,
arbitration and other proceedings
| 69.1 | the
Company is engaged in any litigation, arbitration, prosecution or other legal proceedings
(including any inquiries or investigation by any court or Governmental Agency or governmental
body, domestic or foreign); nor |
| 69.2 | is
any such proceeding pending or threatened against the Company or so far as the Warrantor
is aware, imminent; nor |
| 69.3 | is
there any claim so far as the Warrantor is aware or any fact likely to give rise to a claim, |
which
in any such case may result in or has resulted in during the 12 months preceding the date of the Final Prospectus a material effect on
the financial position of the Company or which would materially affect, singly or in the aggregate, the Offer or the consummation of
the transactions contemplated by this Agreement by the Company.
| 70. | Neither
the Company, nor any of its officers or agents or employees in relation to the affairs of
the Company, has been a party to any undertaking or assurance given to any court or government
agency or the subject of any injunction which is still in force. |
Employment
and Pensions
| 71. | The
Company does not have any material employee or pensions related liabilities. |
Insurance
| 72. | The
Company maintains, from well-established and reputable insurers, insurance of the type and
in amounts reasonably considered by the Company and the Directors to be adequate for their
business and, to the best of the Warrantor’s knowledge, consistent with insurance coverage
maintained by companies carrying on similar businesses or owning assets of a similar nature.
No claim under any policy of insurance taken out in connection with the business or assets
of the Company which is material is outstanding and there are no current circumstances likely
to give rise to such a claim. Such insurances are in full force and effect and there exist
no circumstances which could render any of such insurances void or voidable. |
Real
Estate
| 73. | The
Company does not own or lease, and has not owned or leased any real property. |
Assets
| 74. | The
Company does not have any material assets. |
Intellectual
property
| 75. | The
Company has not infringed any intellectual property owned or licensed by a third party to
the extent that such infringement, in aggregate, would reasonably be expected to result in
a Material Adverse Change. |
United
States
| 76. | None
of the Company, the Founders, the Founder Entity, nor their respective Affiliates nor any
persons acting on their behalf (other than the Placing Banks and their respective Affiliates,
as to whom each of the Company, its Affiliates and each of the Founders and the Founder Entity
makes no representation), directly or indirectly, has made or will make offers or sales of
any security, or has solicited or will solicit offers to buy, or otherwise has negotiated
or will negotiate in respect of any security, under circumstances that would require the
registration of the Shares or Warrants under the Securities Act. |
| 77. | The
Company is a “foreign private issuer” as such term is defined in Rule 405 under
the Securities Act. |
| 78. | At
the date hereof, there is no “substantial US market interest”, as such term is
defined in Regulation S, in any class of securities to be offered or sold in connection with
the Offer. |
| 79. | None
of the Company, the Founders, the Founder Entity or their respective Affiliates has entered
or will enter into any contractual arrangement with a distributor (as defined by Regulation
S) with respect to the distribution of the New Ordinary Shares or Matching Warrants, except
with the Placing Banks pursuant to this Agreement. |
| 80. | Save
as described in the section headed “Use of proceeds” in Part I (Investment Opportunity
and Strategy) of the Final Prospectus, prior to completion of the Acquisition, the Company
will invest or deposit the net proceeds of the offering and sale of the New Ordinary Shares
(with Matching Warrants) and any proceeds received from the subscription for the Founder
Preferred Shares in US “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act (including US Treasuries), such government money market funds
meeting certain criteria and as defined under Rule 2a-7 promulgated under the Investment
Company Act, and such other cash items (as such term is interpreted under the Investment
Company Act), in a manner that will not result in the Company being an “investment company”
as such term is defined in the Investment Company Act. |
| 81. | Prior
to completion of the Acquisition, the Company will invest or deposit any proceeds received
from the exercise of Warrants in a manner that will not result in the Company being an “investment
company” as such term is defined in the Investment Company Act. |
| 82. | None
of (i) in relation to the Warranty given by the Company, the Company nor the Founders, nor
the Founder Entity, nor the Directors, nor (ii) in relation to the Warranty given by the
Founders and the Founder Entity, the Company nor the Founders nor the Founder Entity, nor
in the case of each of (i) and (ii) their respective Affiliates nor any person acting on
their behalf (other than the Placing Banks and their respective Affiliates, as to whom each
of the Company, its Affiliates and each of the Founders and the Founder Entity makes no representation),
directly or indirectly, has engaged or will engage in any directed selling efforts (as defined
in Regulation S) with respect to the New Ordinary Shares or Matching Warrants. |
| 83. | The
Company is not and immediately after giving effect to the offering and sale of the New Ordinary
Shares (with Matching Warrants) and the application of the net proceeds thereof as described
in the Final Prospectus, will not be an “investment company” as such term is defined
in the Investment Company Act. |
| 84. | None
of (i) in relation to the Warranty given by the Company, the Company, nor the Founders, nor
the Founder Entity, nor the Directors, nor (ii) in relation to the Warranty given by the
Founders and the Founder Entity, the Company, nor the Founders nor the Founder Entity, nor
in the case of each of (i) and (ii) their respective Affiliates nor any person acting on
their behalf (other than the Placing Banks and their respective Affiliates, as to whom each
of the Company, its Affiliates and each of the Founders and the Founder Entity makes no representation),
directly or indirectly, has engaged or will engage in any form of “general solicitation”
or “general advertising” as those terms are defined in Rule 502(c) of Regulation
D in connection with any offer or sale of the New Ordinary Shares or the Matching Warrants. |
| 85. | The
New Ordinary Shares and the Matching Warrants are eligible for re-sale pursuant to Rule 144A
and will not be, at the Closing Date, of the same class as securities listed on a national
securities exchange registered under section 6 of the Exchange Act, or quoted in a US automated
inter dealer quotation system. |
| 86. | Subject
to compliance by the Placing Banks with the selling restrictions set forth in Schedule 8,
no registration of the New Ordinary Shares and Matching Warrants is required under the Securities
Act in connection with the offer, allotment, issue, sale and delivery of the New Ordinary
Shares and Matching Warrants to the Placing Banks or to subscribers or purchasers procured
by the Placing Banks, as applicable, in the manner contemplated by this Agreement and the
Final Prospectus. |
| 87. | The
issue and delivery of any Shares upon any exercise of Warrants, in the manner contemplated
by this Agreement and the Final Prospectus, will not require registration under the Securities
Act. |
Ethics,
bribery and corruption
| 88. | Neither
(i) in relation to the Warranty given by the Company, the Company nor any of its officers,
employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders
and the Founder Entity, the Company nor any of its respective officers, employees, representatives
or agents (other than the Non-Founder Directors, as to whom the Founders and the Founder
Entity make no representation), has either in private business dealings or in dealings with
the public / government sector directly or indirectly given, offered or received or agreed
(either themselves or in agreement with others) to offer, give or receive any bribe or committed
or attempted to commit (either themselves or in agreement with others) any other corrupt
act. |
| 89. | Neither
(i) in relation to the Warranty given by the Company, the Company nor any of its officers,
employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders
and the Founder Entity, the Company nor any of its respective officers, employees, representatives
or agents (other than the Non-Founder Directors, as to whom the Founders and the Founder
Entity make no representation) has received, agreed or attempted to receive the proceeds
of or profits from a crime or agreed to assist any person to retain the benefits of a crime. |
| 90. | Neither
(i) in relation to the Warranty given by the Company, the Company nor any of its officers,
employees, representatives or agents, nor (ii) in relation to the Warranty given by the Founders
and the Founder Entity, the Company nor any of its respective officers, employees, representatives
or agents (other than the Non-Founder Directors, as to whom the Founders and the Founder
Entity make no representation) have been investigated (or are being investigated or are subject
to a pending or threatened investigation) or are involved in an investigation (as a witness
or possible suspect) in relation to any of the matters set out in paragraphs 88 or 89 above
by any law enforcement agency or any customer, or been debarred from bidding for any contract/business,
and there are no such circumstances which are likely to give rise to such investigation. |
| 91. | The
operations of the Company are and have been conducted at all times in compliance with the
money laundering statutes of all jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced
by any Governmental Agency (collectively, the “Money Laundering Laws”) and
no action, suit or proceeding by or before any court or Governmental Agency, authority or
body or any arbitrator involving the Company or any of its Affiliates with respect to Money
Laundering Laws is pending or, to the best knowledge of the Warrantor, threatened. |
| 92. | None
of (i) in relation to the Warranty given by the Company, the Company nor the Founders, nor
the Founder Entity, nor the Directors, nor (ii) in relation to the Warranty given by the
Founders and the Founder Entity, the Company nor the Founders, nor the Founder Entity nor
in the case of each of (i) and (ii), to the knowledge of the Warrantor, any agent, employee
or Affiliate of these, is aware of, or has taken any action, directly or indirectly, that
could result in a violation by such persons of the US Foreign Corrupt Practices Act of 1977,
as amended, or the rules and regulations thereunder (the “FCPA”) (including,
without limitation, making use of the mail or any means or instrument of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorisation of the payment
of any money, or other property, gift, promise to give, or authorisation of the giving of
anything of value to any “foreign official” (as such term is defined in the FCPA)
or any foreign political office, in contravention of the FCPA), the OECD Convention on Bribery
of Foreign Public Officials in International Business Transactions (the “OECD Convention”)
or any similar law or regulation, to which the Company, any director, officer, agent, or
employee of the Company or to the knowledge of the Warrantor, any Affiliate is subject; and
the Company and its Affiliates have conducted their businesses in compliance with the FCPA,
the OECD Convention and any applicable similar law or regulation and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith. |
| 93. | Neither
the Company, nor any director, officer, or, to the knowledge of the Warrantor, any employee
or Affiliate of the Company (other than, in relation to the Warranty given by the Founders
and the Founder Entity, the Non-Founder Directors, as to whom the Founders and the Founder
Entity make no representation) is an individual or entity that is, or is owned or controlled
by a person that is, currently the subject or the target of any sanctions administered by
the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”),
the US State Department, the US Commerce Department or other US agencies or any similar sanctions
imposed by the European Union, the United Nations or any other body, governmental or other,
to which the Company or any of its Affiliates is subject (collectively, “Sanctions”),
nor is the Company, nor any director, officer, or, to the knowledge of the Warrantor, any
employee or Affiliate of the Company (other than, in relation to the Warranty given by the
Founders and the Founder Entity, the Non-Founder Directors, as to whom the Founders and the
Founder Entity make no representation), operating in or from, or located, organised or resident
in, or engaged directly or indirectly, in business with, a country, region or territory that
is the subject or the target of any Sanctions, including, in each case and without limitation,
the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic or any other
territory or region of Ukraine currently under the asserted control of Russia, recognised
by Russia or subject to territorial claims by Russia, the Crimea region of Ukraine, Cuba,
Iran, Libya, North Korea, Sudan, Syria, Russia and Venezuela (each a “Sanctioned
Country”). Neither the Company nor any of its Affiliates: (i) is or has been in
violation of any Sanctions (as such Sanctions were in effect at the relevant time) or subject
to an investigation relating to any Sanctions; or (ii) has engaged in any transaction or
activity with or for the benefit of any person or entity who was, at the time of the transaction
or activity, identified as the subject of any Sanctions or involving any sanctioned country
or territory. |
| 94. | Since
the date of incorporation of the Company, the Company has not engaged in, and is not now
engaged in and will not engage in, any dealings or transactions with any Sanctioned Person
or with any Sanctioned Country. |
Schedule 6
UNDERTAKINGS
| 1. | COMMITMENTS,
ARRANGEMENTS AND DEVELOPMENTS |
During
the period from the date of this Agreement until the date which is 180 calendar days after the Closing Date, neither the Company nor
any of the Directors nor any director from time to time of the Company shall take any steps which would be inconsistent with any expression
of policy or intention in the Offer Documents without prior consultation with each of the Placing Banks.
