Transcription
Execution VersionAPPLE BIDCO LIMITEDSHAREHOLDERS AGREEMENTJanuary 5, 2016\\NORTHVA - 069932/000046 - 684148 v29
TABLE OF CONTENTSARTICLE 1 INTERPRETATION . 21.1Definitions . 21.2Schedules . 131.3Headings and Table of Contents . 131.4Gender and Number . 131.5Currency. 131.6Consent . 131.7Invalidity of Provisions . 131.8Entire Agreement . 141.9Waiver, Amendment . 141.10Governing Law . 141.11Shareholder References . 141.12Fairfax Group Shareholder Representative and Power of Attorney . 151.13ACON Group Shareholder Representative and Power of Attorney. 151.14ACM Group Shareholder Representative and Power of Attorney . 161.15Bid Agreement . 171.16Parties to the Agreement . 17ARTICLE 2 BUSINESS AND AFFAIRS OF THE CORPORATION . 172.1Business and Affairs of the Corporation . 172.2Auditors . 242.3Information and Access Rights . 242.4Books and Records . 262.5Dividends on Preference Shares . 262.6Conversion of Preference Shares . 262.7Additional Capital . 26ARTICLE 3 FUNDING . 273.1Fairfax Co-Invest Option and Minority Co-Invest Option . 273.2Roll-Over . 303.3Recapitalization Funding; Additional Funding . 31ARTICLE 4 REPRESENTATIONS AND WARRANTIES . 324.1Fairfax Group Shareholders . 324.2ACON Group Shareholders . 334.3ACM Group Shareholders . 334.4JCLA . 344.5Campion . 354.6Anderson . 35
- ii 4.74.8Munro . 36Udell . 36ARTICLE 5 GENERAL MATTERS RELATING TO THE HOLDING OF SHARES ANDPERMITTED TRANSFERS. 375.1General Prohibition on Transfers . 375.2Permitted Transfers by Fairfax Group Shareholders . 375.3Permitted Transfers by ACON Group Shareholders. 385.4Permitted Transfers by ACM Group Shareholders . 395.5Permitted Transfers by JCLA . 405.6Permitted Transfers by any Additional Investor . 415.7Permitted Transfers by Anderson . 415.8Permitted Transfers by Munro . 41ARTICLE 6 RESTRICTIONS ON TRANSFERS AND ISSUANCES OF JCLA SHARES. 416.1Restrictions on Transfer . 416.2Permitted Transfers by Campion . 426.3Permitted Transfer by Anderson . 426.4Permitted Transfer by Udell. 436.5Right of First Offer for JCLA Shares . 43ARTICLE 7 PRE-EMPTIVE RIGHTS . 457.1Additional Securities. 457.2Exceptions to Pre-Emptive Rights . 47ARTICLE 8 MATTERS RELATING TO THE DISPOSITION AND ACQUISITION OFSHARES . 478.1Right of First Offer . 478.2Right of First Refusal . 498.3Piggy-Back Right . 508.4Drag-Along Right . 518.5Management Group Shareholder Triggering Events . 528.6Limitations on Transfers . 548.7Governmental Approvals . 548.8No Registration of Transfer Unless Transferee is Bound . 548.9Notation on Share Certificates . 548.10Shareholders to Facilitate Permitted Transfers . 558.11Closing Procedures . 55\\NORTHVA - 069932/000046 - 684148 v29
- iii ARTICLE 9 LIQUIDITY EVENTS . 569.1Initial Public Offering . 569.2Liquidity Right. . 579.3Limitations on Forced Sale . 60ARTICLE 10 CONFIDENTIALITY . 6110.1Confidentiality . 6110.2Management Group Shareholders Non Competition . 6210.3Exception . 6310.4Non Solicitation . 6310.5Obligations Not Exhaustive . 6410.6Remedies. 6410.7Restrictions . 64ARTICLE 11 DISPUTE RESOLUTION . 6411.1Dispute Resolution and Arbitration Procedure . 64ARTICLE 12 GENERAL PROVISIONS . 6512.1All Shares Subject to this Agreement . 6512.2RESERVED . 6512.3Indemnity by the Corporation . 6512.4Term . 6612.5Termination Not to Affect Rights or Obligations . 6612.6Corporate Opportunity . 6612.7Notices . 6712.8Time of Essence . 6812.9Time Periods . 6812.10 Further Assurances . 6912.11 Independent Legal Advice . 6912.12 Assignment . 6912.13 Counterparts . 6912.14 Enurement . 6912.15 Costs and Expenses . 6912.16 Third Party Rights . 70\\NORTHVA - 069932/000046 - 684148 v29
- iv SCHEDULE A SHARE CAPITAL . 1SCHEDULE B AIFMD REQUIREMENTS. 1\\NORTHVA - 069932/000046 - 684148 v29
