Exhibit 10.2

BACKSTOP PURCHASE AGREEMENT

by and among

AQUILEX ACQUISITION SUB III, LLC

AQUILEX HOLDINGS, LLC,

certain of its Subsidiaries identified as the Aquilex Parties herein,

and the Backstop Parties identified as such herein

Dated as of December 23, 2011

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TABLE OF CONTENTS

 

              Page  

1.

 

Rights Offering and Backstop

     2     

1.1.

  

The Rights Offering

     2     

1.2.

  

Backstop

     3     

1.3.

  

Backstop Commitment Fee

     6     

1.4.

  

Cash Flow Shortfall Adjustment

     7     

1.5.

  

Transaction Expenses

     8   

2.

 

Representations and Warranties of the Aquilex Parties

     8     

2.1.

  

Organization of the Company

     8     

2.2.

  

Capitalization of the Company

     9     

2.3.

  

Organization and Capitalization of the Subsidiaries

     9     

2.4.

  

Authority; No Conflict

     10     

2.5.

  

Legal Proceedings

     11     

2.6.

  

Compliance with Laws

     12     

2.7.

  

Brokers or Finders

     12     

2.8.

  

Exemption from Registration

     12     

2.9.

  

Issuance

     12     

2.10.

  

Bankruptcy Documents and Exchange Act Documents

     12     

2.11.

  

No Violation or Default

     13     

2.12.

  

Intellectual Property

     13     

2.13.

  

Licenses and Permits

     14     

2.14.

  

Environmental Matters

     14     

2.15.

  

Employee Benefit Plans

     15     

2.16.

  

Material Contracts

     16     

2.17.

  

No Unlawful Payments

     18     

2.18.

  

No Restrictions on Subsidiaries

     18     

2.19.

  

Absence of Certain Changes or Events

     18     

2.20.

  

Title to Property; Leases

     20     

2.21.

  

Financial Statements

     21     

2.22.

  

Tax Matters

     21     

2.23.

  

Labor and Employment Compliance

     22     

2.24.

  

Arm’s Length

     22     

2.25.

  

No Inconsistent Transaction

     23     

2.26.

  

Investment Company Act

     23     

2.27.

  

Accounting Controls

     23     

2.28.

  

Insurance

     23     

2.29.

  

Transactions with Related Parties

     24   

3.

 

Representations and Warranties of the Backstop Parties

     24     

3.1.

  

Organization of Such Backstop Party

     24     

3.2.

  

Authority; No Conflict

     24     

3.3.

  

Units Not Registered

     25     

3.4.

  

Acquisition for Own Account

     25     

3.5.

  

Accredited Investor

     25     

3.6.

  

Brokers or Finders

     25     

3.7.

  

Legal Proceedings

     26   

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4.

 

Covenants of the Aquilex Parties

     26     

4.1.

  

Agreement Motion and Agreement Order

     26     

4.2.

  

Rights Offering

     26     

4.3.

  

Conditions Precedent

     27     

4.4.

  

Notification

     27     

4.5.

  

Financial Information

     28     

4.6.

  

Use of Proceeds

     28     

4.7.

  

HSR Act and Foreign Competition Filings

     28     

4.8.

  

Access

     29     

4.9.

  

Amended LLC Agreement

     29     

4.10.

  

Exit Facility

     29     

4.11.

  

DIP Facility

     30     

4.12.

  

Specified Issuances

     30     

4.13.

  

Conduct of the Business

     30   

5.

 

Covenants of the Backstop Parties

     34     

5.1.

  

Conditions Precedent

     34     

5.2.

  

HSR Act and Foreign Competition Filings

     34     

5.3.

  

Confidential Information

     34     

5.4.

  

Definitive Documents

     35   

6.

 

Conditions to Closing

     35     

6.1.

  

Conditions Precedent to Obligations of the Backstop Parties

     35     

6.2.

  

Conditions Precedent to Obligations of the Company

     39   

7.

 

Termination

     39   

8.

 

Indemnification

     41   

9.

 

Survival of Representations and Warranties

     43   

10.

 

Amendments and Waivers

     43   

11.

 

Notices, etc.

     44   

12.

 

Miscellaneous

     45     

12.1.

  

Assignments

     45     

12.2.

  

Severability

     46     

12.3.

  

Entire Agreement

     46     

12.4.

  

Counterparts

     46     

12.5.

  

Governing Law

     46     

12.6.

  

Submission to Jurisdiction

     46     

12.7.

  

WAIVER OF TRIAL BY JURY

     47     

12.8.

  

Further Assurances

     47     

12.9.

  

Specific Performance

     48   

 

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12.10.

  

Headings

     48     

12.11.

  

Interpretation; Rules of Construction

     48     

12.12.

  

Several, Not Joint, Obligations

     49     

12.13.

  

Disclosure

     49   

13.

 

Definitions

     49   

EXHIBITS

 

Exhibit A      Restructuring Term Sheet Exhibit B      Rights Offering
Procedures Exhibit C      Certain Terms of the Amended LLC Agreement, New Common
Units and New Participating Preferred Units Exhibit D      Certain Terms and
Conditions of the Exit Facility Exhibit E      Certain Terms and Conditions of
the DIP Facility

 

iii

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THIS BACKSTOP PURCHASE AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this “Agreement”) is entered into as of December 23, 2011, by
and among (a) Aquilex Holdings, LLC, a Delaware limited liability company (as in
existence on the date hereof and, to the extent it becomes such, as a
debtor-in-possession and a reorganized debtor, as applicable, the “Company”),
(b) its immediate parent, Aquilex Acquisition Sub III, LLC, a Delaware limited
liability company (“Acquisition Sub III”), (c) each of the Subsidiaries of the
Company set forth on Schedule 1(b) hereto under the title “Aquilex Parties”
(such Subsidiaries, together with Acquisition Sub III, each as in existence on
the date hereof, and, to the extent any of them become such, as a debtor-in
possession in the Chapter 11 Cases and as a reorganized debtor, as applicable,
together with the Company, each an “Aquilex Party” and, collectively, the
“Aquilex Parties”) and (d) each of the undersigned entities and/or their
investment advisors, managers, managed funds or accounts, intermediaries or
nominees set forth on Schedule 1(c) (each, a “Backstop Party” and, collectively,
the “Backstop Parties”). Capitalized terms used in this Agreement are defined in
Section 13 or, if not defined therein, shall have the meanings set forth in the
Restructuring Support Agreement.

RECITALS

WHEREAS, the Aquilex Parties intend to implement a financial restructuring in
accordance with the terms and conditions set forth in the Restructuring Support
Agreement (the “Restructuring”) for the existing debt and other obligations of
certain of the Aquilex Parties, which Restructuring will be consummated either
(a) out-of-court, including pursuant to the Exchange Offer, or, if necessary,
(b) by commencing cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of
the United States Code, 11 U.S.C. §§ 101, et seq. (as amended, the “Bankruptcy
Code”) in the United States Bankruptcy Court for the District of Delaware (the
“Bankruptcy Court”) to pursue a pre-packaged chapter 11 plan of reorganization
(as it may be amended, supplemented or otherwise modified from time to time,
together with the Plan Supplement, the “Plan”), consistent in all material
respects with the restructuring term sheet attached hereto as Exhibit A (the
“Term Sheet”);

WHEREAS, pursuant to the terms of the Restructuring Support Agreement and, if
necessary, the Plan, on the Effective Date, the Company will issue New
Participating Preferred Units to certain of the lenders, and in satisfaction of
the Aquilex Parties’ obligations to such lenders, under the Bridge Facility;

