UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2023
Atlas Energy Solutions Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-41640 |
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88-0523830 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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5918 W. Courtyard Drive, Suite 500
Austin, Texas |
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78730 |
(Address of principal executive office) |
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(Zip Code) |
Registrants telephone number, including area code: (512)
220-1200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
☒ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
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Title of each class |
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Trading
Symbol(s) |
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Name of each exchange
on which registered |
Class A Common Stock, par value $0.01 per share |
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AESI |
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NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item 1.01. |
Entry Into a Material Definitive Agreement. |
Reorganization Transaction
On July 31, 2023,
Atlas Energy Solutions Inc. (the Company or Atlas), entered into a Master Reorganization Agreement (the MRA) to reorganize under a new public holding company (the
Reorganization). The Reorganization will allow the Company, among other things, to eliminate its Up-C structure and to transition to a single class of common stock held by all
stockholders, as opposed to the two classes of common stock of the Company that are currently authorized, issued and outstanding: the Class A Common Stock, par value $0.01 per share (such shares, the Existing Class A
Shares), and the Class B Common Stock, par value $0.01 per share (such shares, the Existing Class B Shares and, together with the Existing Class A Shares, the Existing Common
Stock).
On July 31, 2023, an independent, special committee composed of members of the Companys board of directors (the
Board) approved the MRA and the Reorganization, including the Mergers (as defined below), on behalf of the Board.
The parties to the
MRA are: the Company; Atlas Sand Operating, LLC, a Delaware limited liability company and a direct, majority owned subsidiary of the Company (Opco); New Atlas HoldCo Inc., a Delaware corporation and a direct, wholly owned
subsidiary of the Company (New Atlas); AESI Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of New Atlas (PubCo Merger Sub); Atlas Operating Merger Sub, LLC, a Delaware limited
liability company and a direct, wholly owned subsidiary of New Atlas (Opco Merger Sub); and Atlas Sand Holdings, LLC, a Delaware limited liability company (Holdings). Holdings currently holds all of the Existing
Class B Shares and all of the issued and outstanding membership interests in Opco, designated as Common Units (the Opco Units), not held by the Company. As used in this Current Report on Form 8-K, the term Downstairs Holder(s) refers to Holdings or, in the event that any of the Existing Class B Shares and corresponding Opco Units currently held by Holdings are distributed or
otherwise transferred prior to the consummation of the Reorganization, the holders of such securities following such distribution or transfer.
Pursuant
to the MRA, (a) PubCo Merger Sub will be merged with and into the Company (the PubCo Merger), as a result of which (i) each of the Existing Class A Shares then issued and outstanding will be exchanged for one share of
common stock of New Atlas, par value $0.01 per share (the New Atlas Common Stock), (ii) all of the Existing Class B Shares then issued and outstanding will be surrendered by the Downstairs Holder(s) and cancelled for no
consideration and (iii) the Company will survive the PubCo Merger (in such capacity, the Surviving Corporation) as a direct, wholly owned subsidiary of New Atlas; and (b) Opco Merger Sub will be merged with and into Opco
(the Opco Merger and, together with the PubCo Merger, the Mergers), as a result of which (i) each of the Opco Units then issued, outstanding and held by the Downstairs Holder(s) will be exchanged for one
share of New Atlas Common Stock and (ii) Opco will become a wholly owned subsidiary (partially direct and partially indirect through the Surviving Corporation (i.e. the Company)) of New Atlas.
In connection with the Reorganization:
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each of the Existing Class A Shares issued and outstanding immediately prior to the effective time of the
Mergers (the Effective Time) will be exchanged for one share of New Atlas Common Stock and the holders of Existing Class A Shares at such time will become stockholders of New Atlas; |
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all of the Existing Class B Shares issued and outstanding immediately prior to the Effective Time will be
surrendered by the Downstairs Holder(s) and cancelled for no consideration; |
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each Opco Unit issued and outstanding immediately prior to the Effective Time and held by the Downstairs
Holder(s) will be exchanged for one share of New Atlas Common Stock, and the Downstairs Holder(s) will become stockholders of New Atlas; |
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the Company will continue to hold all of the issued and outstanding Opco Units it held as of immediately prior to
the Effective Time, such Opco Units will otherwise be unaffected by the Reorganization (including the Opco Merger), and such Opco Units, together with the Opco Units received by New Atlas in connection with the Opco Merger, will constitute all of
the Opco Units issued and outstanding immediately following the Effective Time; |
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the Company will become a direct, wholly-owned subsidiary of New Atlas, each share of Existing Class A
Shares then held by New Atlas will be recapitalized into a single share, and New Atlas and the Company will collectively own 100% of the Opco Units; |
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at the Effective Time, New Atlas will assume (a) the Companys existing equity incentive plan (the
LTIP), (b) all awards of restricted stock units and performance share units, in each case, whether vested or unvested, that are then outstanding under the LTIP, (c) the grant notices and agreements evidencing such awards, and
(d) the then remaining unallocated share reserve issuable under the LTIP; and the terms and conditions that are in effect immediately prior to the Reorganization under each outstanding award assumed by New Atlas will continue in full force and
effect after the Reorganization, with certain exceptions to reflect the completion of the Reorganization, such as each award being denominated with reference to shares of New Atlas Common Stock instead of Existing Class A Shares and the
performance share unit awards being in reference to performance of New Atlas instead of performance of the Company (with respect to the portion of the applicable performance period following the Reorganization); |
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at the Effective Time, that certain Registration Rights Agreement, dated March 8, 2023, by and among the
Company and the other parties thereto (the Existing Registration Rights Agreement), and that certain Stockholders Agreement, dated March 8, 2023, by and among the Company and the other parties thereto (the
Existing Stockholders Agreement), are expected to be amended and restated in order to, among other things, provide for the assumption of the Companys obligations thereunder by New Atlas; the amended and restated
registration rights agreement and the amended and restated stockholders agreement will each be substantially similar to the Existing Registration Rights Agreement and Existing Stockholders Agreement, respectively, but will contain
certain administrative and clarifying changes to reflect the transition from a dual class to a single class of common stock; |
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as of the Effective Time, (a) New Atlas will assume the Companys existing management change in control
severance plan (and each participation agreement thereunder, if any, that is then outstanding) and (b) the terms and conditions of director compensation applicable to members of the Board (and any committees thereof) will be applied instead to
members of the board of directors of New Atlas (and any committees thereof) (and any portion of such compensation to be granted in the form of equity-based awards will be granted in awards denominated with reference to shares of New Atlas Common
Stock instead of Existing Class A Shares); |
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the Companys current directors and executive officers will hold the same positions with New Atlas after the
Reorganization; and |
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New Atlas will apply to have the shares of New Atlas Common Stock listed on the New York Stock Exchange under the
ticker symbol AESI which is the Companys current trading symbol. |
After completion of the Reorganization, New Atlas
will replace the Company as the publicly held entity and, through its subsidiaries, will conduct all of the operations currently conducted by the Company, and the Company will remain the managing member of Opco.
The PubCo Merger is intended to be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the Code), and the Mergers are intended to be treated as integrated transactions constituting related transfers governed by Section 351(a) of the Code.
The consummation of the Reorganization, including the Mergers, is subject to the satisfaction or waiver of certain specified conditions in the MRA, including,
among other things, (i) the receipt of approval of the Reorganization by the holders of a majority of the voting power of the outstanding shares of Existing Common Stock entitled to vote thereon, (ii) the registration statement on Form S-4 filed by New Atlas in connection with the Mergers (the Reorganization Registration Statement) having been declared effective by the U.S. Securities and Exchange Commission (the
SEC) under the Securities Act of 1933, as amended (the Securities Act), (iii) the shares of New Atlas Common Stock issuable in connection with the Mergers having been approved for listing on the New
York Stock Exchange, and (iv) at least 20 calendar days having elapsed since the Company mailed the information statement of the Company and prospectus of New Atlas that are each included in
the Reorganization Registration Statement to the Companys stockholders.
The foregoing description of the MRA does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the MRA, a copy of which is filed as Exhibit 2.1 hereto.
2023 Term Loan Credit
Facility
On July 31, 2023, Atlas Sand Company, LLC, a Delaware limited liability company and wholly owned subsidiary of Opco (Atlas
LLC), entered into a credit agreement (the 2023 Term Loan Credit Agreement) with Stonebriar Commercial Finance LLC (Stonebriar), as administrative agent and initial lender, pursuant to which Stonebriar
extended Atlas LLC a term loan credit facility comprised of a $180.0 million single advance term loan that was made on July 31, 2023 (the Initial Term Loan) and commitments to provide up to $100.0 million of delayed
draw term loans (collectively, the 2023 Term Loan Credit Facility).
The Initial Term Loan is payable in eighty-four consecutive
monthly installments and a final payment of the remaining outstanding principal balance at maturity. The Initial Term Loan has a final maturity date of August 1, 2030 (the Maturity Date). The Initial Term Loan bears interest
at a rate equal to 9.50% per annum.
Each delayed draw term loan under the 2023 Term Loan Credit Facility (DDT Loans) will be payable
in equal monthly installments, with the monthly installments comprising 80% of the delayed draw term loan and a final payment of the remaining 20% of the outstanding principal balance due at maturity, unless earlier prepaid. The DDT Loans will bear
interest at a rate equal to the applicable Term SOFR Rate (as defined in the 2023 Term Loan Credit Agreement) plus 5.95% per annum. All monthly installments with respect to the Initial Term Loan and the DDT Loans payable on or prior to
January 1, 2025 will be interest only.
At any time prior to the Maturity Date, Atlas LLC may redeem loans outstanding under the 2023 Term Loan
Credit Facility, in whole or in part, at a price equal to 100% of the principal amount being prepaid (the Prepayment Amount) plus a prepayment fee. The prepayment fee is 8% of the Prepayment Amount for any prepayment that occurs
on or prior to December 31, 2024, four percent 4% of the Prepayment Amount for any prepayment that occurs after December 31, 2024 but on or prior to December 31, 2025, 3% of the Prepayment Amount for any prepayment that occurs after
December 31, 2025 but on or prior to December 31, 2026 and 2% of the Prepayment Amount for any prepayment that occurs thereafter. Upon the maturity of the 2023 Term Loan Credit Facility, the entire unpaid principal amount of the loans
outstanding thereunder, together with interest, fees and other amounts payable in connection with the facility, will be immediately due and payable without further notice or demand.
Dividends and distributions to equity holders are permitted to be made pursuant to certain limited exceptions and baskets described in the 2023 Term Loan
Credit Agreement and otherwise generally subject to certain restrictions set forth in the 2023 Term Loan Credit Agreement, including the requirements that (a) no Event of Default (as defined under the 2023 Term Loan Credit Agreement) has
occurred and is continuing and (b) Atlas LLC maintains at least $30.0 million of Liquidity (as defined under the 2023 Term Loan Credit Agreement) pro forma for the Restricted Payment (as defined under the 2023 Term Loan Credit Agreement).
The 2023 Term Loan Credit Facility includes certain non-financial covenants, including but not limited to
restrictions on incurring additional debt and certain distributions. The 2023 Term Loan Credit Facility is subject to a maximum 4.0 to 1.0 Leverage Ratio (as defined in the 2023 Term Loan Credit Agreement) financial covenant. Such financial covenant
is tested as of the last day of each fiscal quarter.
Proceeds from the 2023 Term Loan Credit Facility were used to repay outstanding indebtedness under
our previous 2021 Term Loan Credit Facility with Stonebriar, to repay obligations outstanding under certain equipment lease arrangements with Stonebriar and for general corporate purposes.
The 2023 Term Loan Credit Facility is unconditionally guaranteed, jointly and severally, by Atlas LLC and
its subsidiaries and secured by substantially all of the assets of Atlas LLC and its subsidiaries. The 2023 Term Loan Credit Facility is also unconditionally guaranteed on an unsecured basis by the Company.
The foregoing description of the 2023 Term Loan Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the 2023 Term Loan Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto.
Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant. |
The disclosures of the material terms and
conditions of the 2023 Term Loan Credit Agreement and the 2023 Term Loan Credit Facility contained in Item 1.01 above are hereby incorporated into this Item 2.03 by reference.
Item 7.01. |
Regulation FD Disclosure. |
On August 1, 2023, the Company posted an updated investor presentation on its website. The presentation, titled Investor Presentation August
2023, may be found at http://ir.atlas.energy in the Presentations section under the News & Events tab on the Companys Investor Relations webpage. A copy of the presentation is attached hereto as
Exhibit 99.1. Investors should note that the Company announces financial information in filings with the SEC, press releases and public conference calls as well as on its website. The Company may use the Investor Relations webpage and
other sections of its website to communicate with investors, and it is possible that the financial and other information posted there could be deemed to be material information.
The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being
furnished pursuant to General Instruction B.2 of Form 8-K and shall not be deemed to be filed for purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the
Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, except as shall be expressly set forth in such filing.
No Offer or Solicitation
This communication relates to
the Reorganization between the Company and New Atlas. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in
any jurisdiction, pursuant to the Reorganization or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Important Additional Information
In connection with the Reorganization, New Atlas will file with the SEC a registration statement on Form S-4,
which will include an information statement of Atlas and a prospectus of New Atlas. Atlas and New Atlas may also file other documents with the SEC regarding the Reorganization. After the registration statement has been declared effective by the SEC,
a definitive information statement/prospectus will be mailed to the shareholders of Atlas. This document is not a substitute for the registration statement and information statement/prospectus that will be filed with the SEC or any other documents
that Atlas or New Atlas may file with the SEC or send to shareholders of Atlas in connection with the Reorganization. INVESTORS AND SHAREHOLDERS OF ATLAS ARE URGED TO READ THE REGISTRATION STATEMENT AND INFORMATION STATEMENT/PROSPECTUS WHEN IT
BECOMES AVAILABLE AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
REORGANIZATION AND RELATED MATTERS.
Investors and shareholders will be able to obtain free copies of the registration statement and the
information statement/prospectus (when available) and all other documents filed or that will be filed with the SEC by Atlas or New Atlas, through the website maintained by the SEC at www.sec.gov.
Forward-Looking Statements
The information included
herein and in any oral statements made in connection herewith include forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements, other than
statements of present or historical fact included herein, regarding the proposed Reorganization between Atlas and New Atlas, the likelihood that the conditions to the consummation of the Reorganization will be satisfied on a timely basis or at all,
Atlass or New Atlass ability to consummate the Reorganization at any time or at all, the benefits of the Reorganization and our future financial performance following the Reorganization, as well as our strategy, future operations,
financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward looking statements. When used herein, including any oral statements made in connection herewith, the words
may, could, believe, anticipate, intend, estimate, expect, project and similar expressions and the negative of such words and similar expressions are
intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on managements current expectations and assumptions about future events and
are based on currently available information as to the outcome and timing of future events. Such statements may be influenced by factors that could cause actual outcomes and results to differ materially from those projected. Except as otherwise
required by applicable law, Atlas and New Atlas disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. Atlas and
New Atlas caution you that these forward-looking statements are subject to several risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Atlas and New Atlas. These risks include, but are not
limited to, Atlass and New Atlass ability to execute on their business objectives; the ongoing war in Ukraine; adverse developments affecting the financial services industry; our ability to complete growth projects, including the Dune
Express, on time and on budget; actions of OPEC+ to set and maintain oil production levels; the level of production of crude oil, natural gas and other hydrocarbons and the resultant market prices of crude oil; inflation; environmental risks;
operating risks; regulatory changes; lack of demand; market share growth; the uncertainty inherent in projecting future rates of reserves, production and cash flow; access to capital; the timing of development expenditures; the risk that the
expected benefits of the Reorganization may not be fully achieved in a timely manner, or at all; the risk that we will not be able to retain and hire key personnel; the risks associated with the timing of the closing of the Reorganization, including
the risk that the conditions to the Reorganization are not satisfied on a timely basis or at all or the failure of the Reorganization to close for any other reason or to close on the anticipated terms, including the anticipated tax treatment; the
risk that any regulatory approval, consent or authorization that may be required for the Reorganization is not obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the
Reorganization, the response of business partners to the announcement and pendency of the Reorganization; uncertainty as to the long-term value of the New Atlas Common Stock; and the diversion of management time to transaction-related matters.
Should one or more of the risks or uncertainties described herein and in any oral statements made in connection with the Reorganization occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from
those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact Atlass expectations and projections can be found in Atlass periodic filings with the SEC, including Atlass
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, any subsequent Current Reports on Form 8-K and Atlass final prospectus, dated
March 8, 2023, filed with the SEC pursuant to Rule 424(b) under the Securities Act on March 10, 2023 in connection with Atlass initial public offering. Atlass and New Atlass SEC filings are or will be available publicly
on the SECs website at www.sec.gov.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit No. |
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Description |
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2.1 |
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Master Reorganization Agreement, dated as of July 31, 2023 by and among Atlas Energy Solutions Inc., Atlas Sand Operating, LLC, New Atlas HoldCo Inc., AESI Merger Sub Inc., Atlas Operating Merger Sub, LLC and Atlas Sand
Holdings, LLC. |
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10.1# |
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Credit Agreement, dated as of July 31, 2023, by and between Atlas Sand Company, LLC, as borrower, and Stonebriar Commercial Finance LLC, as lender. |
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99.1 |
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Atlas Energy Solutions Inc. Investor Presentation August 2023. |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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Certain schedules, annexes or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be furnished supplementally to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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ATLAS ENERGY SOLUTIONS INC. |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
Date: August 1, 2023
Exhibit 2.1
MASTER REORGANIZATION AGREEMENT
by and among
Atlas Energy Solutions Inc.,
Atlas Sand Operating, LLC,
New Atlas HoldCo Inc.,
AESI Merger Sub Inc.,
Atlas Operating Merger Sub, LLC
and
Atlas Sand
Holdings, LLC
July 31, 2023
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS AND CONSTRUCTION |
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Section 1.1. |
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Definitions |
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Section 1.2. |
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Effective Time |
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Section 1.3. |
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Heading; References; Interpretation. |
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4 |
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ARTICLE II |
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RESTRUCTURING ACTIONS AND RELATED MATTERS |
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Section 2.1. |
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The PubCo Merger |
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Section 2.2. |
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The OpCo Merger |
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ARTICLE III |
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ACTIONS TO BE TAKEN IN CONNECTION WITH THE REORGANIZATION |
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Section 3.1. |
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Assumption of PubCo LTIP and Awards |
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Section 3.2. |
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Other Compensation Arrangements |
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Section 3.3. |
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Registration Statement; Information Statement/Prospectus |
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Section 3.4. |
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Section 16 Matters |
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Section 3.5. |
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NYSE Listing |
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Section 3.6. |
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Treatment of Certain Material Agreements. |
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ARTICLE IV |
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REPRESENTATIONS AND WARRANTIES |
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Section 4.1. |
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Organization |
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Section 4.2. |
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Authority; Enforceability |
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Section 4.3. |
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Consents and Approvals; No Violations |
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Section 4.4. |
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Ownership of Interests |
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Section 4.5. |
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Bankruptcy |
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Section 4.6. |
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Litigation |
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Section 4.7. |
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Independent Investigation |
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ARTICLE V |
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CONDITIONS TO CONSUMMATION OF THE REORGANIZATION |
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Section 5.1. |
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Conditions Precedent |
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ARTICLE VI |
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MISCELLANEOUS |
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Section 6.1. |
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Consents; Deemed Amendment to Agreements |
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Section 6.2. |
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Deed; Bill of Sale; Assignment |
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Section 6.3. |
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Tax Matters. |
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Section 6.4. |
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Further Assurances |
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Section 6.5. |
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Termination |
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Section 6.6. |
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Amendment |
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Section 6.7. |
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Notices |
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Section 6.8. |
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Successors and Assigns; No Third Party Rights |
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Section 6.9. |
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Severability |
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Section 6.10. |
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Waivers |
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Section 6.11. |
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Waiver of Appraisal Rights |
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Section 6.12. |
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Entire Agreement; Survival |
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Section 6.13. |
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Governing Law |
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Section 6.14. |
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Counterparts |
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Exhibits
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Exhibit A |
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Form of Certificate of Merger for PubCo Merger |
Exhibit B |
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Form of Second A&R Certificate of Incorporation of PubCo |
Exhibit C |
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Form of Second A&R Bylaws of PubCo |
Exhibit D |
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Form of A&R Certificate of Incorporation of New PubCo |
Exhibit E |
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Form of A&R Bylaws of New PubCo |
Exhibit F |
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Form of Certificate of Merger for OpCo Merger |
Exhibit G |
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Form of Second A&R LLC Agreement of OpCo |
ii
MASTER REORGANIZATION AGREEMENT
This Master Reorganization Agreement (this Agreement), dated effective as of July 31, 2023 (the Execution
Date), is entered into by and among Atlas Energy Solutions Inc., a Delaware corporation (PubCo), Atlas Sand Operating, LLC, a Delaware limited liability company (OpCo), New Atlas HoldCo Inc., a
Delaware corporation (New PubCo), AESI Merger Sub Inc., a Delaware corporation (Merger Sub Inc.), Atlas Operating Merger Sub, LLC, a Delaware limited liability company (Merger Sub LLC and,
together with Merger Sub Inc., the Merger Subs), and Atlas Sand Holdings, LLC, a Delaware limited liability company (Holdings). PubCo, OpCo, New PubCo, the Merger Subs and Holdings are each referred to herein
individually as a Party and collectively as the Parties.
RECITALS
WHEREAS, New PubCo and the Merger Subs are newly formed entities organized for the purposes of participating in the transactions
contemplated by this Agreement (collectively referred to herein as the Transactions or the Reorganization);
WHEREAS, as of the Execution Date, (a) PubCo holds all of the issued and outstanding shares of common stock of New PubCo, par
value $0.01 per share (the New PubCo Common Stock), (b) PubCo and Holdings collectively hold all of the issued and outstanding membership interests in OpCo designated as Common Units (the OpCo
Units), (c) Holdings holds all of the issued and outstanding shares of Class B common stock of PubCo, par value $0.01 per share (Existing Class B Shares), and (d) New PubCo holds (i) all
of the issued and outstanding shares of common stock of Merger Sub Inc., par value $0.01 per share (the Merger Sub Shares), and (ii) all of the issued and outstanding membership interests in Merger Sub LLC (the
Merger Sub Interests);
WHEREAS, the Board of Directors of PubCo (the PubCo Board) previously
established a Special Committee of independent and disinterested members of the PubCo Board (the Special Committee) to evaluate the Transactions, and the Special Committee previously approved of the Transactions and determined
that it is advisable and in the best interests of PubCo and the holders of the outstanding shares of Class A common stock of PubCo, par value $0.01 per share (Existing Class A Shares and, together with the
Existing Class B Shares, Existing PubCo Common Stock), not affiliated with PubCo or Holdings to consummate the Transactions in accordance with this Agreement in order to effect a reorganization by which, among other things:
(a) a new holding company would be created by merging Merger Sub Inc. with and into PubCo (the PubCo
Merger), as a result of which (i) each of the outstanding Existing Class A Shares would be exchanged for one share of New PubCo Common Stock, (ii) each of the outstanding Existing Class B Shares would be surrendered and
cancelled for no consideration and (iii) PubCo would survive the PubCo Merger (PubCo, in such capacity, at times referred to herein as the Surviving Corporation) as a direct, wholly owned subsidiary of New PubCo; and
(b) OpCo would become a wholly owned subsidiary of New PubCo (partially through New PubCos direct interest in
OpCo, and partially indirect through the Surviving Corporations direct interest in OpCo) by merging Merger Sub LLC with and into OpCo (the OpCo Merger and, together with the PubCo Merger, the Mergers), as
a result of which each of the OpCo Units held by Holdings would be exchanged for one share of New PubCo Common Stock;
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WHEREAS, for U.S. federal income tax purposes (and for purposes of any applicable
state or local income tax that follows U.S. federal income tax treatment), the Parties intend that (a) (i) PubCo Merger qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the Code), and (ii) the Mergers be treated as integrated transactions constituting related transfers governed by Section 351(a) of the Code (clauses (a)(i) and (a)(ii) together, the
Intended Tax Treatment) and (b) this Agreement constitute and be adopted as a plan of reorganization within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) with respect to the PubCo Merger;
WHEREAS, (a) the Boards of Directors of each
of PubCo, New PubCo and Merger Sub Inc. have approved this Agreement and the Reorganization, subject to the terms and conditions set forth in this Agreement and (b) PubCo, in its capacity as the managing member of OpCo, has approved this
Agreement and the Reorganization, and (c) New PubCo, in its capacity as the sole member of Merger Sub LLC, has approved this Agreement and the Reorganization; and
WHEREAS, the PubCo Board expects to receive approval of the Reorganization by written consent (the Stockholder Written
Consent) from PubCo stockholders sufficient for the Required Stockholder Vote (as defined herein) in lieu of a meeting pursuant to Section 228 of the Delaware General Corporation Law (the DGCL).
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1. Definitions. In addition to terms defined in the body of this
Agreement, the following capitalized terms have the following meanings:
ASMC means Atlas Sand
Management Company, LLC, a Texas limited liability company.
ASMC II means Atlas Sand Management Company
II, LLC, a Delaware limited liability company.
DLLCA means the Delaware Limited Liability Company Act.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Existing New PubCo Bylaws means those certain Bylaws of New PubCo, adopted June 28, 2023, as amended,
restated or otherwise modified prior to the Effective Time.
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Existing New PubCo Charter means that certain Certificate
of Incorporation of New PubCo, dated as of June 28, 2023, as amended, restated or otherwise modified prior to the Effective Time.
Existing OpCo LLC Agreement means that certain Amended and Restated Limited Liability Company Agreement of
OpCo, dated as of March 8, 2023, as amended, restated or otherwise modified prior to the Effective Time.
Existing PubCo Bylaws means those certain Amended and Restated Bylaws of PubCo, adopted March 8, 2023,
as amended, restated or otherwise modified prior to the Effective Time.
Existing PubCo Charter means
that certain that certain Amended and Restated Certificate of Incorporation of PubCo, dated as of March 8, 2023, as amended, restated or otherwise modified prior to the Effective Time.
Governmental Authority means the United States of America and any foreign country, any state, commonwealth,
territory or possession thereof and any political subdivision or quasi-governmental authority of any of the same, including any court, tribunal, department, commission, board, bureau, agency, county, municipality, province, parish or other
instrumentality of any of the foregoing.
Holdings II means Atlas Sand Holdings II, LLC, a Delaware
limited liability company.
Law means any applicable federal, state, provincial, municipal, local or
foreign statute, law, treaty, ordinance, regulation, rule, code, order or rule of common law.
Legacy
Owners refer to holders of membership interests in one or more of Holdings, Holdings II, ASMC and ASMC II.
NYSE means the New York Stock Exchange.
Person means any natural person, limited liability company, corporation, limited partnership, general
partnership, joint stock company, joint venture, association, company, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, and any government or agency or political subdivision thereof.
Principal Stockholders means Holdings, Holdings II and Ben M. Bud Brigham.
Required Stockholder Vote means the affirmative vote (or written consent) of the holders of a majority of
the voting power of the outstanding shares of Existing PubCo Common Stock entitled to vote on the Reorganization.
SEC means the U.S. Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
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Treasury Regulations means the regulations promulgated
under the Code, as such regulations may be amended from time to time.
Section 1.2. Effective Time. The Mergers shall become effective at the same
time and date (the Effective Time), with such time and date to be specified in each of the Merger Certificates (as defined below) in accordance with Section 103(d) of the DGCL and
Section 18-209(c)(5) of the DLLCA, as applicable.
Section 1.3. Heading; References; Interpretation. All Article and Section
headings in this Agreement are for convenience only and will not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words hereof, herein and hereunder and words of
similar import, when used in this Agreement, refer to this Agreement as a whole, including, without limitation, all Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Articles, Sections and
Exhibits will, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Exhibits attached hereto, and all such Exhibits attached hereto are hereby incorporated herein and
made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, will include all other genders, and the singular will include the plural and vice versa. The use herein of
the word including following any general statement, term or matter will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters,
whether or not non-limiting language (such as without limitation, but not limited to, or words of similar import) is used with reference thereto, but rather will be deemed to refer to
all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.
ARTICLE II
RESTRUCTURING ACTIONS AND RELATED MATTERS
Section 2.1. The PubCo Merger.
(a) Substantially concurrently with the filing of the OpCo Merger Certificate (as defined below), a certificate of
merger with respect to the PubCo Merger in the form attached hereto as Exhibit A (the PubCo Merger Certificate) will be filed with the Secretary of State of the State of Delaware, pursuant to which, at the Effective
Time, Merger Sub Inc. will be merged with and into PubCo, with PubCo surviving the PubCo Merger as a direct, wholly owned subsidiary of New PubCo.
(b) In connection with the PubCo Merger, effective as of the Effective Time, the Existing PubCo Charter and the
Existing PubCo Bylaws will be amended and restated in the forms attached hereto as Exhibit B and Exhibit C, respectively, in order to, among other things, (i) establish a single class of common stock of the Surviving
Corporation, par value $0.01 per share (each, a Surviving Corporation Share), as the sole capital stock of the Surviving Corporation, (ii) provide for the governance of the Surviving Corporation by New PubCo, in its capacity
as the sole stockholder of PubCo following the PubCo Merger, and (iii) change the name of the Surviving Corporation to AESI Holdings Inc.
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(c) In connection with the PubCo Merger, effective as of the
Effective Time, (i) the Existing New PubCo Charter will be amended and restated in substantially the form attached hereto as Exhibit D, and (ii) the Existing New PubCo Bylaws will be amended and restated in substantially the form
attached hereto as Exhibit E, in order to, among other things, increase the authorized number of shares of New PubCo Common Stock, change the name of New PubCo to Atlas Energy Solutions Inc. and effect certain other amendments to
provide for the governance of New PubCo as the new public holding company and successor to PubCo following the Reorganization.
(d) By virtue of the PubCo Merger, effective as of the Effective Time, (i) the Existing Class A Shares issued
and outstanding as of immediately prior to the Effective Time will be exchanged for newly issued shares of New PubCo Common Stock on a one-for-one basis (such shares of
New PubCo Common Stock, the PubCo Merger Shares); (ii) the Existing Class B Shares issued and outstanding as of immediately prior to the Effective Time will be surrendered and cancelled for no consideration; (iii) the
Merger Sub Shares issued and outstanding as of immediately prior to the Effective Time will be converted into Surviving Corporation Shares on a one-for-one basis
(resulting in the Surviving Corporation being a direct, wholly owned subsidiary of New PubCo); and (iv) the separate existence of Merger Sub Inc. will cease.
(e) In connection with the PubCo Merger, effective as of the Effective Time, New PubCo will redeem from PubCo, and
PubCo will convey, transfer and deliver to New PubCo, the 1,000 shares of New PubCo Common Stock issued to PubCo in connection with the incorporation of New PubCo on June 28, 2023 (the Initial New PubCo Shares) for an
aggregate redemption price of $10.00. PubCo will irrevocably constitute and appoint the Secretary of New PubCo to transfer the Initial New PubCo Shares on the books of New PubCo with full power of substitution in the premises. Following their
transfer to New PubCo, the Initial New PubCo Shares will be deemed to have been cancelled and no longer be outstanding effective simultaneously with the Effective Time.
(f) This Section 2.1, together with any related definitions and other provisions of this
Agreement, constitutes an agreement and plan of merger for purposes of the PubCo Merger Certificate and Law.
Section 2.2. The OpCo Merger.
(a) Substantially concurrently with the filing of the PubCo Merger Certificate, a certificate of merger with respect to
the OpCo Merger in the form attached hereto as Exhibit F (the OpCo Merger Certificate and, together with the PubCo Merger Certificate, the Merger Certificates) will be filed with the Secretary of
State of the State of Delaware, pursuant to which, at the Effective Time, Merger Sub LLC will be merged with and into OpCo, with OpCo surviving the OpCo Merger as a wholly owned subsidiary of New PubCo (partially through New PubCos direct
interest in OpCo, and partially indirect through the Surviving Corporations direct interest in OpCo).
(b) By
virtue of the OpCo Merger, effective as of the Effective Time, (i) the OpCo Units issued and outstanding and held by Holdings as of immediately prior to the Effective Time will be exchanged for newly issued shares of New PubCo Common Stock on a
one-for-one basis
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(the OpCo Merger Shares and, together with the PubCo Merger Shares, the Merger Shares); (ii) the Merger Sub Interests issued and outstanding as of
immediately prior to the Effective Time will be converted into a number of OpCo Units equal to the number of OpCo Merger Shares issued in accordance with the foregoing clause (i), all of which will be held by New PubCo immediately following
the Effective Time; and (iii) the separate existence of Merger Sub LLC will cease. The OpCo Units issued and outstanding and held by PubCo as of immediately prior to the Effective Time will remain issued and outstanding and otherwise be
unaffected by the OpCo Merger such that, immediately following the Effective Time, the Surviving Corporation and New PubCo will collectively hold all of the OpCo Units then issued and outstanding.
(c) In connection with the OpCo Merger, effective as of the Effective Time, (i) the Existing OpCo LLC Agreement
will be amended and restated in substantially the form attached hereto as Exhibit G in order to, among other things, reflect the receipt by New PubCo of OpCo Units in the OpCo Merger and the admission of New PubCo as a member of OpCo and to
provide for the governance of OpCo following the Reorganization.
(d) This Section 2.2,
together with any related definitions and other provisions of this Agreement, constitutes an agreement and plan of merger for purposes of the OpCo Merger Certificate and Law.
ARTICLE III
ACTIONS TO
BE TAKEN IN CONNECTION WITH THE REORGANIZATION
Section 3.1. Assumption of
PubCo LTIP and Awards. At the Effective Time, PubCo will assign to New PubCo, and New PubCo will assume (a) the Atlas Energy Solutions, Inc. Long Term Incentive Plan (the PubCo LTIP); (b) all awards of restricted
stock units and performance share units, in each case, whether or not vested (collectively, PubCo LTIP Awards), that are then outstanding under the PubCo LTIP; (c) each (i) restricted stock unit grant notice and restricted
stock unit agreement and (ii) performance share unit grant agreement, in each case, evidencing then-outstanding PubCo LTIP Awards under the PubCo LTIP; and (d) the then remaining unallocated reserve of Existing Class A Shares issuable
under the PubCo LTIP. As of the Effective Time, the reserve of Existing Class A Shares under the PubCo LTIP, whether allocated to outstanding PubCo LTIP Awards or unallocated at that time, will be converted on a
one-for-one basis into a reserve of shares of New PubCo Common Stock, and New PubCo shall reserve such number of shares of New PubCo Common Stock, and each PubCo LTIP
Award assumed by New PubCo will continue to have, and be subject to, the same terms and conditions as set forth in the PubCo LTIP and the agreement(s) evidencing each such award as in effect immediately prior to the Effective Time (including,
without limitation, the vesting schedule and applicable issuance dates (without acceleration thereof by virtue of the Reorganization and the other Transactions), the expiration date and other applicable termination provisions and the tax withholding
procedures), except that (x) each PubCo LTIP Award will be denominated with reference to that number of shares of New PubCo Common Stock equal to the number of Existing Class A Shares that were subject to such PubCo LTIP Award immediately
prior to the Effective Time, (y) dividend equivalents shall accrue with respect to the PubCo LTIP Awards in connection with New PubCos declaration and payment of a dividend in respect of its outstanding shares of New PubCo Common Stock
instead of with respect to PubCos declaration and payment of a dividend in respect of its outstanding Existing Class A Shares (and, for the avoidance of doubt, dividend equivalents that
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have accrued prior to the Effective Time, if any, shall not be affected), and (z) in the case of PubCo LTIP Awards that are performance share units, with respect to the portion of the
applicable performance period following the Effective Time, the return on capital employed metric shall be in reference to New PubCos income from operations and capital employed instead of PubCos income from operations and capital
employed and the relative total shareholder return metric shall be in reference to New PubCo Common Stock instead of Existing Class A Shares (and, for the avoidance of doubt, the other terms and conditions with respect to the applicable
performance metrics and the determination of achievement thereof shall not be affected, including the applicable performance period and that the performance during the portion of the applicable performance period prior to the Effective Time shall be
taken into account in such determination). Effective as of the Effective Time, New PubCo will become the successor issuer of securities under the PubCo LTIP and will, as soon as practicable following the Effective Time, file a post-effective
amendment to the existing registration statement on Form S-8 covering the PubCo LTIP, pursuant to which New PubCo as successor to PubCo will expressly adopt such registration statement on Form S-8 as its own in accordance with Rule 414 issued under the Securities Act.
Section 3.2. Other Compensation Arrangements. As of the Effective Time, PubCo
shall assign to New PubCo, and New PubCo shall assume, the Atlas Energy Solutions Inc. Management Change in Control Severance Plan and each participation agreement that is then outstanding under such plan, if any, upon the same terms and conditions
as set forth in such plan and agreements (if applicable) as in effect immediately prior to the Effective Time. Each of the PubCo Board and the Board of Directors of New PubCo (the New PubCo Board) shall take such action as
necessary such that, as of the Effective Time, the terms and conditions of compensation for members of the PubCo Board for their services on the PubCo Board (and any applicable committee(s) thereof), previously approved by the PubCo Board and as in
effect immediately prior to the Effective Time, shall no longer apply to such members for such services and shall instead apply to members of the New PubCo Board for their services on the New PubCo Board (and any applicable committee(s) thereof),
and such terms and conditions shall otherwise remain unaffected, except that any portion of such compensation that is to be granted in the form of equity-based awards shall be granted in awards denominated with reference to shares of New PubCo
Common Stock instead of Existing Class A Shares (and, for the avoidance of doubt, any awards that have previously been granted and are then outstanding shall be treated as described in Section 3.1).
Section 3.3. Registration Statement; Information Statement/Prospectus. As soon
as reasonably practicable following the Execution Date, PubCo and New PubCo shall cooperate in preparing and PubCo shall cause New PubCo to file with the SEC a registration statement on Form S-4 in connection
with the registration under the Securities Act of the Merger Shares issuable by New PubCo in the Mergers (together with any amendments thereof or supplements thereto, the Registration Statement), and containing an information
statement and prospectus relating to the Mergers (the Information Statement/Prospectus). Each of New PubCo and PubCo shall use its reasonable best efforts to cause the Registration Statement and the Information
Statement/Prospectus to comply with the rules and regulations promulgated by the SEC and to respond promptly to any comments of the SEC or its staff. Each of New PubCo and PubCo shall use its reasonable best efforts to cause the Registration
Statement to become effective under the Securities Act as soon after such filing as practicable and New PubCo shall use its reasonable best efforts to keep the Registration Statement effective as long as is necessary to consummate the Mergers. As
promptly as reasonably practicable following the clearance of the Information
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Statement/Prospectus by the SEC and the effectiveness of the Registration Statement and the receipt by PubCo of the Stockholder Written Consent, each of New PubCo and PubCo will cause the
Information Statement/Prospectus to be filed in definitive form with the SEC and PubCo will mail or cause to be mailed, or otherwise make available in accordance with the Securities Act and the Exchange Act, the Information Statement/Prospectus to
its stockholders. New PubCo shall take all actions reasonably required under any applicable federal securities laws or state blue sky laws in connection with the issuance of the Merger Shares in the Mergers. Each of New PubCo and PubCo shall use
reasonable best efforts to cause all documents that it is responsible for filing with the SEC in connection with the Mergers to comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the
Exchange Act.
Section 3.4. Section 16 Matters. Prior to the Effective
Time, New PubCo and PubCo shall take all such steps as may be required to cause any dispositions of shares of Existing PubCo Common Stock (including derivative securities) or acquisitions of New PubCo Common Stock (including derivative securities)
in connection with the Reorganization by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to PubCo, or will become subject to such reporting requirements with respect to New PubCo,
to be exempt under Rule 16b-3 under the Exchange Act.
Section 3.5. NYSE Listing. Each of PubCo and New PubCo agree to use its
reasonable best efforts to obtain, prior to the Effective Time, confirmation of listing on the NYSE of the New PubCo Common Stock issuable pursuant to the Reorganization.
Section 3.6. Treatment of Certain Material Agreements.
(a) PubCo, New PubCo and Holdings each hereby agree to cause that certain Stockholders Agreement, dated as of
March 8, 2023 (the Existing Stockholders Agreement), by and between PubCo, Holdings and the other Principal Stockholders, to be amended and restated at the Effective Time in substantially the same form as the Existing
Stockholders Agreement (the Existing Stockholders Agreement, as so amended and restated, the A&R Stockholders Agreement), except for such amendments as are necessary to cause (i) the existing rights and obligations of
PubCo under the Existing Stockholders Agreement to become substantively equivalent rights and obligations of New PubCo under the A&R Stockholders Agreement and (ii) the existing rights and obligations of the Principal Stockholders under the
Existing Stockholders Agreement with respect to the PubCo Board, the Existing PubCo Common Stock or otherwise relating to PubCo to become substantively equivalent rights and obligations under the A&R Stockholders Agreement with respect to the
New PubCo Board and the New PubCo Common Stock or to otherwise relate to New PubCo. New PubCo and Holdings each hereby agrees to become a party to the A&R Stockholders Agreement and to assume and agree to perform all of its obligations
thereunder.
(b) PubCo and New PubCo hereby agree to cause that certain Registration Rights Agreement, dated as of
March 8, 2023 (the Existing Registration Rights Agreement), by and among PubCo and certain of the Legacy Owners, to be amended and restated at the Effective Time in substantially the same form as the Existing Registration
Rights Agreement (the Existing Registration Rights Agreement, as so amended and restated, the A&R Registration Rights Agreement), except for such amendments as are necessary to cause (i) the existing rights and
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obligations of PubCo under the Existing Registration Rights Agreement with respect to the Existing PubCo Common Stock to become substantively equivalent rights and obligations of New PubCo under
the A&R Registration Rights Agreement with respect to the New PubCo Common Stock and (ii) the existing rights and obligations of such Legacy Owners under the Existing Registration Rights Agreement with respect to their shares of Existing
PubCo Common Stock to become the substantively equivalent rights and obligations under the A&R Registration Rights Agreement with respect to the shares of New PubCo Common Stock received by such Legacy Owners in connection with the
Reorganization. New PubCo hereby agrees to become a party to the A&R Registration Rights Agreement and to assume and agree to perform all of its obligations thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Party hereby represents and warrants, solely with respect to itself, to the other Parties as follows:
Section 4.1. Organization. Such Party is a corporation, limited partnership or
limited liability company, as applicable, duly organized, validly existing and in good standing (where such concept exists) under the Laws of the jurisdiction of its organization, and has all requisite corporate, partnership or limited liability
company, as applicable, power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such power, authority and
governmental approvals would not have, individually or in the aggregate, a material adverse effect on such Party or on the consummation of the Reorganization and other Transactions.
Section 4.2. Authority; Enforceability. Such Party has the requisite corporate,
limited partnership, limited liability company or other power and authority, as applicable, to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance by such Party of this Agreement and
the consummation of the Transactions have been duly authorized by its board of directors (or committee thereof) or other governing body, as applicable, and no other action is necessary to authorize the execution and delivery by it of this Agreement
or the performance of its obligations hereunder. This Agreement has been duly executed and delivered by such Party, and, assuming due and valid authorization, execution and delivery hereof by the other Parties hereto, this Agreement is a valid and
binding obligation, enforceable against it in accordance with its terms.
Section 4.3. Consents and Approvals; No Violations. None of the execution,
delivery or performance of this Agreement by such Party, or compliance by it with any of the provisions hereof, do, nor will, (a) subject to obtaining the Required Stockholder Vote and the filing of the Certificates of Merger required by the
DGCL and the DLLCA, as applicable, conflict with or result in any breach of any provision of the certificate of incorporation and bylaws, partnership agreement, limited liability company agreement or similar organizational documents of such Party,
as applicable; (b) require any filing with, or permit, authorization, consent or approval of, any Governmental Authority, except for (i) the filing of the Certificate of Mergers with the Secretary of State of the State of Delaware pursuant
to the DGCL and DLLCA, as applicable, (ii) the filing with the SEC of the Registration Statement and the Information Statement/Prospectus, (iii) filings
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with the NYSE and (iv) such other consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable federal and state
securities Laws; or (c) violate any Law applicable to such Party or any of its properties or assets, excluding from the foregoing clauses (b) and (c) such filings, permits, authorizations, consents, violations, breaches,
defaults, rights, obligations or encumbrances that (x) have been obtained or made or will be obtained or made at the time so required or (y) if not given or obtained, would not, individually or in the aggregate, have a material adverse
effect on such Party or prevent the consummation of the Reorganization.
Section 4.4. Ownership of Interests. Each Party contributing, issuing,
delivering or exchanging interests pursuant to this Agreement, owns all such interests free and clear of all liens, encumbrances, security interest, equities, charges or claims, other than as disclosed in the Registration Statement or the
Information Statement/Prospectus. There are no preferential rights to purchase, rights of first refusal or similar rights that are applicable to the contribution, issuance, delivery or exchange of such interests in connection with the Transactions
that have not been waived by the Person holding such rights.
Section 4.5. Bankruptcy. There are no bankruptcy, reorganization, receivership
or other insolvency type proceedings pending, being contemplated by or, to such Partys knowledge, threatened against such Party.
Section 4.6. Litigation. No suit, action or litigation by any Person by or
before any tribunal or Governmental Authority is pending or, to such Partys knowledge, threatened against such Party or its affiliates that would, individually or in the aggregate, reasonably be expected to have a material adverse effect upon
the ability of such Party to perform its obligations hereunder or consummate the Transactions.
Section 4.7. Independent Investigation. Each Party has reviewed with, or has
had opportunity to consult with, their own independent legal and tax advisors regarding the Transactions, including the U.S. federal, state, local, foreign and other tax consequences of the Transactions.
ARTICLE V
CONDITIONS TO
CONSUMMATION OF THE REORGANIZATION
Section 5.1. Conditions Precedent.
The obligations of the Parties to consummate the Reorganization and the other Transactions pursuant to this Agreement will be subject to the satisfaction or waiver by PubCo of each of the conditions set forth below in this
Section 5.1.
(a) The representations and warranties of the Parties contained in
ARTICLE IV, shall be true and correct on and as of immediately prior to the Effective Time, except as would not reasonably be expected to prevent or materially delay the consummation of the Reorganization.
(b) The Registration Statement will have been declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement will have been issued by the SEC and no proceeding for that purpose will have been initiated or, to the knowledge of New PubCo or PubCo, threatened by the SEC and not concluded or withdrawn.
No similar proceeding with respect to the Information Statement/Prospectus will have been initiated or, to the knowledge of New PubCo or PubCo, threatened by the SEC and not concluded or withdrawn.
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(c) PubCo shall have received a legal opinion of Vinson &
Elkins L.L.P. in form and substance reasonably satisfactory to it and the Special Committee indicating the Pubco Merger will qualify as either (i) a reorganization within the meaning of Section 368(a) of the Code and/or
(ii) together with the Opco Merger, as part of integrated transactions constituting a related transfer governed by Section 351(a) of the Code.
(d) All material approvals, licenses and certifications from, and notifications and filings to, Governmental
Authorities and non-governmental third parties required in order to consummate the Reorganization shall have been obtained or made, as applicable.
(e) The Stockholder Written Consent shall have been received by PubCo and be in full force and effect.
(f) At least 20 calendar days will have elapsed since PubCo mailed to the stockholders of PubCo the Information
Statement/Prospectus, as contemplated by Regulation 14C under the Exchange Act (including Rule 14c-2 promulgated under the Exchange Act).
(g) The New PubCo Common Stock to be issued pursuant to Reorganization will have been approved for listing by the NYSE.
(h) No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order
that is in effect will have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality that prohibits or makes illegal the consummation of the Reorganization or any of the other
Transactions.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Consents; Deemed Amendment to Agreements. To the extent required
under Law or the governing documents of any of the Parties or any documents to which they are party, each Party hereby acknowledges that this Agreement constitutes the written consent of such Party to each of the agreements and transactions
described herein, including in its capacity as a member, stockholder, manager or director of any other Party.
Section 6.2. Deed; Bill of Sale; Assignment. To the extent required and
permitted by Law, this Agreement will also constitute a deed, bill of sale, stock power or assignment of the assets, shares and membership and other interests referenced herein, as well as an amendment
of the relevant agreements, without the need for any further assignment or transfer document.
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Section 6.3. Tax Matters.
(a) This Agreement is hereby adopted as and will constitute a plan of reorganization within the
meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) with respect to the PubCo Merger.
(b) The Parties intend for the Mergers to qualify for the Intended Tax Treatment. Each Party will report and file all
applicable U.S. federal and applicable state income tax returns consistent with the Intended Tax Treatment (including by attaching the statement described in Treasury Regulations Sections 1.368-3(a) and/or 1.351-3, as applicable, on or with its tax return for the taxable year that includes the date upon which the Mergers are effected), except as otherwise required pursuant to a change in Law after Execution Date or a
determination within the meaning of Section 1313(a) of the Code or any corresponding or similar provision of Law.
(c) Each Party will use its respective reasonable best efforts to cause the Mergers to qualify for the Intended Tax
Treatment, and no Party shall (or shall permit any of its affiliates to) take or cause to be taken any action that is not specifically contemplated by this Agreement which action, to its knowledge, would reasonably be expected to prevent or impede
the Mergers from qualifying for the Intended Tax Treatment.
(d) Each Party acknowledges and agrees that no other
Party is making any representation or warranty as to the U.S. federal, state, local, foreign or other tax consequences to any Party hereto as a result of the Reorganization. Each of the Parties has reviewed with its own tax advisor the U.S. federal,
state and local tax consequences of the Reorganization. Each Party understands that, notwithstanding any other provision of this Agreement to the contrary, it will be responsible for its own tax liability, if any, that may arise as a result of the
Reorganization.