| 2.1 | Save
in relation to an announcement, advertisement, statement or communication required by law
or by any securities exchange or governmental or regulated body (a “Restricted Announcement”),
each of the Company, the Founder Entity, the Directors and the Founder Non-Directors severally
undertakes not to circulate, distribute, publish, issue, make or despatch (and will not authorise
any other person to circulate, distribute, publish, issue, make or despatch) any public announcement,
advertisement, document or communication concerning the Company, the Offer or otherwise relating
to the assets, liabilities, profits, losses, financial or trading conditions or the earnings,
business affairs or business prospects of the Company which is or may be material in the
context of the Company or in relation to the Offer at any time prior to the date which is
90 calendar days after the Closing Date (the “Restricted Period”), without
having first furnished to each of the Placing Banks a copy of each such proposed announcement
or communication as far in advance of the announcement as reasonably practicable to enable
them to comment thereon and to consult with them and having obtained the Placing Banks’ prior
written consent as to its contents and the timing and manner of its release. |
| 2.2 | The
Company undertakes to make all such announcements concerning the Offer as shall be necessary
to comply with the LPDT Rules, MAR, the Admission and Disclosure Standards, the Companies
Act and FSMA or which the Placing Banks otherwise reasonably consider to be necessary or
desirable and each of the Placing Banks shall be entitled (following consultations with the
other parties to this Agreement where practicable) to make any such announcement if the Company
fails (in the opinion of such Placing Bank) promptly to fulfil its obligations under this
paragraph 2.2. |
| 2.3 | The
Company undertakes that it will not at any time during the Restricted Period make any Restricted
Announcement without first: |
| 2.3.1 | notifying
the Placing Banks as to the content of publication of such Restricted Announcement; |
| 2.3.2 | making
available drafts of such Restricted Announcement to the Placing Banks in sufficient time
prior to its publication to allow the Placing Banks an opportunity to consider and comment
on the same; |
| 2.3.3 | consulting
with the Placing Banks as to the content of publication of such Restricted Announcement;
and |
| 2.3.4 | taking
account of the Placing Banks’ reasonable requirements. |
| 2.4 | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors severally
undertakes not the circulate, distribute, publish, issue, make or despatch (and will not
authorise any other person to circulate, distribute, publish, issue, make or despatch) any
public announcement, advertisement, document, or communication (including when required by
law or by any securities exchange or governmental or regulated body) announcing the consummation
of an Acquisition (the “Acquisition
Announcement”), the financing thereof and other transactions
related thereto, irrespective of any Placing Bank’s involvement (if any) in such transaction,
indicating that the Placing Banks were the joint global coordinators, joint bookrunners and
placing agents (as applicable) to the Offer without having first furnished to each Placing
Bank a copy of the Acquisition Announcement as far in advance of the announcement as reasonably
practicable to enable them to comment thereon, subject to the agreement of the Placing Banks
to keep confidential such draft announcement in accordance with each Placing Bank’s standard
policies regarding confidential information. The provisions of paragraph 2.4 of this Schedule 6
shall remain in full force and effect notwithstanding the completion of all matters and arrangements
referred to in or contemplated by this Agreement or any termination of this Agreement. |
| 3. | RESTRICTIONS
ON THE COMPANY IN RELATION TO THE SHARES |
| 3.1 | Without
prejudice to paragraph 7.2 of this Schedule 6 and subject to paragraph 3.2 of this Schedule 6,
the Company undertakes that it will not, without the prior written consent of each of the
Placing Banks, during the period commencing on the date of this Agreement and ending on the
date which is 180 days from the date of this Agreement: (a) undertake any consolidation or
sub-division of its share capital or any capitalisation issue; or (b) directly or indirectly,
allot, issue, offer, sell, lend, pledge, contract to sell or issue, grant any option, right
or warrant to purchase or otherwise dispose of any Shares or other securities of the Company
or securities exchangeable for, convertible into or representing the right to receive Shares
or other securities in the Company (or any interest therein or in respect of any of the foregoing);
or (c) otherwise enter into any transaction (including any derivative transaction) directly
or indirectly, permanently or temporarily, to dispose of any Shares or other securities referred
to in paragraph (b) above; or (d) undertake any other transaction with the same economic
effect as any of the foregoing or announce an offering of Shares or any interest therein
or in respect thereof; or (e) to announce publicly any intention to enter into any transaction
described in paragraphs (a) to (d) above. |
| 3.2 | The
undertaking in paragraph 3.1 shall not apply to: |
| 3.2.1 | the
issue by the Company of any Shares upon the conversion of the Founder Preferred Shares as
described in paragraph 4.3 of Part VIII (Additional Information) of the Final Prospectus; |
| 3.2.2 | the
issue by the Company of any Shares upon the exercise of the Warrants as described in paragraph
1 of Part IX (Terms and Conditions of the Warrants) of the Final Prospectus; |
| 3.2.3 | any
of the matters referred to in paragraphs 3.1 (a) to (e) when carried out in relation to the
Acquisition; or |
| 3.2.4 | the
issue and offer by the Company of Shares pursuant to the Offer and to Non-Founder Directors
under their Letters of Appointment and Share Option Deeds. |
| 4. | RESTRICTIONS
ON THE FOUNDERS, THE FOUNDER ENTITY AND THE NON-FOUNDER DIRECTORS IN RELATION TO THE SHARES AND WARRANTS |
| 4.1 | Subject
to paragraph 4.2 of this Schedule 6, each of the Founder Entity, the Directors and the
Founder Non-Directors severally undertakes that (other than as provided for in this Agreement)
it will not and will procure that no Affiliate of it shall, without the prior written consent
of each of the Placing Banks, during the period (the “Lock-up Period”) commencing
on the date of this Agreement and ending on the date which is the earlier of: (i) 365 days
from the Acquisition Closing Date; or (ii) the liquidation of the Company for failure to
complete an Acquisition: |
| 4.1.1 | directly
or indirectly, offer, sell, lend, pledge, contract to sell, distribute, grant any option,
right or warrant to purchase or otherwise dispose of: |
| (A) | any
Shares (including, but not limited to, any Shares received by the conversion of the Founder
Preferred Shares) or Warrants; |
| (B) | the
Founder Preferred Shares; or |
| (C) | any
other securities in the Company or any other securities which are exchangeable for, convertible
into or representing the right to receive Shares, Founder Preferred Shares or any other securities
in the Company, or any other interest therein or in respect of any of the foregoing; or |
| 4.1.2 | otherwise
enter into any transaction (including any derivative transaction) directly or indirectly,
permanently or temporarily, to dispose of any Shares, the Founder Preferred Shares, Warrants
or other securities in the Company; or |
| 4.1.3 | undertake
any other transaction with the same economic effect as any of the foregoing; or |
| 4.1.4 | announce
an offering of any Shares, Founder Preferred Shares, Warrants or other securities in the
Company or any interest therein or in respect thereof; or |
| 4.1.5 | to
announce publicly any intention to enter into any transaction described in paragraphs 4.1.1
to 4.1.4 above (each, a “Disposal”). |
| 4.2 | The
undertaking in paragraph 4.1 of this Schedule 6 shall not apply to any of the following
provided that in each case the Disposal is conducted in accordance with all applicable laws
(including the Securities Act), the Articles of Association and the Warrant Instrument
(as applicable) (including without limitation that the transferee is not a Prohibited Person
as described therein): |
| 4.2.1 | a
Disposal by the Founder Entity of up to an aggregate amount of 10 per cent. of its Shares
as a bona fide gift (in each case, by reference to the number of Shares and Warrants held
immediately following Admission); |
| 4.2.2 | a
Disposal of Founder Preferred Shares as a bona fide gift made with the prior written consent
of the Placing Banks; |
| 4.2.3 | a
Disposal of Shares, Founder Preferred Shares or Warrants by a Director for estate planning
purposes to persons immediately related to the relevant Director, as the case may be, making
such Disposal by blood, marriage or adoption; |
| 4.2.4 | a
Disposal of Shares, Founder Preferred Shares or Warrants by a Director to (i) any trust that
is solely for the benefit of the relevant Director, as the case may be, and/or the persons
described in paragraph 4.2.3 of this Schedule 6 or (ii) any direct or indirect wholly-owned
subsidiary of such trust; |
| 4.2.5 | a
Disposal of Shares, Founder Preferred Shares or Warrants by a Founder Director or the Founder
Entity to any of the Company’s Directors (from time to time); |
| 4.2.6 | a
Disposal of Shares, Founder Preferred Shares or Warrants by the Founder Entity to any of
its Affiliates or direct or indirect holders of equity, holders of partnership interests
or members; |
| 4.2.7 | a
Disposal of Shares, Founder Preferred Shares or Warrants to the Founder Entity (or Affiliates
or direct or indirect holders of equity, partnership interests or members of the Founder
Entity); |
| 4.2.8 | a
Disposal of Shares, Founder Preferred Shares or Warrants to a direct or indirect subsidiary
of the Company or to a target company or shareholders of a target company (or direct or indirect
subsidiary of a target company) in connection with, or as a result of transactions related
to, the completion of the Acquisition; |
| 4.2.9 | after
the Acquisition Closing Date, a Disposal of Shares by the Founder Entity (or in the event
of a Disposal under paragraph 4.2.6 of this Schedule 6, any Affiliate or direct or indirect
equity holder, holder of partnership interest or member of the Founder Entity) to any person
if and to the extent that either (i) the proceeds of sale are used solely for the purpose
of making a payment by way of charitable gift to a charitable organisation registered with
the applicable charities regulator or (ii) such person is a charitable organisation registered
with the applicable charities regulator; provided, however, that the aggregate number of
Shares which are the subject of such Disposals by the Founder Entity and any equity holder,
holder of partnership interest or member referred to therein of the Founder Entity shall
not exceed up to an aggregate amount of 10 per cent. of the number of Shares the Founder
Entity would have held immediately following Admission having exercised all the Warrants
it held at that time; |
| 4.2.10 | an
acceptance of a general offer for the Shares or Warrants made to all holders of Shares and/or
Warrants on equal terms; |
| 4.2.11 | the
provision of an irrevocable undertaking to accept an offer as described in paragraph 4.2.10
of this Schedule 6; |
| 4.2.12 | after
the Acquisition Closing Date, any Disposal of Shares by a Founder to any person if and to
the extent that the proceeds of sale are used solely for the purpose of meeting any tax liability
incurred in connection with, or as a result of transactions related to, the completion of
the Acquisition; or |
| 4.2.13 | a
Disposal of any Shares or Warrants acquired by a Founder or Director after the date of Admission
in any open-market transaction; |
provided
that:
| (A) | with
respect to any of the Disposals listed in paragraphs 4.2.1 to 4.2.8 of this Schedule 6
above, the relevant disposing Founder Entity, Director or Founder Non-Director shall deliver
to each of the Placing Banks and the Company, prior to or contemporaneously with making such
a Disposal, an enforceable lock-up agreement in the form set out in Schedule 10 of this
Agreement, duly executed by the permitted transferee (or the trustee or legal guardian of
such transferee) in respect of the Shares, Founder Preferred Shares or Warrants (as applicable)
to be transferred to him, her or it; and |
| (B) | each
Founder or Director severally undertakes to each of the Placing Banks and the Company that
any Disposal by it pursuant to this paragraph 4.2 shall, to the extent permitted by relevant
law or regulation, be notified in writing to each of the Placing Banks and the Company no
later than five Business Days after the entry into of any agreement relating to the same. |
Promptly
following receipt of an agreement referred to in paragraph 4.2(A) above, the Company shall duly execute such agreement and deliver it
to the Placing Banks.
| 5. | COPIES
OF DOCUMENTS AND PROVISION OF INFORMATION |
During
the period from the date of this Agreement until the date which is 180 days after the Closing Date, the Company undertakes to furnish
to each of the Placing Banks copies of all reports or other communications (financial or other) furnished to shareholders or warrantholders
and to deliver to each of the Placing Banks: (i) as soon as they are available, copies of any reports and financial statements furnished
to or filed with the FCA, the London Stock Exchange or any securities exchange on which any class of securities of the Company is listed
(such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to the FCA, the London Stock Exchange or any securities exchange on which any class of securities of the Company
is listed); and (ii) such additional information concerning the business and financial condition of the Company as each of the Placing
Banks may from time to time reasonably request.
| 6. | SUPPLEMENTARY
PROSPECTUS |
| 6.1 | The
Company will comply with FSMA and the LPDT Rules so as to permit the completion of the distribution
of the New Ordinary Shares and Matching Warrants as contemplated in this Agreement and the
Offer Documents. If at any time after the Final Prospectus has been lodged with the FCA for
approval and prior to Admission: |
| 6.1.1 | any
event shall occur or condition shall exist as a result of which it is necessary, in the opinion
of the Placing Banks, the Company or their respective legal advisers, to amend or supplement
any Offer Document in order that such Offer Document will not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances existing at the time it is delivered
to a subscriber of New Ordinary Shares and Matching Warrants; |
| 6.1.2 | if
there arises or is noted any matter referred to in section 87G of FSMA of which the Company
is, or becomes, aware prior to Admission and which requires the Company to deal with such
change in accordance with section 87G of FSMA, the Prospectus Regulation Rules and/or the
Listing Rules; or |
| 6.1.3 | if
it shall be necessary, in the opinion of the Placing Banks’ Counsel or Company’s Counsel,
at any such time to amend or supplement any Offer Document in order to comply with the requirements
of FSMA, the Prospectus Regulation Rules, MAR and/or the Listing Rules or other appropriate
law or regulation (as the case may be), |
the
Company, the Founders, the Founder Entity or the Directors (as the case may be) will:
| (A) | promptly
bring such event or condition to the notice of the Placing Banks and shall promptly prepare
and file with the FCA (or procure the filing with the FCA of) such amendment or supplement
as may be necessary to correct such statement or omission or to make such Offer Document
comply with such requirements. Before amending or supplementing any Offer Documents, the
Company will furnish the Placing Banks with a copy of each such proposed amendment or supplement,
and will not make any such proposed amendment or supplement without the consent of each of
the Placing Banks, such consent not to be unreasonably withheld or delayed, provided always
that (i) nothing in this paragraph shall prevent the Company or the Founders or the Founder
Entity or the Directors from complying with their obligations at law or under FSMA or the
LPDT Rules or MAR and (ii) this paragraph shall be without prejudice to the rights of the
Placing Banks pursuant to clause 13; and |
| (B) | furnish
to the Placing Banks such number of copies or such amendment or supplement as the Placing
Banks may reasonably request. |
| 6.2 | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors undertakes
promptly to notify each of the Placing Banks if it comes to its or his attention at any time
on or before Admission that any person wishes to exercise statutory withdrawal rights after
the issue by the Company of a Supplementary Prospectus. However, the Founder Entity shall
have no right of withdrawal in the event a Supplementary Prospectus is issued. |
| 7. | SELLING
RESTRICTIONS AND EXERCISE OF WARRANTS |
| 7.1 | The
Company, the Founder Entity and each of the Directors and the Founder Non-Directors severally
undertakes that it has (and undertakes that each of its Affiliates has) complied, and will
(and will procure that each of their respective Affiliates will) comply with all relevant
laws and regulations of each relevant jurisdiction (including, without prejudice to the generality
of the foregoing, all requirements of all applicable regulatory authorities in each such
jurisdiction) in connection with the Offer and the release or distribution of any document
or information relating to the Offer in each such jurisdiction. |
| 7.2 | The
Company, the Founder Entity and each of the Directors and the Founder Non-Directors severally
undertakes that it has not (and undertakes that each of its Affiliates has not) made, and
will not (and will procure that each of its Affiliates will not) make, directly or indirectly,
offers or sales of any Shares or other securities of the Company exchangeable for, convertible
into or representing the right to receive Shares or any such substantially similar securities
or otherwise enter into any transaction (including any derivative transaction) in respect
of such Shares, Warrants or other securities nor has it solicited, nor will it solicit, offers
to buy or otherwise negotiate in respect of any such security under circumstances which,
either separately or together, constitute an unlawful offering to the public in, or otherwise
contravene the laws of any jurisdiction or which would require registration under the Securities
Act and will, notwithstanding the foregoing, promptly, from time to time, take such action
as each of the Placing Banks may reasonably request to qualify the Shares or Warrants for
offering and sale under the securities laws of any such jurisdiction, including, without
limitation, the state securities and “blue sky” laws of any such state in the United
States as each of the Placing Banks may reasonably designate, and to use all reasonable efforts
to file and make such statements or reports as are or may be required by such state securities
and “blue sky” laws, and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares. |
| 7.3 | Each
of the Company, the Founder Entity, the Directors and the Founder Non-Directors severally
undertakes that it will and undertakes that its Affiliates and any person acting on its behalf
(other than the Placing Banks and their respective Affiliates, as to whom no undertaking
is made) will comply with all applicable provisions of the US federal and state securities
laws in connection with (a) the Offer and the release or distribution of any document or
information relating to the Offer in the United States and (b) the issue and delivery of
any Shares upon any exercise of Warrants. |
| 8. | DIVIDENDS
AND SHARE CAPITAL |
Other
than in connection with an Acquisition, the Company will not, on or after the date of this Agreement until after completion of the Acquisition
declare, make or pay any dividends or other distribution on any of its share capital nor increase, reduce or modify any part thereof
in any way.
| 9. | RELATED
PARTY TRANSACTIONS |
For
so long as the Company has a listing on the standard listing segment of the Official List, the Company will not enter into any transaction
which would constitute a “related party transaction” as defined in Chapter 11 of the Listing Rules (were Chapter 11 of the
Listing Rules to apply to the Company) without the specific prior approval of a majority of the Relevant Persons (where “Relevant
Persons” means the Independent Non-Founder Directors and the Chairman).
The
Company will not enter into the Acquisition without the specific prior approval of a majority of the Relevant Persons.
| 11. | AUTHORITY
OF REGISTRAR, DEPOSITARY AND ADMINISTRATOR |
The
Company undertakes to provide the Registrar, the Depositary and the Administrator respectively with all necessary authorisations, information
and instructions to enable the Registrar, the Depositary and the Administrator respectively to perform their duties in accordance with,
and as contemplated by, this Agreement, the Final Prospectus (as amended or supplemented from time to time), the Registrar Agreement,
the Depositary Agreement, the Administration Agreement and the Deed Poll. Prior to the Acquisition Closing Date, the Company undertakes
not to exercise any right to terminate the Registrar Agreement, the Depositary Agreement or the Administration Agreement without the
written consent of each of the Placing Banks.
| 12. | INVESTMENT
COMPANY ACT |
The
Company is not, and immediately after giving effect to the offer and sale of the New Ordinary Shares (with Matching Warrants) and the
application of the proceeds thereof as described in the Final Prospectus, will not be an “investment company” as such term
is defined in the Investment Company Act.
| 13. | NO
DIRECTED SELLING EFFORTS |
None
of the Company, the Founder Entity, the Directors, the Founder Non-Directors, nor their respective Affiliates nor any person acting on
its or their behalf (other than the Placing Banks and their respective Affiliates, as to whom no undertaking is made), directly or indirectly,
will engage in any “directed selling efforts” (within the meaning of Regulation S) in connection with any offer or sale of
the New Ordinary Shares or Matching Warrants.
| 14. | NO
GENERAL SOLICITATION |
None
of the Company, the Founder Entity, the Directors, the Founder Non-Directors nor their respective Affiliates nor any person acting on
its or their behalf (other than the Placing Banks and their respective Affiliates, as to whom no undertaking is made), directly or indirectly,
will engage in any form of “general solicitation” or “general advertising” (within the meaning of Rule 502(c) of
Regulation D) in connection with any offer or sale of the New Ordinary Shares or Matching Warrants.
| 15. | RULE
144A ELIGIBLE SECURITIES |
For
so long as the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants are “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act, the Company will not become an “open-end company”, “unit
investment trust” or “face-amount certificate company”, as such terms are defined in, and that it is not registered or
required to be registered under Section 8 of, the Investment Company Act.
For
so long as any of the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants remain outstanding and
are “restricted securities” (within the meaning of Rule 144(a)(3) under the Securities Act), the Company undertakes that during
any period in which it is not subject to section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2b under
the Exchange Act, it will make available to any holder or beneficial owner of New Ordinary Shares, Warrants and Shares issued and delivered
upon exercise of Warrants which are restricted securities and to any prospective purchaser (as designated by such holder or beneficial
owner) of such restricted securities, in each case upon request, any information required to be provided by Rule 144A(d)(4) under the
Securities Act. The undertakings of the company in this paragraph 16 are enforceable by such holders who are not parties to this Agreement
by virtue of the Contracts (Rights of Third Parties) Act 1999.
| 17. | LIMITATIONS
ON RESALES BY AFFILIATES |
The
Company undertakes that, for so long as the New Ordinary Shares, Warrants and Shares issued and delivered upon exercise of Warrants are
“restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, it will not, and will not permit any
of its Affiliates to, resell in the United States any Shares and Warrants acquired by any of them other than in transactions that meet
the applicable requirements of Regulation S or are otherwise exempt from, or not subject to, the registration requirements of the Securities
Act.
