8-K
GPGI, Inc. (GPGI)
UNITED STATES
SECURITIES AND EXCHANGECOMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13or 15(d)
of the Securities ExchangeAct of 1934
Date of Report (Date of earliest event reported): January 12, 2026
CompoSecure, Inc.
(Exact Name of Registrantas Specified in its Charter)
| Delaware | 001-39687 | 85-2749902 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 309 Pierce Street<br><br> <br>Somerset, New Jersey | 08873 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
(908) 518-0500
(Registrant’s telephone number, includingarea code)
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) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | TradingSymbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common stock, par value $0.0001 per share | CMPO | 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. ¨
Introductory Note
As previously disclosed, on November 2, 2025, CompoSecure, Inc., a Delaware corporation (the “Company”), and certain of its subsidiaries entered into a Share Purchase Agreement (as it may be amended from time to time, the “Transaction Agreement”) with Husky Technologies Limited (“Husky”), Platinum Equity Advisors, LLC (“Platinum”), certain entities affiliated with Platinum and certain members of Husky management (collectively, the “Platinum Parties”). On November 2, 2025, concurrently with the execution of the Transaction Agreement, the Company also entered into purchase agreements (the “Purchase Agreements”) with certain investors named therein.
On January 12, 2026 (the “Closing Date”), upon the terms and subject to the conditions set forth in the Transaction Agreement, the Company completed its combination with Husky (the “Transaction”) for aggregate consideration of approximately $688.7 million in cash and 54,978,334 shares of the Company’s Class A Common Stock, par value $0.0001 per share (“Common Stock”). Concurrently with the closing of the Transaction, the Company also completed the transactions contemplated under the Purchase Agreements and issued and sold to the investors party thereto (collectively, the “PIPE Investors”) in a private placement an aggregate of 106,056,083 shares of Common Stock, at a purchase price of $18.50 per share, for an aggregate purchase price of approximately $1.96 billion.
Item 1.01 Entry into a Material Definitive Agreement.
Pursuant to the terms of the Transaction Agreement, on the Closing Date, the Company entered into an Investor Rights Agreement (the “Investor Rights Agreement”) with PE Titan CS Holdings L.P., an affiliate of Platinum (the “PE Holder”). Pursuant to the Investor Rights Agreement, the PE Holder will have the right to nominate (i) two members of the Company’s board of directors (the “Company Board”), for so long as it, together with its affiliates, continue to hold at least 10% of the outstanding shares of the Company’s Common Stock, and (ii) one member of the Company Board so long as it, together with its affiliates, continues to hold less than 10% but more than 5% of the outstanding shares of Common Stock. In addition, the Investor Rights Agreement provides that the PE Holder and its affiliates are allowed to freely pursue any business opportunity. Pursuant to the Investor Rights Agreement, the PE Holder has agreed to be subject to a lock-up period of 90 days following the closing of the Transaction, subject to early release by the Company.
Pursuant to the terms of the terms of the Transaction Agreement, on the Closing Date, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the PE Holder (collectively, with each other person who has executed and delivered a joinder thereto, the “RRA Parties”) which, among other things, provides that the Company will as soon as practicable file with the SEC a shelf registration statement pursuant to Rule 415 under the Securities Act registering the resale of certain shares of the Common Stock and certain other equity securities of the Company held by the RRA Parties. The PE Holder will be entitled to make up to two demand registrations in any 12 month period in connection with an underwritten shelf takedown offering, in each case subject to certain offering thresholds, applicable lock-up restrictions and certain other conditions. In addition, the PE Holder will have certain “piggy-back” registration rights. The Registration Rights Agreement includes customary indemnification and confidentiality provisions. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement.
In connection with the closing of the Transaction, and pursuant to the terms of the existing Management Agreement, dated as of February 28, 2025, by and between Resolute Holdings and CompoSecure Holdings, L.L.C. (the “CompoSecure Management Agreement”), an indirect subsidiary of the Company that will hold, directly or indirectly, the business of Husky following the closing (“Husky Holdings”), entered into a management agreement (the “Management Agreement”) with Resolute Holdings Management, Inc. (“Resolute Holdings”) on the Closing Date. Pursuant to their terms, there will be no duplication of fees under the Management Agreement and the existing CompoSecure Management Agreement.
Pursuant to the Management Agreement, Resolute Holdings is responsible for managing the day-to-day business and operations, and overseeing the strategy, of Husky Holdings and its subsidiaries. Husky Holdings agreed to pay Resolute Holdings a quarterly management fee (the “Management Fee”), payable in arrears, in a cash amount equal to 2.5% of Husky Holdings’ last 12 months’ Adjusted EBITDA, measured for the period ending on the fiscal quarter then ended, as defined in the Management Agreement. Pursuant to the Management Agreement, Husky Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of Husky Holdings, subject to certain exceptions, in the sole discretion of Resolute Holdings. Following its initial ten-year term, the Management Agreement will automatically renew for successive and additional ten-year terms, unless terminated in accordance with its terms. Resolute Holdings and Husky Holdings may each terminate the Management Agreement upon the occurrence of certain other limited events, and in connection with certain of these limited events, Resolute Holdings has the right to require Husky Holdings to pay a termination fee, which may be paid in cash, shares of Common Stock or a combination of cash and shares of Common Stock. The Management Agreement also provides for certain indemnification rights in Resolute Holdings’ favor, as well as certain additional covenants, representations and warranties.
In connection with the closing of the Transaction, on the Closing Date, Resolute Compo Holdings LLC, Tungsten 2024 LLC and the Company entered into an amendment (the “Amendment”) to the Amended and Restated Waiver Agreement, dated as of July 12, 2025, between such parties, pursuant to which the parties agreed that in the event the Company Board rescinds the Board Size Requirement Waiver (as defined therein), the Company Board will adopt resolutions increasing the size of the Board to allow the PE Holder to continue to exercise its nomination rights under the Investor Rights Agreement.
The foregoing description of the Investor Rights Agreement, Registration Rights Agreement, Management Agreement and Amendment and the transactions contemplated thereby is only a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of the Investor Rights Agreement, Registration Rights Agreement, Management Agreement and Amendment, copies of which are filed as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4 hereto, respectively, and incorporated by reference herein.
Item 1.02 Termination of a Material Definitive Agreement.
Concurrently with the closing of the Transaction, the Company repaid all loans and terminated all credit commitments outstanding under that certain Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), dated August 7, 2024, as amended by the Amendment No. 1 to Fourth Amended and Restated Credit Agreement and Limited Waiver, dated December 30, 2024, by and among CompoSecure, L.L.C., Arculus Holdings, L.L.C., CompoSecure Holdings, L.L.C., the Lenders (as defined therein) party thereto and JPMorgan Chase Bank, N.A., which provided for a credit facility of $330.0 million, comprising of a term loan of $200.0 million and a revolving credit facility of $130.0 million. The guarantees and liens securing the indebtedness under the Credit Agreement were discharged and released.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the section titled “Introductory Note” and in Item 1.01 of this Current Report is incorporated herein by reference.
The descriptions of the Transaction Agreement and the Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the actual terms of the Transaction Agreement and the form of Purchase Agreement, which were filed as Exhibit 2.1 and Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2025 and which are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the closing of the Transaction, the Company assumed the indebtedness of Husky, including (i) $1,723.8 million aggregate principal amount outstanding under Husky’s existing U.S. dollar denominated term loan facility (the “Existing Husky Term Loan”), (ii) $350.0 million aggregate principal amount drawn on the Closing Date under Husky’s existing U.S. dollar denominated delayed draw term loan facility (the “Existing Delayed Draw Term Loan” and together with Husky’s existing multi-currency super priority revolving credit facility (the “Existing Husky Revolver”), (iii) $50.0 million aggregate principal amount outstanding under Husky’s existing multi-currency super priority revolving credit facility (the “Existing Husky Revolver” and, together with the Existing Husky Term Loan and the Existing Husky Delayed Draw Term Loan, the “Existing Husky Credit Facilities”), and (iv) $1,000.0 million aggregate principal amount of 9.000% senior secured notes due 2029 (the “Existing Husky Notes”). In connection with the Transaction, CompoSecure commenced transactions to refinance the Existing Husky Credit Facilities and the Existing Husky Notes, which are expected to close on January 14, 2026. Additionally, Husky has issued a conditional notice of partial redemption and a conditional notice of full redemption pursuant which Husky will redeem all of the Existing Husky Notes on January 13, 2026.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth in Item 2.01 of this Current Report is incorporated by reference into this Item 3.02. Pursuant to the Transaction Agreement, upon the closing of the Transaction on January 12, 2026, the Company issued an aggregate of 54,978,334 shares of Common Stock to the Platinum Parties and an aggregate of 106,053,083 shares of Common Stock to the PIPE Investors. The securities issued in connection with the Transaction Agreement, the Purchase Agreements and the transactions contemplated thereby were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued in reliance on exemptions from registration requirements thereof, including exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D and Regulation S promulgated thereunder, as transactions not involving a public offering.
Item 4.01 Changes in Registrant’s CertifyingAccountant.
On January 9, 2026, the audit committee of the board of directors of the Company (the “Board”) (i) approved the dismissal of Grant Thorton LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm and (ii) appointed Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2026. Grant Thornton was previously engaged to audit the Company's consolidated financial statements for the year ending December 31, 2025. The appointment of EY does not affect Grant Thornton’s engagement for the year ended December 31, 2025.
The audit reports of Grant Thornton on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through January 12, 2026, there were no: (i) “disagreements,” as that term is defined in Item 304(a)(1)(iv) of Regulation S-K under the Securities Act of 1933, as amended (“Regulation S-K”) with Grant Thornton on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused Grant Thornton to make reference to the subject matter of such disagreements in connection with its audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2024 and 2023, or (ii) reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K.
The Company provided Grant Thornton with a copy of this Current Report on Form 8-K prior to its filing with the United States Securities and Exchange Commission (the “SEC”) and requested that Grant Thornton furnish it with a letter addressed to the SEC stating whether Grant Thornton agrees to the statements made by the Company herein. A copy of the letter from Grant Thornton addressed to the SEC and dated as of January 12, 2026 is filed as Exhibit 16.1 to this Current Report on Form 8-K.
During the fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through January 12, 2026, neither the Company nor anyone on the Company’s behalf consulted with EY with respect to either (i)(a) the application of accounting principles to a specified transaction, either completed or proposed, or (b) the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided by EY to the Company that EY concluded was an important factor that the Company consider in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any other matter that was the subject of a “disagreement” or a “reportable event” (as these terms are defined in Item 304(a)(1) of Regulation S-K and the related instructions).
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective as of the closing of the Transaction, Louis Samson and Delara Zarrabi were appointed to serve as members of the Board. Mr. Samson will hold office as a Class I director, for a term expiring at the Company’s annual meeting of stockholders to be held in 2028. Ms. Zarrabi will hold office as a Class III director, for a term expiring at the Company’s annual meeting of stockholders to be held in 2027. Mr. Samson and Ms. Zarrabi were appointed pursuant to the terms of the Investor Rights Agreement, as described in Item 1.01 of this Current Report.
Additional information regarding these new directors is set forth below:
Mr. Samson has served as Co-President at Platinum Equity, a global private equity investment firm, since 2023 and is a member of Platinum Equity’s investment committee. Mr. Samson leads the firm’s New York, Greenwich and London-based investment teams and manages the operations of those offices. Mr. Samson joined Platinum Equity in 2007 and plays an active role in Platinum’s day-to-day activities as well as its strategic direction. Prior to joining Platinum Equity, Mr. Samson was a Managing Director in the Mergers & Acquisitions Group at CIBC World Markets, the investment banking subsidiary of the Canadian Imperial Bank of Commerce, a global investment bank. Prior to his role at CIBC World Markets, Mr. Samson was a Mergers & Acquisitions attorney at Stikeman Elliott LLP, a Canadian law firm. Mr. Samson is a graduate of Ottawa University Law School and Le Petit Seminaire de Quebec College. Mr. Samson also serves on the board of directors of Custom Truck One Source (NYSE: CTOS). Mr. Samson previously served as director of PAE Inc.
Ms. Zarrabi has served as a Managing Director at Platinum Equity, a global private equity investment firm, since May 2020. At Platinum Equity, she leads deal execution for large-cap transactions. She is responsible for the structuring and execution of acquisition and divestiture transactions. She also has responsibilities related to post-acquisition monitoring and oversight of operational performance at select portfolio companies. Prior to June 2020, she served as Vice President, Senior Vice President and Principal at Platinum Equity. She joined Platinum Equity in 2013. Prior to joining Platinum Equity in 2013, Ms. Zarrabi was an analyst at CIBC World Markets, a global investment bank, and a Principal at Paine & Partners, a private equity firm. Ms. Zarrabi has a B.S. in Operations Research and Engineering as well as a Master of Engineering in Operations Research and Industrial Engineering both from Cornell University. Ms. Zarrabi previously served as director of PAE Inc.
Additionally, in connection with their appointments, each of Mr. Samson and Ms. Zarrabi entered into customary indemnification agreements in the same form provided to other directors of the Company.
Other than the Transaction Agreement and the Investor Rights Agreement, there are no arrangements between these directors and any other person pursuant to which Mr. Samson and Ms. Zarrabi were selected as directors.
Item 5.03 Amendments to Articles of Incorporationor Bylaws; Change in Fiscal Year
On January 11, 2026, the Company Board approved a change in the Company’s name from CompoSecure, Inc. to GPGI, Inc., and an amendment to the Company’s Third Amended and Restated Certificate of Amendment to reflect the change in the Company’s name, to be effective on January 22, 2026.
Item7.01 Regulation FD Disclosure.
On January 12, 2026, the Company issued a press release announcing the closing of the Transaction and its intention to change its corporate name. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
The information contained in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses or funds acquired.
The financial statements of Husky required by Item 9.01(a) of this Current Report on Form 8-K are attached as Exhibits 99.2 and 99.3 to this Current Report on Form 8-K and incorporated by reference herein.
(b) Pro forma financial information.
The pro forma financial information required by Item 9.01(b) of this Current Report on Form 8-K is attached as Exhibit 99.4 to this Current Report on Form 8-K and incorporated by reference herein.
*****Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: January 12, 2026
| COMPOSECURE, INC. | |
|---|---|
| By: | /s/ Jonathan C. Wilk |
| --- | --- |
| Name: Jonathan C. Wilk | |
| Title: Chief Executive Officer |
Exhibit 3.1
FORM OF CERTIFICATE OFAMENDMENT OF THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF COMPOSECURE, INC.
CompoSecure, Inc. (the “Corporation”), a corporation duly organized and existing under the General Corporation Law of the State of Date (the “DGCL”), DOES HEREBY CERTIFY THAT:
1. The name of the Corporation is CompoSecure, Inc.
2. The Third Amended and Restated Certificate of Incorporation of the Corporation as heretofore in effect is hereby amended such that Article I thereof shall now provide in full as follows:
The name of the corporation is GPGI, Inc. (the “Corporation”).
3. This Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL.
4. This Certificate of Amendment shall become effective on the date of filing with the Secretary of State of the State of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer on this ___ day of __________, 2026.
| COMPOSECURE, INC. | |
|---|---|
| By: | |
| Name: | |
| Title: |
Exhibit 10.1
INVESTOR RIGHTS AGREEMENT
Dated as of January 12, 2026
TABLE OF CONTENTS
Page
| ARTICLE I GOVERNANCE MATTERS | 1 | |
|---|---|---|
| 1.1 | Composition of the Compo PubCo<br> Board at the Closing | 1 |
| 1.2 | Composition of the Compo PubCo<br> Board Following the Closing | 2 |
| 1.3 | Eligibility Criteria | 3 |
| 1.4 | Board Observer Rights | 4 |
| 1.5 | Board Meeting Expenses | 5 |
| 1.6 | Indemnification | 5 |
| 1.7 | Confidentiality | 6 |
| 1.8 | Voting Agreement | 8 |
| 1.9 | Compo PubCo Board Obligations | 8 |
| 1.10 | Freedom to Pursue Opportunities | 8 |
| 1.11 | Governing Documents | 9 |
| 1.12 | No Liability of the Investor | 9 |
| 1.13 | Preemptive Rights | 9 |
| ARTICLE II REPRESENTATIONS AND WARRANTIES | 11 | |
| 2.1 | Representations and Warranties<br> of the Investor | 11 |
| 2.2 | Representations and Warranties<br> of Compo PubCo | 12 |
| ARTICLE III INFORMATION; ACCESS | 13 | |
| 3.1 | Quarterly Financial Statements | 13 |
| 3.2 | Annual Financial Statements | 13 |
| 3.3 | Access | 13 |
| ARTICLE IV DEFINITIONS | 14 | |
| 4.1 | Defined Terms | 14 |
| 4.2 | Other Defined Terms | 17 |
| 4.3 | Interpretation | 18 |
| ARTICLE V MISCELLANEOUS | 18 | |
| 5.1 | Term | 18 |
| 5.2 | Notices | 19 |
| 5.3 | Amendments and Waivers | 20 |
| 5.4 | Severability | 20 |
| 5.5 | Counterparts | 20 |
| 5.6 | Entire Agreement; Parties in<br> Interest | 20 |
| 5.7 | Governing Law; Venue; Waiver<br> of Jury Trial | 21 |
| 5.8 | Remedies | 21 |
| 5.9 | Descriptive Headings | 21 |
i
INVESTOR RIGHTS AGREEMENT, dated as of January 12, 2026 (this “Agreement”), by and between CompoSecure, Inc., a Delaware corporation (“Compo PubCo”) and PE Titan CS Holdings, L.P., a Delaware limited partnership (the “Investor”).
W I T N E S S E T H:
WHEREAS, on November 2, 2025, Compo PubCo, Forge New Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of Compo PubCo (“Holdings”), 1561604 B.C. Unlimited Liability Company, an unlimited liability company existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of Compo PubCo (“BidCo”), the PE Sellers (as defined in the Transaction Agreement), Husky Technologies Limited, a corporation existing under the laws of the Province of British Columbia, 1561570 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia (“New BC”), Forge US Top, LLC, a Delaware limited liability company (“TargetCo”), Platinum Equity Advisors, LLC, as the Shareholders’ Representative, and the Management Sellers (as defined in the Transaction Agreement) (collectively with the PE Sellers, the “Sellers”) entered into a Share Purchase Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), pursuant to which (i) the PE Sellers sold to Holdings, and Holdings purchased from the PE Sellers, the TargetCo Units and (ii) the Sellers sold to BidCo, and BidCo purchased from the Sellers, the New BC Shares (each as defined in the Transaction Agreement) on the Closing Date on the terms and subject to the conditions set forth in the Transaction Agreement;
WHEREAS, pursuant to and subject to the terms and conditions of the Transaction Agreement, in connection with the closing of the transactions contemplated thereby (the “Closing”), the Investor has received cash and Class A Common Stock, par value $0.0001 per share, of Compo PubCo (the “Compo PubCo Common Stock”); and
WHEREAS, in connection with and pursuant to the Transaction Agreement, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding certain governance matters and the Investor’s ownership of the Shares and to establish certain rights, restrictions and obligations of Compo PubCo and the Investor with respect to the Shares.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:
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ARTICLE I
GOVERNANCE MATTERS
1.1 Composition of the Compo PubCo Board at the Closing. As of the Closing, Compo PubCo and the Board of Directors of Compo PubCo (the “Compo PubCo Board”) have taken all action necessary to cause (a) the number of directors constituting each of Class I and Class III directors of the Compo PubCo Board to be increased by one (1), and (b) Louis Samson and Delara Zarrabi, each as designated by the Investor, to be appointed to fill such newly created vacancies on the Compo PubCo Board as the initial Investor Designees hereunder, serving as a Class I director and a Class III director, respectively.
1.2 Composition of the Compo PubCo Board Following the Closing.
(a) Following the Closing and for so long as the Investor (together with its Affiliates) holds a number of shares of Compo PubCo Common Stock representing at least the percentage of the outstanding shares of Compo PubCo Common Stock shown below, Compo PubCo shall take all Necessary Action to include in the slate of nominees recommended by the Compo PubCo Board for election as directors at any applicable annual or special meeting of stockholders at which directors are to be elected, that number of individuals (including, in the case of any Investor Designee, such Investor Designee), which, assuming all such individuals are successfully elected to the Compo PubCo Board, when taken together with any incumbent Investor Director not standing for election at such annual or special meeting of stockholders, would result in the Investor having the number of directors serving on the Board that is shown below (each, an “Investor Designee”); provided, that so long as the Compo PubCo Board is a classified board, the Investor Directors shall be apportioned in Class I and Class III, or if the number of Investor Directors is decreased to one (1), to the applicable class of the remaining Investor Director after giving effect to the resignation or removal of the other Investor Director:
| Percentage of Outstanding Compo PubCo Common Stock | Number of<br><br> Investor Directors | |
|---|---|---|
| 10% or greater (the “First Ownership Threshold”) | 2 | |
| Less than 10% but greater than or equal to 5% (the “Second Ownership Threshold”) | 1 | |
| Less than 5% | 0 |
(b) The Investor shall notify Compo PubCo of the identity of each proposed Investor Designee, in writing, on or before the time such information is reasonably requested (reasonably in advance), in writing, by the Compo PubCo Board or the Governance Committee of the Compo PubCo Board for inclusion in a proxy statement for a meeting of shareholders, together with all information about each proposed Investor Designee as shall be reasonably requested by the Compo PubCo Board or the Governance Committee of the Compo PubCo Board in connection with the Compo PubCo’s disclosure obligations or in connection with Compo PubCo’s legal, regulatory or stock exchange requirements, which requests shall be of the same type as Compo PubCo requires of all other nominees to the Compo PubCo Board; provided, that in the event the Investor fails to provide any such notice, the applicable individual then serving as the Investor Director of the applicable Class shall be deemed to be the Investor Designee for such meeting. For the avoidance of doubt, the Investor shall not be required to comply with any other advance notice provisions generally applicable to the nomination of directors by Compo PubCo so long as the Investor complies with this Section 1.2(b).