SHAREHOLDERS AGREEMENTTHIS AGREEMENT is dated as of January 5, 2016B E T W E E N:FAIRFAX FINANCIAL HOLDINGS LIMITED, a corporation existing underthe laws of Canada (“Fairfax”),– and –The Persons listed in Schedule A under the heading “Fairfax GroupShareholders”,– and –ACON POWER INVESTORS, L.P., a limited partnership existing under thelaws of Ontario (Canada) (“ACON”),– and –The Persons listed in Schedule A under the heading “ACON GroupShareholders”,– and –ALBRIGHT CAPITAL MANAGEMENT LLC, a limited liability companyincorporated under the laws of the State of Delaware (“ACM”),– and –The Persons listed in Schedule A under the heading “ACM GroupShareholders”,– and –The additional Persons listed in Schedule A from time to time whosesignatures are affixed hereto or that have otherwise agreed to be bound bythe terms hereof,– and –APPLE BIDCO LIMITED, a private company limited by shares existing underthe laws of England and Wales (the “Corporation”).\\NORTHVA - 069932/000046 - 684148 v29
-2RECITALS:A.The Shareholders have funded, on the date hereof, in accordance with the Bid Agreement, on anaggregate basis, the following amounts by way of subscription for Ordinary Shares to be issued atthe Subscription Price:ShareholderFunded AmountFairfax Group Shareholders 72,366,972.04ACON Group Shareholders 94,807,624.06ACM Group Shareholders 6,000,000.00B.The Shareholders are entering into this Agreement to provide for the conduct of the business andaffairs of the Corporation, to provide for restrictions on the transfer and ownership of Shares andto govern their relationship as Shareholders.C.In addition to funding the Joint Bid, Fairfax, ACON and ACM have agreed (A) with the lendersunder the Credit Agreement pursuant to an Amendment and Waiver Agreement (the“Amendment and Waiver Agreement”) to provide additional funding to the Corporation (forthe benefit of APR Energy and its Subsidiaries) in an aggregate amount of 200,000,000 (the“Recapitalization Funding”), of which approximately 150,000,000 is to be applied to repaypart of the indebtedness outstanding under the Credit Agreement and the remainder of which(approximately 50,000,000) is to be available to APR Energy for working capital and othergeneral corporate purposes and (B) to provide additional funding to the Corporation in anaggregate amount of 21,615,572.93 (“Additional Funding”) to cover, among other things, costsand other expenses of the Joint Bid, with each of the Recapitalization Funding and the AdditionalFunding to be funded within 29 Business Days of the Closing Date by way of subscription forOrdinary Shares and 10% Preference Shares in accordance with Section 3.3.NOW THEREFORE in consideration of the mutual covenants and agreementscontained in this Agreement and other good and valuable consideration (the receipt and sufficiency ofwhich are hereby acknowledged by each of the Parties), the Parties agree as follows:ARTICLE 1INTERPRETATION1.1DefinitionsIn this Agreement,1.1.1“10% Preference Shares” means the 10% preference shares of 0.10 in the capital of theCorporation with the attributes set out in the Articles;1.1.2“Accounting Standards” means IFRS; provided, however, that in accordance with Section2.1.6.2.5, the Accounting Standards may be changed by the Board of Directors from time to time toany one of (i) U.S. GAAP, (ii) Canadian GAAP or (iii) IFRS (assuming in the case of this clause (iii)that one of the standards in clauses (i) or (ii) is then in effect);1.1.3“ACM” has the meaning attributed to such term in the Preamble;
-31.1.4“ACM Catch-Up Funding” has the meaning given to such term in Section 3.1.11;1.1.5“ACM Funding Threshold” means: (i) the irrevocable subscription and funding by ACMfor Ordinary Shares for an aggregate subscription price of 71,300,000; and (ii) the representation byACM that it has funds available to subscribe for additional Shares in an amount equal to 8,500,000(which amount shall only be funded in accordance with Section 2.7.2);1.1.6“ACM Group Shareholder” means each of ACM, the Persons listed from time to time inSchedule A under the heading “ACM Group Shareholders” (so long as such Persons are Affiliates ofACM) and any Permitted Transferee of the foregoing that beneficially and legally owns Shares, and“ACM Group Shareholders” means all of such Persons collectively, and for the purpose ofdetermining the number of Shares held by the ACM Group Shareholders, all such holdings shall beaggregated;1.1.7“ACON” has the meaning attributed to such term in the Preamble;1.1.8“ACON Group Shareholder” means