WHEREAS, pursuant to the terms of the Restructuring Support Agreement and, if
necessary, the Plan, the Company will conduct a rights offering, on the terms
set forth in this Agreement and, if necessary, the Plan (the “Rights Offering”),
by distributing to Eligible Noteholders non-transferable, non-certificated
rights (“Rights”) to acquire New Participating Preferred Units (the “Rights
Offering Units”) for the Exercise Price in the relative amounts and subject to
the restrictions set forth in the Restructuring Support Agreement;

WHEREAS, pursuant to the terms of the Restructuring Support Agreement and, if
necessary, the Plan, in exchange for each Eligible Noteholder’s Senior Notes or
Allowed Noteholder Claims, as applicable, the Company will issue to such
Eligible Noteholder New Common Units and the right to participate in the Rights
Offering, and in the case of the Plan, the Company will issue New Common Units
in exchange for each Holder’s Senior Notes or Allowed Noteholder Claims;

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WHEREAS, the aggregate amount of the Rights Offering shall be $80.0 million (the
“Aggregate Rights Offering Amount”), and the number of Rights Offering Units
shall be equal to the Fully Diluted Unit Number, multiplied by a fraction
(A) the numerator of which is equal to the Aggregate Rights Offering Amount and
(B) the denominator of which is equal to the Equity Value; and

WHEREAS, in order to facilitate the Rights Offering, pursuant to this Agreement,
and subject to the terms, conditions and limitations set forth herein, each of
the Backstop Parties, severally and not jointly, has agreed, among other things,
to purchase on the Effective Date, and the Company agrees to sell to such
Backstop Party on the Effective Date, at the Exercise Price, such Backstop
Party’s Total Commitment Percentage of the Rights Offering Units that either
(i) have not been subscribed for by Eligible Noteholders by the Rights Offering
Deadline or (ii) the Exercise Price for which has not been deposited with the
Subscription Agent on or prior to the Rights Offering Payment Date (the
“Unsubscribed Units”).

NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
Aquilex Parties and the Backstop Parties agree as follows.

1. Rights Offering and Backstop.

1.1. The Rights Offering.

(a) The Company will commence the Rights Offering contemporaneously with, and as
part of, the Restructuring. The Rights Offering shall be conducted and
consummated by and among the Company, the applicable Eligible Noteholders and
the Backstop Parties on the terms, subject to the conditions and limitations and
in accordance with the procedures set forth on Exhibit B hereto (the “Rights
Offering Procedures”).

(b) On the terms, subject to the conditions and limitations, and in reliance on
the representations and warranties set forth in this Agreement, each of the
Backstop Parties hereby agrees, severally and not jointly, to exercise in full
all Rights distributed to such Backstop Party in the Rights Offering on the
terms set forth in this Agreement, the Restructuring Support Agreement and the
Rights Offering Procedures.

(c) The Company hereby agrees and undertakes to deliver to the Backstop Parties,
by facsimile transmission or email, a certification by an executive officer of
the Company (including any supporting information reasonably requested by the
Backstop Parties) of either (i) a true and accurate calculation of the number of
Unsubscribed Units, and the aggregate Exercise Price therefor (a “Purchase
Notice”), or (ii) in the absence of any Unsubscribed Units, the fact that there
are no Unsubscribed Units and that the Commitments are terminated (a
“Satisfaction Notice”), in either case as soon as practicable after the Rights
Expiration Date or Rights Offering Funding Deadline, as applicable, and, in any
event, at least five (5) Business Days prior to the Effective Date (the date of
transmission of receipt of a

 

2

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Purchase Notice or a Satisfaction Notice, the “Determination Date”). The
Purchase Notice or the Satisfaction Notice, as applicable, shall indicate the
aggregate Noteholder Cash Option Amount elected in accordance with the Exchange
Offer, the Restructuring Support Agreement and, if necessary, the Plan.

1.2. Backstop.

(a) On the terms, subject to the conditions and limitations, and in reliance on
the representations and warranties set forth in this Agreement (including, if
applicable, the entry of the Agreement Order by the Bankruptcy Court and the
Agreement Order becoming a Final Order), each of the Backstop Parties hereby
agrees, severally and not jointly, to purchase on the Effective Date, and the
Company hereby agrees to sell and issue to such Backstop Party, at the aggregate
Exercise Price therefor, its Total Commitment Percentage of all Unsubscribed
Units. The Unsubscribed Units that each of the Backstop Parties is required to
purchase pursuant to this Section 1.2(a) are referred to herein as such Backstop
Party’s “Equity Investor Units.”

(b) On the terms, subject to the conditions and limitations, and in reliance on
the representations and warranties set forth in this Agreement (including, if
applicable, the entry of the Agreement Order by the Bankruptcy Court and the
Agreement Order becoming a Final Order), each of the Backstop Parties hereby
agrees, severally and not jointly, to provide, on or prior to the Effective
Date, its Total Commitment Percentage of the aggregate amount of cash (the
“Noteholder Cash Option Amount”) necessary to fund payments to the holders of
Senior Notes that are entitled, or elect, to receive cash in respect of their
Senior Notes in accordance with the Exchange Offer, the Restructuring Support
Agreement and, if necessary, the Plan, and, in exchange for its portion of such
cash amount, each of the Backstop Parties will receive its Total Commitment
Percentage of the Noteholder Cash Option Units. For the avoidance of doubt, any
such Noteholder Cash Option Units are not and shall not be Unsubscribed Units,
and any Unsubscribed Units in respect of any Senior Notes that are cashed out in
connection with the Noteholder Cash Option Amount shall remain subject to, and
shall be treated in accordance with, Section 1.2(a). “Noteholder Cash Option
Units” means an aggregate number of New Participating Preferred Units equal to
the Fully Diluted Unit Number, multiplied by a fraction (i) the numerator of
which is equal to the Noteholder Cash Option Amount and (ii) the denominator of
which is equal to the Equity Value.

(c) In the event that the Restructuring is consummated pursuant to clause (a) of
the definition thereof, on the terms, subject to the conditions and limitations,
and in reliance on the representations and warranties set forth in this
Agreement, each of the Backstop Parties hereby agrees, severally and not
jointly, to pay to the Company, on the Effective Date, its Total Commitment
Percentage of the aggregate amount of cash (the “Consent Payment Amount”), not
to exceed $561,450 in the aggregate without the consent of the Required Backstop
Interest (which consent may be withheld in the sole discretion of the Required
Backstop Interest), necessary to fund potential cash consent payments by the
Company to certain Noteholders not party to the Restructuring Support Agreement
in connection with the solicitation of the Noteholders’ (i) consent to the
amendment of the Indenture pursuant to the Restructuring and (ii) participation
in the Exchange Offer, and, in exchange for its portion of such cash amount,
each of the Backstop Parties will receive its Total Commitment Percentage of the
Consent Payment Units.

 

3

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(d) In the event that the Restructuring is consummated pursuant to clause (b) of
the definition thereof, on the terms, subject to the conditions and limitations,
and in reliance on the representations and warranties set forth in this
Agreement (including the entry of the Agreement Order by the Bankruptcy Court
and the Agreement Order becoming a Final Order), each of the Backstop Parties
hereby agrees, severally and not jointly, to pay to the Company, on the
Effective Date, its Total Commitment Percentage of $5.0 million (the “Plan
Additional Units Purchase Price”), and in exchange therefor, on the Effective
Date the Company will issue to each of the Backstop Parties such Backstop
Party’s Total Commitment Percentage of the Plan Additional Units.

(e) In the event that a Backstop Party defaults on its obligation to purchase
Unsubscribed Units under Section 1.2(a), Noteholder Cash Option Units under
Section 1.2(b), Consent Payment Units under Section 1.2(c) or Plan Additional
Units under Section 1.2(d) (in any such case, each such Backstop Party, a
“Defaulting Backstop Party” and each such default, a “Backstop Default”),
without any action on the part of any party hereto, each Defaulting Backstop
Party shall be deemed:

(i) to have elected the Eligible Noteholder Cash Option pursuant to the
Restructuring at a price equal to 80% of the price specified for the Eligible
Noteholder Cash Option in the Restructuring Support Agreement; and

(ii) to irrevocably waive any right or entitlement to any portion of the
Backstop Commitment Fee, and the portion of the Backstop Commitment Fee that had
been paid to such Defaulting Backstop Party shall be transferred and assigned to
each of the Non-Defaulting Backstop Parties in proportion to the Default Units
acquired by such Non-Defaulting Backstop Parties pursuant to Section 1.2(f).

