Item
1.01 Entry into a Material Definitive Agreement.
Purchase
Agreement
On
June 25, 2018, Hennessy Capital Acquisition Corp. III, a Delaware corporation (the “
Company
”), entered into
a Purchase Agreement (the “
Purchase Agreement
”) with JFL-NRC-SES Partners, LLC, a Delaware limited liability
company (“
Seller
”).
Proposed
Business Combination
The
Purchase Agreement provides for the acquisition by the Company from Seller of all of the issued and outstanding membership interests
of NRC Group Holdings, LLC, a Delaware limited liability company (“
NRC Group
”), which conducts its business
through its subsidiaries, National Response Corporation and Sprint Energy Services, LLC (the “
Business Combination
”).
Consideration
and Equity Financing
Pursuant
to the Purchase Agreement, the aggregate purchase price for the proposed Business Combination is $662.5 million, subject to certain
pre- and post-closing adjustments as set forth in the Purchase Agreement (the “
Total Purchase Price
”). The
Company will pay the Total Purchase Price partially in cash (the “
Cash Component
”) and partially in common
stock of the Company (the “
Equity Component
”), as follows:
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The
Cash Component means the positive number equal to (i) the dollar amount remaining in
the Company’s trust account after redemptions (described below), plus (ii) the
amount raised in connection with the PIPE Investment (as defined herein), which amount
is expected to be $100.0 million, plus (iii) the amount raised if the Company conducts
a private placement pursuant to the Backstop Commitment (as defined herein), plus (iv)
the amount raised, if any, pursuant to the JFL Subscription Agreement (as defined herein)
minus (v) the Company’s expenses incurred in connection with the proposed Business
Combination; and
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●
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The
Equity Component will consist of the number of shares, rounded up to the nearest whole
number, of Company common stock equal to the quotient of:
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o
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The
positive amount equal to the Total Purchase Price minus the Cash Component, divided by
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o
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The
number equal to the quotient of (1) the remaining trust amount (without giving effect
to any redemptions) as of two business days prior to Closing (as defined herein), divided
by (2) the outstanding public shares of Company common stock (without giving effect to
any redemptions), provided, however, that the minimum proportion of the Total Purchase
Price represented by the Equity Component is to be at least twenty percent (20%) of the
Total Purchase Price, and additional shares of Company common stock will be issued to
satisfy such minimum proportion and the Cash Component will be reduced accordingly.
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The
Cash Component will be funded through a combination of cash held in the Company’s trust account and the proceeds from the
expected sale of $75.0 million of the Company’s Series A Convertible Cumulative Preferred Stock, par value $0.0001 per share
(“
Preferred Stock
”), plus an additional $25.0 million of additional Preferred Stock and/or Company common stock
in a private placement (the “
PIPE Investment
”). A total of $100.0 million of the PIPE Investment has been subscribed.
Additionally, the Company has received commitments from Subscriber (as defined below) to purchase up to $25.0 million of Company
common stock through (i) open market or privately negotiated transactions with third parties, (ii) a private placement with consummation
to occur concurrently with that of the proposed Business Combination, or (iii) a combination thereof, in order to ensure sufficient
funds to finance the Cash Component (the “
Backstop Commitment
”).
Representations
and Warranties
Under
the Purchase Agreement, Seller, on the one hand, and the Company, on the other hand, made customary representations and warranties
for transactions of this nature. Except for certain representations made by Seller relating to its ownership of all the issued
and outstanding membership interests of NRC Group (which survive for a period of one year after the closing of the proposed Business
Combination), the representations and warranties made by Seller and the Company to each other in the Purchase Agreement will not
survive the consummation of the proposed Business Combination.
Conditions
to Consummation of the Proposed Business Combination
Consummation
of the transactions contemplated by the Purchase Agreement (the “
Closing
”) is subject to customary conditions
of the respective parties, including the completion of the Redemption Offer (as defined below). Each redemption of public shares
by the Company’s public stockholders will decrease the amount in the Company’s trust account, which holds approximately
$261.3 million as of June 21, 2018. If the aggregate amount of cash available to pay the Cash Component is less than $125.0 million
(less the payment of the Company’s unpaid transaction expenses), then Seller may, at its option, elect not to consummate
the proposed Business Combination.