Section 6.4. Further Assurances. Each of the Parties hereby agrees to execute,
acknowledge and deliver all such additional assignments, stock or unit powers, conveyances, instruments, notices and other documents, and to do all such other acts and things, all in accordance with Law, as may be necessary or appropriate
(a) to more fully assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (b) to more fully and
effectively vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests and shares contributed and assigned by this Agreement or intended to be so and (c) to more fully and effectively
carry out the purposes and intent of this Agreement.
Section 6.5. Termination. This Agreement may be terminated at any time
prior to the Effective Time (whether before or after any execution and delivery of the Stockholder Written Consent): (a) by action of the PubCo Board, with the concurrence of the Special Committee if it determines that, for any reason, the
completion of the Transactions would be inadvisable or not in the best interest of PubCo or its stockholders; (b) by mutual written agreement of PubCo and New PubCo; and (c) shall automatically terminate and be of no further force or
effect if the Reorganization has not been completed by the first anniversary of the Execution Date.
12
Section 6.6. Amendment. At
any time prior to the Effective Time, this Agreement may, to the extent permitted by the DGCL, be supplemented, amended or modified by the mutual written consent of the Parties. Notwithstanding anything herein to the contrary, if any amendment,
based solely on a reading of the explicit terms thereof, would alter or change the Transactions in a manner that is material and adverse to PubCo or its stockholders, then such amendment shall also require the written consent of the PubCo Board,
with the concurrence of the Special Committee.
Section 6.7. Notices. All
notices, requests, demands and other communications under this Agreement shall be in writing and shall be personally delivered, sent by nationally recognized overnight courier, mailed by registered or certified mail or be sent by facsimile or
electronic mail to such Party at 5918 W. Courtyard Drive, Suite 500, Austin, Texas 78730 (or such other address as shall be specified by like notice).
Section 6.8. Successors and Assigns; No Third Party Rights. This Agreement will
be binding upon and inure to the benefit of the Parties and their respective successors and assigns. This Agreement is not intended to, and does not, create rights in any other Person, and no Person is or is intended to be a third-party beneficiary
of any of the provisions of this Agreement. In the event that Holdings at any time distributes or otherwise transfers any of its shares of Existing PubCo Common Stock to any Person during the period beginning on the Execution Date and ending
immediately prior the Effective Time, such Person shall acquire such shares subject to this Agreement and shall agree in writing to be bound by all of the terms of this Agreement applicable to Holdings as if such Person were originally party to this
Agreement in such capacity; provided, that, notwithstanding any failure by such Person to so agree in writing, such shares of Existing PubCo Common Stock shall be held subject to all of the terms of this Agreement and, by acquiring and
holding such shares, such Person shall be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement applicable to Holdings as if such Person were originally party to this Agreement in such
capacity.
Section 6.9. Severability. If any of the provisions of this
Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the Laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity will not invalidate the entire
Agreement. Instead, this Agreement will be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment will be made and necessary provision added so as to give effect to the intention of
the Parties as expressed in this Agreement at the time of execution of this Agreement.
Section 6.10. Waivers. Any waiver of any term or condition of this Agreement
will be effective only if in writing and signed by the Parties. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement will not in any way affect, limit or waive a Partys rights hereunder at any time to
enforce strict compliance thereafter with every term or condition of this Agreement.
Section 6.11. Waiver of Appraisal Rights. Holdings hereby knowingly,
voluntarily, intentionally and irrevocably waives, and agrees not to exercise or assert, any dissenters or appraisal rights under Section 262 of the DGCL (and any other similar statute) with respect to any shares of Existing PubCo Common
Stock in connection with the Transactions, including the Mergers.
13
Section 6.12. Entire Agreement;
Survival. This Agreement, together with the agreements and other documents referenced herein, constitutes the entire agreement among the Parties pertaining to the Transactions and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the Parties pertaining thereto. The provisions of this Agreement (including the representations and warranties hereunder) shall survive the Reorganization, and shall continue indefinitely.
Section 6.13. Governing Law. This Agreement will be governed by, and construed
in accordance with, the Laws of the State of Delaware.
Section 6.14. Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile or other electronic means) with the same effect as if all Parties had signed the same document.
[Signature Page Follows]
14
IN WITNESS WHEREOF, this Agreement has been duly executed by each of the Parties as
of the date first written above.
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ATLAS ENERGY SOLUTIONS INC. |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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ATLAS SAND OPERATING, LLC |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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NEW ATLAS HOLDCO INC. |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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AESI MERGER SUB INC. |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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ATLAS OPERATING MERGER SUB, LLC |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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ATLAS SAND HOLDINGS, LLC |
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By: |
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/s/ John Turner |
Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
[SIGNATURE PAGE TO MASTER
REORGANIZATION AGREEMENT]
EXHIBIT A
Form of Certificate of Merger
(PubCo Merger)
[see
attached]
CERTIFICATE OF MERGER
merging
AESI MERGER
SUB INC.
(a Delaware corporation)
with and into
ATLAS
SAND ENERGY SOLUTIONS INC.
(a Delaware corporation)
[●], 2023
Pursuant to the
provisions of Title 8, Section 251(c) of the Delaware General Corporation Law (the DGCL), the undersigned corporation hereby submits this Certificate of Merger for filing and certifies as follows:
1. The name and state of incorporation of each of the constituent corporations (the Constituent
Corporations) that are to merge are as follows:
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Name |
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State of Incorporation |
AESI Merger Sub Inc. |
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Delaware |
Atlas Sand Energy Solutions Inc. |
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Delaware |
2. An Agreement and Plan of Merger (the Agreement and Plan of
Merger), providing for the merger of AESI Merger Sub Inc. with and into Atlas Sand Energy Solutions Inc. (the Company), with the Company to continue in existence following such merger as the sole surviving
corporation (the Surviving Corporation), has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with Section 251 of the DGCL.
3. The name of the Surviving Corporation shall be amended in the merger to be AESI Holdings Inc.
4. Upon the effectiveness of the Merger in accordance with Sections 251(c) and 103 of the DGCL at the Effective Time
(as defined below), the Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time shall be amended as set forth on Exhibit A attached hereto and, as so amended, shall be the Certificate of Incorporation
of the Surviving Corporation at the Effective Time and until such time as it may be further amended thereafter in accordance with its terms and the DGCL.
5. The merger shall become effective at [●], Central Standard Time, on [●], 2023 (the Effective
Time).
6. The executed Agreement and Plan of Merger is on file at the principal place of business of
the Surviving Corporation at the following address: 5918 W. Courtyard Drive, Suite 500, Austin, Texas 78730.
7. A copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of any of the Constituent Corporations.
[Signature Page
Follows]
2
IN WITNESS WHEREOF, the undersigned has caused this Certificate of Merger to be executed on
its behalf as of the date first written above.
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ATLAS SAND ENERGY SOLUTIONS INC. |
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By: |
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Name: |
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Title: |
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SIGNATURE PAGE TO CERTIFICATE
OF MERGER
Exhibit A
[See attached.]
EXHIBIT B
Form of Second A&R Certificate of Incorporation of PubCo
[see attached]
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AESI HOLDINGS INC.
[●], 2023
AESI Holdings Inc. (the Corporation), a corporation organized and existing under the General Corporation Law of the
State of Delaware as set forth in Title 8 of the Delaware Code (the DGCL), hereby certifies as follows:
1. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of
Delaware on February 3, 2022.
2. The Amended and Restated Certificate of Incorporation (the Prior
Certificate of Incorporation) was filed with the Secretary of State of the State of Delaware on March 8, 2023.
3. This Second Amended and Restated Certificate of Incorporation, which restates and amends the Prior Certificate of
Incorporation, has been declared advisable by the board of directors of the Corporation (the Board), duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation
in accordance with Sections 103, 228, 242 and 245 of the DGCL. References to this Amended and Restated Certificate of Incorporation herein refer to the Second Amended and Restated Certificate of Incorporation, as amended,
restated, supplemented and otherwise modified from time to time.
4. This Amended and Restated Certificate of
Incorporation will become effective upon its filing with the Secretary of State of the State of Delaware. The Prior Certificate of Incorporation is hereby amended and restated in its entirety to read as follows:
ARTICLE I
NAME
SECTION 1.1. Name. The name of the corporation is AESI Holdings Inc.
ARTICLE II
REGISTERED AGENT
SECTION 2.1. Registered Agent. The address of the Corporations registered office in the State of Delaware is 251 Little Falls
Drive, City of Wilmington, County of New Castle, Delaware 19808. The name of the Corporations registered agent at such address is Corporation Service Company.
ARTICLE III
PURPOSE
SECTION 3.1. Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware (the DGCL). The Corporation shall have all power necessary or convenient to the conduct, promotion or attainment of such acts and activities.
ARTICLE IV
CAPITALIZATION
SECTION 4.1. Capitalization. The total number of shares of all classes of capital stock that the Corporation shall have authority to
issue is 1,000 shares of common stock, par value $0.01 per share.
ARTICLE V
BOARD OF DIRECTORS
SECTION 5.1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board.
SECTION 5.2. Number. The number of directors of the Corporation shall be as specified, or determined in the manner provided, in the
bylaws of the Corporation. Unless and except to the extent that the bylaws of the Corporation so provide, the election of directors need not be by written ballot. Except as otherwise provided in this Amended and Restated Certificate of
Incorporation, each director of the Corporation shall be entitled to one vote on all matters voted or acted upon by the Board.
ARTICLE
VI
BYLAWS
SECTION 6.1. Bylaws. In furtherance of, and not in limitation of, the powers conferred by the General Corporation Law of the State of
Delaware, the Board is expressly authorized and empowered to adopt, amend or repeal the bylaws of the Corporation or adopt new bylaws without any action on part of the stockholders; provided that any bylaw adopted or amended by the Board, and any
powers thereby conferred, may be amended, altered or repealed by the stockholders.
ARTICLE VII
LIMITATION OF DIRECTOR AND OFFICER LIABILITY
SECTION 7.1. Limitation of Director and Officer Liability. No director or officer of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists or may hereafter
be amended. Any amendment, repeal or modification of this Article VII that purports to limit the liability of a director or officer shall be prospective only and shall not affect any limitation of liability of a director or officer, as applicable,
for acts or omissions occurring prior to the date of such amendment, repeal or modification.
ARTICLE VIII
AMENDMENT OF CERTIFICATE OF INCORPORATION
SECTION 8.1. Amendments. The Corporation reserves the right at any time, and from time to time, to amend, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation, 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 law; and
all rights, preferences and privileges of any nature conferred upon directors, stockholders or any other persons by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted
subject to the rights reserved in this Article VIII.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of
Incorporation as of [●], 2023.
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AESI HOLDINGS INC. |
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By: |
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Name: |
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Title: |
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SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
AESI HOLDINGS INC.
EXHIBIT C
Form of Second A&R Bylaws of PubCo
[see attached]
SECOND AMENDED AND RESTATED
BYLAWS
OF
AESI HOLDINGS INC.
A
Delaware Corporation
Date of Adoption:
[●], 2023
TABLE OF CONTENTS
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Page |
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ARTICLE I |
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OFFICES |
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Section 1. |
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Registered Office |
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1 |
Section 2. |
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Other Offices |
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1 |
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ARTICLE II |
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STOCKHOLDERS |
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Section 1. |
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Place of Meetings |
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1 |
Section 2. |
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Quorum; Adjournment of Meetings |
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1 |
Section 3. |
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Annual Meetings |
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1 |
Section 4. |
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Special Meetings |
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2 |
Section 5. |
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Record Date |
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2 |
Section 6. |
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Notice of Meetings |
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2 |
Section 7. |
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Stock List |
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2 |
Section 8. |
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Proxies |
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2 |
Section 9. |
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Voting; Elections; Inspectors |
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3 |
Section 10. |
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Conduct of Meetings |
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3 |
Section 11. |
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Treasury Stock |
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4 |
Section 12. |
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Action Without Meeting |
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4 |
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ARTICLE III |
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BOARD OF DIRECTORS |
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Section 1. |
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Power; Number; Term of Office |
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4 |
Section 2. |
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Quorum |
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4 |
Section 3. |
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Place of Meetings; Order of Business |
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5 |
Section 4. |
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First Meeting |
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5 |
Section 5. |
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Regular Meetings |
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5 |
Section 6. |
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Special Meetings |
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5 |
Section 7. |
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Removal |
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5 |
Section 8. |
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Vacancies; Increases in the Number of Directors |
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5 |
Section 9. |
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Compensation |
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5 |
Section 10. |
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Action Without a Meeting; Telephone Conference Meeting |
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5 |
Section 11. |
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Approval or Ratification of Acts or Contracts by Stockholders |
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6 |
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ARTICLE IV |
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COMMITTEES |
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Section 1. |
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Designation; Powers |
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6 |
Section 2. |
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Procedure; Meetings; Quorum |
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6 |
Section 3. |
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Substitution of Members |
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6 |
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ARTICLE V |
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OFFICERS |
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Section 1. |
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Number, Titles and Term of Office |
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6 |
Section 2. |
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Salaries |
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7 |
Section 3. |
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Removal |
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7 |
Section 4. |
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Vacancies |
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7 |
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Section 5. |
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Powers and Duties of the Chief Executive Officer |
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7 |
Section 6. |
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Powers and Duties of the Chairman of the Board |
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7 |
Section 7. |
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President |
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7 |
Section 8. |
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Vice Presidents |
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7 |
Section 9. |
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Chief Financial Officer |
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7 |
Section 10. |
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Assistant Chief Financial Officers |
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8 |
Section 11. |
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Secretary |
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8 |
Section 12. |
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Assistant Secretaries |
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8 |
Section 13. |
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Action with Respect to Securities of Other Corporations |
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8 |
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ARTICLE VI |
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INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS |
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Section 1. |
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Right to Indemnification |
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8 |
Section 2. |
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Indemnification of Employees and Agents |
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Section 3. |
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Right of Claimant to Bring Suit |
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9 |
Section 4. |
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Nonexclusivity of Rights |
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9 |
Section 5. |
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Insurance |
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9 |
Section 6. |
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Savings Clause |
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9 |
Section 7. |
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Definitions |
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9 |
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ARTICLE VII |
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CAPITAL STOCK |
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Section 1. |
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Certificates of Stock |
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10 |
Section 2. |
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Transfer of Shares |
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10 |
Section 3. |
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Ownership of Shares |
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10 |
Section 4. |
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Regulations Regarding Certificates |
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10 |
Section 5. |
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Lost or Destroyed Certificates |
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10 |
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ARTICLE VIII |
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MISCELLANEOUS PROVISIONS |
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Section 1. |
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Fiscal Year |
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Section 2. |
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Corporate Seal |
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11 |
Section 3. |
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Notice and Waiver of Notice |
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11 |
Section 4. |
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Resignations |
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11 |
Section 5. |
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Facsimile Signatures |
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11 |
Section 6. |
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Reliance upon Books, Reports and Records |
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11 |
Section 7. |
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Form of Records |
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11 |
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ARTICLE IX |
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AMENDMENTS |
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Section 1. |
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Amendments |
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11 |
SECOND AMENDED AND RESTATED
BYLAWS
OF
AESI HOLDINGS INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of AESI Holdings Inc. (the
Corporation) required by the General Corporation Law of the State of Delaware (the DGCL) to be maintained in the State of Delaware, shall be the registered office named in the Second Amended and
Restated Certificate of Incorporation of the Corporation (as the same may be further amended and restated from time to time, the Certificate of Incorporation), or such other office as may be designated from time to time by
the Board of Directors of the Corporation (the Board of Directors) in the manner provided by law. Should the Corporation maintain a principal office within the State of Delaware, such registered office need not be identical
to such principal office of the Corporation.
Section 2. Other Offices. The
Corporation may have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be held at the
principal office of the Corporation, or at such other place within or without the State of Delaware as shall be specified or fixed in the notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise required by law or
provided in the Certificate of Incorporation or these bylaws, the holders of shares of stock with a majority of the voting power entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of
stockholders for the transaction of business. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of the
Corporations stock belonging to the Corporation or to another corporation, if such shares of stock representing a majority of the voting power entitled to vote in the election of directors of such other corporation are held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any subsidiary of the Corporation to vote stock, including
but not limited to its own stock, held by it in a fiduciary capacity.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of shares of stock with a majority of the voting power present in person or represented by proxy at any meeting of stockholders, whether or not a quorum is present, shall have
the power to adjourn such meeting from time to time, without any notice other than announcement at the meeting of the time and place of the holding of the adjourned meeting; provided, however, if the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at such meeting. At any such adjourned meeting at which a quorum shall be present
or represented any business may be transacted which might have been transacted at the meeting as originally called.
Section 3. Annual Meetings. An annual meeting of the stockholders, for the election of
directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, within or without the State of Delaware, on such date, and at such time as the Board
of Directors shall fix and set forth in the notice of the meeting.
1
Section 4. Special Meetings. Unless otherwise provided
in the Certificate of Incorporation, special meetings of the stockholders for any purpose or purposes may be called at any time by the Chairman of the Board (if any), by the Chief Executive Officer or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the Chairman of the Board (if any), by the Chief Executive Officer or the Secretary upon the written request therefor, stating the purpose or purposes of the meeting, delivered to
such officer, signed by the holder(s) of at least 25% of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders entitled to notice
of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to express consent to corporate action in writing 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, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than 60 days nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.
If the Board of Directors does not fix a record date for any meeting of the stockholders, the record date for determining stockholders
entitled to notice of or to vote at such meeting shall be at the close of business on the day next preceding the day on which notice is given, or, if in accordance with Section 3 of Article VIII of these bylaws, notice is waived,
at the close of business on the day next preceding the day on which the meeting is held. If, in accordance with Section 12 of this Article II, corporate action without a meeting of stockholders is to be taken, the record date for
determining stockholders entitled to express consent to such corporate action in writing, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. 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 adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and hour of all
meetings, and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by or at the direction of the Chairman of the Board (if any) or the Chief Executive Officer, the Secretary or the other person(s)
calling the meeting to each stockholder entitled to vote thereat and shall be delivered not less than 10 nor more than 60 days before the date of the meeting, personally, by electronic transmission or by mail. If mailed, notice is given when
deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. The Corporation may provide stockholders with notice of a meeting by electronic transmission
provided such stockholders have consented to receiving electronic notice.
Section 7. Stock List. A complete list of stockholders entitled to vote at any meeting
of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in the name of such stockholder, shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either on a reasonably accessible electronic network, provided that the information required to gain access to the list is
provided with the notice of the meeting, or during ordinary business hours, at the principal place of business of the Corporation. The stock list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably
accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
Section 8. Proxies. Each stockholder entitled to vote at a meeting of stockholders or
to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for him by proxy. Proxies for use at any meeting of stockholders shall be filed with the Secretary, or such other officer
as the Board of Directors may from time to time determine by resolution, before or at the time of the meeting. All proxies shall be received and taken charge of and all ballots shall be received and canvassed by the secretary of the meeting who
shall decide all questions touching upon the qualification of voters, the validity of the proxies, and the acceptance or rejection of votes, unless an inspector or inspectors shall have been appointed by the chairman of the meeting, in which event
such inspector or inspectors shall decide all such questions.
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No proxy shall be valid after three years from its date, unless the proxy provides for a
longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and coupled with an interest sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless such instrument shall provide the contrary, a majority of such persons
present at any meeting at which their powers thereunder are to be exercised shall have and may exercise all the powers of voting or giving consents thereby conferred, or if only one be present, then such powers may be exercised by that one; or, if
an even number attend and a majority do not agree on any particular issue, each proxy so attending shall be entitled to exercise such powers in respect of the same portion of the shares as he or she is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required by law or provided
in the Certificate of Incorporation, each stockholder shall have one vote for each share of stock entitled to vote which is registered in his or her name on the record date for the meeting. Shares registered in the name of another corporation,
domestic or foreign, may be voted by such officer, agent or proxy as the bylaw (or comparable instrument) of such corporation may prescribe, or in the absence of such provision, as the Board of Directors (or comparable body) of such corporation may
determine. Shares registered in the name of a deceased person may be voted by his or her executor or administrator, either in person or by proxy.
All elections for directors shall be by written ballot unless otherwise provided in the Certificate of Incorporation. Unless otherwise
provided in the Certificate of Incorporation or these bylaws, directors shall be elected by a plurality of the votes cast by the holders of shares of stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum
is present. All other elections and questions presented to the stockholders at a meeting at which a quorum is present shall, unless otherwise provided by the Certificate of Incorporation, these bylaws, the rules or regulations of any stock exchange
applicable to the Corporation or applicable law or pursuant to any regulation applicable to the Corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation
which are present in person or by proxy and entitled to vote thereon. Every stock vote shall be taken by written ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the
procedure established for the meeting.
At any meeting at which a vote is taken by ballots, the chairman of the meeting may appoint one or
more inspectors, each of whom shall subscribe an oath or affirmation to execute faithfully the duties of inspector at such meeting with strict impartiality and according to the best of his or her ability. Such inspector shall ascertain the number of
shares of capital stock of the Corporation outstanding and the voting power of each such share, determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, count all votes and ballots,
determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and certify their determination of the number of shares of capital 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 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. The chairman of the meeting may appoint any person to serve as inspector, except no candidate for the office of director shall be
appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors
shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the
stockholders shall be presided over by the Chairman of the Board (if any), or if he or she is not present, by the Chief Executive Officer, or if neither the Chairman of the Board (if any), nor Chief Executive Officer is present, by a chairman
elected at the meeting. The Secretary of the Corporation, if present, shall act as secretary of such meetings, or if he or she is not present, an Assistant Secretary shall so act; if neither the Secretary nor an Assistant Secretary is present, then
a secretary shall be appointed by the chairman of the meeting. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of stockholders shall otherwise determine, the order of business shall be as follows:
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|
(a) |
Calling of meeting to order. |
|
(b) |
Election of a chairman and the appointment of a secretary if necessary. |
|
(c) |
Presentation of proof of the due calling of the meeting. |
|
(d) |
Presentation and examination of proxies and determination of a quorum. |
|
(e) |
Reading and settlement of the minutes of the previous meeting. |
|
(f) |
Reports of officers and committees. |
|
(g) |
The election of directors if an annual meeting, or a meeting called for that purpose. |
Section 11. Treasury Stock. The Corporation shall not vote, directly or indirectly,
shares of its own stock owned by it or any other corporation, if a majority of shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation and such shares shall not be counted
for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise
provided in the Certificate of Incorporation, any action permitted or required by law, the Certificate of Incorporation or these bylaws to be taken at a meeting of stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, 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. Prompt notice of the taking of the corporate action without a meeting by less than a unanimous written consent shall be given by the Secretary to those stockholders who have not consented in
writing.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Power; Number; Term of Office. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors, and subject to the restrictions imposed by law or the Certificate of Incorporation, they may exercise all the powers of the Corporation.
The number of directors of the Corporation shall be determined from time to time by resolution of the Board of Directors, unless the
Certificate of Incorporation fixes the number of directors, in which case a change in the number of directors shall be made only by amendment of the Certificate of Incorporation. Each director shall hold office for the term for which he or she is
elected, and until his or her successor shall have been elected and qualified or until his or her earlier death, resignation or removal.
Unless otherwise provided in the Certificate of Incorporation, directors need not be stockholders or residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of Incorporation, a
majority of the total number of directors shall constitute a quorum for the transaction of business of the Board of Directors and the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
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Section 3. Place of Meetings; Order of
Business. The directors may hold their meetings and may have an office and keep the books of the Corporation, except as otherwise provided by law, in such place or places, within or without the State of Delaware, as the Board of Directors may
from time to time determine by resolution. At all meetings of the Board of Directors, business shall be transacted in such order as shall from time to time be determined by the Chairman of the Board (if any), or in his or her absence by the Chief
Executive Officer, or by resolution of the Board of Directors.
Section 4. First
Meeting. Each newly elected Board of Directors may hold its first meeting for the purpose of organization and the transaction of business, if a quorum is present, immediately after and at the same place as the annual meeting of the stockholders.
Notice of such meeting shall not be required.
Section 5. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution of the Board of Directors. Notice of such regular meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of Directors may be called
by the Chairman of the Board (if any), the Chief Executive Officer or, on the written request of any two directors, by the Secretary, in each case on at least 24 hours personal or written notice or on at least 24 hours notice by
electronic transmission to each director. Such notice, or any waiver thereof pursuant to Section 3 of Article VIII hereof, need not state the purpose or purposes of such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or
the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided that, unless the Certificate of Incorporation otherwise provides, if the
Board of Directors is classified, then the stockholders may effect such removal only for cause; and provided further that, if the Certificate of Incorporation expressly grants to stockholders the right to cumulate votes for the election of directors
and if less than the entire Board of Directors is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire
Board of Directors, or, if there be classes of directors, at an election of the class of directors of which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless otherwise provided
in the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or a sole
remaining director; and any director so chosen shall hold office until the next annual election and until his or her successor shall be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any directors elected to fill vacancies or newly created directorships shall
hold office until the next election of the class for which such directors shall have been chosen, and until their successors shall be duly elected and shall qualify.
Section 9. Compensation. Unless otherwise restricted by the Certificate of
Incorporation, the Board of Directors shall have the authority to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or any committee designated by the Board of Directors, may be taken without a meeting if all members of the Board
of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or
committee. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation, subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors, may participate in a meeting of such Board of Directors or committee, as the case may be, by means of a conference
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telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person
at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by Stockholders. The Board
of Directors in its discretion may submit any act or contract for approval or ratification at any annual meeting of the stockholders, or at any special meeting of the stockholders called for the purpose of considering any such act or contract, and
any act or contract that shall be approved or be ratified by the vote of the holders of shares of stock representing a majority of the voting power entitled to vote and present in person or by proxy at such meeting (provided that a quorum is
present), shall be as valid and as binding upon the Corporation and upon all the stockholders as if it has been approved or ratified by every stockholder of the Corporation. In addition, any such act or contract may be approved or ratified by the
written consent of the holders of shares of stock representing a majority of the voting power entitled to vote and such consent shall be as valid and as binding upon the Corporation and upon all the stockholders as if it had been approved or
ratified by every stockholder of the Corporation.
ARTICLE IV
COMMITTEES
Section 1. Designation; Powers. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one or more committees, including, if they shall so determine, an executive committee, each such committee to consist of one or more of the directors of the Corporation. Any such designated committee shall have
and may exercise such of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as may be provided in such resolution, except that no such committee shall have the power or authority of
the Board of Directors in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders an agreement of merger, recommending to the stockholders the sale, lease or exchange
of all or substantially all of the Corporations property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution of the Corporation or amending, altering or repealing the bylaws or
adopting new bylaws for the Corporation and, unless such resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Any such
designated committee may authorize the seal of the Corporation to be affixed to all papers which may require it. In addition to the above, such committee or committees shall have such other powers and limitations of authority as may be determined
from time to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated pursuant to
Section 1 of this Article IV shall choose its own chairman, shall keep regular minutes of its proceedings and report the same to the Board of Directors when requested, shall fix its own rules or procedures and shall meet at such
times and at such place or places as may be provided by such rules, or by resolution of such committee or resolution of the Board of Directors. At every meeting of any such committee, the presence of a majority of all the members thereof shall
constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution.
Section 3. Substitution of Members. 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 such committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.
ARTICLE V
OFFICERS
Section 1. Number, Titles and Term of Office. The officers of the Corporation shall be a
Chief Executive Officer and a Secretary and, if the Board of Directors so elects, a Chairman of the Board, a President, one or more Vice Presidents (any one or more of whom may be designated Executive Vice President or Senior Vice President), a
Chief Financial Officer, one or more Assistant Chief Financial Officers, one or more Assistant Secretaries
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and such other officers as the Board of Directors may from time to time elect or appoint. Each officer shall hold office until his or her successor shall be duly elected and shall qualify or
until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. Any number of offices may be held by the same person, unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the officers and agents of
the Corporation shall be fixed from time to time by the Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed, either with or without cause, by the vote of a majority of the whole Board of Directors at a special meeting called for the purpose, or at any regular meeting of the Board of Directors. Election or appointment of an officer
or agent shall not of itself create contract rights.
Section 4. Vacancies. Any vacancy
occurring in any office of the Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The President, if any, shall be the
Chief Executive Officer of the Corporation unless the Board of Directors designates the Chairman of the Board or any other officer as Chief Executive Officer. Subject to the control of the Board of Directors and the executive committee (if any), the
Chief Executive Officer shall have general executive charge, management and control of the properties, business and operations of the Corporation with all such powers as may be reasonably incident to such responsibilities; he or she may agree upon
and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation and may sign all certificates for shares of capital stock of the Corporation; and shall have such other powers and duties as designated
in accordance with these bylaws and as from time to time may be assigned to him by the Board of Directors.
Section 6. Powers and Duties of the Chairman of the Board. If elected, the Chairman of
the Board shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and duties as designated in these bylaws and as from time to time may be assigned to him by the Board of Directors.
Section 7. President. Unless the Board of Directors otherwise determines, the
President, if any, shall have the authority to agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation; and, unless the Board of Directors otherwise determines, he or she shall, in
the absence of the Chairman of the Board or if there be no Chairman of the Board, preside at all meetings of the stockholders and (should he or she be a director) of the Board of Directors; and he or she shall have such other powers and duties as
designated in accordance with these bylaws and as from time to time may be assigned to him or her by the Board of Directors.
Section 8. Vice Presidents. In the absence of the Chief Executive Officer, or in the
event of his or her inability or refusal to act, a Vice President designated by the Board of Directors shall perform the duties of the Chief Executive Officer, and when so acting shall have all the powers of and be subject to all the restrictions
upon the Chief Executive Officer. In the absence of a designation by the Board of Directors of a Vice President to perform the duties of the Chief Executive Officer, or in the event of his or her absence or inability or refusal to act, the Vice
President who is present and who is senior in terms of time as a Vice President of the Corporation shall so act. The Vice Presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time
prescribe.
Section 9. Chief Financial Officer. The Chief Financial Officer, if
any, shall have responsibility for the custody and control of all the funds and securities of the Corporation, and he or she shall have such other powers and duties as designated in these bylaws and as from time to time may be assigned to him or her
by the Board of Directors. He or she shall perform all acts incident to the position of Chief Financial Officer, subject to the control of the Chief Executive Officer and the Board of Directors; and he or she shall, if required by the Board of
Directors, give such bond for the faithful discharge of his or her duties in such form as the Board of Directors may require.
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Section 10. Assistant Chief Financial
Officers. Each Assistant Chief Financial Officer, if any, shall have the usual powers and duties pertaining to his or her office, together with such other powers and duties as designated in these bylaws and as from time to time may be assigned
to him or her by the Chief Executive Officer or the Board of Directors. The Assistant Chief Financial Officers shall exercise the powers of the Chief Financial Officer during that officers absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all meetings of the
Board of Directors, committees of directors and the stockholders, in books provided for that purpose; he or she shall attend to the giving and serving of all notices; he or she may in the name of the Corporation affix the seal of the Corporation to
all contracts of the Corporation and attest the affixation of the seal of the Corporation thereto; he or she may sign with the other appointed officers all certificates for shares of capital stock of the Corporation; he or she shall have charge of
the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors may direct, all of which shall at all reasonable times be open to inspection of any director upon application at the office of the
Corporation during business hours; he or she shall have such other powers and duties as designated in these bylaws and as from time to time may be assigned to him or her by the Board of Directors or the Chief Executive Officer; and he or she shall
in general perform all acts incident to the office of Secretary, subject to the control of the Chief Executive Officer and the Board of Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary, if any, shall have the
usual powers and duties pertaining to his or her office, together with such other powers and duties as designated in these bylaws and as from time to time may be assigned to him or her by the Chief Executive Officer or the Board of Directors. The
Assistant Secretaries shall exercise the powers of the Secretary during that officers absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations. Unless otherwise
directed by the Board of Directors, the Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of or with respect to any action of security holders
of any other corporation in which the Corporation may hold securities and to otherwise exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a proceeding), by reason of the fact that he or she or a person of whom he or she is
the legal representative, is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while
serving or having agreed to serve as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against all expense, liability and loss (including
without limitation, attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall
indemnify any such person seeking indemnification in connection with a proceeding (or part thereof), other than a proceeding (or part thereof) brought under Section 3 of this Article VI, initiated by such person or his or her
heirs, executors and administrators only if such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this Article VI shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the DGCL requires, the payment of such expenses incurred by a current, former or proposed director or officer
in his or her capacity as a director or officer
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or proposed director or officer (and not in any other capacity in which service was or is or has been agreed to be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnified person, to repay all amounts so advanced
if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Section or otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation may, by action of
its Board of Directors, provide indemnification to employees and agents of the Corporation, individually or as a group, with the same scope and effect as the indemnification of directors and officers provided for in this Article VI.
Section 3. Right of Claimant to Bring Suit. If a written claim received by the
Corporation from or on behalf of an indemnified party under this Article VI is not paid in full by the Corporation within 90 days after such receipt, the claimant may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it
permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification and the advancement
and payment of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under any law (common or statutory), provision of the Certificate of Incorporation of the
Corporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any person who is or was serving as 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 any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Section 6. Savings Clause. If this Article VI or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each director and officer of the Corporation, as to costs, charges and expenses (including attorneys fees),
judgments, fines, and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative, or investigative to the full extent permitted by any applicable portion of this Article VI that shall
not have been invalidated and to the fullest extent permitted by applicable law. Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any covered person
indemnified under this Article VI in respect of any act or omission occurring prior to the time of such repeal or modification.
Section 7. Definitions. For purposes of this Article VI, reference to the
Corporation shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger prior to (or, in the case of an entity specifically designated in a
resolution of the Board of Directors, after) the adoption hereof and which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had
continued.
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ARTICLE VII
CAPITAL STOCK
Section 1. Certificates of Stock. Except as provided in this Section 1 of
Article VII, the certificates for shares of the capital stock of the Corporation shall be in such form, not inconsistent with that required by law and the Certificate of Incorporation, as shall be approved by the Board of Directors. The
Chairman of the Board (if any), Chief Executive Officer or a Vice President shall cause to be issued to each stockholder one or more certificates, under the seal of the Corporation or a facsimile thereof if the Board of Directors shall have provided
for such seal, and signed by the Chairman of the Board (if any), the Chief Executive Officer or any Vice President, Secretary, Assistant Secretary, Chief Financial Officer or Assistant Chief Financial Officer certifying the number of shares (and, if
the stock of the Corporation shall be divided into classes or series, the class and series of such shares) owned by such stockholder in the Corporation; provided, however, that any of or all the signatures on the certificate may be facsimile. The
stock record books and the blank stock certificate books shall be kept by the Secretary, or at the office of such transfer agent or transfer agents as the Board of Directors may from time to time by resolution determine. In case any officer,
transfer agent or registrar who shall have signed or whose facsimile signature or signatures shall have been placed upon any such certificate or certificates shall have ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless 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 stock certificates shall be consecutively
numbered and shall be entered in the books of the Corporation as they are issued and shall exhibit the holders name and number of shares. The Board of Directors may deem that any outstanding shares of the Corporation will be uncertificated and
registered in such form on the stock books of the Corporation.
Section 2. Transfer of
Shares. Subject to the provisions of the Certificate of Incorporation and any other applicable agreements regarding the transfer of stock, the shares of stock of the Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal representatives upon surrender and cancellation of certificates for a like number of shares. Subject to the provisions of the Certificate of Incorporation and any other
applicable agreements regarding the transfer of stock, upon surrender to the Corporation or a transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to treat the holder
of record of any share or shares of capital stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.
Section 4. Regulations Regarding Certificates. The Board of Directors shall have the
power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors may determine the
conditions upon which a new certificate of stock may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in their discretion, require the owner of such certificate or his or her legal representative
to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent and registrar against any and all losses or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or
destroyed.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be such as
established from time to time by the Board of Directors.
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Section 2. Corporate Seal. The Board
of Directors may provide a suitable seal containing the name of the Corporation. The Secretary shall have charge of the seal (if any). If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and
used by the Chief Financial Officer or by any Assistant Secretary or Assistant Chief Financial Officer.
Section 3. Notice and Waiver of Notice. Whenever any notice is required to be given by
law, the Certificate of Incorporation or under the provisions of these bylaws, said notice shall be deemed to be sufficient if given by electronic transmission or by deposit of the same in a post office box in a sealed prepaid wrapper addressed to
the person entitled thereto at his or her post office address, as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such transmission or mailing, as the case may be.
Whenever notice is required to be given by law, the Certificate of Incorporation or under any of the provisions of these bylaws, a written
waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission 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 on the grounds that 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 any written waiver of notice unless
so required by the Certificate of Incorporation or these bylaws.
Section 4. Resignations. Any director, member of a committee or officer may resign at
any time. Such resignation shall be made in writing or by electronic transmission and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Chief Executive Officer or Secretary. The acceptance
of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for the use of
facsimile signatures elsewhere specifically authorized in these bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director and each member of
any committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or reports made to the Corporation by any of its officers, or by an independent
certified public accountant, or by an appraiser selected with reasonable care by the Board of Directors or by any such committee, or in relying in good faith upon other records of the Corporation.
Section 7. Form of Records. Any records maintained by 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 or method, provided that the records so kept can be converted into clearly
legible paper form within a reasonable time.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. If provided in the Certificate of Incorporation of the
Corporation, the Board of Directors shall have the power to adopt, amend and repeal from time to time bylaws of the Corporation, subject to the right of the stockholders entitled to vote with respect thereto to amend or repeal such bylaws as adopted
or amended by the Board of Directors.
11
EXHIBIT D
Form of A&R Certificate of Incorporate of New PubCo
[see attached]
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ATLAS ENERGY
SOLUTIONS INC.
Atlas Energy Solutions Inc. (the Corporation), a corporation organized and existing under
the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (as it currently exists or may hereafter be amended, the DGCL), hereby certifies as follows:
1. The original Certificate of Incorporation of the Corporation (the Original Certificate of
Incorporation) was filed with the Secretary of State of the State of Delaware on June 28, 2023.
2. This Amended and Restated Certificate of Incorporation, which restates, integrates and also further amends the
Original Certificate of Incorporation, has been declared advisable by the board of directors of the Corporation (the Board), duly adopted by the stockholders of the Corporation and duly executed and acknowledged by an
authorized officer of the Corporation in accordance with Sections 103, 228, 242 and 245 of the DGCL. References to this Certificate of Incorporation herein refer to this Amended and Restated Certificate of Incorporation, as
amended, restated, supplemented and otherwise modified from time to time (including by any Preferred Stock Designation as defined in this Certificate of Incorporation).
3. The Original Certificate of Incorporation is hereby amended, integrated and restated in its entirety to read as
follows:
ARTICLE I
NAME
SECTION 1.1.
Name. The name of the Corporation is Atlas Energy Solutions Inc.
ARTICLE II
REGISTERED AGENT
SECTION 2.1. Registered Agent. The address of its registered office in the State of Delaware is 251 Little Falls Drive, City of
Wilmington, County of New Castle, Delaware 19808. The name of the Corporations registered agent at such address is Corporation Service Company.
ARTICLE III
PURPOSE
SECTION 3.1. Purpose. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the DGCL, and the Corporation shall have the power to perform all lawful acts and activities.
ARTICLE IV
CAPITALIZATION
SECTION 4.1. Number of Shares.
(A) The total number of shares of stock that the Corporation shall have the authority to issue is 2,000,000,000 shares
of stock, classified as:
(i) 500,000,000 shares of preferred stock, par value $0.01 per share
(Preferred Stock); and
(ii) l,500,000,000 shares of common stock, par
value $0.01 per share (Common Stock).
(B) Subject to the rights of the holders of any
outstanding series of Preferred Stock, the number of authorized shares of Preferred Stock or Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding or reserved for the exercise of outstanding options
or warrants or conversion of any authorized and outstanding convertible securities) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of the Corporation entitled to vote irrespective of the
provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of either Preferred Stock or Common Stock voting separately as a class shall be required therefor. For purposes of this Certificate of
Incorporation, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).
SECTION 4.2. Provisions Relating to Preferred Stock.
(A) Preferred Stock may be issued from time to time in one or more series, the shares of each series to have such
designations and powers, preferences, privileges and rights, and qualifications, limitations and restrictions thereof, as are stated and expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the
Board as hereafter prescribed (a Preferred Stock Designation).
(B) Subject to any
limitations prescribed by law and the rights of any series of the Preferred Stock then outstanding, if any, authority is hereby expressly granted to and vested in the Board to authorize the issuance of Preferred Stock from time to time in one or
more series, and with respect to each series of Preferred Stock, to fix and state by the Preferred Stock Designation the designations and powers, preferences, privileges and rights, and qualifications, limitations and restrictions relating to each
series of Preferred Stock, including, but not limited to, the following:
(i) whether or not the
series is to have voting rights, full, special or limited, or is to be without voting rights, and whether or not such series is to be entitled to vote as a separate series either alone or together with the holders of one or more other classes or
series of stock;
(ii) the number of shares to constitute the series and the designation thereof;
(iii) the preferences and relative, participating, optional or other special rights, if any, and
the qualifications, limitations or restrictions thereof, if any, with respect to any series;
(iv) whether or not the shares of any series shall be redeemable at the option of the Corporation or the
holders thereof or upon the happening of any specified event, and, if redeemable, the redemption price or prices (which may be payable or issuable in the form of cash, notes, securities or other property), and the time or times at which, and the
terms and conditions upon which, such shares shall be redeemable and the manner of redemption;
(v) whether or not the shares of a series shall be subject to the operation of retirement or sinking
funds to be applied to the purchase or redemption of such shares for retirement, and, if such retirement or sinking fund or funds are to be established, the annual amount thereof, and the terms and provisions relative to the operation thereof;
(vi) the dividend rate, whether dividends are payable
in cash, stock of the Corporation or other property, the conditions upon which and the times when such dividends are payable, the preference to or the relation to the payment of dividends payable on any other class or classes or series of stock,
whether or not such dividends shall be cumulative or noncumulative, and if cumulative, the date or dates from which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof which the holders of any series thereof shall be
entitled to receive upon the voluntary or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation;
(viii) whether or not the shares of any series, at the option of the Corporation or the holder thereof
or upon the happening of any specified event, shall be convertible into or exchangeable or redeemable for, the shares of any other class or classes or of any other series of the same or any other class or classes or series of stock, securities or
other property of the Corporation and the conversion price or prices or ratio or ratios or the rate or rates at which such exchange or redemption may be made, with such adjustments, if any, as shall be stated and expressed or provided for in such
resolution or resolutions; and
(ix) such other powers, preferences, privileges and rights,
protective provisions and qualifications, limitations and restrictions with respect to any series as may to the Board seem advisable.
(C) The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all of
the foregoing respects. The Board may increase the number of shares of the Preferred Stock designated for any existing series by a resolution adding to such series authorized and unissued shares of the Preferred Stock not designated for any other
series. Unless otherwise provided in the Preferred Stock Designation, the Board may decrease the number of shares of the Preferred Stock designated for any existing series by a resolution subtracting from such series authorized and unissued shares
of the Preferred Stock designated for such existing series, and the shares so subtracted shall become authorized, unissued and undesignated shares of the Preferred Stock.
SECTION 4.3. Provisions Relating to Common Stock.
(A) Except as may otherwise be provided in this Certificate of Incorporation, each share of Common Stock shall have
identical rights and privileges in every respect. Common Stock shall be subject to the express terms of Preferred Stock and any series thereof. Except as may otherwise be provided in this Certificate of Incorporation or by applicable law, the
holders of shares of Common Stock shall be entitled to one vote for each such share on all matters to which stockholders are entitled to vote, the holders of shares of Common Stock shall have the exclusive right to vote for the election of directors
and on all other matters upon which stockholders are entitled to vote, and the holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of stockholders, other than as provided in any Preferred Stock Designation.
Each holder of Common Stock shall be entitled to notice of any stockholders meeting in accordance with the bylaws of the Corporation (as in effect at the time in question) and applicable law on all matters put to a vote of the stockholders of
the Corporation. Except as otherwise required in this Certificate of Incorporation (including any Preferred Stock Designation) or by applicable law, the holders of Common Stock shall vote together as a single class on all actions to be taken by the
stockholders of the Corporation (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, the holders of Common Stock and the Preferred Stock shall vote together as a single class).
(B) Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Common Stock shall not be
entitled to vote on any amendment to this Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to the DGCL.
(C) Subject to the prior rights and preferences, if any, applicable
to shares of Preferred Stock or any series thereof, the holders of shares of Common Stock shall be entitled to receive ratably in proportion to the number of shares of Common Stock held by them such dividends (payable in cash, stock or otherwise),
if any, as may be declared thereon by the Board at any time and from time to time out of any funds of the Corporation legally available therefor.
(D) In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of Preferred Stock or any series thereof, and subject to the right of
participation, if any, of the holders of shares of Preferred Stock in any dividends, the holders of shares of Common Stock shall be entitled to receive all of the remaining 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 dissolution, liquidation or winding-up of the Corporation, as such terms are used in this paragraph (D), shall not be deemed
to be occasioned by or to include any consolidation or merger of the Corporation with or into any other corporation or corporations or other entity or a sale, lease, exchange or conveyance of all or a part of the assets of the Corporation.
(E) No stockholder shall, by reason of the holding of shares of any class or series of capital stock of the
Corporation, have any preemptive or preferential right to acquire or subscribe for any shares or securities of any class or series, whether now or hereafter authorized, which may at any time be issued, sold or offered for sale by the Corporation,
unless specifically provided for in a Preferred Stock Designation.
SECTION 4.4. Restrictions on Transfer.
(A) No holder of Common Stock that acquired its shares thereof in exchange for shares of Class A common stock, par
value $0.01 per share, of the Corporations predecessor, AESI Holdings Inc. (formerly known as Atlas Energy Solutions Inc.) (the Predecessor), that such holder acquired prior to the consummation of the
Predecessors initial public offering on March 13, 2023 (the IPO, and each such holder an Initial Stockholder) shall be permitted to, directly or indirectly, offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of (collectively, a Disposition) any Common Stock, or any securities convertible into or exercisable or exchangeable for, or
any rights to purchase or otherwise acquire, which includes engaging in any hedging, collar (whether or not for any consideration) or other transaction that is designed to or reasonably expected to lead to or result in a Disposition of any Common
Stock, held by such Initial Stockholder or acquired by such Initial Stockholder immediately after the consummation of the IPO, or that may be deemed to be beneficially owned by such Initial Stockholder (collectively, the Lock-Up), pursuant to the Securities Act of 1933, as amended (the Securities Act), and the Exchange Act for a period of 180 days following the consummation of the IPO (the
Lock-Up Period), without the prior written consent of Goldman Sachs & Co. LLC, BofA Securities, Inc. and Piper Sandler & Co. (the
Representatives). If an Initial Stockholder executes a separate agreement covering any Dispositions during the Lock-Up Period as may be reasonably requested by the Representatives
that is necessary to give further effect hereto, in the event of any conflict or inconsistency between the terms of such separate agreement and this Section 4.4, the terms of such separate agreement shall control. Following
the expiration of the Lock-Up Period, the Initial Stockholders may effect a Disposition of all or any portion of their Common Stock, subject to compliance with applicable securities laws, policies of the
Corporation, this Certificate of Incorporation, the bylaws of the Corporation and any other requirements imposed by the Corporation or the transfer agent and registrar with respect to the Common Stock.
(B) Notwithstanding Section 4.4(A), the Lock-Up shall not apply to (i) bona fide gifts, sales or other dispositions of shares of any class of the Corporations capital stock, in each case, that are made exclusively between and among an Initial
Stockholder and members of the Initial Stockholders family, or Affiliates of the Initial Stockholder, including its partners (if a partnership) or members (if a limited liability company); provided that it shall be a condition to any transfer
pursuant to this clause (i) that (A) the transferee/donee, through its subsequent ownership of such transferred shares of Common Stock, is bound by the restrictions set forth in Section 4.4(A) to the same extent as the
transferor/donor, (B) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act and the Exchange Act) to make, and shall agree to not
voluntarily make, any filing or public announcement of the transfer or disposition prior to the expiration of the Lock-Up Period, and (C) the Initial Stockholder notifies the Representatives at least two
business days prior to the proposed transfer or disposition; (ii) any exercise of options or vesting or exercise of any other equity-based award, in each case, under the Corporations equity incentive plan or any other plan or agreement
described in the prospectus included in the registration statement on Form S-1 filed in connection with the IPO, including any Common Stock withheld by the Corporation for the payment of taxes due upon such
exercise or vesting; provided that (A) no filing or public announcement by any party under the Exchange Act or otherwise shall be required or shall be voluntarily made in connection with such exercise or vesting and (B) any Common Stock
received upon such exercise or vesting, following any applicable net settlement or net withholding, will also be subject to the Lock-Up; and (iii) the establishment of any contract, instruction or plan
that satisfies all of the requirements of Rule 10b5-1 (a Rule 10b5-1 Plan) under the Exchange Act; provided, however, that no sales of Common
Stock or securities convertible into, or exchangeable or exercisable for, Common Stock, shall be made pursuant to a Rule 10b5-1 Plan prior to the expiration of the
Lock-Up Period.
(C) Unless the written approval of the Representatives is
obtained with respect to a Disposition prior the expiration of the Lock-Up Period, such purported Disposition shall not be effective to transfer record, beneficial, legal or any other ownership of such Common
Stock, and the transferee shall not be entitled to any rights as a stockholder of the Corporation with respect to the Common Stock purported to be purchased, acquired or transferred in the Disposition (including, without limitation, the right to
vote or to receive dividends with respect thereto). Each such share of Common Stock subject to the Lock-Up Period shall bear the following legend (or any substantially similar legend):
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO A LOCK-UP PERIOD AS SET FORTH IN THE AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION OF ATLAS ENERGY SOLUTIONS INC.