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(c) Except as provided for in Section 1.2 or Section 1.3 and to the extent not inconsistent with Section 141(k) of the General Corporation Law of the State of Delaware and the Compo PubCo’s Governing Documents: (i) the Investor shall have the exclusive right to remove any Investor Director from the Compo PubCo Board and the Compo PubCo Board shall take all Necessary Action to cause the removal of such Investor Director at the request of the Investor, and (ii) the Investor shall have the exclusive right to nominate for election to the Compo PubCo Board directors to fill vacancies created by reason of death, removal or resignation of the Investor Directors (or at any other time at which the number of Investor Directors is less than the number to which the Investor is then entitled), and the Compo PubCo Board and the Investor shall take all Necessary Action to cause any such vacancies to be filled by replacement directors nominated by the Investor (consistent with the other provisions of this Agreement) as promptly as reasonably practicable.
(d) In furtherance of the foregoing, the Investor agrees that (i) immediately upon the Investor no longer maintaining the First Ownership Threshold, the Investor and Compo Pubco shall take all necessary action to cause one of the Investor Directors to resign or be removed immediately, unless otherwise agreed in writing by Compo Pubco and (ii) immediately upon the Investor no longer maintaining the Second Ownership Threshold, the Investor and Compo Pubco shall take all necessary action to cause all of the Investor Directors to resign or be removed immediately, unless otherwise agreed in writing by Compo Pubco.
(e) Compo PubCo shall take all Necessary Action to, and shall cause the Compo PubCo Board or the Governance Committee of the Compo PubCo Board to take all Necessary Action to, cause the election of each Investor Designee to the Compo PubCo Board at any applicable annual or special meeting of stockholders at which directors are to be elected (including supporting the Investor Designee for election in a manner no less rigorous and favorable than the manner in which Compo PubCo supports the other nominees that are included in its slate of nominees in accordance with this Agreement). For so long as the Investor has the right to nominate any Investor Designee, the Compo PubCo Board (and any committee thereof) shall not nominate (and Compo PubCo shall not include in the slate that is included in the proxy statement (or consent solicitation or similar document) of Compo PubCo relating to the election of directors) a number of nominees for any election of directors that exceeds the total number of directors on the Compo PubCo Board. The failure of the stockholders of Compo Pubco to elect any Investor Designee shall not affect the rights of the Investor, or the obligation of Compo PubCo or the Compo PubCo Board (including to take Necessary Action), with respect to any future election or appointment of directors to the Compo PubCo Board.
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1.3 Eligibility Criteria.
(a) Each Investor Director shall (i) not be or have been the subject of a conviction or proceeding enumerated in Item 2(d) or (e) of Schedule 13D under the Exchange Act, (ii) satisfy all applicable requirements and standards for membership on the Compo PubCo Board (but not any committee thereof or any other more specific status) imposed by Applicable Law, the New York Stock Exchange (“NYSE”) or any other national securities exchange on which shares of Compo PubCo Common Stock are then listed and (iii) be reasonably acceptable to the Governance Committee of the Compo PubCo Board, taking into account, among other things, the terms of this Agreement and the Transaction Agreement (such determination to be made by the independent directors of the Compo PubCo Board acting in good faith and consistent with Compo PubCo’s nominating and governance practices (consistently applied) in effect from time to time; provided, that, in the event that the Governance Committee comprises all independent directors, such determination may be made by the Governance Committee) (collectively, the “Eligibility Criteria”); it being understood and agreed by the parties that each of Louis Samson and Delara Zarrabi meets the foregoing Eligibility Criteria. Notwithstanding anything to the contrary in this Article I, the Investor will not be entitled to designate any individual to the Compo PubCo Board pursuant to this Article I if such individual does not satisfy the Eligibility Criteria (taking into account the last clause of the immediately preceding sentence), and the Investor agrees to cause any Investor Director then serving on the Compo PubCo Board to resign from such position promptly upon written notice, setting forth the relevant facts upon which such notice is based, from Compo PubCo to the Investor (which notice and facts underlying such notice are not disputed by the Investor) of such Investor Designee’s failure to satisfy any of the Eligibility Criteria set forth in clause (i), (ii) or (iii) of the first sentence of this Section 1.3(a).
(b) In the event that the Investor designates any Investor Designee other than Louis Samson or Delara Zarrabi and the Compo PubCo Board or the Governance Committee in the exercise of its reasonable business judgment reasonably determines that any Investor Designee fails to satisfy the Eligibility Criteria, the Compo PubCo Board shall promptly notify the Investor of such designation and Investor will be entitled to designate a replacement Investor Designee for nomination.
1.4 Board Observer Rights.
(a) For so long as the Investor (collectively with its Affiliates) holds a number of shares of Compo PubCo Common Stock representing at least five percent (5%) of the outstanding shares of Compo PubCo Common Stock, Compo PubCo will permit an individual designated in writing by Investor from time to time (each, an “Observer”) to attend meetings of the Compo PubCo Board as a non-voting observer, and will give such individual notice of such meetings at the same time and in the same manner as notice to the directors. Each Observer shall be entitled to concurrent receipt of any materials provided to the Compo PubCo Board, subject to the confidentiality obligations set forth in Section 1.7. The foregoing notwithstanding, (a) the Compo PubCo Board shall retain the right to exclude an Observer from meetings, discussions and materials (i) to the extent the Compo PubCo Board in the exercise of its reasonable business judgment reasonably believes there to be a material conflict of interest, (ii) with respect to any discussions of disputes between Compo PubCo and the Investor or its Affiliates, and (iii) as necessary, upon advice from counsel to Compo PubCo, to protect attorney-client privilege, (b) the Compo PubCo Board shall retain the right to require the Investor to replace its designated Observer if the Compo PubCo Board in the exercise of its reasonable business judgment reasonably determines that such Observer is not performing his or her duties in a reasonable manner and (c) the right of the Investor to have an Observer at the Compo PubCo Board’s meetings shall not be transferable to any unrelated third party. No Observer, its Affiliates or its or their employees, officers, directors, agents, successors and assigns shall have any fiduciary or similar duty to, or liability for any debt or obligation of, Compo PubCo or to or of any other entity or person whatsoever as a result of this Section 1.4 or any exercise of, or failure to exercise, the rights of an Observer under this Agreement.
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(b) For so long as the Investor is entitled to nominate an Investor Director hereunder, with respect to each committee of the Compo PubCo Board on which an Investor Director does not serve as a member, such committee of the Compo PubCo Board shall allow an Investor Director to participate as a non-voting observer of such committee; provided, however, that if the Investor Director is not an independent director under applicable stock exchange rules and the inclusion of the Investor Director as a non-voting observer would reasonably be expected to have an adverse effect on Compo PubCo or is otherwise in contravention of such rules, the parties hereto will discuss in good faith the implementation of an alternative arrangement to provide the Investor Director with an opportunity to review materials furnished to such committees.
1.5 Board Meeting Expenses and Board Compensation.
(a) Compo PubCo shall pay all reasonable reimbursable out-of-pocket costs and expenses (including, but not limited to, travel and lodging) incurred by each member of the Compo PubCo Board, and by each Observer (if any), incurred in the course of his or her service hereunder, including in connection with attending regular and special meetings of the Board, any board of directors or board of managers of each of Compo PubCo’s Subsidiaries and/or any of their respective committees.
(b) Except to the extent that the Investor may otherwise notify Compo PubCo, each Investor Director shall be entitled to compensation (including equity awards) that is consistent with the compensation received by other non-employee directors of the Compo PubCo Board; provided, that at the election of an Investor Director, any such compensation shall be paid to the Investor or any Affiliate thereof specified by such Investor Director rather than to such Investor Director.
1.6 Indemnification. Compo PubCo shall obtain and maintain customary director and officer indemnity insurance on reasonable terms. Compo PubCo hereby acknowledges that the Investor Directors may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Investor or one or more of its Affiliates (collectively, the “Affiliate Indemnitors”). Compo PubCo, on its own behalf and on behalf of any of its Subsidiaries that provides indemnification: (a) shall be the indemnitor of first resort with respect to any Investor Director (i.e., its obligations to an Investor Director shall be primary and any obligation of any Affiliate Indemnitor to advance expenses or to provide indemnification for the same expenses or liabilities incurred by an Investor Director shall be secondary); (b) shall be required to advance the full amount of expenses incurred by an Investor Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement or any other agreement between Compo PubCo and an Investor Director, without regard to any rights an Investor Director may have against any Affiliate Indemnitor or its insurers; (c) irrevocably waives, relinquishes and releases the Affiliate Indemnitors from any and all claims against the Affiliate Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof; and (d) agrees that no advancement or payment by the Affiliate Indemnitors on behalf of an Investor Director with respect to any claim for which such indemnitee has sought indemnification from Compo PubCo shall affect the foregoing and the Affiliate Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such indemnitee against Compo PubCo and its applicable Subsidiary, if any. In addition to any other indemnification rights that the directors have pursuant to the Governing Documents of Compo PubCo, each person nominated by the Investor to serve on the Compo PubCo Board shall have the right to enter into, and Compo PubCo agrees to enter into, an indemnification agreement in a form consistent with Compo PubCo’s indemnification agreements entered into with other non-employee directors of the Compo PubCo Board.
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1.7 Confidentiality.
(a) The Investor hereby agrees that all Confidential Information with respect to Compo PubCo, its Subsidiaries and its and their businesses, finances and operations shall be kept confidential by the Investor, each Investor Director and each Observer (if any) and shall not be disclosed by the Investor, any Investor Director or any Observer (if any) in any manner whatsoever, except as expressly permitted by this Section 1.7(a). Notwithstanding the preceding sentence or anything else to the contrary in this Agreement, any Confidential Information may be disclosed:
(i) by an Investor Director or Observer (if any) to the Investor or any of its Affiliates;
(ii) by the Investor to any of its Affiliates, any Investor Director or Observer (if any);
(iii) by (x) an Investor Director or Observer (if any) to any of their respective authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors) or (y) the Investor to its or any of its Affiliates’ respective directors, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers and financial advisors thereof) (each of the Persons described in the foregoing clauses (x) and (y), a “Representative”), in each case, solely if and to the extent any Representative needs to be provided such Confidential Information to enable or assist the Investor Director, Observer (if any) or the Investor (or any of its Affiliates) in evaluating or reviewing its investment in Compo PubCo, including in connection with the disposition thereof, or serving as an Investor Director or Observer, as applicable, and such Confidential Information shall only be used by the Investor Director, Observer (if any) or the Investor (or any of its Affiliates) and their respective Representatives for such purposes. The Investor shall be responsible for any breach of this Section 1.7(a) by the Investor Director, Observer (if any), any of the Investor’s Affiliates or any Representative to the same extent as if such breach had been committed by the Investor; provided, that each of the Investor Director, Observer (if any) and the Investor shall (and the Investor shall cause its Affiliates to) direct their respective Representatives to maintain adequate procedures to prevent any Confidential Information from being used in connection with the purchase or sale of securities of Compo PubCo in violation of Applicable Law or Applicable Regulations;
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(iv) by the Investor, to any prospective purchaser of any shares of Compo PubCo Common Stock from the Investor as long as such prospective purchaser agrees to be bound by the provisions of this Section 1.7 as if the Investor;
(v) by the Investor, to any Affiliate, partner, member, limited partners or related investment fund of the Investor and their respective directors, employees, consultants and representatives, in each case in the ordinary course of business (provided that the recipients of such confidential information are subject to a customary confidentiality and non-disclosure obligation at least as restrictive as the confidentiality obligations under this Section 1.7 as applied to the Investor);
(vi) by an Investor Director, Observer (if any), Investor or any of the Investor’s Affiliates, or any of their respective Representatives to the extent Compo PubCo consents in writing to such disclosure;
(vii) by the Investor Director, Observer (if any), Investor or any of the Investor’s Affiliates, or any of their respective Representatives to the extent that any such Person has received advice from its counsel (which may be internal counsel) that it is required to do so to comply with Applicable Law, Applicable Regulations or any other legal, regulatory or administrative process; provided, that prior to making such disclosure, the Person intending to make such disclosure uses its commercially reasonable efforts to preserve the confidentiality of the Confidential Information to the extent permitted by Applicable Law, including, to the extent permitted by Applicable Law and reasonably practicable under the circumstances, by (x) consulting with Compo PubCo regarding such disclosure and (y) if requested by Compo PubCo, reasonably cooperating with Compo PubCo (at Compo PubCo’s sole cost and expense) in seeking a protective order to limit the scope of the required disclosure; provided, further, that the Person making such disclosure shall use its commercially reasonable efforts to disclose only that portion of the Confidential Information as is, based on the advice of its counsel, legally required and to obtain assurances that confidential treatment will be afforded to any Confidential Information so disclosed; provided, further, that, notwithstanding the foregoing, no notification or consultation shall be required in respect of any disclosure made in response to any routine examination by any banking, financial, securities or similar regulatory or Governmental Authority exercising its supervisory, examination or audit functions over the Person intending to make such disclosure in the ordinary course of business so long as such audit or examination is not targeted at Compo PubCo; and
(viii) by an Investor Director, Observer (if any) and Investor, as may be reasonably determined to be necessary in connection with the enforcement of their rights in connection with this Agreement.
(b) For the avoidance of doubt, in the event of a breach or threatened breach of the obligations under this Section 1.7 by the Investor Director, Observer (if any), the Investor or any of their respective Representatives, Compo PubCo, in addition to all other available remedies, shall be entitled to seek specific performance to enforce the provisions of this Section 1.7 in accordance with Section 5.8.
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1.8 Voting Agreement. For so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement, the Investor hereby agrees to vote, or cause to be voted, all shares of Compo PubCo Common Stock Owned Beneficially or of record by the Investor, or over which the Investor maintains voting control, directly or indirectly, in such manner as may be necessary or advisable in support of, or to implement, maintain, or protect the various matters set forth in, and the intent of, this Article I, whether at an annual or special meeting of stockholders of Compo PubCo or pursuant to any written consent of the stockholders of Compo PubCo.
1.9 Compo PubCo Board Obligations. Any breach by the Compo PubCo Board, or any committee of the Compo PubCo Board, of its obligations under this Article I shall be deemed a breach by Compo PubCo of its obligations hereunder.
1.10 Freedom to Pursue Opportunities.
(a) Compo PubCo acknowledges and understands that each Investor Director, each Observer (if any) and the Investor and its Affiliates and its and their directors, officers and agents (each an, “Identified Person”), from time to time review the business plans and related proprietary information of many enterprises, including enterprises that may have products or services that compete directly or indirectly with those of Compo PubCo and its Subsidiaries, and may trade in the securities of such enterprises. Nothing in this Agreement shall preclude or in any way restrict any Identified Person from investing or participating in any particular enterprise, or trading in the securities thereof, whether or not such enterprise has products or services that compete with those of Compo PubCo and its Subsidiaries and, to the fullest extent permitted by Applicable Law, no such Identified Person shall be liable to Compo PubCo or its stockholders or to any Affiliate of Compo PubCo for breach of any fiduciary duty solely by reason of the fact that such person engages in any such activities, and Compo PubCo hereby waives on its own behalf and on behalf of its Subsidiaries, in perpetuity, any and all claims that it now has or may have in the future, and agree not to initiate any litigation or any other cause of action (whether or not in a court of competent jurisdiction) in respect of any such waived claims, or otherwise on the basis of, or in connection with, the doctrine of corporate opportunity (or any similar doctrine); provided, that if Compo PubCo and the Investor (or any of the Investor’s Affiliates) are, to the Investor’s knowledge, considering the same transaction, the Investor will promptly notify Compo PubCo of its (or its relevant Affiliate’s) interest in such transaction and, if requested by the Compo PubCo Board, cause each of the Investor Directors to recuse himself or herself from all Compo PubCo Board discussions and activities relating to such transaction.
(b) To the fullest extent permitted from time to time by the laws of the State of Delaware, Compo PubCo hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for an Identified Persons and Compo PubCo or any of its Affiliates. In the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity that may be a corporate opportunity for itself, herself or himself, or any of its or his or her Affiliates, and Compo PubCo or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to Compo PubCo or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to Compo PubCo or its stockholders or to any Affiliate of Compo PubCo for breach of any fiduciary duty as a stockholder, director or officer of Compo PubCo solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person. For so long as this Agreement is in effect, Compo PubCo shall not, and shall not permit the Compo PubCo Board to, rescind or retract the Necessary Authorizations, or take any other action that would reduce or eliminate the renunciation or waivers included in the Necessary Authorization with respect to any Identified Person.
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1.11 Governing Documents. Compo PubCo and the Compo PubCo Board shall take or cause to be taken all lawful action necessary to ensure at all times that Compo PubCo’s certificate of incorporation, bylaws, committee charters or similar governing documents (“Governing Documents”), director qualification standards and all other rules, policies and guidelines applicable to members of the Compo PubCo Board are consistent in all but de minimis respects with the provisions of this Agreement.
1.12 No Liability of the Investor. Neither the Investor nor any of its Affiliates shall have any liability as a result of designating a person for nomination for election as a director for any act or omission by such designated person in his or her capacity as a director of Compo PubCo, nor as a result of voting for any such designated nominee in accordance with the provisions of this Agreement.
1.13 Preemptive Rights.
(a) If Compo PubCo proposes to issue any Equity Securities (the “New Securities”) for cash (each, a “Capital Raising Transaction”), excluding New Securities issued (i) in connection with the exercise of equity awards issued pursuant to equity incentive plans or other management equity programs approved by the Compo PubCo Board or Compo PubCo’s manager, (ii) in connection with the exercise of warrants issued in connection with an arms-length business acquisition of or by Compo PubCo or its Affiliates, (iii) to the public in a firm commitment underwriting pursuant to a registration statement filed under the Securities Act, (iv) as consideration in connection with a business combination, acquisition transaction, partnership, joint venture or similar strategic transaction, in each case, involving Compo PubCo or its subsidiaries, (v) in connection with a reclassification, recapitalization, exchange, stock split (including a reverse stock split), combination or readjustment of shares or any stock dividend or other distribution or similar transaction, or (vi) upon conversion or exercise of any security convertible into or exercisable for any Equity Securities, provided that such convertible or exercisable security were issued in accordance with the terms of this Agreement, the Investor, for so long the Investor (together with its Affiliates) maintains the First Ownership Threshold (as determined immediately prior to such issuance), shall have the right to purchase, in whole or in part, a number of New Securities equal to its Pro Rata Portion with respect to such issuance on the same terms and at an all-cash purchase price per New Security equal to the price per share at which such shares are offered and sold in such Capital Raising Transaction (net of any underwriting discounts, commissions or similar sale expenses) (the “Exercise Price”) in accordance with this Section 1.13 (the “Capital Raising Preemptive Right”).
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(b) Compo PubCo shall give written notice (a “Capital Raising Issuance Notice”) to the Investor of any proposed issuance described in Section 1.13(a) no later than ten (10) Business Days prior to the launch of the offering (or, if Compo PubCo has determined to launch such an offering within less than ten (10) Business Days, as promptly as practicable after Compo PubCo has determined to pursue such offering, but no later than three (3) Business Day prior to such launch). The Capital Raising Issuance Notice shall set forth the material terms and conditions of the proposed issuance, including:
(i) the number (which number shall not, except to the extent otherwise specified in such notice, be increased by the amount of New Securities to be purchased by the Investor pursuant to the exercise of their Capital Raising Preemptive Rights) or, if such number has not yet been determined, the basis on which the Pro Rata Portion will be determined and description of the New Securities to be issued and the Pro Rata Portion of the Investor;
(ii) the anticipated date or range of dates of the issuance;
(iii) the cash purchase price per New Security; and
(iv) the anticipated Exercise Price.
(c) The Investor’s Capital Raising Preemptive Right shall be exercisable by delivery of written notice to Compo PubCo no later than ten (10) Business Days after receipt of the Capital Raising Issuance Notice, but in any event, no later than the second (2^nd^) Business Day prior to the settlement date of such Capital Raising Transaction, specifying the number of New Securities to be purchased by the Investor (such number to be less than or equal to its Pro Rata Portion). The closing of such purchase by the Investor shall be consummated concurrently with the consummation of the Capital Raising Transaction, subject only to (i) the consummation of the Capital Raising Transaction and (ii) the satisfaction or waiver by the Investor of the conditions set forth in Sections 1.13(d) and 1.13(e).