In
addition, consummation of the transactions contemplated by the Purchase Agreement is subject to other closing conditions, including,
among others: (i) the waiting period and any extension thereof under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 shall
have expired or been terminated; (ii) the obligations of each party under the Purchase Agreement shall have been performed in
all material respects; (iii) the representations and warranties of each party under the Purchase Agreement shall be true in all
respects, except for such inaccuracy that, individually or in the aggregate, would not result in a material adverse effect on
such party; (iv) the Company shall have issued and Seller shall have received the Equity Component; (v) no material adverse effect
of either party shall have occurred; (vi) each party shall have received a fully executed Lock-Up Agreement (as defined below)from
each other; (vii) each of the Backstop and Subscription Agreement (as defined below), the JFL Subscription Agreement (as defined
herein), the Sponsor Warrant Exchange and Share Forfeiture Agreement (as defined below), the Registration Rights Agreement (as
defined below) and the Voting and Support Agreement (as defined below) remaining in full force and effect, and the parties thereto
are in compliance with the terms and conditions thereof in all material respects, and if Seller exercises its rights to enforce
the Backstop and Subscription Agreement, the JFL Subscription Agreement or the Voting and Support Agreement pursuant to the terms
thereof, such Subscriber (as defined in the Backstop and Subscription Agreement or JFL Subscription Agreement) or Founder Stockholder
(as defined in the Purchase Agreement), as applicable, will have complied with and consummated its obligations with respect thereto;
(viii) no unapproved shares shall have been issued by the Company; (ix) the Company’s common stock remaining listed on the
NYSE American; (x) the Credit Agreement (as defined in the Purchase Agreement) shall be in effect and no event of default shall
have occurred thereunder; (xi) the proposed form of Second Amended and Restated Certificate of Incorporation of the Company shall
have been approved by the stockholders of the Company and the proposed form of Amended and Restated Bylaws of the Company shall
have been adopted by the Company’s Board of Directors (the “
Board
”), and each shall be in effect as of
the Closing; (xii) the proposed form of new management equity incentive plan shall have been approved by the stockholders of the
Company; (xiii) the Redemption Offer shall have been completed; (xiv) the Company will have at least $5,000,001 of net tangible
assets remaining after the proposed Business Combination; and (xv) the receipt of approval by the Company’s stockholders
of the Purchase Agreement and the proposed Business Combination.
Termination
As
discussed above, Seller may, at its option, terminate the Purchase Agreement if the amount of the Cash Component is less than
$125.0 million (less the payment of the Company’s unpaid transaction expenses). The Purchase Agreement may also be terminated
under certain customary and limited circumstances at any time prior to the Closing, including by either party if the transactions
contemplated by the Purchase Agreement have not been completed by November 30, 2018, provided that the failure of the Closing
to occur on or before such date is not due to the failure by the party seeking termination to perform and comply in all material
respects with its covenants and agreements contained in the Purchase Agreement or any of the other documents that are required
to be performed or complied with at or prior to Closing. If the Purchase Agreement is validly terminated, no party thereto will
have any liability or any further obligation to any other party under the Purchase Agreement with certain limited exceptions,
including liability for any willful breach of the Purchase Agreement.
A
copy of the Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference,
and the foregoing description of the Purchase Agreement is qualified in its entirety by reference thereto. The Purchase Agreement
contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement
or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of
the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement. The representations, warranties and covenants in the Purchase Agreement are also
modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual
standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk
among the parties rather than establishing matters as facts. The Company does not believe that these schedules contain information
that is material to an investment decision.
Redemption
Offer
Pursuant
to the Company’s amended and restated certificate of incorporation and in accordance with the terms of the Purchase Agreement,
the Company will be providing its public stockholders with the opportunity to redeem their shares of Company common stock for
cash equal to their pro rata share of the aggregate amount on deposit in the Company’s trust account (which holds the proceeds
of the Company’s July 2017 initial public offering, less taxes payable) as of two business days prior to the Closing (the
“
Redemption Offer
”). For illustrative purposes, based on funds in the trust account of approximately $261.3
million on June 21, 2018, the estimated per share redemption price would have been approximately $10.18.