The
Company undertakes that it will use its best endeavours to monitor its shareholder base and restrict ownership of, or other equity interests
in, its Shares by Plan Investors to less than 25 per cent. of its Shares, after excluding the ownership of, or equity interests in, any
Shares held by each of the Founders, the Founder Entity and the Directors and any of their respective affiliates (as such term is defined
in the Plan Asset Regulations).
| 19.1 | Until
the completion of the Acquisition, the Company and each of the Directors undertakes that
it or they will not approve the appointment of a director to the Board of Directors unless
the Board of Directors at the relevant time is satisfied that the Company will maintain its
status as a foreign private issuer (as defined in Rule 405 under the Securities Act). |
| 19.2 | The
Founders and the Founder Entity confirm that they do not intend to exercise their rights
under the Articles of Association to appoint director(s) to the Board of Directors if the
Company is not in compliance with provisions 10 and 11 of the Corporate Governance Code or
where exercising such rights would result in the Company not being in compliance with such
provisions (in each case as if the Company was required to comply with the Corporate Governance
Code). |
| 20.1 | The
Company will use the net proceeds received by it from the sale of the New Ordinary Shares
(with Matching Warrants) and any proceeds raised from the subscription for the Founder Preferred
Shares in the manner specified in the Final Prospectus under the paragraph entitled “Use
of proceeds” in Part I (Investment Opportunity and Strategy) of the Final Prospectus.
Neither the Company nor any of the Founders nor the Founder Entity will, directly or indirectly,
use the proceeds of the Offer and any proceeds received from the subscription for the Founder
Preferred Shares or from any exercise of the Warrants or lend, contribute or otherwise make
available such proceeds to any Affiliate, joint venture partner or other person or entity:
(i) to fund or finance any activities or business of or with any person currently subject
to Sanctions, or who is located, organised or resident in any Sanctioned Country; or (ii)
in any manner that will result in a violation of Sanctions by any person (including any person
participating in the Offer, whether as placing agent, adviser, investor or otherwise). |
| 20.2 | Save
as described in the section headed “Use of proceeds” in Part I (Investment Opportunity
and Strategy) of the Final Prospectus, prior to completion of the Acquisition, the Company
will invest or deposit the net proceeds received by it from the sale of the New Ordinary
Shares (with Matching Warrants) and any proceeds raised from the subscription for the Founder
Preferred Shares in US “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act (including US Treasuries), such government money market funds
meeting certain criteria and as defined under Rule 2a-7 promulgated under the Investment
Company Act, and such other cash items (as such term is interpreted under the Investment
Company Act), in a manner that will not result in the Company being an ““investment
company”” as such term is defined in the Investment Company Act. |
| 20.3 | Prior
to completion of the Acquisition, the Company will invest or deposit any proceeds received
from the exercise of Warrants in a manner that will not result in the Company being an “investment
company” as such term is defined in the Investment Company Act. |
| 21. | COMPLIANCE
WITH LPDT RULES AND MAR |
Prior
to the Acquisition Closing Date, each of the Directors will, and will ensure that the Company will, as of the date of this Agreement,
comply with the LPDT Rules and MAR on an ongoing basis.
The
Company undertakes that it has not maintained, does not currently maintain and will not maintain any register of members, warrant holders
or depository interests in the United Kingdom at any time prior to the Acquisition Closing Date.
| 23. | REORGANISATION
IN CONNECTION WITH AN ACQUISITION |
Notwithstanding
clause 16.5 of this Agreement and, without prejudice to paragraph 4 of Schedule 6, in the event that the Founder Entity, the Directors
or the Founder Non-Directors receive, in connection with the Acquisition, an interest in an entity other than the Company (such securities,
the “New Securities”), the Founder Entity, the Directors and the Founder Non-Directors acknowledge and agree that the
New Securities shall be (i) subject to the transfer restrictions set forth in paragraph 4.1 of Schedule 6 and (ii) entitled to the
benefits of the same exceptions to such transfer restrictions permitted by paragraph 4.2 of Schedule 6 to this Agreement to the
same extent as such exceptions apply to the Disposal of the Shares.
| 24. | SUBSCRIPTION
BY THE FOUNDER ENTITY |
| 24.1 | The
Founder Entity undertakes that (i) no later than two Business Days prior to the Closing Date,
it will (A) deposit cleared funds (in an amount equal to the Offer Price multiplied by the
number of New Ordinary Shares (with Matching Warrants) set forth against its name in Schedule 9
(such New Ordinary Shares (with Matching Warrants), the “Founder Subscription Securities”,
and such amount, the “Founder Subscription Funds”) in an account at its
custodian (or an Affiliate thereof); and (B) instruct such custodian to enter into a receive
versus payment instruction with the CREST Nominee providing for the transfer, as soon as
reasonably practicable on the Closing Date, of the Founder Subscription Funds; and (ii) subject
to Admission occurring not later than the Closing Date (or such later time and date as the
Company and the Placing Banks may agree), (A) it will not, nor will it instruct any person
acting on its behalf to, amend, modify, terminate or cancel the instruction described in
sub-paragraph 24.1(i)(B) above; and (B) it will make or procure payment of the Founder Subscription
Funds and subscribe for the Founder Subscription Securities on the Closing Date as described
in sub-paragraph 24.1(i)(B) above. |
The
Founder Entity confirms that its custodian for these purposes and the custodian’s details are as follows:
| Agent Name: | |
xxxxx |
| | |
|
| Custodian Name: | |
xxxxx |
| | |
|
| Crest ID: | |
xxxxx |
| | |
|
| Gilts ID: | |
xxxxx |
| | |
|
| Beneficiary Account Number: | |
xxxxx |
| | |
|
| Beneficiary Name: | |
xxxxx |
| 24.2 | Each
of the Founders undertake that the Founder Entity will comply with its obligations in paragraph
24.1 of Schedule 6 and in clause 3.3. |
| 25. | ISSUANCE
OF FOUNDER PREFERRED SHARES OR WARRANTS |
The
Company undertakes that, until after the Acquisition Closing Date, it will not issue any further Founder Preferred Shares or further
Warrants (over and above those Founder Preferred Shares disclosed in the Final Prospectus and those Warrants which will be issued as
disclosed in the Final Prospectus) unless such issuance has first been approved by a majority of Independent Non-Founder Directors and
the Chairman.
Schedule 9
PlacING ALLOCATION tABLE
NEW
ORDINARY SHARES AND MATCHING WARRANTS TO BE ACQUIRED BY THE
FOUNDER ENTITY
| | |
New Ordinary Shares (each with one Matching Warrant per Share) |
| The Founder Entity | |
8,950,000 New Ordinary Shares and 8,950,000 Matching Warrants |
| for
and on behalf of |
) |
/s/
Sir Martin E. Franklin |
|
| ADMIRAL
ACQUISITION LIMITED |
) |
Sir
Martin E. Franklin |
|
| SIGNED
by: |
) |
|
|
| for
and on behalf of |
) |
/s/
Luca Erpici |
|
| JEFFERIES
INTERNATIONAL LIMITED |
) |
Luca
Erpici |
|
| SIGNED
by: |
) |
|
|
| for
and on behalf of |
) |
/s/
Luca Erpici |
|
| JEFFERIES
GMBH |
) |
Luca
Erpici |
|
| SIGNED
by: |
) |
|
|
| |
|
|
|
| and: |
|
|
|
| |
) |
/s/
Oliver Diehl |
|
| |
) |
Oliver
Diehl |
|
| |
) |
|
|
| for
and on behalf of |
) |
/s/
Thomas Raynsford |
|
| UBS
AG LONDON BRANCH |
) |
Thomas
Raynsford |
|
| SIGNED
by: |
) |
|
|
| |
|
|
|
| and: |
|
|
|
| |
) |
/s/
Craig Young |
|
| |
) |
Craig
Young |
|
| |
) |
|
|
| for
and on behalf of |
) |
/s/
Desiree DeStefano |
|
| MARIPOSA
ACQUISITION IX, LLC |
) |
Desiree
DeStefano |
|
| SIGNED
by: |
) |
|
|
| SIGNED
by |
) |
/s/
Sir Martin E. Franklin |
|
| SIR
MARTIN E. FRANKLIN |
) |
Sir
Martin E. Franklin |
|
| SIGNED
by |
) |
/s/
Robert A.E. Franklin |
|
| ROBERT
A.E. FRANKLIN |
) |
Robert
A.E. Franklin |
|
| SIGNED
by |
) |
/s/
Ian G.H. Ashken |
|
| IAN
G.H. ASHKEN |
) |
Ian
G.H. Ashken |
|
| SIGNED
by |
) |
/s/
James E. Lillie |
|
| JAMES
E. LILLIE |
) |
James
E. Lillie |
|
| SIGNED
by |
) |
/s/
Desiree DeStefano |
|
| DESIREE
DESTEFANO |
) |
Desiree
DeStefano |
|
| SIGNED
by |
) |
/s/
Michael E. Franklin |
|
| MICHAEL
E. FRANKLIN |
) |
Michael
E. Franklin |
|
| SIGNED
by |
) |
/s/
Rory Cullinan |
|
| RORY
CULLINAN |
) |
Rory
Cullinan |
|
| SIGNED
by |
) |
/s/
Thomas V. Milroy |
|
| THOMAS
V. MILROY |
) |
Thomas
V. Milroy |
|
| SIGNED
by |
) |
/s/
Melanie Stack |
|
| MELANIE
STACK |
) |
Melanie
Stack |
|
80
Exhibit
10.9
DATED 17 May
2023
ADMIRAL ACQUISITION LIMITED
and
[●]
ADMIRAL
ACQUISITION LIMITED
SHARE
OPTION DEED
GREENBERG TRAURIG,
LLP
The Shard, Level 8
32 London Bridge Street
London SE1 9SG
TABLE OF CONTENTS
| 1. |
DEFINITIONS |
2 |
| 2. |
INTERPRETATION |
4 |
| 3. |
GRANT OF SHARE OPTION |
4 |
| 4. |
EXERCISE OF SHARE OPTION |
4 |
| 5. |
CESSATION OF OFFICE |
4 |
| 6. |
RELATIONSHIP
WITH TERMS OF APPOINTMENT |
5 |
| 7. |
TAX |
5 |
| 8. |
NON-TRANSFERABILITY |
6 |
| 9. |
TAKEOVERS
AND WINDING-UP |
6 |
| 10. |
NOTICES |
6 |
| 11. |
MISCELLANEOUS |
7 |
| 12. |
GOVERNING LAW AND JURISDICTION |
7 |
| EXECUTED AS A DEED |
7 |
| SCHEDULE 1 SHARE OPTION EXERCISE NOTICE |
8 |
THIS DEED
is dated 17 May 2023
BETWEEN:
| (1) | ADMIRAL ACQUISITION LIMITED (incorporated in the territory of the British Virgin Islands with registered
number 2114331) whose registered office is at Ritter House, Wickhams Cay II, Tortola, VG1110, British Virgin Islands (the “Company”);
and |
| (2) | [●] of [●] (together, as the
context may require, with such natural person’s executor, administrator, guardian, conservator or other legal representative, the “Holder”). |
WHEREAS:
| (A) | The Holder was appointed as a non-executive director of the Company on 4 May 2023. |
| (B) | The Directors have resolved that it is in the Company’s best interests to grant to the Holder the Share
Option (as defined below) pursuant to the terms and conditions of this Deed (as modified, supplemented, amended or amended and restated
from time to time, this “Deed”). |
NOW IT IS HEREBY AGREED as follows:
In
this Deed, except where a different interpretation is necessary in the context, the words and expressions set out below shall have the
following meanings:
“Acquisition”
has the meaning given in the Prospectus;
“Admission”
means admission of the Ordinary Shares to the standard segment of the Official List and to trading on the main market for listed securities
of the London Stock Exchange;
“Articles”
means (i) the articles of association of the Company; or (ii) any similar document of the Company governing the Company following any
continuation, change of jurisdiction, merger or similar action under the laws of the British Virgin Islands or any relevant foreign jurisdiction,
in either case, in force from time to time;
“Award
Tax Liability” means in relation to the Holder, any liability of the Company (and any other member
of its Group) to account to His Majesty’s Revenue & Customs or any other tax authority for any amount of, or representing, income
tax, National Insurance contributions, or social security contributions or any other tax charge, levy or other sum (whether under the
laws of the UK or otherwise) (with the exception of employer National Insurance contributions) which may arise on the grant, vesting,
exercise, assignment or release of the Share Option;
”Bloomberg“
means Bloomberg Financial Markets;
“Directors”
means the board of directors of the Company or a duly authorised committee of the directors;
“Exercise
Date” has the meaning specified in Clause 4.2;
“Exercise
Price” means US$11.50 per Ordinary Share (or such adjusted price as may be determined from time
to time in accordance with the provisions of Clause 11.1);
“FCA”
means the UK Financial Conduct Authority;
“Group”
means the Company and any company which is for the time being a Subsidiary;
“Memorandum”
means (i) the memorandum of association of the Company; or (ii) any similar document of the Company governing the Company following any
continuation, change of jurisdiction, merger or similar action under the laws of the British Virgin Islands or any relevant foreign jurisdiction,
in either case, in force from time to time;
“New
Company” has the meaning given in Clause 9.2;
“Official
List” means the official list maintained by the FCA;
“Ordinary
Shares” means (i) the ordinary shares of no par value each in the capital of the Company (which
for these purposes, for the avoidance of doubt, shall include the Company in such form as it exists following any continuation, change
of jurisdiction, merger, consolidation or similar action under the laws of the British Virgin Islands or any relevant foreign jurisdiction)
and (ii) any capital shares into which such ordinary shares shall have been changed (including, for the avoidance of doubt, in connection
with or following any continuation, change of jurisdiction, merger, consolidation or similar action under the laws of the British Virgin
Islands or any relevant foreign jurisdiction) or any share capital resulting from a reclassification of such ordinary shares;
“Prospectus”
means the prospectus to be published by the Company on or around 17 May
2023 in connection with Admission;
’’Share
Dealing Code’’ means the code or policy for dealing or trading in securities, adopted by the Company;
“Share
Option” means the rights to subscribe for Ordinary Shares granted by the Company to the Holder
by this Deed;
“Subsidiary”
means any company which is for the time being a subsidiary (as defined in section 4 of the BVI Business Companies Act, 2004 (as amended))
of the Company;
“Subscription
Period” means the period commencing on the Trading Day immediately following the date of completion
of the Acquisition and ending on the earlier to occur of (i) 5.00 p.m. (London time) on the fifth anniversary of the date of completion
of the Acquisition, and (ii) such earlier date as determined by this Deed, provided that, in each case, if such day is not a Trading Day,
the Trading Day immediately following such day;
“Trading
Day” has the meaning given in the Prospectus;
“UK”
means the United Kingdom of Great Britain and Northern Ireland;
“Variation”
means (in relation to the Ordinary Shares) an issue of Ordinary Shares by way of bonus shares issue, dividend or distribution to holders
of Ordinary Shares, a subdivision, consolidation or any other reclassification of the Ordinary Shares, as determined by the Directors;
and
“VWAP”
means, in respect of any Ordinary Share as of an Exercise Date, the volume weighted average price of an Ordinary Share on the London Stock
Exchange (or such other securities exchange or quotation system on which the Ordinary Shares are traded or quoted) for the ten consecutive
Trading Days prior to the Exercise Date as reported by Bloomberg through its standard “Volume at Price” function with “Calculation”
mode set to “Bloomberg Definition” as reported up to two hours after the relevant market closes on each such Trading Day.
The headings in this
Deed are for convenience and should be ignored when construing this Deed. Unless the context otherwise requires, words in the singular
include the plural and vice versa and words importing either gender include both genders. Reference in this Deed to any statutory provision
are to those provisions as amended, extended or re-enacted from time to time and include any rules, orders, regulations or other subordinate
legislation made under them. References to “$” or “US$” are to the lawful currency of the United States.