ARTICLE V
DIRECTORS
SECTION
5.1. Term and Classes.
(A) The business and affairs of the Corporation shall be managed by or under the
direction of the Board. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do
all such acts and things as may be exercised or done by the Corporation.
(B) The directors, other than those who
may be elected by the holders of any series of Preferred Stock as specified in the related Preferred Stock Designation, shall be divided, with respect to the time for which they severally hold office, into three classes designated as
Class I Directors, Class II Directors and Class III Directors, as nearly
equal in number as is reasonably possible, with the initial term of office of the Class I Directors to expire at the first annual meeting of stockholders following the time at which the initial classification of the Board becomes effective, the
initial term of office of the Class II Directors to expire at the second annual meeting of stockholders following the time at which the initial classification of the Board becomes effective, and the initial term of office of the Class III
Directors to expire at the third annual meeting of stockholders following the time at which the initial classification of
the Board becomes effective, with each director to hold office until such directors successor shall have been duly elected and qualified, subject, however, to such directors earlier
death, resignation, disqualification or removal, and the Board shall be authorized to assign members of the Board, other than those directors who may be elected by the holders of any series of Preferred Stock, to such classes. At each annual meeting
of stockholders, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office
until their successor shall have been duly elected and qualified, subject, however, to such directors earlier death, resignation, disqualification or removal.
SECTION 5.2. Vacancies. Subject to applicable law, the rights of the holders of any series of Preferred Stock then outstanding and the
terms of the Amended and Restated Stockholders Agreement among the Corporation and certain of its stockholders, dated as of [●], 2023 (as amended, restated, supplemented or otherwise modified from time to time, the
StockholdersAgreement), any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, resignation, retirement, disqualification or
removal of any director or from any other cause shall, unless otherwise required by law, be filled solely by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and shall
not be filled by the stockholders. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of such directors predecessor, or if it is a newly created
directorship, shall be included in the class as designated by the Board and shall hold office until the first meeting of stockholders held after their election for the purpose of electing directors of that class and until such directors
successor is elected and qualified or until such directors earlier death, resignation or removal from office. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent director.
SECTION 5.3. Removal. Subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional
directors pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) and subject to the terms of the Stockholders Agreement, (A) prior to the Trigger Date (as defined below), any director may be removed from
office with or without cause, upon the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors and (B) from and
after the Trigger Date (as defined below), any director may be removed only for cause, upon the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally
for the election of directors.
SECTION 5.4. Additional Preferred Stock Directors. During any period when the holders of one or
more series of Preferred Stock have the separate right to elect additional directors as provided for or fixed pursuant to the provisions of this Certificate of Incorporation (including any Preferred Stock Designation), and upon commencement and for
the duration of the period during which such right continues: (A) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such number of directors that the holders of any series of
Preferred Stock have a right to elect, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions; and (B) each such additional director shall serve until
such directors successor shall have been duly elected and qualified, or until such directors right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to such additional directors earlier
death, resignation, disqualification or removal. Except as otherwise provided for or fixed
pursuant to the provisions of this Certificate of Incorporation (including any Preferred Stock Designation), whenever the holders of one or more series of Preferred Stock having a separate right
to elect additional directors cease to have or are otherwise divested of such right pursuant to said provisions, the terms of office of all such additional directors elected by the holders of such series of Preferred Stock, or elected to fill any
vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such additional director shall cease to be qualified as a director and shall cease to be a
director) and the total authorized number of directors of the Corporation shall be automatically reduced accordingly.
SECTION 5.5.
Number. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, and the terms of the Stockholders Agreement, the number of directors shall be fixed from time to
time exclusively pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board. Unless and except to the extent that the bylaws of the Corporation so provide, the election of directors need not be by written ballot. For
purposes of this Certificate of Incorporation, the term Whole Board shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.
SECTION 5.6. Committees. The Board may designate and appoint from among its members one or more committees, which may have one or more
members, and may designate one or more of its members as alternate members, who may, subject to any limitations imposed by the Board, replace absent or disqualified members at any meeting of such committee. The stockholders of the Corporation shall
have no power to appoint or remove directors as members of committees of the Board, nor to abrogate the power of the Board to establish any such committees or the power of any such committee to exercise the powers and authority of the Board.
ARTICLE VI
STOCKHOLDER ACTION
SECTION 6.1. Stockholder Consents.
(A) Prior to the date on which the stockholders party to the Stockholders Agreement (collectively, the
Principal Stockholders) and their respective Affiliates (as such term is defined in Section 10.2) no longer collectively beneficially own a majority of the outstanding shares of Common Stock (the
Trigger Date), any action required or permitted to be taken at any annual meeting or special meeting of the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote of
stockholders, if a consent or consents, setting forth the action so taken, is or are 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 such consent or consents are delivered to the Corporation.
(B) On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock with respect to
such series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be taken at a duly held annual or special meeting of stockholders and may not be taken by any consent of such stockholders.
ARTICLE VII
SPECIAL MEETINGS
SECTION 7.1. Special Meetings. Special meetings of stockholders of the Corporation, and any proposals to be considered at such
meetings, may be called and proposed only by the Executive Chairman, the Chief Executive Officer or, pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board, by the Board; provided, however, that prior to the
Trigger Date, special meetings of the stockholders of the Corporation may also be called by the Secretary of the Corporation at the request of the holders of record of a majority of the outstanding shares of Common Stock. The Board shall fix the
date, time and place, if any, of such special meeting. On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock, the stockholders of the Corporation shall not have the power to call or request a special
meeting of stockholders of the Corporation. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. The Board may postpone, reschedule or cancel any
special meeting of the stockholders previously scheduled by the Board.
ARTICLE VIII
BYLAWS
SECTION
8.1. Bylaws. In furtherance of, and not in limitation of, the powers conferred by the laws of the State of Delaware, the Board is expressly authorized to adopt, amend or repeal the bylaws of the Corporation. Any adoption, amendment or repeal
of the bylaws of the Corporation by the Board shall require the approval of a majority of the Whole Board. Stockholders shall also have the power to adopt, amend or repeal the bylaws of the Corporation; provided, however, that, in addition to any
vote of the holders of any class or series of stock of the Corporation required by law or by this Certificate of Incorporation, the bylaws of the Corporation may be adopted, altered, amended or repealed by the stockholders of the Corporation only
(A) prior to the Trigger Date, by the affirmative vote of holders of not less than a majority of the voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class, and (B) on and after the
Trigger Date, by the affirmative vote of holders of not less than 66 2/3% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. Notwithstanding the foregoing, nothing in the bylaws of
the Corporation shall be deemed to limit the ability of the parties to the Stockholders Agreement to amend, alter or repeal any provision of the Stockholders Agreement pursuant to the terms thereof, provided that no amendment to the
Stockholders Agreement (whether or not such amendment modifies any provision of the Stockholders Agreement to which the bylaws of the Corporation are subject) shall amend the bylaws of the Corporation. The bylaws of the Corporation shall
not contain any provision inconsistent with this Certificate of Incorporation. No bylaws hereafter made or adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of the Board that was valid at the time it was taken.
ARTICLE IX
LIMITATION OF DIRECTOR AND OFFICER LIABILITY
SECTION 9.1. Limitation of Director and Officer Liability. No director or officer of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists or may hereafter
be amended. Any amendment, repeal or modification of this Article IX that purports to limit the liability of a director or officer shall be prospective only and shall not affect any limitation on liability of a director or officer, as
applicable, for acts or omissions occurring prior to the date of such amendment, repeal or modification.
ARTICLE X
CORPORATE OPPORTUNITY
SECTION 10.1. Corporate Opportunity.
(A) Designated Parties (defined below) may own substantial equity interests in other entities and may make investments
and enter into advisory service agreements and other agreements from time to time. Certain Designated Parties may also serve as employees, partners, officers or directors of other companies and, at any given time, certain Designated Parties may be
in direct or indirect competition with the Corporation and/or its subsidiaries. The Corporation renounces, to the maximum extent permitted by law and in accordance with Section 122(17) of the DGCL, all interest and expectancy that it otherwise
would be entitled to have in, and all rights to be offered an opportunity to participate in, any business opportunity that from time to time may be presented to the Designated Parties. To the maximum extent permitted by law, no Designated Party
shall have any obligation to refrain from: (i) engaging in or managing the same or similar activities or lines of business as the Corporation or any of its subsidiaries or developing or marketing any products or services that compete (directly
or indirectly) with those of the Corporation or any of its subsidiaries; (ii) investing in or owning any (public or private) interest in any Person engaged in the same or similar activities or lines of business as, or otherwise in competition
with, the Corporation or any of its subsidiaries (including any Designated Party, a Competing Person); (iii) developing a business relationship with any Competing Person; or (iv) entering into any agreement to provide
any service(s) to any Competing Person or acting as an officer, director, member, manager or advisor to, or other principal of, any Competing Person, regardless (in the case of each of (i) through (iv)) of whether such activities are in direct
or indirect competition with the business or activities of the Corporation or any of its subsidiaries. To the maximum extent permitted by law, if any Designated Party acquires knowledge of a potential transaction or other business opportunity which
may be a corporate opportunity both for such Designated Party or any of his or her respective Affiliates, on the one hand, and for the Corporation or its subsidiaries, on the other hand, such Designated Party shall have no duty to communicate or
offer such transaction or business opportunity to the Corporation or its subsidiaries and such Designated Party may take any and all such transactions or opportunities for itself or offer such transactions or opportunities to any other Person.
Notwithstanding the foregoing, this Section 10.1(A) shall not apply to any potential transaction or business opportunity that is expressly offered to a director, officer or employee of the Corporation or its subsidiaries, solely in his
or her capacity as a director, officer or employee of the Corporation or its subsidiaries.
(B) Neither the
amendment nor repeal of this Article X, nor the adoption of any provision of this Certificate of Incorporation, nor, to the fullest extent permitted by Delaware law, any modification of law, shall eliminate, reduce or otherwise adversely
affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any
proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).
(C) If any provision or provisions of this Article X shall be held to be invalid, illegal or unenforceable as
applied to any circumstance or any reason whatsoever, (i) the validity, legality and enforceability of such provisions in any other circumstance and the remaining provisions of this Article X (including, without limitation, each
portion of any paragraph of this Article X containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and
(ii) to the fullest extent possible, the provisions of this Article X (including, without limitation, each such portion of any paragraph of this Article X containing any such provision held to be invalid, illegal or unenforceable)
shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by
applicable law.
(D) To the fullest extent permitted by applicable law, any Person
purchasing or otherwise acquiring or holding any interest in any shares of capital stock of the Corporation shall be deemed to have notice of, and to have consented to, the provisions of this Article X. This Article X shall not limit
any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Certificate of Incorporation, the bylaws of the Corporation or any applicable law.
SECTION 10.2. Definitions. For purposes of this Article X, the following terms have the following definitions:
(A) Affiliate means, with respect to a specified Person, a Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such specified Person; with respect to any Designated Party, an Affiliate shall include (i) any Person who is the direct
or indirect ultimate holder of equity securities (as such term is described in Rule 405 under the Securities Act) of such Designated Party, and (ii) any investment fund, alternative investment vehicle, special purpose vehicle or
holding company that is directly or indirectly managed, advised or controlled by such Designated Party.
(B) control, including the terms controlling,
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 a Person, whether through
the ownership of the then-outstanding shares of stock entitled to vote, by contract, or otherwise. A Person who is the owner of 20% or more of the then-outstanding shares of stock entitled to vote of the Corporation, partnership, unincorporated
association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds
the then-outstanding shares of stock entitled to vote, in good faith and not for the purpose of circumventing this Section 10.2, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not
individually or as a group have control of such entity.
(C) Designated Parties means the
Principal Stockholders and any member of the Board who is not at the time an officer of the Corporation, and their respective Affiliates (other than the Corporation) and all of their respective interests in other entities (existing and future) that
participate in the energy industry, as applicable.
(D) Person means any individual,
corporation, partnership, limited liability company, joint venture, firm, association, trust, estate or other entity.
ARTICLE XI
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
SECTION 11.1. Business Combinations with Interested Stockholders. The Corporation shall not be governed by Section 203 of the DGCL
(or any successor provision thereto) (Section 203), and the restrictions contained in Section 203 shall not apply to the Corporation until immediately following the time at which both
of the following conditions exist (if ever): (A) Section 203 by its terms would, but for the provisions of this Article XI, apply to the Corporation; and (B) none of the Principal Stockholders own (as defined in Section 203)
shares of capital stock of the Corporation representing at least fifteen percent (15%) of the voting power of all the then outstanding shares of capital stock of the Corporation, and the Corporation shall thereafter be governed by Section 203
if and for so long as Section 203 by its terms shall apply to the Corporation.
ARTICLE XII
AMENDMENT OF CERTIFICATE OF INCORPORATION
SECTION 12.1. Amendments.
(A) The Corporation shall have the right, subject to any express provisions or restrictions contained in this
Certificate of Incorporation, from time to time, to amend this Certificate of Incorporation or any provision hereof in any manner now or hereafter provided by applicable law, and all rights and powers of any kind conferred upon a director or
stockholder of the Corporation by this Certificate of Incorporation or any amendment hereof are subject to such right of the Corporation.
(B) Notwithstanding any other provision of this Certificate of Incorporation (and in addition to any other vote that
may be required by applicable law or this Certificate of Incorporation), on and after the Trigger Date, the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock of the Corporation entitled to vote
thereon, voting together as a single class, shall be required to amend, alter or repeal any provision of this Certificate of Incorporation; provided, however, that the amendment, alteration or repeal of Section 4.1 shall only require the
affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class.
(C) Notwithstanding any other provision of this Certificate of Incorporation (and in addition to any other vote that
may be required by applicable law or this Certificate of Incorporation), prior to, on and after the Trigger Date, the affirmative vote of the holders of at least 75% in voting power of the outstanding shares of stock of the Corporation entitled to
vote thereon, voting together as a single class, shall be required to (i) amend, alter or repeal any provision of this Certificate of Incorporation to (a) include a provision authorized by Section 362(a)(l) of the DGCL (or any
successor provision thereof) in order for the Corporation to become a public benefit corporation (as defined in Section 362(a) of the DGCL (or any successor provision thereof)) or (b) otherwise cause or allow the Corporation to
become a public benefit corporation or similar entity; (ii) merge or consolidate with or into, or convert into, another entity if, as a result of such merger, consolidation or conversion, any class or series of capital stock of the
Corporation would become, or be converted into or exchanged for the right to receive, shares or other equity interests in a domestic or foreign public benefit corporation or similar entity; or (iii) amend, alter or repeal (by
merger, consolidation, conversion or otherwise) this Section 12.1(C).
(D) Notwithstanding the foregoing, nothing in this Certificate of Incorporation shall be deemed to limit the ability of
the parties to the Stockholders Agreement to amend, alter or repeal any provision of the Stockholders Agreement pursuant to the terms thereof, provided that no amendment to the Stockholders Agreement (whether or not such amendment
modifies any provision of the Stockholders Agreement to which this Certificate of Incorporation is subject) shall amend this Certificate of Incorporation.
ARTICLE XIII
FORUM
SELECTION
SECTION 13.1. Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative
forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior Court of the State of Delaware, or, if the
Superior Court of the State of Delaware does not have jurisdiction, the United States District Court for the District of Delaware, in each case, subject to that court having personal jurisdiction
over the indispensable parties named defendants therein) shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (A) any derivative action or
proceeding brought on behalf of the Corporation, (B) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of the Corporation to the Corporation or the
Corporations stockholders, (C) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate of Incorporation or by the bylaws of the Corporation (as either may be amended or restated) or as to which the
DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, this Certificate of Incorporation or bylaws of the Corporation or (D) any action asserting a claim governed by the internal affairs doctrine. Unless the Corporation
consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the
Securities Act. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of
this Article XIII. If any provision or provisions of this Article XIII shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent
permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article XIII (including, without limitation, each portion of any sentence of this Article
XIII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in
any way be affected or impaired thereby. The provisions of this Article XIII shall not apply to actions brought to enforce any liability or duty created by the Exchange Act.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of
Incorporation as of [●], 2023.
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ATLAS ENERGY SOLUTIONS INC. |
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Signature Page to Amended and Restated Certificate of Incorporation
EXHIBIT E
Form of A&R Bylaws of New PubCo
[see attached]
AMENDED AND RESTATED BYLAWS
OF
ATLAS ENERGY
SOLUTIONS INC.
Date of Adoption: [●], 2023
ARTICLE I
OFFICES
AND RECORDS
SECTION 1.1. Registered Office. The registered office of Atlas Energy Solutions Inc. (the
Corporation) in the State of Delaware shall be as set forth in the Amended & Restated Certificate of Incorporation of the Corporation, as it may be further amended, restated, supplemented and otherwise modified
from time to time (the Certificate of Incorporation), and the name of the Corporations registered agent at such address is as set forth in the Certificate of Incorporation. The registered office and registered agent
of the Corporation may be changed from time to time by the board of directors of the Corporation (the Board) in the manner provided by applicable law.
SECTION 1.2. Other Offices. The Corporation may have such other offices, either within or outside of the State of Delaware, as the
Board may designate or as the business of the Corporation may from time to time require.
SECTION 1.3. Books and Records. The books
and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board.
ARTICLE II
STOCKHOLDERS
SECTION 2.1. Annual Meetings. If required by applicable law, an annual meeting of the stockholders of the Corporation shall be held for
the election of directors at such date, time and place, if any, either within or outside of the State of Delaware, as may be fixed by the Board, the Chairman of the Board, the Chief Executive Officer or the President, as the case may be, and stated
in the notice of the meeting or in a duly executed waiver of notice of such meeting. The Board may postpone, recess, adjourn, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board. Any other proper business may be
transacted at the annual meeting.
SECTION 2.2. Special Meetings. Special meetings may be called in the manner as specified in the
Certificate of Incorporation.
SECTION 2.3. Record Date.
(A) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or
any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by applicable
law, not be more than 60 nor less than ten days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at
the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of
or 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. A
determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders
entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or earlier date as that fixed for determination of stockholders entitled to vote in
accordance herewith at the adjourned meeting.
(B) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, exchange or redemption of stock or for the purpose of any other lawful action, the
Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the
record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
(C) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the
stockholders entitled to express consent to corporate action without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record
date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action without a meeting is fixed
by the Board, (i) when no prior action of the Board is required by applicable law, the record date for such purpose 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, and (ii) if prior action by the Board is required by applicable law, the record date for such purpose shall be at the close of business on the day on which the Board adopts the resolution taking
such prior action.
SECTION 2.4. Stockholder List. The Corporation shall prepare, no later than the tenth day before every meeting
of stockholders, a complete list of stockholders entitled to vote at any meeting of stockholders (provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the date of the meeting,
the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date), arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in the
name of such stockholder. Nothing contained in this section shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting for a period of at least ten days ending on the day before the meeting date, either on a reasonably accessible electronic network (provided that the information required to gain access to the list is
provided with the notice of the meeting) or during ordinary business hours at the principal place of business of the Corporation. Except as otherwise required by applicable law, the stock ledger of the Corporation shall be the only evidence as to
who are the stockholders entitled by this section to examine the list required by this section or to vote in person or by proxy at any meeting of the stockholders.
SECTION 2.5. Notice of Meeting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, notice shall be
given not less than ten days nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. The notice shall specify (A) the record date for determining the stockholders entitled to vote at
the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), (B) the place, if any, date and time of such meeting, (C) the means of remote communications, if any, by which stockholders and
proxyholders may be deemed to be present in person and vote at such meeting, (D) in the case of a special meeting, the purpose or purposes for which such meeting is called and (E) such other information as may be required by applicable law
or as may be deemed appropriate by the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary of the Corporation. If the stockholder list referred to in Section 2.4 of these Bylaws is made accessible on an
electronic network, the notice of meeting must indicate how the stockholder list can be accessed. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the
stockholder at his or her address as it appears on the stock transfer books of the Corporation. The Corporation may also provide stockholders with notice of a meeting including by electronic transmission in accordance with the requirements of
Section 232 of the General Corporation Law of the State of Delaware (the DGCL). Such further notice shall be given as may be required by applicable law. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the notice of meeting.
SECTION 2.6. Quorum and Adjournment of
Meetings.
(A) Except as otherwise required by applicable law, the Certificate of Incorporation or these
Bylaws, the holders of a majority of the voting power of all of the outstanding shares of stock of the Corporation entitled to vote at the meeting, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except
that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the voting power of all of the outstanding shares of such class or
series, represented in person or by proxy, shall constitute a quorum of such class or series for the transaction of such business. For the avoidance of doubt, abstentions shall be treated as present for purposes of determining the presence or
absence of a quorum. The presiding person at the meeting may adjourn the meeting from time to time for any reason, whether or not there is such a quorum. The stockholders present at a duly called meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
(B) Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the date, 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 and
vote at such adjourned meeting are announced at the meeting at which the adjournment is taken or are provided in any other manner permitted by the DGCL; provided, however, that if the adjournment is for more than 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 determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as
the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned
meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.
SECTION 2.7. Proxies. At all meetings of stockholders, a stockholder may vote by proxy. The authorization of a person to act as proxy
may be documented, signed and delivered in accordance with Section 116 of the DGCL provided that such authorization shall set forth, or be delivered with information enabling the Corporation to determine the identity of the stockholder granting
such authorization. Any copy, facsimile transmission or other reliable reproduction of the document (including any electronic transmission) created pursuant to this section may be substituted or used in lieu of the original document for any and all
purposes for which the original document could be used, provided that such copy, facsimile transmission or other reproduction shall be a complete reproduction of the entire original document. No proxy may be voted or acted upon after the
expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy is revocable at the pleasure of the stockholder executing it unless the proxy states that it is irrevocable and applicable law makes
it irrevocable.
SECTION 2.8. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board and the proposal of other business to be considered
by the stockholders at an annual meeting of stockholders may be made only (a) pursuant to the Corporations notice of meeting (or any supplement thereto), (b) by or at the direction of the Board or any authorized committee thereof,
(c) by any stockholder of the Corporation who (1) was a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the annual meeting, (2) is entitled to vote at the meeting and
(3) complies with the notice procedures and other requirements set forth in these Bylaws and applicable law, or (d) by stockholders of the Corporation who are given such rights or abilities under the Amended & Restated
Stockholders Agreement, among the Corporation and certain of its stockholders, dated as of [●], 2023 (as further amended, restated, supplemented or otherwise modified from time to time, the Stockholders
Agreement), pursuant to the terms of the Stockholders Agreement. Sections 2.8(A)(i)(c) and (d) of these Bylaws shall be the exclusive means for a stockholder to make nominations or submit other business
(other than matters properly brought under and in compliance with Rule 14a-8 or Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the
Exchange Act), as applicable, and included in the Corporations notice of meeting, annual meeting proxy statement and proxy card) before an annual meeting of the stockholders. In addition, if the proposal is made on
behalf of a beneficial owner other than the stockholder of record, such beneficial owner must be the beneficial owner of stock of the Corporation both at the time of giving notice provided for in this Section 2.8(A)(i) and at the time of
the annual meeting.
(ii) For any nominations or any other business to be
properly brought before an annual meeting by a stockholder pursuant to Section 2.8(A)(i)(c) of these Bylaws, (x) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (y) such
other business must otherwise be a proper matter for stockholder action under the DGCL and (z) the record stockholder and the beneficial owner, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with
the representations set forth in the Solicitation Statement (as defined below) required by these Bylaws. To be timely, a stockholders notice must be received by the Secretary of the Corporation at the principal executive offices of the
Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding years annual meeting (which date shall, for purposes of the
Corporations first annual meeting of stockholders after the shares of Class A common stock, par value $0.01 per share (such stock, the Predecessor Class A Common Stock), of the
Corporations predecessor, AESI Holdings Inc. (formerly known as Atlas Energy Solutions Inc.) (the Predecessor) were first publicly traded, be deemed to have occurred on March 9, 2023), provided,
however, that subject to the following sentence, in the event that the date of the annual meeting is scheduled for a date that is more than 30 days before or more than 60 days after such anniversary date or in the event that no annual meeting
was held in the prior year (other than with respect to the Corporations first annual meeting of stockholders after the shares of Predecessor Class A Common Stock are first publicly traded), notice by the stockholder to be timely must be
so received not later than the 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 any adjournment, recess or postponement of an annual meeting or the announcement
thereof commence a new time period (or extend any time period) for the giving of a stockholders notice as described above. The number of nominees a stockholder may nominate for election at the annual meeting (or in the case of a stockholder
giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at the annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual
meeting.
To be in proper form, a stockholders notice (whether given pursuant to this Section 2.8(A)(ii) or
Section 2.8(B)) to the Secretary of the Corporation must:
(a) set forth, as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Corporations books, and of any such Stockholder
Associated Person (as defined in Section 2.8(C)(ii)), if any, (2) (A) the class or series and number of shares of the Corporation that are, directly or indirectly, owned beneficially and of record by such stockholder and
such Stockholder Associated Person, (B) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series
of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of
stock of the Corporation or otherwise (a Derivative Instrument), directly or indirectly owned beneficially by such stockholder or by any Stockholder Associated Person and any other direct or indirect opportunity to profit
or share in any profit derived from any increase or decrease in the value of shares of the Corporation held by such stockholder or by any Stockholder Associated Person, (C) a complete and accurate description of any agreement, arrangement or
understanding between or among such stockholder and any Stockholder Associated Person and any other person or persons in connection with such stockholders director nomination or other proposed business and the name and address of any other
person(s) or entity or entities known to the stockholder to support such nomination or business, including any agreements, arrangements or understandings relating to any compensation or payments to be paid to any such proposed nominee(s), pertaining
to the nomination(s) or other business proposed to be brought before the meeting of stockholders (which description shall identify the name of each other person who is party to such an agreement, arrangement or understanding), (D) a description of
any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or any Stockholder Associated Person has a right to vote, directly or indirectly, any shares of any security of the Corporation, (E) any short
interest in any security of the Corporation held by such stockholder or any Stockholder Associated Person (for purposes of these Bylaws, a person shall be deemed to have a short interest
in a security if such person directly or indirectly, through any contract, 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), (F) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or by any Stockholder Associated Person that are separated or separable from the underlying
shares of the Corporation, (G) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or any Stockholder Associated Person is
a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (H) any performance-related fees (other than an asset-based fee) that such stockholder or any Stockholder Associated Person is entitled to base
on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholders or any Stockholder
Associated Persons immediate family sharing the same household, (3) any other information relating to such stockholder and any Stockholder Associated Person, if any, that would be required to be disclosed in a proxy statement or other
filing required to be made in connection with solicitations of proxies for, as applicable, the proposal or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder, (4) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other
business before the meeting, (5) a representation as to whether or not such stockholder or any Stockholder Associated Person intends or is a party of a group which intends (x) to deliver a proxy statement or form of proxy to holders of at
least the percentage of the voting power of the Corporations outstanding stock required to approve or adopt the proposal or, in the case of a nomination or nominations, at least the percentage of the voting power of the Corporations
outstanding stock reasonably believed by the stockholder or Stockholder Associated Person, as the case may be, to be sufficient to elect such nominee or nominees, (y) otherwise to solicit proxies or votes from stockholders in support of such
proposal or nomination and/or (z) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act (such representation, a Solicitation
Statement), (6) any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship pursuant to
which such stockholder or beneficial owner has or shares a right to, directly or indirectly, vote any shares of any class or series of capital stock of the Corporation, (7) any rights to dividends or other distributions on the shares of any
class or series of capital stock of the Corporation, directly or indirectly, owned beneficially by such stockholder or beneficial owner that are separated or separable from the underlying shares of the Corporation, (8) any performance-related
fees (other than an asset based fee) to which such stockholder or beneficial owner, directly or indirectly, is entitled based on any increase or decrease in the value of shares of any class or series of capital stock of the Corporation or any
Derivative Instruments and (9) the names and addresses of other stockholders (including beneficial owners) known by any of the stockholders giving the notice to support such nominations or other business proposal(s), and to the extent known the
class and number of all shares of the Corporations capital stock owned beneficially or of record by such other stockholder(s) or other beneficial owner(s);
(b) if the notice relates to any business other than a nomination of a director or directors that the
stockholder proposes to bring before the meeting, set forth (1) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder
and Stockholder Associated Person, if any, in such business, (2) the exact text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the
Bylaws, the language of the proposed amendment) and (3) a complete and accurate description of all agreements, arrangements and understandings between or among such stockholder and such stockholders Stockholder Associated Person, if any,
and the name and address of any other person(s) or entity or entities in connection with the proposal of such business by such stockholder;
(c) set forth, as to each person, if any, whom the
stockholder proposes to nominate for election or reelection to the Board (1) all information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with
solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such persons written consent to being named in the
Corporations proxy statement as a nominee and to serving as a director if elected), (2) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years,
and any other material relationships, between or among such stockholder and Stockholder Associated Person, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed 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 Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the
registrant for purposes of such rule and the nominee were a director or executive officer of such registrant, and (3) a representation that such person intends to serve a full term, if elected as director; and
(d) with respect to each nominee for election or reelection to the Board, include (1) a completed
and signed questionnaire, representation and agreement in a form provided by the Corporation, which form the stockholder must request from the Secretary of the Corporation in writing with no less than seven days advance notice and (2) a written
representation and agreement (in the form provided by the Secretary of the Corporation upon written request) that such person (A) is not and will not become a party to (i) any agreement, arrangement or understanding (whether written or
oral) with, and has not given any commitment or assurance to, any person or entity as to how such person, 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 that could limit or interfere with such persons ability to comply, if elected as a director of the Corporation, with such persons fiduciary duties under applicable
law, (B) is not and will not become a party to any agreement, arrangement or understanding (whether written or oral) with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or
indemnification in connection with service or action as a director that has not been disclosed therein and (C) in such persons individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would
be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the
Corporation. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the
Corporation or that could be material to a reasonable stockholders understanding of the independence, or lack thereof, of such nominee.
(iii) A stockholder providing notice of a nomination or proposal of other business to be brought before
a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to clauses (ii)(a)(1)-(4) and (6)-(9) and clauses
(ii)(b)-(c) of this Section 2.8(A) shall be true and correct (a) as of the record date for the meeting and (b) as of the date that is ten business days prior to the meeting or any adjournment or postponement thereof,
and such update and supplement shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not later than five business days after the record date for the meeting (in the
case of the update and supplement required to be made as of the record date) and not later than seven business days prior to the date for the meeting or any postponement or adjournment thereof, if practicable (or, if not practicable, on the first
practicable date prior to any adjournment or postponement thereof (in the case of the update and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement thereof)).
(B) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporations notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders
at which directors are to be elected pursuant to a notice of meeting (i) by or at the direction of the Board or any committee thereof (or stockholders if permitted pursuant to Article VII of the Certificate of Incorporation and
Section 2.2 of these Bylaws) or (ii) if the Board (or stockholders if permitted pursuant to Article VII of the Certificate of Incorporation and Section 2.2 of these Bylaws) has determined that directors shall be elected at
such meeting, (a) by any stockholder of the Corporation who (1) is a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the special meeting, (2) is entitled to vote at the meeting and
(3) complies with the notice procedures set forth in these Bylaws and applicable law or (b) by a stockholder of the Corporation who is given such rights or abilities under the Stockholders Agreement pursuant to the terms of the
Stockholders Agreement. In the event a special meeting of stockholders is called pursuant to Article VII of the Certificate of Incorporation or Section 2.2 of these Bylaws for the purpose of electing one or more directors to the
Board, a stockholder pursuant to clause (ii)(a) of this Section 2.8(B) may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporations notice of meeting, if the
stockholder delivers notice with the information required by Section 2.8(A)(ii)(a) and Section 2.8(A)(ii)(c) (with the updates required by Section 2.8(A)(iii)) of these Bylaws with respect to any nomination and
the completed and signed questionnaire, representations and agreements required by Section 2.8(A)(ii)(d) of these Bylaws. Such notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the
Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting at which directors are to be elected. In no event shall any adjournment, recess or postponement or the announcement thereof of a special meeting commence a new time period (or extend any
time period) for the giving of a stockholders notice as described above. The number of nominees a stockholder may nominate for election at the special meeting (or in the case of a stockholder giving the notice on behalf of a beneficial owner,
the number of nominees a stockholder may nominate for election at the special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting.
(C) General.
(i) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the
Exchange Act, only such persons who are nominated in accordance with the procedures set forth in these Bylaws and applicable law shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall
have been brought before the meeting in accordance with the procedures set forth in these Bylaws and applicable law. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, the presiding person at the
meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and applicable
law and, if any proposed nomination or business is not in compliance with these Bylaws and applicable law, to declare that such defective proposal or nomination shall be disregarded.
(ii) For purposes of these Bylaws, public announcement shall mean disclosure
in a press release reported by Dow Jones News Service, the Associated Press, or any other 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 and the rules and regulations promulgated thereunder, and Stockholder Associated Person shall mean, for any stockholder, (a) any person or entity controlling, directly or indirectly, or acting in
concert with, such stockholder, (b) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder or (c) any person or entity controlling, controlled by or under common control with any
person or entity referred to in the preceding clauses (a) or (b).
(iii) Notwithstanding the
foregoing provisions of these Bylaws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in these Bylaws; provided,
however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to
be considered pursuant to Section 2.8(A) or Section 2.8(B) of these Bylaws. Nothing in these Bylaws shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the Corporations
proxy statement
pursuant to Rule 14a-8 under the Exchange Act; (b) of stockholders to include the names of persons validly nominated for election as a director of the
Corporation in the Corporations proxy card in compliance with Rule 14a-19 of the Exchange Act; or (c) of the holders of any series of preferred stock of the Corporation (Preferred
Stock) if and to the extent provided for under applicable law, the Certificate of Incorporation or these Bylaws. Notwithstanding anything to the contrary in these Bylaws, unless otherwise required by law, if any stockholder or
Stockholder Associated Person, if any, (1) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to any proposed nominee and (2) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) promulgated under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such
stockholder or such Stockholder Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each such
proposed nominee shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominee may have been received by the Corporation (which proxies and votes shall be disregarded). Upon request by the
Corporation, if any stockholder or Stockholder Associated Person provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act, such stockholder or such Stockholder Associated Person shall
deliver to the Corporation, no later than five business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act.
(iv) Unless otherwise required by law, if the stockholder (or a qualified representative of the
stockholder) making a nomination or proposal under this Section 2.8 does not appear at a meeting of stockholders to present such nomination or proposal, the nomination shall be disregarded and the proposed business shall not be
transacted, as the case may be, notwithstanding that proxies in favor thereof may have been received by the Corporation. For purposes of this Section 2.8, to be considered a qualified representative of the stockholder, a
person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the
meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(v) Notwithstanding anything to the contrary contained in this Section 2.8,
for so long as the Stockholders Agreement remains in effect with respect to any Principal Stockholder, Ben M. Brigham (so long as Ben M. Brigham has the right to designate one or more nominees for election to the Board pursuant to the
Stockholders Agreement) shall not be subject to this Section 2.8 with respect to any annual or special meeting of stockholders.
SECTION 2.9. Conduct of Business. The date and time of the opening and the closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board may adopt by resolution such rules and regulations for the conduct of a meeting of stockholders as it shall deem appropriate in
its sole discretion. The Chairman of the Board, if one shall have been elected, or in the Chairman of the Boards absence, the Chief Executive Officer or, in the Chief Executive Officers absence or if one shall not have been elected, the
director or officer designated by the majority of the Whole Board (as defined below), shall preside at all meetings of the stockholders. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding
over the meeting shall have the right and authority to convene and for any or no reason to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the presiding person at
the meeting, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board 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 entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine; (D) restrictions on entry to the meeting after the time fixed for the
commencement thereof; (E) limitations on the time allotted to questions or comments by participants; and (F) restrictions of the use of audio or visual recording devices. The person presiding over the meeting, 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 a matter or business was not properly brought before the meeting, and if such presiding person at the
meeting should
so determine, such presiding person at the meeting shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered.
Unless and to the extent determined by the Board 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. For purposes of these Bylaws, the term
Whole Board shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.
SECTION 2.10. Required Vote. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified
circumstances, at any meeting at which directors are to be elected, so long as a quorum is present, directors shall be elected by a plurality of the votes cast by the holders of shares present in person or represented by proxy at the meeting and
entitled to vote in such election. Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited. Unless a different or minimum vote is required by applicable law, the rules and
regulations of any stock exchange applicable to the Corporation, any law or regulation applicable to the Corporation or its securities, the Certificate of Incorporation or these Bylaws, in which such different or minimum vote shall be the applicable
vote on the matter, in all matters other than the election of directors and certain non-binding advisory votes described below, the affirmative vote of the holders of a majority of the voting power of the
outstanding shares of stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the act of the stockholders. In non-binding advisory matters
with more than two possible vote choices, the plurality of the votes cast by the holders of outstanding shares of stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the
recommendation of the stockholders.
SECTION 2.11. Treasury Stock. Shares of the Corporations capital stock shall neither be
entitled to vote nor counted for quorum purposes if such shares belong to (A) the Corporation, (B) any other corporation, if a majority of 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; provided, however, that the foregoing shall not limit the right of the Corporation or such other corporation to vote stock of the Corporation held in a fiduciary capacity.
SECTION 2.12. Inspectors of Elections. The Corporation may, and when required by applicable law, shall, appoint one or more inspectors,
which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report
thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders and the appointment of an
inspector is required by applicable law, the presiding person at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath to faithfully execute the
duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by applicable law.
ARTICLE III
BOARD OF
DIRECTORS
SECTION 3.1. General Powers. The business and affairs of the Corporation shall be managed by or under the
direction of the Board. In addition to the powers and authorities expressly conferred upon them by these Bylaws, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. The directors shall act only as a Board or as a committee thereof, and the individual directors shall have no power as such.
SECTION 3.2. Number, Election, Tenure and Voting Power. Subject to applicable law, the Stockholders Agreement and the rights of
the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by the affirmative vote of a majority of the
Whole Board; provided that the initial number of directors shall be nine. The election, term and voting power of directors shall be as set forth in the Certificate of Incorporation.
SECTION 3.3. Regular Meetings. Subject to Section 3.5, regular meetings
of the Board shall be held on such dates, and at such times and places, if any, as are determined from time to time by resolution of the Board. Notice of such regular meetings shall not be required.
SECTION 3.4. Special Meetings. Special meetings of the Board shall be called at the request of the Chairman of the Board, the Chief
Executive Officer or a majority of the Board then in office. The person or persons authorized to call special meetings of the Board may fix the place, if any, date and time of the meetings. Any business may be conducted at a special meeting of the
Board.
SECTION 3.5. Notice. Notice of any special meeting of directors shall be given to each director at his or her business or
residence in writing by hand delivery, first-class or overnight mail, courier service or facsimile or electronic transmission or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in
the United States mails so addressed, with postage thereon prepaid, at least five days before such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail
or courier service company at least 24 hours before such meeting. If by facsimile or electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least 24 hours before such meeting. If by telephone or
by hand delivery, the notice shall be given at least 24 hours prior to the time set for the meeting and shall be confirmed by facsimile or electronic transmission that is sent promptly thereafter. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in
accordance with these Bylaws.
SECTION 3.6. Action by Consent of Board. Any action required or permitted to be taken at any meeting
of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, the consent or consents
relating thereto shall be filed with the minutes of proceedings of the Board or committee in the same paper or electronic form as the minutes are maintained. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware.
SECTION 3.7. Remote
Meetings. Members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can
hear each other, and such participation in a meeting shall constitute presence in person at such meeting.
SECTION 3.8. Quorum. A
majority of the Whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may, to the fullest extent permitted by law,
adjourn the meeting from time to time without further notice unless (A) the date, time and place, if any, of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of
Section 3.5 of these Bylaws shall be given to each director, or (B) the meeting is adjourned for more than 24 hours, in which case the notice referred to in clause (A) shall be given to those directors not present at the
announcement of the date, time and place, if any, of the adjourned meeting. Except as otherwise expressly required by law, the Certificate of Incorporation or these Bylaws, all matters shall be determined by the affirmative vote of a majority of the
directors present at a meeting at which a quorum is present.
SECTION 3.9. Vacancies. Any newly created directorship that results
from an increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, retirement, disqualification or removal of any director or from any other cause shall be filled in accordance with the
Certificate of Incorporation.
SECTION 3.10. Removal. Directors of the Corporation may be removed in the manner provided in the
Certificate of Incorporation and applicable law.
SECTION 3.11. Records. The Board shall cause to be kept a record containing the
minutes of the proceedings of the meetings of the Board and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation.
SECTION 3.12. Compensation. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, the Board shall have authority to fix the compensation of directors, including fees and reimbursement of expenses. The Corporation will cause each non-employee director serving
on the Board to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with such service.
SECTION 3.13. Regulations. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board
may adopt such rules and regulations for the conduct of meetings of the Board and for the management of the affairs and business of the Corporation as the Board may deem appropriate.
SECTION 3.14. First Meeting. Each newly elected Board may hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as the annual meeting of stockholders. Notice of such meeting shall not be required.
ARTICLE IV
COMMITTEES
SECTION
4.1. Designation; Powers. Subject to the terms of the Stockholders Agreement, the Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the
fullest extent permitted by applicable law and to the extent provided in the resolution(s) of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may require it.
SECTION 4.2. Procedure; Meetings; Quorum.
Any committee designated pursuant to Section 4.1 shall choose its own chairman in the event the chairman has not been selected by the Board by a majority vote of the members then in attendance at a meeting of the committee so long as a
quorum is present, shall keep regular minutes of its proceedings, and shall meet at such times and at such place or places as may be provided by the charter of such committee or by resolution of such committee or resolution of the Board. At every
meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present at a meeting where a quorum is present shall be necessary for the adoption
by it of any resolution. A committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to such subcommittee any or all of the powers of such committee. The Board shall adopt a
charter for each committee for which a charter is required by applicable laws, regulations or stock exchange rules, may adopt a charter for any other committee, and may adopt other rules and regulations for the governance of any committee not
inconsistent with the provisions of the Certificate of Incorporation, these Bylaws or any such charter. Unless the Certificate of Incorporation, these Bylaws, any charter for such committee or the Board otherwise provides, any such committee or
subcommittee may make rules for the conduct of its business, but unless otherwise provided by the Board or such rules, its meetings shall be called, notice given or waived, its business conducted or its action taken as nearly as may be in the same
manner as is provided in these Bylaws with respect to meetings or for the conduct of business or the taking of actions by the Board. The Board shall have power at any time to fill vacancies in, change the membership of, or discharge any such
committee. The Secretary of the Corporation shall act as Secretary of any committee or subcommittee, unless otherwise provided by the Board or such committee or subcommittee.
SECTION 4.3. Substitution of Members. The Board may designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board to act at the meeting in the place of the absent or disqualified member.
ARTICLE V
OFFICERS
SECTION
5.1. Officers. The Board shall elect the officers of the Corporation which may include, if the Board so elects, a Chairman of the Board, a Chief Executive Officer, a President, Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents, a Secretary, a Treasurer and such other officers as the Board from time to time may deem proper. If elected, the Chairman of the Board shall be chosen from among the directors. All officers elected by the Board shall each have such
powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article V. Such officers shall also have such powers and duties as from time to time may be conferred by the Board or by any duly
authorized committee thereof or, with respect to any Executive Vice President, Senior Vice President, Vice Presidents, Treasurer or Secretary, by the Chairman of the Board, Chief Executive Officer or President, if any. The Board or any committee
thereof may from time to time elect, or the Chairman of the Board, Chief Executive Officer or President, if any, may appoint, such other officers (including a Chief Financial Officer, Chief Operating Officer and one or more Senior Vice Presidents,
Vice Presidents, Assistant Secretaries and Assistant Treasurers) and such agents, as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices
for such terms as shall be provided in these Bylaws or as may be prescribed by the Board or such committee thereof or by the Chairman of the Board, Chief Executive Officer or President, as the case may be. Any number of offices may be held by the
same person. Except for the Chairman of the Board, if any, no officer need be a director. None of the officers need be a stockholder of the Corporation.
SECTION 5.2. Election and Term of Office. Each officer shall hold office until his or her successor shall have been duly elected or
appointed and shall have qualified or until his or her death or until he or she shall resign, but any officer may be removed from office at any time by the affirmative vote of a majority of the Board or, except in the case of an officer or agent
elected by the Board, by the Chairman of the Board, Chief Executive Officer or President, if any. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed. No elected officer shall have any contractual
rights against the Corporation for compensation by virtue of such election beyond the date of the election of his or her successor, his or her death, resignation or removal, whichever event shall first occur, except as otherwise provided in an
employment contract or under an employee deferred compensation plan.
SECTION 5.3. Chairman of the Board. The Chairman of the
Board, if elected, shall perform all duties incidental to his or her office that may be required by law and all such other duties as are properly required of him or her by the Board. The Chairman of the Board may also serve as Chief Executive
Officer, if so elected by the Board. The Chairman of the Board may also have the title of Executive Chairman if the Chairman of the Board is also an officer of the Corporation.
SECTION 5.4. Chief Executive Officer. The Chief Executive Officer, if any, shall be responsible for the general management of the
affairs of the Corporation and shall act in a general executive capacity subject to the oversight of the Chairman of the Board in the administration and operation of the Corporations business and general supervision of its policies and
affairs. The Chief Executive Officer shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and all other documents and instruments in connection with the business of the
Corporation. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer, if also a director, shall preside when present at all meetings of the Board.
SECTION 5.5. President. The President, if any, shall have such powers and shall perform such duties as shall be assigned to him or her
by the Board. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President, if any and if he or she shall be a director, shall preside when present at all meetings of the Board.
SECTION 5.6. Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. Each Executive Vice President, Senior Vice
President and Vice President, if any, shall have such powers and shall perform such duties as shall be assigned to him or her by the Board or the Chairman of the Board, the Chief Executive Officer or the President, if any.
SECTION 5.7. Treasurer. The Treasurer, if any, shall exercise general supervision over the receipt, custody and disbursement of
corporate funds. The Treasurer shall cause the funds of the Corporation to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositaries in the manner provided by resolution of the Board. He or
she shall have such further powers and duties and shall be subject to such directions as may be granted or imposed upon him or her from time to time by the Board, the Chairman of the Board, the Chief Executive Officer or the President, if any.
SECTION 5.8. Secretary. The Secretary, if any, shall keep or cause to be kept in one
or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and the stockholders; he or she shall see that all notices are duly given in accordance with the provisions of these Bylaws and as
required by applicable law; he or she shall be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; and he or she shall have charge of the certificate books, transfer books and stock ledgers, and such
other books and papers as the Board may direct; and in general, he or she shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Board, the Chairman of the
Board, the Chief Executive Officer or the President, if any.
SECTION 5.9. Vacancies. A newly created elected office and a vacancy
in any elected office because of death, resignation, removal or otherwise may be filled by the Board for the unexpired portion of the term at any meeting of the Board. Any vacancy in an office appointed by the Chairman of the Board, the Chief
Executive Officer or the President, if any, because of death, resignation, removal or otherwise may be filled by the Chairman of the Board, the Chief Executive Officer or the President, if any.
SECTION 5.10. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board, the Chief Executive
Officer or any officer authorized by the Chairman of the Board, the Chief Executive Officer or the President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation or entity in which the Corporation may hold securities and otherwise to exercise any and all rights and powers that the Corporation may possess by reason of its ownership of
securities in such other corporation.
SECTION 5.11. Delegation. The Board may from time to time delegate the powers and duties of
any officer to any other officer or agent, notwithstanding any provision hereof.
SECTION 5.12. Compensation. The salaries or other
compensation of the officers of the Corporation shall be fixed from time to time by the Board, a committee of the Board or an officer of the Corporation designated by the Board or a committee of the Board, subject to applicable law and the rules or
regulations of any stock exchange applicable to the Corporation.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFERS
SECTION 6.1. Stock Certificates and Transfers. The interest of each stockholder of the Corporation evidenced by certificates for shares
of stock shall be in such form as the appropriate officers of the Corporation may from time to time prescribe, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock may
be uncertificated shares. The shares of the stock of the Corporation shall be entered in the books of the Corporation as they are issued and shall exhibit the holders name and number of shares. Subject to the provisions of the Certificate of
Incorporation, the shares of the stock of the Corporation shall be transferred on the books of the Corporation, which may be maintained by a third-party registrar or transfer agent, by the holder thereof in person or by his or her attorney, upon
surrender for cancellation of certificates for at least the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation
or its agents may reasonably require or upon receipt of proper transfer instructions from the registered holder of uncertificated shares and upon compliance with appropriate procedures for transferring shares in uncertificated form, at which time
the Corporation shall issue a new certificate to the person entitled thereto (if the stock is then represented by certificates), cancel the old certificate and record the transaction upon its books.
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 (it being understood that each of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary and any Assistant Secretary shall be an authorized officer for such purpose), certifying the number of shares owned by such holder in 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 has 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 he or she were such officer, transfer agent or registrar at the date of issue.
SECTION 6.2.
Lost, Stolen or Destroyed Certificates. No certificate for shares or uncertificated shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen, except on production of such
evidence of such loss, destruction or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board or any financial officer may in its or their discretion require.
SECTION 6.3. Ownership of Shares. The Corporation shall be entitled to treat the holder of record of any share or shares of stock of
the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise required by law.
SECTION 6.4. Regulations Regarding Certificates. Subject to applicable law, the
Board shall have the power and authority to make all such rules and regulations concerning the issue, transfer and registration or the replacement of certificates for shares of stock of the Corporation. The Corporation may enter into additional
agreements with stockholders to restrict the transfer of stock of the Corporation in any manner not prohibited by the DGCL.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the 31st day of
December of each year or as otherwise determined by the Board.