(f) In the event of any Backstop Default, as applicable, all Unsubscribed Units
not purchased by the Defaulting Backstop Parties under Section 1.2(a), all
Noteholder Cash Option Units not purchased by the Defaulting Backstop Parties
under Section 1.2(b), all Consent Payment Units not purchased by the Defaulting
Backstop Parties under Section 1.2(c) and all Plan Additional Units not
purchased by the Defaulting Backstop Parties under Section 1.2(d) (collectively,
all such Units, the “Default Units” and, together with the Equity Investor
Units, the “Backstop Units”) shall be allocated among each of the Backstop
Parties that is not a Defaulting Backstop Party (each, a “Non-Defaulting
Backstop Party”) as follows.

(i) Each Non-Defaulting Backstop Party shall have the right, but not the
obligation, to purchase up to a number of Default Units equal to the product of
(A) the total number of Default Units multiplied by (B) the Total Commitment
Percentage of such Non-Defaulting Backstop Party.

(ii) If any Non-Defaulting Backstop Party does not elect to purchase its full
allotment of Default Units in accordance with Section 1.2(f)(i), then each of
the Non-Defaulting Backstop Parties that elected to purchase its full allotment

 

4

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of Default Units in accordance with Section 1.2(f)(i) shall have the right, but
not the obligation, to purchase up to a number of such remaining Default Units
equal to the product of (A) the total number of such remaining Default Units
multiplied by (B) the quotient of (1) such Non-Defaulting Backstop Party’s Total
Commitment Percentage divided by (2) the Total Commitment Percentages of all the
Non-Defaulting Backstop Parties that elected to purchase their full allotment of
Default Units in accordance with Section 1.2(f)(i).

(iii) If any Default Units are not elected to be purchased pursuant to
Section 1.2(f)(ii), then such Default Units shall continue to be offered
iteratively pursuant to Section 1.2(f)(ii) to each Non-Defaulting Backstop Party
that continues to elect to purchase its full allotment until (A) all Default
Units are elected to be purchased by the Non-Defaulting Backstop Parties or
(B) the Non-Default Backstop Parties fail to elect to purchase all of the
remaining Default Units.

(iv) In the event that any Default Units have not been purchased after giving
effect to application of the provisions of this Section 1.2(f) (including
iterative application, if applicable, of Section 1.2(f)(iii) and including,
after any or all such applications, if no Non-Defaulting Backstop Parties elect
to purchase any Default Units pursuant to this Section 1.2(f)), such Default
Units shall be purchased by the Backstop Sponsor. All Default Units shall be
purchased by the applicable Non-Defaulting Backstop Party or Backstop Sponsor at
the Closing, and the purchase price therefor shall be equal to the Exercise
Price.

(g) The closing of the purchase and sale of Units hereunder (the “Closing”) will
occur at 10:00 a.m., New York City time, on the Effective Date. At the Closing,
(i) each Backstop Party shall pay to the Company an aggregate amount equal to
(A) the product of (1) the number of Backstop Units to be purchased by such
Backstop Party (as determined by Sections 1.2(a) and 1.2(f) and (2) the Exercise
Price plus (B) the portion of the Noteholder Cash Option Amount, Consent Payment
Amount, Plan Additional Units Purchase Price and the Cash Flow Shortfall Amount
payable by such Backstop Party (as determined by Sections 1.2(b), 1.2(c), 1.2(d)
and 1.4, as applicable) by wire transfer of immediately available funds to an
account designated by the Company at least two (2) Business Days prior to the
anticipated Effective Date, and (ii) the Company shall deliver to each Backstop
Party (x) a certificate or certificates duly executed on behalf of the Company
registered in the name of such Backstop Party (or its designee) representing the
number of Units to be issued to such Backstop Party by the Company pursuant to
this Agreement and (y) such other certificates, counterparts to agreements,
documents or instruments required to be delivered by the Company to such
Backstop Party pursuant to Section 6.1. The agreements, instruments,
certificates and other documents to be delivered on the Effective Date by or on
behalf of the Company will be delivered to the Backstop Parties at the offices
of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022 or such
other location as may be mutually agreed upon between the Company and the
applicable Backstop Parties.

(h) All Units will be delivered free and clear of any and all Encumbrances
(except for any restrictions on transfer as may be imposed by applicable Law or
in the Amended LLC Agreement), with any and all issue, stamp, transfer or
similar taxes or duties payable in connection with such delivery duly paid by
the Company.

 

5

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(i) Anything in this Agreement to the contrary notwithstanding (but without
limiting the provisions of Section 12.1), any Backstop Party, in its sole
discretion, may designate that some or all of the Units be issued in the name
of, and delivered to, one or more Persons to which such Backstop Party would
have been entitled to assign, delegate or transfer Assigned Interests pursuant
to clause (iii) or (iv) of Section 12.1.

1.3. Backstop Commitment Fee.

(a) To compensate the Backstop Parties for the risk of their undertakings
herein, the Aquilex Parties shall pay to the Backstop Parties, in the aggregate
and in accordance with the terms of the Restructuring Support Agreement, a
backstop commitment fee (the “Backstop Commitment Fee”) in an amount equal to
4.0% of the sum of (i) the Aggregate Rights Offering Amount, (ii) the Noteholder
Cash Option Amount, (iii) the Consent Payment Amount and (iv) the Plan
Additional Units Purchase Price (in each case, assuming the full exercise of the
applicable amounts and assuming, in the case of clause (ii), that 75% of the
principal amount of the Senior Notes is held by holders of Senior Notes that are
Eligible Holders and 25% of the principal amount of the Senior Notes is held by
holders of Senior Notes that are not Eligible Holders), which Backstop
Commitment Fee shall be equal to $3,631,753 and paid in the form of an immediate
increase, on the date upon which the Company shall have received a fully
underwritten commitment agreement for the DIP Facility, in the aggregate
principal amount outstanding under the Bridge Facility in an amount equal to the
Backstop Commitment Fee; provided that, in the event that any Backstop Party is
not a lender under the Bridge Facility as of the date on which the Backstop
Commitment Fee is paid, the lenders under the Bridge Facility will agree that
the borrowers under the Bridge Facility may, and the Aquilex Parties that are
parties to the Bridge Facility shall, issue and deliver notes (or other
instruments) under the Bridge Facility to such non-lender Backstop Parties in an
amount equal to such non-lender Backstop Party’s Total Commitment Percentage of
the Backstop Commitment Fee. Pursuant to the terms of the Restructuring Support
Agreement and, if necessary, the Plan, on the Effective Date, the aggregate
principal amount outstanding under the Bridge Facility (including the Backstop
Commitment Fee), together with all interest accrued thereon (provided that no
interest shall accrue on the Backstop Commitment Fee), will be converted into
the Bridge Units, which will be issued by the Company on the Effective Date.

(b) The Backstop Commitment Fee (i) shall be deemed earned in full on the date
upon which the Company shall have received a fully underwritten commitment
agreement for the DIP Facility, (ii) will not be refundable under any
circumstance or creditable against any other fee or other amount paid or payable
in connection with the Contemplated Transactions or otherwise and (iii) shall be
paid without setoff or recoupment and shall not be subject to defense or offset
on account of any claim, defense or counterclaim. Subject to Section 1.2(e)(ii),
the Backstop Commitment Fee shall be paid to the Backstop Parties in accordance
with their respective Total Commitment Percentages. The Backstop Commitment Fee
shall be paid without any action required of or entertained by the Bankruptcy
Court or any other Person.