The Company hereby
grants to the Holder the right, but not the obligation, to subscribe for up to [50,000][37,500] Ordinary Shares (or such adjusted number
of Ordinary Shares as may be determined from time to time in accordance with the provisions of Clause 11.1) at any time during the Subscription
Period at the Exercise Price on the terms and subject to the conditions set out in this Deed.
| 4. | EXERCISE OF SHARE OPTION |
| 4.1 | The Share Option shall not be exercised on any occasion if such exercise would not be in accordance with
the Share Dealing Code. |
| 4.2 | Subject to Clause 4.1, the Holder may exercise all or any of the subscription rights pursuant to the Share
Option for all or any whole number of Ordinary Shares for which the Holder is entitled to subscribe at any time during the Subscription
Period by delivering to the Company notice in writing in substantially the same form as set out in Schedule 1 to this Deed and, subject
to the Company’s receipt of the Exercise Price for each Ordinary Share to be issued, the Company shall (within 10 days of the Company
receiving the notice in question and remittance of such Exercise Price) issue to (or to the order of) the Holder the Ordinary Shares in
question. Subscription rights will be deemed to be exercised on the Trading Day upon which the Company receives the notice in question
and remittance of the Exercise Price for each Ordinary Share to be issued (such Trading Day, an “Exercise Date”) in cleared
funds. |
| 4.3 | Ordinary Shares issued pursuant to the full exercise or partial exercise of the Share Option in accordance
with the terms of this Deed shall be issued fully paid and free from any liens, charges or encumbrances and rights of pre-emption but
shall not rank for any dividends or other distributions declared, made or paid on the Ordinary Shares for which the record date is prior
to the relevant Exercise Date, shall rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares
on or after the relevant Exercise Date and otherwise pari passu in all respects with the Ordinary Shares in issue at that date. |
| 4.4 | At any time when the Ordinary Shares are listed on the Official List and admitted to trading on the London
Stock Exchange’s main market for listed securities and/or any other securities exchange or quotation system, it is the intention of the
Company to apply to the FCA and the London Stock Exchange (or relevant authority for any other securities exchange or quotation system)
for the Ordinary Shares issued pursuant to the full exercise or partial exercise of the Share Option to be admitted to the Official List
and to trading on the London Stock Exchange’s main market for listed securities or such other securities exchange or quotation system
on which the Ordinary Shares are traded or quoted. |
Otherwise than in connection
with the Acquisition, and unless the Directors (in their absolute discretion) determine otherwise, if for any reason the Holder ceases
to hold office as a non- executive director of the Company (or if for any reason the Holder gives or receives notice to terminate the
Holder’s office as a non-executive director of the Company) before the completion of the Acquisition, the Share Option will lapse and
cease to be exercisable from the earlier of the date of such giving or receiving of notice and the date of ceasing to hold office.
| 6. | RELATIONSHIP WITH TERMS OF APPOINTMENT |
| 6.1 | The Share Option is governed solely by the terms of this Deed and does not form part of the Holder’s entitlement
to remuneration or benefits pursuant to the Holder’s terms of appointment as a non-executive director and save as otherwise provided the
rights and obligations of the Holder under the Holder’s terms of appointment as a non-executive director shall not be affected by the
granting of the Share Option. |
| 6.2 | The rights or opportunity granted to the Holder on the granting of the Share Option shall not give the
Holder any rights or additional rights to compensation or damages in consequence of either: |
| 6.2.1 | the Holder giving or receiving notice of termination of the Holder’s office as non-executive director
of the Company; or |
| 6.2.2 | the loss or termination of the Holder’s office as non-executive director of the Company for any reason
whatsoever, whether or not the termination (and/or giving of notice) is ultimately held to be wrongful or unfair or in breach of the Holder’s
terms of appointment or applicable law or regulation. |
| 6.3 | The Holder shall not be entitled to any compensation or damages for any loss or potential loss which the
Holder may suffer by reason of being unable to acquire Ordinary Shares, or any interest in Ordinary Shares, pursuant to the Share Option
in consequence of: |
| 6.3.1 | the Holder giving or receiving notice of termination of the Holder’s office as non-executive director
of the Company (whether or not the termination (and/or giving of notice) is ultimately held to be wrongful or unfair or in breach of the
Holder’s terms of appointment or applicable law or regulation); |
| 6.3.2 | the loss or termination of the Holder’s office as non-executive director of the Company for any reason
whatsoever (whether or not the termination is ultimately held to be wrongful or unfair or in breach of the Holder’s terms of appointment
or applicable law or regulation); |
| 6.3.3 | the exercise by the Directors of any discretion in accordance with this Deed; or |
| 6.3.4 | for any other reason. |
| 7.1 | The Holder irrevocably agrees to pay to the Company and any other member of its Group a sum equal to any
Award Tax Liability of such company. |
| 7.2 | In the event of any claim being made by the Company pursuant to Clause 7.1, and notwithstanding any other
provision of this Deed or Schedule 1 to this Deed to the contrary, the Company shall have the right: |
| 7.2.1 | to sell, as agent for the Holder (and the Holder hereby appoints the Company as the Holder’s agent and
true and lawful attorney in fact for this purpose), a sufficient number of Ordinary Shares held by the Holder and to retain from the net
proceeds of sale of such Ordinary Shares (after deduction of all fees, commissions and expenses incurred in relation to such sale) monies
sufficient to satisfy the amount of Award Tax Liability claimed; |
| (a) | this power of attorney is irrevocable, save with the consent of the Company and is given by way of security
to secure the interest of the Company (for itself and as trustee under this Deed on behalf of any relevant Group company) as a person
liable to account for or pay any Award Tax Liability; |
| (b) | a person who deals in good faith with the Holder’s attorney appointed under this Clause 7 may accept a
written statement signed by that person that this power of attorney has not been revoked as conclusive evidence of that fact; |
| 7.2.2 | to deduct the amount of Award Tax Liability claimed from the Holder’s fees under his or her terms of appointment
as non-executive director or any other amounts owing to him or her; and/or |
| 7.2.3 | to deduct from the number of Ordinary Shares otherwise required to be issued to the Holder upon exercise
of the Holder’s subscription rights pursuant to the Share Option, a number of Ordinary Shares having an aggregate VWAP equal to the amount
of Award Tax Liability claimed. |
| 8.1 | The Share Option is personal to the Holder and may not be transferred during the Holder’s lifetime (which,
for the avoidance of doubt, shall not restrict the transfer of the Share Option by operation of law or otherwise on the Holder’s death). |
| 8.2 | The Holder shall immediately cease to have any right or entitlement to receive any Ordinary Shares pursuant
to this Share Option if the Holder: |
| 8.2.1 | transfers or assigns, mortgages, charges or otherwise disposes of the Share Option during the Holder’s
lifetime (which, for the avoidance of doubt, shall not include any transfer or assignment or other disposition to the Holder’s executor,
administrator, guardian, conservator or other legal representative on the Holder’s death); or |
| 8.2.2 | is adjudged bankrupt or an interim order is made because the Holder intends to propose a voluntary arrangement
to the Holder’s creditors under the Insolvency Act 1986 of the U.K. (or any other provision of the laws of any jurisdiction outside the
UK which is intended to have similar effect or purpose); or |
| 8.2.3 | makes or proposes any other plan or arrangement, in relation to the Holder’s debts, with the Holder’s
creditors or any section of them; or |
| 8.2.4 | is otherwise deprived (except on death) of the legal or beneficial ownership of the Share Option, whether
by operation of law or by doing or omitting to do anything which causes the Holder to be so deprived. |
| 9. | TAKEOVERS AND WINDING-UP |
| 9.1 | While any subscription rights pursuant to the Share Option remain outstanding (whether or not such rights
have become exercisable), if at any time an offer is made to all holders of the issued Ordinary Shares (or all such holders other than
the offeror and/or any company controlled by the offeror and/or persons acting in concert with the offeror) to acquire all or some of
the issued Ordinary Shares and the Company becomes aware, on or before the end of the Subscription Period, that as a result of such offer
(or as a result of such offer and any other offer made by the offeror) the right to cast a majority of the votes which may ordinarily
be cast generally at a meeting of the shareholders of the Company has or will become vested in the offeror and/or such companies or persons
as aforesaid, the Company will give notice to the Holder of such vesting within 14 days of it occurring, and each such Holder will be
entitled, at any time within the period of 30 days immediately following the date of such notice, to exercise the Holder’s outstanding
subscription rights pursuant to the Share Option on the terms and subject to the conditions on which the same could have been exercised
if they had been exercisable and had been exercised on the date of such notice after which time all subscription rights under the Share
Option will lapse. If any part of such period falls after the end of the Subscription Period, the end of the Subscription Period will
be deemed to be the last business day of that 30 day period. |
| 9.2 | If in connection with the Acquisition holders of issued Ordinary Shares are offered or receive shares
in another company (the “New Company”) the Directors may (in their absolute discretion) determine that the Share Option
will be replaced by a new share option in respect of shares of the New Company and Clause 9.1 will not apply if it otherwise would do
so. Any such new share option will be equivalent to the Share Option (as determined by the Directors in their absolute discretion) and
will be on such terms as the Directors consider in their absolute discretion to be fair and reasonable. |
| 9.3 | If the Company enters liquidation (or, following any continuation, change of jurisdiction, merger or similar
action, dissolves under any relevant foreign jurisdiction), all subscription rights under the Share Option will lapse on the date of entry
into liquidation (or, following any continuation, change of jurisdiction, merger or similar action, the date of dissolution under any
relevant foreign jurisdiction). The Company will use reasonable endeavours to give the Holder at least 15 calendar days’ notice prior
to the date on which the Company closes its books or takes a record with respect to determining rights of shareholders of the Company
to vote with respect to any voluntary liquidation (or, following any continuation, change of jurisdiction, merger or similar action, any
voluntary dissolution under any relevant foreign jurisdiction) of the Company. |
| 10.1 | Any notice or document to be given by the Directors or the Company to the Holder in accordance or in connection
with this Deed shall be duly given: |
| 10.1.1 | by sending it through the post in a pre-paid envelope to the address last known to the Company to be the
Holder’s address; or |
| 10.1.2 | by sending it to the Holder by e-mail or by sending to the Holder a facsimile transmission addressed to
them at the Holder’s normal email address or fax number for communications with the Company. |
| 10.2 | Any notice in writing or document to be submitted or given to the Company in accordance or in connection
with this Deed may be delivered, sent by post/mail, facsimile transmission or e-mail to such person as may from time to time be nominated
by the Company and whose name and address, facsimile and email details are notified to the Holder and: |
| 10.2.1 | in the case of notice by delivery, such notice shall be deemed to have been given when the notice is delivered;
or |
| 10.2.2 | in the case of notice by post/mail, such notice shall be deemed to have been duly given on the day following
the date of posting/mailing; or |
| 10.2.3 | in the case of notice by facsimile or e-mail, such notice shall be deemed to have been duly given at the
time of transmission, provided that for notice given by email, a return receipt must be received indicating that the email has been opened. |
| 11.1 | In the event of any Variation, the Directors may make such adjustments as they consider appropriate to
the number of Ordinary Shares in respect of which the Share Option subsists and/or the Exercise Price; provided, however, that in no event
shall the Exercise Price be less than that required by any laws and regulations for the time being in force. |
| 11.2 | The Company and the Holder may at any time by the execution of a written instrument, modify, supplement,
amend or amend and restate the provisions of this Deed in any respect; provided, however, that the Company may unilaterally, by written
instrument, modify, supplement, amend or amend and restate the provisions of this Deed in connection with the Company’s change of jurisdiction
from the British Virgin Islands to a foreign jurisdiction. |
| 11.3 | The issue of Ordinary Shares pursuant to this Deed shall be subject to the Company’s Memorandum and Articles
and compliance by the Holder with all laws, rules, regulations, requirements and guidance applicable to dealing in the Ordinary Shares. |
| 11.4 | Unless otherwise provided in this Deed, the Share Option shall become incapable of exercise and shall
lapse at the end of the Subscription Period. |
| 11.5 | Except as otherwise expressly stated to the contrary in this Deed, neither this Deed nor the granting
of the Share Option shall have the effect of giving any third party any rights under this Deed. |
| 11.6 | This Deed may be executed in any number of counterparts and by each of the parties on separate counterparts,
each of which when executed and delivered shall be deemed to be an original, but all the counterparts together shall constitute one and
the same agreement. |
| 12. | GOVERNING LAW AND JURISDICTION |
| 12.1 | This Deed shall be governed by and construed in all respects in accordance with the laws of the British
Virgin Islands. |
| 12.2 | The courts of the British Virgin Islands shall have exclusive jurisdiction in relation to any claim, dispute
or difference concerning the Share Option and any matter arising from or in relation to this Deed. |
EXECUTED
AS A DEED by the parties on the date which first appears in this Deed.
SCHEDULE 1 SHARE OPTION
EXERCISE NOTICE
The Directors
Admiral Acquisition Limited (the ’’Company’’)
Ritter House, Wickhams Cay II
Tortola
VG1110
British Virgin Islands
Dear Directors
SUBSCRIPTION OF ORDINARY SHARES PURSUANT TO SHARE OPTION
Unless otherwise stated, defined terms shall have
the meaning given to them in the Share Option Deed entered into between me and the Company, dated [●] 2023 (as modified, supplemented,
amended or amended and restated from time to time, the “Share Option Deed”).
Pursuant to the Share Option Deed, I hereby give
notice that I wish to exercise my right to subscribe for [●] Ordinary
Shares. Accordingly, I hereby apply for [●] Ordinary Shares to be
issued fully paid at the aggregate Exercise Price of [●] (the “Subscription
Price”).
I enclose payment of a cheque made payable to
the Company for an amount equal to the Subscription Price/ I have made other arrangements (as agreed to by the Company) to pay the Subscription
Price by electronic transfer (delete as appropriate).
*If you wish to pay by electronic transfer,
please contact the Company.
I hereby undertake and agree to subscribe for
and purchase the said Ordinary Shares in accordance with the Share Option Deed, subject to the provisions of the Memorandum and Articles
and I hereby authorise you to enter my name and relevant particulars in the member register, share register or stock ledger of the Company
as holder of the Ordinary Shares so issued to me pursuant to this notice and to send the relevant share certificate to me at the address
set out above at my own risk.