SECTION 7.2. Dividends. Except as otherwise provided by law or the
Certificate of Incorporation, the Board may from time to time declare, and the Corporation may pay, out of funds legally available therefor, dividends on its outstanding shares of stock, which dividends may be paid in either cash, property or shares
of stock of the Corporation. A member of the Board, or a member of any committee designated by the Board, shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or committees of the Board, or by any other person as to matters the director reasonably believes are within such other persons professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other
funds from which dividends might properly be declared and paid.
SECTION 7.3. Seal. The Corporation may adopt a corporate seal,
which shall be adopted and which may be altered by the Board. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
SECTION 7.4. Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the
provisions of the DGCL, the Certificate of Incorporation or these Bylaws, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board or committee thereof need be specified in any waiver of notice of such
meeting. 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.
SECTION 7.5. Resignations. Any director or any officer, whether elected or appointed,
may resign at any time by giving notice in writing or by electronic transmission of such resignation to the Chairman of the Board, the Chief Executive Officer, the President, if any, or the Secretary, and such resignation shall be deemed to be
effective when said notice is received by the Chairman of the Board, the Chief Executive Officer, the President, if any, or the Secretary, or at such later time as is specified therein unless otherwise provided in the notice of resignation. No
formal action shall be required of the Board or the stockholders to make any such resignation effective.
SECTION 7.6. Indemnification
and Advancement of Expenses.
(A) The Corporation shall indemnify and hold harmless, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed 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 or has agreed to become a director or
officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation or of a
partnership, joint venture, trust, other enterprise or non-profit entity, including service with respect to an employee benefit plan (a Covered Person), whether the basis of such
proceeding is alleged action in an official capacity as a director, officer, trustee, employee or agent, or in any other capacity while serving or having agreed to serve as a director, officer, trustee, employee or agent, against all expenses,
liability and loss (including, without limitation, attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Covered Person in connection with such
proceeding.
(B) The Corporation shall, to the fullest extent not prohibited by applicable law as it presently
exists or may hereafter be amended, 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 by final
judicial decision from which there is no further right to appeal (hereinafter, a final adjudication) that the Covered Person is not entitled to be indemnified under this Section 7.6 or otherwise.
(C) The rights to indemnification and advancement of expenses under this Section 7.6 shall be contract
rights and such rights shall continue as to a Covered Person who has ceased to be a director, officer, trustee, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing
provisions of this Section 7.6, except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to a Covered Person in connection with a
proceeding (or part thereof) initiated by such Covered Person only if such proceeding (or part thereof) was authorized by the Board.
(D) If a claim for indemnification under this Section 7.6 (following the final disposition of such
proceeding) is not paid in full within 60 days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Section 7.6 is not paid in full within 30 days after the
Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part,
the Covered Person shall be entitled to be paid the expense of prosecuting such claim, or a claim brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, to the fullest extent permitted by applicable
law. 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. In (i) any suit brought by a Covered Person to
enforce a right to indemnification hereunder (but not in a suit brought by a Covered Person to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the Covered Person has not met any applicable standard for indemnification set forth in the DGCL. Neither
the failure of the Corporation (including
its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit
that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are
not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the
applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an advancement of expenses hereunder, or
brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to such advancement of expenses, under this
Section 7.6 or otherwise shall be on the Corporation.
(E) The rights conferred on any Covered Person
by this Section 7.6 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, law (common or statutory), any provision of the Certificate of Incorporation, these Bylaws, any
agreement or vote of stockholders or disinterested directors or otherwise.
(F) This Section 7.6 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.
(G) Any Covered Person entitled to indemnification and/or advancement of expenses, in each case pursuant to this
Section 7.6, may have certain rights to indemnification, advancement and/or insurance provided by one or more persons with whom or which such Covered Person may be associated (including, without limitation, any Principal
Stockholder). The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any proceeding, expense, liability or matter that is the subject of this
Section 7.6, (ii) the Corporation shall be primarily liable for all such obligations and any indemnification afforded to a Covered Person in respect of a proceeding, expense, liability or matter that is the subject of this
Section 7.6, whether created by law, organizational or constituent documents, contract or otherwise, (iii) any obligation of any persons with whom or which a Covered Person may be associated (including, without
limitation, any Principal Stockholder) to indemnify such Covered Person and/or advance expenses or liabilities to such Covered Person in respect of any proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the
Corporation shall be required to indemnify each Covered Person and advance expenses to each Covered Person hereunder to the fullest extent provided herein without regard to any rights such Covered Person may have against any other person with whom
or which such Covered Person may be associated (including, without limitation, any Principal Stockholder) or insurer of any such person and (v) the Corporation irrevocably waives, relinquishes and releases any other person with whom or which a
Covered Person may be associated (including, without limitation, any Principal Stockholder) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Corporation hereunder.
(H) The Corporations 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, other enterprise or non-profit entity, including service with respect to an employee
benefit plan, 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, other enterprise,
non-profit entity or employee benefit plan.
(I) The Corporation may
maintain insurance, at its expense, to protect itself and any person who is or was serving as 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, other enterprise or non-profit entity, including service with respect to an employee benefit plan, against any expense, liability or loss (including,
without limitation, attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement), whether or not the Corporation would have the power to indemnify such person against any such expense, liability or loss
under the DGCL.
(J) Any repeal or modification of the provisions of this Section 7.6 shall not
adversely affect any right or protection hereunder of any Covered Person in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior
to the time of such repeal or modification.
SECTION 7.7. Notices. Except as otherwise specifically provided herein or required by
applicable law, all notices required to be given to any stockholder, director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the
mails, postage paid, or by sending such notice by commercial courier service, or by facsimile or other electronic transmission, provided that notice to stockholders by electronic transmission shall be given in the manner provided in Section 232
of the DGCL. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. Without limiting the manner by which notice otherwise may
be given effectively, notice to any stockholder shall be deemed given: (A) if by facsimile, when directed to a number at which the stockholder has consented to receive notice; (B) if by electronic mail, when directed to such
stockholders electronic mail address (unless the stockholder has notified the corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by the DGCL) in accordance
with the DGCL; (C) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (i) such posting and (ii) the giving of such separate notice; (D) if by any
other form of electronic transmission, when directed to the stockholder; and (E) if by mail, when deposited in the mail, postage prepaid, directed to the stockholder at such stockholders address as it appears on the records of the
Corporation.
SECTION 7.8. Facsimile and Electronic Signatures. In addition to the provisions for use of facsimile or electronic
signatures elsewhere specifically authorized in these Bylaws, facsimile or electronic signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof, the Chairman of the Board, the
Chief Executive Officer or President, if any.
SECTION 7.9. Time Periods. Except as otherwise set forth in these Bylaws, in
applying any provision of these Bylaws that require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the
day of the doing of the act shall be excluded, and the day of the event shall be included.
SECTION 7.10. Reliance Upon Books, Reports
and Records. Each member of the Board, each member of any committee designated by the Board and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the
Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporations officers or employees, or committees designated by the Board, or by any other person as to the matters the member
reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
SECTION 7.11. Severability. Whenever possible and to the fullest extent permitted by law, each provision or portion of any provision of
these Bylaws will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of these Bylaws is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such provision or portion of any provision shall be severable and the invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and these Bylaws
will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
ARTICLE VIII
AMENDMENTS
SECTION
8.1. Amendments. In furtherance of, and not in limitation of, the powers conferred by the laws of the State of Delaware, and subject to the provisions in the Certificate of Incorporation, the Board is expressly authorized to adopt, amend or
repeal these Bylaws. Any adoption, amendment or repeal of these Bylaws by the Board shall require the approval of a majority of the Whole Board. Stockholders shall also have the power to adopt, amend or repeal these Bylaws; provided,
however, that, in addition to any vote of the holders of any class or series of stock
of the Corporation required by law or by the Certificate of Incorporation, these Bylaws may be adopted, altered, amended or repealed by the stockholders of the Corporation only (i) prior to
the Trigger Date (as defined in the Certificate of Incorporation), by the affirmative vote of holders of not less than a majority in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class,
and (ii) on and after the Trigger Date by the affirmative vote of holders of not less than 66 2/3% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. No Bylaws hereafter made or
adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of the Board that was valid at the time it was taken.
EXHIBIT F
Form of Certificate of Merger
(OpCo Merger)
[see
attached]
CERTIFICATE OF MERGER
merging
ATLAS
OPERATING MERGER SUB, LLC
(a Delaware limited liability company)
with and into
ATLAS
SAND OPERATING, LLC
(a Delaware limited liability company)
[●], 2023
Pursuant to the
provisions of Title 6, Section 18-209 of the Delaware Limited Liability Company Act (the Act), the undersigned entity hereby submits this Certificate of Merger for filing and
certifies as follows:
1. The name, jurisdiction of formation or organization and type of entity of each of the
business entities that are to merge are as follows:
|
|
|
|
|
Name |
|
State of Formation |
|
Type of Business Entity |
Atlas Operating Merger Sub, LLC |
|
Delaware |
|
Limited Liability Company |
Atlas Sand Operating, LLC |
|
Delaware |
|
Limited Liability Company |
2. An Agreement and Plan of Merger (the Agreement and Plan of
Merger), providing for the merger of Atlas Operating Merger Sub, LLC, a Delaware limited liability company (Merger Sub), with and into Atlas Sand Operating, LLC, a Delaware limited liability company (the
Company and, together with Merger Sub, the Constituent Entities), with the Company to continue in existence following such merger as the sole surviving entity (the Surviving
Entity), has been approved and executed by each of the Constituent Entities in accordance with Title 6, Section 18-209 of the Act.
3. The name of the Surviving Entity shall be Atlas Sand Operating, LLC.
4. The Certificate of Formation of the Company as in effect immediately prior to the merger shall be the Certificate of
Formation of the Surviving Entity.
5. The merger shall become effective at [●], Central Standard Time, on
[●], 2023.
6. The executed Agreement and Plan of Merger is on file at the principal place of business of the
Surviving Entity at the following address: 5918 W. Courtyard Drive, Suite 500, Austin, Texas 78730.
7. A copy of
the Agreement and Plan of Merger will be furnished by the Surviving Entity, on request and without cost, to any member of either of the Constituent Entities.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Certificate of Merger to be executed on its
behalf as of the date first written above.
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|
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ATLAS SAND OPERATING, LLC |
|
|
By: |
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Name: |
|
|
Title: |
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|
SIGNATURE
PAGE TO CERTIFICATE OF MERGER
EXHIBIT G
Form of Second A&R LLC Agreement of OpCo
[see attached]
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ATLAS SAND OPERATING,
LLC
a Delaware Limited Liability Company
This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Atlas Sand Operating, LLC,
a Delaware limited liability company (the Company), dated as of [●], 2023 (the Effective Date), is adopted, executed and agreed to by the Members (as defined below). Capitalized terms used
but not defined herein shall have the meaning ascribed to such terms in the Existing LLC Agreement (as defined below).
WHEREAS, the
Company was formed pursuant to the filing of a Certificate of Formation with the Secretary of State of the State of Delaware effective on November 18, 2022, in accordance with the provisions of the Act (as defined below), and is currently
governed by that certain Amended and Restated Limited Liability Company Agreement, dated March 8, 2023 (the Existing LLC Agreement);
WHEREAS, this Agreement is being entered into pursuant to and in connection with the consummation of the transactions contemplated by that
certain Master Reorganization Agreement, dated as of [●], 2023 (the Reorganization Agreement and, such transactions, the Reorganization), by and among the Company, Atlas Energy Solutions
Inc., a Delaware corporation (Atlas), New Atlas HoldCo Inc., a Delaware corporation (New Atlas), AESI Merger Sub Inc., a Delaware corporation, Atlas Operating Merger Sub, LLC, a Delaware limited
liability company (Merger Sub), and Atlas Sand Holdings, LLC, a Delaware limited liability company (Holdings);
WHEREAS, prior to the Reorganization, (a) Holdings and Atlas collectively held 100% of the issued and outstanding membership
interests in the Company and (b) Merger Sub was a direct wholly owned subsidiary of New Atlas;
WHEREAS, in connection with the
consummation of the Reorganization on the Effective Date, among other things, (a) Merger Sub merged with and into the Company, with the Company surviving such merger as a subsidiary of the Members, (b) Atlas changed its name from
Atlas Energy Solutions Inc. to AESI Holdings Inc. (as used herein, the term AESI Holdings refers to Atlas at times following consummation of the Reorganization) and (c) New Atlas changed its
name from New Atlas HoldCo Inc. to Atlas Energy Solutions Inc.; and
WHEREAS, the Members desire to enter into
this Agreement in order to amend and restate the Existing LLC Agreement in connection with the Reorganization, with this Agreement to supersede the Existing LLC Agreement in its entirety effective on the Effective Date and at such time as is
provided under the terms of the Reorganization Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows.
1. Formation. The Company was formed as a Delaware limited liability company under and pursuant to the Delaware Limited
Liability Company Act (the Act).
2. Term. The Company shall have perpetual existence
unless dissolved in accordance with Section 10 of this Agreement.
3. Purposes. The
purposes of the Company shall be to carry on any lawful business, purpose or activity for which limited liability companies may be formed under the Act.
4. Members. As of the Effective Date, the members of the Company (each, a Member and,
collectively, the Members) are AESI Holdings and New Atlas.
5. Units; Percentage
Interests. The Company shall have a single class of membership interests designated as Units. Each Members ownership of Units in relation to the total outstanding Units of the Company is referred to herein as
such Members Percentage Interest. As of the Effective Date, AESI Holdings owns [57,147,501]1 Units, and New Atlas owns [42,852,499]2 Units. Following the Effective Date, the Company shall update its books and records from time to time to reflect any transfers or additional issuances of Units. The Company shall be authorized to
issue from time to time such additional number of Units as the Managing Member (as defined below) may determine.
6. Contributions. Without creating any rights in favor of any third party, the Members may, from time to time, make
contributions of cash or property to the capital of the Company but shall have no obligation to do so.
7. Capital Accounts;
Allocations.
(a) Capital Accounts. The Managing Member shall establish and maintain a separate
capital account in accordance with the requirements of Section 704(b) of Internal Revenue Code of 1986, as amended (the Code) and Treasury Regulations
Section 1.704-1(b)(2)(iv) (the Capital Account) for each Member in the Companys books of account.
(b) Book Allocations of Profits and Losses. After giving effect to the allocations under Section 7(c), all
items of income, profit, gain, loss, deduction and credit of the Company for each tax period shall be allocated among the Members in such a manner as shall cause the Capital Accounts of the Members (as adjusted to reflect all allocations under
Section 7(c) and all distributions through the end of such tax period) to equal, as nearly as possible, the amount such Members would receive if all assets of the Company on hand at the end of such tax period were sold for cash equal to their
Code Section 704(b) book values, all liabilities of the Company were satisfied in cash in accordance with their terms, and all remaining or resulting cash were distributed to the Company under Section 8, as reasonably determined by the
Managing Member.
1 |
Note to draft: To be the number of OpCo Units held by AESI as of immediately prior to the
closing. |
2 |
Note to draft: To be the total number of Class B shares outstanding as of immediately prior
to closing. |
2
(c) Regulatory Allocations. Allocations of individual items of
income and gain will be made in accordance with the minimum gain chargeback, partner nonrecourse debt minimum gain chargeback, and qualified income offset provisions of the Treasury Regulations promulgated under
Section 704(b) of the Code.
(d) Tax Allocations. Except as otherwise provided herein, each item of
income, profit, gain, loss, deduction and credit of the Company shall be allocated among the Members in the same manner as set forth in Sections 7(b) and 7(c); provided, however, that (a) in accordance with Section 704(c) of
the Code and the Treasury Regulations promulgated thereunder, with respect to any property that has a variance between its book basis for capital account purposes and its adjusted tax basis, the income, gain, loss and deduction with respect to such
property shall, solely for tax purposes, be allocated among the Members so as to take into account such variation pursuant to any permissible allocation method described in Treasury Regulations
Section 1.704-3 as is determined by the Managing Member in its sole discretion, and (b) any such allocations made pursuant to this Section 7(d) are solely for purposes of federal income taxation
and shall not affect any Members Capital Account or right to receive distributions under this Agreement.
(e) The provisions of this Section 7 are intended, and shall be construed, and, if necessary, modified by the
Managing Member in its sole discretion to cause the allocations of profits, losses, income, gain, deductions, credits and other tax items pursuant to this Section 7 to have substantial economic effect under the Code and the Treasury Regulations
promulgated under Section 704(b) of the Code (or the equivalent thereof within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(i)). This Agreement shall not be construed as creating a
deficit restoration obligation or otherwise personally obligating any Member or its assignees or successors in interest to make a capital contribution to the Company.
8. Distributions. Distributions (including, without limitation, liquidating distributions) made by the Company shall be
distributed to the Members solely at such times and in such amounts as the Managing Member shall determine and shall be allocated to the Members in accordance with their respective Percentage Interests.
9. Management. AESI Holdings shall be the sole managing member of the Company (the Managing
Member). Except as otherwise required by applicable law, (a) the Managing Member shall have full and complete charge of all affairs of the Company, (b) the management and control of the Companys business activities and
operations shall rest exclusively with the Managing Member, and the Managing Member shall make all decisions regarding the business, activities and operations of the Company (including the incurrence of costs and expenses) in its sole discretion
without the consent of any other Member, and (c) the Members other than the Managing Member (in their capacity as such) shall not participate in the control, management, direction or operation of the activities or affairs of the Company and
shall have no power to act for or bind the Company.
3
10. Officers.
(a) General. The Managing Member may designate one or more persons to be officers of the Company. Officers are
not managers as that term is used in the Act. Any officers who are so designated shall have such titles and authority and perform such duties as the Managing Member may delegate to them. The salaries or other compensation, if any, of the
officers of the Company shall be fixed by the Managing Member. Any officer may be removed as such, either with or without cause, by the Managing Member. Designation of an officer shall not of itself create contract rights.
(b) Titles. To the extent appointed by the Managing Member, the officers of the Company may be a Chief Executive
Officer, President, a Secretary, one or more Vice Presidents (any one or more of whom may be designated Executive Vice President or Senior Vice President), a Treasurer and such other officers as the Managing Member may from time to time elect or
appoint. Any number of offices may be held by the same person.
11. Dissolution. The Company shall dissolve and its
affairs shall be wound up at such time, if any, as the Managing Member may elect. No other event will cause the Company to dissolve.
12. Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
13. Amendments. This Agreement may be
modified, altered, supplemented or amended at any time by a written agreement executed and delivered by the Managing Member.
14. Liability. The Members, including any of their officers or members, and the officers of the Company shall not have
any liability for the obligations, debts or liabilities of the Company, except to the extent required in the Act.
15. Indemnity; Exculpation.
(a) The Company shall indemnify and hold harmless, to the fullest extent permitted by applicable Law as it presently
exists or may hereafter be amended (provided, that no such amendment shall limit a Covered Persons rights to indemnification hereunder with respect to any actions or events occurring prior to such amendment except to the extent required by a
non-waivable and non-modifiable provision of applicable Law), any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed
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 Manager
entitled to indemnification under the Existing LLC Agreement, a Member, an Officer, the Managing Member or the Company Representative or is or was serving at the request of the Company as a member, director, officer, trustee, employee or agent of
another limited liability company or of a corporation, partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (a Covered Person), whether the
basis of such Proceeding is alleged action in an official capacity as a member, director, officer, trustee, employee or agent, or in any other capacity while serving as a member, director, officer, trustee, employee or agent, against all expenses,
liability and loss (including, without limitation, attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid
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in settlement) reasonably incurred or suffered by such Covered Person in connection with such Proceeding, unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgements and agreements set forth in this Agreement, (x) such Covered Person engaged in a bad faith
violation of the implied contractual covenant of good faith and fair dealing or a bad faith violation of this Agreement or (y) such Covered Person would not be so entitled to be indemnified and held harmless if the Company were a corporation
organized under the laws of the State of Delaware that indemnified and held harmless its directors, officers, employees and agents to the fullest extent permitted by Section 145 of the Delaware General Corporation Law as in effect on the date
of this Agreement (but including any expansion of rights to indemnification thereunder from and after the date of this Agreement). The Company shall, to the fullest extent not prohibited by applicable Law as it presently exists or may hereafter be
amended (provided, that no such amendment shall limit a Covered Persons rights to indemnification hereunder with respect to any actions or events occurring prior to such amendment except to the extent required by a non-waivable and non-modifiable provision of 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
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 by final judicial decision
from which there is no further right to appeal that the Covered Person is not entitled to be indemnified under this Section 14 or otherwise. The rights to indemnification and advancement of expenses under this
Section 14 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a member, director, officer, trustee, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators. Notwithstanding the foregoing provisions of this Section 14, except for Proceedings to enforce rights to indemnification and advancement of expenses, the Company shall indemnify and advance
expenses to a Covered Person in connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized by the Managing Member. If this Section 14(a) or any
portion of this Section 14(a) shall be invalidated on any ground by a court of competent jurisdiction the Company shall nevertheless indemnify each Covered Person as to expenses (including attorneys fees), judgments,
fines and amounts paid in settlement with respect to any action, suit, proceeding or investigation, whether civil, criminal or administrative, including a grand jury proceeding or action or suit brought by or in the right of the Company, to the
fullest extent permitted by any applicable portion of this Section 14(a) that shall not have been invalidated.
(b) Subject to other applicable provisions of this Section 14, to the fullest extent
permitted by applicable Law, the Covered Persons shall not be liable to the Company, any Subsidiary, any director, any Member or any holder of any equity interest in any Subsidiary by virtue of being a Covered Person or for any acts or omissions in
their capacity as a Covered Person or otherwise in connection with the Company, this Agreement or the business and affairs of the Company and its Subsidiaries unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that such losses or liabilities were the result of conduct in which such Covered Person breached the terms of this Agreement or any duties owed to the Company or the Members.
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16. Counterparts. This Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed in one or more counterparts and by different parties in separate counterparts any may delivered by email or other electronic means. All of such counterparts shall constitute one and
the same agreement (or other document) and shall become effective (unless otherwise provided therein) when one or more counterparts have been signed by each party and delivered to the other party.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the undersigned, being the Members, have caused this Agreement to
be duly executed effective as of the date first set forth above.
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MANAGING MEMBER: |
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AESI HOLDINGS INC. |
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MEMBER: |
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ATLAS ENERGY SOLUTIONS INC. |
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SIGNATURE
PAGE TO
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
ATLAS SAND OPERATING, LLC
Exhibit 10.1
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CREDIT AGREEMENT |
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This CREDIT AGREEMENT, dated as of July 31, 2023, is made by and among ATLAS SAND COMPANY, LLC, a Delaware
limited liability company (together with its successors and permitted assigns, Borrower), the Lenders from time to time party hereto, and STONEBRIAR COMMERCIAL FINANCE LLC, a Delaware limited liability company, as
Administrative Agent and as Initial Lender.
WHEREAS, Borrower has applied to Initial Lender for term loans, and Initial Lender has agreed to extend
(a) an initial term loan to Borrower in an aggregate principal amount of $180,000,000.00 (the Maximum Initial Term Loan Principal Amount) and (b) a delayed draw term loan to Borrower in an aggregate principal
amount of up to $100,000,000.00 (the Maximum Delayed Draw Term Loan Principal Amount).
NOW, THEREFORE, in consideration of the
premises, agreements, provisions and covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS;
CONSTRUCTION. In addition to terms that are defined elsewhere in this Agreement, capitalized words and terms used in this Agreement shall have the meanings specified therefor in Exhibit A attached hereto. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement that are defined in the Uniform Commercial Code shall have the meanings attributed to such terms in the Uniform Commercial Code. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to Administrative Agent
hereunder shall be prepared in accordance with GAAP applied on a consistent basis except for changes in which the Borrowers independent certified public accountants concur and which are disclosed to Administrative Agent on the next date on
which financial statements are required to be delivered to Administrative Agent pursuant to Section 5(d); provided that, unless Borrower and Administrative Agent shall otherwise agree in writing, no such change shall
modify or affect the manner in which compliance with the covenants contained herein are computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods. Notwithstanding any
changes in GAAP after December 31, 2017 any lease of Borrower or its Subsidiaries that would be characterized as an operating lease under GAAP in effect on December 31, 2017 (whether such lease is entered into before or after
December 31, 2017) shall not constitute a Capital Lease under this Agreement or any other Loan Document as a result of such changes in GAAP unless otherwise agreed to in writing by Borrower and Required Lenders (it being understood and agreed
that, for the avoidance of doubt, any future effectiveness of ASC 842 after December 31, 2017 shall be disregarded for purposes of this Agreement). Borrower and the Lenders agree to negotiate in good faith to amend such computation or
determination to preserve the original intent in light of the change in GAAP. References herein to any Section, Schedule or exhibit shall be to a Section of, or a Schedule or an exhibit to, this Agreement, unless otherwise specifically
provided, and the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular
provision hereof. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word
will shall be construed to have the same meaning and effect as the word shall.
2. TERM. This Agreement shall be effective as of the date hereof, and shall continue in full force and effect until such
time as all of the Indebtedness and other Obligations of Borrower under the Loans have been indefeasibly paid and satisfied in full, including principal, interest, costs, expenses, attorneys fees, and other fees and charges required to be paid
pursuant to the terms of the Loan Documents.
3. LOANS AND TERMS OF PAYMENT; ADVANCE PROVISIONS.
(a) The Loans.
(i). The Initial Term Loan. Subject to the terms and conditions set forth in this
Agreement and in the other Loan Documents (including, for avoidance of doubt, satisfaction of the conditions precedent set forth in Exhibit B attached hereto), the Initial Lender agrees to make an initial term loan to Borrower in an amount
equal to the Maximum Initial Term Loan Principal Amount (the Initial Term Loan), which Initial Term Loan shall be funded in a single Advance made on the Closing Date and repaid in accordance with the terms of this Agreement
and the Initial Term Loan Note. The Initial Term Loan will be evidenced by the Initial Term Loan Note in the Maximum Initial Term Loan Principal Amount. Borrower agrees to borrow and repay the Initial Term Loan, with interest, in accordance with the
Initial Term Loan Note, this Agreement, and the other Loan Documents. The obligation of Borrower to repay the Initial Term Loan, together with interest as provided in this Agreement and in the Initial Term Loan Note, shall commence upon the
funding of the Initial Term Loan on the Closing Date and shall be unconditional. Borrower hereby accepts the Initial Term Loan on the Closing Date, subject to and upon the terms and conditions set forth herein.
(ii). Delayed Draw Term Loans. Subject to the terms and conditions set forth in this
Agreement and in the other Loan Documents (including, for avoidance of doubt, satisfaction of the conditions precedent set forth in Exhibit B attached hereto on the Closing Date and Exhibit E attached hereto on the applicable Delayed
Draw Funding Date), the Initial Lender agrees to make delayed draw term loans to Borrower at any time and from time to time during the Availability Period (each, a Delayed Draw Term Loan and collectively, the
Delayed Draw Term Loans); provided that the aggregate principal
amount of all Delayed Draw Term Loan Notes shall not exceed the Maximum Delayed Draw Term Loan Principal Amount. Delayed Draw Term Loans may be funded at Borrowers request in multiple
Advances made during the Availability Period and repaid in accordance with the terms of this Agreement and each Delayed Draw Term Loan Note. Whenever Borrower desires to incur a Delayed Draw Term Loan hereunder, Borrower shall give Administrative
Agent at least five (5) Business Days (or such shorter period agreed to by Administrative Agent in its sole discretion) prior written notice of such Delayed Draw Term Loan to be incurred hereunder specifying the principal amount of
such Delayed Draw Term Loan to be incurred and the date of such Advance (which shall be a Business Day). Each Delayed Draw Term Loan will be evidenced by a Delayed Draw Term Loan Note appropriately completed in accordance with the terms of the form
of Delayed Draw Term Loan Note attached hereto as Exhibit G to include the applicable interest rate and required amortization payments; provided that the aggregate principal amount of all Delayed Draw Term Loan Notes shall not exceed
the Maximum Delayed Draw Term Loan Principal Amount. Interest on each Delayed Draw Term Loan shall accrue commencing on the Delayed Draw Funding Date for such Delayed Draw Term Loan at a per annum rate equal to the Term SOFR Rate plus 5.95%.
Borrower agrees to repay the Delayed Draw Term Loans, with interest, in accordance with the Delayed Draw Term Loan Notes, this Agreement, and the other Loan Documents. The obligation of Borrower to repay the Delayed Draw Term Loans, together
with interest as provided in this Agreement and in each Delayed Draw Term Loan Note, shall commence upon the funding of each Delayed Draw Term Loan on the Delayed Draw Funding Date for such Delayed Draw Term Loan and shall be unconditional.
Borrower hereby accepts each Delayed Draw Term Loan requested by Borrower on the Delayed Draw Funding Date for such Delayed Draw Term Loan, subject to and upon the terms and conditions set forth herein.
(b) Closing Fee. On the Closing Date, Borrower shall pay to Administrative Agent a closing fee equal to
$3,700,000.00 (the Closing Fee) which fee shall be fully earned as of the Closing Date and shall not be refundable.
(c) No Reborrowings. Amounts borrowed hereunder and that are repaid or prepaid may not be
reborrowed.
(d) Lenders Records. Each Lender shall record in its records the date and amount of the
Loans and each repayment thereof. The amounts so recorded shall be conclusive evidence, absent manifest error, of the principal amount owing and unpaid with respect to the Loans; provided, however, that the failure to so record any such
amount or any error in so recording any such amount shall not limit or otherwise affect the obligations of Borrower hereunder or under the Notes or any other Loan Document to repay the principal amount of the Loans together with all interest
accruing thereon.
(e) Use of Proceeds. Proceeds of the Loans will be used exclusively by Borrower for
general corporate purposes (including, e.g., to refinance existing indebtedness, to make permitted distributions, etc.), in each case in accordance with the terms of this Agreement and the other Loan Documents. No proceeds of the Loans will be used
in violation of any Applicable Law.
(f) Collateral. The Loans will be secured by the Collateral.
Notwithstanding that the total Obligations may, at any time, exceed the Maximum Principal Amount, the total of all such disbursements and all other Obligations hereunder and under any other Loan Document shall be secured by all of the Collateral.
All other sums expended by Administrative Agent and the Lenders pursuant to any Loan Document that are required to be reimbursed by Borrower in accordance with Section 9(c) shall constitute Obligations under the Loan Documents and shall be
secured by all of the Collateral.
(g) Payments. During the term of the Loans, Borrower shall make payments
on each Payment Day as required by each respective Note. Payments of principal, interest and all other amounts due under the Notes and this Agreement shall be made by wire transfer. All such payments shall be payable to Administrative Agent, for the
account of the Lenders, as to such account or place as Administrative Agent may designate in writing from time to time. Administrative Agent will promptly distribute to each Lender its ratable share of such payment in like funds as received to such
Lender (or otherwise distribute such payment in like funds as received to the Person or Persons entitled thereto as provided herein or in the applicable Note). If an Event of Default has occurred and is continuing, Administrative Agent may apply
payments received or collected from Borrower or for the account of Borrower (including, the monetary proceeds of collection or of realization upon any Collateral) to the Indebtedness in such order and manner as Administrative Agent determines in its
sole discretion, but subject to the terms of any Intercreditor Agreement. If no Event of Default shall have occurred and be continuing, all payments shall be applied as set forth in this Agreement and the Loan Documents.
(h) No Deductions or Setoff; Reinstatement of Obligations. Borrower hereby unconditionally promises to pay to
the Lenders all Indebtedness as and when due in accordance with this Agreement and the Loan Documents. Borrower shall make all payments to Administrative Agent, for the account of the Lenders, on the Indebtedness free and clear of, and without
deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restriction or conditions of any kind. If after receipt of any payment of, or proceeds of Collateral
applied to the payment of, any of the Indebtedness, any Lender is required to surrender or return such payment or proceeds to any Person for any reason, then the Indebtedness intended to be satisfied by such payment or proceeds shall be reinstated
and continue, and this Agreement shall continue in full force and effect as if such payment or proceeds has not been received by such Lender. Borrower shall be liable to pay to each Lender, and does hereby indemnify and hold each Lender harmless
for, the amount of any payments or proceeds surrendered or returned. This Section 3(h) shall remain effective notwithstanding any contrary action which may be taken by any Lender in reliance upon such payment or proceeds, and this
Section 3(h) shall survive the payment of the Indebtedness and the termination of this Agreement.
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(i) Late Fees. If Borrower fails to make any payment pursuant
to this Agreement, the Notes or any other Loan Document on or before the fifth day after the due date for such payment (other than the payment due at maturity, in which case, if Borrower fails to make such payment on the date such payment is due),
then Borrower shall, following Administrative Agents written request therefor, pay Administrative Agent for the ratable account of the Lenders a late fee on each such applicable payment date equal to 3% of each such past-due payment (not to exceed the lawful maximum). Such late fee will be immediately due and payable and is in addition to any other charges, costs, fees, and expenses that Borrower may owe as a result of the late
payment, including the imposition of the Default Rate pursuant to the Notes or this Agreement.
4. REPRESENTATIONS AND
WARRANTIES. Borrower represents and warrants to Administrative Agent and the Lenders, as of the date of this Agreement:
(a) Organization. Borrower (i) is a registered organization (as defined in the
Uniform Commercial Code) duly organized, validly existing and in good standing under the laws of the State of Delaware, and Borrowers exact legal name is as set forth in the first paragraph of this Agreement; (ii) has the power and
authority to own its properties and assets and to transact the businesses in which it is presently, or proposes to be, engaged and (iii) is duly qualified and authorized to do business and is in good standing in every jurisdiction in which the
laws of such jurisdiction require Borrower to be so qualified or authorized, except where failure to be so qualified or authorized would not reasonably be expected to result in a Material Adverse Effect.
(b) Authorization. The execution, delivery and performance by Borrower hereof and of each of the other Loan
Documents to which it is a party are within the powers of Borrower, do not contravene the organizational documents of Borrower, and do not (i) violate any law or regulation, or any order or decree of any court or Governmental Authority,
(ii) conflict with or result in a breach of, or constitute a default under, any material indenture, mortgage or deed of trust or any material lease, agreement or other instrument binding on Borrower or any of its properties, or
(iii) require the consent, authorization by or approval of or notice to or filing or registration with any Governmental Authority or other Person, except (A) such as have been obtained or made and are in full force and effect, (B) the
recording and filing of the Security Instruments and Uniform Commercial Code financing statements as required by the Loan Documents and (C) those third party approvals or consents which, if not made or obtained, would not cause a Default
hereunder and would not reasonably be expected to result in a Material Adverse Effect. This Agreement is, and each of the other Loan Documents to which Borrower is or will be a party, when delivered hereunder or thereunder, will be, the legal, valid
and binding obligation of Borrower enforceable against Borrower in accordance with such Loan Documents terms, subject to applicable bankruptcy laws and subject to general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
(c) Financial Information. All financial statements of the Applicable Reporting
Entity, including in each case the related statements and notes, supplied to Administrative Agent on or prior to the Closing Date fairly present in all material respects the financial position of the Applicable Reporting Entity and its subsidiaries
for the respective periods so specified and have been prepared in accordance with GAAP except as may be set forth in the notes thereto (subject, in the case of any interim financial statements, to normal
year-end adjustments). Moreover, Borrower is expressly stating that as of the date of this Agreement there has been no material adverse change in Borrowers financial condition as compared to the
condition represented in the audited financial statements of Borrower for the fiscal year ending December 31, 2022. It is understood and agreed for all purposes under the Loan Documents that (i) to the extent any certificate, statement,
report, or information furnished by any Loan Party pursuant to or in connection with the Loan Documents was based upon or constitutes a forecast or projection, each Loan Party represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such certificate, statement, report, or information (it being recognized by Administrative Agent and the Lenders, however, that projections as to future events are not to be viewed as facts and that
results during the period(s) covered by such projections may differ from the projected results and that such differences may be material and that the Loan Parties make no representation that such projections will be realized) and (ii) as to
statements, information and reports supplied by third parties after the Closing Date, each of the Loan Parties represents only that it is not aware of any material misstatement or omission therein.
(d) Hazardous Substances. Except as disclosed by Borrower and acknowledged by Administrative Agent in writing on
or prior to the date hereof or for matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, Borrower represents and warrants that Borrower has no knowledge of (i) any violation of
Environmental Laws by Borrower or any other Loan Party or affecting Borrowers or any other Loan Partys property, including the Collateral; (ii) any use, generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance on any of Borrowers or any other Loan Partys property, including the Collateral, by Borrower, any Loan Party or any prior owners or occupants of any of the such property; or (iii) any litigation or
claims of any kind relating to such matters. Any inspections or tests made by Administrative Agent related to the foregoing during the continuance of an Event of Default shall be at Borrowers expense and for Administrative Agents and
Lenders purposes only. Borrower hereby (A) releases and waives any claims (including any future claims) against Administrative Agent and Lenders for indemnification or contribution in the event Borrower becomes liable for cleanup or other
costs in connection with any event described in clauses (i) or (ii) above, and (B) agrees to indemnify, defend and hold harmless Administrative Agent and Lenders against any and all claims, losses, liabilities, damages, penalties, and
expenses which Administrative Agent and Lenders may directly or indirectly suffer as a consequence of any event described in clauses (i) or (ii) above or any event similar or related thereto. The provisions of this Section 4(d) shall
survive the payment of the Indebtedness and the termination, expiration or other satisfaction of this Agreement and shall not be affected by Administrative Agents acquisition of any interest in the Collateral, whether by foreclosure or other
means.
(e) Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar
action (including those for unpaid taxes) against Borrower, any other Loan Party or the Parent Guarantor is pending or, to Borrowers knowledge, threatened (in writing), and, to Borrowers knowledge, no other event has occurred which may
adversely affect Borrowers, any other Loan Partys or
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Parent Guarantors financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Administrative Agent in writing
on or prior to the date hereof or that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(f) Taxes. All of Borrowers, each other Loan Partys and Parent Guarantors federal tax returns
and all other material tax returns required to be filed have been filed by the date of this Agreement, and all material Taxes (other than Contested Taxes) resulting therefrom have been paid in full when due.
(g) Solvency. Borrower and the other Loan Parties, on a consolidated basis, are solvent, are paying their debts
as they become due and have sufficient capital to conduct their business. The fair salable value of the Loan Parties assets, on a consolidated basis, is in excess of the total amount of their liabilities (including contingent liabilities) as
they become absolute and matured.
(h) No Defaults or Events of Default. Neither Borrower nor any other Loan
Party is in default under any Major Material Contract to which it is a party or by which it is bound, and Borrower knows of no ongoing dispute regarding any contract or lease of a Loan Party which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
(i) Foreign Assets Control
Regulations, Etc. (i) None of the Loan Parties, the Parent Guarantor nor any of their respective Affiliates is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of
Foreign Assets Control, United States Department of the Treasury (OFAC and each such Person, an OFAC Listed Person) (B) an agent, department, or instrumentality of, or is otherwise beneficially
owned by, controlled by or acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC sanctions program, or (3) otherwise
blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions (collectively, U.S. Economic Sanctions) (each OFAC Listed Person and each other Person, entity,
organization and government of a country described in clause (A), clause (B) or clause (C), a Blocked Person). (ii) No part of the proceeds from any Loan constitutes or will constitute funds obtained on behalf of any
Blocked Person or will otherwise be used by Borrower or any Affiliate of Borrower, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (B) otherwise in violation of
U.S. Economic Sanctions. (iii) None of the Loan Parties, the Parent Guarantor nor any of their respective Affiliates (A) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related
activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such
activities (collectively, Anti-Money Laundering Laws) or any U.S. Economic Sanctions violations, (B) to Borrowers actual knowledge, after making due inquiry, is under investigation by any Governmental Authority
for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (C) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (D) has had any of its funds
seized or forfeited in an action under any Anti-Money Laundering Laws.
(j) Investment Company Act. None of
the Loan Parties is an investment company or a company controlled by an investment company, within the meaning of, or subject to regulation under, the Investment Company Act of 1940, as amended.
(k) ERISA. Each of Borrower, each other Loan Party and the Parent Guarantor is in compliance with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and no event has occurred or other circumstance now exists with respect to any employee pension benefit plan (as defined in
Section 3(2) of ERISA, other than a Multiemployer Plan) that, in any case, could reasonably be expected to cause a Material Adverse Effect.
5. COVENANTS. For the term of this Agreement:
(a) Existence, Compliance with Laws, Fundamental Changes. Borrower will maintain its existence and its current
yearly accounting cycle and will maintain in full force and affect all licenses, bonds, franchises, leases, trademarks, patents, contracts and other rights necessary to the conduct of its business, in each case, except where the failure to do so
could not reasonably be expected to cause a Material Adverse Effect. Borrower will comply with all applicable laws and regulations of any applicable Governmental Authority, except for such laws and regulations the violations of which would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect on Borrower. Borrower will give Administrative Agent prior written notice of any intent to change Borrowers or any other Loan Partys name, principal address or
jurisdiction of formation. Neither Borrower nor any other Loan Party shall amend, restate, supplement, modify or terminate any of its organizational documents in any manner that would reasonably be expected to be materially adverse to the interests
of the Lenders without the prior written consent of Administrative Agent in each instance. In the event that Borrower or any other Loan Party shall amend, restate, supplement, modify or terminate any of its organizational documents in any manner,
Borrower or such other Loan Party shall provide Administrative Agent with notice and copies of any and all such amendments, restatements, supplements, modifications or terminations within thirty (30) days following the effective date thereof.
(b) Merger, Consolidation, Etc. Without the prior written consent of Administrative Agent (such consent to
be granted or withheld at Administrative Agents sole discretion), no Loan Party will merge or consolidate with any other Person, divide or be divided, amend or modify its capital structure if such amendment or modification could reasonably be
expected to result in a Material Adverse Effect, sell or otherwise dispose of all or substantially all of its assets, or otherwise allow a Change of Control; provided, however, that so long as no Default or Event of Default is continuing or
would occur as a result thereof, (i) any Loan Party shall be permitted to merge into or consolidate with any other Loan Party, provided, that in the case of any such merger or consolidation to which the Borrower is a
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party, the Borrower is the surviving business entity, (ii) any Loan Party (other than the Borrower) shall be permitted to sell or otherwise dispose of any of its assets to any other Loan
Party, and (iii) any Person may be consolidated (by merger, liquidation or otherwise) with (A) any Loan Party (other than Borrower), so long as a Loan Party is the surviving business entity or the surviving business entity becomes a
Guarantor in accordance with this Agreement and the other Loan Documents and (B) Borrower, so long as Borrower is the surviving business entity.
(c) Insurance. Borrower will maintain or will cause to be maintained insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and covering such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations and which insurance shall
be reasonably satisfactory to Administrative Agent (it being understood and agreed that the insurance coverages maintained by Borrower as of the Closing Date are satisfactory to Administrative Agent as of the Closing Date); provided that
Borrower shall not reduce the insurance coverages maintained by Borrower as of the Closing Date without the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned or delayed. The loss payable clauses
or provisions of the insurance policies insuring any of the Collateral (excluding the Title Policy and any business interruption insurance) shall be endorsed to confer lenders loss payable status to Administrative Agent as its interests may
appear. All such insurance policies shall contain a clause requiring (or shall be endorsed to require) the insurer to give Administrative Agent at least thirty (30) days prior written notice (or ten (10) days prior written
notice of cancellation for non-payment of premium) of any material change in the terms or cancellation of the policy and shall include a waiver of subrogation as respects Administrative Agents insurance
policies. At Administrative Agents reasonable request, true copies of all original insurance policies (with endorsements) are to be promptly delivered to Administrative Agent. All liability policies shall name Administrative Agent, its
affiliates and its and their successors and assigns as additional insureds. If Borrower fails to maintain such insurance, Administrative Agent may arrange for (at Borrowers expense and without any responsibility on Administrative Agents
part for) obtaining the insurance required by this Agreement. Unless Administrative Agent will otherwise agree with Borrower in writing, during the continuance of an Event of Default and subject to any Intercreditor Agreement, Administrative Agent
will have the sole right, in the name of Administrative Agent, Lenders or Borrower, to file claims under any insurance policies, to receive and give acquittance for any payments that may be payable thereunder, and to execute any endorsements,
receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies; provided that, subject to the two immediately
following sentences, so long as no Event of Default under Sections 7(a), (e), (f) or (g) has occurred and is continuing, the Loan Parties shall be entitled to receive and reinvest all insurance proceeds in the business and Properties of the
Loan Parties. The Loan Parties shall deposit all cash proceeds of any Casualty Event in a Term Cash Collateral Account that is subject to a Control Agreement in favor of Administrative Agent. The Loan Parties may only withdraw and use funds in such
account to (i) pay costs and expenses incurred in connection with the repair or replacement of the Property that was subject to the applicable Casualty Event or (ii) repay all or a portion of the Indebtedness. COLLATERAL
PROTECTION INSURANCE NOTICE. (A) BORROWER IS REQUIRED TO: (i) KEEP THE COLLATERAL INSURED AGAINST DAMAGE AS SPECIFIED IN THIS AGREEMENT; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE
STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (iii) NAME ADMINISTRATIVE AGENT AS A PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS; (B) BORROWER MUST, IF REQUIRED BY ADMINISTRATIVE AGENT IN ACCORDANCE WITH THIS
AGREEMENT, DELIVER TO ADMINISTRATIVE AGENT A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS THEREFOR; AND (C) IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN CLAUSES (A) OR (B) HEREOF, ADMINISTRATIVE AGENT MAY OBTAIN
COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWERS EXPENSE.
(d) Financial
Statements & Records; Other Information. Until the payment and satisfaction in full of all Obligations, Borrower will deliver to Administrative Agent (and Administrative Agent shall promptly provide the same to the
Lenders) the following financial information:
(i). as soon as available, but not later than 120
days after the end of each fiscal year of the Applicable Reporting Entity and its consolidated subsidiaries, the consolidated balance sheet, income statement and statements of cash flows and shareholders equity for the Applicable Reporting Entity
and its consolidated subsidiaries (the Financial Statements) for such year, prepared in accordance with GAAP and certified by independent certified public accountants of recognized standing selected by Borrower;
(ii). as soon as available, but not later than 60 days after the end of each of the first three fiscal
quarters in any fiscal year of the Applicable Reporting Entity and its consolidated subsidiaries, the Financial Statements for such fiscal quarter, together with a certification duly executed by the chief financial officer of Borrower that such
Financial Statements have been prepared in accordance with GAAP and presenting fairly in all material respects the financial condition and results of operations of Applicable Reporting Entity and its consolidated subsidiaries (subject to normal year-end audit adjustments and the absence of footnotes);
(iii). as soon as practicable, and in any event within five Business Days after Borrower or any other
Loan Party learns of any of the following, Borrower will give written notice to Administrative Agent of (A) the occurrence of any Default or Event of Default, together with a statement of the action which Borrower has taken or proposes to take
with respect thereto, (B) the occurrence of any material loss or damage with respect to any material Collateral with a fair market value in excess of $20,000,000, or (C) the occurrence of any other development or event which could
reasonably be expected to result in a Material Adverse Effect together with a statement of the action which Borrower has taken or proposes to take with respect thereto;
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(iv). concurrently with any delivery of Financial
Statements under subclause (i) above, an annual budget of Borrower and its consolidated subsidiaries in form and detail reasonably satisfactory to Administrative Agent and forecasts prepared by Borrower in the form of consolidated balance
sheets and income statements for the Applicable Reporting Entity and its consolidated subsidiaries on a quarterly basis for the first year following the year for which such Financial Statements are then being delivered;
(v). promptly, but in any event within five (5) Business Days, after the execution or furnishing,
as applicable, thereof, copies of (i) any amendment to, or waiver or consent with respect to any provision of, any ABL Loan Document entered into by any Loan Party, and (ii) any notice of default or notice of the commencement of a Trigger
Period (as defined in the ABL Credit Agreement), in either case, furnished by any Loan Party to the ABL Agent under, and pursuant to the terms of, any ABL Facility; and
(vi). promptly following Administrative Agents reasonable request therefor, any other information
regarding the operations, business affairs and financial condition of the Parent Guarantor or any Loan Party or compliance with the terms of this Agreement or any other Loan Document (e.g., purchaser lists, extraction reports, reserves reports,
copies of material contracts, copies of investor presentations, copies of certificates or other notices provided to the holders of any Material Other Indebtedness); provided that, notwithstanding the foregoing or anything to the contrary
herein, neither the Borrower nor any other Loan Party shall be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (A) constitutes non-financial trade secrets or nonfinancial proprietary information, (B) in respect of which disclosure to Administrative Agent or Lenders (or their respective representatives or contractors) is prohibited by
any Applicable Law or (C) is subject to attorney-client or similar privilege or constitutes attorney work-product.
Financial statements, opinions of
independent certified public accountants and other certificates and information required to be delivered by Borrower pursuant to subclauses (i) or (ii) above shall be deemed to have been delivered if the Applicable Reporting Entity shall have
timely filed an SEC Form 10-Q or Form 10-K, satisfying the requirements of such subclauses, as the case may be, with the SEC or EDGAR; or such financial statements are
timely posted by or on behalf of Applicable Reporting Entity on a website to which Administrative Agent has free access, provided, however, that the Borrower shall have given Administrative Agent prior written notice of such posting or filing
in connection with each delivery, provided further, that upon request of Administrative Agent to receive paper copies of such deliverables, Borrower will promptly deliver such paper copies to Administrative Agent.
(e) Notices of Claims and Litigation. Borrower will inform Administrative Agent in writing of all existing or
threatened (in writing) litigation, claims, investigations, administrative proceedings or similar actions affecting Parent Guarantor, Borrower or any other Loan Party which would reasonably be expected to have a Material Adverse Effect.