each of ACON and the Persons listed from time totime in Schedule A under the heading “ACON Group Shareholders” (so long as such Persons areAffiliates of ACON) and any Permitted Transferee of the foregoing that beneficially and legallyowns Shares, and “ACON Group Shareholders” means all of such Persons collectively, and for thepurpose of determining the number of Shares held by the ACON Group Shareholders, all suchholdings shall be aggregated;1.1.9“Act” means the Companies Act 2006 of the United Kingdom, as the same may beamended from time to time, and any successor legislation thereto;1.1.10 “Additional Investor” means any Person (other than an ACM Group Shareholder, ACONGroup Shareholder, Fairfax Group Shareholder or Management Group Shareholder or a PermittedTransferee or Affiliate of any of the foregoing) who becomes a Shareholder;1.1.11“Additional Funding” has the meaning set forth in the Recitals;1.1.12 “Affiliate” means, with respect to any Person, any other Person which, directly orindirectly, (i) Controls the first Person, (ii) is Controlled by the first Person, or (iii) is under commonControl with the first Person;1.1.13 “Agreement” means this agreement and all schedules attached to this agreement, in eachcase as they may be supplemented or amended from time to time, and the expressions “hereof”,“herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this agreement, and unlessotherwise indicated, references to Articles, Sections and Schedules are to the specified Articles,Sections and Schedules, as applicable, of this Agreement;1.1.14 “AIF Controlling Investor” means an AIF Investor that acquires control, within themeaning of Regulation 36 of the AIFM Regulations or the equivalent in another relevant EEA state,of a Group Company;1.1.15 “AIF Investor” means a Shareholder that is an AIF (Alternative Investment Fund) withinthe meaning of the AIFMD, and which has an AIFM;
-41.1.16 “AIFM” means an AIFM (Alternative Investment Fund Manager) within the meaning ofthe AIFMD, which is subject to Part 5 of the AIFM Regulations, or the equivalent in another relevantEEA state, in respect of the AIF Investor;1.1.17“AIFMD” means the Alternative Investment Fund Managers Directive (2011/61/EU), andany applicable laws or regulations implementing such Directive in relevant member states of theEEA, including the AIFM Regulations;1.1.18 “AIFM Regulations” means the Alternative Investment Fund Managers Regulations 2013(SI 2013/773);1.1.19 “Amendment and Waiver Agreement” has the meaning attributed to such term in theRecitals;1.1.20“Anderson” means Laurence Anderson;1.1.21 “Annual Business Plan” means the annual business plan of the Corporation and itsSubsidiaries for a fiscal year consisting, for such fiscal year, of a pro forma balance sheet and incomestatement, including details of projected expenses (which shall include salary and compensationforecasts for employees of the Corporation and its Subsidiaries), and forecasts of cash flows, capitalexpenditures and income for the Corporation and its Subsidiaries, and the sources of financingthereof, with commentary and detailed supporting assumptions, including information related tomaterial customer contracts in effect or reasonably expected to be executed during the course of suchfiscal year (it being understood that the inclusion of any such information shall not imply that eachcontract to which it relates requires approval in accordance with Section 2.1.10.5 unless thethresholds or requirements of Section 2.1.10.5 are otherwise implicated);1.1.22“APR Energy” means APR Energy plc, and any successor thereto;1.1.23“APR Shares” means ordinary shares of APR Energy;1.1.24 “Arm’s Length” means, in respect of a Person (the “first-mentioned Person”), a Personwho is not Controlled by, or under common Control with, the first-mentioned Person;1.1.25time;“Articles” means the articles of association of the Corporation as adopted from time to1.1.26 “Bid Agreement” means the Joint Bidding Agreement dated October 26, 2015 betweenthe Corporation, Fairfax, ACON Power Investors, L.P., ACON Equity Management, L.L.C., ACM,ACM Emerging Markets Master Fund I, L.P. and ACM Energy Holdings I Ltd., as it may beamended from time to time in accordance with its terms;1.1.27“Board” means the board of directors of the Corporation;1.1.28 “Business Day” means any day, other than Saturday, Sunday or any statutory or publicholiday in London (United Kingdom), Toronto (Canada) and New York (United States of America)on which banks are open for general commercial business;1.1.29“Campion” means John Campion;