Yours faithfully,
| EXECUTED as a deed by ,
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| Director , duly authorised for and on behalf of |
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| ADMIRAL ACQUISITION LIMITED, in the |
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| presence of: |
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| Signature of Witness: |
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| EXECUTED as a deed by [●] in the presence of: |
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9
Exhibit 10.10
FOUNDER INSIDER LETTER
Admiral Acquisition Limited
Ritter House, Wickhams Cay II
Road Town, Tortola VG1110
British Virgin Islands
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Jefferies GmbH
Bockenheimer Landstrasse 24
60323
Frankfurt am Main
Germany
UBS AG London Branch
5 Broadgate
London
EC2M 2QS
17 May 2023
Re: Admiral Acquisition Limited (the “Company”)
| 1.1 | Jefferies International Limited and UBS AG London Branch have been appointed as Joint Global Co-ordinators
and Joint Bookrunners and are acting, together with Jefferies GmbH, as placing agents (the “Placing Agents”) in connection
with the contemplated placing (the “Placing”) of Ordinary Shares of no par value (with Matching Warrants) of the Company
at a placing price of $10.00 per Ordinary Share, and admission to the standard segment of the Official List and to trading on the London
Stock Exchange’s main market for listed securities as more fully described in the prospectus relating to the Placing (the “Prospectus”). |
| 1.2 | In consideration of each Placing Agent using its reasonable endeavours to procure subscribers for, or
failing which itself to subscribe for, such number of Ordinary Shares as more particularly set out in the Placing Agreement to be entered
into among the Company, the Placing Agents and the other parties set forth therein in connection with the Placing, each of the undersigned
agree as set out below. Unless expressly provided otherwise, each obligation of each of the undersigned shall be several and not joint
and several. |
| 1.3 | Expressions and terms used but not otherwise defined in this Agreement have the meaning given to them
in the Prospectus except as otherwise defined herein: |
| 1.3.1 | “Affiliate” has the meaning given to it in Rule 405 under the Securities Act of 1933; |
| 1.3.2 | “Connected Persons” means an individual’s spouse, civil partner, cohabitant,
children, parents, brothers, sisters, grandchildren and grandparents; |
| 1.3.3 | “Control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person, whether through the ownership of voting securities or by contract, declaration
of trust, power of attorney or otherwise; and |
FOUNDER
INSIDER LETTER
| 1.3.4 | a “person” includes references to an individual, company, body corporate, trust, association
or partnership. |
| 2. | Extension of Acquisition Period |
| 2.1 | Pursuant to the Articles, if the Acquisition has not been announced by the second anniversary of Admission,
the board will recommend to Shareholders either that: |
| 2.1.1 | the Company be wound up; or |
| 2.1.2 | the Company shall continue to pursue the Acquisition for a further 12 months from the second anniversary
of Admission. |
| 2.2 | The board’s recommendation will then be put to a Shareholder vote, at which, the undersigned agrees to: |
| 2.2.1 | abstain from exercising any voting rights in respect of any Ordinary Shares or Founder Preferred Shares
held or beneficially owned by them at the date of such resolution; |
| 2.2.2 | procure that their Connected Persons and Affiliates abstain from exercising any voting rights with respect
of any Ordinary Shares or Founder Preferred Shares held or beneficially owned by such persons; and |
| 2.2.3 | in respect of other entities not controlled by them, but which hold an interest in Ordinary Shares or
Founder Preferred Shares to which they are or may be beneficially entitled, to notify or direct such controllers of such persons that
they wish that person to abstain from exercising any voting rights with respect to such Ordinary Shares or Founder Preferred Shares, and
to use (so far as they or it has the power to do so) reasonable endeavours to procure that they abstain from exercising any such voting
rights. |
| 3. | PRESENTATION OF OPPORTUNITIES |
| 3.1 | Subject to clauses 3.2 and 3.3 below, in order to minimise potential conflicts of interest which may arise
from multiple affiliations, each of the undersigned agrees to present to the Company for its consideration, and not to any other person
or entity unless the opportunity is rejected by the Company, those opportunities to acquire an operating company or business the undersigned
reasonably believes are suitable opportunities for the Company, until the earlier of: |
| 3.1.1 | the consummation by the Company of an Acquisition; or |
| 3.1.2 | the liquidation and dissolution of the Company. |
| 3.2 | Each of the undersigned individuals excluding, for the avoidance of doubt, the Founder Entity, has, or
may come to have, other fiduciary obligations, including to other companies on whose boards of directors they presently sit and to other
companies whose boards of directors they may join in the future. In addition, certain of the undersigned individuals have pre-existing
fiduciary or contractual commitments to refrain from engaging in certain businesses without permission from certain companies. To the
extent that each of the undersigned individuals identify business opportunities that may currently be suitable for the Company or other
companies on whose boards of directors they may sit or to whom they owe a pre-existing fiduciary or contractual obligation, each of the
undersigned individuals will honour those pre-existing fiduciary and contractual obligations ahead of their obligations to the Company.
Accordingly, each such individual may refrain from presenting certain opportunities to the Company that come to their attention in the
performance of their duties as directors or other fiduciaries of such other companies or in observance of pre-existing fiduciary or contractual
obligations, unless the other companies have declined to accept such opportunities or waive the fiduciary or contractual obligations. |
FOUNDER INSIDER
LETTER
| 3.3 | Each of the Founders and the Founder Entity agree that if they or it becomes involved prior to the consummation
of the Acquisition with any new special purpose acquisition company whose purpose is the acquisition of Control of a target company or
business with similar acquisition criteria to the Company’s (as set forth in the Prospectus), any potential acquisition opportunities
that fit the Company’s acquisition criteria would first be presented to the Company for evaluation, and the Company shall evaluate such
opportunity, prior to it being presented to such new special purpose acquisition company. |
| 4. | COMPANY ASSISTANCE AND REGISTRATION RIGHTS |
| 4.1 | Subject to the expiration or waiver of any lock-up arrangement entered into between the Founders, the
Founder Entity and the Placing Agents pursuant to the Placing Agreement, the Company shall provide, at its own cost, such information
and assistance as the Founders or the Founder Entity may reasonably request to enable them to effect a disposal of all or part of any
Ordinary Shares or Warrants they may then hold (the “Subject Securities”) at any time after the completion of the Acquisition,
including, without limitation, (a) the preparation, qualification and approval of a prospectus in respect of the Subject Securities, (b)
the provision of all financial and other records to any underwriters and any attorneys, accountants or other professionals retained by
the Founders or the Founder Entity or the underwriters as shall be reasonably necessary to enable them to conduct a reasonable investigation,
and (c) all other steps reasonably necessary to effect the qualification, offering and sale of the Subject Securities, the entry into
any customary agreements and such other actions, including participation in “road shows”, as are reasonably required in order
to consummate or facilitate the disposition of the Subject Securities. The obligations of the Company in this clause 4 shall terminate
upon the effective date of the Registration Rights Agreement (as defined below). |
| 4.2 | Prior to the consummation of an Acquisition that is structured in a manner to result in the Company’s
securities being delisted from the London Stock Exchange and listed or traded on a principal securities exchange or trading market in
the United States, the Company shall enter a customary registration rights agreement with the undersigned (a “Registration Rights
Agreement”) providing for the Company (or its successor) to maintain, at its own expense, and subject to agreed limitations,
an effective registration statement on the appropriate Securities and Exchange Commission form, for a period of at least one year after
the consummation of the Acquisition or such longer period as the undersigned shall be deemed an affiliate of the Company with respect
to the resale to the public of the Securities (or any securities received in exchange for the Securities upon consummation of the Acquisition)
held by the undersigned, which agreement shall be in a form mutually acceptable to both parties. |
| 5.1 | Other than any compensation due to Mariposa Capital pursuant to the Mariposa Advisory Agreement, neither
the undersigned nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered
to the Company prior to the consummation of the Acquisition. However, each of the Founders shall be entitled to reimbursement from the
Company for their out-of-pocket expenses, such as travel expenses, incurred in connection with seeking and consummating an Acquisition
in accordance with Company policies. |
| 5.2 | Neither the undersigned nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s
fee or any other compensation in the event the undersigned or any Affiliate of the undersigned originates an Acquisition. |
FOUNDER
INSIDER LETTER
| 6.1 | Subject to clause 6.2, each of the undersigned severally undertakes that it will not and will procure
that no Affiliate of it shall, without the prior written consent of the Company, during the period commencing on the date of this Agreement
and ending on the date which is the earlier of: (i) the fifth anniversary of completion of the Acquisition; or (ii) the liquidation of
the Company for failure to complete an Acquisition: |
| 6.1.1 | directly or indirectly, offer, sell, lend, pledge, contract to sell, distribute, grant any option, right
or warrant to purchase or otherwise dispose of the Founder Preferred Shares or any other securities which are exchangeable for, convertible
into or representing the right to receive Founder Preferred Shares or any other interest therein or in respect thereof (but not including,
for the avoidance of doubt, Ordinary Shares issued to the Founder Entity in respect of their Annual Dividend Amount from time to time);
or |
| 6.1.2 | otherwise enter into any transaction (including any derivative transaction) directly or indirectly, permanently
or temporarily, to dispose of any Founder Preferred Shares; or |
| 6.1.3 | undertake any other transaction with the same economic effect as any of the foregoing; or |
| 6.1.4 | announce an offering of any Founder Preferred Shares or any interest therein or in respect thereof; or |
| 6.1.5 | to announce publicly any intention to enter into any transaction described in paragraphs 6.1.1 to 6.1.4
above (each, a “Disposal”). |
| 6.2 | The undertaking in clause 6.1 shall not apply to any of the following provided that in each case the Disposal
is conducted in accordance with all applicable laws (including the Securities Act) and the Articles (as applicable) (including without
limitation that the transferee is not a Prohibited Person as described therein): |
| 6.2.1 | a Disposal of Founder Preferred Shares as a bona fide gift made with the prior written consent of the
Company; |
| 6.2.2 | a Disposal of Founder Preferred Shares by a Founder for estate planning purposes to persons immediately
related to the relevant Founder, as the case may be, making such Disposal by blood, marriage or adoption; |
| 6.2.3 | a Disposal of Founder Preferred Shares by a Founder or the Founder Entity to (i) any trust that is solely
for the benefit of the relevant Founder, as the case may be, and/or the persons described in paragraph 6.2.2 above or (ii) any direct
or indirect wholly-owned subsidiary of such trust; |
| 6.2.4 | a Disposal of Founder Preferred Shares by a Founder or the Founder Entity to any of the Company’s
Directors (from time to time); |
| 6.2.5 | a Disposal of Founder Preferred Shares by the Founder Entity to any of its Affiliates or direct or indirect
holders of equity, holders of partnership interests or members; |
FOUNDER
INSIDER LETTER
| 6.2.6 | a Disposal of Founder Preferred Shares to Affiliates or direct or indirect holders of equity, partnership
interests or members of the Founder Entity; or |
| 6.2.7 | a Disposal of Founder Preferred Shares to a direct or indirect subsidiary of the Company or to a target
company or shareholders of a target company (or direct or indirect subsidiary of a target company) in connection with, or as a result
of transactions related to, the completion of the Acquisition; |
| (a) | with respect to any of the Disposals listed in clauses 6.2.1
to 6.2.7 above, the relevant disposing Founder or the Founder Entity shall deliver to the Company, prior to or contemporaneously with
making such a Disposal, an enforceable lock up agreement in the same form as this Agreement, duly executed by the permitted transferee
(or the trustee or legal guardian of such transferee) in respect of the Founder Preferred Shares to be transferred to them or it; and |
| (b) | each Founder and the Founder Entity severally undertakes to the Company that any Disposal by them or it
pursuant to this clause 6 shall, to the extent permitted by relevant law or regulation, be notified in writing to the Company no later
than five Business Days after the entry into of any agreement relating to the same. |
| 7. | notices and COMMUNICATIONS |
| 7.1 | Any notice, consent or other communication shall be in writing, in English and delivered personally or
sent by commercial courier to the party due to receive such notice, consent or other communication marked for the attention of the person
set out in clause 7.4 or to any address as may be notified to another party in accordance with clause 7.3. |
| 7.2 | For the purposes of this Agreement, notice shall be deemed given, if delivered personally, at the time
of delivery, or in the case of commercial courier, on the date and at the time of signature of the courier’s delivery receipt. |
| 7.3 | A party may change its details given in clause 7.4 by giving notice to the other party, the change taking
effect on the later of the date, if any, specified in the notice as the effective date for the change and the date five Business Days
after deemed receipt of the notice. |
FOUNDER INSIDER
LETTER
| 7.4 | The details for the purposes of clause 7.1 are: |
|
Party: |
Address |
For the attention of |
| Mariposa Acquisition IX, LLC |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
Desiree DeStefano
|
| Party |
Address |
| Sir Martin E. Franklin |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| Ian G.H. Ashken |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| Desiree DeStefano |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| Michael E. Franklin |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| Robert A.E. Franklin |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| James E. Lillie |
c/o Mariposa Capital, LLC, 500 South Pointe Drive, Suite 240, Miami Beach, Florida 33139 |
| 8.1 | Each of the undersigned has full right and power, without violating any agreement by which they or it
is bound, to enter into this Agreement. |
| 8.2 | This Agreement may be executed in any number of counterparts, each of which is an original and all of
which together evidence the same agreement. |
| 8.3 | The Placing Agents are parties to this Agreement solely for the purpose of receiving the benefit of the
undertakings and agreements of the other parties to this Agreement and the Placing Agents shall have no liabilities under or in connection
with this Agreement. |
| 9. | GOVERNING LAW AND ENFORCEMENT |
| 9.1 | This Agreement, and any dispute or claim arising out of, or in connection with, it or its subject matter
or formation (including non-contractual disputes or claims), shall be governed by, and construed in accordance with, the law of England
and Wales. |
| 9.2 | The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to
determine any dispute or claim that arises out of, or in connection with, this Agreement or its subject matter or formation (including
non-contractual disputes or claims). |
[Signature Page to Follow]
FOUNDER INSIDER LETTER
| SIGNED by SIR MARTIN E. FRANKLIN |
) |
/s/ Sir Martin E. Franklin |
| SIGNED by IAN G. H. ASHKEN |
) |
/s/ Ian G. H. Ashken
|
| SIGNED by DESIREE DESTEFANO |
) |
/s/ Desiree Destefano
|
| SIGNED by MICHAEL E. FRANKLIN |
) |
/s/ Michael E. Franklin |
| SIGNED by ROBERT A.E. FRANKLIN |
) |
/s/ Robert A. E. Franklin |
| SIGNED by JAMES E. LILLIE |
) |
/s/ James E. Lillie |
| SIGNED by duly authorised for and on behalf of MARIPOSA ACQUISITION IX, LLC |
)
) |
/s/ Mariposa Acquisition IX, LLC |
FOUNDER INSIDER LETTER
| ACKNOWLEDGED AND AGREED TO BY: |
|
|
| |
|
|
| SIGNED by |
) |
|
| |
|
|
| duly authorised for and on behalf of ADMIRAL |
) |
/s/ Admiral Acquisition Limited |
| ACQUISITION LIMITED |
|
|
| |
|
|
| SIGNED by |
) |
|
| |
|
|
| and |
) |
/s/ Jefferies International Limited |
| |
|
|
| duly authorised for and on behalf of JEFFERIES |
) |
|
| INTERNATIONAL LIMITED |
|
|
| |
|
|
| SIGNED by |
) |
|
| |
|
|
| and |
) |
/s/ Jefferies GMBH |
| |
|
|
| duly authorised for and on behalf of JEFFERIES GMBH |
) |
|
| |
|
|
| SIGNED by |
) |
|
| |
|
|
| and |
) |
/s/
UBS AG London Branch |
| |
|
|
| duly authorised for and on behalf of UBS AG LONDON BRANCH |
) |
|
8
Exhibit 10.11
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 19 day of September 2024 (the
“Effective Date”) by and between Acuren Corporation (“Company”) and Talman B. Pizzey
(“Executive”).
WHEREAS, the
Company desires to employ the Executive as its Chief Executive Officer and Executive desires to accept such employment under the terms
and conditions hereof.
NOW, THEREFORE,
in consideration of the promises and the mutual agreements contained herein, the Company and Executive each hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the following meanings.
(a) “Benefit Continuation” means the continued participation for Executive and his eligible dependents in the Company Group’s medical and dental benefit plans, via an effective election by Executive under COBRA.
(b) “Benefit Plans” means all medical and dental benefit plans of the Company Group and any group life insurance, group accident insurance and group disability insurance plans of the Company Group, in each case, as may be in effect from time to time.
(c) “Board” means the board of directors of the Company.
(d) “Business” means providing nondestructive testing and examination, inspection, rope access, materials engineering, maintenance, repair, industrial, and similar services; manufacturing products relating to nondestructive testing and examination; and marketing, selling, and distributing such products and services.
(e) “Cause” means any of the following:
(i) the
willful and continuous failure by Executive to substantially perform Executive’s duties with the Company or any member of the Company
Group (other than any such failure resulting from Executive’s incapacity due to physical or mental illness) within thirty (30) days
after a written demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in
which the Board believes that Executive has not substantially performed Executive’s duties,
(ii) misconduct
or gross negligence by Executive provided (A) the Board has determined that the resulting harm to the Company Group from Executive’s
misconduct or gross negligence cannot be adequately remedied, or (B) Executive fails to correct any resulting harm to the Company Group
within thirty (30) days after a written demand for correction is delivered to Executive by the Board which specifically identifies both
the manner in which the Board believes that Executive has engaged in misconduct or gross negligence and an appropriate method of correcting
any resulting harm to the Company Group,
(iii) Executive’s
conviction of or the entering of a plea of guilty or nolo contendere to the commission of a felony,
(iv) fraud,
embezzlement, or theft, against the Company Group, or a willful material violation by Executive of a policy or procedure of the Company
Group, resulting, in any case, in economic harm to the Company Group, or
(v) A
breach of Executive’s representations or warranties contained in Section 3.1.
(f) “COBRA”
means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, including codifications and rules thereunder and successor provisions and rules thereto.
(g) “Code”
means the Internal Revenue Code of 1986, as amended, and the regulations and other guidance promulgated by the Treasury Department and
the Internal Revenue Service thereunder.
(h)
“Competitive Products or Services” means any services or products competitive with any product or service sold, offered
for sale, or under development by the Company Group as of the date of Executive’s termination of employment.
(i) “Company
Group” means the Company, together with any direct or indirect subsidiary of the Company, as well as any business, corporation,
partnership, limited liability company or other entity designated by the Board and in which the Company or a subsidiary holds a controlling
ownership interest, directly or indirectly.