(d) Upon the date of any Capital Raise Issuance Notice and the date of the applicable Preemptive Share Purchase by the Investor, as applicable, Compo PubCo shall be deemed to represent and warrant to the Investor, as of such date, that (i) Compo PubCo is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to consummate the Preemptive Share Purchase; (ii) the Compo PubCo Board has granted the Section 16 Exemption with respect to the acquisition of the New Securities by Investor in connection with the Preemptive Share Purchase; and (iii) the New Securities to be issued to Investor in connection with the Preemptive Share Purchase have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will have been validly issued and will be fully paid and nonassessable. Upon the exercise of the Capital Raising Preemptive Rights, the Investor shall be deemed to represent and warrant to Compo PubCo, as of the date of such exercise and as of the date of the consummation of the applicable issuance to the Investor, (i) that all of the representations and warranties made by the Investor in Section 2.1 are true and correct, and (ii) that the Investor has performed all of its obligations hereunder. Each party to any purchase pursuant to Section 1.13(e) agrees to use its reasonable best efforts to cause the conditions to such closing to be satisfied.
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(e) Subject to Section 1.13(c), the Preemptive Share Purchase Closing shall take place at such time and at such place as the applicable parties mutually agree. The obligations the Investor to consummate the Preemptive Share Purchase pursuant to this Section 1.13 shall be subject to the following conditions:
(i) Any applicable waiting period (or extensions thereof) under the HSR Act applicable to the Preemptive Share Purchase shall have expired or been terminated; and
(ii) No Law, order, judgment or injunction (whether preliminary or permanent) issued, enacted, promulgated, entered or enforced by a court of competent jurisdiction or other Governmental Authority restraining, prohibiting or rendering illegal the consummation of the Preemptive Share Purchase, as applicable, by this Agreement is in effect;
provided, that, Compo PubCo shall deliver an officer’s certificate at the applicable date of each Preemptive Share Purchase Closing to the Investor certifying that the representations deemed made by Compo PubCo at such closing are true and correct in all respects, and the Investor shall deliver an officer’s certificate at the applicable date of each Preemptive Share Purchase Closing to Compo PubCo certifying that the representations made by the Investor at such closing are true and correct in all respects and that the condition set forth in clause (i) of the penultimate sentence of Section 1.13(d) above has been satisfied (or, if any such representation is inaccurate or such condition has not been satisfied, a reasonably detailed description as to the reasons for such inaccuracy or the failure of the condition shall be included in such certificate). For the avoidance of doubt, if any conditions set forth in this 1.13 are not satisfied, the Investor shall have no obligation to complete the Preemptive Share Purchase Closing, as the case may be.
(f) So long as the Investor has the right to designate an Investor Director, the Compo PubCo Board shall take such action as is necessary to cause the exemption of the Preemptive Share Purchase by the Investor from the liability provisions of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 (each, a “Section 16 Exemption”).
(g) Notwithstanding anything in this Section 1.13 to the contrary, Compo PubCo will not be deemed to have breached this Section 1.13 if (i) the Compo PubCo Board or Compo PubCo’s manager determines that it is reasonably necessary for Compo PubCo to issue any New Securities without previously complying with the provisions of this Section 1.13, so as to be able to raise capital in a situation of financial distress (as reasonably determined by the Compo PubCo Board or Compo PubCo’s manager) where a delay in obtaining such funding would seriously jeopardize the financial viability of Compo PubCo (as reasonably determined by the Compo PubCo Board or Compo PubCo’s manager) and (ii) not later than thirty (30) Business Days following the issuance of any New Securities in contravention of this Section 1.13, Compo PubCo or the transferee of such New Securities offers to sell a portion of such New Securities to the Investor so that, taking into account such previously issued securities and any such New Securities, the Investor will have had the right to purchase or subscribe for securities in a manner consistent with the terms and upon same economic and other terms provided for in this Section 1.13.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Investor. The Investor hereby represents and warrants to Compo PubCo as follows:
(a) The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Investor has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.
(b) The execution and delivery by the Investor of this Agreement and the performance by the Investor of its obligations under this Agreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals which have been obtained) under, (x) Applicable Law or Applicable Regulations, (y) its Governing Documents or (z) any material contract or agreement to which it is a party.
(c) The execution and delivery by the Investor of this Agreement and the performance by the Investor of its obligations under this Agreement have been duly authorized by all necessary corporate or other analogous action on its part and does not require any corporate or other action on the part of any trustee or beneficial or record owner of any equity interest in it, other than those which have been obtained prior to the date hereof and are in full force and effect.
(d) This Agreement has been duly executed and delivered by the Investor and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.
2.2 Representations and Warranties of Compo PubCo. Compo PubCo hereby represents and warrants to the Investor as follows:
(a) Compo PubCo is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Compo PubCo has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.
(b) The execution and delivery by Compo PubCo of this Agreement and the performance by Compo PubCo of its obligations under this Agreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals which have been obtained) under, (x) Applicable Law or Applicable Regulations, (y) its Governing Documents or (z) any material contract or agreement to which it is a party.
(c) The execution and delivery by Compo PubCo of this Agreement and the performance by Compo PubCo of its obligations under this Agreement have been duly authorized by all necessary corporate action on its part and on the part of the Compo PubCo Board, including with respect to the renouncing interests and expectancies under Section 1.10 hereof (the “Necessary Authorizations”) and does not require any corporate or other action on the part of any trustee or beneficial or record owner of any equity interest in it, other than those which have been obtained prior to the date hereof and are in full force and effect.
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(d) This Agreement has been duly executed and delivered by Compo PubCo and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of Compo PubCo, enforceable against Compo PubCo in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.
ARTICLE III
TRANSFER RESTRICTIONS
3.1 Lock-up Period. Investor shall not Transfer any shares of Compo PubCo Common Stock acquired by Investor pursuant to the Transaction Agreement during the Lock-Up Period.
3.2 Permitted Transfers. Notwithstanding the foregoing, Investor may Transfer any or all of its Compo PubCo Common Stock: (i) to its affiliates; (ii) in the event of Compo PubCo’s liquidation, merger, capital stock exchange, reorganization or other similar transaction which results in all of Compo PubCo’s stockholders having the right to exchange their shares of Compo PubCo Common Stock for cash, securities or other property; or (iii) by distribution to partners, members or stockholders of Investor, or to any corporation, partnership or other entity that controls, is controlled by or is under common control with Investor; provided, however, that (x) it shall be a condition to any such Transfer pursuant to clause (i) or (iii) that the transferee execute an agreement stating that the transferee is receiving and holding the securities subject to the provisions of, and agrees to be bound by the restrictions on Transfer set forth in, this Article III and (y) any purported Transfer pursuant to clauses (i) and (iii) that does not meet the conditions set forth in clause (x) shall be void ab initio.
ARTICLE IV
INFORMATION; ACCESS
4.1 Quarterly Financial Statements. Concurrently with the distribution of the Compo PubCo’s quarterly financial statements to the audit committee of the Compo PubCo Board for review, for so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement, Compo PubCo shall deliver to the Investor an unaudited balance sheet of Compo PubCo as of the last day of each of the first three (3) fiscal quarters of each fiscal year and the related unaudited consolidated statements of income, stockholders equity and cash flows for such fiscal quarter and for the fiscal year-to-date period then ended, including any related notes thereto, if available.
4.2 Annual Financial Statements. Concurrently with the distribution of the Compo PubCo’s annual financial statements to the audit committee of the Compo PubCo Board for review, for so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement, Compo PubCo shall deliver to the Investor an audited balance sheet of Compo PubCo as of the end of such fiscal year and the related audited consolidated statements of income, stockholders equity and cash flows for such fiscal year, including any related notes thereto.
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4.3 Access. For so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement and subject to the confidentiality obligations set forth in Section 1.7, Compo PubCo shall, and shall cause its Subsidiaries to, permit the Investor and its respective designated representatives, at reasonable times and upon reasonable prior notice to Compo PubCo, to review the books, records, contracts and agreements of Compo PubCo or any of such Subsidiaries and to discuss the affairs, finances and condition of Compo PubCo or any of such Subsidiaries with the officers of Compo PubCo or any such Subsidiary. For so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement, Compo PubCo shall, and shall cause its Subsidiaries to, provide the Investor, in addition to other information that might be reasonably requested by the Investor from time to time: (a) direct access to the Compo PubCo’s auditors and officers; (b) copies of all materials provided to the Compo PubCo Board at the same time as provided to the Board; (c) access to appropriate officers and directors of Compo PubCo at such times as may be requested by the Investor with respect to matters relating to the business and affairs of Compo PubCo and its Subsidiaries; (d) information in advance with respect to any significant corporate actions, including, without limitation, extraordinary dividends, mergers, acquisitions or dispositions of assets, issuances of significant amounts of debt or equity and material amendments to the certificate of incorporation or bylaws of Compo PubCo or any of its respective Subsidiaries; and (e) to the extent otherwise prepared by Compo PubCo, operating and capital expenditure budgets and periodic information packages relating to the operations and cash flows of Compo PubCo and its Subsidiaries. For so long as the Investor has the right to designate at least one (1) director for nomination under this Agreement, Compo PubCo shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to provide the Investor access to “Growth Days” and any other substantive meetings that take place between Compo PubCo’s officers, directors and employees, on the one hand, and one or more members of the Compo PubCo Board or any stockholder of Compo PubCo, on the other hand.
ARTICLE V
DEFINITIONS
5.1 Defined Terms. Capitalized terms when used in this Agreement have the following meanings:
“Compo PubCo” has the meaning set forth in the Preamble.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, “control” when used with respect to any Person, unless otherwise specified, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have correlative meanings; provided, however, that for the avoidance of doubt, the Investor shall not be deemed an Affiliate of Compo PubCo or any of its Subsidiaries for purposes of this Agreement.
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“Applicable Law” means, with respect to any Person, all applicable U.S., non-U.S. or transnational federal, state or local Laws.
“Applicable Regulations” means applicable laws and national security exchange regulations that apply to Compo PubCo.
“Beneficial Owner”, “Beneficially Own” or “Beneficial Ownership” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficial ownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such rule is actually applicable in such circumstance).
“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.
“Company” has the meaning set forth in the Preamble.
“Confidential Information” means all confidential and/or non-public information (irrespective of the form of communication,) obtained by or on behalf of the Investor or its Representatives from or on behalf of Compo PubCo or its Representatives pursuant to this Agreement, other than information which (i) was or becomes generally available to the public other than as a result of a breach of this Agreement by the Investor or any of its Representatives, (ii) was or becomes available to the Investor or any of its Representatives on a non-confidential basis from a source other than Compo PubCo or its Representatives; provided that the source thereof is not known by the Investor or its Representatives to be bound by an obligation of confidentiality to Compo PubCo or its Subsidiaries in respect of such information, or (iii) is independently developed by the Investor or its Representatives without the use of or reference to any such information that would otherwise be Confidential Information hereunder.
“Equity Securities” means any equity securities of Compo PubCo or securities convertible into or exercisable or exchangeable for equity securities of Compo PubCo.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Governance Committee” means the Nominating and Corporate Governance Committee of Compo PubCo.
“Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or political subdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial or administrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.
“Investor Designee” means, at any applicable time, an individual designated in writing by the Investor for election or appointment to the Compo PubCo Board.
“Investor Director” means an Investor Designee who, at the applicable time, is a member of the Compo PubCo Board.
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“Laws” means laws, statutes, binding Orders, rules, and regulations, ordinances, directives, treaties, rules of common law and rules of any applicable SRO.
“Lock-up Period” means the period ending on the earlier of (i) the 90th day following the date hereof, and (ii) the date on which the Compo PubCo notifies the Investor that the Lock-up Period has terminated.
“Necessary Action” means, with respect to a specified result, all actions, to the fullest extent permitted by applicable law, necessary to cause such result, including, without limitation, to the extent applicable: (a) recommending that the stockholders of Compo PubCo approve such result; (b) causing the Compo Pubco Board to recommend that the stockholders of Compo Pubco approve such result; (c) voting or providing a written consent or proxy with respect to the Compo PubCo Common Stock; (d) causing the adoption of amendments to the Governing Documents; (e) executing agreements and instruments; and (f) making, or causing to be made, with any Governmental Authority, all filings, registrations or similar actions that are required to achieve such result.
“Order” means any order, writ, decree, judgment, award, decision, injunction, ruling, settlement, verdict, consent decree, compliance order, civil or administrative order, or stipulation issued, promulgated, made, rendered or entered into by or with any Governmental Authority or arbitrator (in each case, whether temporary, preliminary or permanent).
“Person” an individual, firm, body corporate (wherever incorporated), partnership, limited liability company, association, joint venture, trust, foundation, works council or employee representative body (whether or not having separate legal personality) or other entity or organization, including a Governmental Authority.
“Preemptive Share Purchase” means the exercise of the Capital Raising Preemptive Right.
“Preemptive Share Purchase Closing” means closing of the Preemptive Share Purchase.
“Pro Rata Portion” means, with respect to the Investor, for any issuance of New Securities, the number of New Securities equal to the product of (a) the total number of New Securities to be issued by Compo PubCo in such issuance (including any securities to be issued to all stockholders of Compo PubCo) and (b) the percentage of outstanding Compo PubCo Common Stock held by the Investor and its Affiliates on such issuance date (immediately prior to any such issuance of New Securities).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares” means the shares of Compo PubCo Common Stock issued to the Investor pursuant to the Transaction Agreement (as adjusted for any stock split, reverse stock split, stock dividend, subdivision, reclassification, recapitalization, exchange or similar reorganization of shares).
“SRO” means (i) any “self-regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securities exchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.
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“Subsidiary” means, with respect to any Person, another Person with respect to which the first Person holds, directly or indirectly, (a) an amount of the voting securities, other voting ownership or voting partnership interests sufficient to elect at least a majority of its board of directors or other governing body or (b) more than fifty (50%) of the equity interests.
“Transfer” means the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any security; (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise; or (c) public announcement of any intention to effect any transaction specified in the preceding clauses (a) or (b).
“Voting Securities” means shares of Compo PubCo Common Stock and any other securities of Compo PubCo entitled to vote generally in the election of directors of Compo PubCo.
5.2 Other Defined Terms.
| Term | Section |
|---|---|
| Affiliate Indemnitors | 1.6 |
| Agreement | Preamble |
| BidCo | Recitals |
| Closing | Recitals |
| Company | Recitals |
| Compo PubCo | Preamble |
| Compo PubCo Board | 1.1 |
| Compo PubCo Common Stock | Recitals |
| Delaware Courts | 5.7(a) |
| Eligibility Criteria | 1.3(a) |
| Governing Documents | 1.11 |
| Holdings | Recitals |
| Investor | Preamble |
| Investor Designee | 1.2(a) |
| NYSE | 1.3(a) |
| Observer | 1.4 |
| Representative | 1.7(a)(iii) |
| TargetCo | Recitals |
| Transaction Agreement | Recitals |
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5.3 Interpretation. Whenever used: the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” and the words “hereof,” “hereunder” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular provision of the Article or Section in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles and Sections mean the Articles and Sections of this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute, rule or regulation means such statute, rule or regulation as amended or supplemented from time to time and includes any successor legislation thereto and any rules or regulations promulgated thereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shall include all genders. The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The headings and captions herein are for convenience of reference only and do not affect the construction or interpretation of any of the provisions hereof. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if.” The word “or” when used in this Agreement is not exclusive. If, and as often as, there is any change in the outstanding shares of Compo PubCo Common Stock by reason of any stock split, reverse stock split, stock dividend, subdivision, reclassification, recapitalization or exchange or similar reorganization of shares, appropriate adjustment shall be made in the provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on the date of such change. Any reference to “written” or “in writing” refers to printing, typing and other means of reproducing words (including electronic media) in a visible form, including e-mail. To the extent that this Agreement requires an Affiliate or Subsidiary of any party to take or omit to take any action, such covenant or agreement includes the obligation of such party to cause such Affiliate or Subsidiary to take or omit to take such action. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. The word “party” is to be deemed to refer to a party hereto, unless the context requires otherwise.
ARTICLE VI
MISCELLANEOUS
6.1 Term. This Agreement will be effective as of the date hereof and, except as otherwise set forth herein, will continue in effect thereafter until the first date on which the Investor ceases to Beneficially Own any Voting Securities; provided, however, that Section 1.7 (Confidentiality) shall survive for one (1) year following the termination of this Agreement and Section 2.1 (Representations and Warranties of the Investor), Section 2.2 (Representation and Warranties of Compo PubCo), respectively, ARTICLE V (Definitions) and this ARTICLE VI (Miscellaneous) shall survive any termination of this Agreement indefinitely.
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6.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via email (provided the sender does not receive email notification of failed transmission or delivery) to the applicable parties hereto at the following addresses, as applicable (or at such other address for a party as shall be specified by like notice):
(a) if to Compo PubCo, to:
CompoSecure, Inc.
309 Pierce Street
Somerset, NJ 08873
Attention: Thomas R. Knott, Chief Investment Officer
Email: tom@resoluteholdings.com
with a copy (which shall not be considered notice) to:
Paul, Weiss, Rifkind Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
| Attention: | Scott Barshay; Laura C. Turano |
|---|---|
| Telephone No.: | (212) 373-3000 |
| Email: | sbarshay@paulweiss.com; |
| lturano@paulweiss.com |
(b) if to the Investor, to:
c/o Platinum Equity Advisors, LLC
1 Greenwich Office Park
North Building, Floor 2
Greenwich, CT 06831
| Attention: | Louis Samson<br><br> <br>Delara Zarrabi |
|---|---|
| Email: | lsamson@platinumequity.com<br><br> <br>dzarrabi@platinumequity.com |
and
c/o Platinum Equity Advisors, LLC
360 North Crescent Drive, South Building
Beverly Hills, CA 90210
| Attention: | John Holland |
|---|---|
| Email: | jholland@platinumequity.com |
with a copy (which shall not be considered notice) to:
Latham & Watkins LLP
555 Eleventh Street, NW
Suite 1000
Washington, D.C. 20004-1304
| Attention: | David Brown; Victoria VanStekelenburg |
|---|---|
| Telephone No.: | (202) 637-2200 |
| Email: | David.Brown@LW.com; |
| Victoria.VanStekelenburg@lw.com |
6.3 Amendments and Waivers. Subject to the provisions of applicable Laws, this Agreement may be amended at any time by the parties hereto by, and only by, an instrument in writing signed on behalf of each of the parties. In the event any Applicable Regulations come into force or effect (including by amendment), including any applicable rules of a national securities exchange upon with the Compo PubCo Common Stock is registered, or of the Commission, which conflicts with the terms and conditions of this Agreement, the parties shall negotiate in good faith to revise the Agreement to achieve the parties’ intention set forth herein.
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6.4 Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall be interpreted so as reasonably necessary to effect the intent of the parties hereto. The parties hereto shall use all reasonable efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
6.5 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto; it being understood that all parties hereto need not sign the same counterpart. If any signature is delivered by PDF or electronic signature (including DocuSign), such signature shall create a valid and binding obligation of the party executing (or on whose behalf the signature is executed) with the same force and effect as if such PDF or electronic signature were an original thereof.
6.6 Entire Agreement; Parties in Interest. This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto (a) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof and (b) except as expressly set forth in this Agreement, are not intended to confer, and shall not be construed as conferring, upon any Person other than the parties hereto any rights or remedies hereunder.
6.7 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by a party hereto without the prior written consent of the other party hereto, and any such assignment without such prior written consent shall be null and void; provided that, notwithstanding anything herein to the contrary, the Investor may assign its rights and obligations under this Agreement to any Affiliate to which it transfers its shares of Compo PubCo Common Stock and such transferee shall be treated as the “Investor” for all purposes hereunder; provided, further, that it shall be a condition to any such transfer that the transferee execute an agreement stating that the transferee is receiving and holding the Compo PubCo Common Stock subject to the provisions of this Agreement.
6.8 Governing Law; Venue; Waiver of Jury Trial.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to such state’s principles of conflicts of law. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Delaware Court of Chancery, and to the extent the Delaware Court of Chancery rejects jurisdiction, in any state or federal court located in the County of New Castle, State of Delaware, and in each case appellate courts therefrom (collectively, the “Delaware Courts”), in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, and hereby waives, and agrees not to assert, as a defense in any proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such proceeding shall be heard and determined in the Delaware Courts. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such proceeding by registered or certified mail in the manner provided in Section 6.2 or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof. Nothing herein shall affect the right of a party hereto to commence proceedings against the other party hereto in any other jurisdiction to enforce orders obtained in any proceeding brought in accordance with this Section 6.8(a).
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(b) EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WITH AND UPON THE ADVICE OF COMPETENT COUNSEL IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
6.9 Remedies Cumulative. Except as otherwise provided or limited herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy shall not preclude the exercise of any other remedy and nothing in this Agreement shall be deemed a waiver by any party of any right to specific performance or injunctive relief. The parties hereto agree that irreparable damage would occur, and that the parties would not have any adequate remedy at law, in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to seek specific enforcement of the terms and provisions hereof, without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity. Each party agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy.