(f) Further Assurances. Subject to the exceptions, thresholds and limitations set forth herein and the other
Loan Documents, Borrower will, and will cause each other Loan Party to, promptly upon the reasonable request of Administrative Agent, execute and deliver or use commercially reasonable efforts to obtain any document reasonably required by
Administrative Agent (including, e.g., warehouseman or processor disclaimers, mortgagee waivers, landlord disclaimers, or subordination agreements with respect to the Indebtedness and the Collateral), give any notices, execute (if applicable)
and file any financing statements or other documents (all in form and substance reasonably satisfactory to Administrative Agent), and take any other actions that are necessary or, in the reasonable opinion of Administrative Agent, desirable to
perfect or continue the perfection and the required priority of Administrative Agents security interest in the Collateral, to protect the Collateral against the rights, claims, or interests of any Persons (other than holders of Permitted
Liens), or to effect the purposes of this Agreement or any other Loan Documents. Borrower hereby authorizes Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relating to all or any part of the
Collateral. All costs incurred in connection with any of the foregoing shall be for the account of and paid by Borrower.
(g) [Reserved].
(h) Other Agreements. Borrower will, and will cause each other Loan Party and Parent Guarantor to,
(i) comply with all terms and conditions of all other agreements to which Parent Guarantor, Borrower or such other Loan Party is a party, now existing or later entered into, and (ii) provide written notice to Administrative Agent of any
default in connection with any such agreements, except, in the case of both clauses (i) and (ii), for any such defaults or failure to comply that, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(i) Responsibilities. Borrower will, and will cause each other Loan Party and Parent
Guarantor to, perform and satisfy, in a timely fashion, all terms and conditions in this Agreement and in the other Loan Documents, in each case subject to all applicable grace periods.
(j) Government Requirements. Borrower will, and will cause each other Loan Party and Parent Guarantor to, comply
with all laws, ordinances, and regulations now or hereafter created applicable to Borrowers properties, business and operations, except for such laws, ordinances, and regulations the violations of which would not reasonably be expected to have
a Material Adverse Effect on Borrower.
(k) Use of Collateral; Entry and Inspection. The Collateral
will not be used or operated for personal, family or household purposes. Borrower will permit Administrative Agents employees or agents, at reasonable times during normal business hours, at Borrowers expense but at Administrative
Agents sole risk, to inspect any Collateral; provided that so long as no Event of Default shall have occurred and be continuing, (i) Administrative Agent shall provide reasonable notice prior to conducting any inspections, (ii)
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Administrative Agent shall limit the number of inspections to not more than two (2) during any twelve (12) month period, and (iii) not more than one such inspection during any
twelve (12) month period shall be at Borrowers expense; provided, further, that during any such inspection, Administrative Agent and its employees and agents shall comply with Borrowers standard health and safety
policies and procedures.
(l) Taxes. Borrower will pay, when due, all Taxes, except where the failure to
make payment would not reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any material Property of Borrower or any other Loan Party or of any Collateral (other than Collateral that, individually or in
the aggregate, (i) has a fair market value of less than $5,000,000 and (ii) is not of material importance to the normal operation of the Sand Facilities and the business operations of the Loan Parties). If any Taxes remain unpaid after the
date fixed for the payment thereof, or if any lien will be claimed therefor in violation of the immediately preceding sentence, then, without notice to Borrower, but on Borrowers behalf, Administrative Agent may (but is not obligated to) pay
such Taxes, and the amount thereof will be included in the Indebtedness immediately upon such payment.
(m) Fees
on Collateral. Except, in each case, where the failure to do so could not reasonably be expected to result in a Material Adverse Effect or in the seizure, levy or forfeiture of any Collateral (other than Collateral that, individually or in the
aggregate, (i) has a fair market value of less than $5,000,000 and (ii) is not of material importance to the normal operation of the Sand Facilities and the business operations of the Loan Parties), Borrower will, and will cause each other
Loan Party to, promptly pay, when due, all transportation, storage and warehousing charges and license fees, registration fees, assessments, charges and permit fees which may now or hereafter be imposed upon the ownership, leasing, renting,
possession, sale or use of the Collateral.
(n) No Liens or Disposition of Collateral. Borrower will not,
and will not permit any other Loan Party to, in any way hypothecate or create or permit to exist any Lien in any of the Collateral or in any other Property of Borrower or any other Loan Party, except for Permitted Liens. No Loan Party, except for
Permitted Sales, will sell, transfer, assign, pledge, collaterally assign, exchange or otherwise dispose of any the Collateral, including, but not limited to, transfer to any entity with the same or similar name as any Loan Party and organized under
the laws of a state other than the state of such Loan Partys organization on the date hereof. In the event the Collateral, or any part thereof, is sold, transferred, assigned, exchanged, or otherwise disposed of in violation of this
Section 5(n), the Liens of Administrative Agent will continue in such Collateral or part thereof notwithstanding such sale, transfer, assignment, exchange or other disposition, and Borrower will hold the proceeds thereof in the Term Cash
Collateral Account for the benefit of Administrative Agent. Following such a sale in violation of this Section 5(n) and subject to any Intercreditor Agreement, Borrower will transfer such proceeds to Administrative Agent in kind, and all of the
Indebtedness will survive until otherwise satisfied in accordance with the terms hereof and under the other Loan Documents.
(o) No Further Indebtedness. Neither Borrower nor any other Loan Party shall create, incur, assume, permit to
exist, or otherwise become or remain directly or indirectly liable with respect to any Debt other than Permitted Debt.
(p) Restricted Payments. The Borrower shall not make any Restricted Payment, except (i) Permitted Payments
and (ii) so long as no Event of Default has occurred and is continuing or would occur as a result thereof, other Restricted Payments; provided that, in the case of this clause (ii), immediately after giving pro forma effect thereto, the
Applicable Reporting Entity and its consolidated subsidiaries shall have, on a consolidated basis, Liquidity of at least $30,000,000.
(q) No Limitation on Administrative Agents Rights. Borrower will not, and will not permit
any other Loan Party to, enter into any contractual obligations which may restrict or inhibit Administrative Agents rights or ability to sell or otherwise dispose of the Collateral or any part thereof; provided that the foregoing shall
not apply to (i) any Intercreditor Agreement, (ii) any ABL Loan Document, (iii) documents creating Permitted Liens described in (A) clauses (ii), (iv), (v), (vi), (vii), (viii), (x), (xi), (xiv) and (xvi) of the
definition of Permitted Liens and (B) clauses (c), (e) and (h) of the definition of Excepted Liens, (iv) customary restrictions and conditions with respect to the sale or disposition of Property or Equity Interests
not prohibited under Section 5(n) pending the consummation of such sale or disposition, (v) restrictions on cash and other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business, and
(vi) prohibitions or restrictions imposed by any Governmental Requirement.
(r) Terrorism Sanctions
Regulations. The Loan Parties will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable Anti-Money Laundering Laws, or (ii) (A) to fund any activities or business of or
with any Person, or in any country or territory, that, at the time of such funding, is the subject of U.S. Economic Sanctions, or (B) in any other manner that would result in a violation of U.S. Economic Sanctions by any Person (including
Administrative Agent and any Lender). Borrower shall, and shall cause Parent Guarantor, each other Loan Party and each Controlled Affiliate of Borrower to, comply in all material respects with all applicable Anti-Money Laundering Laws and not
violate applicable U.S. Economic Sanctions.
(s) Maintenance of Collateral. Except for such acts or failures
to act as could not reasonably be expected to result in a Material Adverse Effect or could otherwise materially diminish the fair market value of a Sand Facility or any other Mortgaged Property (other than Mortgaged Property that (i) is not a
Specified Property and (ii), individually or in the aggregate, is not of material importance to the normal operation of the Sand Facilities and the business operations of the Loan Parties), Borrower, at no expense to Administrative Agent or Lenders
will, and will cause each other Loan Party to operate all Collateral material to the conduct of its business, or cause such Collateral to be operated, in a careful, workmanlike manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with all Applicable Law, and consistent with the requirement of every Governmental Authority and otherwise to preserve, maintain and keep in good repair and working order
(ordinary wear and tear and obsolescence excepted) all Collateral necessary for the normal operation of the Sand Facilities.
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(t) No Sale-Leasebacks. No Loan Party shall enter into any
arrangement, directly or indirectly, with any Person whereby in a substantially contemporaneous transaction such Loan Party shall sell or transfer all or substantially all of its right, title and interest in a Property and, in connection therewith,
rent or lease back the right to use such Property (a Sale-Leaseback), except the Loan Parties may enter into Stonebriar Sale-Leaseback Transactions.
(u) Affiliate Transactions. No Loan Party shall enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate of a Loan Party (other than a Loan Party) involving aggregate payments or consideration in any fiscal year in excess of $500,000 unless such
transaction is upon fair terms, as reasonably determined by the Borrower, that are no less favorable to such Loan Party than it would obtain in a comparable arms length transaction with a Person not an Affiliate or that are otherwise fair to
such Loan Party from a financial point of view; provided, however, that the restrictions set forth in this clause shall not apply to (i) the execution and delivery of any Loan Document, (ii) compensation to, and the terms of any employment
contracts with, individuals who are employees, officers, managers or directors of the Loan Parties (including, the performance of employment, equity award, equity option or equity appreciation agreements, plans or other similar compensation or
benefit plans or arrangements (including vacation plans, health and insurance plans, deferred compensation plans and retirement or savings plans)), (iii) any Restricted Payment permitted pursuant to Section 5(p) and any other payment expressly
permitted under this Agreement, (iv) the issuance and sale of Equity Interests in Borrower (other than Disqualified Capital Stock) or the amendment of the terms of any Equity Interests issued by Borrower (other than Disqualified Capital Stock),
(v) Permitted Intercompany Activities, (vi) Investments described in clauses (i), (vii), (ix), (xii) (with respect to Debt permitted under clause (ii) of the definition of Permitted Debt), (xiv), (xv), (xvi), (xvii) and
(xviii) of the definition of Permitted Investments, and (vii) reasonable and customary fees and compensation to, the reimbursement of reasonable out of pocket costs of, and indemnities provided on behalf of, officers,
directors, and employees of the Borrower (or any Parent Entity) or any subsidiary in their capacity as such.
(v) Subsidiaries. No Loan Party shall create or acquire any additional Subsidiary unless Borrower gives prompt,
but in any event within 10 Business Days after such creation or acquisition, written notice to Administrative Agent of such creation or acquisition, as applicable, and complies with Section 5(w) below. No Loan Party shall sell, assign or
otherwise dispose of any Equity Interests in any Subsidiary except in compliance with Section 5(b) or Section 5(n). No Loan Party shall have any Subsidiary not organized under the laws of the United States of America or any state thereof
or the District of Columbia, and each Subsidiary shall be a Wholly-Owned Subsidiary.
(w) Additional
Guarantors. Borrower shall promptly cause each of its Subsidiaries to unconditionally guarantee, on a joint and several basis, the prompt payment and performance of the Indebtedness pursuant to the Guaranty Agreement. In connection therewith,
Borrower shall, or shall cause such Subsidiary to, promptly, but in any event no later than 30 days (or such longer period as Administrative Agent may agree in Administrative Agents sole discretion) after the formation or acquisition (or
similar event) of such Subsidiary, (i) execute and deliver an amendment or a supplement to the Guaranty Agreement in form and substance reasonably acceptable to Administrative Agent, (ii) cause the applicable Loan Party that owns Equity
Interests in such Subsidiary to execute and deliver an amendment or supplement to the Security Agreement to confirm the pledge of all of the Equity Interests in such Subsidiary that are owned by such Loan Party (and deliver the original stock or
other equity certificates, if any, evidencing the Equity Interests in such Subsidiary owned by it, together with an appropriate undated stock power for each such certificate duly executed in blank by the registered owner thereof), and
(iii) execute and deliver such other additional customary closing documents, certificates and legal opinions as shall reasonably be requested by Administrative Agent.
(x) Additional Collateral. Subject to the final sentence of this Section 5(x), within 30 days after the
consummation of any Material Acquisition (or such longer period as Administrative Agent may agree in Administrative Agents sole discretion) or whenever requested by Administrative Agent in Administrative Agents reasonable discretion,
Borrower shall, and shall cause the other Loan Parties to, execute and deliver Security Instruments that will, upon recording or other appropriate action, create in favor of Administrative Agent, first priority (subject to Permitted Liens),
perfected Liens on the Property acquired by any Loan Party in connection with the Material Acquisition, excluding any assets or properties excluded as Collateral pursuant to the terms of the Security Instruments. All such Liens will be created and
perfected by and in accordance with the provisions of Security Instruments in form and substance reasonably satisfactory to Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording
purposes. Notwithstanding anything herein or in any other Loan Document to the contrary, the Liens granted by the Loan Parties under the Security Instruments shall not, and the Loan Parties shall not be required to grant any such Liens that,
encumber any real or personal property interests of the Loan Parties excluded as Collateral pursuant to the terms of the Security Instruments.
(y) Investments and Loans. Borrower will not, and will not permit any other Loan Party to, make or permit to
remain outstanding any Investments in or to any Person other than Permitted Investments.
(z) Term Cash
Collateral Account. Borrower shall (i) maintain with a depository bank reasonably acceptable to Administrative Agent the Term Cash Collateral Account in which Borrower will only deposit identifiable proceeds of Term Priority Collateral that
constitute Term Priority Collateral and (ii) if any Intercreditor Agreement is then in existence, notify the ABL Agent (as defined in any then existing Intercreditor Agreement) in writing that such Term Cash Collateral Account will be used
solely and
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exclusively for holding identifiable proceeds of Term Priority Collateral. The Loan Parties shall not deposit any funds in the Term Cash Collateral Account other than identifiable proceeds of
Term Priority Collateral that constitute Term Priority Collateral. Notwithstanding the foregoing or anything else to the contrary herein, so long as no Event of Default has occurred and is continuing, (x) the Loan Parties shall not be required
to deposit proceeds of Term Priority Collateral into the Term Cash Collateral Account and (y) promptly following the request of Borrower therefor, any funds on deposit in the Term Cash Collateral Account shall be transferred to Borrower.
(aa) Negative Pledge Agreements; Dividend Restrictions. Borrower will not, and will not permit any other Loan
Party to, create, incur, assume or suffer to exist any contract, agreement or understanding (other than this Agreement, the Security Instruments, agreements with respect to purchase money Debt or Capital Leases creating Liens permitted by clause
(vi) of the definition of Permitted Liens, documents creating Liens which are described in clause (c), (e) or (h) of the definition of Excepted Liens, agreements, instruments, and documents executed in connection
with Debt permitted under clause (ix) of the definition of Permitted Debt, and contracts, agreements and arrangements described in the proviso to Section 5(q)) that in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien in favor of Administrative Agent with respect to any Collateral or restricts any Subsidiary from paying dividends or making distributions in respect of its Equity Interests to the Borrower or any other Loan Party.
(bb) Maximum Leverage Ratio. The Loan Parties shall not permit the Leverage Ratio calculated and tested as
of the last day of each fiscal quarter (commencing with the fiscal quarter ending September 30, 2023) to be greater than 4.00 to 1.00.
(cc) Equity Cure.
(i). Notwithstanding anything to the contrary in this Agreement, in the event that the Loan Parties fail
to comply (or anticipate that they may fail to comply) with the maximum Leverage Ratio covenant contained in this Section 5(bb) (the Financial Covenant) as of the end of any fiscal quarter (the Cure
Quarter), then Borrower shall have the right, during the period (the Cure Period) beginning on the first day of the applicable Cure Quarter until the tenth (10) Business Day after the day on which the
financial statements with respect to such test period for which such covenant is being measured are required to be delivered for the applicable Cure Quarter pursuant to Sections 5(d)(i) or 5(d)(ii), as applicable (such financial
statements, the Applicable Financial Statements and such date, the Cure Deadline), to include an amount equal to the cash proceeds of a Specified Equity Contribution (the Cure
Amount) in EBITDA for the purposes of calculating the Financial Covenant (the Cure Right), and pursuant to the exercise of the Cure Right, the Financial Covenant shall be recalculated, (A) upon the date
of receipt if such Specified Equity Contribution is received after the delivery of the Applicable Financial Statements or (B) on the date the Applicable Financial Statements are delivered if such Specified Equity Contribution is received prior
to the delivery of the Applicable Financial Statements giving effect to a pro forma increase to EBITDA for such test period in an amount equal to such Cure Amount; provided that such pro forma adjustment to EBITDA shall be given solely for
the purpose of measuring the Financial Covenant with respect to any period that includes the fiscal quarter for which such Cure Right was exercised and not for any other purpose under any Loan Document (including any other use of the Financial
Covenant).
(ii). If, after the receipt of the Cure Amount and the recalculations pursuant to
Section 5(cc)(i) above, the Loan Parties shall then be in compliance with the requirements of the Financial Covenant as of the last day of the applicable fiscal quarter, the Loan Parties shall be deemed to have satisfied the requirements of the
Financial Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable Default that had occurred shall be deemed cured; provided that
(A) the Cure Right may be exercised on no more than eight (8) times during the term of this Agreement, (B) in each four fiscal quarter period, there shall be at least two fiscal quarters in respect of which no Cure Right is exercised,
(C) with respect to any exercise of the Cure Right, the Cure Amount shall be no greater than the amount required to cause the Loan Parties to be in compliance with the Financial Covenant, (D) all Cure Amounts shall be disregarded for
purposes of determining any baskets or ratios with respect to the covenants contained in the Loan Documents and (E) there shall be no pro forma reduction in Debt (by netting or otherwise) or Consolidated Interest Expense with the proceeds of
any Cure Amount for determining compliance with the Financial Covenant for the test period for which such Cure Amount is deemed applied.
(iii). Prior to the Cure Deadline if Borrower notifies the Administrative Agent of its intent to cure,
neither Administrative Agent nor any Lender shall exercise any rights or remedies under Section 8 (or under any other Loan Document available during the continuance of any Default or Event of Default) solely on the basis of any actual or
purported failure to comply with the Financial Covenant unless such failure is not cured by the Cure Deadline (it being understood that this sentence shall not have any effect on the rights and remedies of the Administrative Agent or the Lenders
with respect to any other Default or Event of Default pursuant to any other provision of any Loan Document other than breach of the Financial Covenant); provided, that the Initial Lender shall have no obligation to make any Loans, prior to
receipt of the Cure Amount or such Default or Event of Default is otherwise cured or waived.
(dd) Post-Closing
Matters. The Loan Parties will execute and deliver the documents, take the actions and complete the tasks as set forth in Exhibit D, in each case within the applicable time limits specified on such exhibit.
6. ADMINISTRATIVE AGENTS EXPENDITURES. During the continuance of an Event of Default, Administrative Agent will
have the right at any time to make any payments and do any other acts Administrative Agent may reasonably deem necessary to protect its security interests in the Collateral, including, without limitation, the rights to satisfy, purchase, contest or
compromise any encumbrance, charge or lien which, in the reasonable judgment of Administrative Agent, appears to be prior to or superior to the security interests granted hereunder, and appear in and defend any action or proceeding purporting to
affect its security interests in, or the value of, any of the
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Collateral, in each case other than with respect to Permitted Liens. Borrower hereby agrees to reimburse Administrative Agent for all payments made and documented
out-of-pocket expenses incurred under this Agreement including reasonable and documented
out-of-pocket fees, expenses and disbursements of external attorneys and paralegals engaged by Administrative Agent, including any of the foregoing payments under, or
acts taken to protect its security interests in, any of the Collateral, which amounts will be secured under the Security Instruments, and agrees it will be bound by any payment made or act taken by Administrative Agent hereunder absent
Administrative Agents gross negligence or willful misconduct. Administrative Agent will have no obligation to make any of the foregoing payments or perform any of the foregoing acts. This Section 6 shall be subject to the Legal Expenses
Limitation.
7. EVENTS OF DEFAULT. The occurrence of any of the following events will constitute an Event of Default
hereunder:
(a) failure of Borrower to pay any Indebtedness, whether at stated maturity, by acceleration, or
otherwise within five (5) days of the stated due date;
(b) failure of any Loan Party to observe or perform
any covenant, condition or agreement contained in Section 5(b), Section 5(c), Section 5(d)(iii), Section 5(k), Section 5(p) or Section 5(r);
(c) failure of Parent Guarantor, Borrower or any other Loan Party to perform, comply with or observe any other term,
covenant or agreement applicable to it contained in any of the Loan Documents and such failure will continue unremedied for a period of thirty (30) days after Administrative Agents written notice thereof to Parent Guarantor, Borrower or
such Loan Party; or if such failure is not reasonably capable of being cured within such thirty (30) day period, but Parent Guarantor, Borrower or any other Loan Party is diligently pursuing such cure within such period, then Parent Guarantor,
Borrower and any other Loan Party shall have an additional thirty (30) days to remedy such failure so long as Parent Guarantor, Borrower or any other Loan Party continues to diligently pursue such cure;
(d) any representation or warranty made or deemed made by Parent Guarantor or a Loan Party hereunder, under or in
connection with any financial statements provided to Administrative Agent, under any other Loan Document, or under any document, instrument or certificate executed by any of the Parent Guarantor or the Loan Parties in favor of Administrative Agent
in connection with the Loan Documents, will prove to have been false, misleading, inaccurate or incorrect in any material respect when made;
(e) the admission in writing by Parent Guarantor or any of the Loan Parties of its inability to pay its debts as they
mature;
(f) the voluntary commencement by Parent Guarantor or any of the Loan Parties of any bankruptcy,
insolvency, reorganization, receivership or similar proceedings under any Debtor Relief Laws;
(g) the commencement
against Parent Guarantor or any of the Loan Parties of any bankruptcy, insolvency, reorganization, receivership or similar proceedings under any Debtor Relief Laws and, either (i) such proceeding remains undismissed or unstayed for sixty
(60) days following the commencement thereof, or (ii) Parent Guarantor or any Loan Party takes any action authorizing any such proceedings;
(h) Parent Guarantor or a Loan Party defaults (a) in the payment of principal of or interest on any Material Other
Indebtedness beyond any grace period provided with respect thereto or (b) in the observance or performance of any other agreement or condition relating to any Material Other Indebtedness or contained in any instrument or agreement relating
thereto, or any other event will occur or condition exist, the effect of such default or other event or condition is to cause, or to permit the holder or holders of such Material Other Indebtedness to cause, with the giving of notice if required,
such Material Other Indebtedness to become due prior to its stated maturity, in each case other than any event requiring prepayment pursuant to customary asset sale or change of control provisions;
(i) any final, non-appealable judgment or judgments for the payment of money in
an aggregate amount in excess of $25,000,000 (to the extent not covered by independent third-party insurance) shall be rendered against Parent Guarantor or a Loan Party which shall remain unpaid or is not fully stayed for a period of sixty
(60) days;
(j) any material covenant, agreement or obligation of Parent Guarantor or any Loan Party contained
in or evidenced by any of the Loan Documents is determined to be unenforceable, in accordance with its terms, except to the extent permitted by the terms thereof; Parent Guarantor or any Loan Party denies or disaffirm its obligations under any of
the Loan Documents or any Liens granted in connection therewith; or any Lien granted on any material part of the Collateral is determined to be void, voidable or invalid, is subordinated or is not given the priority contemplated by this Agreement or
any other Loan Document (except to the extent permitted by the terms of this Agreement or any other Loan Document or as otherwise agreed in writing by Administrative Agent); or
(k) any event or circumstance occurs with respect to any other agreement between Parent Guarantor, any Loan Party or
any Controlled Affiliate of any Loan Party, on the one hand, and Administrative Agent or any Affiliate of Administrative Agent, on the other, pursuant to which any Loan Party pays, receives or incurs liabilities (or could reasonably be expected to
pay, receive or incur liabilities) in excess of $20,000,000 in any twelve (12) month period, which, after giving effect to the expiration of any applicable grace period or the giving of notice, or both, provided in such agreement, would entitle
any party thereto (other than Parent Guarantor or the applicable Loan Party) to accelerate the obligations under such agreement prior to their stated maturity and such event or circumstance continues unremedied for a period of thirty (30) days
after Administrative Agents written notice thereof to Borrower.
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8. REMEDIES. If any Event of Default will have occurred and be
continuing beyond all applicable notice and cure periods:
(a) Administrative Agent may, without prejudice to any
of its other rights under any Loan Document or applicable law, declare all Indebtedness to be immediately due and payable (except with respect to any Event of Default set forth in Section 7(f) or
Section 7(g) hereof, in which case all Indebtedness will automatically become immediately due and payable without necessity of any declaration) without presentment, representation, demand of payment or protest, all of which
are hereby expressly waived;
(b) Administrative Agent may, subject to the terms of any Intercreditor Agreement,
take possession of the Collateral and, for that purpose may enter, with the aid and assistance of any person or persons, any premises where the Collateral or any part hereof is, or may be placed, and remove the same;
(c) the obligation of Lenders, if any, to make any Advances or give additional (or to continue) financial
accommodations of any kind to Borrower will immediately terminate;
(d) subject to the terms of any Intercreditor
Agreement, Administrative Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein (or in any other Loan Document) or otherwise available to it, all the rights and remedies of a secured party
under the Uniform Commercial Code whether or not the Uniform Commercial Code applies to the affected Collateral and also may (i) require Borrower to, and Borrower hereby agrees that it will at its expense and upon request of Administrative
Agent forthwith, use commercially reasonable efforts to assemble all or part of the Collateral (other than real property) as directed by Administrative Agent and make it available to Administrative Agent at a place to be designated by Administrative
Agent that is reasonably convenient to both parties and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Administrative Agents offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms as Administrative Agent may deem commercially reasonable. Borrower agrees that, to the extent notice of sale will be required by law with respect to Collateral
consisting of personal property, at least ten days prior written notice to Borrower of the time and place of any public sale or the time after which any private sale is to be made will constitute reasonable notification. Administrative Agent
will not be obligated to make any sale of Collateral regardless of notice of sale having been given. Administrative 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;
(e) all cash proceeds
received by Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of Administrative Agent, be held by Administrative Agent as collateral for, or then or at
any time thereafter applied in whole or in part by Administrative Agent against, all or any part of the Indebtedness in such order as Administrative Agent will elect; provided, that, notwithstanding anything to the contrary herein or
in any other Loan Document, upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Collateral shall be applied in accordance with the terms of any
Intercreditor Agreement. Any surplus of such cash or cash proceeds held by Administrative Agent and remaining after the full and final payment of all the Indebtedness will be paid over to Borrower or to such other Person to which Administrative
Agent may be required under applicable law, or directed by a court of competent jurisdiction, to make payment of such surplus; and
(f) Administrative Agent may pursue any other rights or remedies under any other Loan Document or available at law or
in equity, including, without limitation, rights or remedies seeking damages, specific performance and injunctive relief, and Administrative Agent shall have the right, in its sole discretion, to exercise any one or more of the remedies described in
this Section 8 or otherwise.
Notwithstanding anything to the contrary set forth herein, (i) (A) upon the occurrence and
during the continuance of an Event of Default under clauses (e), (f) or (g) of Section 7 or (B) upon the maturity or acceleration of the Indebtedness (to the extent the Indebtedness is not paid in full on the date
thereof), and/or (ii) if Required Lenders so elect, upon the occurrence and during the continuance of any other Event of Default, all unpaid and overdue amounts of the Indebtedness (whether or not accelerated) shall bear interest (including
post-petition interest in any proceeding under applicable Debtor Relief Laws, whether or not allowed in such a proceeding), at a rate per annum equal to the lesser of (i) a rate per annum equal to (A) the rate otherwise applicable to such
amounts plus (B) 5.0% per annum and (ii) the highest rate Lenders can legally collect under Applicable Law (such lesser rate, the Default Rate), and such interest shall be paid by Borrower upon demand.
9. MISCELLANEOUS PROVISIONS.
(a) Final Agreement. This Agreement, together with the Loan Documents, constitutes the entire understanding and
agreement of the parties hereto as to the matters set forth herein, superseding all proposals and prior agreements, oral or written, and all other communications between the parties with respect to the subject matter hereof. There are no
unwritten oral agreements between the parties hereto.
(b) Amendments. Except as otherwise expressly
set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by Borrower therefrom, shall be effective unless such amendment, waiver or consent is in writing
executed by Borrower and the Required Lenders, and acknowledged by Administrative Agent, or by Borrower and Administrative Agent with the consent of the Required Lenders, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:
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(i). extend or increase any Commitment of the Initial
Lender without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth on Exhibit A or Exhibit E or the waiver of any Default shall not constitute an extension or increase of any
Commitment of the Initial Lender);
(ii). reduce the principal of, or rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly and adversely affected thereby (provided that only the consent of the Required Lenders
shall be necessary to amend the definition of Default Rate or to waive the obligation of the Borrower to pay interest at the Default Rate);
(iii). postpone any date scheduled for any payment of principal of, or interest on, any Loan, or any
fees or other amounts payable hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender directly and adversely affected thereby;
(iv). release (A) the Borrower from its Obligations under the Loan Documents or (B) release
all or substantially all of the Guarantors from their Guaranty Agreement (except as expressly provided in Section 5(b) or Section 10(h)(i)), or limit their liability in respect of such Guaranty Agreement, in each case, without the written
consent of each Lender;
(v). except as expressly provided in Section 10(h)(i), release all or
substantially all of the Collateral from the Liens of the Security Instruments without the written consent of each Lender;
(vi). change Section 3(g) in a manner that would alter the pro rata sharing of payments required
thereby without the written consent of each Lender directly and adversely affected thereby;
(vii). waive any condition set forth in Exhibit A or Exhibit E without the written consent
of the Initial Lender; or
(viii). change any provision of this Section or the percentage in the
definition of Required 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;
provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise
affect the rights or duties hereunder or under any other Loan Document of Administrative Agent, unless in writing executed by Administrative Agent, in each case in addition to Borrower and Lenders required above.
(c) Attorneys Fees and Expenses. Borrower agrees to pay within ten (10) days of written demand
(i) all of Administrative Agents reasonable and documented out-of-pocket costs and expenses, including but not limited to Administrative Agents
reasonable and documented out-of-pocket attorneys fees and legal expenses, incurred in connection with the administration of this Agreement or any of the other
Loan Documents and (ii) all of Administrative Agents and Lenders documented out-of-pocket costs and expenses, including but not limited to
Administrative Agents and Lenders documented out-of-pocket attorneys fees and legal expenses incurred in connection with the enforcement of this
Agreement or any of the other Loan Documents. This Section 9(c) shall be subject to the Legal Expenses Limitation.
(d) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be
used to define or interpret this Agreement.
(e) Assignments.
(i). 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 none of Borrower, any other Loan Party or Parent Guarantor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of Administrative Agent, such consent to be granted at Administrative Agents sole and absolute discretion. No Lender may assign, sell or transfer all or any portion of its rights or obligations
hereunder except (A) to an assignee in accordance with the provisions of paragraph (ii) of this Section 9(e), (B) by way of participation in accordance with the provisions of paragraph (iv) of this Section 9(e), or
(C) by way of pledge or assignment of a security interest. 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 paragraph (iv) of this Section 9(e) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(ii). Assignments by Lenders. Any Lender may at
any time assign to one or more assignees (other than any Disqualified Lender or any natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person)) all or a portion of its
rights and obligations under this Agreement (including all or a portion of the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(A) the consent of Borrower (such consent not to be unreasonably withheld, conditioned or delayed) shall be required
unless (x) an Event of Default occurred and continued without cure for more than seven (7) Business Days after Administrative Agents written notice thereof to Borrower or (y) such assignment is to a Lender or a Controlled
subsidiary of Stonebriar Finance Holdings LLC; provided that, notwithstanding the foregoing clause (A)(x), no Lender shall be permitted to consummate an assignment without the consent of the Borrower until the date that is 30 days
after the date that the Administrative Agent has provided Borrower with notice of the termination of Borrowers consent right as a result of the occurrence of an Event of Default;
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(B) the consent of Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments to a Person that is not a Lender;
(C) the parties to each assignment
shall execute and deliver to Administrative Agent an Assignment and Assumption (with a copy to be promptly provided to Borrower);
(D) the
Initial Lender may not assign its Delayed Draw Term Loan Commitment without the consent of the Borrower; and
(E) no assignment shall be
permitted or effective if as a result of such assignment, Stonebriar and its Affiliates would hold less than 50% of the aggregate Credit Exposure of all Lenders without the consent of the Borrower.
Subject to acceptance and recording thereof by Administrative Agent pursuant to paragraph (iii) of this Section 9(e), 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 Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (iv) of this Section 9(e).
(iii). Register. Administrative Agent, acting solely for this purpose as an agent of Borrower,
shall maintain at one of Administrative Agents offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the principal amounts (and stated interest) of
the Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive absent manifest error, and Borrower, Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(iv). Participations. Any Lender may at any
time, without the consent of, or notice to, Borrower or Administrative Agent, sell participations to any Person (other than a Disqualified Lender, a natural person, or a holding company, investment vehicle or trust for, or owned and operated for the
primary benefit of, a natural person, or the Borrower or any of the Borrowers Affiliates or Subsidiaries) (each, a Participant) in all or a portion of such Lenders rights or obligations under this Agreement
(including all or a portion of the Loans owing to it); provided that (A) such Lenders 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) Borrower, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and 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, modification or waiver described in Section 9(b)(i) (viii) that affects such Participant. Each
Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participants 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 Participants interest in any commitments, loans 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 or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. 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. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(v). Subject to Section 9(p), each Lender may provide to any one or more purchasers, or
potential purchasers (in each case other than a Disqualified Lender), any information or knowledge about Borrower, the other Loan Parties and the Loans. Borrower additionally waives any and all notices of sales of participation interests, as
well as all notices of any repurchase of any participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the economic owners of such interests in the Loans and will have all the rights
under the agreement(s) governing the sale of such participation interests or other assignment of any Lenders interests. Borrower unconditionally agrees that a Lender or such purchaser (through a Lender)
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may enforce Borrowers obligations under the Loans irrespective of the failure or insolvency of any holder of any interest in the Loans. Borrower further agrees that the purchaser or
assignee of any such interests may, unless it is a Controlled Affiliate of the selling or assigning Lender, enforce its interests irrespective of any personal claims or defenses that Borrower may have against a Lender.
(vi). Disqualified Lenders.
(A) Notwithstanding anything to the contrary contained herein, no assignment or participation shall be
made to any Person that was a Disqualified Lender as of the date (the Trade 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 (1) Administrative Agent has consented in writing (not to be unreasonably withheld or delayed) and (2) unless an Event of Default has occurred, the Borrower has consented in writing in its sole and
absolute discretion to such assignment, in which case such Person will not be considered a Disqualified Lender for the purpose of such assignment or participation. For the avoidance of doubt, with respect to any assignee that becomes a Disqualified
Lender after the applicable Trade Date or any Person that the Borrower removes from the DQ List (including as a result of the delivery of a notice pursuant to, or the expiration of the notice period referred to in, the definition of
Disqualified Lender), (x) any additional designation or removal permitted by the foregoing shall not apply retroactively to any prior or pending assignment or participation, as applicable, to any Lender or Participant and (y) any
designation or removal after the Closing Date of a Person as a Disqualified Institution shall become effective three Business Days after such designation or removal. Any assignment or participation in violation of this Section 9(e)(vi)(A) shall
not be void, but the other provisions of this Section 9(e)(vi) shall apply. The Borrower shall deliver notices of any designation or removal of a Disqualified Lender to the Administrative Agent.
(B) If any assignment or participation is made to any Disqualified Lender without the Borrowers
prior written consent in violation of Section 9(e)(vi)(A) above, or if any Person becomes a Disqualified Lender after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Lender
and the Administrative Agent, (A) in the case of outstanding Loans held by Disqualified Lender, purchase or prepay such Loans by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified
Institution paid to acquire such Loans or such participation in such Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder or (B) require such Disqualified Lender to
assign, without recourse (in accordance with and subject to the restrictions contained in this Section), all of its interest, rights and obligations under this Agreement to one or more Lenders at the lesser of (x) the principal amount thereof
and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.
(C) Notwithstanding anything to the contrary contained in this Agreement, Disqualified Lenders
(i) will not (x) have the right to receive information, reports or other materials provided to Lenders by Parent Guarantor, any Loan Party, Administrative Agent or any other Lender, (y) attend or participate in meetings attended by
the Lenders and Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of Administrative Agent or the Lenders and (ii) (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 Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other
Loan Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Lenders consented to such matter, and (y) for purposes of voting on any plan of reorganization or similar
plan, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan, (2) if such Disqualified Lender does vote on such 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 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 the applicable
bankruptcy court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).
(D) Administrative Agent shall have the right, and the Borrower hereby expressly authorize
Administrative Agent, to provide the DQ List to each Lender requesting the same.
(f) Governing Law. This
Agreement and the rights and obligations of the parties hereunder will in all respects be governed by, and construed in accordance with, the laws of the State of Texas (without regard to the conflict of laws principles of such state), including all
matters of construction, validity and performance, except for any matters that are required by Applicable Law to be governed and construed in accordance with the laws of the jurisdiction where the Sand Facilities are located.
(g) VENUE. THE PARTIES HERETO AGREE THAT ANY ACTION OR PROCEEDING ARISING UNDER OR RELATED TO THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS MAY BE COMMENCED IN ANY FEDERAL OR STATE
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COURT SITTING IN THE EASTERN FEDERAL DISTRICT OF TEXAS, AND BORROWER IRREVOCABLY SUBMITS TO THE JURISDICTION OF EACH SUCH COURT AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR THE TRANSACTION CONTEMPLATED HEREBY MAY NOT BE ENFORCED IN OR BY SUCH COURT. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
LIMIT OR RESTRICT ADMINISTRATIVE AGENTS OR ANY LENDERS RIGHT TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS LOCATED IN THE STATE IN WHICH THE SAND FACILITIES OR ANY COLLATERAL IS LOCATED TO THE EXTENT ADMINISTRATIVE AGENT OR
SUCH LENDER DEEMS SUCH PROCEEDING NECESSARY OR ADVISABLE TO EXERCISE REMEDIES AVAILABLE UNDER ANY LOAN DOCUMENT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING WILL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(h) WAIVER OF JURY TRIAL.
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
(i) No Waiver by Lenders; Cumulative. No failure or delay by Administrative Agent or
any Lender in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege, or any abandonment
or discontinuance of steps to enforce such a right remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right remedy, power or privilege. The rights, remedies, powers and privileges of
Administrative Agent and Lenders hereunder and under the Loan Documents are cumulative and are not exclusive of any rights, remedies, powers or privileges that any such Person would otherwise have. A waiver by Administrative Agent or any Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of Administrative Agents or such Lenders right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by
Administrative Agent or any Lender, nor any course of dealing between Administrative Agent or any Lender and Borrower, or between Administrative Agent or any Lender and any Grantor or any Guarantor, shall constitute a waiver of any of Administrative
Agents or any Lenders rights or of any of Borrowers, any Grantors or any Guarantors obligations as to any future transactions. Whenever the consent of Administrative Agent or any Lender is required under this Agreement,
the granting of such consent by Administrative Agent or such Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole
discretion of Administrative Agent and the Lenders.
(j) Notices. Except as otherwise provided herein, all
notices, approvals, consents, correspondence or other communications required or desired to be given hereunder will be given in writing and will be delivered by overnight courier, hand delivery or certified or registered mail, postage prepaid to the
addresses stated below. All such notices and correspondence will be effective when received:
If to Administrative Agent: 5601
Granite Parkway, Suite 1350, Plano, Texas 75024, attention: General Counsel; or such other address as will be designated by Administrative Agent to Borrower; and
If to any Loan Party: 5918 West Courtyard Drive, Suite 500, Austin, Texas 78730, attention: John Turner; or such other address as will
be designated by Borrower to Administrative Agent
Borrower and Administrative Agent agree to keep the other informed at all times of Borrowers and
Administrative Agents, as applicable, current address. Unless otherwise provided or required by law, if there is more than one Loan Party, any notice given by Administrative Agent to Borrower is deemed to be notice given to all Loan Parties.
(k) Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal,
invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it
becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
(l) Successors and Assigns. 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. Without limiting the generality of the foregoing, all covenants and agreements by or on behalf of Borrower contained in this Agreement or any Loan Documents shall bind
Borrowers successors and permitted assigns and shall inure to the benefit of Administrative Agent, Lenders and their respective successors and assigns.
(m) Survival of Representations and Warranties. Borrower understands and agrees that in making the Loan, each
Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Administrative Agent in connection with this Agreement or the Loan Documents.
Borrower further agrees that regardless of any investigation made by Administrative Agent or any Lender, all such representations, warranties and covenants
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will survive (as of the date made) the extension of the Loans and delivery to Administrative Agent of the Loan Documents, shall be continuing in nature, shall be deemed made and then dated by
Borrower at the time each subsequent Advance (if any) is made, and shall remain in full force and effect until such time as Borrowers Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
(n) Time is of the Essence. Time is of the essence in the performance of
this Agreement.
(o) Indemnification. Borrower agrees to indemnify, hold harmless and defend
Administrative Agent (and any sub-agent thereof), each Lender and their respective Affiliates (each, an Indemnitee) for, from and against all Liabilities that may be imposed
on, incurred by or asserted against an Indemnitee in any matter relating to or arising out of: (i) any Loan Document or Obligation (or repayment thereof) or the use of proceeds of the Loans; (ii) Borrowers
operations at or relating to the Sand Facilities; (iii) the Collateral, including its design, construction, operation, alteration, maintenance, or use by Borrower or any other Person; (iv) any permitted
disclosure of information of any Loan Party not in violation of Section 9(p); (v) any misrepresentation or inaccuracy in any representation or warranty in any Loan Document; (vi) any breach or failure by any
Loan Party or the Parent Guarantor to pay or perform the Obligations; (vii) any action taken by Administrative Agent or any Lender pursuant to a request for an Advance or (viii) any other act, event or
transaction related, contemplated in or attendant to any of the foregoing, including any actual or prospective investigation, litigation or other proceeding relating to any of the foregoing, whether or not such Indemnitee initiated such
investigation, litigation or other proceeding or is a party thereto and without regard to legal theory, including pursuant to Applicable Law, common law, equity, contract, tort, or otherwise (collectively, the Indemnified
Matters), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE. Notwithstanding the foregoing, Borrower shall not have any liability
hereunder to any Indemnitee with respect to any Indemnified Matter, to the extent such liability has resulted from the gross negligence or willful misconduct of such Indemnitee or any of its Affiliates, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. This Section 9(o) shall not apply to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim. Borrower, Administrative Agent and each Lender agree that, to the extent permissible under applicable law, in no event will any Indemnitee or any Loan Party have any liability to the other for any
special, punitive, indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date); provided that the foregoing
shall not relieve Borrower of its obligation to indemnify an Indemnitee for any claims for special, punitive, indirect or consequential damages brought against such Indemnitee by a third party in connection with an Indemnified Matter. This
Section 9(o) shall be subject to the Legal Expenses Limitation.
(p) Confidentiality.
Each party hereto agrees to treat information concerning the terms of this Agreement and the other Loan Documents confidentially including all information received or obtained hereunder, except to the extent that disclosure is required by Applicable
Law. The foregoing constraint shall not include: (i) information that is now in the public domain or subsequently enters the public domain without fault on the part of the disclosing party; (ii) information currently known to the
disclosing party from its own sources and not subject to confidentiality obligations; (iii) information that the disclosing party receives from a third party not under any obligation to keep such information confidential; (iv) disclosure
made to Affiliates, agents, employees, officers, directors, auditors, lawyers or other professional advisors of the disclosing party (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); (v) disclosure made in connection with the enforcement of any right or the fulfillment of any obligation pursuant hereto or pursuant to any other Loan Document;
(vi) disclosure made to credit rating agencies, bank examiners or other regulatory officials; and (vii) disclosure made to any assignee, potential assignee, participant or potential participant of a Lender and any counsel or other
professional advisors of the foregoing respecting the transactions contemplated by this Agreement so long as such recipient shall be informed of the confidential nature of such information and shall agree that by receiving such information such
recipient is obligated to maintain the confidentiality of such information in accordance with the terms hereof.
(q) Counterparts. This Agreement and the other Loan Documents may be executed in any number of counterparts
(electronic delivery accepted) and by different parties in separate counterparts, each of which, when so executed, shall be deemed an original and all of which, taken together, shall constitute one integrated agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single counterpart.
(r) ABL/Term Intercreditor
Agreement. For so long as the ABL/Term Intercreditor Agreement is in effect, this Agreement and the other Loan Documents are subject to the terms and conditions set forth in the ABL/Term Intercreditor Agreement in all respects and, in the event
of any conflict between the terms of the ABL/Term Intercreditor Agreement and this Agreement, the terms of the ABL/Term Intercreditor Agreement shall govern. Upon the expiration or termination of the ABL/Term Intercreditor Agreement, all references
to the ABL/Term Intercreditor Agreement in this Agreement shall be of no further force or effect.
10. AGENCY
PROVISIONS.
(a) Appointment and Authority. Each of the Lenders hereby irrevocably appoints Stonebriar
Commercial Finance LLC to act on its behalf as Administrative Agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative
Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10 are solely for the benefit of
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Administrative Agent and the Lenders, and neither Borrower nor any other Loan Party shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the
use of the term agent herein or in any other Loan Documents (or any other similar term) with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency
doctrine of any Applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties. Administrative Agent shall also act as the collateral
agent under the Loan Documents, and each of the Lenders hereby irrevocably appoints and authorizes Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted
by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Administrative Agent, as collateral agent and any co-agents, sub-agents and attorneys-in-fact appointed by Administrative Agent pursuant to
Section 10(e) for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Instruments, or for exercising any rights and remedies thereunder at the direction of Administrative Agent, shall
be entitled to the benefits of all provisions of this Section 10 and Section 9(o) as if set forth in full herein with respect thereto.
(b) Rights as a Lender. The Person serving as Administrative 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 Administrative Agent, and the term Lender or Lenders shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its branches and Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in
any other advisory capacity for, and generally engage in any kind of business with, any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to
Lenders or to provide notice to or consent of Lenders with respect thereto.
(c) Exculpatory Provisions.
(i). Administrative Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, Administrative Agent:
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(A) |
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of
Default has occurred and is continuing; |
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(B) |
shall not have any duty to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of Lenders as shall be
expressly provided for herein or in the other Loan Documents); provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or
that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law; and |
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(C) |
shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity.
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(ii). Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 8 and 9(b)), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing such Default is given to Administrative Agent in writing by Borrower or a Lender.
(iii). Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (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 Security Instruments or (v) the satisfaction of any
condition set forth in Exhibit A or Exhibit E or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.
(iv). The Administrative Agent shall not 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 Lenders. Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or
inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Lender or (ii) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential
information, to any Disqualified Lender.
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(d) Reliance by Administrative Agent. Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, Administrative
Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. Administrative Agent may consult with legal counsel (who
may be counsel for the Loan Parties), 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.
(e) Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10 shall apply to any such sub agent and to the Related Parties of Administrative Agent and any such sub-agent. Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction
determines in a final and nonappealable judgment that Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
(f) Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that Administrative Agent has not made any representation or warranty to it, and that no act by Administrative Agent hereafter taken, including any consent to, and acceptance of any assignment or review of the affairs of any
Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or any warranty by Administrative Agent to any Lender as to any matter, including whether Administrative Agent has disclosed material information in its (or its
Related Parties) possession. Each Lender represents to Administrative Agent that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis of, appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and its
Subsidiaries, and all applicable bank or other regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower hereunder. Each Lender also acknowledges that it
will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own credit
analysis, appraisal and 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, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower. Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial
lending facility and (ii) it is engaged in making, acquiring or holding commercial loans in the ordinary course and is entering into this Agreement as a Lender for the purpose of making, acquiring or holding commercial loans set forth herein as
may be applicable to such Lender, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument, and each Lender agrees not to assert a claim in contravention of the foregoing. Each Lender represents and warrants
that it is sophisticated with respect to decisions to make, acquire or hold commercial loans, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire or hold such commercial
loans, is experienced in making, acquiring or holding such commercial loans.
(g) 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, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(i). to file and prove a claim for the whole amount of the principal and interest owing and unpaid
in respect of the Loans 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 and Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and Administrative Agent under Sections 6 and 9(c))
allowed in such judicial proceeding; and
(ii). to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Lenders, to
pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Sections 6 and 9(c).
(h) Collateral and Guaranty Matters.
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(i). Each of the Lenders irrevocably authorize
Administrative Agent, at Administrative Agents option and in Administrative Agents discretion and upon the Borrowers request,
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(A) |
to release any Lien on any property granted to or held by Administrative Agent under any Loan Document
(i) upon the payment in full of the Indebtedness (other than contingent indemnification obligations for which no claim has been made) and the termination of this Agreement, (ii) that is sold or otherwise disposed of or to be sold or
otherwise disposed of as part of or in connection with any sale or other disposition permitted hereunder or under any other Loan Document, (iii) that is reasonably determined by the Administrative Agent to be of immaterial value with respect to
the Collateral as a whole or (iv) if approved, authorized or ratified in writing by the Required Lenders in accordance with Section 9(b); |
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(B) |
to subordinate any Lien on any property granted to or held by Administrative Agent under any Loan Document to
the holder of any Lien on such property that is subject to a Lien permitted under clause (vi) of the definition of Permitted Liens; and |
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(C) |
to release any Guarantor from its obligations under the Guaranty Agreement if such Person ceases to be a
Subsidiary as a result of a transaction permitted under the Loan Documents. |
(ii). Administrative Agent and Lenders agree that upon the incurrence by the Loan Parties of an ABL
Facility described in clause (b) of the definition thereof and execution of an Intercreditor Agreement described in clause (b) of the definition thereof, the Liens of the Administrative Agent on all ABL Collateral shall be automatically
released without further action by any party.