Backstop
and Subscription Agreement
Concurrent
with the execution of the Purchase Agreement, the Company entered into a Backstop and Subscription Agreement (the “
Backstop
and Subscription Agreement
”) with Nomura Securities International, Inc., a New York corporation (in its capacity as
investor and not advisor, “
Subscriber
”), pursuant to which Subscriber has agreed to purchase (i) $75.0 million
worth of Preferred Stock (subject to a possible increase of up to an additional $25.0 million if the Company is unable to enter
into one or more backstop and/or subscription agreements prior to the Closing) and (ii) up to $25.0 million worth of shares of
Company common stock. Subscriber will purchase the shares through one or more of (x) open market or privately negotiated transactions
with third parties (including forward contracts), (y) a private placement with consummation concurrently with that of the proposed
Business Combination at a purchase price of $10.25 per share of Company common stock, or (z) a combination thereof. Subscriber
in the Backstop Commitment has agreed to vote any Company common stock that it owns, whether acquired pursuant to the Backstop
Commitment or otherwise, in favor of the proposed Business Combination and the other proposals to be set forth in the Company’s
proxy statement relating to the transactions described in this Current Report (the “
Proxy Statement
”). The
terms, rights, obligations and preferences of the Preferred Stock are set forth in the form of Certificate of Designations, Preferences,
Rights and Limitations of Series A Convertible Cumulative Preferred Stock of NRC Group Holdings Corp. (formerly known as Hennessy
Capital Acquisition Corp. III) attached as
Exhibit A
to the Backstop and Subscription Agreement. Subscriber in the Backstop
Commitment has also agreed not to transfer any Company common stock that it owns until the earlier of (i) the Closing or (ii)
the public announcement by the Company of the termination of the Purchase Agreement. In consideration for the aggregate $125.0
million equity commitment, Subscriber will receive (i) a commitment fee of $2.5 million, which fee will be paid by JFL (as defined
below) or one of its affiliates on behalf of the Company, subject to credit to the Total Purchase Price, and (ii) upon the Closing,
five percent (5%) of the aggregate consideration paid by Subscriber to acquire the shares of common stock in connection with the
Backstop Commitment (if any) (not to exceed five percent (5%) of the total Backstop Commitment). Subscriber may receive up to
a three percent (3%) placement and/or funding fee on the aggregate Preferred Stock acquired pursuant to the Backstop and Subscription
Agreement.
In
addition, pursuant to the terms of the Backstop and Subscription Agreement, Subscriber has agreed to use its reasonable best efforts
to exercise its right to acquire the Preferred Stock by having one or more U.S. citizens (within the meaning of the Jones Act),
prior to the Closing, enter into subscription agreements with the Company for the direct purchase from the Company of shares of
Preferred Stock (so that the Subscriber does not take title to those shares) for the Company at all times (including from and
after the Closing) to the extent necessary to satisfy the U.S. citizenship requirements set forth in the Jones Act, and otherwise
to the extent necessary to comply with the Company’s amended and restated certificate of incorporation and bylaws in effect
as of the Closing. Further, if prior to the Closing an insufficient amount of Preferred Stock will be directly acquired by U.S.
citizens, then in lieu of purchasing Preferred Stock, the Subscriber shall acquire such alternative securities or other contractual
obligations of the Company as the Company shall structure such that the Company at all times (including from and after the Closing)
to the extent required satisfies the U.S. citizenship requirements set forth in the Jones Act, provided that such alternative
securities or other contractual obligations have substantially similar economic terms as the Preferred Stock, including economic
terms based on a theoretical conversion into (or exercise for) Preferred Stock or common stock of the of the Company.
The
Backstop and Subscription Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by
reference, and the foregoing description of the Backstop and Subscription Agreement is qualified in its entirety by reference
thereto.
JFL
Subscription Agreement
Concurrent
with the execution of the Purchase Agreement, the Company entered into a subscription agreement (the “
JFL Subscription
Agreement
”) with J.F. Lehman & Company, LLC (“
JFLCo
”). The JFL Subscription Agreement provides
that JFLCo or one or more of its affiliated investment funds may elect to purchase (i) up to 300,000 shares of Preferred Stock
for a per share price of $97.00, (ii) up to 1,951,220 shares of Company common stock for a per share price of $10.25, and (iii)
an additional number of shares of Company common stock as determined in accordance with the terms of the JFL Subscription Agreement.
The JFL Subscription Agreement is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by reference,
and the foregoing description of the JFL Subscription Agreement is qualified in its entirety by reference thereto.