-51.1.30 “Canadian GAAP” means generally accepted accounting principles in Canada which areapplicable as at the date on which any calculation made hereunder is to be effective or as at the dateof any financial statements referred to herein;1.1.31 “Cause” means, with respect to any Management Group Shareholder or any otherShareholder who is an employee or officer of or other service provider to the Corporation or any ofits Subsidiaries, (i) any breach by such Shareholder of such Shareholder’s employment agreement (ifapplicable), including the breach of any representation, warranty or covenant made under suchShareholder’s employment agreement; (ii) such Shareholder’s continued failure to (A) substantiallyperform his, her or its duties with the Corporation or any of its Subsidiaries (other than any suchfailure resulting from his, her or its incapacity due to physical or mental impairment) or (B) complywith, in any material respect, any of the Corporation’s or any Subsidiary of the Corporation’spolicies to which such Shareholder is subject; (iii) the Board of Directors’ reasonable determinationthat such Shareholder failed in any material respect to carry out or comply with any lawful andreasonable directive of the Board of Directors; (iv) such Shareholder’s conviction, plea of no contest,plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involvingbribery, corruption or moral turpitude; (v) such Shareholder’s unlawful use (including being underthe influence) or possession of illegal drugs on the Corporation’s, any Subsidiary of theCorporation’s or any of their respective Affiliate’s premises or while performing such Shareholder’sduties and responsibilities under such Shareholder’s employment agreement; or (vi) suchShareholder’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct,or breach of fiduciary duty against the Corporation or any of its Subsidiaries or Affiliates; providedthat, if such Shareholder has an employment agreement containing a definition of “cause” withrespect to termination of such employment or other service arrangement then the definition of“cause” contained in such employment or other agreement shall replace clauses (ii) through (vi) ofthe definition of “Cause” set forth above with respect to such Shareholder for the purposes of thisAgreement;1.1.32“Chairman” has the meaning attributed to such term in Section 2.1.2.1;1.1.33“Closing” has the meaning attributed to such term in Section 8.11.1;1.1.34“Closing Date” has the meaning attributed to such term in the Bid Agreement;1.1.35 “Competitor” means any Person that competes, or would reasonably be expected tocompete, with the Corporation or any of its Subsidiaries, as determined by the Board in accordancewith Section 2.1.6.2.4, including, by way of example, Aggreko, Energyst CAT Rental Power andKaradeniz Holding;1.1.36 “Confidential Information” means all confidential or proprietary information relating tothe business and affairs of the Corporation and its Subsidiaries, including their customers, products,services, technology, trade secrets, know-how, systems and operations, except that ConfidentialInformation will exclude information that:1.1.36.1is generally available in the public domain;1.1.36.2 becomes generally available in the public domain, other than as a result ofdisclosure in violation of this Agreement;1.1.36.3 the disclosing Shareholder can demonstrate was already known to it at thetime of its disclosure to such Shareholder; or