6.10 Descriptive Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
6.11 Inconsistent Agreements. Neither Compo PubCo nor the Investor shall enter into any agreement or side letter with, or grant any proxy to, the Investor, Compo PubCo or any other Person (whether or not such proxy, agreements or side letters are with affiliates of the Investor, holders of shares of Compo PubCo Common Stock that are not parties to this Agreement or otherwise) that conflicts with the provisions of this Agreement or which would obligate such Person to breach any provision of this Agreement.
The remainder of this page intentionally left blank.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written.
| COMPO PUBCO: | |
|---|---|
| CompoSecure, Inc. | |
| By: | /s/ Thomas R. Knott |
| Name: Thomas R. Knott | |
| Title: Chief Investment Officer |
[Signature Page to Investor Rights Agreement]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written.
| INVESTOR: | ||
|---|---|---|
| PE TITAN CS HOLDINGS, L.P. | ||
| By: Platinum Equity Partners International IV (Cayman), L.P., its<br> general partner | ||
| By: Platinum Equity Investment Holdings IV (Cayman),<br> LLC, its general partner | ||
| By: | /s/ Ty Renbarger | |
| Name: | Ty Renbarger | |
| Title: | Vice President |
[Signature Page to Investor Rights Agreement]
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 12, 2026, is made and entered into by and among CompoSecure, Inc., a Delaware corporation (the “Company”), and PE Titan CS Holdings L.P., a Delaware limited partnership (the “Investor”). The Investor and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 or Section 5.10 of this Agreement are each referred to herein as a “Holder” and collectively as the “Holders”.
RECITALS
WHEREAS, on November 2, 2025, the Company and the Investor entered into that certain Share Purchase Agreement (the “Purchase Agreement”), pursuant to which, subject to the satisfaction of the conditions set forth therein and on the terms thereof, Investor acquired an aggregate of 52,829,757 shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Common Stock”) in a transaction exempt from registration under the Securities Act;
AND****WHEREAS, the Company and the Investor are entering into this Agreement for the purpose of providing Investor and other Holders with certain registration rights with respect to the Registrable Securities on the terms set forth herein.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLEI
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Additional Holder” shall have the meaning given in Section 5.10.
“AdditionalHolder Common Stock” shall have the meaning given in Section 5.10.
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
“Affiliate” shall mean with respect to a specified person, each other person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified; provided that no Holder shall be deemed an Affiliate of any other Holder by reason of an investment in, or holding of Common Stock (or securities convertible, exercisable or exchangeable for share of Common Stock) of, the Company. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities or by contract or other agreement).
“Agreement” shall have the meaning given in the Preamble.
“Block Trade” shall have the meaning given in subsection 2.4.1.
“Board” shall mean the Board of Directors of the Company.
“Closing” shall have the meaning given in the Purchase Agreement.
“Closing Date” shall have the meaning given in the Purchase Agreement.
“Commission” shall mean the Securities and Exchange Commission.
“Common Stock” shall have the meaning given in the Recitals hereto.
“Company” shall have the meaning given in the Preamble and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.
“Demanding Holder” shall have the meaning given in subsection 2.1.4.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
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“Existing Debt RegistrationRights Agreement” shall mean that certain Registration Rights Agreement, dated December 27, 2021, by and among CompoSecure, Inc., CompoSecure Holdings, L.L.C. and the Investors (as defined therein) party thereto.
“Existing Equity RegistrationRights Agreement” shall mean that certain Amended and Restated Registration Rights Agreement, dated as of December 27, 2021, by and among CompoSecure, Inc., the LLR Investors (as defined therein), the CompoSecure Investors (as defined therein), the Founder Investors (as defined therein), and the Additional Investors (as defined therein).
“Existing RRA Holders” shall have the meaning given in subsection 2.1.5.
“Existing RRA Registrable Securities” shall have the meaning given in subsection 2.1.5.
“Form S-1 Shelf” shall have the meaning given in subsection 2.1.1.
“Form S-3 Shelf” shall have the meaning given in subsection 2.1.1.
“Holder Information” shall have the meaning given in subsection 4.1.2.
“Holders” shall have the meaning given in the Preamble, for so long as such person or entity holds any Registrable Securities.
“Joinder” shall have the meaning given in Section 5.2.4.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.5.
“Minimum Takedown Threshold” shall have the meaning given in subsection 2.1.4.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.
“Permitted Transferees” shall mean with respect to the Investor and its respective Permitted Transferees, any person or entity to whom such Holder of Registrable Securities is permitted to transfer such Registrable Securities pursuant to and in accordance with any applicable agreement between such Holder and/or their respective Permitted Transferees and the Company and any transferee thereafter.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Piggyback Securities” shall have the meaning given in subsection 2.1.5.
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“PIPE Subscription Agreements” shall mean, collectively, those certain Subscription Agreements, entered into on November 2, 2025, by and between the Company and each investor party thereto, governing such investor’s purchase of shares of Common Stock substantially concurrently with the completion of the transactions contemplated by the Purchase Agreement;
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Purchase Agreement” shall have the meaning given in the Recitals hereto.
“Registrable Security” shall mean (a) any outstanding share of Common Stock or any other equity security (including warrants to purchase shares of Common Stock and shares of Common Stock issued or issuable upon the exercise of any equity security) of the Company held by a Holder immediately following the Closing (including any securities distributable pursuant to the Purchase Agreement), (b) any outstanding shares of Common Stock or any other equity security (including warrants to purchase shares of Common Stock and shares of Common Stock issued or issuable upon the exercise of any equity security) of the Company acquired by a Holder following the date hereof to the extent that such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of the Company, (c) any Additional Holder Common Stock, and (d) any other equity security of the Company or any of its subsidiaries issued or issuable with respect to any securities referenced in clause (a), (b) or (c) above by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred or disposed of in accordance with such Registration Statement by the applicable Holder; (B)(i) such securities shall have been otherwise transferred, (ii) new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and (iii) subsequent public distribution of such securities shall not require registration under the Securities Act; provided, that the foregoing clause (B) shall not apply to securities held by Permitted Transferees to the extent subsequent distribution of such securities by such Permitted Transferees requires registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities have been sold without registration pursuant to Section 4(a)(1) of the Securities Act or Rule 144 or Rule 145 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission); provided, that the foregoing clause (D) shall not apply to securities held by Permitted Transferees to the extent subsequent distribution of such securities by such Permitted Transferees requires registration under the Securities Act; (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; and (F)(i) with respect to Registrable Securities held by a Holder (other than the Investor), such Holder and its Affiliates are able to dispose of all of their Registrable Securities without volume or manner of sale restrictions pursuant to Rule 144 and (ii) with respect to Registrable Securities held by the Investor, the later of (i) the date on which the Investor no longer beneficially owns at least 2% of the then outstanding Common Stock (including all options, warrants and other securities convertible into, or exchangeable or exercisable for (at any time or upon the occurrence of any event or contingency and without regard to any vesting or other conditions to which such securities may be subject), shares of Common Stock (including any note or debt security convertible into or exchangeable for shares of Common Stock) (“Common Stock Equivalents”), and the Investor (notwithstanding any beneficial ownership of Common Stock or Common Stock Equivalents by the Investor) is not an “affiliate” (as defined in Rule 144) of the Company and (ii) the Investor and its Affiliates are able to dispose of all of their Registrable Securities without volume or manner of sale restrictions pursuant to Rule 144; provided that, to the extent such information is not otherwise publicly available, the Investor shall confirm the number of shares that it beneficially owns upon the reasonable request of the Company. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities whenever such Person has the right to acquire, directly or indirectly, such Registrable Securities (including upon conversion, exercise or exchange of any equity interests but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person shall not be required to convert, exercise or exchange such equity interests (or otherwise acquire such Registrable Securities) to participate in any registered offering hereunder until the closing of such offering.
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“Registration” shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, Prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc. and reasonable fees and disbursements of outside counsel for the Underwriters in connection therewith) and any national securities exchange on which the Common Stock is then listed;
(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of outside counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
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(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses of one (1) legal counsel selected by the Demanding Holders in an Underwritten Offering.
“Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holders” shall have the meaning given in subsection 2.1.5.
“Requisite Percentage” shall mean at least fifty percent (50%) of the Registrable Securities received by the Investor in connection with the Transactions.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf” shall mean the Form S-1 Shelf, the Form S-3 Shelf or any Subsequent Shelf Registration, as the case may be.
“Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.
“Subsequent Shelf Registration” shall have the meaning given in subsection 2.1.2.
“Transactions” shall have the meaning given in the Recitals hereto.
“Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act of 1934 with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
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“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten Shelf Takedown” shall have the meaning given in subsection 2.1.4.
“Withdrawal Notice” shall have the meaning given in subsection 2.1.6.
ARTICLEII
REGISTRATIONS
2.1 Shelf Registration.
2.1.1 Filing. At the Investor’s request, as soon as practicable but no later than the later of (i) thirty (30) calendar days following the Closing Date and (ii) the earlier of (x) ninety (90) calendar days following the Company’s most recent fiscal year end and (y) two (2) calendar days following the date the Company files its annual report on Form 10-K with respect to such fiscal year (in either case of clauses (i) or (ii), the “Filing Date”), the Company shall file a Registration Statement for a Shelf Registration on Form S-3 (the “Form S-3 Shelf”) or, if the Company is ineligible to use a Form S-3 Shelf, a Registration Statement for a Shelf Registration on Form S-1 (the “Form S-1 Shelf”), in each case, covering the resale of all the Registrable Securities (determined as of two business days prior to such filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as practicable after the filing thereof and no later than the earlier of (x) the ninetieth (90th) calendar day following the Filing Date if the Commission notifies the Company that it will “review” the Shelf and (y) the fifth (5th) business day after the date the Company is notified in writing by the Commission that such Shelf will not be “reviewed” or will not be subject to further review, provided that if the Commission is closed for operations due to a government shutdown, the deadline for the Shelf being declared effective shall be extended the same number of days that the Commission remains closed for operations following the Filing Date. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. The Company shall maintain a Shelf in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf continuously effective, available for use to permit all Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Form S-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form S-1 Shelf (and any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as practicable after the Company is eligible to use Form S-3. Notwithstanding anything to the contrary herein, the Company shall not be required to file any Registration Statement contemplated by this section 2.1 during any trading “blackout” period under Company’s securities trading policies.
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2.1.2 Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act (including using its commercially reasonably efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “SubsequentShelf Registration”) registering the resale of all Registrable Securities (determined as of two (2) business days prior to such filing), and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use to permit all Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form.
2.1.3 Additional Registrable Securities. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of the Investor, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, any then available Shelf (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year.
2.1.4 Requests for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, the Investor (being in such case the “Demanding Holder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf (each, an “Underwritten ShelfTakedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown (other than a Block Trade pursuant to Section 2.4) if such offering shall include either (x) Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders with a total offering price reasonably expected to exceed, in the aggregate, $100 million, or (y) all remaining Registrable Securities held by the Demanding Holder ((x) or (y), as applicable, the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. Subject to subsection 2.4.4 and the Existing Equity Registration Rights Agreement, the initial Demanding Holder shall have the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the Company’s and the other Demanding Holders’ (if any) prior approval (which shall not be unreasonably withheld, conditioned or delayed). The Investor may demand not more than three (3) Underwritten Shelf Takedowns pursuant to this subsection 2.1.4 in any twelve (12) month period. Notwithstanding anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then effective Registration Statement, including a Form S-3, that is then available for such offering.
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2.1.5 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding Holders and the Holders requesting piggy back rights pursuant to this Agreement (such Holders with respect to an offering or a Registration, the “Requesting Holders”) with respect to such Underwritten Shelf Takedown (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that the Company desires to sell and all other shares of Common Stock or other equity securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other stockholders, including the Existing Equity Registration Rights Agreement, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, (i) first, the shares of Common Stock or other equity securities requested to be included in such Underwritten Offering shall be allocated on a pro rata basis among the Demanding Holders and all Holders (as defined in the Existing Equity Registration Rights Agreement, the “Existing RRA Holders”) requesting that Registrable Securities (as defined in the Existing Equity Registration Rights Agreement, the “Existing RRA Registrable Securities”) be included in such Underwritten Offering pursuant to the exercise of piggyback rights pursuant to Section 2.2(a) of the Existing Registration Rights Agreement, based on the aggregate number of securities or Existing RRA Registrable Securities, as applicable, then owned by each of the foregoing requesting inclusion in relation to the aggregate number of securities or Existing RRA Registrable Securities, as applicable, owned by all such persons requesting inclusion, up to the Maximum Number of Securities, (ii) second, to the extent that the number of securities to be included pursuant to clause (i) of this Section 2.1.5 is less than the Maximum Number of Securities, the remaining securities to be included in such Underwritten Offering shall be allocated on a pro rata basis among all Requesting Holders and other persons requesting that securities be included in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other holders of the Company’s securities other than the Existing RRA Holders (collectively, the “PiggybackSecurities”), based on the aggregate number of Piggyback Securities then owned by such persons requesting inclusion in relation to the aggregate number of Piggyback Securities owned by all such persons requesting inclusion, up to the Maximum Number of Securities, (iii) third, to the extent that the number of securities to be included pursuant to clauses (i) and (ii) of this Section 2.1.5 is less than the Maximum Number of Securities, any equity securities that the Company proposes to register for its own account, up to the Maximum Number of Securities.
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2.1.6 Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown, any Demanding Holder initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of subsection 2.1.4, unless (i) such Demanding Holder has not previously withdrawn any Underwritten Shelf Takedown, (ii) (a) the withdrawal is based upon adverse Company-specific information or (b) at the time of the Withdrawal Notice, the last reported sale price of the Common Stock is at least 10% lower than the last reported sale price of the Common Stock on the date prior to delivery of the demand or (iii) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown). Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this subsection 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (iii) of this subsection 2.1.6.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. Subject to subsection 2.4.3, if the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file a Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, an Underwritten Shelf Takedown pursuant to Section 2.1), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) a Block Trade pursuant to Section 2.4 and the Existing Equity Registration Rights Agreement, then the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to subsection 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder’s agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering (and, in the case of an Underwritten Offering pursuant to the provisions of the Existing Equity Registration Rights Agreement, with the Initiating Holders or the Majority Participating Holders (as defined in the Existing Equity Registration Rights Agreement) in such Underwritten Offering).
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Common Stock or other equity securities that the Company desires to sell, taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, including the Existing Equity Registration Rights Agreement, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back registration rights of persons or entities other than the Holders of Registrable Securities hereunder, including the Existing Equity Registration Rights Agreement, exceeds the Maximum Number of Securities, then:
(a) if the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration or registered offering (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Existing RRA Registrable Securities of the Existing RRA Holders exercising their rights to register their Existing RRA Registrable Securities pursuant to the exercise of piggyback rights pursuant to Section 2.2(a) of the Existing Equity Registration Rights Agreement, pro rata, based on the aggregate number of Existing RRA Registrable Securities then owned by each such Existing RRA Holder so exercising their rights in relation to the aggregate number of Existing RRA Registrable Securities owned by all such Existing RRA Holders so exercising their rights, and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), Piggyback Securities, pro rata, based on the respective number of Piggyback Securities then owned by each person that has requested inclusion in relation to the aggregate number of Piggyback Securities then owned by each such person requesting inclusion, which can be sold without exceeding the Maximum Number of Securities;
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(b) if the Registration or registered offering is pursuant to a demand under the Existing Equity Registration Rights Agreement, then the Company shall include in any such Registration or registered offering (A) first, the Existing RRA Registrable Securities of the Existing RRA Holders requested to be included therein (including pursuant to the exercise of piggyback rights pursuant to Section 2.2 of the Existing Equity Registration Rights Agreement), which can be sold without exceeding the Maximum Number of Securities, provided, that if the number of such Existing RRA Registrable Securities exceeds the Maximum Number of Securities, the number of such securities to be included in such Registration or registered offering shall be allocated on a pro rata basis among all requesting Existing RRA Holders based on the number of Existing RRA Registrable Securities then owned by each such requesting Existing RRA Holder in relation to the aggregate number of Existing RRA Registrable Securities owned by all such requesting Existing RRA Holders; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), any securities that the Company proposes to register for its own account, which can be sold without exceeding the Maximum Number of Securities; provided, that the Company hereby agrees that it shall not propose to register any securities in connection with a demand under the Existing Equity Registration Rights Agreement without the consent of the Investor; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), Piggyback Securities, pro rata, based on the respective number of Piggyback Securities then owned by each person that has requested inclusion in relation to the aggregate number of Piggyback Securities then owned by each such person requesting inclusion, which can be sold without exceeding the Maximum Number of Securities; and
(c) if the Registration or registered offering and Underwritten Shelf Takedown is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1.4 hereof, or pursuant to a demand by persons or entities other than the Holders of Registrable Securities or Existing RRA Holders, then the Company shall include in any such Registration or registered offering securities in the priority set forth in subsection 2.1.5.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf Takedown, and related obligations, shall be governed by subsection 2.1.6) shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include a Shelf) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
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2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, any Piggyback Registration effected pursuant to Section 2.2 hereof shall not be counted as a demand for an Underwritten Shelf Takedown under subsection 2.1.4 hereof.
2.3 Market Stand-off.
2.3.1 In connection with any Underwritten Offering of Common Stock of the Company pursuant to this Agreement (other than a Block Trade), if requested by the Underwriters managing the offering, each Holder that is an executive officer or director of the Company or the beneficial owner of more than five percent (5%) of the outstanding shares of Common Stock of the Company, and any other Holder reasonably requested by the managing Underwriter, agrees not to, and to execute a customary lock-up agreement (in each case on substantially the same terms and conditions as all such Holders, including customary waiver “mfn” provisions) in favor of the managing Underwriters to not, sell or dispose of any shares of Common Stock of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company, during the ninety (90)-day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing of such offering, except as expressly permitted by such lock-up agreement or in the event the managing Underwriters otherwise agree by written consent.
2.3.2. The Company hereby agrees that, in connection with an offering pursuant to Section 2.1 or 2.2, the Company shall not sell, transfer, or otherwise dispose of, any Common Stock (or securities convertible, exercisable or exchangeable for shares of Common Stock) (other than as part of such underwritten public offering, a registration on Form S-4 or Form S-8 or any successor or similar form which is (x) then in effect or (y) shall become effective upon the conversion, exchange or exercise of any then outstanding securities convertible, exercisable or exchangeable for shares of Common Stock), until a period from seven days prior to the pricing date of such offering until ninety (90) days after the pricing date of such offering or such shorter period as the managing underwriter shall agree to; provided that the time period may be longer than ninety (90) days if required by the managing underwriter, as long as all Holders, directors and officers are subject to the same lock-up.
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2.4 Block Trades.
2.4.1 Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in an underwritten registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”), with a total offering price reasonably expected to exceed, in the aggregate, either (x) $40 million or (y) all remaining Registrable Securities held by the Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade at least three (3) business days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade shall use commercially reasonable efforts to work with the Company and any Underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade.
2.4.2 Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade, any Demanding Holder initiating such Block Trade shall have the right to submit a Withdrawal Notice to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Block Trade. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a block trade prior to its withdrawal under this subsection 2.4.2.
2.4.3 Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade initiated by a Demanding Holder pursuant to this Agreement.
2.4.4 The Demanding Holder in a Block Trade shall have the right to select the Underwriters for such Block Trade (which shall consist of one or more reputable nationally recognized investment banks).
ARTICLEIII
COMPANY PROCEDURES
3.1 General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible (without limiting the generality of the Company’s obligations pursuant to Section 2.1):
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities have ceased to be Registrable Securities;
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3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by a majority-in-interest of the Holders with Registrable Securities registered on such Registration Statement and/or the Investor (provided that the Investor, as applicable, holds at least five percent (5%) of the Registrable Securities registered on such Registration Statement) or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each national securities exchange on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
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3.1.8 at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (or such shorter period of time as may be necessary in order to comply with the Securities Act, the Exchange Act, and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable), furnish a copy thereof to each seller of such Registrable Securities or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference therein);
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;
3.1.10 permit a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters agree to confidentiality arrangements, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 in connection with such Registration, including in the event of (x) an Underwritten Offering, (y) a Block Trade or (z) a sale by a broker, placement agent or sales agent (subject to such broker, placement agent or sales agent provided such certification or representation reasonably requested by the Company’s independent registered public accountants and the Company’s counsel), use its commercially reasonable efforts to obtain from the Company’s independent registered public accountants a “cold comfort” letter (including any “bring-down” letter), in customary form and covering such matters of the type customarily covered by “cold comfort” letters, and reasonably satisfactory to a majority-in-interest of the participating Holders and the applicable broker, placement agent or sales agent, if any, and the Underwriters, if any;
3.1.12 in connection with such Registration, including in the event of (x) an Underwritten Offering, (y) a Block Trade or (z) a sale by a broker, placement agent or sales agent, obtain an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders and to the broker, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, or such broker, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority-in-interest of the participating Holders and the applicable broker, placement agent or sales agent, if any, and the Underwriters, if any;
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3.1.13 enter into and perform its obligations under an underwriting agreement or distribution agreement, in usual and customary form (including with respect to indemnification and “clear market” provisions contained therein), with the managing Underwriter or the broker, placement agent or sales agent of such offering or sale;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.15 with respect to an Underwritten Offering pursuant to subsection 2.1.4, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering;
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders and the broker, placement agent or sales agent, if any, and Underwriters, if any, as applicable;
3.1.17 upon request of a Holder, the Company shall (i) authorize the Company’s transfer agent to remove any legend on share certificates of such Holder’s Common Stock restricting further transfer (or any similar restriction in book entry positions of such Holder) if such restrictions are no longer required by the Securities Act or any applicable state securities laws or any agreement with the Company to which such Holder is a party, including if such shares subject to such a restriction have been sold on a Registration Statement, (ii) request the Company’s transfer agent to issue in lieu thereof shares of Common Stock without such restrictions to the Holder upon, as applicable, surrender of any stock certificates evidencing such shares of Common Stock, or to update the applicable book entry position of such Holder so that it no longer is subject to such a restriction, and (iii) use commercially reasonable efforts to cooperate with such Holder to have such Holder’s shares of Common Stock transferred into a book-entry position at The Depository Trust Company, in each case, subject to delivery of customary documentation, including any documentation required by such restrictive legend or book-entry notation; and
3.1.18 in connection with such Registration, including in the event of (x) an Underwritten Offering, or (y) a Block Trade, to the extent requested by the majority participating Holders or Underwriter, cause the Company’s directors and executive officers to enter into lock-up agreements in customary form.
Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter if such Underwriter has not then been named with respect to the applicable Underwritten Offering.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that each Holder shall bear, with respect to such Holder’s Registerable Securities being sold, all Underwriters’ commissions and discounts, brokerage fees and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing such Holders.
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3.3 Requirements for Participation in Registration Statement in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.
3.4 Suspension of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed.
3.4.2 If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than ninety (90) days in any twelve (12) month period, determined in good faith by the Board to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this subsection 3.4.2.
3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to the Electronic Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished or delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
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3.6 Existing Registration Statements. Notwithstanding anything herein to the contrary and subject to applicable law and regulation, the Company may satisfy any obligation hereunder to file a registration statement or to have a registration statement become effective by designating a registration statement that previously has been filed with the SEC or become effective, as the case may be, as the relevant registration statement for purposes of satisfying such obligation, and all references to any such obligation shall be construed accordingly; provided that such previously filed registration statement may be, and is, amended or, subject to applicable securities laws, supplemented to add the number of Registrable Securities, and, to the extent necessary, to identify as selling stockholders the Holders pursuant to the terms of this Agreement. To the extent this Agreement refers to the filing or effectiveness of other Registration Statements, by or at a specified time and the Company has, in lieu of then filing such Registration Statements or having such Registration Statements become effective, designated a previously filed or effective registration statement as the relevant Registration Statement for such purposes, in accordance with the preceding sentence, such references shall be construed to refer to such designated Registration Statement, as amended or supplemented in the manner contemplated by the immediately preceding sentence.
3.6 Limitations on Registration of Other Securities; Representation. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Investor (not to be unreasonably withheld or delayed), enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are more favorable taken as a whole than the registration rights granted to the Holders hereunder.
ARTICLEIV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors and agents and each person who controls such Holder (within the meaning of the Securities Act), to the extent permitted by applicable law, against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including reasonable and documented outside attorneys’ fees of one law firm (and one firm of local counsel)) caused by any untrue or alleged untrue statement of material fact contained or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, except insofar as the same are caused by or contained in any Holder Information (as defined below). The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act), and each broker, placement agent or sales agent to or through which a Holder effects or executes the resale of Registrable Securities, to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
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4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify the Company, its directors, officers and agents and each person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses (including, without limitation, reasonable and documented outside attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or omission is contained in any Holder Information; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act), and each broker, placement agent or sales agent to or through which a Holder effects or executes the resale of Registrable Securities, to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or out-of-pocket expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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ARTICLEV
MISCELLANEOUS
5.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) or email to the parties hereto at the following address (or at such other address for a party as shall be specified by like notice); provided that with respect to notices delivered to the Investor, such notices must be delivered solely via facsimile (with confirmation of receipt) or email:
If to a Holder (other than the Investor), at such Holder’s address as set forth in the Company’s books and records.
If to the Investor, to:
c/o Platinum Equity Advisors, LLC
1 Greenwich Office Park
North Building, Floor 2
Greenwich, CT 06831
| Attention: | Louis Samson |
|---|---|
| Delara Zarrabi | |
| Email: | lsamson@platinumequity.com |
| dzarrabi@platinumequity.com |
and
c/o Platinum Equity Advisors, LLC
360 North Crescent Drive, South Building
Beverly Hills, CA 90210
| Attention: | John Holland |
|---|---|
| Email: | jholland@platinumequity.com |
with copies (which shall not constitute notice) to:
Latham & Watkins LLP
555 Eleventh Street, NW
Suite 1000
Washington, D.C. 20004-1304
| Attention: | David Brown |
|---|---|
| Victoria VanStekelenburg | |
| Email: | david.brown@lw.com; |
| victoria.vanStekelenburg@lw.com |
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If to the Company, to:
CompoSecure, Inc.
309 Pierce Street
Somerset, NJ 08873
| Attention: | Thomas R. Knott, Chief Investment Officer |
|---|---|
| Email: | tom@resoluteholdings.com |
with copies (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
| Attention: | Laura C. Turano |
|---|---|
| Tim Cruickshank | |
| David A.P. Marshall | |
| Email: | lturano@paulweiss.com |
| tcruickshank@paulweiss.com | |
| dmarshall@paulweiss.com |
or to such other address or addresses as the parties may from time to time designate in writing. Copies delivered solely to outside counsel shall not constitute notice. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective upon delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
5.2.2 Subject to Section 5.2.4, this Agreement and the rights, duties and obligations of a Holder hereunder may be assigned in whole or in part to such Holder’s Permitted Transferees. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and Permitted Transferees.
5.2.3 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2.
5.2.4 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii) an executed joinder to this Agreement from such successor or permitted assignee in the form of Exhibit A attached hereto (a “Joinder”). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
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5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to such state’s principles of conflicts of law. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the Delaware Court of Chancery, and to the extent the Delaware Court of Chancery rejects jurisdiction, in any state or federal court located in the County of New Castle, State of Delaware (the “Delaware Courts”), in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, and hereby waives, and agrees not to assert, as a defense in any proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such proceeding shall be heard and determined in the Delaware Courts. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such proceeding in the manner provided in Section 5.1 or in such other manner as may be permitted by applicable legal requirements, shall be valid and sufficient service thereof. With respect to any particular proceeding, venue shall lie solely in the County of New Castle, State of Delaware.
5.5 TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WITH AND UPON THE ADVICE OF COMPETENT COUNSEL IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LEGAL REQUIREMENTS, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
5.6 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority-in-interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof shall also require the written consent of the Investor so long as the Investor and its respective Affiliates hold, in the aggregate, the applicable Requisite Percentage; provided, further, that any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
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5.7 Other Registration Rights. Other than as provided in (i) the Existing Debt Registration Rights Agreement, (ii) the Existing Equity Registration Rights Agreement, (iii) the PIPE Subscription Agreements, and (iv) the Warrant Agreement, dated as of November 5, 2021, between Roman DBDR Tech Acquisition Corp. and Continental Stock Transfer & Trust Company, the Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration Statement filed by the Company for the sale of securities for its own account or for the account of any other person.
5.8 Term. This Agreement shall terminate with respect to any Holder on the first date that such Holder no longer holds any Registrable Securities. The provisions of Section 3.5 and Article IV shall survive any termination.
5.9 Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make determinations hereunder.
5.10 Additional Holder; Joinder. In addition to Persons who may become Holders pursuant to Section 5.2 hereof, (i) subject to the prior written consent of the Investor so long as the Investor and its respective Affiliates hold, in the aggregate, the applicable Requisite Percentage, the Company may make any person or entity who acquires Common Stock or rights to acquire Common Stock after the date hereof a party to this Agreement and (ii) the Company shall make a party to this Agreement any Pre-Closing Holder (as defined in the Purchase Agreement) who holds Common Stock at the Closing (as defined in the Purchase Agreement) (which would, if such Pre-Closing Holder was a Holder (as defined herein) at such time be Registrable Securities) as a result of the Purchase Agreement and delivers an executed Joinder to the Company (in either case of clause (i) or (ii), each such Person, an “Additional Holder”) by obtaining an executed Joinder from such Additional Holder in the form of Exhibit A attached hereto. Such Joinder shall specify the rights and obligations of the applicable Additional Holder under this Agreement, including in the case of an Additional Holder pursuant to clause (ii) of this Section 5.10 that such Additional Holder will not have rights under Section 2.2. Upon the execution and delivery and subject to the terms of a Joinder by such Additional Holder, the Common Stock of the Company then owned, or underlying any rights then owned, by such Additional Holder (the “Additional Holder Common Stock”) shall be Registrable Securities to the extent provided herein and therein and such Additional Holder shall be a Holder under this Agreement with respect to such Additional Holder Common Stock (subject to the restriction noted in the immediately preceding sentence).
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| COMPANY: | ||
|---|---|---|
| COMPOSECURE, INC. | ||
| By: | /s/ Thomas R. Knott | |
| Name: | Thomas R. Knott | |
| Title: | Chief Investment<br>Officer |
[Signature Page to Registration Rights Agreement]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| INVESTOR: | ||
|---|---|---|
| PE TITAN CS HOLDINGS, L.P. | ||
| By: Platinum Equity Partners International IV (Cayman), L.P., its<br> general partner | ||
| By: Platinum Equity Investment Holdings IV (Cayman),<br> LLC, its general partner | ||
| By: | /s/ Ty Renbarger | |
| Name: | Ty Renbarger | |
| Title: | Vice President |
[Signature Page to Registration Rights Agreement]
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT JOINDER
The undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Registration Rights Agreement, dated as of [●], between CompoSecure, Inc., a Delaware corporation (the “Company”), and [●] (the “Investor”). Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the Registration Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s shares of Common Stock shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein; provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights as a Holder, and the undersigned’s (and its transferees’) shares of Common Stock shall not be included as Registrable Securities, for purposes of the Excluded Sections.
[For purposes of this Joinder, “Excluded Sections” shall mean [ ].]^1^
Accordingly, the undersigned has executed and delivered this Joinder as of the day of ___________, 20__.
| Signature of Stockholder |
|---|
| Print Name of Stockholder |
| By: |
| Its: |
| Address: |
^1^ Note to form: For Persons to be made Additional Holders pursuant to clause (ii) of Section 5.10, this language will be included and reference Section 2.2 of the Registration Rights Agreement.
Agreed and Accepted as of ______________, 20__.
COMPOSECURE, INC
| By: |
|---|
| Name: |
| Its: |
Exhibit 10.3
CONFIDENTIAL
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT, dated as of January 12, 2026, is entered into by and between Forge New Holdings, LLC, a Delaware limited liability company (the “Company”), and Resolute Holdings Management, Inc., a Delaware corporation (the “Manager”).
WHEREAS, the Company is a wholly-owned subsidiary of CompoSecure Holdings, L.L.C., a Delaware limited liability (“CompoSecure Holdings”);
WHEREAS, on November 2, 2025, CompoSecure, Inc., a Delaware corporation (“Parent”), the Company, 1561604 B.C. Unlimited Liability Company, an unlimited liability company existing under the laws of the Province of British Columbia and an indirect wholly-owned subsidiary of Parent (“BidCo”), the Sellers (as defined in the Transaction Agreement), Husky Technologies Limited, a corporation existing under the laws of the Province of British Columbia, Forge US Top, LLC, a Delaware limited liability company (“TargetCo”), 1561570 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia (“New BC”), and the Shareholders’ Representative (as defined in the Transaction Agreement) entered into a Share Purchase Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), pursuant to which the Sellers sold to the Company and BidCo, and the Company and BidCo purchased from the Sellers, the New BC Shares and the TargetCo Units (each as defined in the Transaction Agreement) on the Closing Date on the terms and subject to the conditions set forth in the Transaction Agreement;
WHEREAS, pursuant to Section 15(d) of that certain Management Agreement, dated as of February 28, 2025, by and between CompoSecure Holdings and the Manager (the “CompoSecure Management Agreement”) and in connection with the closing of the transactions contemplated by the Transaction Agreement (the “Closing”), the Manager has elected to have CompoSecure Holdings to cause, and CompoSecure Holdings desires to cause, the Company to retain the Manager to provide the management and other related services in the manner and on the terms set forth herein;
WHEREAS, the Manager is willing to provide such management and related services in the manner and on the terms hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and agreements hereinafter set forth, the parties hereto hereby agree as follows:
**Section 1.**Definitions.
(a) The following terms shall have the meanings set forth in this Section 1(a):
“Actions” has the meaning set forth in Section 9(a).
“Adjusted EBITDA” means, for any period, Net Income for such period, plus, without duplication, (i) the sum of the amounts for such period included in determining such Net Income of (A) Interest Expense, (B) Income Tax Expense, (C) Depreciation and Amortization Expense, (D) losses and expenses that are properly classified under GAAP as extraordinary or non-recurring expenses unrelated to continuing, (E) all Quarterly Management Fees, (F) actual one-time and non-recurring fees, expenses and costs relating to any acquisition, business combination transaction or other transaction, in each case, evaluated, negotiated and, if applicable, implemented in accordance with the Management Agreement (whether or not closed), (G) any non-cash compensation charge or expense realized, or non-cash charge that represents any accrual or reserve for anticipated cash charges in any future period, resulting from any contingent payment obligation or similar payment obligation (including any “earn-out” obligation) that would require payments to any Person arising in connection with any acquisition, business combination transaction or other transaction consummated in accordance with the Management Agreement, (H) losses/(gains) attributable to foreign exchange hedges and unrealized foreign exchange losses/(gains), including those relating to mark to market remeasurement of intercompany balances, (I) any impairment charges or asset write-offs, in each case, pursuant to GAAP, and (J) any other non-cash non-recurring expenses, minus, without duplication, (ii) (A) the sum of the amounts for such period included in determining such Net Income of (1) any gains on sales of assets and gains that are properly classified under GAAP as extraordinary, all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP and (2) any cash payments made during such period in respect of non-cash charges described in clause (i)(I) taken in a prior period, and (B) Parent Allocated Expense.
“Affiliate” means, with respect to a Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such other Person, (ii) any executive officer, employee or general partner of such Person, (iii) any member of the board of directors or board of managers (or bodies performing similar functions) of such Person and (iv) any legal entity for which such Person acts as an executive officer or general partner; provided that it is acknowledged and agreed that (x) the Company and its Subsidiaries shall not be deemed to be Affiliates of the Manager and its Subsidiaries, (y) the Manager and its Subsidiaries shall not be deemed to be Affiliates of the Company and its Subsidiaries and (z) other Persons managed by the Manager shall not be deemed to be Affiliates of the Manager or its Subsidiaries or the Company or its Subsidiaries.
“Agreement” means this Management Agreement, as amended, restated, supplemented or otherwise modified from time to time.
“Automatic Renewal Term” has the meaning set forth in Section 11(a).
“BidCo” has the meaning set forth in the Recitals.
“Business Day” means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are not required to be open.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Capitalized Lease” means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP.
“Claim” has the meaning set forth in Section 9(c).
“Class A Common Stock” means the Class A Common Stock, par value $0.0001 per share, of Parent.
“Closing” has the meaning set forth in the Recitals.
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“Company” has the meaning set forth in the Preamble, except that, solely for the purposes of Section 3(a), the term “Company” means, collectively, Forge New Holdings, LLC and its controlled Affiliates.
“Company’s Business” means the activities, operations and business affairs of the Company and its controlled Affiliates.
“Company Expenses” has the meaning set forth in Section 8(b).
“Company Indemnified Party” has meaning set forth in Section 9(b).
“Company Kick-Out Event” means (i) a final judgment by any Governmental Authority of competent jurisdiction not stayed or vacated within thirty (30) days that the Manager has committed a felony or a material violation of applicable securities laws that has a material adverse effect on the business of the Company or the ability of the Manager to perform its duties under the terms of this Agreement, (ii) an order for relief in an involuntary bankruptcy case relating to the Manager or the Manager authorizing or filing a voluntary bankruptcy petition, (iii) the dissolution of the Manager or (iv) a final, non-appealable judgment by any Governmental Authority of competent jurisdiction that the Manager has (a) committed actual fraud against the Company, (b) misappropriated or embezzled funds of the Company or (c) acted, or failed to act, in a manner constituting bad faith, willful misconduct, gross negligence or reckless disregard in the performance of its duties under this Agreement; provided, however, that if any of the actions or omissions described in this clause (iv) are caused by an employee and/or officer of the Manager or one of its Affiliates and the Manager cures the damage caused by such actions or omissions within thirty (30) days of such determination, then such event shall not constitute a Company Kick-Out Event.
“Company Kick-Out Right” means the Company’s right to terminate this Agreement, in accordance with the terms hereof, upon the occurrence of a Company Kick-Out Event.
“Company-Selected Valuation Firm” has the meaning set forth in Section 11(e)(ii).
“Company Termination Notice” has the meaning set forth in Section 11(b).
“Confidential Information” means all confidential, proprietary or non-public information of, or concerning the performance, terms, business, operations, activities, personnel, training, finances, actual or potential acquisitions, plans, compensation, clients or investors of the Company or its Subsidiaries, written or oral, obtained by the Manager in connection with the services rendered hereunder; provided that Confidential Information shall not include information which (i) is in the public domain at the time it is received by the Manager, (ii) becomes public other than by reason of a disclosure by the Manager in breach of this Agreement, (iii) was already in the possession of the Manager lawfully and on a non-confidential basis prior to the time it was received by the Manager from the Company or its Affiliates, (iv) was obtained by the Manager from a third-party which, to the Manager’s knowledge, was not disclosed in breach of an obligation of such third-party not to disclose such information or (v) was developed independently by the Manager without using or referring to any of the Confidential Information.
“Consultation Period” has the meaning set forth in Section 11(b)(i).
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“Covered Person” has the meaning set forth in Section 5(b).
“Depreciation and Amortization Expense” means, for any period, all depreciation and amortization expense of the Company and its Subsidiaries, all as determined on a consolidated basis in accordance with GAAP.
“Effective Date” has the meaning set forth in Section 11(b)(i).
“Effective Termination Date” means, as applicable, (a) with respect to any termination of this Agreement by the Company pursuant to Section 11(b), the last day of the Initial Term or Automatic Renewal Term during which the Company exercises such termination right, (b) with respect to any termination of this Agreement by the Manager pursuant to Section 11(d)(iii), the date upon which the Manager provides a Manager Termination Notice pursuant to Section 11(d)(iii), or (c) with respect to any other termination of this Agreement by the Company or the Manager pursuant to Section 11, the last day of the notice period required for the exercise by the Company or the Manager of its applicable termination right.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.
“Fair Market Value of Fees Payable” means, as of the Effective Termination Date, the fair market value of the aggregate Quarterly Management Fees then payable or that would become payable hereunder if this Agreement were automatically renewed and remained in effect in perpetuity. For the avoidance of doubt, the Fair Market Value of Fees Payable shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Fair Market Value of Fees Payable as though no such waiver or discount was applied).
“GAAP” means generally accepted accounting principles in the U.S.
“Governing Agreements” means, with regard to any entity, the articles of incorporation or certificate of incorporation and bylaws in the case of a corporation, the certificate of limited partnership (if applicable) and the partnership agreement in the case of a general or limited partnership, the certificate of formation and limited liability company agreement in the case of a limited liability company, the trust instrument in the case of a trust, or similar governing documents in each case, as amended, restated, supplemented or otherwise modified from time to time.
“Governmental Authority” means any domestic, foreign or transnational governmental, competition or regulatory authority, court, arbitral tribunal, agency, commission, body or other legislative, executive or judicial governmental entity or self-regulatory agency.
“Income Tax Expense” means, for any period, all provisions for taxes based on the net income of the Company or any of its Subsidiaries (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto and any expensed taxes), all as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.
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“Indemnified Party” has the meaning set forth in Section 9(b).
“Independent Director” means, a member of the board of directors of Parent who qualifies as an “independent director” under the Exchange Act and the NYSE Rules.
“Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Company and its Subsidiaries for such period with respect to all outstanding indebtedness of the Company and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Company and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.
“Initial Term” has the meaning set forth in Section 11(a).
“Initial Valuation Firm Review Period” has the meaning set forth in Section 11(e)(ii).
“Investment Bank-Selected Valuation Firm” has the meaning set forth in Section 11(e)(iii).
“Investment Company Act” means the U.S. Investment Company Act of 1940, as amended from time to time, or any successor statute thereto.
“Letter Agreement” means the letter agreement, dated as of February 28, 2025, by and between Parent and the Manager.
“Losses” means any expenses, losses, damages, liabilities, demands, penalties, costs, charges and claims of any nature whatsoever (including any Out-of-Pocket Expenses).
“LTM Adjusted EBITDA” means, with respect to any twelve (12)-month period prior to a determination date, the last twelve (12) months’ aggregate amount of Adjusted EBITDA. Schedule I sets forth an illustrative calculation of LTM Adjusted EBITDA for the twelve (12)-month period ended September 30, 2025.