 

6

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(c) The Backstop Commitment Fee shall be, and as of the date upon which the
Company shall have received a fully underwritten commitment agreement for the
DIP Facility shall be deemed, earned and shall be payable, in each case, without
regard to whether the Rights Offering is fully subscribed. The provision for
payment of the Backstop Commitment Fee is an integral part of the Contemplated
Transactions, and without this provision the Backstop Parties would not have
entered into this Agreement.

1.4. Cash Flow Shortfall Adjustment.

(a) At least three (3) Business Days prior to the Effective Date, the Company
shall deliver to the Backstop Parties a certificate from the Chief Financial
Officer of the Company setting forth the Company’s good faith estimate, as of
the Effective Date, calculated both before and after giving effect to the
consummation of the Contemplated Transactions (other than the transactions
contemplated by this Section 1.4), of the net working capital (including in such
calculation all cash and cash equivalents) of the Company and its Subsidiaries
on a consolidated basis, determined in accordance with GAAP applied in a manner
consistent with the preparation of the Financial Statements.

(b) In the event that the Required Backstop Interest determines in its
reasonable discretion, and the Company consents (which consent shall not be
unreasonably withheld, conditioned or delayed), that in light of the Company’s
working capital and cash position based on the certificate referred to in
Section 1.4(a), it would be desirable to provide additional cash resources to
the Company, then each of the Backstop Parties shall have the right, but not the
obligation, to pay to the Company in cash, on the Effective Date, up to its
Total Commitment Percentage of an aggregate amount determined by the Required
Backstop Interest (the “Cash Flow Shortfall Amount”), which amount shall not
exceed $5,000,000 in the aggregate without the consent of the Company, and, in
exchange for the portion of the Cash Flow Shortfall Amount paid by each Backstop
Party (such Backstop Party’s “Cash Flow Shortfall Portion”), such Backstop Party
will receive an aggregate number of New Participating Preferred Units equal to
the Fully Diluted Unit Number, multiplied by a fraction (i) the numerator of
which is equal to such Backstop Party’s Cash Flow Shortfall Portion and (ii) the
denominator of which is equal to the Equity Value. The aggregate number of New
Participating Preferred Units that may be purchased pursuant to this
Section 1.4(b) are referred to as “Cash Flow Shortfall Units.”

(c) In the event that any of the Backstop Parties does not elect to fund its
entire Total Commitment Percentage of the Cash Flow Shortfall Amount, then the
number of Cash Flow Shortfall Units that such Backstop Party could have
purchased if it had funded its entire Total Commitment Percentage of the Cash
Flow Shortfall Amount (the “Remaining Cash Flow Units”) shall be allocated among
the Backstop Parties who wish to commit to purchase such Remaining Cash Flow
Units on a pro rata basis based on the respective Total Commitment Percentages
of such Backstop Parties.

(d) The purchase and sale of the Cash Flow Shortfall Units, if any, shall take
place concurrently with the Closing. Within thirty (30) days following the
Closing, the Company shall offer to each Eligible Noteholder that participated
in the Rights Offering (other than the Backstop Parties) the opportunity to
purchase up to such Eligible Noteholder’s pro rata share (determined on the
basis of its participation in the Rights Offering) of additional New

 

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Participating Preferred Units, on the same terms and for the same price as the
Cash Flow Shortfall Units, in an aggregate amount equal to the difference
between (i) the Cash Flow Shortfall Amount divided by the quotient of (A) the
number of Rights Offering Units held by the Backstop Parties, divided by (B) the
total number Rights Offering Units outstanding, minus (ii) the Cash Flow
Shortfall Amount.

1.5. Transaction Expenses. Whether or not the Contemplated Transactions are
consummated, the Aquilex Parties hereby agree to reimburse or pay, as the case
may be, all Transaction Expenses as follows: (a) all accrued and unpaid
Transaction Expenses incurred up to (and including) the date (the “Execution
Date”) this Agreement is duly executed and delivered by the parties hereto (the
“Initial Transaction Expenses”) shall be paid in full on the Execution Date,
(b) after the Execution Date and prior to the Petition Date, all accrued and
unpaid Transaction Expenses shall be paid on a regular and continuing basis
promptly (but in any event within ten (10) calendar days) after invoices are
presented to the Company, (c) if applicable, after the Petition Date, all
accrued and unpaid Transaction Expenses incurred up to (and including) the date
of the entry by the Bankruptcy Court of the Agreement Order shall be paid in
full on the date of the entry by the Bankruptcy Court of the Agreement Order,
(d) if applicable, after the date of the entry by the Bankruptcy Court of the
Agreement Order, all accrued and unpaid Transaction Expenses shall be paid on a
regular and continuing basis promptly (but in any event within ten (10) calendar
days) after invoices are presented to the Company without Bankruptcy Court
review or further Bankruptcy Court order, (e) all accrued and unpaid Transaction
Expenses shall be paid in full on the Effective Date, and (f) upon termination
of this Agreement, all accrued and unpaid Transaction Expenses incurred up to
(and including) the date of such termination shall be paid in full promptly (but
in any event within ten (10) calendar days) after invoices are presented to the
Company without Bankruptcy Court review or further Bankruptcy Court order. All
Transaction Expenses of a Backstop Party shall be paid to such Backstop Party
(or its designee) in cash by wire transfer of immediately available funds to the
account(s) specified by such Backstop Party. The terms set forth in this
Section 1.5 shall survive termination of this Agreement and shall remain in full
force and effect. The obligations set forth in this Section 1.5 are in addition
to, and do not limit, the Aquilex Parties’ obligations under Section 1.3.
Amounts required to be paid by the Aquilex Parties pursuant to this Section 1.5
shall constitute allowed administrative expenses under the Bankruptcy Code
(which shall be an administrative expense claim of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code).

2. Representations and Warranties of the Aquilex Parties. The Aquilex Parties
jointly and severally represent and warrant to the Backstop Parties as set forth
below, except as set forth in the Schedules. Except for representations and
warranties that are expressly limited as to a particular date, each
representation and warranty is made as of the date hereof.

2.1. Organization of the Company. The Company is a limited liability company
duly organized, validly existing and in good standing under the Laws of the
State of Delaware and has full limited liability company power

 

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and authority to conduct its business as it is now conducted. The Company is
duly qualified or registered to do business as a foreign entity and is in good
standing under the Laws of each jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification or registration, except where the
failure to do so would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

2.2. Capitalization of the Company. As of the Effective Date, the authorized
limited liability company interests of the Company will consist entirely of New
Common Units and New Participating Preferred Units, the number of which shall be
as set forth in the Amended LLC Agreement of Effective Date Aquilex. As of the
Effective Date, the only New Common Units and New Participating Preferred Units
that shall be issued and outstanding shall be those New Common Units and New
Participating Preferred Units that shall have been issued in accordance with the
Restructuring Support Agreement and this Agreement. Except as set forth on
Schedule 2.2, as of the Effective Date, there will be no options, warrants,
securities or rights that are or may become exercisable or exchangeable for,
convertible into, or that otherwise give any Person any right to acquire, shares
of capital stock or other securities of the Company or to receive payments based
in whole or in part upon the value of the capital stock of the Company, whether
pursuant to a phantom stock plan or otherwise. As of the Effective Date, and
except as provided hereunder or contemplated by the Restructuring Support
Agreement, there will be no Contracts relating to the issuance, grant, sale or
transfer of any equity securities, options, warrants, convertible securities or
other securities of the Company. Except as contemplated by the Restructuring
Support Agreement, as of the Effective Date, there will be no Contracts of the
Company to repurchase, redeem or otherwise acquire any of its equity securities,
options, warrants, convertible securities or other securities and, other than
pursuant to the Amended LLC Agreement, the Company will not have granted any
registration rights with respect to any of its securities or any securities of
any of its Subsidiaries. As of the Effective Date, all of the outstanding New
Common Units and the New Participating Preferred Units (including the Units)
will have been duly authorized, validly issued and fully paid, and, assuming the
accuracy of the Backstop Parties’ representations and warranties set forth in
Section 3, will not be issued in violation of the Securities Act or any other
applicable Laws (including state “blue sky” Laws).