Voting
and Support Agreement
Concurrent
with the execution of the Purchase Agreement, the Sponsor and certain stockholders of the Company, in each case, that hold founder
shares (together with the Sponsor, the “
Initial Hennessy Stockholders
”) entered into a Voting and Support Agreement
with Seller (the “
Voting and Support Agreement
”). Pursuant to the Voting and Support Agreement, the Initial
Hennessy Stockholders (representing as of the date hereof approximately 20% of the voting power of the Company) agreed to vote:
(i) in favor of the adoption of the Purchase Agreement and approval of the proposed Business Combination and other transactions
contemplated by the Purchase Agreement; (ii) against any actions that would result in a breach by the Company of any representations,
warranties, covenants, obligations or agreements contained in the Purchase Agreement; (iii) in favor of the proposals set forth
in the Company’s Proxy Statement when available, related to the Redemption Offer and the proposed Business Combination;
(iv) for any proposal to adjourn or postpone the special meeting of stockholders to approve matters related to the proposed Business
Combination to a later date if there are not sufficient votes for approval of such matters, and (v) against any alternative proposals
or transactions to the proposed Business Combination.
The
Voting and Support Agreement generally prohibits the Initial Hennessy Stockholders from transferring, or permitting to exist any
liens on, their shares of the Company’s common stock prior to the termination of such agreement. The Voting and Support
Agreement will automatically terminate, as to any Initial Hennessy Stockholder, upon the first to occur of (i) the mutual written
consent of Seller and such Initial Hennessy Stockholder, (ii) the Closing or (iii) the date of termination of the Purchase Agreement
in accordance with its terms. A copy of the Voting and Support Agreement is filed with this Current Report on Form 8-K as Exhibit
10.3 and is incorporated herein by reference, and the foregoing description of the Voting and Support Agreement is qualified in
its entirety by reference thereto.
Sponsor
Warrant Exchange and Share Forfeiture Agreement
Concurrent
with the execution of the Purchase Agreement, the Company entered into a Sponsor Share Exchange and Share Forfeiture Agreement
with the Sponsor (the “
Sponsor Warrant Exchange and Share Forfeiture Agreement
”), which provides for the exchange
of 9,600,000 outstanding placement warrants for 1,920,000 newly issued shares of Company common stock (the “
Sponsor Warrant
Exchange
”) concurrent with, and contingent upon, the consummation of the proposed Business Combination. Pursuant to
the Sponsor Share Exchange and Share Forfeiture Agreement, the Sponsor has also agreed that, (i) for a period of up to 180 days
from the Closing (which period may be shortened under certain circumstances), it shall not transfer, assign or sell any of its
shares issuable upon exchange of placement warrants and (ii) immediately prior to and contingent upon the Closing, it will forfeit
1,920,000 founder shares currently held by the Sponsor and such shares shall be retired and canceled by the Company. The Sponsor
has also agreed in the Sponsor Warrant Exchange and Share Forfeiture Agreement that it will not, directly or indirectly, transfer
or otherwise dispose of the founder shares to be so forfeited prior to the Closing. A copy of the Sponsor Warrant Exchange and
Share Forfeiture Agreement is filed with this Current Report on Form 8-K as Exhibit 10.3 and is incorporated herein by reference,
and the foregoing description of the Sponsor Warrant Exchange and Share Forfeiture Agreement is qualified in its entirety by reference
thereto.
Registration
Rights Agreement
At
the Closing, the Company and Sponsor will enter into an amended and restated registration rights agreement (the “
Registration
Rights Agreement
”) with each of the Initial Hennessy Stockholders, Seller, JFL, and the investors in the Backstop Commitment
and the PIPE Investment. In this “Registration Rights Agreement” section, each of the parties to the Registration
Rights Agreement (other than the Company) is referred to as a “Restricted Stockholder.”
Resale
Shelf Registration Statement.
