EX-10.2
Published on August 3, 2023
Exhibit 10.2
AMENDMENT NO. 2 TO
TAX RECEIVABLE AGREEMENT
This AMENDMENT NO. 2 (this “Amendment”), dated as of June 23, 2023, to that certain Tax Receivable Agreement, dated as of December 19, 2016 (as amended prior to the date hereof, the “Agreement”), by and among Select Energy Services, Inc., a Delaware corporation (the “Corporate Taxpayer”), the other signatories hereto (collectively, the “TRA Holders”) and the Agents. Capitalized terms used but not defined herein have the meanings given such terms in the Agreement.
WHEREAS, certain of the TRA Holders previously received rights under, and became party to and bound by, to the same extent as an original signatory thereunder (the “Joinder”), the Agreement, including Section 7.13 and the confidentiality obligations thereunder, pursuant to certain assignment and assumption transactions (the “Assignment and Assumption”) in accordance with Section 7.6(a) of the Agreement;
WHEREAS, for the avoidance of doubt, such TRA Holders desire to reaffirm their Joinder to the Agreement, including Section 7.13 and the confidentiality obligations thereunder, following the Assignment and Assumption pursuant to the execution of this Amendment;
WHEREAS, the Corporate Taxpayer, the TRA Holders and the Agents are parties to the Agreement;
WHEREAS, pursuant to Section 7.7 of the Agreement, the Agreement may be amended in writing by each of the Corporate Taxpayer and by TRA Holders who would be entitled to receive more than fifty percent (50%) of the aggregate amount of the Early Termination Payments payable to all TRA Holders if the Corporate Taxpayer had exercised its right of early termination on the date of the most recent Exchange prior to such amendment;
WHEREAS, the Agreement utilizes the London Interbank Offered Rate (“LIBOR”) for certain purposes, including the determination of the Agreed Rate and the Default Rate, and the administrator of LIBOR intends to discontinue publishing LIBOR;
WHEREAS, the U.S. Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) as part of the Consolidated Appropriations Act, 2022 (Pub. L. 117-103), and the LIBOR Act, among other things, sets forth benchmark replacement rates for legacy contracts governed by U.S. law that reference LIBOR and that do not provide for the use of a clearly defined or practicable replacement benchmark rate when LIBOR is discontinued;
WHEREAS, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) has promulgated final regulations (the “LIBOR Regulations”) that, among other things, carry out the LIBOR Act and set forth the benchmark replacement rate that would replace LIBOR in the Agreement following June 30, 2023; and
WHEREAS, the parties to the Agreement desire to amend the Agreement to replace the use of LIBOR in the Agreement with the use of the benchmark replacement rate that, under the LIBOR Act and the LIBOR Regulations, would otherwise replace LIBOR in the Agreement following June 30, 2023.
NOW THEREFORE, in consideration of the foregoing and the covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
“CME Term SOFR” means, during any period, an interest rate per annum equal to the CME Term SOFR Reference Rates for a 12-month tenor, as published by the CME Term SOFR Administrator at approximately 5:00 a.m. U.S. Central Standard Time on the date two (2) calendar days prior to the first day of such period, plus 71.513 basis points.
“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
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IN WITNESS WHEREOF, the Corporate Taxpayer and the TRA Holders have duly executed this Amendment as of the date first written above.
CORPORATE TAXPAYER:
Select Energy Services, Inc.
By:
Name: John D. Schmitz
Title: Chairman, President and
Chief Executive Officer
TRA HOLDERS:
SES Legacy Holdings, LLC
By:
Name: John D. Schmitz
Title: President
Crestview Partners II SES Investment, LLC
By:
Name: ____________________________________
Title: _____________________________________
B-29 Investments, LP
By: B-29 GP, LLC, its general partner
By:
Name: ____________________________________
Title: _____________________________________