“Manager” has the meaning set forth in the Preamble.
“Manager Expenses” has the meaning set forth in Section 8(a).
“Manager Indemnified Party” has the meaning set forth in Section 9(a).
“Manager Permitted Disclosure Parties” has the meaning set forth in Section 6(b).
“Manager-Selected Valuation Firm” has the meaning set forth in Section 11(e)(ii).
“Manager Termination Notice” has the meaning set forth in Section 11(d)(ii).
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“Mediation” has the meaning set forth in Section 11(b)(ii).
“Mediator” has the meaning set forth in Section 11(b)(ii).
“Multiple on Fees Value” means an amount equal to (i) the aggregate Quarterly Management Fees that became payable hereunder during the twenty-four (24)-month period ended as of the last day of the most recent fiscal quarter completed prior to the Effective Termination Date multiplied by (ii) four (4). For the avoidance of doubt, the Multiple on Fees Value shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Multiple on Fees Value as though no such waiver or discount was applied).
“Net Income” means, for any period, the consolidated net income (or loss) determined for the Company and its Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall be excluded (i) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Company or such Subsidiary in the form of dividends or similar distributions and (ii) the undistributed earnings of any Subsidiary, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation law applicable to such Subsidiary.
“Net Present Value of Fees Payable” means, as of the Effective Termination Date, (i) the net present value of the aggregate Quarterly Management Fees then payable or that would become payable hereunder during the five (5)-year period following the Effective Termination Date, discounted annually at a per annum rate equal to six percent (6.0%), plus (ii) the net present value of the terminal value of the Quarterly Management Fees that would become payable hereunder after such five (5)-year period if this Agreement were automatically renewed and remained in effect in perpetuity, discounted from the terminal year to the applicable present date at a per annum rate equal to six percent (6.0%). For the avoidance of doubt, the Net Present Value of Fees Payable shall be determined without regard to any waiver or other discount by the Manager of any Quarterly Management Fee (which shall be calculated for purposes of the determination of the Net Present Value of Fees Payable as though no such waiver or discount was applied).
“NYSE” means the New York Stock Exchange.
“NYSE Rules” means the NYSE listing rules currently in effect and, as amended, restated, supplemented or otherwise modified from time to time.
“Out-of-Pocket Expenses” means any and all documented and reasonable out-of-pocket expenses (including fees and out-of-pocket disbursements of counsel).
“Parent” has the meaning set forth in the Recitals.
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“Parent Allocated Expense” means, for any period, the sum of all selling, general and administrative expenses of Parent, all as determined for Parent in accordance with GAAP, minus, without duplication, (i) the sum of (A) Depreciation and Amortization Expense, (B) losses and expenses that are properly classified under GAAP as extraordinary, (C) actual one-time and non-recurring fees, expenses and costs relating to any acquisition, business combination transaction or other transaction, in each case, evaluated, negotiated and, if applicable, implemented in accordance with the Management Agreement (whether or not closed), (D) any non-cash compensation charge or expense realized or resulting from any contingent payment obligation or similar payment obligation (including any “earn-out” obligation) that would require payments to any Person arising in connection with any acquisition, business combination transaction or other transaction consummated in accordance with the Management Agreement, (E) any impairment charges or asset write-offs, in each case, pursuant to GAAP, and (F) any other non-cash non-recurring expenses, plus, without duplication, (ii) the sum of the amounts for such period included in determining such selling, general and administrative expenses of Parent of (A) any gains on sales of assets and gains that are properly classified under GAAP as extraordinary, all as determined for Parent in accordance with GAAP and (B) any cash payments made during such period in respect of non-cash charges described in clause (i)(F) taken in a prior period.
“Parent Trading Price” means the VWAP of one (1) share of Class A Common Stock for the five (5) consecutive trading days ending on the trading day immediately preceding the date that the Termination Fee is finally determined pursuant to Section 11(e) (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“Person” means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any federal, state, county or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing.
“Quarterly Management Fee” means, with respect to each fiscal quarter, the quarterly management fee, payable in arrears, in a cash amount equal to two-and-a-half percent (2.5%) of LTM Adjusted EBITDA, measured for the period ending on the last day of the fiscal quarter then ended. The Quarterly Management Fee shall be pro-rated for partial periods, to the extent necessary, as described more fully elsewhere herein.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor statute thereto.
“Subsidiary” means a corporation, limited liability company, partnership, joint venture or other entity or organization of which: (i) the Company or any other subsidiary of the Company is a general partner or managing member, or (ii) voting power to elect a majority of the board of directors, trustees or other Persons performing similar functions with respect to such entity or organization is held by the Company or by any one or more of the Company’s subsidiaries; provided that, for the avoidance of doubt, it is acknowledged and agreed that (x) the Company and its Subsidiaries shall not be deemed to be Subsidiaries of the Manager and its Subsidiaries and (y) other Persons managed by the Manager shall not be deemed to be Subsidiaries of the Manager or its Subsidiaries or the Company or its Subsidiaries.
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“Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided 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 the Company or its Subsidiaries shall be a Swap Agreement.
“TargetCo” has the meaning set forth in the Recitals.
“Termination Fee” means an amount equal to the greatest of (i) the Fair Market Value of Fees Payable, (ii) the Net Present Value of Fees Payable and (iii) the Multiple on Fees Value.
“Termination Fee Negotiation Period” has the meaning set forth in Section 11(e)(i).
“Termination Make-Whole Cash Payment” has the meaning set forth in Section 11(f).
“Termination Shares” has the meaning set forth in Section 11(f).
“Termination Shares Value” means an amount equal to (i) the aggregate number of Termination Shares multiplied by (ii) the Parent Trading Price.
“Termination Without a Company Kick-Out Event” has the meaning set forth in Section 11(b).
“Trading Days” means a day on which NYSE is open for the transaction of business.
“Transaction Agreement” has the meaning set forth in the Recitals.
“Valuation Firm” has the meaning set forth in Section 11(e)(iii).
“VWAP” means the daily per share volume-weighted average price of Class A Common Stock on the principal U.S. securities exchange, “over-the-counter” market or automated or electronic quotation system on which Class A Common Stock trades, as displayed under the heading Bloomberg VWAP on the Bloomberg page designated for Class A Common Stock (or its equivalent successor if such page is not available) in respect of the period from the open of trading on such day until the close of trading on such day (or if such volume-weighted average price is unavailable, the per share volume-weighted average price of such Class A Common Stock on such day (determined without regard to afterhours trading or any other trading outside the regular trading session or trading hours)).
(b) As used herein, “fiscal quarters” shall mean the applicable fiscal quarter of Parent and “fiscal year” shall mean the applicable fiscal year of Parent. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified. References herein to “Sections,” “clauses” and other subdivisions, and to Schedules, without reference to a document are to the specified Sections, clauses and other subdivisions of and Schedules to, this Agreement. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. References to “dollars” or “$” mean United States dollars, unless otherwise clearly indicated to the contrary.
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**Section 2.**Appointmentof the Manager. To the fullest extent permitted by Delaware law, the Exchange Act, the Securities Act, the NYSE Rules and any other applicable rule or regulation (including the rules and regulations promulgated under the Exchange Act and the Securities Act), the Company hereby appoints the Manager (and grants to it all powers necessary, convenient or appropriate) to, and the Manager hereby agrees and covenants that it shall manage the day-to-day business and operations and oversee the strategy of the Company and its controlled Affiliates in accordance with the terms of this Agreement.
**Section 3.**Obligationsof the Manager.
(a) Subject to Section 2, the Manager shall use commercially reasonable efforts to perform (or cause to be performed) the following services (the “Services”):
(i) establishing and monitoring the Company’s objectives, financing activities and operating performance;
(ii) selecting and overseeing the Company’s management team and their performance;
(iii) reviewing and approving the Company’s compensation and benefit plans, programs, policies, arrangements and agreements, including with respect to any grants of equity awards to Persons providing services to the Company;
(iv) devising capital allocation strategies, plans and policies of the Company;
(v) setting the budget parameters and expense guidelines of the Company and monitoring compliance therewith;
(vi) identifying, analyzing and overseeing the consummation of business opportunities and potential acquisitions, dispositions and other business combinations;
(vii) originating and recommending opportunities to form or acquire, and structuring and managing, any joint ventures;
(viii) leading or overseeing negotiations with potential participants in any business opportunity under the Company’s consideration and determining (or delegating to any officer of the Company the decision to determine) if and when to proceed;
(ix) engaging and supervising, on the Company’s behalf, independent contractors and third-party service providers;
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(x) communicating on behalf of the Company with the holders of any securities of the Company (A) as required to satisfy any reporting and other requirements of any Governmental Authority having jurisdiction over the Company and (B) to maintain effective relations with such holders;
(xi) overseeing all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day activities (other than with the Manager or its Affiliates);
(xii) counselling the Company in connection with decisions required by Delaware law to be made by the Board; and
(xiii) performing such other services from time to time in connection with the management of the business and affairs of the Company and its activities as the Company shall reasonably request and/or the Manager shall deem appropriate under the particular circumstances.
(b) From the Effective Date until the termination of this Agreement, if any, in accordance with Section 11, the Company, on behalf of itself and its controlled Affiliates, hereby constitutes, appoints and authorizes the Manager, and any officer of the Manager acting on its behalf from time to time, as the true and lawful agent and attorney-in-fact of the Company and such controlled Affiliates, in its or their respective names, places and steads, to negotiate, execute, deliver and enter into any certificates, instruments, agreements, authorizations and other documentation in the name and on behalf of the Company or any such controlled Affiliate as the Manager, in its sole discretion, deems necessary or appropriate to perform the Services, in each case subject to subject to Section 2. This power of attorney is deemed to be coupled with an interest. In performing the Services, as an agent of the Company or any of its controlled Affiliates, the Manager shall have the right to exercise all powers and authority which are reasonably necessary and customary to perform its obligations under this Agreement.
(c) The Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of the Persons as the Manager deems necessary or advisable to perform the Services (which Persons may include Affiliates of the Manager), in each case, subject to Section 2; provided that any such services may be provided by such Affiliates only to the extent such services are on arm’s length terms. In performing or causing to be performed the Services, the Manager shall be entitled to rely reasonably on qualified experts and professionals (including, accountants, legal counsel and other professional service providers) hired by the Manager.
(d) At the Company’s reasonable request, the Manager shall prepare, or, at the sole cost and expense of the Company, cause to be prepared, (i) reports and other information on the Company’s operations and (ii) other information relating to any proposed or consummated business acquisition or divestiture.
(e) At all times during the term of this Agreement, the Manager shall maintain “errors and omissions” insurance coverage and other insurance coverage that is customarily carried by managers performing functions similar to those of the Manager under this Agreement with respect to assets similar to the assets of the Company and its Subsidiaries.
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(f) Officers, employees and agents of the Manager and its Affiliates may serve as directors, officers, employees, agents, nominees or signatories for the Company or any of its controlled Affiliates. When executing documents or otherwise acting in such capacities for the Company or any of its controlled Affiliates, such Persons shall indicate in what capacity they are executing on behalf of the Company or any of its controlled Affiliates.
(g) The Manager shall refrain from any action that, in its sole judgment made in good faith, would materially violate any law, rule or regulation of any Governmental Authority having jurisdiction over the Company and its controlled Affiliates. Notwithstanding the foregoing, neither the Manager nor any of its Affiliates shall be liable to the Company, any of its controlled Affiliates or any of their respective Affiliates or equityholders for any act or omission by the Manager or any of its Affiliates, except as provided in Section 9.
(h) For the avoidance of doubt, and not withstanding anything to the contrary in this Agreement, the entry by the Company and the Manager into this Agreement and the performance of their respective obligations hereunder shall not affect the authority, duties or responsibilities of the executive officers of Parent or the Company, including the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer of Parent, or the Executive Chairman of the Company.
**Section 4.**Obligationsof the Company.
(a) The Company agrees to take all actions reasonably required to permit and enable the Manager to carry out its duties and obligations under this Agreement, including, all steps reasonably necessary to allow the Manager, subject to Section 2, to make any filing required to be made under the Securities Act, Exchange Act, the NYSE Rules or other applicable law, rule or regulation on behalf of the Company in a timely manner.
(b) The Company further agrees to use commercially reasonable efforts to make available to the Manager all resources, information and materials reasonably requested by the Manager to enable the Manager to satisfy its obligations hereunder, including its obligations to deliver financial statements and any other information or reports with respect to the Company.
(c) The Company hereby acknowledges and agrees that the Manager may use the name “Husky Technologies” and other trademarks of the Company in connection with its activities under this Agreement (including, in connection with the preparation of any filing with or notification to any Governmental Authority made on behalf of the Company or any of its Subsidiaries). The parties hereto will reasonably cooperate to maintain reasonable quality control with respect to the Manager’s use of such trademarks.
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**Section 5.**AdditionalActivities of the Manager; Non-Solicitation.
(a) Nothing in this Agreement shall (i) prevent the Manager or any of its Affiliates, or any of its or their officers, directors or employees, from engaging in other businesses or from rendering services of any kind to any other Person, whether or not the business objectives or policies of any such other Person are similar to those of the Company, (ii) in any way bind or restrict the Manager or any of its Affiliates, or any of its or their officers, directors or employees from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom the Manager or any of its Affiliates, or any of its or their officers, directors or employees may be acting, or (iii) prevent the Manager or any of its Affiliates from receiving fees or other compensation or profits from such activities described in this Section 5(a) which shall be for the Manager’s (and/or its Affiliates’) sole benefit. In furtherance of the foregoing, the Company acknowledges and agrees that (A) this Agreement and the Manager’s obligation to provide the Services shall not create an exclusive relationship between the Manager and its Affiliates, on the one hand, and the Company and its controlled Affiliates, on the other hand, (B) the Manager and its Affiliates may engage in or possess an interest in other profit-seeking or business ventures of any kind, nature or description, independently or with others, whether or not such ventures are competitive with the Company or any of its controlled Affiliates and the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to the Manager and its Affiliates, (C) none of the Manager or any of its Affiliates who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company or any of its controlled Affiliates shall have any duty to communicate or offer such opportunity to the Company or any of its controlled Affiliates, and the Manager and its Affiliates shall not be liable to the Company or any of its controlled Affiliates for breach of any fiduciary or other duty by reason of the fact that the Manager or any of its Affiliates pursues or acquires for, or directs such opportunity to another Person or does not communicate such opportunity or information to the Company or any of its controlled Affiliates and (D) the Manager and its Affiliates may, in the Manager’s sole and absolute discretion, allocate opportunities among the Company and such other Persons to which the Manager renders services of any kind, or for which the Manager otherwise acts as an external manager, in any manner that the Manager determines would be necessary, convenient or appropriate (which determination, for the avoidance of doubt, may be based upon such allocation of opportunities that maximizes the aggregate management fees received by the Manager pursuant to this Agreement and any other management agreement or similar agreement entered into between the Manager and such other Persons). Notwithstanding anything herein to the contrary, (x) nothing in this Agreement shall be construed to impose on the Manager an express or implied fiduciary duty to the Company, any of its controlled Affiliates or their respective holders of equity or voting interests, and (y) none of the Company or any of its controlled Affiliates shall have any rights in or to such business ventures, potential transactions, agreements, arrangements, opportunities or other matters referred to in this Section 5(a), or the income or profits or losses derived therefrom, and the pursuit of such business ventures, potential transactions, agreements, arrangements, opportunities or other matters, even if competitive with the activities of the Company and its controlled Affiliates, shall not be deemed wrongful or improper.
(b) In the event of a Termination Without a Company Kick-Out Event by the Company pursuant to Section 11(b), for a period of two (2) years following such termination, the Company shall not, without the consent of the Manager, employ or otherwise retain any employee of the Manager or any of its Affiliates or any Person who has been employed by the Manager or any of its Affiliates at any time within the two (2)-year period immediately preceding the date on which such Person commences employment with or is otherwise retained by the Company (any such Person, a “Covered Person”); provided that the preceding sentence shall not restrict the Company from employing or retaining any Covered Person who devotes substantially all of such Covered Person’s business time and attention to the Company’s Business, other than with respect to acquisitions, dispositions and other business combinations, joint ventures or other investments of the Company or any of its Subsidiaries. The Company acknowledges and agrees that, in addition to any damages, the Manager may be entitled to equitable relief for any violation of this Section 5(b) by the Company, including, injunctive relief.
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**Section 6.**Records;Confidentiality.
(a) The Manager shall maintain appropriate books of account, records and files relating to services performed hereunder, and such books of account, records and files shall be accessible for inspection by representatives of the Company at any time during normal business hours upon advance written notice. The Manager shall have full responsibility for the maintenance, care and safekeeping of all such books of account, records and files (it being understood that if any such recordkeeping services are performed by service providers to the Company and such service providers are monitored by the Manager with due care, the Manager shall be in compliance with the foregoing).
(b) Until the third (3^rd^) anniversary of any termination of this Agreement pursuant to Section 11 (or in the case of trade secrets, for so long as such trade secrets constitute trade secrets under applicable law), the Manager shall keep confidential any and all Confidential Information and shall not use Confidential Information other than in connection with the performance of the Services or disclose Confidential Information, in whole or in part, to any Person other than (i) to officers, directors, employees, agents, representatives, advisors of the Manager or its Affiliates who need to know such Confidential Information for the purpose of rendering services hereunder, (ii) to appraisers, lenders or other financing sources, co-originators, custodians, administrators, brokers, commercial counterparties or any similar entity and others in the ordinary course of the Company’s Business ((i) and (ii) collectively, “Manager Permitted Disclosure Parties”), (iii) in connection with any governmental or regulatory filings of the Company or its Affiliates or disclosure or presentations to investors in the Company’s Business (subject to compliance with applicable law), (iv) to Governmental Authorities having jurisdiction over the Company or the Manager, (v) as requested by law, legal process or regulatory request to which the Manager or any Person to whom disclosure is permitted hereunder is a party or subject, (vi) to existing or prospective investors in the Company’s Business and their advisors to the extent such Persons reasonably request such information, subject to an undertaking of confidentiality, non-disclosure and non-use, or (vii) with the consent of the Company, including pursuant to a separate agreement entered into between the Manager and the Company. The Manager agrees to inform each of its Manager Permitted Disclosure Parties of the non-public nature of the Confidential Information. Nothing herein shall prevent the Manager from disclosing Confidential Information (A) upon the order of any court or administrative agency, (B) upon the request or demand of, or pursuant to any law or regulation to, any regulatory agency or authority, (C) to the extent reasonably required in connection with the exercise of any remedy hereunder, or (D) to its legal counsel or independent auditors; provided, however, that with respect to clauses (A) and (B), it is agreed that, so long as not legally prohibited, the Manager will (x) consider, and if advisable seek, at the Company’s sole expense, an appropriate protective order or confidentiality agreement, (y) notify the Company of such disclosure, and (z) in the absence of an appropriate protective order or confidentiality agreement, disclose only that portion of such information that is responsive to such request or demand.
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**Section 7.**Compensation.
(a) For the Services rendered, the Company shall pay the Quarterly Management Fees to the Manager. The Manager will not receive any Quarterly Management Fees for periods prior to the Effective Date. The Manager may (at its sole discretion) elect not to receive, or to discount, any Quarterly Management Fee for a given quarterly period, which election shall not be deemed to constitute a waiver or discount of the Quarterly Management Fee in any future periods and shall, for the avoidance of doubt, be ignored in calculating the Termination Fee (and the components thereof).
(b) The parties hereto acknowledge that the Quarterly Management Fee is intended in part to compensate the Manager and its Affiliates for the costs and expenses (other than reimbursable costs and expenses) the Manager will incur hereunder, as well as certain expenses not otherwise reimbursable under Section 8, in order for the Manager to provide the Services to the Company. A management fee paid by the Manager under a sub-management agreement (if any) shall not constitute an expense reimbursable by the Company under this Agreement or otherwise unless otherwise approved by the Company.
(c) Each Quarterly Management Fee shall be payable in arrears in cash, commencing with the fiscal quarter in which the Effective Date occurs. If applicable, the initial and final Quarterly Management Fees shall be pro-rated based on the number of days during the initial and final fiscal quarter, respectively, that this Agreement is in effect. The Manager shall calculate each Quarterly Management Fee, and deliver such calculation to the Company, within thirty (30) days following the last day of each fiscal quarter and the Company shall pay the Manager the applicable Quarterly Management Fee for such fiscal quarter within three (3) Business Days after the date of delivery to the Company of such computations.
(d) The Company shall make any payments due hereunder to the Manager or, if the Manager directs, to an Affiliate of the Manager.
(e) The parties hereto acknowledge that, for the avoidance of doubt, any fees under this Agreement, the CompoSecure Management Agreement and any other management agreement that may be entered into from time to time pursuant to Section 15(d) of the CompoSecure Management Agreement or Section 15(d) of this Agreement, shall be calculated in a manner such that there will be no duplication of fees nor fee deductions, including with respect to Parent Allocated Expenses.