Pursuant
to the Registration Rights Agreement, the Company has agreed to file, as soon as reasonably practicable within 60 days (but in
no event later than 90 days) after the Closing, a resale shelf registration statement on Form S-3 (the “
Shelf Registration
Statement
”), for the benefit of the Restricted Stockholders, to register (i) the shares of Company common stock issued
to Seller upon the Closing as part of the Equity Component, (ii) the founder shares held by the Initial Hennessy Stockholders,
(iii) the shares of Company common stock issued to the Sponsor in exchange for its warrants, (iv) any shares of Company common
stock or any shares of Preferred Stock issued in the PIPE Investment (including any shares of Company common stock issued or issuable
upon conversion of such Preferred Stock), (v) the shares of Company common stock issued to Backstop Commitment investors in a
private placement by the Company pursuant to the Backstop and Subscription Agreement, (vi) any shares of Company common stock
or any shares of Preferred Stock issued pursuant to the JFL Subscription Agreement (including any shares of Company common stock
issued or issuable upon conversion of such Preferred Stock) (vi) any outstanding shares of Company common stock or any other security
of the Company held by a holder as of the date of the Registration Rights Agreement and (vii) any other equity security of the
Company issued or issuable with respect to a combination of shares, distribution, recapitalization, merger, consolidation, reorganization
or other similar event (collectively, the “
Registrable Securities
”). In addition, the Company intends to register
the shares issuable upon the exercise of the public warrants in the Shelf Registration Statement. The Company is obligated to
use reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the U.S. Securities and Exchange
Commission (“
SEC
”) within 180 days following the Closing (or 120 days following the Closing if the SEC does
not comment on the Shelf Registration Statement), and to use best efforts to maintain the Shelf Registration Statement continuously
effective under the Securities Act, subject to certain permitted blackout periods, during the period (the “
Shelf Registration
Statement Effective Period
”) from the date the Shelf Registration Statement is declared effective by the SEC until the
earliest to occur of (a) 36 months after the effective date of the Shelf Registration Statement, (b) the date on which all the
Registrable Securities have been sold or distributed pursuant to such Shelf Registration Statement or (c) the date on which the
Registrable Securities covered by the Shelf Registration Statement first become eligible for sale pursuant to Rule 144 under the
Securities Act without volume limitation or other restrictions on transfer thereunder.
Certain
Restricted Stockholders (consisting of the Initial Hennessy Stockholders, certain investors in the PIPE Investment, investors
in the Backstop Commitment, JFL and Seller) (each such person, a “
Demand Right Holder
”) will have the right,
subject to certain conditions, to demand an underwritten offering of their respective Registrable Securities. The Company is not
obligated to effect more than (i) six underwritten offerings for Seller, (ii) one underwritten offering for the other Demand Right
Holders (acting individually), and (iii) a customary number of demands for JFL in the event they purchase securities under the
JFL Subscription Agreement, in each case less any demand registrations initiated by such person
.
In addition, the Company
is not obligated to effect any underwritten offering demand unless the minimum aggregate offering price is at least $5.0 million.
Demand
Rights.
Subject
to certain restrictions and limitation, if (a) the Shelf Registration Statement is not declared effective by the SEC on or prior
to the date that is 180 days after the Closing or (b) at any time during the Shelf Registration Statement Effective Period, the
Shelf Registration Statement is not available to the Restricted Stockholders (subject to certain specified exceptions), the Demand
Right Holders will have the right, subject to certain conditions, to require the Company by written demand to prepare and file
a registration statement registering the offer and sale of a certain number of registrable securities (which offering may, in
certain cases, be in the form of an underwritten offering). The Company is not obligated to effect more than (i) six demand registrations
for Seller, (ii) one demand registration for the other Demand Right Holders (acting individually), and (iii) a customary number
of demands for JFL in the event they purchase securities under the JFL Subscription Agreement, in each case less any underwritten
offerings pursuant to the Shelf Registration Statement initiated by such person
.
In
addition, the Company is also not obligated to effect any demand registration in the form of an underwritten offering unless the
minimum aggregate offering price is at least $5.0 million (if on Form S-3) or at least $25.0 million (if the Company is not eligible
to use Form S-3 or any successor form or similar short-form registration).
Piggyback
Rights.
If
at any time on or after the Closing (a)(i) the Shelf Registration Statement is not declared effective by the SEC on or prior to
the date that is 180 days after the Closing or (ii) at any time during the Shelf Registration Statement Effective Period, the
Shelf Registration Statement is not available to the Restricted Stockholders (subject to certain specified exceptions), and (b)
the Company proposes to file a registration statement under the Securities Act with respect to an offering of equity securities
for its own account or for the account of stockholders of the Company (other than those an offering pursuant to a registration
statement on a form that does not permit registration for resale by the Restricted Stockholders), then the Restricted Stockholders
will have customary piggyback registration rights that allow them to include their equity securities in any such registration
statement. In addition, if the Company proposes to effect an underwritten offering for its own account or for the account of stockholders
of the Company, then the Restricted Stockholders will have customary piggyback rights that allow them to include their equity
securities in such underwritten offering, subject to proportional cutbacks based on the identity of the party initiating such
offering.