(j) “Confidential
Information” as used in Sections 2.5, 2.6 and 2.7 of this Agreement, means all confidential and proprietary
information, data, documents, records, materials, and other trade secrets and/or other proprietary business information of the Company
Group that is not readily available to competitors, outside third parties and/or the public, including without limitation, (i) data, designs,
plans, notes, memoranda, work sheets, formulas, processes, patents, pricing, production methods and techniques, financial information
and information about current or prospective customers and/or suppliers and customer and supplier lists; (ii) employees, research, goodwill,
production, prices, costs, margins, and operating unit financial performance, salaries and expertise, customer preferences, contact information,
key contacts, credit and purchasing history, and purchasing requirements and preferences; (iii) business methods, processes, practices
or procedures; (iv) computer software and technology development; and (v) marketing, pricing strategies, business plans, and business
strategy, including acquisition, merger and/or divestiture strategies.
(k) “Customer”
means any individual or entity that is a customer of the Company Group with whom Executive dealt, for whom Executive had direct supervisory,
sales, or service responsibility, for whom Executive has knowledge is a customer of the Company Group, or about whom Executive received
or had access to Confidential Information as a result of Executive’s employment and in the case of the employment having ended,
at any time during the last twelve months of Executive’s employment with the Company.
(l) “Disability”
means Executive’s inability, or failure, to perform the essential functions of his position, with or without reasonable accommodation,
for any period of six (6) months or more in any twelve (12) month period, by reason of any medically determinable physical or mental impairment.
(m) “Equity
Plan” means that certain Acuren Corporation 2024 Equity Incentive Plan, as may be amended from time to time, or any subsequent
equity plan adopted by the Company in which the Executive participates.
(n) “Good
Reason” means the occurrence of one or more of the following conditions without the consent of Executive:
(i) a
material diminution in Executive’s authority, duties, or responsibilities;
(ii) any
action or inaction that constitutes a material breach by the Company of this Agreement; or
(iii) a
material diminution in the Executive’s Base Salary or Annual Bonus opportunity.
In order for
a termination of employment to be on account of “Good Reason,” Executive must provide the Company with a written notice
within ninety (90) days of the initial existence of a condition constituting Good Reason, must afford the Company thirty (30) days in
which to remedy the condition, and if no such cure has been effectuated, must terminate employment within six (6) months of the initial
existence of the identified condition constituting Good Reason.
(o) “Person”
means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.
(p) “Potential
Customer” means a potential customer of the Company Group whom Executive solicited or helped the Company Group solicit or about
whom Executive learned Confidential Information as a result of Executive’s employment and in the case of the employment having ended,
at any time during the last twelve months of Executive’s employment with the Company.
(q) “PPACA”
means the Patient Protection and Affordable Care Act of 2010 and the related regulations and guidance promulgated thereunder.
(r) “Restricted
Employee” means any individual who Executive knows is an employee or officer of the Company Group at the time of contact or
solicitation and with whom Executive had direct contact as a result of employment with the Company Group or whose identity Executive learned
as a result of employment with the Company Group.
(s) “Termination
Date” means the date on which the Employment Period ends hereunder.
ARTICLE II
EMPLOYMENT
2.1 Employment. The Company agrees to employ Executive and Executive hereby accepts such employment with the Company, upon the terms and conditions set forth in this Agreement, for an indeterminate term as an employee at will subject to the supervision, will and pleasure of the Board until such termination occurs in accordance with Section 2.4 hereof (the “Employment Period”).
2.2 Position and Duties.
(a) During
the Employment Period, Executive shall serve as the Chief Executive Officer of the Company and its subsidiaries. As Chief Executive Officer,
Executive’s duties shall be as may be prescribed by the Company’s constituent documents and as may be assigned by the Board
from time to time, commensurate with Executive’s positions. Executive shall report to the Board.
(b) Executive
shall devote his best efforts and his full business time and attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company Group. The Executive shall perform his duties and responsibilities
to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner. In the performance of his duties hereunder,
Executive shall at all times report and be subject to the lawful direction of the Board and perform his duties hereunder subject to and
in accordance with the resolutions or any other determinations of the Board and the governing documents of the Company (and if applicable,
member of the Company Group) and applicable law. During the Employment Period, Executive shall not become an employee of any Person or
entity other than any member of the Company Group nor engage in any other business or occupation including, without limitation, any activity
that (i) conflicts with the interests of the Company Group, (ii) interferes with the proper and efficient performance of his duties for
the Company Group, or (iii) interferes with the exercise of his judgment in the best interests of the Company Group.
2.3 Base Salary, Bonus, Long Term Incentives and Benefits.
(a) Base
Salary. Subject to the terms of this Agreement, in consideration of Executive’s agreements contained herein, for each fiscal
year of the Company during the Employment Period, Executive shall receive a Base Salary at an annual rate of Nine Hundred and Forty-Seven
Thousand Eight Hundred Ten Canadian Dollars (CAD $947,810) (“Base Salary”), with such Base Salary payable in installments
consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. Executive’s Base
Salary in subsequent fiscal years may be subject to adjustment pursuant to Section 2.3(f) hereof and any increase in such amount
shall become the Base Salary under this Section 2.3(a).
(b) Bonus
Plan. During the Employment Period, Executive shall be eligible to receive an annual bonus (an “Annual Bonus”)
under the Company’s annual incentive compensation plan, program and/or arrangements applicable to senior-level executives as established
and modified from time to time by the Compensation Committee of the Board within its sole discretion (the “Bonus Plan”).
For the fiscal year commencing January 1, 2024, and each fiscal year thereafter, Executive shall have a target bonus opportunity equal
to 100% of his current Base Salary, subject to performance criteria to be established by the Compensation Committee of the Board within
the first three (3) months of each fiscal year. Payment of Annual Bonuses, if any, to Executive shall be made in the fiscal year immediately
following the fiscal year to which the Annual Bonus relates, in the same manner and at the same time that other senior-level executives
receive their annual incentive compensation awards.
(c) Annual LTI Awards. During the
Employment Period, beginning promptly after the Company’s Form 10-K filing for the fiscal year ending December 31, 2024 and
annually thereafter, Executive shall be eligible to participate in the Equity Plan and any other long term incentive plan, program
and/or arrangements applicable to senior-level executives as established and modified from time to time by the Compensation
Committee of the Board, within its sole discretion. So long as Executive continues to be employed with the Company as of the
applicable grant dates, subject to annual approval by the Compensation Committee of the Board, Executive will be awarded long-term
compensation awards under the Equity Plan and/or such other plans, programs or arrangements (each an "LTI Award")
having a grant date value of not less than $2.2 million (the "Annual LTI Amount"). The Annual LTI Amount shall be
granted in the form of stock options, restricted stock units, performance shares or other forms of equity or long-term incentive as
determined by the Compensation Committee of the Board and on terms to be specified by the Compensation Committee of the Board in its
discretion.
(d) Benefits.
During the Employment Period, Executive shall be entitled to participate in all medical, dental, hospitalization, accidental death and
dismemberment, disability, travel and life insurance plans, and any and all other plans as are presently and hereinafter offered by the
Company Group to all of its executive personnel, including savings, pension, profit-sharing and deferred compensation plans, subject to
the general eligibility and participation provisions set forth in such plans. In addition, Executive will be entitled to twenty-five (25)
days of paid time off (“PTO”) annually (excluding fixed company holidays) in accordance with Company Group policies.
(e) Office
Location. During the Employment Period, Executive shall be based at 260, 2301 Premier Way, Sherwood Park, Alberta Canada T8H2K8, or
such other location that may be mutually agreed between the parties and shall travel as necessary to perform his duties hereunder.
(f) Annual
Review. Notwithstanding anything to the contrary in this Agreement, during the Employment Period, Executive’s Base Salary, Annual
Bonus and long-term incentive opportunity shall be reviewed and set annually by the Compensation Committee of the Board, within its sole
discretion.
(g) Automobile
Allowance. During the Employment Period, the Company shall provide Executive with an automobile and expense allowance of CAD $850
per month, net of applicable taxes, payable monthly, subject to, and in accordance with, the Company’s policies as in effect from
time to time with respect to such matters, including that any expenses be reasonably incurred, adequately documented and timely presented
for reimbursement or payment.
2.4 Termination.
(a) General.
The Employment Period shall terminate upon the earliest to occur of (i) Executive’s death, (ii) a termination by the Company by
reason of Executive’s Disability, (iii) a termination by the Company with or without Cause, or (iv) a termination by Executive with
or without Good Reason. Upon any termination of Executive’s employment for any reason, except as may otherwise be requested by the
Company in writing and agreed upon in writing by Executive, Executive shall resign from any and all directorships, committee memberships
or any other positions Executive holds with the Company Group.
(b) Termination
for Cause or Voluntary Termination. If Executive is terminated by the Company for Cause or if the Executive voluntarily terminates
his employment without Good Reason, the Executive shall be entitled only to his (i) accrued yet unpaid Base Salary through the Termination
Date, payable as and when such accrued Base Salary would otherwise be payable, (ii) accrued but unused PTO as determined in accordance
with Company Group policies, payable within thirty (30) days after the Termination Date and (iii) vested employee benefits in accordance
with the terms of the applicable plan or program (collectively, the “Accrued Obligations”). Other than as specifically
set forth in this Section 2.4(b), the Company shall have no further liability or obligation hereunder after the Termination Date.
(c) Termination
Without Cause or for Good Reason.
(i) Except
as set forth in Section 2.4(h) of this Agreement, if the Executive is involuntarily terminated by the Company without Cause or
terminates his employment for Good Reason, the Executive shall be entitled to (x) the Accrued Obligations and (ii) any unpaid Annual Bonus
with respect to any completed fiscal year which has not been paid as of the Termination Date, payable at the time the Company pays the
Annual Bonus to the other Bonus Plan participants.
(ii) Provided
the Executive has executed and not revoked the General Release referred to in Section 2.4(i) below and provided that Executive
complies with Sections 2.5 and 2.7 below, Executive shall also be entitled to:
(1) severance
pay in an aggregate amount equal to (x) two (2) times his annual Base Salary as in effect under Section 2.3(a) and (y) two (2)
times his Target Bonus Amount as in effect under Section 2.3(b) (collectively, the “Severance Amount”), payable
in equal installments over a 12-month period (the “Severance Period”), with the first payment being made on the first
payroll date occurring on or after the Payment Commencement Date described in Section 2.4(i) below, less applicable income and
employment tax withholdings;
(2) an
amount equal to the product of (A) the Executive’s Annual Bonus for the year in which the Termination Date occurs, determined in
accordance with the Bonus Plan in a manner consistent with that applicable to other senior executives in the Bonus Plan generally, multiplied
by (B) a fraction, (1) the numerator of which is the number of days elapsed in the performance year as of the date of termination, and
(2) the denominator of which is 365 (the “Pro Rata Bonus”), which Pro Rata Bonus shall be paid at the same time that
the Annual Bonus is paid to other participants in the Bonus Plan generally in respect of the applicable performance year; and
(3) Benefit
Continuation for twenty four (24) months, at the Company’s expense; provided, however, that if the Company’s providing Benefit
Continuation would violate the non-discrimination rules applicable to non-grandfathered plans, or would result in the imposition of penalties
under applicable rules, the Company shall have the right to amend this Section 2.4(h)(iii) in a manner it determines, in its sole discretion,
to comply with the PPACA.
(iii) Notwithstanding
anything to the contrary in this Agreement, in the event that Executive is determined to be a “specified employee” in accordance
with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and the regulations and other
guidance issued thereunder for purposes of any Severance Amounts under this Section 2.4(c), such Severance Amounts and Pro Rata
Bonus shall begin on or be payable on the first payroll date that is more than six (6) months following the date of separation from service,
but only to the extent that such payments do not satisfy either the short term deferral exception to Section 409A described in 26 CFR
§ l.409A-l(b)(4) (“Short Term Deferral Exception”) or, to the extent such payments do not satisfy the Short Term
Deferral Exception, the involuntary termination exception to Section 409A described in 26 CFR § l.409A-l(b)(9). At all times, the
right to all such installment payments made under this subsection (c) shall be treated as the right to a series of separate payments within
the meaning of 26 CFR § l.409A-2(b)(2)(iii). In the event that a termination of employment occurs on or after December 1st
of a calendar year that would entitle the Executive to Severance Amounts under Section 2.4(c)(i) above, and such Severance Amounts
are payable prior to the first payroll date that is more than six (6) months following the date of separation from service, such severance
benefits shall commence no earlier than the first payroll date in the following calendar year and within ninety (90) days after such separation
from service. Any amount that (i) is payable upon termination of Executive’s employment with the Company under any provision of
this Agreement, and (ii) is subject to the requirements of Section 409A, shall not be paid unless and until the Executive has Separated
from Service as defined in Treasury Regulation Section l.409A-l(h).
(d) No
Mitigation. To the extent that Executive shall receive compensation for personal services from employment other than with the Company
subsequent to a termination of Executive’s employment with the Company, the amounts so earned shall not be offset against the amounts
(if any) due under this Agreement following Executive’s termination of employment.
(e) Severance
Forfeiture. Executive agrees that Executive shall be entitled to the Severance Amount and the Pro Rata Bonus as set forth in Section
2.4(c) only if Executive does not breach the provisions of the General Release, the Non-Compete or other material terms of this Agreement
at any time during the period for which such payments are to be made. The Company’s obligation to make such payments will terminate
upon the occurrence of any material breach during the Severance Period.
(f) No
Additional Severance. Executive hereby agrees that no severance compensation of any kind, nature or amount shall be payable to Executive,
except as expressly set forth in this Section 2.4 and Executive hereby irrevocably waives any claim for any other severance compensation.
(g) Death
or Disability. The Company’s obligation under this Agreement terminates on the last day of the month in which the Executive’s
death occurs or on the date of termination of employment on account of Executive’s Disability. The Company shall pay to Executive,
or the Executive’s estate, all previously earned and accrued but unpaid Base Salary up to such Termination Date, payable as and
when such accrued Base Salary would otherwise be payable. Executive (or his estate) shall also be paid a Pro Rata Bonus for the year of
termination, payable as and when the Annual Bonus would otherwise have been paid had the Executive’s employment not been terminated.
Thereafter, Executive or his estate shall not be entitled to any further Base Salary, Annual Bonus or benefits for that year or any subsequent
year, except as may be provided in an applicable benefit plan or program.
(h) Cap
on Certain Payments by the Company; Payment Procedures. Notwithstanding any provision in this Agreement, in the event that any payment
or benefit of any type by the Company Group to or for the benefit of Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (all such payments and benefits, including, without limitation, the Compensation
Incentive Amount, being hereinafter referred to as the “Total Payments”), would exceed the greatest amount that could
be paid to Executive without Executive incurring an excise tax imposed by Section 4999 of the Code (or any similar tax that may be imposed),
then the Total Payments to Executive under this Agreement (or any other employee plan, program, agreement or other arrangement) shall
be reduced (or appropriately adjusted) to the maximum amount which may be paid without Executive becoming subject to such excise tax,
but only if the net after-tax proceeds of such reduced amount would be greater than the net after-tax proceeds (taking into account the
excise tax) of the unreduced Total Payments. If a reduction in the Total Payments is required under this Section 2.4(h), the Total
Payments shall be reduced by the Company in its reasonable discretion in the following order: (i) reduction of any cash payment; (ii)
reducing of vesting acceleration of equity awards; and (iii) reduction of other benefits paid or provided. In the event that acceleration
of vesting of equity awards is to be reduced, such acceleration of vesting will be cancelled in the reversed order of the dates of grant
for the equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. Executive
shall be advised of the determination as to which compensation will be reduced and the reasons therefor, and Executive and his advisors
will be entitled to present information that may be relevant to that determination. In no event will the Company Group pay any excise
tax imposed by Section 4999 of the Code or otherwise on behalf of Executive. No amounts or benefits which constitute nonqualified deferred
compensation subject to Section 409A shall be forfeited or reduced pursuant to this Section 2.4(h) until all amounts and benefits
not subject to Section 409A have been forfeited, and reduction or forfeiture of amounts subject to Section 409A shall be made first (to
the extent necessary) out of payments and benefits which are due at the latest future date.