**Section 8.**Expenses.
(a) Subject to Section 8(b) and except as otherwise specifically acknowledged and agreed in writing, the Manager shall be responsible for the expenses related to any and all personnel of the Manager and its Affiliates who provide services to the Company pursuant to this Agreement or otherwise (including, each of the officers of the Company and any directors of the Company who are also directors, officers or employees of the Manager or any of its Affiliates), including, salaries, bonuses and other wages, payroll taxes and the cost of employee benefit plans of such personnel, and costs of insurance (other than insurance specifically required under this Agreement, including pursuant to Section 3(e)) with respect to such personnel (collectively, “Manager Expenses”).
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(b) The Company shall pay all of its costs and expenses and shall reimburse the Manager or its Affiliates for documented costs and expenses of the Manager and its Affiliates incurred on behalf of the Company other than Manager Expenses (collectively, “Company Expenses”). The Manager, in good faith, shall determine whether a cost or expense is a Manager Expense or Company Expense. Without limiting the generality of the foregoing, it is specifically agreed that the following costs and expenses shall be paid by the Company and shall not be paid by the Manager or its Affiliates: (i) fees, costs and expenses in connection with transaction costs incident to the acquisition, negotiation, structuring, trading, settling, disposition and financing of any investments of the Company and its Subsidiaries (whether or not consummated); (ii) fees, costs and expenses of legal, tax, accounting, consulting, auditing (including internal audit), finance, administrative, investment banking, capital market and other similar services rendered to the Company or any of its Subsidiaries (including, where the context requires, through one or more third-parties and/or Affiliates of the Manager) or, if provided by the Manager’s personnel, in accordance with Section 3(c); (iii) the compensation and expenses of the directors and officers of the Company and its Subsidiaries, as applicable, the cost of liability insurance to indemnify such directors and officers and the non-cash equity incentive compensation (that is denominated in, or the value of which is determined with reference to, shares of capital stock of Parent) of the personnel of the Company and its Subsidiaries, the Manager and their respective Affiliates who provide services to the Company and its Affiliates; (iv) interest and fees and expenses arising out of borrowings made by the Company or any of its Subsidiaries, including, costs associated with the establishment and maintenance of any credit facilities, other financing arrangements, or other indebtedness of the Company or any of its Subsidiaries (including commitment fees, accounting fees, legal fees, closing and other similar costs) or any securities offerings of the Company or any of its Subsidiaries; (v) expenses connected with communications to holders of securities of the Company or any of its Subsidiaries and other bookkeeping and clerical work necessary in maintaining relations with holders of such securities and in complying with the continuous reporting and other requirements of any Governmental Authorities having jurisdiction over the Company or any of its Subsidiaries, including, all costs of preparing and filing required reports with the SEC, the costs payable by the Company or any of its Subsidiaries to any transfer agent and registrar in connection with the listing and/or trading of the securities of the Company or any of its Subsidiaries on any exchange, the fees payable by the Company or any of its Subsidiaries to any such exchange in connection with its listing, costs of preparing, printing and mailing any other reports or related statements of the Company or any of its Subsidiaries; (vi) costs of the Company or any of its Subsidiaries associated with technology-related expenses, including without limitation, any computer software or hardware, electronic equipment or purchased information technology services from third-party vendors or Affiliates of the Manager, technology service providers and related software/hardware utilized in connection with the investment and operational activities of the Company and its Subsidiaries; (vii) expenses incurred by managers, officers, personnel and agents of the Manager for travel on behalf of the Company or any of its Subsidiaries and other Out-of-Pocket Expenses incurred by them in connection with the Services or the acquisition, financing, refinancing, sale or other disposition of an investment or any securities offerings of the Company or any of its Subsidiaries; (viii) expenses incurred with respect to market information systems and publications, research publications and materials, including, news research and quotation equipment and services, obtained or used by the Manager in connection with rendering the Services or performing any other duty hereunder; (ix) the costs and expenses relating to ongoing regulatory compliance matters and regulatory reporting obligations relating to the Company’s Business; (x) the costs of any litigation involving the Company or any of its Subsidiaries or its or their respective assets and the amount of any judgments or settlements paid in connection therewith, (xi) all taxes and license fees of the Company and its Subsidiaries; (xii) all costs of directors and officers, liability or other insurance relating to the Company’s Business and other insurance costs incurred in connection with the operation of the Company’s Business, except for the costs attributable to the insurance that the Manager elects to carry for itself and its personnel, and all indemnification or extraordinary expense or liability relating to the Company’s Business; (xiii) costs and expenses incurred in contracting with any third-parties, in whole or in part, on behalf of the Company or any of its Subsidiaries; (xiv) all other costs and expenses relating to the Company’s Business and operations, including, the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of businesses, including appraisal, reporting, audit and legal fees; (xv) expenses relating to any office(s) or office facilities, including, disaster backup recovery sites and facilities, maintained for the Company, any of its Subsidiaries or any investments of the Company and its Subsidiaries separate from the office or offices of the Manager; (xvi) expenses connected with the payments of interest, dividends or distributions in cash or any other form authorized or caused to be made to or on account of holders of securities of the Company or any of its the Subsidiaries, including, in connection with any dividend reinvestment plan; (xvii) any judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company or any of its Subsidiaries, or against any trustee, director, partner, member or officer of the Company or any of its Subsidiaries in such Person’s capacity as such for which the Company or any of its Subsidiaries is required to indemnify such trustee, director, partner, member or officer by any Governmental Authority; and (xviii) all other expenses actually incurred by the Manager (except as otherwise specifically excluded herein) which are reasonably necessary for the performance by the Manager of its duties and functions under this Agreement.
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(c) The Manager may, at its option, elect not to seek reimbursement for certain expenses during a given quarterly period, which determination shall not be deemed to construe a waiver of reimbursement for the same type of expenses or similar expenses in future periods if such expenses or similar expenses are incurred in future periods.
(d) The provisions of this Section 8 shall survive any termination of this Agreement pursuant to Section 11 to the extent such expenses have previously been incurred or are incurred in connection with such termination.
**Section 9.**Limitsof the Manager’s Responsibility; Indemnification.
(a) The Manager assumes no responsibility under this Agreement other than to render the Services in good faith in accordance with this Agreement. To the fullest extent permitted by Delaware law, the Manager and its Affiliates, including their respective directors, officers, employees, managers, trustees, control persons, partners, stockholders and equityholders, will not be liable to the Company, any of its Subsidiaries or any of their respective Affiliates or equityholders, for any acts or omissions by the Manager or its officers, employees or Affiliates performed in accordance with, pursuant to, or in furtherance of, this Agreement, whether by or through attempted piercing of the corporate veil, by or through a claim, by the enforcement of any judgment or assessment or by any legal or equitable proceeding (including any threatened or ongoing investigative, administrative, judicial or regulatory action or proceeding), or by virtue of any statute, regulation or other applicable law, or otherwise (together, “Actions”), except by reason of acts or omission constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of their respective duties under this Agreement. The Company shall, to the fullest extent permitted by Delaware law, reimburse, indemnify and hold harmless the Manager, its Affiliates, and the directors, officers, employees and stockholders of the Manager and its Affiliates including their respective directors, officers, employees, managers, trustees, control persons, partners, stockholders and equityholders (each, a “Manager Indemnified Party”), (i) of and from any and all Losses in respect of or arising from any acts or omissions of such Manager Indemnified Party performed in good faith in accordance with, pursuant to, or in furtherance of, this Agreement and not constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of duties of such Manager Indemnified Party under this Agreement and (ii) of and from any Out-of-Pocket Expenses incurred in connection with investigating, preparing or defending any Actions as such expenses are incurred or paid (provided that if it is ultimately finally judicially determined in a court of competent jurisdiction that such Manager Indemnified Party is not entitled to indemnification hereunder, such Manager Indemnified Party shall reimburse the Company for any Out-of-Pocket Expenses already paid or reimbursed by the Company in respect of which such final judicial determination was made). Notwithstanding the above, the Manager will not be liable for trade errors that may result from ordinary negligence, errors in the investment decision making process and/or in the trade process.
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(b) The Manager shall, to the fullest extent permitted by Delaware law, reimburse, indemnify and hold harmless the Company, its Subsidiaries and the directors, officers and employees of the Company and its Subsidiaries, as applicable (each, a “Company Indemnified Party”, a Manager Indemnified Party and a Company Indemnified Party are each sometimes hereinafter referred to as an “Indemnified Party”) of and from any and all Losses in respect of or arising from (i) any acts or omissions of the Manager constituting bad faith, fraud, willful misconduct, gross negligence or reckless disregard of duties of the Manager under this Agreement or (ii) any claims by the Manager’s or its Affiliate’s employees relating to the terms and conditions of their employment by the Manager or its Affiliate.
(c) In case any such claim, suit, action, investigation or proceeding (a “Claim”) is brought against any Indemnified Party in respect of which indemnification may be sought by such Indemnified Party pursuant hereto, the Indemnified Party shall give prompt written notice thereof to the indemnifying party, which notice shall include all documents and information in the possession of or under the control of such Indemnified Party reasonably necessary for the evaluation and/or defense of such Claim and shall specifically state that indemnification for such Claim is being sought under this Section 9; provided, however, that the failure of the Indemnified Party to so notify the indemnifying party shall not limit or affect such Indemnified Party’s rights other than pursuant to this Section 9 unless the failure to provide such notice results in material prejudice to the indemnifying party. Upon receipt of such notice of Claim (together with such documents and information from such Indemnified Party), the indemnifying party shall, at its sole cost and expense, in good faith control and defend any such Claim (including any settlement thereof) with counsel reasonably satisfactory to such Indemnified Party, which counsel may, without limiting the rights of such Indemnified Party pursuant to the next succeeding sentence of this Section 9(c), also represent the indemnifying party in such Claim. In the alternative, such Indemnified Party may elect to conduct the defense of the Claim, if (i) such Indemnified Party reasonably determines that the conduct of its defense by the indemnifying party could be materially prejudicial to its interests, (ii) the indemnifying party refuses to assume such defense (or fails to give written notice to the Indemnified Party within ten (10) days of receipt of a notice of Claim that the indemnifying party assumes such defense), or (iii) the indemnifying party shall have failed, in such Indemnified Party’s reasonable judgment, to defend the Claim in good faith. The indemnifying party may settle any Claim against such Indemnified Party; provided that (A) such settlement is without any Losses (including equitable relief) whatsoever to such Indemnified Party, (B) the settlement does not include or require any admission of liability or culpability by such Indemnified Party and (C) the indemnifying party obtains an effective written release of liability for such Indemnified Party from the party to the Claim with whom such settlement is being made, which release must be reasonably acceptable to such Indemnified Party, and a dismissal with prejudice with respect to all claims made by the party against such Indemnified Party in connection with such Claim. Subject to the immediately prior sentence, the applicable Indemnified Party shall reasonably cooperate with the indemnifying party, at the indemnifying party’s sole cost and expense, in connection with the defense or settlement of any Claim in accordance with the terms hereof. If such Indemnified Party is entitled pursuant to this Section 9 to elect to defend such Claim by counsel of its own choosing and so elects, then the indemnifying party shall be responsible for any good faith settlement of such Claim entered into by such Indemnified Party. Except as provided in the immediately preceding sentence, no Indemnified Party may pay or settle any Claim and seek reimbursement therefor under this Section 9.
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(d) Any Indemnified Party entitled to indemnification hereunder shall first seek recovery from any other indemnity then available with respect to portfolio entities and/or any applicable insurance policies by which such Indemnified Party is indemnified or covered prior to seeking recovery hereunder and shall obtain the written consent of the Company or the Manager (as applicable) prior to entering into any compromise or settlement which would result in an obligation of the Company or the Manager (as applicable) to indemnify such Indemnified Party. If such Indemnified Party shall actually recover any amounts under any applicable insurance policies or other indemnity then available, it shall offset the net proceeds so received against any amounts owed by the Company or the Manager (as applicable) by reason of the indemnity provided hereunder or, if all such amounts shall have been paid by the Company or the Manager (as applicable) in full prior to the actual receipt of such net insurance proceeds, it shall pay over such proceeds (up to the amount of indemnification paid by the Company or the Manager (as applicable) to such Indemnified Party) to the Company or the Manager (as applicable). If the amounts in respect of which indemnification is sought arise out of the conduct of the business and affairs of the Company or the Manager and also of any other Person or entity for which the Indemnified Party hereunder was then acting in a similar capacity, the amount of the indemnification to be provided by the Company or the Manager (as applicable) may be limited to the Company’s or the Manager’s (as applicable) allocable share thereof if so determined by the Company or Manager (as applicable) in good faith.
(e) The provisions of this Section 9 shall survive any termination of this Agreement pursuant to Section 11.
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**Section 10.**NoJoint Venture. The Company and the Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them.
**Section 11.**Term;Renewal; Termination.
(a) *Term; Renewal.*This Agreement became effective on the Closing (the “Effective Date”) and shall continue in operation, unless terminated in accordance with the terms hereof, until the tenth (10th) anniversary of the Effective Date (the “Initial Term”). Following the Initial Term, this Agreement shall be deemed renewed automatically for successive and additional ten (10)-year period(s) (each, an “Automatic Renewal Term”) unless the Company or the Manager elects to terminate or not renew this Agreement in accordance with Section 11(b), Section 11(c) or Section 11(d), as applicable. For the avoidance of doubt, during the Initial Term and each Automatic Renewal Term, the Company shall have the Company Kick-Out Right.
(b) Terminationby the Company Without a Company Kick-Out Event. Notwithstanding any other provision of this Agreement to the contrary, upon both (x) the expiration of the Initial Term or an Automatic Renewal Term, as applicable, and (y) one hundred eighty (180) days’ prior written notice to the Manager (the “Company Termination Notice”), the Company may, without the occurrence of a Company Kick-Out Event, decline to renew this Agreement upon a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote) that the Quarterly Management Fees payable to the Manager are not fair, subject to clauses (i)-(iv) below (any such nonrenewal, a “Termination Without a Company Kick-Out Event”). The Company Termination Notice shall include reasonable supporting detail for the Independent Directors’ determination that the Quarterly Management Fees payable to the Manager are not fair.
(i) No later than five (5) Business Days following the receipt by the Manager of the Company Termination Notice, the management teams of the Company and the Manager shall engage in good faith discussions and negotiations to resolve the Independent Directors’ concerns that the Quarterly Management Fees are not fair for a period of sixty (60) days (the “Consultation Period”).
(ii) If, at the end of the Consultation Period, the Company and the Manager have been unable to resolve such concerns, then the Company and the Manager shall attempt in good faith to retain as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Consultation Period) an agreed upon impartial professional mediator who is a partner or a retired partner, in each case, in a law firm of national standing based in New York City with experience in investment management (any such Person, a “Mediator”) for a nonbinding mediation of such dispute (such process, a “Mediation”); provided that if the Company and the Manager cannot agree on a Mediator within such ten (10)-Business Day period, or if the Mediator agreed upon by the Company and the Manager does not accept being retained for the Mediation, then within an additional ten (10) Business Days, the Company and the Manager shall each select one (1) Mediator and those two (2) Mediators shall, within ten (10) Business Days after their selection, select a third (3^rd^) Mediator. The Mediation shall be conducted by the Mediator selected in accordance with the preceding sentence on a strictly confidential basis, and no participant shall disclose the existence, nature, any documents, exhibits or information exchanged or presented, in connection with such Mediation, or the result of the Mediation, to any third-party, with the sole exceptions of its legal counsel and/or tax advisor, all of whom shall be bound by these confidentiality terms. The Company and the Manager agree to take all steps necessary to protect the confidentiality of the materials in respect of the Mediation, agree to file (and, if so required by applicable court rules, seek leave to file) confidential information (and documents containing confidential information) under seal, and agree to the entry of an appropriate protective order encompassing the confidentiality terms contained herein.
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(iii) In the event that the Company and the Manager are able to resolve such concerns pursuant to Section 11(b)(i) or Section 11(b)(ii) prior to the Effective Termination Date, then the Termination Fee that became payable upon the Manager’s receipt of the Company Termination Notice delivered by the Company pursuant to Section 11(b) shall no longer be payable, (B) such Company Termination Notice shall be deemed to be of no force and effect, (C) the Company and the Manager shall as promptly as practicable (and in no event later than five (5) Business Days following the resolution of such concerns) execute and deliver an amendment to this Agreement setting forth the revised Quarterly Management Fee as then agreed upon by the Company and the Manager and (D) this Agreement, as so amended, shall continue in full force and effect on the terms stated herein and in such amendment.
(iv) In the event that the Company and the Manager are unable to reach an understanding with respect to the Quarterly Management Fee, the Agreement shall be deemed terminated and the Company shall pay to the Manager the Termination Fee in accordance with Section 11(f).
(c) Termination bythe Company Upon a Company Kick-Out Event. The Company may terminate this Agreement effective upon thirty (30) days’ prior written notice of termination from the Company to the Manager, without payment of the Termination Fee, upon the occurrence of a Company Kick-Out Event.
(d) Termination bythe Manager. The Manager shall have the following rights to terminate this Agreement:
(i) No later than one hundred eighty (180) days prior to the expiration of the Initial Term or the then current Automatic Renewal Term, the Manager may deliver written notice to the Company informing it of the Manager’s intention to decline to renew this Agreement, whereupon this Agreement shall not be renewed and extended and this Agreement shall terminate effective on the expiration of the then-current term. The Company shall not be required to pay to the Manager the Termination Fee if the Manager terminates this Agreement pursuant to this Section 11(d)(i).
(ii) The Manager may terminate this Agreement effective upon sixty (60) days’ prior written notice of termination to the Company (any such notice, a “Manager Termination Notice”) (A) in the event that the Company shall default in the performance or observance of any material term, condition or covenant contained in this Agreement and such default shall continue for a period of thirty (30) days after written notice thereof specifying such default and requesting that the same be remedied in such thirty (30) day period or (B) upon the termination of the Letter Agreement, prior to any nonrenewal or termination of this Agreement. The Company shall be required to pay to the Manager the Termination Fee in accordance with Section 11(f) if the Manager terminates this Agreement pursuant to clause (A) or (B) above.
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(iii) The Manager may terminate this Agreement if the Company becomes required to register as an investment company under the Investment Company Act, with such termination deemed to occur immediately before such event, in which case the Company shall not be required to pay to Manager the Termination Fee.
(e) Determinationof the Termination Fee. If a Termination Fee becomes payable by the Company to the Manager upon a termination of this Agreement pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), the Termination Fee shall be finally determined as follows:
(i) If the Company and the Manager agree on the Termination Fee within thirty (30) days following receipt (A) by the Manager of a Company Termination Notice delivered by the Company pursuant to Section 11(b) or (B) by the Company of a Manager Termination Notice delivered by the Manager pursuant to Section 11(d)(ii)(A) or Section 11(d)(ii)(B) (the “Termination Fee Negotiation Period”), then the finally determined Termination Fee shall be the amount agreed in writing by the Company and the Manager.
(ii) If the Company and the Manager do not agree on the Termination Fee prior to the expiration of the Termination Fee Negotiation Period, then, as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Termination Fee Negotiation Period), the Manager shall retain an internationally recognized top-tier investment bank (the “Manager-Selected Valuation Firm”) and the Company shall retain a different internationally recognized top-tier investment bank (the “Company-Selected Valuation Firm”), in each case, to deliver to the Manager and the Company, within thirty (30) days following the tenth (10^th^) Business Day after the expiration of the Termination Fee Negotiation Period (the “Initial Valuation Firm Review Period”), a report setting forth in reasonable detail such Valuation Firm’s good faith determination of (A) the Fair Market Value of Fees Payable, (B) the Net Present Value of Fees Payable, (C) the Multiple on Fees Payable and (D) the Termination Fee. If the Termination Fee determined by the Manager-Selected Valuation Firm and the Termination Fee determined by the Company-Selected Valuation Firm are within ten percent (10%) of each other, then the finally determined Termination Fee shall be the average of such Termination Fees determined by the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm.
(iii) If the Termination Fees determined by the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm are not within ten percent (10%) of each other, then:
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(A) as soon as reasonably practicable (but in no event later than ten (10) Business Days after the expiration of the Initial Valuation Firm Review Period, the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm shall select a third (3^rd^) internationally recognized top-tier investment bank (the “Investment Bank-Selected Valuation Firm”, together with the Manager-Selected Valuation Firm and the Company-Selected Valuation Firm, the “Valuation Firms”) to deliver to the Manager and the Company, within thirty (30) days following the tenth (10^th^) Business Day after the expiration of the Initial Valuation Firm Review Period, a report setting forth in reasonable detail such Valuation Firm’s good faith determination of (1) the Fair Market Value of Fees Payable, (2) the Net Present Value of Fees Payable, (3) the Multiple on Fees Payable and (4) the Termination Fee; and
(B) the finally determined Termination Fee shall be the average of the Termination Fee determined by the Investment Bank-Selected Valuation Firm and whichever Termination Fee determined by the Manager-Selected Valuation Firm or the Company-Selected Valuation Firm is closer in value to the Termination Fee determined by the Investment Bank-Selected Valuation Firm.