Limitations;
Expenses; Indemnification.
These
registration rights are subject to certain customary limitations, including the right of the underwriters to limit the number
of securities to be included in an underwritten public offering and the Company’s right to delay or withdraw a registration
statement under certain circumstances. The Company will generally be required to bear the registration expenses, other than underwriting
discounts and commissions and transfer taxes, associated with any registration and sale of Registrable Securities held by the
Restricted Stockholders. In addition, the Company will pay the reasonable fees and expenses of one legal counsel selected by the
majority-in-interest of the Demand Right Holders initiating a demand registration. Under the Registration Rights Agreement, the
Company has agreed to indemnify the Restricted Stockholders against any losses or damages resulting from any untrue statement
or omission or alleged untrue statement or omission of a material fact in any registration statement or prospectus pursuant to
which they sell its equity securities, unless such liability arose from their misstatement or omission, and each of the Restricted
Stockholders, severally and individually, has agreed to indemnify the Company against any losses or damages caused by such Restricted
Stockholder’s material misstatements or omissions in those documents.
A
form of the Registration Rights Agreement is filed with this Current Report on Form 8-K as Exhibit 10.5 and is incorporated herein
by reference, and the foregoing description of the Registration Rights Agreement is qualified in its entirety by reference thereto
Lock-Up
Agreements
At
the Closing, Seller will enter into a 180-day lock-up agreement (the “
Seller Lock-Up Agreement
”) with the Company
with respect to the shares of the Company common stock received by Seller as part of the Equity Component (the “
Seller
Lock-Up Shares
”). Also at Closing, Sponsor will enter will enter into a 180-day lock-up agreement (the “
Sponsor
Lock-Up Agreement
” and together with the Seller Lock-Up Agreement, the “
Lock-Up Agreements
”) with
the Company with respect to the shares of the Company common stock owned by Sponsor (the “
Sponsor Lock-Up Shares,
”
together with the Seller Lock-Up Shares, the “
Lock-Up Shares
”). Pursuant to the Lock-Up Agreements, each of
Seller and Sponsor individually will agree that, for a period of 180 days from the Closing (which period may be shortened under
certain circumstances), they will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended (the “
Exchange Act
”), with respect to any Lock-Up Shares, (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Lock-Up Shares, in
cash or otherwise, or (iii) publicly announce any intention to affect any transaction specified in clause (i) or (ii). Notwithstanding
the foregoing, pursuant to the Lock-Up Agreements, Seller and Sponsor may sell or otherwise transfer any Lock-Up Shares to their
respective equity holders or to any of its other affiliates, provided that the transferee thereof agrees to be bound by the restrictions
set forth in the Lock-Up Agreements. A form of the Lock-Up Agreements is filed with this Current Report on Form 8-K as Exhibit
10.6 and is incorporated herein by reference, and the foregoing description of the Lock-Up Agreements is qualified in its entirety
by reference thereto.
Investor
Rights Agreement
At
the Closing, the Company will enter into an Investor Rights Agreement with Seller and JFLCo (the “
Investor Rights Agreement
”).
The Investor Rights Agreement provides that JFLCo (together with Seller and each of its respective affiliates, subsidiaries and
managed funds and its and their successors and assigns (other than the Company and its subsidiaries, collectively “
JFL
”)
shall have the right (but not the obligation) to nominate to the Board, a number of designees equal to at least: (i) a majority
of the total number of directors serving on the Board, so long as JFL collectively beneficially owns 50% or more of the shares
of Company common stock; (ii) 50% of the total number of directors serving on the Board in the event that JFL collectively beneficially
owns 40% or more, but less than 50% of the shares of Company common stock; (iii) 40% of the total number of directors serving
on the Board in the event that JFL collectively beneficially owns 30% or more, but less than 40% of the Company common stock;
(iv) 30% of the total number of directors serving on the Board in the event that JFL collectively beneficially owns 15% or more,
but less than 30% of the shares of Company common stock; and (v) 20% of number of directors serving on the Board in the event
JFL collectively beneficially owns 10% or more, but less than 15% of the shares of Company Stock. A form of the Investor Rights
Agreement is filed with this Current Report on Form 8-K as Exhibit 10.7 and is incorporated herein by reference, and the foregoing
description of the Investor Rights Agreement is qualified in its entirety by reference thereto.