For purposes of determining
whether any of the Total Payments will be subject to the Excise Tax and the amount of such excise tax: (A) the Total Payments shall be
treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the excise tax, unless, and except to the extent that,
in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing (the “Independent
Auditors”) selected by the Company and reasonably acceptable to Executive, the Total Payments and benefits (in whole or in part)
do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3)
of the Code or are otherwise not subject to the excise tax, and (B) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Independent Advisors in accordance with the principles of Section 280G(d)(3) and (4) of the Code. For purpose
of determining the amount of the net after-tax proceeds of the reduced and unreduced Total Payments pursuant to this Section 2.4(h),
Executive shall be deemed (I) to pay federal income and employment taxes at the applicable rates of federal income and employment taxation
for the calendar year in which the compensation would be payable; and (II) to pay any applicable state or local income taxes at the applicable
rates of taxation for the calendar year in which the compensation would be payable taking into account any effect on federal income taxes
from payment of state and local income taxes.
(i) General
Release. Any payments due to Executive under this Section 2.4 (other than the earned and accrued obligations on any payments
due on account of Executive’s death) shall be conditioned upon Executive’s execution of a general release of claims in the
form attached hereto as Exhibit A (subject to such modifications as the Company reasonably may request) that becomes irrevocable
within sixty (60) days of the Termination Date. Payment of any amounts subject to Executive’s release shall be delayed until the
61st day following the Termination Date (the “Payment Commencement Date”) and any payments that are so delayed shall
be paid on the Payment Commencement Date. If the sixty (60) day period following the Termination Date overlaps two (2) calendar years,
then if and to the extent required to comply with Section 409A, any payment due to Executive under this Section 2.4 shall not be
made on or before the January 1 of the second overlapped year. If the foregoing release is executed and delivered and no longer subject
to revocation as provided in the preceding sentence, then the following shall apply:
(i) To
the extent any such cash payment or continuing benefit to be provided is not “deferred compensation” for purposes of Section
409A, then such payment or benefit shall commence upon the first scheduled payment date immediately after the date the release is executed
and no longer subject to revocation (the “Release Effective Date”). The first such cash payment shall include payment
of all amounts that otherwise would have been due prior to the Release Effective Date under the terms of this Agreement had such payments
commenced immediately upon the Termination Date, and any payments made thereafter shall continue as provided herein. The delayed benefits
shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following the Termination
Date.
(ii) To
the extent any such cash payment or continuing benefit to be provided is “deferred compensation” for purposes of Section 409A,
then such payments or benefits shall be made or commence upon the sixtieth (60) day following the Termination Date. The first such cash
payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such
payments commenced immediately upon the Termination Date, and any payments made thereafter shall continue as provided herein. The delayed
benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following the
Termination Date.
All payments shall
be subject to deductions for customary withholdings, including without limitation, federal and state withholding taxes and social security
taxes. If Executive dies during the Severance Period, any remaining Severance Amounts shall be paid to his surviving spouse, or if there
is no surviving spouse, to his estate.
2.5 Confidential Information.
(a) Executive
recognizes that the Company Group is engaged in the business of providing nondestructive testing and examination, inspection, rope access,
materials engineering, maintenance, repair, industrial, and similar services; manufacturing products relating to nondestructive testing
and examination; and marketing, selling, and distributing such products and services (collectively, the “Company’s Business”),
which business requires for its successful operation the fullest security of its Confidential Information of which Executive will acquire
knowledge during the course of his employment.
(b) Executive
shall use his best efforts and diligence both during and after his employment with the Company, regardless of how, when or why Executive’s
employment ends, to protect the confidential, trade secret and/or proprietary character of all Confidential Information. Executive shall
not, directly or indirectly, use (for himself or another) or disclose any Confidential Information, for so long as it shall remain proprietary
or protectable as confidential or trade secret information, except as may be necessary for the performance of Executive’s duties
for the Company Group.
(c) Executive
shall promptly deliver to the Company, at the termination of the Employment Period or at any other time at the Company’s request,
without retaining any copies, whether in written form or in any technological form, all documents, information and other material in Executive’s
possession or control containing, reflecting and/or relating, directly or indirectly, to any Confidential Information.
(d) Executive’s
obligations under this Section 2.5 shall also extend to the confidential, trade secret and proprietary information learned or acquired
by Executive during his employment from others with whom the Company Group has a business relationship.
(e) Permitted
disclosures. Nothing in this Agreement shall be construed to prevent disclosure of Confidential Information as may be required by
applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency,
provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. Executive shall promptly
provide written notice of any such order to an authorized officer of the Company Group.
(f) Notice
of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016. Notwithstanding any other
provision of this Agreement:
(i) Executive
will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is
made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and solely
for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document that is filed under
seal in a lawsuit or other proceeding; and
(ii) if
Executive files a lawsuit for retaliation by the Company Group for reporting a suspected violation of law, Executive may disclose the
Company Group’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive
(1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order.
2.6 Competitive Activity.
(a) During
the period commencing on the date hereof and ending on the date that is twenty-four (24) months from the date Executive is no longer employed
by or providing services to the Company Group (the “Restricted Period”), Executive will not, within any geographic
region over which Executive had supervisory responsibility, in the twelve (12) months preceding Executive’s separation from the
Company Group (the “Restricted Territory”): (i) provide to any person or entity engaged in the Business (each a “Competitive
Business”) the same or similar services that Executive provided to the Company Group in the course of his or her employment;
(ii) provide to any Competitive Business any services that require or inevitably will require disclosure of the Company Group’s
trade secrets or other Confidential Information; or (iii) loan money or otherwise provide financial assistance to any person or entity
engaged in the Business; provide, however, that nothing in this Agreement prohibits Executive from owning an interest in a mutual fund
which has invested an entity engaged in the Business or otherwise owning less than two percent (2%) of a publicly traded company engaged
in the same, so long as such investment is a passive investment and Executive is not directly or indirectly involved in the management
or operation of such company .
(b) Following
expiration of the twenty-four (24) month period in Section 2.6(a) of this Agreement, Executive shall continue to be obligated under
Section 2.5 of this Agreement not to use or to disclose Confidential Information so long as it shall remain proprietary or protectable
as confidential or trade secret information.
(c) Following
termination of Executive’s employment with the Company for any reason, Executive agrees to advise the Company of his new employer,
work location and job responsibilities within ten (10) days after accepting new employment if such new employment commences within twenty-four
(24) months following the termination of the Executive’s employment with the Company. Executive further agrees to keep the Company
so advised of any change in his employment for twenty-four (24) months following the termination of his employment with the Company.
(d) Executive
understands that the intention of Sections 2.5 and 2.6 of this Agreement is not to prevent the Executive from earning a
livelihood and Executive agrees nothing in this Agreement would prevent Executive from earning a livelihood utilizing his general professional
or technical skills in any business which is not directly or indirectly in competition with the Company Group.
(e) Executive
agrees that during Executive’s employment with the Company and for a period of twenty-four (24) consecutive months after the termination
of Executive’s employment, whether Executive’s termination of employment or service was voluntary or involuntary, the Executive
will not, other than on behalf of the Company, directly or indirectly: (i) sell, attempt to sell, or assist in selling any Competitive
Products or Services to any Customer or Prospective Customer of the Company Group; (ii) provide any Competitive Products or Services to
any Customer or Prospective Customer; (iii) have contact with, solicit, or direct or assist in the contact or solicitation of any Customers
for the purpose of selling or providing any Competitive Products or Services; or (iv) induce or attempt to induce any of the Company Group’s
Customers, vendors, suppliers, or other business relations to cease doing business with the Company Group, in whole or in part.
(f) Executive
agrees that during Executive’s employment with the Company and for a period of twenty four (24) consecutive months after the termination
of Executive’s employment, whether Executive’s termination of employment or service was voluntary or involuntary, the Executive
will not, directly or indirectly, (i) solicit or induce or attempt to solicit or induce any Restricted Employee to leave employment with
the Company Group or cease performing services for the benefit of the Company Group or (ii) hire any Restricted Employee to provide services
to anyone other than the Company Group.
(g) In addition
to any other remedies available to Company, including but not limited to injunctive relief as specified in Section 3.12 below,
Executive’s material breach of Section 2.6 of this Agreement shall relieve the Company of its obligations (if any) to pay
any further Severance Amounts or Pro Rata Bonus under this Agreement.
2.7 Ideas, Inventions and Discoveries.
(a) Executive
shall promptly disclose to the Company any ideas, inventions or discoveries, whether or not patentable, which Executive may conceive or
make (alone or with others) during the Employment Period, whether or not during working hours, and which, directly or indirectly (i) relate
to matters within the scope of Executive’s duties or field of responsibility during Executive’s employment with the Company;
or (ii) are based on Executive’s knowledge of the actual or anticipated business or interest of the Company Group; or (iii) are
aided by the use of time, materials, facilities or information of the Company Group.
(b) Executive
hereby assigns to the Company or its designee, without further compensation, all of the right, title and interest in all such ideas, inventions
or discoveries in all countries of the world except for patents currently held by Executive developed outside of employment with the Company.
(c) Without
further compensation but at the Company’s expense, Executive shall give all testimony and execute all patent applications, rights
of priority, assignments and other documents and in general do all lawful things requested of Executive by the Company to enable the Company
to obtain, maintain and enforce protection of such ideas, inventions and discoveries for and in the name of the Company or its designee,
as the case may be, in all countries of the world. However, should Executive render any of the services in this Section 2.7(c)
during a two (2) year period following termination of Executive’s employment, Executive shall be compensated at a rate per hour
equal to the Base Salary Executive received from the Company at the time of termination and shall be reimbursed for reasonable out-of-pocket
expenses incurred in rendering the services.
ARTICLE III
MISCELLANEOUS
3.1 Executive’s
Representations. Executive hereby represents and warrants to theC ompany that (i) Executive’s execution, delivery and
performance of this Agreement do not and shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which he is bound, and (ii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that he fully understands the terms and conditions contained
herein.
3.2 Survival. Sections 2.5, 2.6 and 2.7 and Sections 3.3 through 3.14 shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.
3.3 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the recipient. Such notices, demands and other communications will be sent to the address indicated below:
| To the Company: |
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c/o Acuren Corporation
14434 Medical Complex Drive
Suite 100, Tomball, TX 77377
Attention: General Counsel
Fiona.sutherland@acuren.com |
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Copy (which will not constitute notice) to: |
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Greenberg Traurig, P.A.
401 East Las Olas Boulevard Suite 2000
Fort Lauderdale, FL 33301
Attention: Brian Gavsie and Flora Perez
Facsimile: (954) 765-1477
Email: brian.gavsie@gtlaw.com and perezf@gtlaw.com |
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Talman B. Pizzey |
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At the address on file with the Company, |
or such other address or to the attention
of such other Person as the recipient party shall have specified by prior written notice to the sending party.
3.4 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, (a) the parties agree that such provision(s) will be enforced to the maximum extent permissible under the applicable law and a court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable, and enforceable, and (b) any invalidity, illegality or unenforceability of a particular provision will not affect any other provision of this Agreement.
3.5 Successors and Assigns. Except as otherwise provided herein, all covenants and agreements contained in this Agreement shall bind and inure to the benefit of and be enforceable by the Company, and their respective successors and assigns. This Agreement is personal to Executive and except as otherwise specifically provided herein, this Agreement, including the obligations and benefits hereunder, may not be assigned to any party by Executive. This Agreement shall also be enforceable by the Executive against any of the Company’s successors or assigns.
3.6 Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
3.7 Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
3.8 Waiver. Neither any course of dealing nor any failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of such right, power or privilege or of any other right, power or privilege or of the same right, power or privilege in any other instance. All waivers by either party hereto must be contained in a written instrument signed by the party to be charged therewith, and, in the case of the Company, by its duly authorized officer.
3.9 Entire Agreement. This instrument constitutes the entire agreement of the parties in this matter and shall supersede any other agreement between the parties, oral or written, concerning the same subject matter including, but not limited to, any prior employment and severance agreements.
3.10 Amendment. This Agreement may be amended only by a writing which makes express reference to this Agreement as the subject of such amendment and which is signed by Executive and by a duly authorized officer of the Company.
3.11 Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the domestic law of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
3.12 Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including reasonable attorneys’ fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement, including, without limitation, Sections 2.5, 2.6 and 2.7 hereof, and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or deposit) for specific performance and/or other injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.
3.13 Exit Interview. To ensure a clear understanding of this Agreement, Executive agrees, at the time of termination of Executive’s employment, to engage in an exit interview with the Company at a time and place designated by the Company and at the Company’s expense. Executive understands and agrees that during said exit interview, Executive may be required to confirm that he will comply with his on-going obligations under this Agreement. The Company may elect, at its option, to conduct the exit interview by telephone.
3.14 Future Employment. Executive shall disclose the existence of this Agreement to any new employer or potential new employer which offers products or services that compete with the Company’s Business if such new employment commences within [twelve (12)] months following Executive’s termination of employment with the Company. Executive consents to the Company informing any subsequent employer of Executive, or any entity which the Company in good faith believes is, or is likely to be, considering employing Executive, of the existence and terms of this Agreement if such subsequent employment commences (or is expected to commence) within [twelve (12)] months following the Executive’s termination of employment with the Company.
3.15 Effectiveness of Agreement. This Agreement has been executed and delivered on the date set forth on the signature page below and shall automatically become effective on the Effective Date.
3.16 Section 409A. To the extent that any payments pursuant to this Agreement are subject to Section 409A, it is intended that this Agreement shall be administered in a manner that will comply with or meet an exception from Section 409A and this Agreement shall be interpreted in accordance with such intent. Any reimbursements by the Company to the Executive of any eligible expenses under this Agreement that are not excludable from the Executive’s income for Federal income tax purposes (the “Taxable Reimbursements”) shall be made by no later than the last day of the taxable year of the Executive following the year in which the expense was incurred. The amount of any Taxable Reimbursements and the value of any in-kind benefits to be provided to the Executive, during any taxable year of the Executive shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Executive. The right to Taxable Reimbursement, or in- kind benefits, shall not be subject to liquidation or exchange for another benefit.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed
this Employment Agreement as of the date set forth above and it shall be automatically effective as of the Effective Date.
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ACUREN CORPORATION |
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By: |
/s/ Robert A. E. Franklin |
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Name: |
Robert A. E. Franklin |
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Title: |
Co-Chairman of the Board of Directors |
[Signature Page to Employment Agreement]
IN WITNESS WHEREOF, the parties hereto have executed
this Employment Agreement as of the date set forth above and it shall be automatically effective as of the Effective Date.
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EXECUTIVE |
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By: |
/s/ Talman B. Pizzey |
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Name: |
Talman B. Pizzey |
[Signature Page to Employment Agreement]
EXHIBIT A
FORM OF RELEASE
GENERAL RELEASE OF CLAIMS
1. (“Executive”),
for himself and his family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange
for the consideration received pursuant to Section 2.4 (other than earned and accrued obligations) of the Employment Agreement to which
this release is attached as Exhibit A (the “Employment Agreement”), does hereby release and forever discharge Acuren
Corporation (the “Company”), its subsidiaries (including, without limitation, Rockwood Service Corporation), affiliated
companies, successors and assigns, and its current or former directors, officers, employees, shareholders or agents in such capacities
(collectively with the Company, the “Released Parties”) from any and all actions, causes of action, suits, controversies,
claims and demands whatsoever, for or by reason of any matter, cause or thing whatsoever, whether known or unknown including, but not
limited to, all claims under any applicable laws arising under or in connection with Executive’s employment or termination thereof,
whether for tort, breach of express or implied employment contract, wrongful discharge, intentional infliction of emotional distress,
or defamation or injuries incurred on the job or incurred as a result of loss of employment. Executive acknowledges that the Company encouraged
him to consult with an attorney of his choosing, and through this General Release of Claims encourages him to consult with his attorney
with respect to possible claims under the Age Discrimination in Employment Act (“ADEA”) and that he understands that
the ADEA is a Federal statute that, among other things, prohibits discrimination on the basis of age in employment and employee benefits
and benefit plans. Without limiting the generality of the release provided above, Executive expressly waives any and all claims under
ADEA that he may have as of the date hereof. Executive further understands that by signing this General Release of Claims he is in fact
waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this paragraph 1 that
may have existed on or prior to the date hereof. Notwithstanding anything in this paragraph 1 to the contrary, this General Release of
Claims shall not apply to (i) any rights to receive any payments or benefits pursuant to Section 2.3(c) and/or 2.4 of the Employment Agreement,
(ii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iii)
any indemnification rights Executive may have as a former officer or director of the Company or its subsidiaries or affiliated companies,
(iv) any claims for benefits under any directors’ and officers’ liability policy maintained by the Company or its subsidiaries
or affiliated companies in accordance with the terms of such policy, and (v) any rights as a holder of equity securities of the Company.