2.3. Organization and Capitalization of the Subsidiaries.

(a) Schedule 2.3(a) sets forth the name and jurisdiction of incorporation or
organization (as applicable) of each Subsidiary of the Company. Except as set
forth on Schedule 2.3(a), the Company or one or more of its Subsidiaries, as the
case may be, beneficially owns all of the outstanding shares of capital stock or
other equity securities (or any securities convertible into or exercisable for
any such securities) of each of its Subsidiaries. Except for the Company’s
Subsidiaries and other ownership interests set forth on Schedule 2.3(a), the
Company does not have any direct or indirect equity or ownership interest of any
corporation, partnership, limited liability company or other Person or business.
Neither the Company nor any of its Subsidiaries has any Contract to directly or
indirectly acquire any equity or other ownership interest in any Person or
business.

 

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(b) Each Subsidiary is a corporation or limited liability company (as
applicable), duly organized, validly existing and in good standing under the
Laws of its jurisdiction of incorporation or organization (as applicable), with
full corporate or limited liability company (as applicable) power and authority
to conduct its business as it is now conducted, and to own or use the properties
and assets that it purports to own or use. Each Subsidiary is duly qualified or
registered to do business as a foreign corporation or limited liability company
(as applicable) and is in good standing under the Laws of each jurisdiction in
which either the ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such qualification or
registration, except where the failure to do so would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

(c) All of the outstanding capital stock or other securities of each Subsidiary
directly or indirectly owned by the Company have been duly authorized and
validly issued and are fully paid and (to the extent applicable) nonassessable
and the Company has good and marketable title to such capital stock or other
equity securities, free and clear of all Encumbrances, other than Permitted
Encumbrances. There are, and there will be on the Effective Date, no options,
warrants, securities or rights that are or may become exercisable or
exchangeable for, convertible into, or that otherwise give any Person any right
to acquire shares of capital stock or other securities of any Subsidiary or to
receive payments based in whole or in part upon the value of the capital stock
of any Subsidiary, whether pursuant to a phantom stock plan or otherwise. Except
as set forth on Schedule 2.3(c), there are no Contracts relating to the
issuance, grant, sale or transfer of any equity securities, options, warrants,
convertible securities or other securities of any Subsidiary. There are, and
there will be on the Effective Date, no outstanding Contracts of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any equity securities,
options, warrants, convertible securities or other securities of any Subsidiary
and no Subsidiary will have granted any registration rights with respect to any
of its securities.

2.4. Authority; No Conflict.

(a) Each Aquilex Party has the requisite corporate or limited liability company
(as applicable) power and authority (i) to enter into, execute and deliver this
Agreement and the Plan and (ii) to consummate the Contemplated Transactions, and
has taken all necessary corporate or limited liability company action required
for (x) the due authorization, execution and delivery of this Agreement, (y) the
due authorization, execution and filing with the Bankruptcy Court of the Plan
and (z) the performance and consummation of the Contemplated Transactions. This
Agreement has been duly executed and delivered by each Aquilex Party and, if
consummated pursuant to the Plan, subject to the entry of the Confirmation
Order, constitutes the legal, valid and binding obligation of each Aquilex
Party, enforceable against each Aquilex Party in accordance with its terms. The
Plan has been duly executed and delivered by each Aquilex Party and, subject to
entry of the Confirmation Order, the Plan constitutes the legal, valid and
binding obligation of each Aquilex Party, enforceable against it in accordance
with its terms.

(b) Except as set forth on Schedule 2.4(b), neither the execution and delivery
of this Agreement or the Plan nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time or both):

(i) contravene, conflict with, or result in a violation of (A) any provision of
the Organizational Documents of the Company or any of its Subsidiaries, or
(B) any resolution adopted by the board of directors (or similar governing body)
or the equityholders or members of the Company or any of its Subsidiaries;

 

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(ii) contravene, conflict with or result in a violation of any existing Law as
in effect on the date of this Agreement or as in effect on the Effective Date to
which the Company or any of its Subsidiaries, or any of the properties, assets,
rights or interests owned or used by the Company or any of its Subsidiaries, may
be subject;

(iii) except in connection with the filing of the Chapter 11 Cases, and any
Proceedings related thereto, contravene, conflict with or result in a violation
or breach of any provision of, or give rise to any right of termination,
acceleration, modification or cancellation under, any Contract to which the
Company or any of its Subsidiaries is a party or which any of the Company’s or
any of its Subsidiaries’ properties or assets are bound; or

(iv) result in the imposition or creation of any Encumbrance, other than
Permitted Encumbrances, upon or with respect to any of the assets, properties,
rights or businesses owned or leased by the Company or any of its Subsidiaries;

except, in the case of clauses (ii), (iii) and (iv), where such occurrence,
event or result would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

(c) Except (i) as set forth on Schedule 2.4(c), (ii) for any notices, filings or
Consents required by the Commission or the Bankruptcy Court and (iii) where the
failure to do so would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, neither the Company nor any of
its Subsidiaries will be required to give any notice to, make any filing with or
obtain any Consent from, any Person (including any Government Body other than
the Commission and the Bankruptcy Court) in connection with the execution and
delivery of this Agreement or the execution and filing with the Bankruptcy Court
of the Plan, or the performance or consummation of any of the Contemplated
Transactions.

2.5. Legal Proceedings. Except as set forth on Schedule 2.5, there are no
pending, outstanding or, to the Knowledge of the Company, threatened Proceedings
(a) that are material to the Company and its Subsidiaries, taken as a whole, and
to which the Company or any of its Subsidiaries is a party or to which any
property, rights, or interests of any of them is subject, except for, following
the Petition Date, claims of creditors or other parties in the Chapter 11 Cases
or (b) to which the Company or any of its Subsidiaries is a party that
challenge, or that are reasonably likely to have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions.

 

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2.6. Compliance with Laws. The Company and each of its Subsidiaries are in
compliance with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, and no written notices have
been received by, and no written claims have been made against, the Company or
any Subsidiary alleging a violation of any such Laws, except, in each case, for
any such violations that would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.

2.7. Brokers or Finders. Except for Alvarez & Marsal, LLC, Rothschild Inc.,
Houlihan Lokey, Inc. and Zolfo Cooper, neither the Company, any of its
Subsidiaries nor any of their respective agents has incurred any obligation or
liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payments in connection with this Agreement, the
Restructuring Support Agreement or the Contemplated Transactions.

2.8. Exemption from Registration. Assuming the accuracy of the Backstop Parties’
representations and warranties set forth in Section 3 and the accuracy of the
representations and warranties of the Consenting Noteholders in the
Restructuring Support Agreement, the offer, sale and issuance of the Units by
the Company in the manner contemplated by this Agreement will be exempt from the
registration requirements of the Securities Act.

2.9. Issuance. Subject to the entry of the Agreement Order and the Confirmation
Order, the distribution of the Rights, the issuance of the Rights Offering Units
pursuant to the Rights Offering, and the issuance of the Units to be issued by
the Company to the Backstop Parties hereunder and pursuant to the Restructuring
Support Agreement, have been duly and validly authorized and, when (a) the
Rights Offering Units are issued and delivered against payment therefor in the
Rights Offering and (b) the Units are issued and delivered against payment
therefor as provided herein, all such Rights Offering Units and Units will be
duly and validly issued, fully paid and free and clear of all taxes, liens,
pre-emptive rights, rights of first refusal, subscription and similar rights,
except as provided in the Amended LLC Agreement or as set forth in the Term
Sheet or Disclosure Statement.