Item
3.02 Unregistered Sales of Equity Securities.
The
disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. The shares of
Company common stock and Preferred Stock (including the shares of Company common stock issuable upon conversion thereof) to be
issued in connection with the proposed Business Combination, the JFL Subscription Agreement, the PIPE Investment and the Backstop
Commitment (pursuant to the Backstop and Subscription Agreement) will not be registered under the Securities Act in reliance upon
the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Item
7.01 Regulation FD Disclosure.
Attached
as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference is a copy of the press release
issued June 26, 2018 announcing the proposed Business Combination.
Attached
as Exhibit 99.2 to this Current Report on Form 8-K and incorporated into this Item 7.01 by reference is the investor presentation
dated June 2018 (the “
Investor Presentation
”) that will be used by the Company in making presentations to certain
existing and potential stockholders of the Company with respect to the proposed Business Combination.
The
Company and NRC Group management will hold a joint conference call on June 27, 2018 at 10:00 a.m. (Eastern Time) to discuss the
proposed Business Combination. Interested investors and other parties may listen to the joint conference call by dialing (877)
407-0789 and refer to audience passcode 13681067. To access the replay, please dial (844) 512-2921 and reference audience passcode
13681067. There will not be a question-and-answer session on this call.
Interested
investors and other parties may also listen to a simultaneous webcast of the conference call by logging on to http://public.viavid.com/index.php?id=130227,
where the Investor Presentation has also been posted. The online replay will remain available for a limited time beginning immediately
after the conclusion of the call. The information contained in, or that can be accessed through the Company’s website, is
not a part of this Item 7.01.
The
foregoing (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 7.01 and shall not be deemed to be filed for
purposes of Section 18 of the Exchange Act or otherwise be subject to the liabilities of that section, nor shall it be deemed
to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Additional
Information About the Proposed Business Combination and Where To Find It
The
proposed Business Combination will be submitted to stockholders of the Company for their consideration. The Company intends
to file with the SEC preliminary and definitive proxy statements in connection with the proposed Business Combination and other
matters and will mail a definitive proxy statement and other relevant documents to its stockholders as of the record date established
for voting on the proposed Business Combination.
The Company’s stockholders and other interested persons are advised
to read, once available, the preliminary proxy statement and any amendments thereto and, once available, the definitive proxy
statement, in connection with the Company’s solicitation of proxies for its special meeting of stockholders to be held to
approve, among other things, the proposed Business Combination because these documents will contain important information about
the Company, NRC Group and the proposed Business Combination
. Stockholders may also obtain a copy of the preliminary or definitive
proxy statement, once available, as well as other documents filed with the SEC regarding the proposed Business Combination and
other documents filed with the SEC by the Company, without charge, at the SEC’s website located at www.sec.gov or by directing
a request to Nicholas A. Petruska, Executive Vice President, Chief Financial Officer, 3485 North Pines Way, Suite 110, Wilson,
Wyoming 83014 or by telephone at (312) 803-0372.
Participants
in the Solicitation
The
Company, Seller, NRC Group, and certain of their respective directors, executive officers and other members of management and
employees may, under SEC rules, be deemed to be participants in the solicitations of proxies from the Company’s stockholders
in connection with the proposed Business Combination. Information regarding the persons who may, under SEC rules, be deemed participants
in the solicitation of the Company’s stockholders in connection with the proposed Business Combination will be set forth
in the Company’s Proxy Statement when it is filed with the SEC. You can find more information about the Company’s
directors and executive officers in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed
with the SEC on April 2, 2018. Additional information regarding the participants in the proxy solicitation and a description of
their direct and indirect interests will be included in the Proxy Statement when it becomes available, which can be obtained free
of charge from the sources indicated above.
Forward
Looking Statements
This
report includes, or incorporates by reference, “forward-looking statements” within the meaning of the “safe harbor”
provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified
by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,”
“expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions
that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements
include, but are not limited to: (1) references with respect to the anticipated benefits of the proposed Business Combination;
(2) the projection of future financial performance of NRC Group, NRC Group’s operating companies and the Company following
the proposed Business Combination; (3) changes in the market for NRC Group’s services and expansion plans and opportunities; (4)
future acquisition or additional business combinations; (5) the financing component of the proposed Business Combination; (6)
the sources and uses of cash; (7) the management and board composition of the Company following the proposed Business Combination
n; (8) the anticipated capitalization and enterprise value of the Company following the proposed Business Combination; (9) the
continued listing of the Company’s securities on the NYSE American; and (10) the expected date of closing the proposed Business
Combination.