(iii). Upon request by Administrative Agent at any
time, the Required Lenders will confirm in writing Administrative Agents authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty Agreement
pursuant to this Section 10(h). In each case as specified in this Section 10(h), Administrative Agent will, at 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 Security Instruments or to subordinate its interest in such item, or to release such Guarantor from its obligations under the
Guaranty Agreement, in each case in accordance with the terms of the Loan Documents and this Section 10(h).
(iv). Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any
representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of Administrative Agents Lien thereon, or any certificate prepared by any Loan Party in connection therewith,
nor shall Administrative Agent be responsible or liable to Lenders for any failure to monitor or maintain any portion of the Collateral.
(i) Intercreditor Agreements. REFERENCE IS MADE TO EACH INTERCREDITOR AGREEMENT. EACH LENDER HEREUNDER AGREES
THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF ANY INTERCREDITOR AGREEMENT AND AUTHORIZES AND INSTRUCTS ADMINISTRATIVE AGENT TO ENTER INTO ANY INTERCREDITOR AGREEMENT IN THE CAPACITY OTHERWISE PERMITTED HEREUNDER AND
ON BEHALF OF SUCH LENDER. THE PROVISIONS OF THIS SECTION 10(i) ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF ANY INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO SUCH INTERCREDITOR AGREEMENT TO UNDERSTAND ALL TERMS AND CONDITIONS
THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF SUCH INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER OR AS
TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN ANY INTERCREDITOR AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed by
their respective duly authorized officers as of the date first above written.
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BORROWER: |
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ATLAS SAND COMPANY, LLC |
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By: |
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Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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ADMINISTRATIVE AGENT: |
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STONEBRIAR COMMERCIAL FINANCE LLC |
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By: |
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Name: |
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Jeffrey L. Wilkison |
Title: |
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Senior Vice President |
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INITIAL LENDER: |
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STONEBRIAR COMMERCIAL FINANCE LLC |
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By: |
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Name: |
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Jeffrey L. Wilkison |
Title: |
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Senior Vice President |
[Signature Page to Credit
Agreement]
EXHIBIT A
DEFINITIONS
As used in the Agreement, the
following terms shall have the following definitions:
ABL Agent means the administrative agent under the then
extant ABL Facility. As of the Closing Date, the ABL Agent is Bank of America, N.A., together with its successors and assigns in its capacity as administrative agent under the ABL Credit Agreement.
ABL Collateral means (a) accounts receivable, as extracted sand inventory, credit card receivables, deposit
accounts (other than Term Cash Collateral Accounts) and cash (other than identifiable cash proceeds of Collateral) and the proceeds of the foregoing and (b) other customary collateral for an inventory and receivables-based, asset-based
revolving credit facility, in the case of this clause (b), as reasonably approved by the Administrative Agent.
ABL Credit
Agreement means that certain Loan, Security and Guaranty Agreement, dated as of February 22, 2023, among the Borrower, each of the lenders and letter of credit issuers from time to time party thereto, and the ABL Agent, as
administrative agent and collateral agent, as such agreement may be amended, modified, supplemented or restated from time to time.
ABL Facility means (a) at any time prior to the Discharge of ABL Obligations, a revolving credit facility which
(i) does not have any obligors that are not Loan Parties and (ii) is at all times subject to an Intercreditor Agreement and (b) at any time after the Discharge of ABL Obligations, a revolving credit facility which (i) does not
have any obligors that are not Loan Parties, (ii) is not secured by Collateral but is secured solely by ABL Collateral and (iii) is at all times subject to an Intercreditor Agreement.
ABL Obligations means all Debt and other obligations incurred under the ABL Loan Documents.
ABL Loan Documents means (a) the Loan Documents as defined in the ABL Credit Agreement and
(b) any other documents, instruments or agreements entered into by a Loan Party in connection with an ABL Facility.
ABL/Term Intercreditor Agreement means that certain Second Amended and Restated ABL/Term Intercreditor Agreement
dated as of February 22, 2023 and initially entered into among the Borrower, the other Grantors (as defined therein) party thereto, Administrative Agent, ABL Agent, and each additional Representative (as defined therein) that from time to time
becomes a party thereto, as amended, amended and restated, supplemented, renewed or otherwise modified from time to time.
Administrative Agent means Stonebriar, in its capacity as administrative agent under any of the Loan Documents, or
any successor administrative agent.
Advance means a disbursement of a Loan made to Borrower or on
Borrowers behalf under the terms and conditions of this Agreement.
Affiliate means, with respect to a
Person, each officer, director, manager, general partner, or joint-venturer of such Person and any other Person that directly or indirectly Controls, is Controlled by, or is under common Control with, such Person.
Agreement means this Credit Agreement, as the same may be amended or modified from time to time, together with all
exhibits and schedules attached hereto.
Anti-Money Laundering Laws has the meaning given to such term in
Section 4(i).
Applicable Law means, as to a Person, any law (statutory or common), ordinance, rule,
regulation, order, policy, code, other legal requirement, directive or determination of any arbitrator or Governmental Authority, in each case applicable to or binding on such Person or any of its assets or to which such Person or any of its assets
is subject.
Applicable Reporting Entity means the public Parent Entity of the Borrower; provided that the
calculations of consolidated net income, Consolidated Net Tangible Assets, the Leverage Ratio, Net Indebtedness, Consolidated Interest Expense, EBITDA, and any component of the foregoing shall only include amounts attributable to the Applicable
Reporting Entity and its consolidated subsidiaries. For the avoidance of doubt, it is understood and agreed that in the event Atlas Energy Solutions Inc. becomes a subsidiary of a publicly traded company, such publicly traded company shall
immediately become the Applicable Reporting Entity for all purposes of this Agreement.
Assignment and Assumption
means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9(e)), and accepted by the Administrative Agent, in substantially the form of Exhibit F or
any other form approved by the Administrative Agent.
Availability Period means the period from and including the
Closing Date to the Maturity Date.
Board means the Board of Governors of the Federal Reserve System of the
United States of America or any successor Governmental Authority.
Exhibit A - 1
Bona Fide Debt Fund means any bona fide debt fund, investment
vehicle, regulated bank entity or non-regulated lending entity (i) that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans or bonds and/or similar extensions of
credit in the ordinary course of business, (ii) that has in place customary information barriers between it and (A) any applicable Person referred to in clauses (a) through (c) of the definition of Disqualified Lenders and
(B) any Affiliate of such Person that is not primarily engaged in the investing activities described above, (iii) whose managers have fiduciary duties to the investors of such fund independent of and in addition to their duties to such
fund and any Affiliate of such fund, and (iv) such Person and investment vehicles managed or advised by such Person that are not engaged primarily in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar
extensions of credit in the ordinary course do not, either directly or indirectly, make investment decisions for such Person.
Borrower has the meaning ascribed to such term in the first paragraph of this Agreement.
Brigham Family means, collectively: (i) the lineal descendants by blood or adoption of Bud Brigham
(descendants), and the spouses and surviving spouses of such descendants, (ii) any estate, trust, guardianship, custodian or other fiduciary arrangement for the primary benefit of any one or more individuals described
in clause (i) of this definition, and (iii) any corporation, partnership, limited liability company or other business organization so long as (A) one or more individuals or entities described in clause (i) or (ii) of this
definition possess, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, partnership, limited liability company or other business organization, and (B) substantially all of the
ownership, beneficial or other equity interests in such corporation, partnership, limited liability company or other business organization are owned, directly or indirectly, by one or more individuals or entities described in clause (i) or
clause (ii) of this definition.
Business Day means any day of the year that is not a Saturday, Sunday or a
day on which banks are required or authorized to close in Austin, Texas, Plano, Texas or Kansas City, Missouri.
Capital
Leases means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, recorded as capital leases on the balance sheet of the Person liable for the payment of rent thereunder.
Cash means money, currency or a credit balance in any demand or deposit account; provided, however, for purposes of
calculating compliance with any requirements set forth herein, Cash shall exclude any amounts that would not be considered cash under GAAP or cash as recorded on the books of the Applicable Reporting Entity and
its consolidated subsidiaries.
Cash Collateral Accounts means any deposit account designated by the Borrower as
a Cash Collateral Account by written notice to Administrative Agent, in each case maintained for the exclusive purpose of securing Debt in respect of letters of credit permitted under this Agreement.
Cash Equivalents means Investments described in clauses (iii), (iv), (v) and (vi) of the definition of Permitted
Investments.
Casualty Event means any loss, casualty or other insured damage to, or any nationalization, taking
under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrower or of any other Loan Party having a fair market value in excess of $50,000,000.
Change of Control means the acquisition by any person, entity or group (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) that does not include Bud Brigham or the Brigham Family, beneficially or of record, of direct or indirect ownership (as defined in SEC Rules 13(d)-3 and 13(d)-5 under the Securities Exchange Act of 1934, as amended) of 50% or more of the economic and/or voting interest in the equity interests in Borrower or any
other Loan Party.
Closing Date means the date of this Agreement.
Code means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.
Collateral means all property and assets granted as collateral security for the Indebtedness pursuant to the Security
Instruments, whether real or personal property, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, or any other security or lien interest
whatsoever. It is understood and agreed that Collateral shall not include any ABL Collateral from and after the incurrence by the Loan Parties of an ABL Facility described in clause (b) of the definition thereof.
Commitment means the Initial Lenders Initial Term Loan Commitment and the Initial Lenders Delayed Draw
Term Loan Commitment.
Competitor means any Person that is an operating company engaged in substantially similar
business operations as any of the Loan Parties.
Consolidated Interest Expense means, for any period of
determination, total interest expense of the Applicable Reporting Entity and its consolidated subsidiaries on a consolidated basis with respect to all of the outstanding Debt of the Applicable Reporting Entity and its consolidated subsidiaries
(including, to the extent included in interest expense under GAAP: (i) interest paid-in-kind, (ii) amortization of financing fees, (iii) the amortization
of original issue discount resulting from the issuance of Debt at less than par, (iv) the interest component of obligations under Capital Leases, and (v) other non-cash interest expense) net of cash
interest income.
Exhibit A - 2
Consolidated Net Tangible Assets means, at any date of
determination, the total amount of consolidated assets of Applicable Reporting Entity and its consolidated subsidiaries on a consolidated basis (including the Sand Reserves Value of the Loan Parties Sand Reserves) after deducting, without
duplication, therefrom: (a) all current liabilities (excluding (i) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the
amount thereof is being computed and (ii) current maturities of long-term debt) and (b) the value (net of any applicable reserves) of all goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth, or on
a pro forma basis would be set forth, on the consolidated balance sheet of Applicable Reporting Entity and its subsidiaries on a consolidated basis for the most recently completed fiscal quarter, prepared in accordance with GAAP.
Contested Tax means taxes that are being contested in good faith by Borrower by appropriate proceedings promptly
instituted and diligently conducted and (i) for which an adequate reserve is being maintained by Borrower in accordance with GAAP or (ii) so long as Borrower has a reasonable expectation of succeeding in such contest and there is no
material risk of any Collateral (other than Collateral that, individually or in the aggregate, (i) has a fair market value of less than $5,000,000 and (ii) is not of material importance to the normal operation of the Sand Facilities and
the business operations of the Loan Parties) being seized or forfeited in connection with such contest.
Control
means the sole power, directly or indirectly, to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Controlling and
Controlled have meanings correlative thereto.
Control Agreement has the meaning given
such term in the Security Agreement.
Controlled Affiliate means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries, is Controlled by such specified Person.
Credit Card
Agreement means all agreements entered into by the Borrower or for the benefit of the Borrower, in each case with any Credit Card Issuer or any Credit Card Processor, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
Credit Card Issuer means any Person (other than any Loan
Party) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa
International and American Express, Discover, Japan Credit Bureau (a/k/a JCB Co.), Diners Club, Carte Blanche and other non-bank credit or debit cards, including, without limitation, credit or debit cards
issued by or through American Express Travel Related Services Company, Inc., and Novus Services, Inc.
Credit Card
Processor means any servicing or processing agent or any factor or financial intermediary (other than Borrower and its Subsidiaries) who facilitates, services, processes or manages the credit authorization, billing transfer and/or
payment procedures with respect to any Borrowers sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.
Credit Card Receivables Account means one or more deposit accounts established in connection with a Credit Card
Agreement.
Cure Deadline has the meaning assigned such term in Section 5(c)(c)(i).
Cure Period has the meaning assigned such term in Section 5(c)(c)(i).
Debt means, for any Person, the sum of the following (without duplication): (a) all obligations of such Person for
borrowed money or evidenced by bonds, bankers acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and
similar instruments; (c) all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services; (d) all obligations of such Person under Capital Leases; (e) all Debt (as
defined in the other clauses of this definition) of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Debt is assumed
by such Person; (f) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or in respect of which such Person otherwise assures a creditor against loss of such Debt (howsoever such assurance shall be
made, including by means of obligations to pay for goods or services even if such goods or services are not actually taken, received or utilized) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee
or assurance against loss; (g) any Debt (as defined in the other clauses of this definition) of a partnership for which such Person is liable either by agreement or by operation of Applicable Law but only to the extent of such liability; and
(h) obligations of such Person with respect to Disqualified Capital Stock; provided, however, that Debt does not include (i) obligations with respect to surety or performance bonds and similar instruments
entered into in the ordinary course of business in connection with the operation of the Sand Facilities or with respect to appeal or utility bonds, (ii) accounts payable and accrued expenses, liabilities or other obligations to pay the deferred
purchase price of Property or services, from time to time incurred in the ordinary course of business which are not greater than 90 days past the date of invoice or which are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP, or (iii) endorsements of negotiable instruments for collection. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP.
Exhibit A - 3
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 or other applicable
jurisdictions from time to time in effect.
Default means any event or circumstance that, with the passing of
time or the giving of notice, or both, would (if not cured or otherwise remedied during such time) become an Event of Default.
Default Rate has the meaning given to such term in Section 8.
Delayed Draw Funding Date means each date, which shall be a Business Day, on which a Delayed Draw Term Loan is funded
hereunder, which shall in no event be after the expiration of the Availability Period.
Delayed Draw Term Loan
has the meaning assigned such term in Section 3(a)(ii).
Delayed Draw Term Loan Commitment means the Initial
Lenders obligation to make Delayed Draw Term Loans to Borrower hereunder in the amount not to exceed the Maximum Delayed Draw Term Loan Principal Amount, as the same may be decreased by the aggregate principal amount of Delayed Draw Term Loans
funded by the Initial Lender.
Delayed Draw Term Loan Note means a promissory note executed by Borrower in
connection with this Agreement in favor of the Initial Lender, in substantially the form of Exhibit G, as the same may be amended, supplemented, replaced or otherwise modified from time to time.
Discharge of ABL Obligations has the meaning assigned to such term in the ABL/Term Intercreditor Agreement in effect
on the Closing Date (without giving effect to any amendments, restatements, supplements or modifications thereto).
Disqualified Capital Stock means 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) or upon the happening of any event, (i) matures or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock),
pursuant to a sinking fund obligation or otherwise, or (ii) is convertible or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of
the holder thereof, in whole or in part, in each case of clauses (i) and (ii), on or prior to the date that is 91 days after the earlier of (A) the Maturity Date and (B) the date on which all Indebtedness is indefeasibly satisfied in
full.
Disqualified Lenders means (a) those certain banks, financial institutions and other investors
designated in writing by the Borrower to Administrative Agent on or prior to the Closing Date as (i) a Disqualified Lender or (ii) a Competitor, (b) any Person clearly identifiable solely on the basis of such Persons name, as an
Affiliate of any Person referred to in clause (a)(i) or (a)(ii) above and (c)(i) any Person that is added as a Competitor and (ii) any Person that is clearly identifiable solely on the basis of such Persons name, as an Affiliate of any
Person referred to in clause (c)(i), pursuant to a written supplement to the list of Competitors that are Disqualified Lenders, that is delivered by the Borrower after the date hereof to Administrative Agent, which supplement shall become effective
one (1) Business Day after the date that such written supplement is delivered to Administrative Agent, but which shall not apply retroactively to disqualify any Persons that have previously acquired an assignment or participation interest in
the Loans as permitted herein prior to the date that is one (1) Business Day after delivery of the applicable supplement; provided that Disqualified Lenders shall exclude (x) any Person that the Borrower has designated
as no longer being a Disqualified Lender by written notice delivered to the Administrative Agent from time to time and (y) any other Person (other than a Competitor) at all times after an Event of Default occurred and continued
without cure for more than seven (7) Business Days after Administrative Agents written notice thereof to Borrower. In no event shall a Bona Fide Debt Fund be a Disqualified Lender unless such Bona Fide Debt Fund is identified under clause
(a)(i) above (or an affiliate thereof pursuant to clause (b) above).
EBITDA means, for any period of
determination, with respect to the Applicable Reporting Entity and its consolidated subsidiaries, net income for such period, plus the sum of the following items for the same period, all determined on a consolidated basis, without duplication and
(except in the case of clause (h) below) to the extent deducted in calculating net income for such period: (a) Consolidated Interest Expense for such period, (b) the sum of federal, state, local and foreign income Taxes and any
franchise Taxes, margin Taxes and foreign withholding Taxes accrued or paid during such period (including, without duplication, Permitted Tax Distributions) and any penalties and interest related to such Taxes or arising from any Tax examination,
(c) the amount of depreciation, depletion, exploration and amortization expense for such period, (d) any extraordinary, unusual or non-recurring items, (e) transaction costs, expenses and
charges, including legal, professional and advisory fees and expenses, (i) with respect to the Transactions incurred prior to or within 90 days of the Closing Date and (ii) incurred in connection with any Investment, acquisition, merger,
asset disposition, equity issuance, issuance or modification of any Debt (including any amendment, waiver or modification of the Loan Documents) or similar transactions after the Closing Date, in each case that are permitted hereunder and whether or
not such transactions are ultimately consummated, (f) stock-based compensation expense and any other non-cash items, including any non-cash losses or negative
adjustments under ASC 815 as a result of changes in the fair market value of derivatives or otherwise resulting from fair value accounting required under GAAP (excluding any such non-cash item to the extent
that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item
Exhibit A - 4
that was paid in a prior period), (g) other non-recurring costs and expenses approved by Administrative Agent in its reasonable discretion, and
(h) the amount of pro forma run rate cost savings, operating expense reductions and synergies related to mergers and other business combinations, acquisitions, Investments, dispositions, divestitures, restructurings, operating
improvements, cost savings initiatives and other similar initiatives (including the modification and renegotiation of contracts and other arrangements) that are projected by the Borrower in good faith to result from actions that have been taken, are
committed to be taken or with respect to which substantial steps have been taken (including prior to the Closing Date), in each case (i) net of the amount of actual benefits realized during such period from such actions, (ii) calculated on
a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period for which EBITDA is being determined and as if such cost savings, operating expense reductions and synergies
were realized on the first day of the applicable period for the entirety of such period and (iii) the pro forma run rate being the full benefit associated with any action taken, committed to be taken or with respect to which
substantial steps have been taken calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been fully realized on the first day of the applicable period for the entirety of such period; provided
that (A) the Borrower reasonably expects to realize such savings, operating expense reductions and/or synergies within 18 months after the consummation of such transaction or the taking of the applicable actions, (B) such cost
savings, operating expense reductions and/or synergies are factually supportable and reasonably identified in writing to Administrative Agent and (C) no cost savings, operating expense reductions and/or synergies shall be added pursuant to this
clause (h) to the extent duplicative of any expenses or charges otherwise added to EBITDA, whether through a pro forma adjustment or otherwise, for such period; provided further that the aggregate amount added back under this clause
(h) shall not exceed 10% of EBITDA, minus (without duplication) (i) any extraordinary, unusual or non-recurring items increasing consolidated net income for such period, and (ii) any non-cash items increasing consolidated net income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for
potential cash item in any prior period). For the purposes of calculating EBITDA for any period, if at any time during such period, the Applicable Reporting Entity or its consolidated subsidiaries shall have made any Material Acquisition or Material
Disposition, then EBITDA for such period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Material Acquisition or Material Disposition, are
factually supportable, and are expected to have a continuing impact, in each case to be determined by the Borrower in good faith and reasonably acceptable to Administrative Agent) or in such other manner acceptable to the Borrower and Administrative
Agent as if any such Material Acquisition, Material Disposition or adjustment occurred on the first day of such period.
Environmental Laws means any and all state, federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (CERCLA), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (SARA), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.
Event of Default means the occurrence of any condition or event set forth in Section 7.
Excepted Liens means: (a) Liens arising solely by virtue of any statutory or common law provision relating
to bankers liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution; provided that no such
deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by the Borrower or any
of the other Loan Parties to provide collateral to the depository institution; (b) Liens in favor of the depository bank arising under documentation governing deposit accounts or in any Control Agreement (as defined in the Security Agreement)
or Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the UCC, which Liens secure the payment of returned items, settlement item amounts, bank fees, or similar
items or fees; (c) Immaterial Title Deficiencies and easements, restrictions, servitudes, permits, conditions, covenants, exceptions, reservations, zoning and land use requirements in any Property of the Borrower or any of the other Loan
Parties for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines and other means of ingress and egress for the removal of gas, oil, coal, other minerals or sand or timber, and other like and/or usual and
customary purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and leases or subleases of real property and any interest or title of a lessee or sublessee under any such lease or sublease, in each case,
that do not secure any Debt for borrowed money and which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Borrower or any of the other Loan Parties or materially impair the
value of such Property subject thereto; (d) Liens on cash or securities pledged to secure (either directly, or indirectly by securing letters of credit that in turn secure) performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; (e) title and ownership interests of lessors
(including sub-lessors) of Property leased by such lessors to any Loan Party, Liens and encumbrances encumbering such lessors titles and interests in such Property and to which the applicable Loan
Partys leasehold interests may be subject or subordinate, in each case whether or not evidenced by UCC financing
Exhibit A - 5
statement filings or other documents of record, provided that such Liens do not secure Debt for borrowed money of any Loan Party and do not encumber Property of any Loan Party other than the
Property that is the subject of such leases and items located thereon; provided, further, that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property
is held by the applicable Loan Party or materially impair the value of such Property subject thereto; (f) judgment and attachment Liens not giving rise to an Event of Default; provided that any appropriate legal proceedings which may
have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and no action to enforce such Lien has been commenced; (g) (i) a
Lien on any Property acquired by a Loan Party after the Closing Date that existed on such Property prior to the acquisition thereof or (ii) a Lien existing on any Property of any Person that becomes a Loan Party after the date hereof prior to
the time such Person becomes a Loan Party; provided that, in each case, (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as applicable, (B) such Lien shall not
apply to any other Property of such Loan Party and (C) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as applicable, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount thereof; (h) licenses of intellectual property rights granted in the ordinary course of business, which in the aggregate do not materially impair the use of any Property
owned by the Borrower or any of the other Loan Parties for the purposes of which such Property is held by the Borrower or any of the other Loan Parties; and (i) purported Liens evidenced by the filing of UCC financing statements as a
precautionary measure in connection with leases of personal property; provided, that (x) Liens described in clause (a) shall remain Excepted Liens only for so long as no action to enforce such Lien has been commenced and
no intention to subordinate the Lien granted in favor of Administrative Agent is to be hereby implied or expressed by the permitted existence of such Excepted Liens and (y) the term Excepted Liens shall not include any Lien securing
Debt for borrowed money other than the Indebtedness.
Excluded Account has the meaning given such term in the
Security Agreement.
Existing Credit Agreement means that certain Credit Agreement dated as of October 20,
2021, by and between Borrower and Stonebriar, as amended or otherwise modified prior to the date hereof.
Existing
Debt means Debt of a Loan Party existing on the date hereof and disclosed by Borrower on Schedule 1 hereto.
Existing Title Policies means the title policies covering the Sand Facilities issued pursuant to the Existing Credit
Agreement.
Fountainhead MLA Documents means, collectively, (a) that certain Master Lease Agreement dated as
of May 16, 2022, between Fountainhead Logistics, LLC, as lessee, and Stonebriar, as lessor, (b) that certain Interim Funding Agreement dated as of May 16, 2022, between Fountainhead Logistics, LLC and Stonebriar and (c) each
schedule executed in connection with the foregoing.
GAAP means generally accepted accounting principles,
consistently applied.
Good Faith Deposit means the $1,000,000 deposit provided by Borrower to Stonebriar on
July 14, 2023.
Governmental Authority means any federal, state, municipal, national, supranational or other
government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to any government or any court, in each case whether associated with the United States of America, any state thereof or the District of Columbia or a foreign entity or government.
Governmental Requirement means any law, statute, code, ordinance, order, determination, rule, regulation, judgment,
decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter in effect, of any Governmental Authority.
Grantor means each and all Persons granting a Lien in any Collateral to secure the Loan.
Guarantor means any guarantor, surety, or accommodation party of the Loan or any portion thereof.
Guaranty Agreement means that certain Guaranty Agreement, dated as of even date herewith, executed by the Guarantors
(other than the Parent Guarantor) in favor of Administrative Agent, for the benefit of the Lenders, pursuant to which the Guarantors unconditionally guaranty, on a joint and several basis, payment of the Indebtedness and performance of all other
Obligations, as such agreement may be amended, modified, supplemented, restated or replaced from time to time.
Hazardous
Substances means any chemical, material, waste or substance that is prohibited, limited or regulated in any manner by any Governmental Authority or that, because of its quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words Hazardous
Substances are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term Hazardous
Substances also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.
Improvements means the buildings and other improvements located or erected on the Sand Facilities, including any and
all items of property attached or affixed to such buildings or other improvements (or any portion thereof).
Exhibit A - 6
Indebtedness means the indebtedness created or evidenced by this
Agreement, the Notes or any other Loan Document, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Loan Documents.
Initial Lender means Stonebriar and its successors that have acquired all or substantially all of the assets of
Stonebriar.
Initial Term Loan has the meaning assigned such term in Section 3(a)(i).
Initial Term Loan Commitment means the Initial Lenders obligation to make an Initial Term Loan to Borrower on
the Closing Date in the amount equal to the Maximum Initial Term Loan Principal Amount.
Initial Term Loan Note
means a promissory note executed by Borrower in connection with this Agreement in favor of the Initial Lender, as the same may be amended, supplemented, replaced or otherwise modified from time to time.
Intercreditor Agreement means (a) the ABL/Term Intercreditor Agreement and (b) any other intercreditor
agreement in effect from time to time between Administrative Agent and the ABL Agent (i) which is on terms and conditions reasonably satisfactory to Administrative Agent (acting at the direction of the Required Lenders) and (ii) which such
ABL Agent, on behalf of the lenders party to any ABL Facility, disclaims all interests whatsoever in the Collateral.
Investment Returns means, with respect to any Investment, any return on such Investment received by a Loan Party in
cash in the form of dividends, interest, distributions, returns of principal, and/or proceeds of the sale thereof.
Investments means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or
otherwise) of Equity Interests in any other Person or any agreement to make any such acquisition (including, e.g., any short sale or any sale of any securities at a time when such securities are not owned by the Person
entering into such short sale); (b) the making of any deposit with, or advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of any other Debt or equity participation interest in, or other extension of credit
to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding (i) any such advance, loan or extension of
credit having a term not exceeding ninety (90) days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business) and (ii) unsecured intercompany loans, advances, or Debt in each case
solely among Borrower and its subsidiaries and made in the ordinary course of business; (c) the purchase or acquisition (in one or a series of transactions) of the Property of another Person that constitutes a business unit; or (d) the
entering into of any guarantee of, or other surety obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt of any other Person. The amount of any Investment shall be the original cost or amount of such Investment
plus the cost or amount of all additions thereto, without any adjustment for increases or decreases in value, or write-ups, write-downs, or writeoffs with respect to such Investment, minus any actual returns
received in cash or Cash Equivalents on such Investment.
Kermit Facility means the sand mine located in or
around Kermit, Texas as described within NSR Permit #149761.
Legal Expenses Limitation means (a) with
respect to any obligation in any Loan Document of a Loan Party to pay or reimburse any legal fees or expenses of Administrative Agent, that such obligation shall be limited to the documented out-of-pocket fees and expenses of one primary counsel, one local counsel for each relevant jurisdiction as may be necessary in the reasonable judgment of Administrative Agent, and one specialty counsel
acting in each reasonably necessary specialty area as determined in the reasonable judgment of Administrative Agent and (b) with respect to any obligation in any Loan Document of a Loan Party to pay or reimburse any legal fees or expenses of
the Lenders or any other Indemnitee (other than Administrative Agent acting in its capacity as such), that such obligation shall be limited to the documented
out-of-pocket fees and expenses of one primary counsel (plus one additional counsel in each relevant jurisdiction due to an actual or perceived conflict of interest for
each group of similarly affected parties) and one local counsel for each relevant jurisdiction (plus one additional counsel in each relevant jurisdiction due to an actual or perceived conflict of interest for each group of similarly affected
parties) for all such Persons taken as a whole.
Lender means the Initial Lender and each of the Persons that
shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
Leverage Ratio means, as of any date of determination, the ratio of (i) the outstanding Net Indebtedness to
(ii) the EBITDA for the four (4) fiscal quarter period most recently ended, in each case calculated based on the Financial Statements most recently delivered pursuant to Section 5(d)(i) or 5(d)(ii), as applicable.
Liabilities means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.
Lien means any and all types of collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factors lien, equipment trust, conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise and shall include, for the avoidance of doubt, any easement, restriction, servitude,
permit, condition, covenant, exception or reservation where the effect is to secure an obligation owed to, or a claim by, a Person other than the owner of the Property.
Liquidity means at any time of determination, the sum of (i) the aggregate amount of Cash and Cash Equivalents
held by the Applicable Reporting Entity and its consolidated subsidiaries at such time (excluding the proceeds of any Specified Equity
Exhibit A - 7
Contribution for a period of ninety (90) days after the receipt thereof) plus (ii) the undrawn amounts of the Delayed Draw Term Loan Commitment at such time plus
(iii) to the extent that Borrower is a party to an ABL Facility permitted by Section 5(o) at such time, the aggregate amount available to be borrowed (subject to any borrowing base or similar limitations at such time) by Borrower on the
undrawn commitments under such ABL Facility during such month in an maximum amount not to exceed $25,000,000.
Loan means an Initial Term Loan and/or a Delayed Draw Term Loan, as the context may require.
Loan Documents means this Agreement, the Notes, the Security Instruments, the Parent Guaranty Agreement, together
with all environmental indemnity agreements, guaranties, security agreements, pledge agreements, mortgages, deeds of trust, security deeds, collateral mortgages, subordination agreements, collateral assignments, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in connection with this Agreement.
Loan Party means
Borrower and each Guarantor (other than the Parent Guarantor).
Major Material Contract means (i) any
contract or agreement (other than any Loan Document) entered into in respect of a Sand Facility the breach, nonperformance, cancellation, or failure to renew could reasonably be expected to result in a material adverse effect with respect to such
Sand Facility and (ii) any other contract or agreement the breach, nonperformance, cancellation, or failure to renew could reasonably be expected to result in a Material Adverse Effect; provided, however, that no such agreement that is
permitted to be terminated by any party thereto (absent any breach by any party thereto) within 180 days of such date shall constitute a Major Material Contract during such 180-day period.
Material Acquisition means any acquisition of Property or series of related acquisitions of Property (including by
way of merger or consolidation) that involves the payment of consideration by one or more of the Loan Parties in excess of $25,000,000.
Material Adverse Effect means a material adverse change in, or material adverse effect on (i) the business,
operations, property or financial condition of Borrower and the other Loan Parties taken as a whole, (ii) the ability of (A) Borrower to perform its payment obligations under any Loan Document or (B) the Loan Parties, taken as a
whole, to perform any of their obligations under any Loan Document, (iii) the validity or enforceability of any Loan Document or (iv) the rights and remedies of or benefits available to Lenders, taken as a whole, under this Agreement, the
Notes or the Security Instruments.
Material Disposition means any assignment, sale or other transfer of Property
or series of related assignments, sales or other transfers of Property that yields gross proceeds to one or more of the Loan Parties in excess of $25,000,000.
Material Other Indebtedness means Debt (other than the Indebtedness, but including obligations in respect of one or
more Swap Agreements) of one or more Loan Parties in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Other Indebtedness, the principal amount of the obligations of the Loan Party in
respect of any Swap Agreement at any time shall be the Swap Termination Value of such Swap Agreement.
Maturity
Date means the first to occur of (i) July 31, 2030 and (ii) the date, if any, on which the maturity of the Loans shall have been accelerated pursuant to Section 8 hereof.
Maximum Delayed Draw Term Loan Principal Amount has the meaning ascribed to such term in the second paragraph of this
Agreement.
Maximum Initial Term Loan Principal Amount has the meaning ascribed to such term in the second
paragraph of this Agreement.
Maximum Principal Amount means the sum of the Maximum Initial Term Loan Principal
Amount plus the Maximum Delayed Draw Term Loan Principal Amount.
Monahans Facility means the sand mine located
in or around Monahans, Texas as described within PBR Permit #148572.
Mortgage means each of the mortgages and
deeds of trust executed by any Loan Party for the benefit of Administrative Agent covering the Mortgaged Property to secure the Loans as the same may be amended, modified, supplemented, restated or replaced from time to time.
Mortgaged Property means any Property owned or leased by any Loan Party that is subject to the Liens existing and to
exist under the terms of any Mortgage.
Net Indebtedness means, as of any date of determination, an amount equal
to (i) the total outstanding principal amount of Indebtedness of the Applicable Reporting Entity and its consolidated subsidiaries, minus (ii) the aggregate amount of Cash and Cash Equivalents of Applicable Reporting Entity and its
consolidated subsidiaries.
Note means an Initial Term Loan Note or a Delayed Draw Term Loan Note, as the context
may require.
Obligations means the Indebtedness and all other amounts, obligations, liabilities, covenants and
duties of every type and description owing by Borrower, any other Loan Party or the Parent Guarantor to Administrative Agent and Lenders arising out of, under, or in connection with any Loan Document, whether direct or indirect, absolute or
contingent, due or to become due, liquidated or not, now existing or hereafter arising, however acquired, and whether or not evidenced by any instrument.
Exhibit A - 8
Outstanding Amount means, with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any borrowings, prepayments or repayments of Loans occurring on such date.
Parent Entity any Person that is or becomes a direct or indirect parent company of the Borrower. For the avoidance of
doubt, (a)(i) Atlas Energy Solutions Inc. and (ii) any other Person that is the managing member of or that directly or indirectly owns a majority of the voting Equity Interests of the Borrower, in each case, shall be deemed to constitute a
Parent Entity of the Borrower and (b) the term Parent Entity shall exclude (i) the Brigham Family and (ii) any Person that is a parent company to the public entity or that is a direct or indirect
non-managing member of the Borrower.
Parent Guarantor means Atlas Energy
Solutions Inc. and its successors and assigns; provided that if Atlas Energy Solutions Inc. shall become a subsidiary of a publicly traded company, Parent Guarantor shall mean such publicly traded company.
Parent Guaranty Agreement means a Parent Guaranty Agreement, in the form of Exhibit H hereto, executed by the Parent
Guarantor in favor of Administrative Agent, for the benefit of the Lenders, pursuant to which the Parent Guarantor unconditionally guarantees on an unsecured basis, payment of the Indebtedness and performance of all other Obligations, as such
agreement may be amended, modified, supplemented, restated or replaced from time to time. It is understood and agreed that in the event Atlas Energy Solutions Inc. becomes a subsidiary of a publicly traded company, (a) such publicly traded
company shall promptly execute and deliver a parent guaranty agreement in the form of the Parent Guaranty Agreement in effect on the date of this Agreement and (b) upon the effectiveness of such new parent guaranty agreement, such new parent
guaranty agreement shall constitute the Parent Guaranty Agreement for all purposes under the Loan Documents and Atlas Energy Solutions Inc. shall be released from the Parent Guaranty Agreement in effect on the date of this Agreement.
Payment Day means the first day of each calendar month.
Permitted Debt means:
(i) the Indebtedness;
(ii)
intercompany Debt between or among the Loan Parties that is subordinated to the Indebtedness as and to the extent provided in the Guaranty Agreement;
(iii) Debt constituting a guaranty by any Loan Party of other Debt permitted to be incurred hereunder;
(iv) Debt constituting purchase money Debt or under Capital Leases (or other equipment financing arrangements for mobile excavation equipment,
automobiles, trucks, rental equipment or other personal Property to be used in the ordinary course of business) not to exceed in the aggregate principal amount at any one time outstanding the greater of (i) $25,000,000 and (ii) an amount equal
to 5.0% of Borrowers Consolidated Net Tangible Assets (calculated based on the Financial Statements most recently delivered pursuant to this Agreement);
(v) Debt and obligations owing under Swap Agreements;
(vi) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in
the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business so long as such Debt is extinguished within two Business Days of its incurrence;
(vii) Debt incurred in respect of insurance premium financing arrangements in the ordinary course of business;
(viii) the Existing Debt and extensions, renewals and replacements of any such Existing Debt and any refinancings, modifications, renewals and
extensions of any such Debt so long as (A) the principal amount of such Debt shall not be increased from the principal amount outstanding at the time of such refinancing, renewal or extension plus amounts to fund any original issue discount or
upfront fees relating thereto plus amounts to fund accrued interest, fees, expenses and premiums, (B) the maturity of such Debt shall not be shortened and (C) the covenants and events of default governing such refinanced, renewed, modified
or extended Debt shall not be, taken as a whole, materially more restrictive to the Loan Parties than those under the Debt being so refinanced, renewed, modified or extended;
(ix) the ABL Obligations and other first lien senior secured Debt incurred pursuant to an ABL Facility in an aggregate principal amount not to
exceed (A) $75,000,000 at any one time outstanding prior to the Discharge of ABL Obligations and (B) $25,000,000 at any one time outstanding thereafter; provided, that such Debt will be subject to an Intercreditor Agreement;
(x) unsecured Debt arising from loan programs of the Small Business Administration or other Governmental Authorities where the principal
thereof is eligible for forgiveness under the applicable program or legislation; provided that the Loan Party incurring such Debt meets the requirements and criteria for forgiveness under such program or legislation;
(xi) Debt incurred or assumed in connection with permitted acquisitions (including a permitted acquisition effectuated by a Permitted Parent
Entity Investment), including Debt consisting of indemnities, obligations in respect of earn outs or other purchase price adjustments or similar obligations in connection therewith, not to exceed (x) $50,000,000 or (y) an unlimited amount so
long as (A) on the date of incurrence or assumption thereof, Borrower would be in compliance on a pro forma basis with a Total Leverage Ratio of no greater than 3.00 to 1.00 as of such time and (B) Borrower has at least five
(5) Business Days prior to the incurrence thereof delivered a certificate duly executed by a Responsible Officer of Borrower in form and detail reasonably satisfactory to Administrative Agent demonstrating compliance with such Total Leverage
Ratio;
Exhibit A - 9
(xii) Debt incurred by the Loan Parties in respect of Credit Card Agreements in the ordinary
course of business in an aggregate principal amount not to exceed $2,000,000 at any one time outstanding;
(xiii) Debt in respect of
letters of credit in an aggregate face amount not to exceed $25,000,000 at any one time outstanding;
(xiv) other unsecured Debt,
provided that (A) no Default or Event of Default shall exist or will result immediately after giving effect to the incurrence of such unsecured Debt, (B) the maturity of such unsecured Debt is not prior to, and such unsecured Debt
does not require any scheduled amortization or other scheduled payments of principal prior to, the date that is ninety one (91) days after the Maturity Date, (C) the covenants and events of default governing such unsecured Debt shall not
be, taken as a whole, materially more restrictive to the Loan Parties than those under this Agreement, (D) on the date of incurrence thereof and after taking into account the incurrence of such Debt, Borrower would be in compliance on a pro
forma basis with a Total Leverage Ratio of no greater than 5.00 to 1.00 as of such time and (E) Borrower has at least five (5) Business Days prior to the incurrence thereof delivered a certificate duly executed by a Responsible Officer of
Borrower in form and detail reasonably satisfactory to Administrative Agent demonstrating compliance with the conditions set forth in this clause (xiv);
(xv) other Debt not otherwise permitted under the foregoing clauses (i) through (xiv) so long as: (A) no Default or Event of Default
shall exist or will result immediately after giving effect to the incurrence of such Debt; (B) on the date of incurrence thereof and after taking into account the incurrence of such Debt, Total Other Debt (including all Debt under this clause
(xv)) does not exceed 10% of Consolidated Net Tangible Assets (calculated based on the Financial Statements most recently delivered pursuant to this Agreement) of the Applicable Reporting Entity and its consolidated subsidiaries; (C) on the
date of incurrence thereof and after taking into account the incurrence of such Debt, Borrower would be in compliance on a pro forma basis with a Total Leverage Ratio of no greater than 2.00 to 1.00 as of such time and (D) Borrower has at least
five (5) Business Days prior to the incurrence thereof delivered a certificate duly executed by a Responsible Officer of Borrower in form and detail reasonably satisfactory to Administrative Agent demonstrating compliance with the conditions
set forth in this clause (xv);
(xvi) Debt in respect of any Stonebriar Sale-Leaseback Transaction; and
(xvii) other unsecured Debt not otherwise permitted under the foregoing clauses (i) through (xvi) in an aggregate amount not to exceed
$35,000,000 at any one time outstanding, provided that no Default or Event of Default shall exist or will result immediately after giving effect to the incurrence of such unsecured Debt.
Permitted Intercompany Activities means administrative, overhead, operating, technology or licensing arrangements and
related payments or obligations in respect thereof entered into in the ordinary course of business or consistent with customary industry practices between or among the Borrower and its subsidiaries that are, in the good faith judgment of the
Borrower, necessary or advisable in connection with the ownership or operation of the business of the Borrower and its subsidiaries.
Permitted Investments means
(i) Investments existing as of the date of this Agreement which are disclosed on Schedule 2 hereto;
(ii) accounts receivable arising in the ordinary course of business and promissory notes received in settlement of any such accounts
receivable;
(iii) direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any
agency thereof, in each case maturing within one year from the date of acquisition thereof;
(iv) commercial paper maturing within one year
from the date of acquisition thereof having a rating of at least P-1 or A-1 from either Moodys or S&P, respectively;
(v) deposits (including certificates of deposit) maturing within one year from the date of deposit thereof with or issued by any Lender or any
office located in the United States of any other bank or trust company which is organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least $1,000,000 (as of the date of such
bank or trust companys most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moodys, respectively;
(vi) deposits in money market funds investing not less than 90% of their assets in Investments described in the preceding clauses (iii),
(iv) and (v);
(vii) Investments (A) made by the Borrower in or to any of the other Loan Parties including any Person who,
contemporaneously with the making of such Investment becomes a Guarantor and (B) made by any Loan Party in or to the Borrower or any other Loan Party;
(viii) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts arising in the
ordinary course of business and disputes with, customers and suppliers;
Exhibit A - 10
(ix) Investments in any new Subsidiary (whether by formation or acquisition) to the extent
such Subsidiary becomes a Guarantor hereunder in accordance with the terms hereof and complies with Section 5(w);
(x) any endorsement
of a check or other medium of payment for deposit or collection through normal banking channels or similar transaction in the ordinary course of business;
(xi) extensions of trade credit in the ordinary course of business;
(xii) Investments constituting Permitted Debt;
(xiii) Investments permitted by Section 5(b);
(xiv) loans or advances to employees, officers or directors in the ordinary course of business of any Loan Party, in each case only as
permitted by applicable law, but in any event not to exceed $1,000,000 in aggregate principal amount at any time outstanding except to the extent that the proceeds of such loans are paid to or retained by the Borrower substantially contemporaneously
with the making of such loans to fund such employees, officers or directors purchase of Equity Interests (other than Disqualified Capital Stock) in the Borrower;
(xv) Investments, including acquisitions, to the extent funded with cash proceeds from contributions to the Borrowers common equity
capital or from the sale of its Equity Interests (other than Disqualified Capital Stock) received by the Borrower after the Closing Date and within 90 days of the making of such Investment;
(xvi) to the extent constituting an Investment, Permitted Intercompany Activities;
(xvii) other Investments; provided that (A) no Event of Default has occurred and is continuing or would result therefrom and
(B) immediately after giving pro forma effect thereto, the Applicable Reporting Entity and its consolidated subsidiaries shall have, on a consolidated basis, Liquidity of at least $30,000,000; and
(xviii) other Investments; provided that (A) no Event of Default has occurred and is continuing or would result therefrom and
(B) the aggregate amount of Investments made pursuant to this clause (xviii) shall not exceed $10,000,000 plus the amount of any Investment Returns in respect of Investments previously made pursuant to this clause (xviii) at any time
outstanding.
Permitted Liens means
(i) Liens and security interests in favor of Administrative Agent securing the Indebtedness owed by Borrower to Lenders (collectively, the
Administrative Agents Liens);
(ii) Liens securing Permitted Debt described in clause (ix) of the
definition thereof;
(iii) Liens for taxes, assessments, other governmental charges or levies, and Liens in connection with workers
compensation, unemployment insurance, or other social security, old age pension or public liability obligations or similar legislation, in each case which are either not yet overdue by more than 90 days or which are being contested in good faith and
for which adequate reserves have been maintained in accordance with GAAP (i.e., which are Not Risks);
(iv)
landlords liens, operators, vendors, carriers, warehousemens, repairmens, mechanics, suppliers, workers, materialmens, construction or similar Liens, in each case, arising in the ordinary
course of business and which are Not Risks;
(v) contractual Liens which arise in the ordinary course of business under real property
leases, operating agreements, joint venture agreements, mineral leases, contracts for the sale, transportation or exchange of sand or minerals, area of mutual interest agreements, overriding royalty agreements, marketing agreements, processing
agreements, net profits agreements, development agreements, supply agreements, seismic or other geophysical permits or agreements, and other agreements which are or have become usual and customary in the sand extracting, producing, processing,
developing and/or marketing business and are for claims which are Not Risks;
(vi) purchase money Liens or purchase money security
interests securing Debt permitted under clause (iv) of the definition of Permitted Debt; provided that (A) such Liens do not attach to any Property other than the Property leased or financed by such Debt (provided that
individual financings of equipment or other Property permitted under clause (iv) of the definition of Permitted Debt provided by one lender may be cross collateralized to other permitted financings provided by such lender) and (B) the
principal amount of Debt secured by any such Lien shall at no time exceed 100% of the original purchase price or lease payment amount of such Property at the time it was acquired;
(vii) Liens existing on the date of this Agreement and disclosed in Schedule 3 hereto, so long as any such Lien shall apply only to the
Property to which it currently applies and shall secure only those obligations which it secures on the date hereof, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(viii) Liens on insurance proceeds or unearned premiums incurred in the ordinary course of business in connection with the financing of
insurance premium permitted pursuant to clause (vii) of the definition of Permitted Debt;
Exhibit A - 11
(ix) those Liens and security interests which in the aggregate constitute an immaterial and
insignificant monetary amount with respect to the net value of Borrowers assets (as determined by Administrative Agent in Administrative Agents sole reasonable discretion);
(x) Liens on Cash Collateral Accounts that secure Debt in respect of letters of credit permitted under clause (xiii) of the definition of
Permitted Debt so long as the aggregate amount credited to the Cash Collateral Accounts does not exceed $26,250,000;
(xi)
Liens or rights of setoff against credit balances or cash and Cash Equivalents held in a Credit Card Receivables Account of the Borrower or any of its Subsidiaries with Credit Card Issuers or Credit Card Processors to secure obligations described in
clause (xii) of the definition of Permitted Debt; provided, however, that the aggregate amount of credit balances or cash or Cash Equivalents subject to such Liens and rights of setoff under this clause (xi) shall not exceed
$500,000;
(xii) Liens securing Debt and obligations owing under Swap Agreements permitted hereunder; provided that at the time of
the incurrence thereof, the aggregate outstanding amount of Debt and other obligations secured by Liens under this clause (xii) shall not exceed $10,000,000;
(xiii) Excepted Liens;
(xiv)
Liens on assets that are acquired in a permitted acquisition (including a permitted acquisition effectuated by a Permitted Parent Entity Investment), securing Debt permitted by clause (xi) of the definition of Permitted Debt;
(xv) other Liens not otherwise described under clauses (i) through (xiv) above so long as (A) such Liens only secure Permitted Debt
and (B) such Liens do not attach to any Sand Facilities, any Specified Property or to any personal property, fixture or improvement constituting Collateral related thereto or used in connection therewith; and
(xvi) other Liens not otherwise described under clauses (i) through (xv) above so long as the outstanding amount of Debt and other
obligations secured by Liens under this clause (xv) shall not exceed $2,500,000 in the aggregate at any time.
Permitted
Parent Entity Investment has the meaning give to such term in the definition of Permitted Payments.