2.10. Bankruptcy Documents and Exchange Act Documents. The Disclosure Statement,
the monthly operating reports and the other pleadings filed with the Bankruptcy
Court (collectively, the “Bankruptcy Documents”), when filed with the Bankruptcy
Court, and the documents filed by the Company under the Exchange Act with the
Commission since January 1, 2011 (collectively, the “Exchange Act Documents”),
when they became effective or were filed with the Commission, as the case may
be, conformed in all material

 

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respects, in the case of the Bankruptcy Documents, with the requirements of the
Bankruptcy Code, and in the case of the Exchange Act Documents, with the
requirements of the Securities Act or the Exchange Act, as applicable, and none
of such Bankruptcy Documents or Exchange Act Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

2.11. No Violation or Default. Neither the Company nor any of its Subsidiaries
is in violation in any material respect of its Organizational Documents.

2.12. Intellectual Property.

(a) Schedule 2.12 sets forth a true and complete list as of the date hereof of
all material IP Rights owned by the Company or any of its Subsidiaries for which
registrations or applications for registration are issued to, filed or applied
for in the name of the Company or any of its Subsidiaries (“Registered IP
Rights”). Except as set forth on Schedule 2.12(a), the Company and its
Subsidiaries exclusively own, free and clear of any Encumbrances (other than
Permitted Encumbrances), the Registered IP Rights and own or possess adequate
rights to use all other material IP Rights used in or necessary for the conduct
of their businesses (collectively, “Company IP Rights”), except where the
failure to own or possess any such rights would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) To the Knowledge of the Company, the conduct of the businesses of the
Company and its Subsidiaries does not infringe, misappropriate or otherwise
violate any IP Rights of any Person in any material manner. To the Knowledge of
the Company, since January 1, 2011, neither the Company nor any of its
Subsidiaries has received any notice of any claim of infringement,
misappropriation or violation of any IP Rights of any Person. Except as set
forth in Schedule 2.12(b), to the Knowledge of the Company, since January 1,
2011, no third party has materially infringed, misappropriated or otherwise
violated any Company IP Rights, and the Company is not aware of any facts
indicating the likelihood of any of the foregoing or of any current or
anticipated claims against a third party relating to the foregoing, except where
such infringement, misappropriation or violation (or the likelihood thereof)
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.

(c) As of the date hereof, none of the Company IP Rights owned by the Company or
any of its Subsidiaries has been adjudged invalid or unenforceable in an Order,
nor, to the Knowledge of the Company, has any Person challenged since January 1,
2011, the validity or enforceability of such rights. The Company and its
Subsidiaries have, as of the date hereof, paid all necessary maintenance fees
and filed all necessary documents necessary for the purpose of maintaining all
Registered IP Rights in full force and effect and used such efforts to maintain
the secrecy of its Trade Secrets that are reasonable within the industry in
which the Company and its Subsidiaries operate.

 

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(d) Except as set forth on Schedule 2.12(d), the Company and its Subsidiaries
have complied with and do comply with, in all material respects, their own
rules, policies and procedures, relating to privacy, collection, storage, onward
transfer and use of any personally identifiable information or other financial
information of all users and customers that is collected, used, or held for use
by the Company or its Subsidiaries, and no written claims have been asserted or,
to the Knowledge of the Company, threatened, against the Company or its
Subsidiaries by any third party alleging a violation of any of the foregoing,
except where the failure to so comply would not reasonably be expected to result
in a Material Adverse Effect.

2.13. Licenses and Permits. The Company and its Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, have made
all declarations, payments and filings with, and have given all notices to, the
appropriate Governmental Bodies that are necessary or required for the ownership
or lease of their respective properties or assets, or the conduct of their
respective businesses, except where the failure to do so would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. To the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has received written notice of any revocation or modification of
any such license, certificate, permit or authorization or has any reason to
believe that any such license, certificate, permit or authorization will not be
renewed in the ordinary course. All of such licenses, certificates, permits or
authorizations are in full force and effect and will continue to be in full
force and effect following the Effective Time without requiring the consent or
approval of any Person, except where the failure to obtain such approval or
consent would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

2.14. Environmental Matters. Except as set forth on Schedule 2.14, the Company
and its Subsidiaries: (i) are and have been in material compliance with any and
all applicable Environmental Laws; (ii) have received and are and have been in
material compliance with all permits, licenses or consents required of them
under applicable Environmental Laws to conduct their respective businesses or
occupy their respective facilities; (iii) have no Knowledge of and have not
received any notice, report, order, directive or other information regarding
(A) any violation of, or liability under, any Environmental Law or (B) any
actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances, petroleum products,
asbestos, asbestos-containing material, or any other wastes, pollutants or
contaminants; (iv) are not subject to any Proceedings or Orders under any
Environmental Laws and have no Knowledge of any threatened Proceedings or Orders
under any Environmental Laws; (v) have not treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, manufactured,
distributed, or released any substance, including any hazardous substance, or
owned or operated any property or facility which is or has been contaminated by
any such substance, as would give rise to any material current or future
liabilities under any Environmental Laws; (vi) have no Knowledge of any products
manufactured, sold or distributed by the Company or any of its Subsidiaries

 

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containing a material amount of asbestos; (vii) have not assumed, undertaken,
provided an indemnity with respect to, or otherwise become subject to, any
liability of any other Person relating to Environmental Laws; and (viii) have
provided to the Backstop Parties all material environmental audits, reports and
other material environmental documents relating to their or their predecessors’
or Affiliates’ past or current properties, facilities or operations that are in
their possession, custody or control. Notwithstanding any other provision of
this Agreement, this Section 2.14 contains the only representations and
warranties that relate to environmental matters and Environmental Laws.

2.15. Employee Benefit Plans.

(a) Schedule 2.15(a) sets forth a complete and correct list of each employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), each other plan, program or
agreement providing equity or equity-based compensation, deferred compensation,
bonus or incentive compensation, severance, separation, change-of-control,
pension, welfare benefit, disability, life insurance, sick leave, vacation pay,
salary continuation and educational assistance, in each case, as to which the
Company and its Subsidiaries have any material liability (contingent or
otherwise) for current or former employees of the Company and its Subsidiaries,
other than (i) any employment or severance agreement that is not a Material
Contract, (ii) any governmental plan or program or statutorily required benefit
arrangements, or (iii) individual grant agreements (each, other than (i),
(ii) and (iii), a “Company Benefit Plan”). Except as set forth on
Schedule 2.15(a), none of the Company Benefit Plans is a “multiemployer plan”
(as defined in Section 3(37) of ERISA (a “Company Multiemployer Plan”)), is or
was subject to Sections 4063 or 4064 of ERISA, or is subject to Title IV of
ERISA.

(b) Except (i) for any noncompliance required in order to comply with the
Bankruptcy Code or (ii) as would not reasonably be expected to result in a
Material Adverse Effect, each Company Benefit Plan (other than any Company
Multiemployer Plan) has been maintained, funded and administered in compliance
with its terms and the requirements of any applicable Law, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”).

(c) To the Knowledge of the Company, with respect to each Company Benefit Plan,
(i) neither the Company nor any of its Subsidiaries has engaged in a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code (excluding transactions effected pursuant to a statutory or administrative
exemption) which could reasonably be expected to subject the Company or any of
its Subsidiaries, directly or indirectly, to any material liability, and
(ii) none of the Company, any of its Subsidiaries, or, to the Knowledge of the
Company, any fiduciary (as defined in Section 3(21) of ERISA) has breached a
fiduciary duty imposed upon the fiduciary under Title I of ERISA which could
reasonably be expected to subject the Company or any of its Subsidiaries,
directly or indirectly, to any material liability.