2. Executive
represents that he has not filed against the Released Parties any complaints, charges, or lawsuits arising out of his employment, or any
other matter arising on or prior to the date of this General Release of Claims, and covenants and agrees that he will never individually
or with any person file, or commence the filing of, any charges, lawsuits, complaints or proceedings with any governmental agency, or
against the Released Parties with respect to any of the matters released by Executive pursuant to paragraph 1 hereof (a “Proceeding”);
provided, however, Executive shall not have relinquished his right to commence a Proceeding to challenge whether Executive knowingly and
voluntarily waived his rights under ADEA.
3. Executive
hereby acknowledges that the Company has informed him that he has up to twenty-one (21) days to sign this General Release of Claims and
he may knowingly and voluntarily waive that twenty-one (21) day period by signing this General Release of Claims earlier. Executive also
understands that he shall have seven (7) days following the date on which he signs this General Release of Claims within which to revoke
it by providing a written notice of his revocation to the Company.
4. Executive
acknowledges that this General Release of Claims will be governed by and construed and enforced in accordance with the· internal
laws of the State of Delaware applicable to contracts made and to be performed entirely within such State.
5. Executive
acknowledges that he has read this General Release of Claims, that he has been advised that he should consult with an attorney before
he executes this general release of claims, and that he understands all of its terms and executes it voluntarily and with full knowledge
of its significance and the consequences thereof.
6. This
General Release of Claims shall take effect on the eighth day following Executive’s execution of this General Release of Claims
unless Executive’s written revocation is delivered to the Company within seven (7) days after such execution.
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TALMAN B. PIZZEY |
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18
Exhibit 10.12
July 16, 2020
Dear Michael Grigsby,
Congratulations -on behalf of Acuren, I am delighted to offer you a
position as CFO for Acuren working grom our Webster, TX Office with an expected start date of August 17, 2020. You will report to Talman
Pizzey, President and CEO.
Compensation
| ● | Annual base salary: $375,000 paid bi-weekly (every other week). |
| ● | Annual cash bonus: Target 75% annual bonus based on company performance and
meeting personal objectives. Your 2020 bonus will be prorated based on your start date. Given the COVID impact on our business most bonus
eligible employees would not earn, by formula, a bonus in 2020. To provide incentive we are implementing an H2 (second half) incentive
with adjusted targets - you would be part of this program with potential to earn a prorated bonus for 2020. For 2020 we will guarantee
$100,000 as a minimum cash bonus. |
| ● | Long term incentive plan: Stock option program as described in program documents
and summarized in the attached value chart. |
| ○ | 20,289 Tranche A options (time-based vesting, 20% per year) plus |
| ○ | 10,144 Tranche B options (vest at 2x multiple of investment returned to equity holders) plus |
| ○ | 5,940 Tranche C options (vest at 2.5x multiple of investment returned to equity holders). |
| ○ | The stock value at the time of purchase (December 2019) was $100 per share. |
| ● | Your compensation will be reviewed once per year; increases will be at the
discretion of Acuren. |
Benefits
After your first 90 days of employment, you will be eligible to participate
in the Company's comprehensive benefits program (Attachment A), which includes health, dental, vision, short-term and long-term disability
and life insurance. The Company agrees to pay / reimburse you for your Cobra cost during this 90-day waiting period. After completing
one month of employment, you will be eligible to participate in the Company's 401 (k) program.
Vacation
You will be eligible to receive four (4) weeks of paid vacation / PTO.
Performance Review
The Company will review your performance on at least an annual basis.
Confidentiality, Non-Solicitation
and/or Non-Competition Agreement
All employees in positions such as yours must execute Confidentiality,
Non-Solicitation and/or Non-Competition Agreement. If you signed a similar agreement with another employer, you must identify that
agreement in the space provided below and provide a copy if you have it.
Other
| ● | Your position is an “exempt” position for federal and state wage-hour
laws, which means that you will not be eligible for overtime pay. |
| ● | Your employment with the Company will be “at will,” which means
that either you or the Company may terminate your employment at any time. This offer letter will not create a contract of employment for
a definite term or otherwise limit the circumstances under which your employment may be terminated. |
Conditional Offer
This offer is subject to the following conditions:
| ● | Passing a drug and alcohol test. |
| ● | Returning an executed I-9 form and any other similar forms as required by
law and/or Company policy. |
| ● | Returning executed signature pages for the accompanying Code of Conduct and
Confidentiality, Solicitation and/or Non-Competition Agreement. |
| ● | Returning a copy of this letter signed by you no later than the below deadline. |
Deadline for Accepting Offer
We very much hope that you will accept this offer by signing in the
space provided below and returning a signed copy of this letter to me (in person or by email or fax) by Friday July 17, 2020. This offer
will automatically expire and be rescinded if you do not you return this letter by that date or obtain an extension of time from me.
On behalf of the Acuren and myself, we look forward to having you join
our organization. This position will provide you with the kind of rewarding opportunities, challenges and career growth you seek. If you
have any questions, please feel free to contact me.
Sincerely,
| /s/ Talman Pizzey |
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| Talman Pizzey |
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| President, Acuren |
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Acceptance of Offer
I hereby accept the terms of employment set forth above.
| /s/ Michael Grigsby |
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Date: 07/16/2020 |
Exhibit 10.13
February 10, 2023
Ms. Rindi St. John
[____]
Dear Rindi,
Congratulations! On behalf of Acuren, I am delighted to
offer you the position of Chief Human Resources Officer (CHRO). This job is a hybrid work position. You can work primarily from home,
with occasional travel to our Webster, Texas officer or other Acuren work sites. You will report to Talman Pizzey, CEO, with an expected
start date of February 27, 2023.
Compensation
| o | Annual base salary: $250,000 paid bi-weekly (every other week). |
| o | Potential 40% annual incentive based on company performance and meeting personal objectives. Your 2023
incentive will be prorated based on your start date. |
| o | Stock option program as described in program documents and summarized in the attached value chart – 8557 Tranche A options (time-based
vesting at 20% per year) plus 4630 Tranche B options (vest at 2x multiple of initial investment returned to equity holders). The stock
value at the time of purchase will be determined in the coming weeks based on the 2022-year end valuation. |
| o | Your compensation will be reviewed annually; increases will be at the discretion of Acuren Inspection, Inc. |
Benefits
Effective upon completion of thirty (30) days of employment,
you will be eligible to participate in the Company’s comprehensive benefits program, which includes health, dental, vision, short-term
and long-term disability, and life insurance. You will also be eligible for the Benicomp Executive Reimbursement Account (more information
will be provided by the Benefits Team).
After completing one month of employment, you will be
eligible to participate in the Company’s Retirement Savings Plan 401(k) program.
Vacation
You will be eligible to receive four (4) weeks of paid
vacation / PTO.
Performance Review
The Company will review your performance on at least an annual
basis.
Confidentiality, Non-Solicitation and/or Non-Competition
Agreement
Executive level positions require a Non-Solicitation and/or
Non-Competition Agreement. If you signed a similar agreement with another employer, you must identify that agreement in the space provided
below and provide a copy if you have it.
Other
| o | Your position is an “exempt” position for federal and state wage-hour laws, which means that
you will not be eligible for overtime pay. |
| o | Your employment with the Company will be “at will,” which means that either you or the Company
may terminate your employment at any time. This offer letter will not create a contract of employment for a definite term or otherwise
limit the circumstances under which your employment may be terminated. |
Conditional Offer
This offer is subject to the following conditions:
| o | Passing a drug and alcohol test. |
| o | Returning an executed I-9 form and any other similar forms as required by law and/or Company policy. |
| o | Returning executed signature pages for the accompanying Code of Conduct and Confidentiality, Solicitation
and/or Non-Competition Agreement. |
| o | Returning a copy of this letter signed by you no later than the below deadline. |
Deadline for Accepting Offer
We very much hope that you will accept this offer by signing
in the space provided below and returning a signed copy of this letter to me (in person or by email) by February 15, 2023. This offer
will automatically expire and be rescinded if you do not you return this letter to me by that date or obtain an extension of time from
me.
On behalf of Acuren and myself, we look forward to having
you join our organization. This position will provide you with the kind of rewarding opportunities, challenges and career growth you seek.
If you have any questions, please feel free to contact me.
Sincerely,
| /s/ Talman Pizzey |
|
| Talman Pizzey |
|
| President, Acuren |
|
Acceptance of Offer
I hereby accept the terms of employment set forth above.
| /s/ Lourinda St. John |
|
Date: 02/14/2023 |
Exhibit 16.1
November 4, 2024
U.S. Securities and Exchange Commission
Office of the Chief Accountant
100 F Street, NE
Washington, DC 20549
Re: Acuren Corporation
File No. 333-XXXXX
Dear Sir or Madam:
We have read the “Change in the Company’s Certifying Accountant”
section of Form S-4 of Acuren Corporation, and agree with the statements concerning our Firm contained therein.
Very truly yours,
GRANT THORNTON UK LLP
Exhibit 21.1
Subsidiaries of Acuren Corporation
| Subsidiary |
|
Jurisdiction |
| AAL Delaware Holdco, Inc. |
|
Delaware |
| ASP Acuren Holdings, Inc. |
|
Delaware |
| ASP Acuren Intermediate Holdings, Inc. |
|
Delaware |
| Rockwood Service Corporation |
|
Delaware |
| TEI Analytical Servics, Inc. |
|
Delaware |
| GBOG Holding Corporation |
|
Delaware |
| Echo NDE USA, Inc. |
|
Delaware |
| ADV Integrity, Inc. |
|
Texas |
| Acuren Inspection, Inc. |
|
Delaware |
| Acuren Wind US Inc. |
|
Delaware |
| Acuren USA, Inc. |
|
Delaware |
| Rockwood Canada Holdings Ltd. |
|
Nova Scotia |
| Rockwood Canada Inc. |
|
Alberta |
| Acuren Inc. |
|
New Brunswick |
| Rockwood Canada Shared Services Inc. |
|
Alberta |
| Century Inspection, Inc. |
|
Delaware |
| HT Engineering Inc. |
|
Michigan |
| Versa Integrity Group, Inc. |
|
Delaware |
| BakosNDT Ltd. |
|
Alberta |
| Echo NDE Inc. |
|
Alberta |
| Nextgen Task Inspection Inc. |
|
Alberta |
| Triquest Nondestructive Testing Corp. |
|
Alberta |
| 2471981 Alberta Ltd. |
|
Alberta |
| Acuren Group Inc. |
|
Alberta |
| Acuren Industrial Holdings Inc. |
|
Alberta |
| Applied Inspection Ltd. |
|
United Kingdom |
| Cambridge Materials Testing Ltd. |
|
Ontario |
| Acuren Wind Canada Inc. |
|
Quebec |
| Eclipse Scientific Products Inc. |
|
Ontario |
| Tacten Industrial Inc. |
|
Nova Scotia |
Exhibit 23.1
Consent of Independent Accounting Firm
We have issued our report dated November 4, 2024, with respect to the financial statements of Acuren Corporation (formerly Admiral Acquisition Limited) contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts”.
/s/ Grant Thornton UK LLP
London, England
November 4, 2024
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of Acuren Corporation of our report
dated August 12, 2024, except for the effects of the revision and the change in the manner in which the Company accounts for certain
costs discussed in Note 1 to the consolidated financial statements, as to which the date is November 4, 2024, relating to the
financial statements of ASP Acuren Holdings, Inc., which appears in this Registration Statement. We also consent to the reference to
us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
November 4, 2024
Exhibit
107
Calculation
of Filing Fee Tables
Form
S-4
(Form Type)
Acuren
Corporation
(Exact Name of Registrant as Specified in its Charter)
Table
1: Newly Registered and Carry Forward Securities
| | |
Security
Type | |
Security Class Title | |
Fee
Calculation
Or Carry
Forward Rule | |
Amount
Registered(1)(2) | | |
Proposed
Maximum
Offering
Price Per
Unit | | |
Maximum
Aggregate
Offering Price | | |
Fee
Rate | | |
Amount
of
Registration
Fee | |
| | |
Newly
Registered Securities | |
| Fees to be Paid | |
Equity | |
Common Stock,
par value $0.0001 per share | |
457(f)(2) | |
| 131,686,215 | (3) | |
| $10.249 | (4) | |
$ | 1,349,652,017.54 | | |
$ | 0.00015310 | | |
$ | 206,631.72 | |
| Fees to
be Paid | |
Equity | |
Warrants to purchase Common
Stock | |
457(f)(1) | |
| 18,246,876 | | |
| — | (5) | |
| — | (5) | |
| — | (5) | |
| — | (5) |
| Fees to
be Paid | |
Equity | |
Common Stock underlying Warrants | |
457(g),(i) | |
| 4,566,219 | | |
$ | 11.58 | (6) | |
$ | 52,876,816.02 | | |
$ | 0.00015310 | | |
$ | 8,095.44 | |
| Fees to
be Paid | |
Equity | |
Series A Preferred Stock | |
457
(i) | |
| 1,000,000 | | |
| — | (5) | |
| — | (5) | |
| — | (5) | |
| — | (5) |
| Carry
Forward Securities |
| Carry
Forward Securities | |
— | |
— | |
— | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Total
Offering Amounts | |
| | | |
| | | |
| | | |
$ | 214,727.16 | |
| Total
Fees Previously Paid | |
| | | |
| | | |
| | | |
| — | |
| Total
Fee Offsets | |
| | | |
| | | |
| | | |
| — | |
| Net
Fee Due | |
| | | |
| | | |
| | | |
$ | 214,727.16 | |
| (1) | Shortly
after the effectiveness of this registration statement, Acuren Corporation (formerly known
as Admiral Acquisition Limited) (the “Registrant”) intends to effect a discontinuance
under Section 184 of the BVI Business Companies Act, 2004 (as amended) and a domestication
under Section 388 of the General Corporation Law of the State of Delaware, pursuant to which
the Registrant’s jurisdiction of incorporation will be changed from the British Virgin
Islands to the State of Delaware, United States of America. All securities being registered
will be issued by the Registrant after such domestication, as the continuing entity following
the domestication. |
| (2) | Pursuant
to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”),
this registration statement also covers an indeterminate number of additional shares of Common
Stock which may be offered and issued by reason of any stock dividend, stock split, recapitalization
or other similar transaction. |
| (3) | The
shares to be registered include (1) up to 128,976,215 shares of common stock issuable upon
the domestication in exchange for the Registrant’s outstanding ordinary shares, (2)
1,000,000 shares of common stock issuable upon conversion of the Registrant’s outstanding
Series A Preferred Stock subsequent to the domestication, and (3) 1,710,000 shares of common
stock issuable upon exercise or settlement of the Registrant’s options and restricted
stock units subsequent to the domestication. |
| (4) | Pursuant
to Rule 457(f)(2) under the Securities Act and solely for the purpose of calculating the
registration fee, the proposed maximum aggregate offering price per share is based on the
aggregate book value of the securities of the Registrant as of June 30, 2024 ($564,722,000)
and the shares outstanding and reserved for issuance as of June 30, 2024 (55,100,000). |
| (5) | Pursuant
to Rule 457(g), Rule 457(i) and the response to Question 240.06 of the Securities Act Rules
Compliance and Disclosure Interpretations, no separate registration fee is required for the
warrants and Series A Preferred Stock. The registration fee with respect to the warrants
and Series A Preferred Stock has been allocated to the underlying shares of common stock
issuable upon exercise of such warrants and conversion of such Series A Preferred Stock and
the registration fee for such shares of common stock is calculated in footnote (4) and (6). |
| (6) | Estimated
solely for the purpose of calculating the registration fee in accordance with Rule 457(g)
and 457(i) of the Securities Act and represents the sum of (i) the average ($0.08) of the
high ($0.08) and low ($0.08) prices of the warrants on the London Stock Exchange (“LSE”)
on July 30, 2024, which is the date such warrants were
suspended from trading on the LSE and (ii) the exercise price of $11.50 per ordinary
share issuable upon exercise of such warrant. |