These
forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could
cause actual results to differ materially and adversely from those expressed in any forward-looking statement. Important risk
factors that may cause such a difference in connection with the proposed Business Combination include, but are not limited to,
the following factors: (1) the occurrence of any event, change or other circumstances that could give rise to the termination
of the purchase agreement between Seller and the Company; (2) the outcome of any legal proceedings that may be instituted against
NRC Group, Seller or the Company following announcement of the proposed Business Combination and related transactions; (3) the
inability to complete the transactions contemplated by the purchase agreement between Seller and the Company due to the failure
to obtain approval of the stockholders of the Company, consummate the anticipated financing, obtain necessary approval from governmental
authorities or satisfy other conditions to the closing of the proposed Business Combination; (4) the ability to obtain or
maintain the listing of the Company’s securities on the NYSE American following the proposed Business Combination; (5) the risk
that the proposed Business Combination disrupts the parties’ current plans and operations as a result of the announcement and
consummation of the transactions described herein; (6) the ability to recognize the anticipated benefits of the proposed Business
Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage
growth profitably; (7) unexpected costs, charges or expenses related to or resulting from the proposed Business Combination; (8)
changes in applicable laws or regulations; (9) the possibility that NRC Group or the Company may be adversely affected by other
economic, business, and/or competitive factors; and (10) other risks associated with the proposed Business Combination, as are
more fully discussed in the Proxy Statement to be filed by the Company with the SEC in connection with the proposed Business Combination.
Investors and potential investors are urged not to place undue reliance on forward-looking statements in this report, which speak
only as of this date. Neither the Company nor Seller nor NRC Group undertakes any obligation to revise or update publicly any
forward-looking statement to reflect future events or circumstances. Nothing contained herein constitutes or will be deemed to
constitute a forecast, project or estimate of the future financial performance of the Company, NRC Group or the combined company
following the implementation of the proposed Business Combination or otherwise. In addition, actual results are subject to other
risks identified in the Company’s prior and future filings with the SEC, available at
www.sec.gov
.
Item
9.01 Financial Statements and Exhibits.
Number
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Description
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2.1
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Purchase Agreement, dated as of June 25, 2018, by and between Hennessy Capital Acquisition Corp. III and JFL-NRC-SES Partners, LLC.
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10.1
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Backstop and Subscription Agreement, dated as of June 25, 2018, by and between Hennessy Capital Acquisition Corp. III and Nomura Securities International, Inc. (including the form of Certificate of Designations, Preferences, Rights and Limitations of Series A Convertible Cumulative Preferred Stock of NRC Group Holdings Corp. (formerly known as Hennessy Capital Acquisition Corp. III) attached as Exhibit A thereto).
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10.2
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JFL
Subscription Agreement, dated as of June 25 2018, by and among Hennessy Capital Acquisition Corp. III, Hennessy Capital
Partners III LLC and J.F. Lehman & Company, LLC.
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10.3
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Voting and Support Agreement Subscription Agreement, dated as of June 25, 2018, by and among JFL-NRC-SES Partners, LLC, Hennessy Capital Partners III LLC and the stockholders of Hennessy Capital Acquisition Corp. III set forth therein.
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10.4
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Sponsor Warrant Exchange and Share Forfeiture Agreement, dated as of June 25, 2018, by and between Hennessy Capital Partners III LLC and Hennessy Capital Acquisition Corp. III.
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10.5
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Form
of Amended and Restated Registration Rights Agreement to be entered into by and among Hennessy Capital Acquisition Corp.
III, Hennessy Capital Partners III LLC, JFL-NRC-SES Partners, LLC and the other investors to be named
therein.
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10.6
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Form of Lock-Up Agreement to be entered into by and between Hennessy Capital Acquisition Corp. III and JFL-NRC-SES Partners, LLC.
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10.7
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Form of Investor Rights Agreement to be entered into by and among Hennessy Capital Acquisition Corp. III, JFL-NRC-SES Partners, LLC and J.F. Lehman & Company, LLC
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99.1
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Press Release issued June 26, 2018
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99.2
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Investor Presentation dated June 2018
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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.
Dated:
June 26, 2018
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HENNESSY
CAPITAL ACQUISITION CORP. III
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By:
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/s/
Daniel J. Hennessy
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Name:
Daniel J. Hennessy
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Title:
Chief Executive Officer
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10