-61.1.36.4 is or becomes available to the disclosing Shareholder on a non-confidentialbasis from a source other than another Shareholder, the Corporation or any of itsSubsidiaries and such Shareholder has made inquiry reasonable in the circumstances tosatisfy itself that such source, at the time of its disclosure of such information to suchShareholder, was not prohibited from making such disclosure by a confidentialityobligation owed to the Corporation or any of its Subsidiaries;1.1.37 “Consolidated EBITDA” means, for any period, the consolidated net income of theCorporation and its Subsidiaries for such period plus, without duplication:1.1.37.1consolidated interest expense for such period;1.1.37.2consolidated income tax expense for such period;1.1.37.3consolidated depreciation and amortization expense for such period;1.1.37.4 all extraordinary, non-recurring and unusual items that reduced consolidatednet income for such period;1.1.37.5andall other non-cash items that reduced consolidated net income for such period;1.1.37.6 any other items permitted to be added back pursuant to the definition ofEBITDA as defined in the Corporation’s Credit Agreement;in each case only to the extent used in the calculation of consolidated net income for such period,less, without duplication:1.1.37.7 all extraordinary, non-recurring and unusual items that increased consolidatednet income for such period; and1.1.37.8period;all other non-cash items that increased consolidated net income for suchall as determined in accordance with the Accounting Standards, as applicable.1.1.38 “Consortium Allocation” means, in respect of the Fairfax Group Shareholders, ACONGroup Shareholders and ACM Group Shareholders, 46.21%, 32.44% and 21.35%, respectively;1.1.39 “Control” means the possession, directly or indirectly, of the power to direct or cause thedirection of the management and policies of any Person, whether through the ownership of votingsecurities, by contract or otherwise (and “Controls”, “Controlling” and “Controlled” havecorresponding meanings);1.1.40 “Corporation” means Apple Bidco Limited and includes any successor to the Corporationresulting from any amalgamation, merger, arrangement or other reorganization of or including theCorporation or any continuance under the laws of another jurisdiction;1.1.41 “Corporation Fair Market Value”, at any date, means on a per Ordinary Share basis, theimplied equity value using the lesser of (i) 6 times Consolidated EBITDA and (ii) 1 times tangibleassets of the Corporation, as determined in accordance with the Accounting Standards, based on the
-7most recent financial statements of the Corporation, and in the case of Consolidated EBITDA for the12-month period ended on the date of such financial statements; provided, however, that in no eventshall Corporation Fair Market Value be less than 1.75 per Ordinary Share. For greater certainty, thevaluations reflected in (i) and (ii) hereof represent the enterprise valuation of the Corporation and theimplied equity value for the Ordinary Shares shall equate to the enterprise valuation less (x)indebtedness outstanding under the Credit Agreement and any other credit facility to which theCorporation is a party, net of all cash and cash equivalents and (y) Preference Shares thenoutstanding;1.1.42 “Credit Agreement” means that certain Third Amended and Restated Credit Agreementdated August 15, 2014, as amended as of March 31, 2015, entered into with APR Energy, APREnergy Holdings Limited, Bank of America N.A. as Administrative Agent and other lenders,together with any amendments, supplements, modifications, refinancings and replacements thereof;1.1.43“Defaulting Shareholder” has the meaning attributed to such term in Section 8.5.1;1.1.44“Director” has the meaning attributed to such term in Section 2.1.1.1;1.1.45“Disability” means the mental or physical state of an individual such that:1.1.45.1 the Board determines, acting reasonably, that such individual has been unable,due to illness, disease, mental or physi
1.1.16 "AIFM" means an AIFM (Alternative Investment Fund Manager) within the meaning of the AIFMD, which is subject to Part 5 of the AIFM Regulations, or the equivalent in another relevant EEA state, in respect of the AIF Investor; 1.1.17 "AIFMD" means the Alternative Investment Fund Managers Directive (2011/61/EU), and