Permitted Payments means (i) Restricted Payments made by any Loan Party to any other Loan Party;
(ii) Permitted Tax Distributions; (iii) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, repurchases or redemptions of any Equity Interests that are not Disqualified Equity
Interests of the Borrower (or any direct or indirect parent of the Borrower) held by officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of the Borrower (or such direct or indirect parent), including
any repurchase, retirement or redemption pursuant to any stock option plans, employee benefit plans or any shareholders agreement or other agreement or arrangement then in effect or upon their death, disability, retirement, severance or
termination of employment or service or to cover such persons payment of withholding taxes in connection therewith, provided, that the aggregate cash consideration paid for all such redemptions and payments shall not exceed $10,000,000
in any fiscal year; provided, however, that any unused amount may be carried over to the subsequent fiscal year; (iv) repurchases of Equity Interests (A) deemed to occur on the exercise of options by the delivery of Equity
Interests in satisfaction of the exercise price of such options and (B) in consideration of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant (or any spouses, former spouses,
successors, executors, administrators, heirs, legatees or distributees of any of the foregoing), including deemed repurchases in connection with the exercise of stock options or restricted stock units, (v) to the extent constituting Restricted
Payments, distributions by the Borrower to any Parent Entity to pay such Parent Entitys overhead costs and expenses incurred in the ordinary course of business (including legal, accounting and other general and administrative expenses) in each
case that are reasonable and customary and directly attributable to the ownership or operation of the Borrower and the other Loan Parties and (vi) Restricted Payments by the Borrower to a Parent Entity to finance any Permitted Investment
(including any permitted acquisition) (provided that (x) any Restricted Payment under this clause (vi) shall be made substantially concurrently with the closing of such Investment and (y) such Parent Entity shall, promptly following
the closing thereof, cause (I) all Property acquired to be contributed to the Borrower or one or more other Loan Parties, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into the Borrower or one or more
other Loan Parties, in order to consummate such Investment in compliance with the applicable requirements of this Agreement as if undertaken as a direct Investment by the Borrower or the relevant Loan Party) (any such Investment or permitted
acquisition described in this clause (vii), a Permitted Parent Entity Investment).
Permitted
Sale means (i) the sale of Inventory in the ordinary course of business; (ii) the transfer of Property by means of a transaction permitted under Section 5(b) hereof; (iii) the issuance or transfer of any Equity
Interest in a Subsidiary to any Loan Party; (iv) the issuance of Equity Interests (other than Disqualified Capital Stock) in Borrower; (v) the transfer of Property among the Loan Parties; (vi) the sale or transfer of equipment and
other personal property that is (A) worn out, obsolete or surplus Property or (B) is replaced by equipment or other personal property of at least comparable value and use; (vii) licensing and cross-licensing arrangements involving any
technology or other intellectual property of Borrower or any Subsidiary in the ordinary course of business; (viii) the abandonment of any rights, franchises, licenses, or intellectual property that any Loan Party reasonably determines are no
longer necessary in its business or commercially desirable; (ix) the transfer of Property in connection with a Casualty Event; (x) the use, transfer or disposition of cash and Cash Equivalents pursuant to any transaction not prohibited by
the terms of the Loan Documents; (xi) any sale of Property by a Loan Party to Stonebriar consummated in connection with a Stonebriar Sale-Leaseback Transaction; (xii) other sales, dispositions or transfers not regulated by the other
clauses in this definition of any
Exhibit A - 12
Properties that are not Specified Properties or personal property, fixtures or improvements constituting Collateral related to or used in connection with the Sand Facilities or the Specified
Properties and which have a fair market value of not more than $25,000,000 in the aggregate during any 12-month period; (xiii) Permitted Liens; and (xiv) the sale, disposition or other transfer of
any Properties that are not Specified Properties having a fair market value of not more than $7,500,000 in the aggregate during the term of this Agreement.
Permitted Tax Distributions without duplication, (i) dividends or distributions by the Borrower to a Parent
Entity in an amount required for such Parent Entity to pay franchise, excise and similar taxes, (ii) with respect to any taxable period (or portion thereof) for which the Borrower and any of its subsidiaries are members of a consolidated,
combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable foreign, state or local income tax purposes (each, a Tax Group) of which a direct or indirect parent of the Borrower is the common
parent, or for which the Borrower is a partnership or disregarded entity for U.S. federal or applicable foreign, state or local income tax purposes that is wholly-owned (directly or indirectly) by an entity that is taxable as a corporation for such
income tax purposes, dividends or distributions by the Borrower to any direct or indirect parent of the Borrower in an amount not to exceed the amount of any U.S. federal, foreign, state and/or local income taxes that the Borrower and/or its
subsidiaries that are members of the relevant Tax Group, as applicable, would have paid for such taxable period had the Borrower and/or such subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; and
(iii) with respect to any taxable period (or portion thereof) for which the Borrower is a passthrough entity (including a partnership or disregarded entity) for U.S. federal income tax purposes and is not wholly owned (directly or indirectly)
by an entity that is taxable as a corporation for U.S. federal income tax purposes, dividends or distributions by the Borrower to any member or partner of the Borrower, on or prior to each estimated tax payment date as well as each other applicable
due date, on a pro rata basis, such that each such member or partner (or its direct or indirect members or partners, if applicable) receives, in the aggregate for such period, payments or distributions sufficient to equal such members or
partners U.S. federal, state and/or local income taxes (as applicable) attributable to its direct or indirect ownership of the Borrower and its subsidiaries with respect to such taxable period (assuming that such member or partner is subject
to tax at the highest combined marginal U.S. federal, state, and/or local income tax rates (including any tax rate imposed on net investment income by Section 1411 of the Code)) applicable to an individual or, if higher, a
corporation, resident in New York, New York, determined by taking into account (A) the deductibility of state and local income taxes for U.S. federal income tax purposes (disregarding any deduction that is subject to a dollar limitation), (B)
the alternative minimum tax, (C) any U.S. federal, state and/or local (as applicable) loss carryforwards of such member or partner available from losses of such member or partner attributable to its direct or indirect ownership of the Borrower
and its subsidiaries for prior taxable periods to the extent such loss is of a character that would allow such loss to be available to reduce taxes in the current taxable period (taking into account any limitations on the utilization of such loss to
reduce such taxes and to the extent such loss had not already been utilized), (D) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income, and (E) any adjustment to such member or partners
taxable income attributable to its direct or indirect ownership of the Borrower and its subsidiaries as a result of any tax examination, audit or adjustment with respect to any period (or portion thereof).
Person means any natural person, corporation, limited partnership, general partnership, limited liability company,
limited liability partnership, joint stock company, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and any Governmental Authority.
Prepayment Fee has the meaning given to such term in the Notes.
Property means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, cash, securities, accounts and contract rights.
Refinancing has the
meaning given to such term in the definition of Transactions.
Related Parties means, with respect to
any Person, such Persons Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Persons Affiliates.
Required Lenders means, as of any date of determination, Lenders holding more than 50% of the sum of the
(a) Total Outstandings and (b) aggregate unused Delayed Draw Term Loan Commitments (such aggregate amount with respect to any Lender is referred to herein as such Lenders Credit Exposure).
Responsible Officer means, as to any Person, the chief executive officer, the president, any financial officer (for
purposes of this Agreement, meaning the chief financial officer, principal accounting officer, treasurer or controller of such Person) or any vice president of such Person. Unless otherwise specified, all references to a Responsible Officer herein
shall mean a Responsible Officer of the Borrower.
Restricted Payment means any dividend or other distribution
(whether in cash, securities or other property (but excluding dividends paid in Equity Interests)) with respect to any Equity Interests in Borrower or any of the other Loan Parties, or any payment (whether in cash or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in Borrower or any of the other Loan Parties or any option, warrant or other right to acquire
any such Equity Interests in Borrower or any of the other Loan Parties.
Sale-Leaseback has the meaning given to
such term in Section 5(t).
Exhibit A - 13
Sand Facilities mean the Kermit Facility and the Monahans
Facility.
Sand Reserves means, collectively, sand reserves that, in accordance with S-K 1300, are classified as Probable mineral reserves or Proven mineral reserves.
Sand Reserves Value means, as of any date of determination, the present value of the reasonably estimated future net
revenues, discounted at a rate of 9% per annum, from forecasted sales of Inventory during the remaining expected economic lives of the reserves related thereto.
Security Agreement means that certain Security Agreement, dated as of even date herewith, by the Loan Parties in
favor of Administrative Agent, for the benefit of the Lenders, granting Liens and a security interest on each Loan Partys personal property constituting Collateral (as defined therein) in favor of Administrative Agent to secure the
Indebtedness, as such agreement may be amended, modified, supplemented, restated or replaced from time to time.
Security
Instruments means the Guaranty Agreement, the Security Agreement, the Mortgages, and each account control agreement, deed of trust, collateral assignment, and other agreement or instrument described or referred to in Exhibit C
attached hereto, and any and all other agreements or instruments now or hereafter executed and delivered by any Loan Party to provide security for or guarantee the payment or performance of the Indebtedness, the Loans, this Agreement or any other
Loan Document, as such agreements or instruments may be amended, modified, supplemented, restated or replaced from time to time.
Specified Equity Contribution means an equity contribution to, or the cash proceeds of an issuance of common Equity
Interests (other than Disqualified Stock) of the Borrower, in each case, (a) received by the Borrower in cash during the applicable Cure Period and on or prior to the applicable Cure Deadline and (b) designated in writing to the
Administrative Agent within five (5) Business Days of the receipt thereof as being a Specified Equity Contribution.
Specified Property means the Property described on Schedule 5 hereto.
Stonebriar means Stonebriar Commercial Finance LLC, a Delaware limited liability company.
Stonebriar Sale-Leaseback Transaction means a Sale-Leaseback between any Loan Party and Stonebriar.
subsidiary means, with respect to any Person (the parent) at any date, (i) any other
Person the accounts of which would be consolidated with those of the parent in the parents consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, or (ii) any other Person of
which (A) Equity Interests representing more than 50% of the equity or more than 50% of the ordinary voting power (irrespective of whether or not at the time Equity Interests of any other class or classes in such Person shall have or might have
voting power by reason of the happening of any contingency) are, or (B) in the case of a partnership, any general partnership interests are, in each case, as of such date, owned, controlled or held by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
Subsidiary means any subsidiary of the
Borrower.
Swap Agreement means any swap within the meaning of Section 1a(47) or
Section 2(e) of the Commodity Exchange Act entered into with a Person whose long term senior unsecured debt rating is BBB-/Baa3 or higher by S&P or Moodys, respectively, (or their equivalent)
and includes any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or
bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement; provided, however, that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or
consultants of any Loan Party shall be a Swap Agreement.
Swap Termination Value means, in respect of any Swap
Agreement, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreement, (i) for any date on or after the date such Swap Agreement has been closed out and the termination value determined in
accordance therewith, such termination value and (ii) for any date prior to the date referenced in clause (i), the amount determined as the mark-to-market value for
such Swap Agreement, as determined by (A) the Borrower in good faith, if no Event of Default has occurred and is continuing or (B) Administrative Agent in good faith, if otherwise.
Taxes means any and all taxes, assessments, claims and other charges lawfully levied or assessed by any Governmental
Authority against, in connection with or otherwise with respect to Borrower, the Sand Facilities or any of the Collateral.
Term Cash Collateral Account means a deposit account in which Borrower will only deposit identifiable proceeds of
Term Priority Collateral that constitute Term Priority Collateral.
Term Priority Collateral has the meaning
assigned to such term in the ABL/Term Intercreditor Agreement.
Exhibit A - 14
Term SOFR Rate means, as of any date of determination, the greater
of (a) three and one half percent (3.50%) and (b) the rate reported for the 1 Month CME Term SOFR (as published on the CME Group Benchmark Administration website) for the most current date available preceding the date of determination of
the applicable Delayed Draw Term Loan interest rate, or a comparable or successor rate as Administrative Agent in its reasonable discretion determines most closely approximates such rate.
Title Company means Madison Title Agency (and its issuing agent, if and as applicable), issuing the Title Policy.
Title Policy means a loan policy of title insurance issued by the Title Company, in form and substance
reasonably acceptable to and approved by Administrative Agent (as well as the Borrower and the Title Company), insuring that the Mortgage encumbering each Sand Facility constitutes a valid first priority lien upon each Sand Facility subject to such
Mortgage. The Title Policy may be subject only to those exceptions set forth in the Existing Title Policies and any others which Administrative Agent may approve in writing, and must contain endorsements consistent with the Existing Title Policies.
Total Debt means, as of any date of determination, an amount equal to the total outstanding Debt of the
Applicable Reporting Entity and its consolidated subsidiaries, minus the aggregate amount of Cash and Cash Equivalents of the Applicable Reporting Entity and its consolidated subsidiaries.
Total Leverage Ratio means, as of any date of determination, the ratio of (i) Total Debt to (ii) EBITDA for
the four (4) fiscal quarter period most recently ended, in each case calculated based on the Financial Statements most recently delivered pursuant to Section 5(d)(i) or 5(d)(ii), as applicable.
Total Other Debt means, as of any date of determination, an amount equal to the total outstanding Debt of Applicable
Reporting Entity and its consolidated subsidiaries, minus (i) the aggregate amount of Cash and Cash Equivalents of the Applicable Reporting Entity and its consolidated subsidiaries and (ii) the outstanding principal amount of the Loans.
Total Outstandings means the aggregate Outstanding Amount of all Loans.
Transactions means, collectively, (i) the negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions hereunder and thereunder, including the borrowing of Loans, (ii) the consummation of the repayment in full of all amounts outstanding under the Existing Credit Agreement, the Stonebriar
Sale-Leaseback Transaction in existence immediately prior to the Closing Date and the Fountainhead MLA Documents together with the termination and/or release of all commitments, guarantees and Liens in respect thereof (the
Refinancing) and the execution and delivery of all documents and instruments related thereto, and (iii) the payment of costs, fees, expenses and premiums related to the foregoing.
Uniform Commercial Code means the Uniform Commercial Code as in effect in the State of Texas, or, where applicable to
specific Property, any other relevant State.
U.S. Economic Sanctions has the meaning given to such term in
Section 4(i).
Wholly-Owned Subsidiary means any Subsidiary of which all of the outstanding Equity Interests
(other than any directors qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or more of the Wholly-Owned
Subsidiaries.
Exhibit A - 15
EXHIBIT B
CLOSING CONDITIONS SCHEDULE
The Initial
Lenders obligation to close the Initial Term Loan (the Closing) and to fund the Advance with respect to the Initial Term Loan is subject to Administrative Agents and Initial Lenders reasonable satisfaction with
or waiver of the following conditions, including required deliverables, each at Borrowers expense:
1. Due
Diligence. Administrative Agent shall have received and approved all items, documents and information required by Administrative Agent in connection with its credit underwriting and due diligence for the Loans and shall have completed such
credit underwriting and due diligence with respect to Borrower, each other Loan Party, the Collateral, and all aspects of the Loans as Administrative Agent deems appropriate, and the results of such underwriting and due diligence are satisfactory to
Administrative Agent and the Initial Lender, in their sole discretion.
2. Payments. All costs, expenses and
fees to be paid by Borrower on or before the Closing Date shall have been paid in full, including after giving effect to the application of the Good Faith Deposit.
3. No Default; Representations. No Default has occurred and is continuing or would occur as a result of the
consummation of the transactions at the Closing. All representations and warranties of each of the Loan Parties in Loan Documents signed by such Loan Party are true, correct, and complete in all material respects.
4. Executed Loan Documents. Administrative Agent shall have received the following Loan Documents, together with
all such other documents and instruments as Administrative Agent may require, in each case duly executed and, where appropriate, acknowledged, by all parties thereto, other than Administrative Agent and the Lenders, each in form and substance
satisfactory to Administrative Agent:
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b. |
The Initial Term Loan Note; |
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c. |
The Security Agreement; |
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e. |
The Reaffirmation of Intercreditor Agreement among the ABL Agent, Administrative Agent, and the persons listed
on the signature pages thereto as Grantors; |
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f. |
The Unsecured Indemnity Agreement; and |
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g. |
A Mortgage for each Sand Facility. |
5. Financing Statements. Administrative Agent shall be reasonably satisfied that the Security Instruments listed
on Exhibit C will, when properly recorded (or when the applicable financing statements related thereto are properly filed or such other actions needed to perfect are taken) create perfected Liens (subject to Permitted Liens) on all of the Property
purported to be encumbered by such Security Instruments.
6. Deliverables. Borrower shall have delivered to
Administrative Agent, or Administrative Agent shall otherwise have obtained, and Administrative Agent shall have approved, the following, together with such other information and documentation as Administrative Agent may reasonably require, all at
Borrowers expense:
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a. |
Insurance. Evidence that all insurance that Borrower is required to have at Closing has been obtained,
is in full force and effect, and complies with the requirements of the Loan Documents. |
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b. |
Solvency Certificate. If required by Administrative Agent, a certificate from Borrower, signed by
Borrowers chief financial officer or other comparable person certifying to Administrative Agent and the Lenders that, both before and immediately after closing the Initial Term Loan, and giving effect thereto, the Loan Parties, on a
consolidated basis, are solvent. |
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c. |
KYC. All information requested by Lenders at least five (5) Business Days prior to the Closing Date
to verify the representations set forth in Section 4(i) with respect to Borrower and any other Loan Party. |
Exhibit B - 1
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d. |
Secretarys Certificates. A certificate of the Secretary, an Assistant Secretary or other officer
of each Loan Party setting forth (i) resolutions of its board of directors (or comparable governing body) with respect to the authorization of such Loan Party to execute and deliver the Loan Documents to which it is a party and perform its
obligations thereunder, (ii) the officers of such Loan Party (y) who are authorized to sign the Loan Documents to which such Loan Party is a party and (z) who will, until replaced by another officer or officers duly authorized for
that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized
officers, and (iv) the Organizational Documents of such Loan Party, certified as being true and complete. |
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e. |
Existence and Good Standing Certificates. Certificates of the appropriate State agencies with respect to
the existence, qualification and good standing of each Loan Party in each jurisdiction where such Loan Party is required to be qualified or in good standing, as applicable, in accordance with Section 5(a). |
7. [Intentionally omitted]
8. Environmental. Administrative Agent shall be reasonably satisfied with the environmental condition of the
Sand Facilities and such other real property Collateral of the Borrower and the Guarantors and shall have been furnished with all environmental site assessments reports in the possession of Borrower.
9. Due Diligence. Administrative Agent shall have received appropriate UCC search certificates, fixture filing,
judgment, tax and county-level real property record search results reflecting no Liens encumbering the Properties of the Loan Parties for each jurisdiction reasonably requested by Administrative Agent, other than those being assigned or released on
or prior to the Closing Date or Permitted Liens and bankruptcy and litigation searches.
10. Refinancing.
The Refinancing shall have been consummated substantially concurrently with the funding of the Initial Term Loan on the Closing Date. On the Closing Date, after giving effect to the Transactions, none of the Borrower or any of its Subsidiaries shall
have any Debt other than the Indebtedness and Permitted Debt.
Exhibit B - 2
EXHIBIT C
SECURITY INSTRUMENTS AS OF THE CLOSING DATE
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3. |
Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Rents and Leases to be
recorded in the Real Property Records of Winkler County, Texas. |
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4. |
Leasehold Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Rents and
Leases to be recorded in the Real Property Records of Ward County, Texas. |
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5. |
Leasehold Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Rents and
Leases to be recorded in the Real Property Records of Winkler County, Texas. |
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6. |
UCC-1 Financing Statement for Atlas Sand Company, LLC, to be filed with
the Delaware Secretary of State. |
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7. |
UCC-1 Financing Statement for Atlas Sand Employee Company, LLC, to be
filed with the Texas Secretary of State. |
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8. |
UCC-1 Financing Statement for Atlas Sand Employee Holding Company, LLC,
to be filed with the Texas Secretary of State. |
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9. |
UCC-1 Financing Statement for Atlas Sand Construction, LLC, to be filed
with the Texas Secretary of State. |
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10. |
UCC-1 Financing Statement for Atlas Construction Employee Company, LLC,
to be filed with the Texas Secretary of State. |
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11. |
UCC-1 Financing Statement for OLC Employee Company, LLC, to be filed
with the Texas Secretary of State. |
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12. |
UCC-1 Financing Statement for Fountainhead Logistics, LLC, to be filed
with the Texas Secretary of State. |
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13. |
UCC-1 Financing Statement for Fountainhead Transportation Services,
LLC, to be filed with the Texas Secretary of State. |
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14. |
UCC-1 Financing Statement for Fountainhead Logistics Employee Company,
LLC, to be filed with the Texas Secretary of State. |
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15. |
UCC-1 Financing Statement for OLC Kermit, LLC, to be filed with the
Texas Secretary of State. |
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16. |
UCC-1 Financing Statement for OLC Monahans, LLC, to be filed with the
Texas Secretary of State. |
Exhibit C - 1
EXHIBIT D
POST-CLOSING MATTERS
Not later
than the date that is 30 days following the Closing Date (or such later date as Administrative Agent may agree in its reasonable discretion) the Loan Parties shall have delivered:
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1. |
Control Agreements with respect to each Deposit Account, Securities Account and Commodity Account maintained by
the Loan Parties as of the Closing Date (other than Excluded Accounts); and |
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2. |
customary collateral access agreements in form and substance reasonably satisfactory to Administrative Agent
executed by each of the parties thereto (other than Administrative Agent) from the lessor of each leased property (other than lessors of leases with respect to the Kermit Facility and the Monahans Facility) where a Loan Party maintains original
books and records in respect of the Collateral. |
Not later than the date that is 15 days following the Closing Date (or
such later date as Administrative Agent may agree in its reasonable discretion) the Loan Parties shall have delivered:
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1. |
a Parent Guaranty in the form of Exhibit H hereto executed by Parent Guarantor; |
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2. |
a duly completed Annex C to Part II of Exhibit A of the Security Agreement; and |
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3. |
a legal opinion of Vinson & Elkins LLP, special counsel to the Loan Parties, in form and substance
reasonably satisfactory to Administrative Agent. |
Not later than the date that is 90 days following the Closing Date (or
such later date as Administrative Agent may agree in its reasonable discretion) the Loan Parties shall have delivered:
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1. |
originals of certificates of title, manufacturers certificates of origin or other appropriate title
documents for all Closing Date Titled Vehicles (as defined in the Security Agreement), together with such executed documents as Administrative Agent may reasonably request to enable Administrative Agent to perfect the Liens in favor of the
Administrative Agent on such Collateral. |
At Borrowers sole expense, the Borrower shall use commercially reasonable
efforts to cause the Title Company to, not later than the date that is 1 day following the Closing Date (or such later date as Administrative Agent may agree in its reasonable discretion), record the Mortgages in favor of Administrative Agent and be
unconditionally committed to issue to Administrative Agent a Title Policy with respect to each of (a) the owned property related to the Kermit Facility and (b) the leased property related to the Monahans Facility, in such form and amount
and with such endorsements as Administrative Agent may reasonably require, insuring that the Mortgages are in first lien position subject only to Permitted Liens and such recorded easements, covenants, restrictions, encumbrances and other matters of
record affecting such properties as approved by Administrative Agent in its reasonable discretion.
Exhibit D - 1
EXHIBIT E
DELAYED DRAW TERM LOANS CONDITIONS SCHEDULE
Initial Lenders obligation to fund an Advance with respect to any Delayed Draw Term Loan is subject to Initial Lenders reasonable satisfaction
with or waiver of (a) each of the conditions set forth on Exhibit A and (b) each of the following conditions, each at Borrowers expense:
1. No Default; Representations. No Default or Event of Default has occurred and is continuing or would occur as
a result of the proposed Advance or from the application of the proceeds therefrom. On each Delayed Draw Funding Date, both immediately before and immediately after giving effect to an Advance of a Delayed Draw Term Loan, all representations and
warranties of each of the Loan Parties in Loan Documents signed by such Loan Party are true, correct, and complete in all material respects with the same effect as though such representations and warranties had been made on the date of such Advance
(it being understood and agreed that any representation or warranty that is qualified as to materiality, Material Adverse Effect or similar language shall be true and correct in all respects as of such date), except to the
extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct in all material respects (with duplication of any applicable
materiality qualification) as of such specified earlier date.
2. Executed Delayed Draw Term Loan Note.
Administrative Agent shall have received an executed Delayed Draw Term Loan Note, duly executed by the Borrower.
3. No Material Adverse Effect. Since December 31, 2022, no Material Adverse Effect has occurred.
Exhibit E - 1
EXHIBIT F
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the Assignment and Assumption) is dated as of the Effective Date set forth below and is
entered into by and between the Assignor identified in item 1 below (the Assignor) and the Assignee identified in item 2 below (the Assignee). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the Credit Agreement), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of the Assignors rights
and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights
and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a
Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related
to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the Assigned Interest). Each such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
1. Assignor:
2. Assignees:
3. Borrower: Atlas
Sand Company, LLC
4. Administrative Agent: Stonebriar Commercial Finance
LLC, as Administrative agent under the Credit Agreement
5. Credit
Agreement: The Credit Agreement dated as of July 31, 2023 among Atlas Sand Company, LLC, the Lenders parties thereto and Stonebriar Commercial Finance, LLC, as Administrative Agent
6. Assigned Interest[s]:
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Assignor |
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Assignee |
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Facility Assigned |
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Aggregate Amount of Loans for all Lenders |
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Amount of Loans Assigned |
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Percentage Assigned of Loans |
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$
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$
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%
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$
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$
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%
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$
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$
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%
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Exhibit F - 1
Effective
Date: ,
20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
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ASSIGNOR |
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[NAME OF ASSIGNOR] |
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By:
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Name: |
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Title: |
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ASSIGNEE[S] |
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[NAME OF ASSIGNEE] |
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By:
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Title: |
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Consented to and Accepted: |
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Stonebriar Commercial Finance LLC, as Administrative Agent |
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By:
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Name: |
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Title: |
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[Atlas Sand Company, LLC, as Borrower |
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By:
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Name: |
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Title:]1 |
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1 |
Include if required pursuant to Section 9(e) of the Credit Agreement. |
Exhibit F - 2
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner
of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment
and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and
has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee
under Section 9(e) of the Credit Agreement (subject to such consents, if any, as may be required thereunder), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive
copies of the most recent financial statements delivered pursuant to Section 5(d) thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest, (vi) it has, independently and without reliance upon Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest and (vii) it is not a Disqualified Lender; and (b) agrees that (i) it will, independently and without reliance on
Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts that have accrued to but excluding the Effective Date and to the Assignee for amounts that have accrued from and after the Effective
Date. Notwithstanding the foregoing, Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to the Assignee.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the Texas.
Exhibit F - 3
EXHIBIT G
FORM OF DELAYED DRAW TERM LOAN NOTE
[See Attached]
EXHIBIT G
FORM OF
DELAYED DRAW
TERM LOAN PROMISSORY NOTE
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Principal: $[●] |
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Date: [●] |
FOR VALUE RECEIVED, the undersigned ATLAS SAND COMPANY, LLC, a Delaware limited liability company (together with its
successors and permitted assigns, Borrower), promises to pay to the order of STONEBRIAR COMMERCIAL FINANCE LLC, a Delaware limited liability company (together with the respective successors, assigns, and subsequent holders
of this Delayed Draw Term Loan Note, Lender), at 5601 Granite Parkway, Suite 1350, Plano, Texas 75024, or as Lender or the holder hereof may otherwise designate in writing, the principal amount of [●] and No/100
Dollars ($[●])2 (or so much thereof as shall have been advanced and remain unpaid and outstanding hereunder), with interest (computed on the basis of a 365-day year for the actual number of days elapsed) on the unpaid principal amount hereof from and including the date hereof until paid in full at the rate per annum equal to [●]%3.
This Delayed Draw Term Loan Note shall be payable in [●] ([●])4 consecutive monthly installments as follows: [●] ([●])5 monthly
installments of interest only each in the amount of $[●]6 payable on each Payment Day commencing with the Payment Day on [●]7 and continuing on each Payment Day up to and including January 1, 2025; followed by [●] ([●])8 additional monthly installments of combined principal and interest each in the amount of [●]9
payable on each Payment Day commencing February 1, 2025 and continuing on each Payment Day up to and including August 1, 2030; and then a final installment also payable on August 1, 2030 (the Stated Maturity
Date) equal to $[●]10, together with all other accrued and unpaid interest hereon and all other amounts (if any) then payable hereon or otherwise
under the Loan Documents, each such installment to be applied, first, to the payment of interest accrued on the unpaid principal amount hereof to the date of such installment and, second, to the reduction of such unpaid principal amount.11 All payments hereunder shall be made in lawful money of the United States and in immediately available funds.
This Delayed Draw Term Loan Note is one of the Delayed Draw Term Loan Notes referenced in that certain Credit Agreement, dated as of
July 31, 2023 (as amended, supplemented or otherwise modified from time to time, the Credit Agreement), among Borrower, the Lenders from time to time party thereto, and Stonebriar Commercial Finance, LLC, a Delaware
limited liability company, as Administrative Agent. Capitalized terms used, but not expressly defined herein that are defined in the Credit Agreement shall have the meanings as set forth in the Credit Agreement.
Borrower shall have the right to voluntarily prepay all or a portion of this Delayed Draw Term Loan Note on any Payment Day, upon thirty
(30) days prior written notice to Administrative Agent, such notice of prepayment being irrevocable unless expressly conditioned upon the occurrence of another transaction, in which case such notice may be revoked in the event such other
transaction is not consummated, provided that any such prepayment shall be in a minimum principal amount of $1,000,000 (or, if less than $1,000,000, the remaining principal balance of the Delayed Draw Term Loans) and shall be in an integral
multiple of $500,000 (such principal amount, the Prepayment Amount), together with all interest then accrued and unpaid on the principal so prepaid together with the Prepayment Fee (if any) set forth below. Except as
otherwise provided in the Credit Agreement (including regularly scheduled payment installments as required by this Delayed Draw Term Loan Note), if Borrower voluntarily prepays or is required to prepay (whether due to permitted acceleration by the
Administrative Agent or otherwise) this Delayed Draw Term Loan Note prior to the Stated Maturity Date, Borrower shall pay, on the date of such
2 |
To insert the applicable principal amount |
3 |
To insert the applicable rate (i.e., the Term SOFR Rate plus 5.95%) |
4 |
To insert number of months from Delayed Draw Funding Date until the Maturity Date. |
5 |
To insert number of months from Delayed Draw Funding Date until December 1, 2024. |
6 |
To insert amount of interest only payments. |
7 |
To insert first Payment Date occurring after Delayed Draw Funding Date. |
8 |
To insert number of months from February 1, 2025 until the Maturity Date. |
9 |
To insert amount of principal and interest payments (to equal 80% of the applicable Delayed Draw Term Loan
divided by months remaining until the Maturity Date). |
10 |
To insert amount of final principal and interest payment (to equal 20% of the applicable Delayed Draw Term
Loan). |
11 |
NTD: If the Note date is after December 31, 2024, there shall be no interest-only period.
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Promissory Note (Atlas Sand Company, LLC) |
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Page 1 |
prepayment (which shall be a Payment Day), a fee (the Prepayment Fee) to Lender in an amount equal to (a) eight percent (8%) of the Prepayment Amount if such
prepayment occurs on or prior to December 31, 2024 (b) four percent (4%) of the Prepayment Amount if such prepayment occurs after December 31, 2024 but on or prior to December 31, 2025, (c) three percent (3%) of the Prepayment Amount
if such prepayment occurs after December 31, 2025 but on or prior to December 31, 2026 and (d) two percent (2%) of the Prepayment Amount if such prepayment occurs thereafter, provided that the Prepayment Fee shall be charged
and paid only to the extent permitted by Applicable Law. Any prepayment pursuant to this paragraph shall be applied to the installments hereof in the inverse order of maturity.
Upon the maturity of this Delayed Draw Term Loan Note, the entire unpaid principal amount on this Delayed Draw Term Loan Note, together with
all interest, fees and other amounts payable hereon or in connection herewith pursuant to the Loan Documents (the Total Obligation), shall be immediately due and payable without further notice or demand. In the event
Borrower fails to pay in full and in good, immediately available funds the Total Obligation upon the same becoming due and payable (whether at maturity or upon acceleration), then all past due amounts shall bear interest at the Default Rate in
accordance with Section 8 of the Credit Agreement, from the due date thereof until all such amounts have been paid in full in good, immediately available funds. If any payment on this Delayed Draw Term Loan Note becomes payable on a day other
than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day.
Borrower hereby waives diligence,
demand, presentment, protest and notice of any kind, and assents to extensions of the time of payment, release, surrender or substitution of security, or forbearance or other indulgence, without notice. Borrower agrees to pay all amounts under this
Delayed Draw Term Loan Note without offset, deduction, claim, counterclaim, defense or recoupment, all of which are hereby waived.
Administrative Agent, Lender, Borrower and any other parties to the Loan Documents intend to contract in strict compliance with applicable
usury law from time to time in effect. In furtherance thereof such Persons stipulate and agree that none of the terms and provisions contained in the Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest permitted to be charged by Applicable Law from time to time in effect. Neither Borrower nor any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest thereon or shall ever be required to pay interest thereon in excess of the maximum amount that may be lawfully charged under Applicable Law from time to time in effect,
and the provisions of this paragraph shall control over all other provisions of the Loan Documents which may be in conflict or apparent conflict herewith. Lender expressly disavows any intention to charge or collect excessive unearned interest or
finance charges in the event the maturity of any Obligation is accelerated. If (a) the maturity of any Obligation is accelerated for any reason, (b) any Obligation is prepaid and as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or (c) Lender or any other holder of any or all of the Obligations shall otherwise collect amounts which are determined to constitute interest which would otherwise increase the interest on any
or all of the Obligations to an amount in excess of that permitted to be charged by Applicable Law then in effect, then all sums determined to constitute interest in excess of such legal limit shall, without penalty, be promptly applied to reduce
the then outstanding principal of the related Obligations or, at Lenders or such holders option, promptly returned to Borrower upon such determination. In determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under Applicable Law, Lender and Borrower (and any other payors thereof) shall to the greatest extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread the total
amount of interest through the entire contemplated term of this Delayed Draw Term Loan Note in accordance with the amount outstanding from time to time thereunder and the maximum legal rate of interest from time to time in effect under Applicable
Law in order to lawfully charge the maximum amount of interest permitted under Applicable Law.
This Delayed Draw Term Loan Note may not
be changed, modified or terminated orally, but only by an agreement in writing signed by Borrower and Lender or any holder hereof.
This
Delayed Draw Term Loan Note shall be binding upon the successors and assigns of Borrower and inure to the benefit of Lender and its successors, endorsees and assigns; provided, however, that Borrower shall not assign this Delayed Draw Term
Loan Note or any obligations hereunder without the prior written consent of Lender (such consent to be granted or withheld at Lenders sole discretion), and any purported assignment without such prior written consent shall be null, void and of
no effect. If any term or provision of this Delayed Draw Term Loan Note shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby.
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Promissory Note (Atlas Sand Company, LLC) |
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Page 2 |
BORROWER AND, BY ITS ACCEPTANCE HEREOF, LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS DELAYED DRAW TERM LOAN NOTE AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A
JUDGE SITTING WITHOUT A JURY.
THIS DELAYED DRAW TERM LOAN NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING ARISING UNDER OR RELATED TO THIS
DELAYED DRAW TERM LOAN NOTE MAY BE COMMENCED IN ANY FEDERAL OR STATE COURT SITTING IN THE EASTERN DISTRICT OF TEXAS AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF EACH SUCH COURT AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THE AGREEMENT OR THE SUBJECT MATTER THEREOF OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY MAY NOT BE ENFORCED IN OR BY SUCH COURT. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS DELAYED DRAW TERM LOAN NOTE OR IN
ANY OTHER LOAN DOCUMENT SHALL LIMIT OR RESTRICT LENDERS RIGHT TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS LOCATED IN THE STATE IN WHICH ANY COLLATERAL IS LOCATED TO THE EXTENT LENDER DEEMS SUCH PROCEEDING NECESSARY OR ADVISABLE
TO EXERCISE REMEDIES AVAILABLE UNDER ANY LOAN DOCUMENT. THE PARTIES AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW.
[Signature Page Follows]
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Promissory Note (Atlas Sand Company, LLC) |
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IN WITNESS WHEREOF, Borrower has executed or caused this Delayed Draw Term Loan Note to be executed by its duly
authorized officer as of the year and day first written above.
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BORROWER: |
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ATLAS SAND COMPANY, LLC, a
Delaware limited liability company |
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By: |
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Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
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Promissory Note (Atlas Sand Company, LLC) |
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Signature Page |
EXHIBIT H
FORM OF PARENT GUARANTY
[See
Attached]
PARENT GUARANTY AGREEMENT
THIS PARENT GUARANTY AGREEMENT (as it may be amended, restated, supplemented or otherwise modified from time to time, this
Guaranty) dated as of July 31, 2023, is made by ATLAS ENERGY SOLUTIONS INC ., a Delaware corporation (Parent Guarantor) in favor of STONEBRIAR COMMERCIAL FINANCE LLC, a Delaware
limited liability company, as administrative agent (in such capacity, Administrative Agent) for the benefit of itself and any one or more other Lenders from time to time party to the Credit Agreement (Administrative Agent
[and any sub-agent thereof], each Lender, and their respective Affiliates, each a Guaranteed Party and collectively, the Guaranteed Parties).
PRELIMINARY STATEMENTS
A. Contemporaneously with the execution and delivery hereof, Atlas Sand Company, LLC, a Delaware limited liability company (the
Borrower), Administrative Agent and the Initial Lender executed that certain Credit Agreement dated as of July 31, 2023 (as amended, restated, replaced, supplemented or otherwise modified from time to time, the
Credit Agreement) pursuant to which Initial Lender agreed to make extensions of credit to the Borrower for the purposes set forth therein. Capitalized terms used but not defined herein have the respective meanings given to
them in the Credit Agreement.
B. Administrative Agent and Initial Lender have required, as a condition to extending credit under
the Credit Agreement, that Parent Guarantor execute and deliver this Guaranty to guarantee the payment and performance of the Obligations.
C. Parent Guarantor has determined that valuable benefits will be derived by it as a result of the Credit Agreement and the extensions
of credit made by Lenders thereunder.
D. Parent Guarantor has further determined that the benefits accruing to it from the Credit
Agreement exceed Parent Guarantors anticipated liability under this Guaranty.
Accordingly, for valuable consideration, the receipt
and sufficiency of which are hereby acknowledged and confessed, Parent Guarantor hereby covenants and agrees in favor of Administrative Agent, for the benefit of the Guaranteed Parties, as follows:
1. Parent Guarantor hereby absolutely, irrevocably and unconditionally guarantees the prompt, complete and full payment when due, no
matter how such shall become due, of the Obligations, and further guarantees that Borrower will properly and timely perform the Obligations and other obligations and liabilities of the Loan Parties under the Credit Agreement and other Loan
Documents.
2. Parent Guarantor covenants that, so long as any Lender has any Commitment under the Credit Agreement and/or any
Obligation remains outstanding under the Credit Agreement or any other Loan Document (other than any contingent indemnification obligation for which no claim has been made), except as otherwise provided in the Credit Agreement or unless
Administrative Agent gives its prior written consent to any deviation therefrom, it will fully comply with the conditions, covenants, and agreements set forth in the Credit Agreement and the other Loan Documents which
are applicable to Parent Guarantor. Notwithstanding any contrary provision in this Guaranty, Parent Guarantors maximum liability under this Guaranty is limited, to the extent, if any,
required so that its liability is not subject to avoidance under applicable Debtor Relief Laws.
3. If Parent Guarantor is or
becomes liable for any indebtedness owing by Borrower or any other Loan Party to any Guaranteed Party by endorsement or otherwise other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights
of Guaranteed Parties hereunder shall be cumulative of any and all other rights that any Guaranteed Party may ever have against Parent Guarantor. The exercise by Administrative Agent of any right or remedy hereunder or under any other instrument, at
law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.
4. All obligations of
Parent Guarantor hereunder shall be absolute, irrevocable, and unconditional and continuing irrespective of, and Parent Guarantor hereby knowingly waives any defense arising out of:
(a) any extension, renewal, settlement, compromise, waiver or release in respect of any of the Obligations, by
operation of law or otherwise, or any obligation of any other guarantor of any of the Obligations, or any default, failure or delay, willful or otherwise, in the payment or performance of the Obligations;
(b) any lack of validity or enforceability relating to or against the Borrower, any other Loan Party, the
Parent Guarantor or any other guarantor of any of the Obligations, for any reason related to the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, or any Applicable Law purporting
to prohibit the payment and/or performance of any of the Obligations by the Borrower, any other Loan Party, the Parent Guarantor or any other guarantor of any of the Obligations;
(c) any modification or amendment of or supplement to the Credit Agreement or any other Loan Document;
(d) any change in the time, manner or place of payment of, or in any other term of, all or any part of the
Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations, including any increase or decrease in
the amount of any of the Commitments and/or Loans or the rate of interest thereon;
(e) any release, non-perfection or invalidity of any collateral security for any obligation of any Loan Party under the Credit Agreement or any other Loan Document or any obligations of any other guarantor of any of the Obligations,
any amendment or waiver of, or consent to departure from, any other guaranty or support document, any exchange, release or non-perfection of any collateral security for the Loan Documents or the Obligations,
or any action or failure to act by any Guaranteed Party or any Affiliate of a Guaranteed Party with respect to any collateral securing all or any part of the Obligations;
(f) any change in the legal existence, company structure or ownership of the Borrower, any other Loan Party,
the Parent Guarantor or any other guarantor of any of the
Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower, any other Loan Party, the Parent Guarantor or any other guarantor of any of the
Obligations, or any of their assets or any resulting release or discharge of any obligation of the Borrower, any other Loan Party, the Parent Guarantor or any other guarantor of any of the Obligations;
(g) any present or future law, regulation, decree or order of any jurisdiction (whether of right or in fact) or
of any Governmental Authority thereof or any other event purporting to reduce, amend, restructure or otherwise affect any term of any Loan Document or Obligations, other than payment and performance of the Obligations in full;
(h) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any
other theory) with respect to the Credit Agreement, any other Loan Document, any other agreement or instrument governing or evidencing any of the Obligations or the transactions contemplated thereby which might constitute a legal or equitable
defense available to, or discharge of, the Borrower or any Guarantor, other than payment and performance of the Obligations in full; or
(i) any other act or omission to act or delay of any kind by the Borrower, any other Loan Party, any other
guarantor of any of the Obligations, any Guaranteed Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of Parent Guarantors
obligations hereunder, other than payment and performance of the Obligations in full;
in each case to the extent permitted by Applicable Law, and except
in each case to the extent that any written amendment, settlement, compromise, waiver or release expressly modifies or terminates the obligations of Parent Guarantor in accordance with the terms hereof.
5. In the event of the occurrence of an Event of Default by the Borrower or any other Loan Party under Section 7(a) of the Credit
Agreement with respect to the failure to pay the Indebtedness, or any part thereof, when such Indebtedness becomes due, either by its terms or as the result of the exercise of any power to accelerate, Parent Guarantor shall, on demand, and without
further notice of dishonor and without any notice having been given to Parent Guarantor previous to such demand of the acceptance by Guaranteed Parties, and without any notice having been given to Parent Guarantor previous to such demand of the
creating or incurring of such Indebtedness, pay the amount due thereon to Administrative Agent for the benefit of the Guaranteed Parties as set forth in the Credit Agreement. It shall not be necessary for any Guaranteed Party, in order to enforce
such payment by Parent Guarantor, first, to institute suit or exhaust its remedies against the Borrower, any other Guarantor or others liable on such Indebtedness, to have the Borrower joined with Parent Guarantor in any suit brought under this
Guaranty or to enforce its rights against any collateral security which shall ever have been given to secure such indebtedness; provided, however, that in the event Administrative Agent on behalf of Guaranteed Parties elects to enforce
and/or exercise any remedies it may possess with respect to any collateral security for the Indebtedness prior to demanding payment from Parent Guarantor, Parent Guarantor shall nevertheless be obligated hereunder for any and all sums still owing to
Guaranteed Parties on the Indebtedness and not repaid or recovered incident to the exercise of such remedies.
6. Notice to Parent Guarantor of the acceptance of this Guaranty and of the making,
renewing or assignment of the Obligations and each item thereof are hereby expressly and knowingly waived by Parent Guarantor.
7. Each payment on the Indebtedness shall be deemed to have been made by the Borrower unless express written notice is given to
Administrative Agent at the time of such payment that such payment is made by Parent Guarantor as specified in such notice.
8. If
all or any part of the Obligations at any time is secured, Parent Guarantor agrees that the Administrative Agent and/or Guaranteed Parties may at any time and from time to time, in their discretion and with or without valuable consideration, allow
substitution or withdrawal of collateral or other security and release collateral or other security or compromise or settle any amount due or owing under the Credit Agreement or any other Loan Document or amend or modify in whole or in part, in
accordance with the terms thereof, the Credit Agreement or any other Loan Document executed in connection with same without impairing or diminishing the obligations of Parent Guarantor hereunder, except as otherwise expressly provided therein.
Parent Guarantor further agrees that if any Loan Party executes in favor of Administrative Agent any collateral agreement, mortgage or other security instrument, the exercise by Administrative Agent of any right or remedy thereby conferred on
Administrative Agent shall be wholly discretionary, and that the exercise or failure to exercise any such right or remedy shall in no way impair or diminish the obligation of Parent Guarantor hereunder. Parent Guarantor further agrees that
Administrative Agent shall not be liable for its failure to use diligence in the collection of the Obligations (other than in the case of Administrative Agents gross negligence or willful misconduct) or in preserving the liability of any
person liable for the Obligations, and Parent Guarantor hereby waives presentment for payment and notice of nonpayment, dishonor or protest (including notice of acceleration), and diligence in bringing suits against any Person liable on the
Obligations, or any part thereof.
9. Parent Guarantor agrees that Administrative Agent (at the direction of the Required Lenders in
their discretion), may (i) bring suit against all guarantors (including, without limitation, Parent Guarantor hereunder) of any of the Obligations jointly and severally or against any one or more of them, (ii) compound or settle with any
one or more of such guarantors for such consideration as Lenders may deem proper, and (iii) release one or more of such guarantors from liability hereunder, and that no such action shall impair the rights of the Guaranteed Parties to collect
the Obligations (or the unpaid balance thereof) from other such guarantors of any of the Obligations, or any of them, not so sued, settled with or released; provided that Administrative Agent may not take the actions described in clauses
(i) and (ii) above unless an Event of Default shall have occurred and be continuing. Parent Guarantor agrees, however, that nothing contained in this paragraph, and no action by Administrative Agent permitted under this paragraph, shall in any
way affect or impair the rights or obligations of such guarantors among themselves.
10. The representations and warranties in the
Credit Agreement, to the extent applicable to Parent Guarantor, are incorporated herein by reference, the same as if stated verbatim herein as representations and warranties made by Parent Guarantor, and Parent Guarantor represents and warrants as
of the Closing Date and as of each Delayed Draw Funding Date that each of such representations and warranties are true and correct in all material respects, except that (x) to the extent that such representations and warranties are expressly
limited to an earlier date,
such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date and (y) to the extent that any such representation and
warranty is qualified by materiality, such representation and warranty (as so qualified) shall continue to be true and correct in all respects. Parent Guarantor further represents and warrants to the Guaranteed Parties that, as of the Closing Date
and as of each Delayed Draw Funding Date, (i) Parent Guarantor is a corporation, limited liability company or limited partnership, as applicable, duly organized and validly existing under the laws of the jurisdiction of its incorporation or
formation; (ii) Parent Guarantor possesses all requisite authority and power to authorize, execute, deliver and comply with the terms of this Guaranty; (iii) this Guaranty has been duly authorized and approved by all necessary action on
the part of Parent Guarantor and constitutes a legal, valid and binding obligation of Parent Guarantor enforceable in accordance with its terms, except as (a) the enforcement thereof may be limited by applicable Debtor Relief Laws, and
(b) the availability of remedies may be limited by equitable principles of general applicability; (iv) the execution, delivery and compliance by Parent Guarantor with this Guaranty do not violate any agreement, instrument, Applicable Laws,
or order applicable to Parent Guarantor in any material respect; (v) no approval or consent of any person or entity, including but not limited to any court or Governmental Authority, or any filing or registration of any kind is required for the
authorization, execution, delivery or compliance by Parent Guarantor with this Guaranty except (A) such as have been obtained or made and are in full force and effect, and (B) those third party approvals or consents which, if not made or
obtained, would not cause a Default hereunder and could not reasonably be expected to result in a Material Adverse Effect; and (vi) Parent Guarantor has (a) executed and delivered this Guaranty without reliance on any Guaranteed Party or
any information received from any Guaranteed Party and based upon such documents and information it deems appropriate, made an independent investigation of the transactions contemplated hereby and the Borrower, the Borrowers business, assets,
operations, prospects and condition, financial or otherwise, and any circumstances which may bear upon such transactions, the Borrower or the obligations and risks undertaken herein with respect to the Obligations; (b) adequate means to obtain
from the Borrower on a continuing basis information concerning the Borrower; (c) full and complete access to the Loan Documents and any other documents executed in connection with the Loan Documents; and (d) not relied and will not rely
upon any representations or warranties of any Guaranteed Party not embodied herein or any acts heretofore or hereafter taken by any Guaranteed Parties (including but not limited to any review by any Guaranteed Party of the affairs of the Borrower).
11. This Guaranty is for the benefit of each Guaranteed Party, their respective successors and permitted assigns, and in the event
of a permitted assignment by a Lender (or its successors or permitted assigns) of the Obligations, or any part thereof, made in accordance with Section 9(e) of the Credit Agreement, the rights and benefits hereunder, to the extent applicable to
the Obligations so assigned, may be transferred with such Obligations. This Guaranty is binding upon Parent Guarantor and its successors and assigns; provided that Parent Guarantor may not assign or otherwise transfer any of its obligations
hereunder without the prior written consent of Administrative Agent.
12. No modification, consent, amendment or waiver of any
provision of this Guaranty, nor consent to any departure by Parent Guarantor therefrom, shall be effective unless the same shall be in writing and signed by the Parent Guarantor and Administrative Agent, on behalf of Lenders, and then shall be
effective only in the specific instance and for the purpose for which
given. No notice to or demand on Parent Guarantor in any case shall, of itself, entitle Parent Guarantor to any other or further notice or demand in similar or other circumstances. No delay or
omission by any Guaranteed Party in exercising any power or right hereunder shall impair any such right or power or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such power preclude
other or further exercise thereof, or the exercise of any other right or power hereunder. All rights and remedies of Administrative Agent hereunder are cumulative of each other and of every other right or remedy which Administrative Agent may
otherwise have at law or in equity or under any other contract or document, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies of any Administrative
Agent.