(iv) In preparing their respective reports, each Valuation Firm shall (A) determine the Termination Fee and components thereof in accordance with the terms of this Agreement, (B) be provided with the same access to the Company’s and the Manager’s respective management teams and the same source documents and information regarding the Company and the Manager and (C) take into account all factors such Valuation Firm determines relevant to such determination, including the Company’s historical financial and operating results, the Company’s future business prospects and projected financial and operating results and public and private market and industry conditions. Each such report prepared shall set forth a single point determination (and not a range of values) of the Termination Fee.
(v) The Manager shall bear the fees and expenses of the Manager-Selected Valuation Firm. The Company shall bear the fees and expenses of the Company-Selected Valuation Firm. The fees and expenses of the Investment Bank-Selected Valuation Firm shall be borne by the party hereto whose Valuation Firm’s determination of the Termination Fee was the furthest from the Termination Fee determined by the Investment-Bank Selected Valuation Firm, or, if the determinations of such other Valuation Firms were equally different from that determined by the Investment Bank-Selected Valuation Firm, then the Investment Bank-Selected Valuation Firm’s fees and expenses shall be borne equally by the Manager and the Company.
(f) Paymentof the Termination Fee. Within five (5) Business Days of the determination of the Termination Fee pursuant to Section 11(e), the Company shall pay to the Manager the Termination Fee, in cash, by wire transfer of immediately available funds, to one (1) or more accounts designated in writing by the Manager. Notwithstanding anything to the contrary in this Agreement, at the option of the Company, by action of a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote) and upon written notice to the Manager no later than two (2) Business Days after the determination of the Termination Fee pursuant to Section 11(e), the Company’s obligation to pay the Termination Fee pursuant to this Section 11(f) may be satisfied by (i) the issuance to the Manager of an aggregate number of shares of Class A Common Stock equal to (A) all or any portion of the Termination Fee divided by (B) the Parent Trading Price (such shares, collectively, the “Termination Shares”) and (ii) to the extent the Termination Fee exceeds the Termination Shares Value, the payment by the Company to the Manager of an amount equal to such excess, in cash, by wire transfer of immediately available funds, to one (1) or more accounts designated in writing by the Manager (such amount, the “Termination Make-Whole Cash Payment”); provided that any Termination Shares shall be issued and any Termination Make-Whole Cash Payment shall be paid to the Manager within five (5) Business Days of the determination of the Termination Fee pursuant to Section 11(e). For the avoidance of doubt, any issuance of Termination Shares pursuant to this Section 11(f) shall be in accordance with applicable laws and stock exchange regulations.
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(g) *No Liability.*Except as expressly provided in Section 5(b), Section 6(b), Section 8 and Section 9 and the Termination Fee that shall become payable by the Company to the Manager upon any termination pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), a termination of this Agreement pursuant to this Section 11 shall be without any further liability or obligation of either party hereto to the other party hereto.
(h) *Cooperation.*Following a termination of this Agreement pursuant to this Section 11, the Manager shall cooperate, at the Company’s request and expense, with the Company in executing an orderly transition of the management of the Company.
**Section 12.**Assignments.
(a) Assignments bythe Manager. This Agreement may not be assigned by the Manager without the consent of the Company, which consent shall be contingent on the affirmative vote of a majority of the Company’s Independent Directors. Notwithstanding the foregoing, the Manager may, at any time without the approval of the Company and without the approval of the Company’s Independent Directors, (i) assign this Agreement to one or more Affiliates of the Manager and (ii) delegate to one or more of its Affiliates, including sub-managers where applicable, the performance of any of its responsibilities hereunder so long as it remains liable for any such Affiliates’ performance. Any such permitted assignment shall bind the assignee under this Agreement in the same manner as the Manager is bound, and the Manager shall be liable to the Company for all acts or omissions of the assignee under any such assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee as the Manager. Nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement.
(b) Assignments bythe Company. This Agreement shall not be assigned by the Company without the prior written consent of the Manager.
**Section 13.**ActionUpon Termination. Notwithstanding anything to contrary contained herein, from and after any Effective Termination Date, the Manager shall not be entitled to compensation for further Services hereunder, but shall be paid all compensation accruing to such Effective Termination Date and, upon a termination of this Agreement pursuant to Section 11(b), Section 11(d)(ii)(A) or Section 11(d)(ii)(B), the Termination Fee.
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**Section 14.**Representationsand Warranties.
(a) The Company hereby represents and warrants to the Manager as follows:
(i) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the limited liability company power and authority and the legal right to own and operate its assets, to lease any property it may operate as lessee and to conduct the business in which it is now engaged and is duly qualified as a foreign limited liability company and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Company and its Subsidiaries, if any, taken as a whole.
(ii) The Company has the limited liability company power and authority and the legal right to make, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary limited liability company action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other Person that has not already been obtained, including stockholders and creditors of the Company, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by the Company in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Company, and this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Company enforceable against the Company in accordance with its terms.
(iii) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on the Company, or any order, judgment, award or decree of any Governmental Authority binding on the Company, or the Governing Agreements of, or any securities issued by the Company or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Company is a party or by which the Company or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Company and its Subsidiaries, if any, taken as a whole, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.
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(b) The Manager hereby represents and warrants to the Company as follows:
(i) The Manager is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the corporate power and authority and the legal right to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on the business operations, assets or financial condition of the Manager.
(ii) The Manager has the corporate power and authority and the legal right to make, deliver and perform this Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Agreement on the terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any other Person, including stockholders of the Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required by the Manager in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered by a duly authorized officer of the Manager, and this Agreement constitutes, and each instrument or document required hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Manager enforceable against the Manager in accordance with its terms.
(iii) The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate any provision of any existing law or regulation binding on the Manager, or any order, judgment, award or decree of any Governmental Authority binding on the Manager, or the Governing Agreements of, or any securities issued by the Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Manager is a party or by which the Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial condition of the Manager, and will not result in, or require, the creation or imposition of any lien or any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.
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**Section 15.**Miscellaneous.
(a) Notices. Any notices that may or are required to be given hereunder by any party to another shall be deemed to have been duly given if (i) personally delivered or delivered by facsimile, when received, (ii) sent by U.S. Express Mail or recognized overnight courier, on the second (2^nd^) following Business Day (or third (3^rd^) following Business Day if mailed outside the United States), (iii) delivered by electronic mail, when received or (iv) posted on a password protected website maintained by the Manager and for which the Company has received access instructions by electronic mail, when posted:
| The<br> Company: | Forge New Holdings, LLC.<br><br> c/o CompoSecure Holdings, L.L.C.<br><br> <br>309 Pierce Street<br><br> <br>Somerset, NJ 08873<br><br> Attention: General Counsel |
|---|---|
| The<br> Manager: | Resolute Holdings Management, Inc.<br><br> <br>445 Park Avenue, Suite 5B<br><br> <br>New York, NY 10022<br><br> <br>Attention: Chief Executive Officer |
(b) BindingNature of Agreement*; Successors and Assigns; No Third-Party Beneficiaries*. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein. Except for Section 5 and Section 9, none of the provisions of this Agreement are intended to be, nor shall they be construed to be, for the benefit of any third-party.
(c) Integration. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.
(d) Additional Agreements. In the event the Company forms any Subsidiary or acquires any business or any other equity interest (or other interest convertible or exchangeable into an equity interest) in any other Person, following the Effective Date, the Company shall, at the Manager’s election, cause any such Subsidiary, business or other Person to enter into a management agreement with the Manager in a form substantially similar to this Agreement (for the avoidance of doubt, there will be no duplication of fees under this Agreement and any such agreement), and, if the Manager so elects shall not make such acquisition in the absence of such a management agreement.
(e) Amendments. Neither this Agreement, nor any terms hereof, may be amended, supplemented or modified except in an instrument in writing executed by the parties hereto.
(f) Governing Law. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties hereto expressly agree that all of the terms and provisions hereof shall be governed by and construed under the laws of the State of Delaware.
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(g) Forum; Consentto Service. To the fullest extent permitted by law, in the event of any proceeding arising out of the terms and conditions of this Agreement, the parties hereto irrevocably (i) consent and submit to the exclusive jurisdiction of the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware), (ii) waive any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines and, (iii) agree that all claims in respect of such a proceeding must be heard and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline jurisdiction over a particular matter, in which case, any state or federal court within the State of Delaware). Process in any such proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Each of the parties hereto hereby agrees and consents that service of any process, summons, notice, or document pursuant to Section 15(a) shall be effective service of process for any suit or proceeding arising out of the terms and conditions of this Agreement.
(h) Waiver of JuryTrial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
(i) Survival of Representationsand Warranties. All representations and warranties made hereunder, and in any document, certificate or statement delivered pursuant hereto or in connection herewith, shall survive the execution and delivery of this Agreement.
(j) NoWaiver*; Cumulative Remedies*. No failure to exercise and no delay in exercising, on the part of a party hereto, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
(k) Costs and Expenses. Each party hereto shall bear its own costs and expenses (including the fees and disbursements of counsel and accountants) incurred in connection with the negotiations, preparation of and entry into this Agreement, and all matters incident thereto, prior to the Effective Time. For the avoidance of doubt, all costs and expenses incurred by the parties hereto on and after the Effective Time in connection with the performance of their respective duties hereunder shall be borne in accordance with Section 8.
(l) Headings. The section and subsection headings in this Agreement are for convenience in reference only and shall not be deemed to alter or affect the interpretation of any provisions hereof.
(m) Counterparts. This Agreement may be executed by the parties to this Agreement on any number of separate counterparts (including by facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
(n) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(o) Action by theCompany. Notwithstanding anything to the contrary in this Agreement, only the Company, by action of a two-thirds (2/3) vote of the Independent Directors (who have not recused themselves with respect to such vote), and for the avoidance of doubt not the Manager, may exercise the Company’s rights or grant any consent, amendment or waiver hereunder, including the termination rights under Section 11(b).
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first written above.
| Company: | |
|---|---|
| Forge New Holdings, LLC, | |
| By: | /s/ Jonathan C.<br> Wilk |
| Name: Jonathan C. Wilk | |
| Title: President | |
| Manager: | |
| Resolute<br> Holdings Management, Inc., | |
| By: | /s/ Thomas R. Knott |
| Name: Thomas R. Knott | |
| Title: Chief Executive Officer |
[Signature Page to Management Agreement]
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Schedule I
Illustrative LTM Adjusted EBITDA Calculation
Exhibit 10.4
First Amendment to theAmended and Restated Waiver Agreement
This First Amendment to the Amended and Restated Waiver Agreement (this “Amendment”) is made as of January 12, 2026, by and among CompoSecure, Inc., a Delaware corporation (the “Company”), Resolute Compo Holdings LLC, a Delaware limited liability company (“Resolute Compo Holdings”), and Tungsten 2024 LLC, a Delaware limited liability company (“Tungsten” and, together with the Company and Resolute Compo Holdings, the “Parties” and each, a “Party”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Governance Agreement (as defined below).
WITNESSETH
WHEREAS, the Company, Resolute Compo Holdings and Tungsten are parties to the Governance Agreement, dated as of September 17, 2024 (the “Governance Agreement”);
WHEREAS, the Company, Resolute Compo Holdings and Tungsten are parties to the Amended and Restated Waiver Agreement, dated as of July 12, 2025 (the “Waiver Agreement”), pursuant to which (a) the Parties waived the Board Size Requirement and (b) the Stockholder waived its right to designate a sixth (6th) Stockholder Director in accordance with the Stockholder Directors Requirement (the “Specified Stockholder Designation Right”), in each case, subject to and in accordance with the terms set forth therein;
WHEREAS, pursuant to Section 5 of the Waiver Agreement, any amendment by any Party of any provision of the Waiver Agreement must be (a) first approved by a majority of the Independent Directors and (b) set forth in an instrument in writing signed by the parties to the Waiver Agreement;
WHEREAS, the Parties desire to amend the Waiver Agreement as set forth in this Amendment; and
WHEREAS, prior to the execution and delivery of this Amendment, a majority of the Independent Directors approved this Amendment.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the Parties agree as follows:
1. The following sentence shall be added as the last sentence to Section 3 of the Waiver Agreement:
Notwithstanding anything to the contrary herein, in the event that either the Board rescinds the Board Size Requirement Waiver pursuant to Section 1 hereof or the Stockholder rescinds the Specified Stockholder Designation Right Waiver pursuant to Section 2 hereof, and, following such rescission, it is necessary to increase the size of the Board for PE Titan CS Holdings, L.P., a Delaware limited partnership (“Platinum”) to be able to exercise its rights pursuant to that certain Investor Rights Agreement, dated as of January 12, 2026, by and between Platinum, and the Company (the “Investor Rights Agreement”), the Board shall adopt resolutions increasing the size of the Board to a number of members that enables Platinum to exercise its rights pursuant to the Investor Rights Agreement.
2. Except to the extent specifically amended hereby, the Waiver Agreement remains unchanged and in full force and effect. From and after the execution of this Amendment, each reference in the Waiver Agreement to “this Waiver Agreement,” “hereof”, “herein”, and words of similar import, will be deemed to mean the Waiver Agreement, as amended by this Amendment.
3. Section 5 of the Waiver Agreement is hereby incorporated by reference as if set forth in this Amendment in its entirety and shall apply mutatis mutandis.
[Signature page follows]
IN WITNESS WHEREOF, each of the Parties has executed and delivered this Amendment as of the date first above written.
| COMPOSECURE, INC. | |
|---|---|
| By: | /s/<br> Thomas R. Knott |
| Name: | Thomas R. Knott |
| Title: | Chief Investment<br>Officer |
| RESOLUTE COMPO HOLDINGS, LLC | |
| By: | /s/ John D.<br> Cote |
| Name: | John D. Cote |
| Title: | John D. Cote,<br>Manager of Tungsten 2024 LLC, its managing member |
| TUNGSTEN 2024 LLC | |
| By: | /s/ John D.<br> Cote |
| Name: | John D. Cote |
| Title: | Manager |
Exhibit 16.1
| GRANT THORNTON LLP | January 12, 2026 | |
|---|---|---|
| 757 Third Ave., 9th Floor | ||
| New York, NY 10017 | ||
| D +1 212 599 0100 | U.S. Securities and Exchange Commission | |
| F +1 212 370 4520 | Office of the Chief Accountant | |
| 100 F Street, NE | ||
| Washington, DC 20549 | ||
| RE: | CompoSecure, Inc. | |
| File No. 001-39687 | ||
| Dear Sir or Madam: | ||
| We have read Item 4.01 of Form 8-K of<br> CompoSecure, Inc. dated January 12, 2026, and agree with the statements concerning our Firm contained therein. | ||
| Very truly yours, | ||
| GT.COM | Grant Thornton LLP is a U.S. member firm of Grant<br>Thornton International Ltd (GTIL). GTIL and each of its member firms are separate legal entities and are not a worldwide partnership. |
Exhibit 99.1
| News Release |
|---|
CompoSecure Completes Business Combinationwith Husky Technologies
and Rebrands Corporate Entity to GPGI, Inc.
January 12, 2026
| § | Completed<br> business combination with Husky Technologies creating a $7.4 billion best-in-class, diversified<br> compounder |
|---|---|
| § | Rebrands<br> corporate entity to GPGI, Inc. (“Great Positions in Good Industries”) with two<br> reporting segments CompoSecure and Husky |
Completed Business Combination
SOMERSET, N.J., January 12, 2026 (GLOBE NEWSWIRE) – CompoSecure, Inc. (NYSE: CMPO) completed its previously announced business combination with Husky Technologies Limited (“Husky”), a leader in highly engineered equipment and aftermarket services. The combination of Husky and CompoSecure creates a best-in-class, diversified compounder featuring two global market leaders with ~70% recurring revenues, high margins, and strong free cash flow generation.
As previously disclosed, the combined business is valued at $7.4 billion^1^, representing ~11.6x 2026E Pro Forma Adjusted EBITDA^2^ of ~$635 million and a ~7.5% free cash flow yield^3^ in the first full year post closing. Additionally, the transaction is expected to be more than 20% accretive to adjusted diluted earnings per share in the first full year post closing. The business combination was funded through an oversubscribed private placement of approximately $2.0 billion from premier investors, Platinum Equity’s rollover of approximately $1.0 billion, and approximately $2.0 billion of debt. The David Cote Family will retain its entire $1.0 billion equity investment in the corporate entity.
Rebrands Corporate Entityto GPGI, Inc.
In conjunction with closing the Husky transaction, CompoSecure is also announcing a rebrand to GPGI, Inc. (“GPGI”). The new name represents our core philosophy of acquiring and operating businesses that hold “Great Positions in Good Industries” – or “GPGI.” This rebranding follows the evolution of CompoSecure from a single operating business into a permanent capital platform purpose-built to acquire, own, and scale great businesses that can benefit from the systematic deployment of the Resolute Operating System. On a go-forward basis, both CompoSecure and Husky will retain their existing trade names and will be two distinct reporting segments operating independently as part of GPGI’s permanent capital platform. It is anticipated that the Company’s common stock will begin trading under the new name and ticker symbol “GPGI” on the New York Stock Exchange at the opening of trading on January 23, 2026.
Dave Cote, the Company’s Executive Chairman, and Tom Knott, the Company’s Chief Investment Officer, stated: “We are thrilled to announce the completion of the Husky transaction and the corporate entity’s name change to GPGI, Inc. We are making progress at both CompoSecure and Husky – and are even more convinced today about the prospects for both companies and for the broader platform. We remain focused on delivering results for our shareholders and investors and making GPGI an aspirational home for great operators and great businesses.”
About GPGI
GPGI, Inc. is a diversified, multi-industry compounder comprised of companies with great positions in good industries. The platform is managed by Resolute Holdings Management, Inc. (NYSE: RHLD) and is purpose-built to acquire, own, and scale high-quality businesses led by great operators, benefiting from a permanent capital base and the systematic deployment of the Resolute Operating System. GPGI currently consists of CompoSecure and Husky Technologies – two market leaders with best-in-class financials and durable opportunities for growth. For more information, please visit gpgi.com.
^1^ Enterprise value based on private placement price of $18.50 / share of CompoSecure Class A Common Stock.
^2^ Non-GAAP Pro Forma Adjusted EBITDA net of management fees to Resolute Holdings.
^3^ Non-GAAP free cash flow yield defined as free cash flow (cash flow from operations less capital expenditures) divided by fully diluted equity value at $18.50 / share.
About CompoSecure, a GPGIBusiness
Founded in 2000, CompoSecure is a technology partner to market leaders, fintechs, and consumers enabling trust for millions of people around the globe. CompoSecure is a leader in metal payment cards, security, and authentication solutions. CompoSecure combines elegance, simplicity, and security to deliver exceptional experiences and peace of mind in the physical and digital world. CompoSecure’s innovative payment card technology and metal cards with Arculus security and authentication capabilities deliver unique, premium branded experiences, enable people to access and use their financial and digital assets, and ensure trust at the point of a transaction. For more information, please visit CompoSecure.com and GetArculus.com.
About Husky Technologies,a GPGI Business
Founded in 1953, Husky is a technology pioneer that enables the delivery of essential needs to the global community with industry-leading expertise and service. Husky is a leader in highly engineered equipment and aftermarket services. Husky’s products are used to manufacture a wide range of plastic products, including beverage and food containers, medical devices, and consumer electronic parts. Husky provides comprehensive and integrated systems solutions that are comprised of injection molding machines, molds, hot runners, controllers, and auxiliaries. For more information, please visit Husky.co.
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from non-GAAP financial measures used by other companies. We believe that Pro Forma Adjusted EBITDA and adjusted diluted earnings per share are useful to investors in evaluating our financial performance. We believe that these non-GAAP financial measures depict the performance of the business and underlying economics attributable to our stockholders. These measures should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from these measures are significant components in understanding and assessing our financial performance. Accordingly, these key business metrics have limitations as analytical tools and should not be considered as alternatives to net income or any other performance measures derived in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures used by other companies. Due to the forward-looking nature of these measures, the charges excluded from the forward-looking Non-GAAP financial measures, including with respect to depreciation, amortization, interest, and taxes that would be required to reconcile the Non-GAAP financial measures to GAAP measures are inherently uncertain or difficult to predict, so it is not feasible to provide accurate forecasted Non-GAAP reconciliations without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included, and no reconciliation of the forward-looking Non-GAAP financial measures is included.
Forward Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although we believe that our plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies and events, including those of the CompoSecure and Husky businesses, anticipated outcomes of the acquisition of Husky or the rebranding of CompoSecure are forward-looking statements. In some instances, these statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “outlook” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CompoSecure Contact
ir@composecure.com
Husky Contact
media@husky.ca
Exhibit 99.5
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
| 1. | Form<br>S-3 (File No. 333-262341 and 333-282228) of CompoSecure, Inc. |
|---|---|
| 2. | Form<br>S-8 (File No. 333-288316, 333-281483, 333-273982 and 333-263617) of CompoSecure, Inc. |
of our report dated February 27, 2025, relating to the consolidated financial statements of Husky Technologies Limited as of December 31, 2024 and 2023, and for each of the years in the three-year period ended December 31, 2024, appearing in the Definitive Proxy Statement of CompoSecure, Inc. filed with the Securities and Exchange Commission on November 24, 2025, and incorporated by reference in this Current Report on Form 8-K of CompoSecure, Inc.
/s/ Ernst & Young LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Canada
January 12, 2026