(d) True, correct and complete copies of the following documents, as described
on Schedule 2.15(d), as applicable, with respect to each of the Company Benefit
Plans (other than a Company Multiemployer Plan), have been made available to the
Backstop

 

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Parties: (i) any plans and related trust documents, and all amendments thereto;
(ii) the most recent Form 5500 and schedules thereto; (iii) the most recent
financial statement and actuarial valuation; (iv) the most recent IRS
determination letter; and (v) the most recent summary plan description.

(e) Except as set forth on Schedule 2.15(e), neither the execution and delivery
of this Agreement nor the consummation of the Contemplated Transactions, either
alone or together with another event, will (i) result in any payment (including
severance, unemployment compensation, golden parachute, forgiveness of
Indebtedness or otherwise) becoming due under any Company Benefit Plan (other
than any Company Multiemployer Plan), whether or not such payment is contingent,
(ii) increase any benefits or compensation otherwise payable under any Company
Benefit Plan (other than any Company Multiemployer Plan) or (iii) result in the
acceleration of the time of payment, vesting or funding of any benefits or
compensation under any Company Benefit Plan (other than any Company
Multiemployer Plan).

(f) Each Company Benefit Plan (other than any Company Multiemployer Plan)
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to such
Company Benefit Plan as to its qualified status under the Code, and, to the
Knowledge of the Company, no fact or event has occurred that could reasonably be
expected to result in the revocation of the qualified status of any such Company
Benefit Plan.

(g) Except as set forth on Schedule 2.15(g), none of the Company Benefit Plans
(other than any of the Company Multiemployer Plans) provide for post-retirement
medical or life insurance benefit coverage for any current or former employees
of the Company or any of its Subsidiaries, except (i) as may be required under
applicable Law, (ii) a medical reimbursement account plan pursuant to
Section 125 of the Code, or (iii) through the last day of the calendar month in
which the participant’s employment with the Company or any Subsidiary
terminates.

(h) Except as set forth on Schedule 2.15(h), neither the Company or any of its
Subsidiaries nor any entity which is considered on employer with the Company
under Section 4001 of ERISA of Section 414 of the Code (and “ERISA Affiliate”)
maintains or has a material obligation to contribute to or has within the past
six years maintained or had a material obligation to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA that is subject
to Subtitle E of Title IV of ERISA (each, a “Multiemployer Pension Plan”). The
Company and its Subsidiaries have not incurred and do not expect to incur any
withdrawal liability with respect to any such Multiemployer Pension Plan
(regardless of whether based on contributions of an ERISA Affiliate) and, to the
Knowledge of the Company, all Multiemployer Pension Plans are “Building and
Construction Industry” pension plans within the meaning of Section 4203(b) of
Title IV of ERISA.

2.16. Material Contracts.

(a) Schedule 2.16(a) sets forth a true and complete list (including a summary of
material terms for any oral Contract) of each Contract of the Company or any of
its Subsidiaries currently in effect which by its terms:

(i) is a Contract with one of (A) the Company’s twenty-four (24) largest
suppliers based on total cost of products or services purchased by the Company
and its Subsidiaries for the Specialty Repair and Overhaul business or (B) the
Company’s fifteen (15) largest suppliers based on total cost of products or
services purchased by the Company and its Subsidiaries for the Industrial
Cleaning business in the twelve (12) months ended July 31, 2011;

 

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(ii) is a Contract with one of (A) the Company’s or its Subsidiaries’ twenty
(20) largest customers based on total sales for each of the Specialty Repair and
Overhaul business and (B) the Company’s twenty (20) largest customers based on
total sales for the Company and its Subsidiaries for the Industrial Cleaning
business in the twelve (12) months ended July 31, 2011;

(iii) is a note, debenture, bond, equipment trust agreement, letter of credit
agreement, loan agreement or other contract or commitment for the borrowing or
lending of money or agreement or arrangement for a line of credit or guarantee,
pledge or undertaking of the Indebtedness of any other Person or other
Indebtedness, except for (A) the Senior Notes, (B) the First Lien Credit
Agreement and (C) the Bridge Facility;

(iv) limits or purports to limit the ability of the Company or any of its
Subsidiaries to compete in any line of business or in any geographic area;

(v) requires any capital commitment or capital expenditure, individually or in
the aggregate, by the Company or its Subsidiaries of greater than $1,000,000;

(vi) relates to the acquisition or disposition of any business or assets or
under which the Company or any of its Subsidiaries has any future liability
greater than $100,000 with respect to an “earn–out”, contingent purchase price,
deferred purchase price or similar contingent payment obligation, or any
indemnification obligation;

(vii) reflects any partnership, joint venture, limited liability company or
similar agreement or arrangement (other than the Organizational Documents of the
Company or any of its Subsidiaries);

(viii) provides for change in control payments (other than any Company Benefit
Plan) of more than $100,000;

(ix) relates to the licensing of material IP Rights involving annual payments in
excess of $100,000 (other than commercial off-the-shelf software licenses with
annual license fees of less than $100,000);

(x) provides for the employment, severance or retention of any current employee,
officer or director of the Company or any of its Subsidiaries with annual salary
or severance in excess of $100,000; or

 

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(xi) is a collective bargaining agreement, works council or similar agreement
with any labor organization representing employees of the Company or any of its
Subsidiaries (the types of Contracts described in clauses (i) through (xi),
“Material Contracts”).

(b) True and complete copies of all Material Contracts have previously been made
available to the Backstop Parties. Each Material Contract is in full force and
effect and is valid, binding and enforceable against the Company or its
applicable Subsidiary and, to the Knowledge of the Company, each other party
thereto, in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
Laws of general applicability relating to or affecting creditor’s rights
generally and by the application of general principles of equity. Other than in
connection with the filing of the Chapter 11 Cases and any Proceedings related
thereto, neither the Company nor any of its Subsidiaries nor, to the Knowledge
of the Company, any other party to such Material Contracts is in material breach
of or default under any obligation thereunder or has given notice of default to
any other party thereunder, except for breaches and defaults that would not
reasonably be expected to result in a Material Adverse Effect.

2.17. No Unlawful Payments. To the Knowledge of the Company, neither the Company
nor any of its Subsidiaries nor any current or former director, officer or
employee of the Company or any of its Subsidiaries has, directly or indirectly:
(a) offered, paid, delivered or otherwise used any funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (b) offered, delivered or made any direct or indirect
unlawful payment to any official or employee of a Governmental Body;
(c) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977 or any comparable legislation applicable under foreign
Law; or (d) offered, delivered, made or received any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

2.18. No Restrictions on Subsidiaries. Other than pursuant to (a) the Senior
Notes, (b) the First Lien Credit Agreement and (c) the Bridge Facility, and
subject to the Bankruptcy Code, no Subsidiary of the Company is prohibited or
otherwise restricted, directly or indirectly, under any agreement, instrument or
other Contract from paying any dividends to the Company, from making any other
distribution on such Subsidiary’s capital stock or other securities, from
repaying any loans or advances to such Subsidiary from the Company or any other
Subsidiary, or from transferring any of such Subsidiary’s properties or assets
to the Company or any other Subsidiary.