13. No provision herein or in any promissory note, instrument or any other Loan Document executed by the Borrower or any
Guarantor evidencing the Obligations shall require the payment or permit the collection of interest in excess of the highest rate Lenders can legally collect under Applicable Law. If any excess of interest in such respect is provided for herein or
in any such promissory note, instrument, or any other Loan Document, the provisions of this paragraph shall govern, and neither the Borrower nor any Guarantor shall be obligated to pay the amount of such interest to the extent that it is in excess
of the amount permitted by law. The intention of the parties being to conform strictly to any applicable federal or state usury laws now in force, all promissory notes, instruments and other Loan Documents executed by the Borrower or any Guarantor
evidencing the Obligations shall be held subject to reduction to the amount allowed under said usury laws as now or hereafter construed by the courts having jurisdiction.
14. If Parent Guarantor should breach or fail to perform any provision of this Guaranty, Parent Guarantor agrees to pay Guaranteed
Parties all reasonable and documented out-of-pocket costs and expenses (including court costs and reasonable attorneys fees) incurred by Guaranteed Parties in the
enforcement hereof and the collection of guaranteed amounts. This Section 14 shall be subject to the Legal Expenses Limitation.
15. (a) The liability of Parent Guarantor under this Guaranty shall in no manner be impaired, affected or released by the
insolvency, bankruptcy, making of an assignment for the benefit of creditors, arrangement, compensation, composition or readjustment of any Loan Party, or any proceedings affecting the status, existence or assets of any Loan Party or other similar
proceedings instituted by or against any Loan Party and affecting the assets of any Loan Party.
(b) Parent
Guarantor acknowledges and agrees that any interest on any portion of the Obligations which accrues after the commencement of any proceeding referred to in clause (a) above (or, if interest on any portion of the Obligations ceases to
accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Obligations if said proceedings had not been commenced) shall be included in the Obligations, and neither Parent
Guarantor nor any Loan Party shall be relieved of any portion of such Obligations on account of such proceeding. Parent Guarantor will, to the extent not prohibited by law from doing so, permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay Administrative Agent, for the benefit of Lenders, or allow the claim of Administrative Agent, on behalf of Lenders, of any such interest accruing after the date on which such
proceeding is commenced.
(c) In the event that all or any portion of the Obligations is
paid by any Loan Party, the obligations of Parent Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly
or indirectly from any Guaranteed Party as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Obligations for all purposes under this Guaranty.
16. Parent Guarantor understands and agrees that any amounts of Parent Guarantor on account with any Lender may, if an Event of Default
has occurred and is continuing, be offset to satisfy the obligations of Parent Guarantor hereunder to the extent such obligations are then due and payable (whether by acceleration of the Obligations or otherwise).
17. Parent Guarantor hereby subordinates and makes inferior any and all indebtedness now or at any time hereafter owed by any Loan Party
to Parent Guarantor to the Obligations evidenced by the Credit Agreement and the other Loan Documents and agrees, if an Event of Default shall have occurred and be continuing, to the extent permitted by Applicable Law, not to permit any Loan Party
to repay, or to accept payment from any Loan Party of, such indebtedness or any part thereof without the prior written consent of Administrative Agent, on behalf of Lenders. Parent Guarantor further agrees that if any payment is received by Parent
Guarantor in contravention of this Section 17, such payment shall, at the request of Administrative Agent, be collected, enforced and received by Parent Guarantor as trustee for Administrative Agent, for the benefit of Lenders, and, while an
Event of Default is continuing, shall be paid over to Administrative Agent, for the benefit of Lenders, on account of the Obligations but without reducing or affecting in any manner the liability of Parent Guarantor under the other provisions of
this Guaranty, except to the extent of such payment.
18. Parent Guarantor hereby agrees that, to the extent that Parent Guarantor
shall have paid more than its proportionate share (calculated on the basis of the maximum liability of Parent Guarantor as determined under Section 2 of this Guaranty, relative to the maximum liability of all Guarantors, as so determined) of
any payment made hereunder, Parent Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor which has not paid its proportionate share of such payment. Parent Guarantors right of contribution shall be
subject to the terms and conditions of Section 2, Section 17 and Section 19 of this Guaranty. The provisions of this Section 18 shall in no respect limit the obligations and liabilities of Parent Guarantor to any Guaranteed
Party, and Parent Guarantor shall remain liable to Guaranteed Parties for the full amount guaranteed by Parent Guarantor hereunder.
19. Notwithstanding any payment made by Parent Guarantor hereunder or any set-off or application
of funds of Parent Guarantor by any Lender, Parent Guarantor shall not be entitled to be subrogated to any of the rights of any Guaranteed Parties against the Borrower or any Guarantor or any collateral security or guaranty or right of offset held
by any Guaranteed Party for the payment of the Obligations, nor shall Parent Guarantor seek or be entitled to seek any indemnity, exoneration, participation, contribution or reimbursement from the Borrower or any other Guarantor in respect of
payments made by Parent Guarantor hereunder, until all amounts owing to Guaranteed Parties by the Loan Parties on account of the Obligations are paid in full (other than contingent indemnification obligations for which no claim has been made) and
the Commitments are terminated (such date, the Release Date). If any amount shall be paid to
Parent Guarantor on account of such subrogation rights at any time prior to the Release Date, such amount shall be held by Parent Guarantor in trust for Administrative Agent for the benefit of
Lenders, segregated from other funds of Parent Guarantor, and shall, forthwith upon receipt by Parent Guarantor, be turned over to Administrative Agent in the exact form received by Parent Guarantor (duly endorsed by Parent Guarantor to
Administrative Agent, if required), to be applied against the Obligations whether matured or unmatured.
20. If any provision of
this Guaranty is held to be illegal, invalid, or unenforceable in any jurisdiction, such provision shall be fully severable, and for purposes of such jurisdiction only this Guaranty shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof, and in all cases the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as a part of this Guaranty a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid and enforceable.
21. (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT SITTING IN THE EASTERN FEDERAL DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, PARENT GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. PARENT GUARANTOR HEREBY IRREVOCABLY WAIVES 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 SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT
PRECLUDE GUARANTEED PARTIES FROM OBTAINING JURISDICTION OVER PARENT GUARANTOR IN ANY COURT OTHERWISE HAVING JURISDICTION.
(b) PARENT GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS 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 IT, CARE OF THE BORROWER, AT THE ADDRESS SPECIFIED IN SECTION 9(j) OF THE CREDIT AGREEMENT OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT
TO SECTION 9(j) OF THE CREDIT AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING (OR AS SOON THEREAFTER AS IS PROVIDED BY APPLICABLE LAW). NOTHING HEREIN SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST PARENT GUARANTOR IN ANY OTHER JURISDICTION.
22. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS COLLECTIVELY REPRESENT THE FINAL
AGREEMENT BY PARENT GUARANTOR REGARDING THE MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF ANY GUARANTEED PARTY AND PARENT GUARANTOR. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG ANY GUARANTEED PARTY AND PARENT GUARANTOR.
23. (A) ADMINISTRATIVE AGENT AND PARENT GUARANTOR HEREBY
(i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN AND (ii) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES, AND (B) PARENT GUARANTOR HEREBY CERTIFIES THAT NONE OF THE GUARANTEED PARTIES NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY GUARANTEED PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT GUARANTEED PARTIES WOULD
NOT, IN THE EVENT OF LEGAL ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVERS.
24. THIS GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
25. This Guaranty may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of
this Guaranty by facsimile or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed counterpart of this Guaranty.
26. This Guaranty shall remain in full force and effect until the Release Date.
[Signature page follows]
EXECUTED and effective as of the date first above written.
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PARENT GUARANTOR: |
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ATLAS ENERGY SOLUTIONS INC., |
a Delaware corporation |
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By: |
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Name: |
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John Turner |
Title: |
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President and Chief Financial Officer |
[Signature Page to Parent Guaranty Agreement]
Exhibit 99.1 Investor Presentation August 2023 NYSE: AESI
Important Disclosures Forward-Looking Statements This presentation
contains “forward-looking statements” of Atlas Energy Solutions Inc. (“Atlas,” the “Company,” “AESI,” “we,” “us” or “our”) within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are predictive or prospective in nature, that depend upon or refer to future events or conditions or that include the words
“may,” “assume,” “forecast,” “position,” “strategy,” “potential,” “continue,” “could,” “will,” “plan,” “project,”
“budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,”
“estimate,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Our forward-looking statements include statements about our
business strategy, industry, future operations and profitability, expected capital expenditures and the impact of such expenditures on our performance, our proposed corporate reorganization transaction (the Up-C Simplification ), financial position,
production, revenues and losses, our capital programs, management changes, current and potential future long-term contracts and our future business and financial performance. Although forward-looking statements reflect our good faith beliefs at the
time they are made, we caution you that these forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited
to, commodity price volatility stemming from the continued impacts of COVID-19, including any new strains or variants, the ongoing war in Ukraine, adverse developments affecting the financial services industry, our ability to complete growth
projects, including the Dune Express, on time and on budget, our ability to consummate the Up-C Simplification, the expected benefits of such transaction and the related impact on existing stakeholders, estimates regarding future market
capitalization and the anticipated financial impact of the Up-C Simplification, actions of OPEC+ to set and maintain oil production levels, the level of production of crude oil, natural gas and other hydrocarbons and the resultant market prices of
crude oil, inflation, environmental risks, operating risks, regulatory changes, lack of demand, market share growth, the uncertainty inherent in projecting future rates of reserves, production, cash flow, access to capital, the timing of development
expenditures and other factors discussed under the heading “Risk Factors” in our Registration Statement on Form S-1 (our “Final Prospectus”) filed with the U.S. Securities and Exchange Commission (“SEC”) on
January 31, 2023 (as later amended) in connection with our initial public offering (our “IPO”), the registration statement on Form S-4 that will be filed by New Atlas HoldCo Inc. (“New Atlas”) with the SEC in connection with
the Up-C Simplification, or any of our other filings with the SEC. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly
qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as
otherwise required by applicable law, we disclaim any duty and do not intend to update any forward-looking statements to reflect events or circumstances after the date of this presentation. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash
Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures are non-GAAP supplemental financial measures are used by our management and by external users of our financial statements such as
investors, research analysts and others, in the case of Adjusted EBITDA, to assess our operating performance on a consistent basis across periods by removing the effects of development activities, provide views on capital resources available to
organically fund growth projects and, in the case of Adjusted Free Cash Flow, to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure, levels
of reinvestment or historical cost basis. These measures do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, net cash provided by operating activities, or any other measure of
financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA and Adjusted Free Cash Flow have important limitations as analytical tools because they exclude some but not all items that affect net
income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures
may differ from computations of similarly titled measures of other companies. We define Adjusted EBITDA as net income before depreciation, depletion and accretion, interest expense, income tax expense, stock and unit-based compensation, loss on
extinguishment of debt, unrealized commodity derivative gain (loss), and non-recurring transaction cost. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total sales. We define Adjusted Free Cash Flow as Adjusted EBITDA less
Maintenance Capital Expenditures. We define Maintenance Capital Expenditures as capital expenditures less growth capital expenditures. We define Adjusted Free Cash Flow Margin as Adjusted Free Cash Flow divided by total sales. We define Adjusted
Free Cash Flow Conversion as Adjusted Free Cash Flow divided by Adjusted EBITDA. Reserves This Presentation includes frac sand reserve and resource estimates based on engineering, economic and geological data assembled and analyzed by our mining
engineers, which are reviewed periodically by outside firms. However, frac sand reserve estimates are by nature imprecise and depend to some extent on statistical inferences drawn from available drilling data, which may prove unreliable. There are
numerous uncertainties inherent in estimating quantities and qualities of frac sand reserves and non-reserve frac sand deposits and costs to mine recoverable reserves, many of which are beyond our control and any of which could cause actual results
to differ materially from our expectations. These uncertainties include: geological and mining conditions that may not be fully identified by available data or that may differ from experience; assumptions regarding the effectiveness of our mining,
quality control and training programs; assumptions concerning future prices of frac sand, operating costs, mining technology improvements, development costs and reclamation costs; and assumptions concerning future effects of regulation, including
the issuance of required permits and taxes by governmental agencies. Atlas Energy Solutions (NYSE: AESI) | August 2023 2
Important Disclosures Trademarks and Trade Names The Company owns or has
rights to various trademarks, service marks and trade names that it uses in connection with the operation of its business. This presentation also contains trademarks, service marks and trade names of third parties, which are the property of their
respective owners. The use or display of third parties’ trademarks, service marks, trade names or products in this presentation is not intended to, and does not imply, a relationship with the Company, or an endorsement or sponsorship by or of
the Company. Solely for convenience, the trademarks, service marks and trade names referred to in this presentation may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that the Company will
not assert, to the fullest extent under applicable law, its rights or the right of the applicable licensor to these trademarks, service marks and trade names. Industry and Market Data This presentation has been prepared by the Company and includes
market data and certain other statistical information from third-party sources, including independent industry publications, government publications, and other published independent sources. Although we believe these third-party sources are reliable
as of their respective dates, we have not independently verified the accuracy or completeness of this information. Some data is also based on our good faith estimates, which are derived from our review of internal sources as well as the third-party
sources described above. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results to differ materially from those expressed in these third-party
publications. Additionally, descriptions herein of market conditions and opportunities are presented for informational purposes only; there can be no assurance that such conditions will actually occur. Please also see “Forward-Looking
Statements” disclaimer above. No Offer or Solicitation This communication relates to the Up-C Simplification between the Company and New Atlas. This communication is for informational purposes only and does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the Up-C Simplification or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities
referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. Important Additional Information
In connection with the Up-C Simplification, New Atlas will file with the SEC a registration statement on Form S-4, which will include an information statement of the Company and a prospectus of New Atlas. The Company and New Atlas may also file
other documents with the SEC regarding the Up-C Simplification. After the registration statement has been declared effective by the SEC, a definitive information statement/prospectus will be mailed to the shareholders of the Company. This document
is not a substitute for the registration statement and information statement/prospectus that will be filed with the SEC or any other documents that the Company or New Atlas may file with the SEC or send to shareholders of the Company in connection
with the Up-C Simplification. INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND INFORMATION STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE UP-C SIMPLIFICATION AND RELATED MATTERS. Investors and shareholders will be able to
obtain free copies of the registration statement and the information statement/prospectus (when available) and all other documents filed or that will be filed with the SEC by the Company or New Atlas, through the website maintained by the SEC at
www.sec.gov. These documents (when they are available) can also be obtained free of charge from the Company or New Atlas by directing a written request to Atlas Energy Solutions Inc., 5918 W. Courtyard Drive, Suite 500, Austin, Texas 78730,
Attention: Investor Relations, Telephone: 512-220-1200. Atlas Energy Solutions (NYSE: AESI) | August 2023 3
Atlas Energy Solutions (NYSE: AESI) at a Glance Atlas Q2 2023 Update
Video (1) Market Capitalization ctrl + click to play $2.0B (1) Enterprise Value $1.8B (2) Q2’23 Quarterly Dividend $0.20 / share (3) Resource Life 100+ years Employees ~400 Headquarters Austin, Texas Stock Symbol NYSE: AESI (1) Source:
Bloomberg. Market data as of 28-July-2023. | (2) Q2’23 dividend payment date of 17-August-2023 to holders of record as of 10-August-2023. Reflects a base dividend of $0.15 per share and variable dividend of $0.05 per share. | (3) Resource life
calculated as (reserves + resources) / 15mmtpy of annual production capacity based on projected annual production capacity by year-end 2023. | Video link https://vimeo.com/849140021/4b3bbc3269?share=copy. Atlas Energy Solutions (NYSE: AESI) | August
2023 4
Atlas Energy Solutions Q2 2023 Operational & Financial Update (2)
(2) Cash Provided by Total Sales Adj. EBITDA Adj. FCF Net Income Operating Activities $162mm $93mm $82mm $71mm $104mm (1) (2.8mm tons) (57% Margin) (51% Margin) (44% Margin) (92% growth QoQ) Q2 2023 Capital Projects Update: Dune Express, Wellsite
Delivery Assets and Kermit Expansion On-Time & On-Budget Dune Express Wellsite Delivery Assets Kermit Facility Expansion Substantial procurement progress 66 trucks delivered (120 expected Wet / dry plants progressing nicely reduces budget risk
by YE 2023) Silos are substantially complete – ~80% of equipment & materials All 323 trailers have been delivered Expected production capacity of ordered; >50% of installation & more than 15mmtpy services ordered 45% increase in
service sales Q/Q Expecting to begin washing sand in Have cleared ~36 miles of right of way ~10% of our Q2 2023 deliveries (“ROW”), graded ~22 miles of ROW, Q3 2023 and drying / selling sand in utilized multi-trailers; seeing laid
caliche on ~19 miles of ROW Q4 2023 continued customer adoption Expected in-service of Q4 2024 Q2 2023 Market and Contracts Update (3) Permian activity and proppant demand remains healthy; record Permian proppant demand expected in both 2023 and
2024 AESI is sold out of sand for the remainder of 2023 ~6 million tons of 2024 proppant volumes secured (~40% of our expected production capacity of >15 mmtpy); contract negotiations remain ongoing for additional sand and logistics revenue (1)
Represents proppant sales volumes. | (2) Non-GAAP financial measure. See Appendix for reconciliations of non-GAAP measures to the nearest GAAP measures. | (3) Per Rystad and Lium. Atlas Energy Solutions (NYSE: AESI) | August 2023 5
Atlas is a Leading Pure-Play Permian Proppant and Logistics Provider (2)
Key Investment Highlights Pure Play Permian Asset Base Compelling Valuation and Growth Profile (1) Trading at a discount to peers High growth potential from ongoing capital projects Robust Cash Flow Generation + Strong Financial Position Strong and
resilient margins Strong balance sheet with low financial leverage Low capital intensity required to maintain core business High Quality, Differentiated Asset Base Giant open dunes are best-in-class resource Plants with automation + redundancy
maximize efficiency Water access enables low-cost electric dredge mining Atlas & Sustainable Environmental and Social Progress Dune express is a step-change in sand logistics A long-term focus on shareholders and profits also Fit-for-purpose
trucking assets with expanded payloads produces favorable environmental and social outcomes: Proven Team, Compelling Track Record, E&P Experience Dune Express: 42-mile conveyor to transport sand into core Permian acreage will make roads safer,
reduce emissions Bud Brigham led team with a track record of performance Fit-for-purpose wellsite delivery assets with significantly Long-time E&P operators now optimizing sand solutions expanded payloads and the potential for automation further
Innovators applying proven technology in novel ways aims to enhance safety and emissions improvements Proven ability to return capital to shareholders Electric dredge mining = lower cost, lower emissions Source: Enverus, Baker Hughes, Public
Filings, Bloomberg Consensus data. | (1) As of 28-July-2023. Peer group includes: SLB, BHI, HAL, NOV, FTI, WHD, OII, CHX, SES, SOI, ARIS, SLCA, USAC, AROC, XPRO, HLX. | (2) Represents planned Dune Express route based on secured rights-of-way and
federal permits. Atlas Energy Solutions (NYSE: AESI) | August 2023 6
AESI’s Proppant Production Advantage Premium Giant Open Dune
Geology Advantaged Access to Water Next Generation Plant Design Key Benefits from Geology: Key Benefits from Geology Key Benefits from Water Access: Key Benefits from Water Access Key Benefits from Plant Design: Key Benefits from Plant Design Large
scale with >100 years of Water is ample enough that ponds Redundancies built throughout the resource life at 15mmtpy of production have been created at each of our plants to maximize utilization rates mine sites in the middle of the West Deep
deposits allow Atlas to limit Plants designed to enable automation, TX desert, which provides us with the mining footprint to 60 acres per year remote operations leading to the distinct advantage of deploying the per plant, limiting surface
disturbances realization of lower labor intensity Permian’s only electric dredge mining Lack of overburden, access to wind assets over time has created a premium Efficient loadouts allow for high quality product with high crush volumes of
trucking throughput Electric dredge mining is lower cost strength, more rounding, lower and more environmentally sustainable Large wet and finished good storage turbidity, etc. than traditional mining methods provides for efficient inventory
utilizing yellow iron Lack of organics and impurities result management in high mining yields, reducing cost Ponds also are a source of costless per ton of mined material, and water for our wash process, of which provides for a consistent feedstock
we recycle >95% that is easier for the plants to handle Atlas Energy Solutions (NYSE: AESI) | August 2023 7 High Quality, Differentiated Asset Base
The Permian’s Giant Open Dunes are a Tier One Resource Geology of
open dunes separates AESI on scale, costs, margins & quality Premier Assets Bookending the Winkler Sand Trend Improved yields relative to off-dune deposits enhances economics Atlas Kermit: • 5,825 gross acres (all on Kermit Exceptional
quality (high crush strength, low turbidity, etc.) Giant Open Dune) • ~93% WI / ~87% to 93% NRI Large, deep deposits with consistent reserve mix • Atlas holds >50% of the Kermit Giant Open Dune’s areal extent • Atlas holds
both fee and leases Costless Pecos Valley Aquifer provides unique dredging & washing advantage (1) Over 100 years of resource life Up to ~100 feet of consistent stacked pay produces > economic yields Illustrative Cross-Section Atlas Monahans:
Atlas Giant Open Dune Advantage Off-Dune Deposit • ~32,000 gross acres (~8,750 on the Monahans Giant Open Dune, Deposit Yields: ~85-90% or ~100% of this dune excluding Deposit Yields: ~65-70% the state park) Legend • 100% WI / 92% to 97%
NRI Vegetation Unconfined depending on proppant prices Stabilized Dune Silty Sand Sheet Pecos Valley • Leased Zones Aquifer Stabilized Dune Thin Buried soil horizons Caliche (~5-30ft thick) Saturated thickness Stabilized Dune Clay Stabilized
Dune State Park Silt & Clay Stabilized Dune Caliche Stabilized Dune Silt & Clay Source: Atlas 2022 Reserve Report (produced by John T. Boyd Company), Atlas internal, illustrative of processes and characteristics of different styles of
Permian aeolian deposits. | (1) Resource life calculated as (reserves + resources) / 15mmtpy of annual production capacity based on projected annual production capacity by year-end 2023. | Note: WI = Working Interest, defined as the average %
interest in the gross acres that Atlas owns or leases out of the areal extent of the acreage footprint. NRI = Net Revenue Interest, defined as WI * (1- average royalty rate). Atlas Energy Solutions (NYSE: AESI) | August 2023 8 High Quality,
Differentiated Asset Base Up to ~100 ft. of Stacked Pay ~40ft to ~50ft ft. of Payable Depth
Atlas Plant Design & Dredge Mining Provide Operational Advantages
Comparison of Electric Dredging vs. Traditional Mining Atlas has invested in automation to reduce labor costs (2) (1) Cost Impact Emissions Impact Hours of Labor per 1mmtpy Nameplate Capacity 100,000 ~70% ~50% Contract Mining Cost Reduction, with
Annual Mining Emissions Reduction Durability as Costs Increase Less with Haul Length Relative to Traditional Mining 1 Electric Dredge 8 Pieces of Diesel-Powered Equipment Equipment Needs 80,000 2 People 17 People Labor Required 60,000 ~9.0 Million
Pounds of ~18.3 Million Pounds Emissions Emissions Annually of Emissions Annually Profile 40,000 ~816,000 Gallons of Diesel Fuel Annually 0 Gallons Fuel Usage Automation and remote operations drive our industry leading cost structure 20,000 AESI
Peers Source: Management Estimates, EPA, ERCOT. (1) Emissions defined as CO emissions plus particulate matter. Atlas and its contractors use traditional mining methods to supplement dredge production and as a backup during dredge downtime. 2 (2) Per
Lium data & management estimates; represents total hours worked as reported to MSHA divided by nameplate capacity. Atlas Energy Solutions (NYSE: AESI) | August 2023 9 High Quality, Differentiated Asset Base
Annualized Annualized Annualized (1) Industry Leading Sustainability,
Financial Performance & Growth Sales ($mm) (2) Volume (mmtpy) 8.3 10.2 11.3 ü Avg. Price ($/ton) $17.21 $40.10 $45.32 Growing Sales $483 with High-Quality, Diversified Customer Base $172 $315 YTD 2021 2022 1H 2023 Adj. EBITDA ($mm) &
Adj. EBITDA Margin and Adj. EBITDA ($mm) (3) Adj. EBITDA Margin (%) Net Income ($mm) & Net Income Margin ü Net Income ($mm) 55% 56% Net Income Margin (%) Growing 42% 43% 45% Profitability $264 With Resilient $217 2% Margins $72 $4 $177 YTD
$134 YTD 2021 2022 1H 2023 Adj. Free Cash Flow (“FCF”) ($mm) & Adj. FCF Margin (%) Adj. Free Cash Flow ($mm) (3) and Operating Cash Flow (“OCF”) ($mm) & OCF Margin (%) Adj. FCF Margin (%) ü 50% Operating Cash
Flow ($mm) 47% OCF Margin (%) 37% 50% 43% $229 $206 Strong Cash Flow and 12% FCF Conversion $64 $21 $159 YTD $158 YTD 2021 2022 1H 2023 Adj. EBITDA to Adj. 89% 87% 90% (3) FCF Conversion (%) (1) Atlas has leading margin performance when compared to
peers. See slide 11. | (2) Annualized. | (3) Non-GAAP financial measure. See Appendix for reconciliations of non-GAAP measures to the nearest GAAP measures. Atlas Energy Solutions (NYSE: AESI) | August 2023 10 Strong Financial Performance and Growth
Profile
Consistent and Durable Return of Capital to Shareholders (1) Since Q4
2021, Atlas has paid $105 million in distributions and dividends (1) Capital Allocation Framework Historical Investor Distributions & Dividends Declared a Q2 2023 base dividend of $0.15 per share and Post-IPO Dividends & Associated
Distributions variable dividend of $0.05 per share for a $0.20 per share dividend in the aggregate $105 Annualized dividend yield is currently 4.1% based on closing (1) price of $19.52 per share Atlas continues to refine its long-term dividend
framework $85 Pre-IPO Distributions (2) Share Price Performance (indexed to 100) (3) Total Shareholder Returns $70 AESI (+10.4%) Van Eck Oil Index (+6.4%) PHLX Index (+4.9%) $55 1Q’23 $40 Dividend $25 $20 Inaugural $15 $15 $15 $15 $15
Distribution $10 $10 $10 – Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Quarterly Dividend Cumulative ROC Mar-23 Apr-23 May-23 Jun-23 Jul-23 (1) Pro forma for August 2023 dividend. | (2) Bloomberg as of 28-July-23. Share price performance
since AESI IPO on 08-March-23 | (3) AESI pro forma total shareholder return to include recently announced 2Q’23 AESI dividend of $0.20 / share. Atlas Energy Solutions (NYSE: AESI) | August 2023 11 Strong Financial Performance and Growth
Profile
Exceptional Margins & Growth that Merit Multiple Expansion EV /
2025E Adj. EBITDA, ’22 – ‘25E EBITDA Growth and 2025E EBITDA Margins Atlas Trades at a Discount to Peers while Wall Street Consensus Margins and Growth Outperform Median EV / '25E Adj. EBITDA Median '22A - '25E Adj. EBITDA Growth
Median '25E Adj. EBITDA Margin per Wall Street Consensus 131.0% 8.7x 8.7x 7.8x 105.6% 6.9x 86.7% 4.9x 64.3% 62.6% 44.0% 38.9% 2.9x 27.7% 22.8% 22.3% 15.0% 13.3% Atlas Energy Solutions Midstream Production & Field Big Three Oilfield Services
Equipment & Infra Chemical / Water / (NYSE: AESI) Services Proppant Source: Public Filings, Bloomberg Consensus data as of 28-July-2023. | Big Three Oilfield Services: SLB, BHI and HAL. | Equipment & Infra.: NOV, FTI, WHD and OII. | Chemical
/ Water / Proppant: CHX, SES, SOI, ARIS and SLCA. | Production & Field Services: USAC, AROC, XPRO and CLB. | Midstream: KMI, WMB, OKE, TRGP, MMP, WES, ENLC and ETRN. Atlas Energy Solutions (NYSE: AESI) | August 2023 12 Strong Financial
Performance and Growth Profile
AESI Trucking Fleet Update: Significantly Expanding Payloads Summary
Update / Latest Developments AESI Payloads on Private Roads Far Exceed Industry Norm 120 5.0x 105 ~10% of our second quarter deliveries utilized multi-trailers; 4.5x 100 seeing continued customer adoption 4.0x 4.4x 3.5x We expect to have 120 trucks
in the fleet by year-end 2023 80 70 3.0x — 66 trucks received to-date Average payload delivered 60 2.5x in Q2 2023: ~31 tons 2.9x 2.0x 120-truck fleet expected to haul 13mmtpy of proppant once 40 35 Dune Express is online 1.5x 24 1.0x 1.5x
Equipment deliveries progressing on-time and on-budget 20 1.0x 0.5x Driver hiring plan is on-time and on-budget – – 2022 Average Capacity of 1x Capacity of 2x Capacity of 3x A.I. based safety and efficiency training implemented Payload
Filled at AESI Trailer AESI Trailers AESI Trailers Atlas Plants Atlas’s efficient supply chain model enables significantly Payload Size (tons) Multiple of Industry Standard expanded payloads to run on private roads Atlas Trucking Fleet
Milestones December 26, 2022: January 3, 2023: March 20, 2023: April 5, 2023: : First Atlas Truck First Delivery with First Double First Triple Arrives at Kermit Atlas assets Trailer Delivery Trailer Delivery: ~35 ton / truck payload ~70 ton / truck
payload ~100 ton / truck payload Atlas Energy Solutions (NYSE: AESI) | August 2023 13 High Quality, Differentiated Asset Base
Shortened Distances and Expanded Payloads Drive Efficiencies Positive
disruption of the Permian trucking model reduces road traffic Conventional Trucking Atlas Drop-Depot Model Atlas / Dune Express ~23 tons ~23 tons ~70+ tons ~70+ tons 130-miles round trip 42-miles one-way 35-miles round trip 75-miles round trip
20-miles round trip Loadout Well Site Loadout Drop-Depot Well Site Loadout Well Site Loadout @ Kermit (1) Increased Payloads when Combined with Less Truck Traffic Increases Efficiencies (1) Delivered Truck Loads : 426 143 143 Estimated Haul
Distance: 130-Mile Haul 110-Mile Haul 20-Mile Haul 55,319 5,532 ~54% Reduction in Miles Driven 25,608 49,787 10,714 ~95% Reduction in Miles Driven 2,857 14,894 Conventional Trucking Drop-Depot Model Dune Express Public Road Mileage Private Road
Mileage (1) Assumes a Permian well requires 10,000 tons of sand for completion and represents a well ~60 miles from the Atlas Kermit facility. Conventional Trucking utilizes 23.5-ton payload trailers. Drop-Depot and Dune Express utilize
high-capacity Atlas double-trailers with 70-ton payloads. Atlas Energy Solutions (NYSE: AESI) | August 2023 14 High Quality, Differentiated Asset Base
The Dune Express: Proppant Midstream Infrastructure Project Overview
Dune Express Update (as of July 31, 2023) The Dune Express is an overland conveyor system that will Right of Way Acquisition: Complete transport proppant to the Delaware Basin Pre-Construction Engineering: Complete — Expected cost: $400
million Groundbreaking: Complete (March 2023) — Planned commercial in-service: Q4 2024 Procurement: ~80% of equipment + materials on order Asset Specifications: Construction: ~36 miles of the right of way has been cleared — Expected
throughput capacity: 13mmtpy Sales: Secured commitments from 5 customers who will be — ~85,000 tons of storage tied-in to 4+ loadouts serviced with sand and logistics from the Dune Express Atlas acts as its own general contractor on all major
construction activity to maximize budget & timeline control Dune Express remains on-time and on-budget (1) (1)(2)(3) Routed into High Return Drilling Routed into Deepest Inventory Dune Express Update ~36 Miles of Cleared Right-of-Way Source:
Enverus | (1) Represents expected Dune Express route based on secured rights-of-way and federal permits. | (2) Based on existing well count within each section. st nd rd (3) Based on conservative estimates wells per section per interval – 6-8
for 1 Bone Spring, 2 Bone Spring, 8-10 for 3 Bone Spring and Wolfcamp XY, 10-14 for Wolfcamp A, 8-12 for Wolfcamp B and 6-8 for Wolfcamp C. Atlas Energy Solutions (NYSE: AESI) | August 2023 15 High Quality, Differentiated Asset Base
AESI Logistics = Safer, More Reliable and Lower Emission Sand Delivery
Daily Proppant Delivery Capacity per Truck (Current) Daily Proppant Delivery Capacity per Truck (Dune Express) (1) Today, a truck can deliver only With the Dune Express, a truck can ~125 to ~150 tons to this point deliver up to 500 tons a day to
this same in a day, ~95% of which is on point, none of which impacts the commercial roads commercial roads and the communities! Operational Efficiency Gains Driving Huge Safety + Emissions Benefits (2) Expected Reduction in Mileage Driven ~70% (2)
Expected Reduction in Traffic Accident & Fatality Rate (2) (3) Expected Reduction in Emissions …all while driving up throughput per truck per day 3x – 10x+ Source: Enverus, Management analysis and estimates. | (1) Represents planned
Dune Express route based on secured rights-of-way and federal permits. | (2) Estimates represent anticipated reductions over a 30-year period; Management’s internal analysis, based on results of study completed by Texas A&M Transportation
Institute. | (3) Emissions includes CO , CH , N O, PM10 + PM2.5 particulates and is calculated on a CO e basis. Represents 2 4 2 2 anticipated emissions reductions over a 30-year period. Atlas Energy Solutions (NYSE: AESI) | August 2023 16 High
Quality, Differentiated Asset Base
Kermit Plant Expansion Poised to Meet Growing Permian Demand (1) Kermit
Plant Expansion Update Atlas is Expanding it’s Differentiated Proppant Producing Leadership Silos are up Existing Production Capacity Kermit Facility Expansion will Capacity Under Construction increase Atlas’s production capacity by ~50%
Permian Supply Short of (1) (2) Growing Demand 15+ 78 2024E Demand 70 Estimated 12/31/23 Permian Production Capacity 72.6mmtpy Key Progress Updates: Wet / Dry plants progressing as planned Atlas is the leading producer in a (1) fragmented market
Loadout: silos are substantially complete 8.0 7.7 21+% Wet plant: underground electrical work complete 6.3 5.8 5.6 Dryer area: surge bin tower erection ongoing 10.0 4.2 3.6 7.7 7.5 Screener: structural steel erection and 3.2 2.8 6.3 feed conveyor
assembly work complete 5.8 5.6 2.2 2.1 1.8 1.7 4.2 1.4 3.6 3.2 Planned in-service late Q3 / early Q4 2.8 0.7 2.1 0.5 2023 (remains on-time & on-budget) 1.7 1.4 1.4 0.5 0.5 – Atlas A B C D E F G H I J K L M N O P Sand Source: Lium, Rystad,
management estimates. | (1) Lium Local Sand Plants – Permian Q1’23. Estimated Permian Production capacity assumes competitor mines operate at 70% of nameplate capacity. Includes the addition of incremental nameplate capacity presently
under construction. | (2) Lium and Rystad proppant demand estimates for 24E. Atlas Energy Solutions (NYSE: AESI) | August 2023 17 High Quality, Differentiated Asset Base
Management’s E&P Background and Track Record of Value
Creation Disruptive Oil & Gas Ventures with Track Record of Success Management’s E&P Background Drives Customer Success What We Observed Through an E&P Operator’s Lens Pioneering Use of 3D Seismic, Disruption in Horizontal
D&C Techniques within the Oil-Rich Bakken Shale The Permian is North America’s premier shale resource IPO in 1997 Proppant is mission-critical to efficient shale development Sold to Statoil in 2011 for $4.7 billion — Logistics
challenges are a barrier to optimization The sector was primed for positive disruption due to inefficiencies: Drilling & Completion Innovations in Delaware Basin; Early Adopter of E-Frac & Proppant Loading >5,000 lbs per foot —
Out-of-basin proppant not cost effective — Plants not designed for just-in-time demand model Sold to Diamondback Energy, Inc. in 2017 for $2.6 billion — Local roadways overwhelmed by robust activity levels Need for high-quality, reliable
and efficient in-basin sand Technically Sophisticated Tier One Minerals Model Our Differentiated Approach to Transform the Market + SESP IPO in 2019 Focused on giant open dunes with unique geologic attributes Sitio Merger = $2.2 billion value to
MNRL (1) — Plentiful water, quality product, high mining yields 145% total return from IPO to sale Plants designed with operator mindset; scaled for efficiency with Differentiated Permian Pure-Play Proppant Producer with multiple redundancies
to minimize downtime Game Changing Logistics Platform Culture of technological innovation drives Atlas’s growth (2) Q2 2023 Adj. EBITDA of $92.8 million (2) Q2 2023 Adj. EBITDA Margin of 57.4% We have “walked the walk” on
sustainability, putting shareholders (2) Q2 2023 Net Income of $71.2 million and corporate integrity first to drive Sustainable Environmental (2) Q2 2023 Net Income Margin of 44.0% and Social Progress (“SESP”) Note: Past performance by
members of our management team, our directors or their respective affiliates may not be indicative of future performance. | Source: Bloomberg, public disclosures. | (1) Total return calculated as cumulative dividends plus stock price appreciation
(IPO date through 28-Dec-2022, includes the reinvestment of dividends and is pro forma for Sitio merger). | (2) Non-GAAP financial measure. See Appendix for reconciliations of non-GAAP measures to the nearest GAAP measures. Atlas Energy Solutions
(NYSE: AESI) | August 2023 18 Proven Team, Compelling Track Record, E&P Experience
Atlas Energy Solutions (NYSE: AESI) Investment Highlights Atlas
Conveyor Fed Silos at Kermit Facility Atlas Wellsite Delivery Assets Illustrative Dune Express Highway Overpass Robust Cash Flow Generation + Strong Financial Position High Quality, Differentiated Asset Base Compelling Valuation and Growth Profile
Proven Team, Compelling Track Record, E&P Experience Atlas Energy Solutions (NYSE: AESI) | August 2023 19
Term Loan Refinancing Enhances Liquidity, Extends Maturity and Improves
Dividend Capacity (1) Transaction Overview Pro Forma Capitalization and Liquidity Position ($ in millions except per share data) On 7/31/2023, AESI & Stonebriar closed on a refinancing of As of Pro Forma the 2021 Term Loan, alongside all
existing capital leases 30-Jun-23 Adj. 30-Jun-23 between AESI & Stonebriar, into a new $180.0 million term Liquidity Summary: loan (the “2023 Term Loan ) Cash & Equivalents $341.7 $8.8 $350.5 — In addition, the New Term Loan
provides for a $100 (2) 73.9 – 73.9 ABL Availability million delayed draw facility (“DDTL”) DDTL Availability – 100.0 100.0 — The 2023 Term Loan will bear interest at a rate of 9.50% Total Liquidity $415.6 $108.8 $524.4
and have a maturity date of August 2030 Debt Capital Structure: — The DDTL will bear interest at a rate of SOFR + 595 with ABL Drawings – – – a 3.50% SOFR floor Finance Leases 39.3 (38.8) 0.6 Refinancing Highlights: 2021
Stonebriar Sr. Secured Term Loan 132.4 (132.4) – Enhanced Liquidity: Increases liquidity by ~$100 million 2023 Stonebriar Sr. Secured Term Loan – 180.0 180.0 2023 Stonebriar Sr. Secured Delayed Draw Term Loan – – –
— Furthermore, the DDTL amount is fixed, providing Total Debt $171.8 $8.8 $180.6 increased visibility into our future liquidity as compared to Net Debt / (Cash) ($169.9) ($169.9) ABL availability subject to a variable borrowing base Extended
Maturity: Extends maturity of debt facility from Key Credit Statistics: February 2027 to August 2030 Total Debt / LTM EBITDA 0.53x 0.55x Improved Dividend Capacity: Only requirements to paying Total Debt / Book Capitalization 14% 15% dividends are
(a) no event of default and (b) $30 million minimum pro forma liquidity Leverage neutral transaction and ~$100 million increase Overall financial leverage and cost of debt materially in pro forma liquidity unchanged from pre-transaction levels (1)
Subsequent to June 30, 2023, but prior to July 31, 2023, Atlas incurred additional finance lease purchases, payables due under existing finance leases, and paid closing and other debt refinancing costs, which resulted in a net cash outflow at
closing of $6.6 million. | (2) No borrowings are outstanding on the ABL facility; $1.1 million of undrawn letters of credit reduce the $75.0 million borrowing base to $73.9mm. Atlas Energy Solutions (NYSE: AESI) | August 2023 20
Up-C Simplification Clearly Aligns All Shareholders The elimination of
the Up-C is expected to reduce corporate complexities Transaction Overview Pro Forma Organizational Chart Up-C Simplification will result AESI’s board has approved an Up-C simplification in a Single Class of Stock transaction pursuant to which
all outstanding shares of Class A common stock will be exchanged on a 1:1 basis for shares Legacy & Public Investors of common stock of a newly formed public holdings entity (“New Atlas”) New Atlas Common All outstanding common units
of our operating subsidiary, corresponding to outstanding shares of Class B common Atlas Energy Solutions Inc. stock, will also be exchanged on a 1:1 basis for shares of (NYSE: AESI) (“New Atlas”) common stock of New Atlas, and all
outstanding shares of Class B common stock will be cancelled The transaction will not result in any change in ownership percentages or voting rights AESI Holdings Inc. (“Existing Atlas”) The transaction is expected to close by end of Q3
2023 Why Eliminate the Up-C Structure? Clarifies alignment of interests: Simplified corporate Atlas Sand Operating, LLC structure with a single class of shares (Opco) Simplifies financial reporting: Eliminates redeemable non- controlling interest
and associated allocation of income and equity between AESI common stockholders and Legacy Atlas Sand Company, LLC Owners’ interest in operating units (Atlas LLC) Expands potential investor universe: Could result in increased demand for our
stock from certain indices and asset managers due to the elimination of the dual-class share structure and associated bifurcation of our market Operating Subsidiaries capitalization Reduces annual G&A burden Atlas Energy Solutions (NYSE: AESI) |
August 2023 21
AESI’s DSL Conservation Plan has us Well Prepared for Anything We
expect no disruption to our business even if the DSL is ultimately listed under the ESA AESI’s proactive conservation measures mitigate business risk Dunes Sagebrush Lizard (“DSL”) Atlas has been a leader in the Permian sand
community, promoting best practices for conservation of the DSL, including: — Identification of up to 17,000 acres of land for potential set asides — Dredge mining which causes less surface disturbance per year as compared to traditional
mining methods — AESI conducted environmental and presence / absence surveys to determine that the giant open dunes are unsuitable DSL habitat DSL requires a mesquite shinnery oak rich environment Atlas’ giant open dunes benefit from
minimal overburden — Participation in the Candidate Conservation Agreement with Assurances (“CCAA”) for the DSL The CCAA is a voluntary conservation agreement between the U.S. Fish & Wildlife Service ( USFWS ) and other
participant stakeholders Ample Shinnery Oak Must be Present for DSL Habitat that provides a framework for CCAA participants to work together with the USFWS to identify threats to the DSL and design and implement conservation measures — In
2021, we were accepted by the USFWS (within the Department of Interior) into a new CCAA for the DSL The CCAA provides guidelines for our continued operations Surface disturbance to be limited to 60 acres/year per sand mining plant Dues to be paid
into the plan Plan participation ensures that USFWS will not require us to comply with conservation measures or restrictions on our use of resources beyond those already agreed Atlas was the first proppant producer to apply for a permit under, and
be accepted into, the CCAA for the DSL and we are currently one of only a few proppant producers participating in the CCAA Atlas Energy Solutions (NYSE: AESI) | August 2023 22
Appendix
Reconciliation and Calculation of Non-GAAP Financial Measurements
EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow to Net Income (in thousands) For the Three Months Ended For the Year Ended December 31, June 30, 2023 March 31, 2023 2022 2021 Net income $ 71, 211 $ 62, 905 $ 217,006 $ 4,258 Depreciation,
depletion and accretion expense 9,814 8,808 28,617 24,604 Interest expense 4,027 4,021 15,803 30,290 Income tax expense 5,054 7,677 1,856 831 EBITDA $ 90,106 $ 83, 411 $ 263,282 $ 59,983 Stock and unit-based compensation 1,624 622 678 129 Loss on
extinguishment of debt — — — 11,922 Unrealized commodity derivative gain (loss) — — 66 ( 66) Non-recurring transaction costs 1,116 — — — Adjusted EBITDA $ 92, 846 $ 84, 033 $ 264,026 $ 71,968
Maintenance capital expenditures (10,937) (7,114) $ (35,473) $ (7,715) Adjusted Free Cash Flow $ 81, 909 $ 76, 919 $ 228,553 $ 64,253 Maintenance Capital Expenditures Reconciliation (in thousands) For the Three Months Ended For the Year Ended
December 31, June 30, 2023 March 31, 2023 2022 2021 Purchases of property, plant and equipment $ 85, 895 $ 60,940 $ 89,592 $ 19,371 Changes in operating assets and liabilities associated with investing activities (1) 20,996 6,811 20,747 2,362 Less:
Growth capital expenditures (95,954) (60,637) (74,866) (14,018) Maintenance Capital Expenditures, accrual basis $ 10, 937 $ 7,114 $ 35, 473 $ 7,715 (1) Positive working capital changes reflect capital expenditures in the current period that will be
paid in a future period. Negative working capital changes reflect capital expenditures incurred in a prior period but paid during the period presented. Atlas Energy Solutions (NYSE: AESI) | August 2023 24
Reconciliation and Calculation of Non-GAAP Financial Measurements
Adjusted Free Cash Flow to Net Cash Provided by Operating Activities (in thousands, except percentages) For the Three Months Ended For the Year Ended December 31, June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2021 Net cash provided by
operating activities $ 103,883 $ 54, 235 $ 206,012 $ 21, 356 Repayment of paid-in-kind interest borrowing - - - 22,233 Current income tax expense (benefit) (765) 3,869 1,858 471 Change in operating assets and liabilities (15,212) 22,319 41,774 8,622
Cash interest expense 3,804 3,816 14,904 19,173 Maintenance capital expenditures (10,937) (7,114) (35,473) (7,715) Non-recurring transaction costs 1,116 - - - Other 20 (206) (522) 113 Adjusted Free Cash Flow $ 81, 909 $ 76, 919 $ 228,553 $ 64, 253
Total Sales $ 161,788 $ 153,418 $ 482,724 $ 172,404 Adjusted EBITDA Margin 57% 55% 55% 42% Adjusted Free Cash Flow Margin 51% 50% 47% 37% Adjusted Free Cash Flow Conversion 88% 92% 87% 89% Current tax expense reconciliation: Income tax expense $
5,054 $ 7,677 $ 1,856 $ 831 Less: deferred tax expense (5,819) (3,808) 2 (360) Current income tax expense (benefit) $ (765) $ 3,869 $ 1,858 $ 471 Cash interest expense reconciliation: Interest expense, net, excluding loss on extinguishment of debt $
521 $ 3,442 $ 15, 760 $ 30, 276 Less: Interest paid-in-kind through issuance of additional term loans - - - (3,039) Less: Amortization of debt discount (120) (118) (457) (7,320) Less: Amortization of deferred financing costs (104) ( 87) (442) (739)
Less: Interest income 3,507 579 43 14 Less: Other - - - ( 19) Cash interest expense $ 3,804 $ 3,816 $ 14, 904 $ 19, 173 Atlas Energy Solutions (NYSE: AESI) | August 2023 25
Non-GAAP Financial Measure Definitions Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures are non-GAAP supplemental financial measures used by our management and by
external users of our financial statements such as investors, research analysts and others, in the case of Adjusted EBITDA, to assess our operating performance on a consistent basis across periods by removing the effects of development activities,
provide views on capital resources available to organically fund growth projects and, in the case of Adjusted Free Cash Flow, assess the financial performance of our assets and their ability to sustain dividends or reinvest to organically fund
growth projects over the long term without regard to financing methods, capital structure, or historical cost basis. These measures do not represent and should not be considered alternatives to, or more meaningful than, net income, income from
operations, net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA and Adjusted Free Cash Flow have important limitations
as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow
Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures may differ from computations of similarly titled measures of other companies. Non-GAAP Measure Definitions: We define Adjusted EBITDA as net income before depreciation,
depletion and accretion, interest expense, income tax expense, stock and unit-based compensation, loss on extinguishment of debt, unrealized commodity derivative gain (loss), and non-recurring transaction costs. Management believes Adjusted EBITDA
is useful because it allows management to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period and against our peers without regard to financing method or capital
structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital
structures and the method by which the assets were acquired. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total sales. We define Adjusted Free Cash Flow as Adjusted EBITDA less Maintenance Capital Expenditures. Management believes
that Adjusted Free Cash Flow is useful to investors as it provides a measure of the ability of our business to generate cash. We define Adjusted Free Cash Flow Margin as Adjusted Free Cash Flow divided by total sales. We define Adjusted Free Cash
Flow Conversion as Adjusted Free Cash Flow divided by Adjusted EBITDA. We define Maintenance Capital Expenditures as capital expenditures excluding growth capital expenditures. Atlas Energy Solutions (NYSE: AESI) | August 2023 26
Investor Relations Contact For more information, please visit our
website at https://atlas.energy/ IR Contact: Kyle Turlington 5918 W Courtyard Drive, Suite #500; Austin, Texas 78730 (T) 512-220-1200 IR@atlas.energy NYSE: AESI
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