2.19. Absence of Certain Changes or Events. Since September 30, 2011, the
Company and its Subsidiaries have conducted their respective businesses in the
ordinary course of business consistent with past practices (other than in
connection with the Restructuring as disclosed in filings by any of the Aquilex
Parties with the Commission on or after September 30, 2011, and prior to the
date hereof) and, except as set forth on Schedule 2.19, there has been no:

(a) Material Adverse Effect;

 

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(b) discharge or satisfaction of any material lien or discharge or satisfaction
of any material obligation other than current liabilities in the ordinary course
of business consistent with past practices;

(c) (i) disposition of any material items of real or personal, tangible or
intangible, property or asset (other than sales of inventory in the ordinary
course of business consistent with past practices), or mortgaging, pledging or
otherwise encumbering or subjecting to any Lien any such property or asset, by
any Subsidiary; or (ii) material capital investment in, any material loan to, or
any material acquisition of the securities or assets of, any other Person (or
series of related material capital investments, loans or acquisitions);

(d) material change in the accounting methods (including assumptions underlying
estimates of reserves for inventory and accounts receivable and accruals for
liabilities) of any of the Subsidiaries, other than as required by GAAP;

(e) material damage, destruction or loss (whether or not covered by insurance)
to the Tangible Property of any Subsidiary;

(f) other than in the ordinary course of business or as required by Law,
(i) adoption of, entry into or amendment, termination or cancellation of any
Company Benefit Plan, (ii) increase, or agreement to any increase, in the
compensation payable or to become payable to, or any increase in the contractual
term of employment of, any officer, director or management level employee with
an annual salary as of the date hereof in excess of $200,000, or (iii) entry
into, termination or cancellation of any collective bargaining agreement, works
council or similar agreement with any labor organization representing employees
of the Company or any of its Subsidiaries;

(g) incurrence, assumption or guarantee of any Indebtedness for borrowed money,
other than (i) the Bridge Facility, (ii) intercompany borrowings or
(iii) borrowings under a revolving credit facility to fund working capital needs
in the ordinary course of business;

(h) making of any loans or advances to any Person or making of any capital
expenditures or commitments therefor, in each case, in excess of $500,000, other
than in the ordinary course of business;

(i) amendment to or restatement of any of the organizational documents of any of
the Subsidiaries;

(j) making of or change to any material election, change to any material annual
accounting period, adoption of or change to any material method of accounting,
filing of any material amended tax return, entry into any material closing
agreement, settlement of any material claim or assessment, surrender of any
right to claim a material refund, consent to any extension or waiver of the
limitations period applicable to any material claim or assessment (other than
pursuant to extensions of time to file tax returns obtained in the ordinary
course of business), in each case, with respect to taxes;

 

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(k) waiver or cancellation by any Subsidiary of any debt, claims or rights
involving in excess of $500,000; or

(l) agreement or commitment to do any of the foregoing.

2.20. Title to Property; Leases.

(a) Owned Real Property. Subject to entry of the Confirmation Order on the
Effective Date, the Company and each of its Subsidiaries will have good, valid
and marketable indefeasible title to the Owned Real Property identified on
Schedule 2.20(a), free and clear of all Encumbrances, other than Permitted
Encumbrances. With respect to the Owned Real Property: (i) except as set forth
on Schedule 2.20(a), the Company or its Subsidiaries has not leased or otherwise
granted to any Person the right to use or occupy such Owned Real Property or any
portion thereof, other than Permitted Encumbrances; and (ii) there are no
outstanding options, rights of first offer or rights of first refusal to
purchase such Owned Real Property or any portion thereof or interest therein.

(b) Leased Real Property. Subject to entry of the Confirmation Order on the
Effective Date, Schedule 2.20(b) sets forth the address of each Leased Real
Property and, with respect to the Leased Real Property that is material, a true
and complete list of all Leases (including all amendments, extensions, renewals,
guaranties and other agreements with respect thereto) for each such Leased Real
Property (the “Material Leases”). The Company has delivered or made available to
the Backstop Parties true and complete copies of the Material Leases. Except as
set forth on Schedule 2.20(b) (and subject to entry of the Confirmation Order on
the Effective Date), with respect to each of the Leases: (i) such Lease is
legal, valid, binding, enforceable and in full force and effect, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar Laws of general applicability relating to or
affecting creditor’s rights generally and by the application of general
principles of equity; (ii) the Company’s or Subsidiary’s possession and quiet
enjoyment of the Leased Real Property under such Lease has not been disturbed in
any material respect, and to the Knowledge of the Company, there are no material
disputes with respect to such Lease; (iii) except with respect to the filing of
the Chapter 11 Cases, neither the Company nor any Subsidiary nor, to the
Knowledge of the Company, any other party to the Lease, is in breach or default
under such Lease; (iv) no security deposit or portion thereof deposited with
respect such Lease has been applied in respect of a breach or default under such
Lease which has not been redeposited in full; (v) neither the Company nor
Subsidiary owes, or will owe in the future, any brokerage commissions or
finder’s fees with respect to such Lease; and (vi) neither the Company nor
Subsidiary has subleased, licensed or otherwise granted any Person the right to
use or occupy such Leased Real Property or any portion thereof.

(c) Real Property Used in the Business. The Owned Real Property identified on
Schedule 2.20(a) and Leased Real Property identified on Schedule 2.20(b)
(collectively, the “Real Property”), comprise all of the real property used in,
or otherwise related to, the business of the Company and its Subsidiaries,
except to the extent the Company and its Subsidiaries perform services on the
real property of their customers.

 

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2.21. Financial Statements. Each of (i) the audited consolidated balance sheet
of the Company as of December 31, 2010 and 2009, and the related consolidated
statements of operations and cash flows for the twelve-month periods then ended,
included in the Annual Report on Form 10-K of the Company for the year ended
December 31, 2010 (the “Audited Financial Statements”), and (ii) the condensed
consolidated balance sheet of the Company as of September 30, 2011, and the
related condensed consolidated statements of operations and cash flows for the
three month and nine month periods then ended, included in the Quarterly Report
on Form 10-Q of the Company for the quarter ended September 30, 2011 (the
“Unaudited Financial Statements” and, together with the Audited Financial
Statements, the “Financial Statements”), (a) comply as to form in all material
respects with applicable accounting requirements and published rules and
regulations of the Commission with respect thereto; (b) have been prepared in
accordance with GAAP (subject, in the case of the Unaudited Financial Statements
to normal recurring year-end adjustments and the absence of footnotes); and
(c) present fairly in all material respects the consolidated financial position
and results of operations and cash flows (as applicable) of the Company and its
Subsidiaries on a consolidated basis as of the respective dates thereof and for
the periods referred to therein. Neither the Company nor any of its Subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) of a type normally reflected on a balance sheet
prepared in accordance with GAAP, other than for liabilities and obligations
(i) reflected on the face of the consolidated balance sheet included in the
Financial Statements, (ii) that were incurred after December 31, 2010 in the
ordinary course of business consistent with past practice and that are not,
individually or in the aggregate, material to the Company or any of its
Subsidiaries or (iii) set forth on Schedule 2.21.

2.22. Tax Matters. Except as set forth on Schedule 2.22:

(a) (i) All material tax returns required to be filed by or on behalf of the
Company or any of its Subsidiaries, or any Affiliated Group of which the Company
or any of its Subsidiaries is or was a member, have been properly prepared in
all material respects and duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such tax returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings); (ii) all material taxes payable by or on behalf of the Company or any
of its Subsidiaries either directly, as part of the consolidated tax return of
another taxpayer, or otherwise, have been fully and timely paid; and (iii) no
agreement, waiver or other document or arrangement extending or having the
effect of extending the period for assessment or collection of a material amount
of taxes (including any applicable statute of limitation), has been executed or
filed with the IRS or any other taxing authority by or on behalf of the Company
or any of its Subsidiaries (other than pursuant to extensions of time to file
tax returns obtained in the ordinary course of business).

(b) All material deficiencies asserted or assessments made in writing as a
result of any examinations by the IRS or any other taxing authority of the tax
returns of or covering or including the Company or any of its Subsidiaries have
been fully paid, and, to the Knowledge of the Company, there are no other audits
or investigations by any taxing authority in progress with respect to the
Company or any of its Subsidiaries, nor has the Company or any of its
Subsidiaries received written notice from any taxing authority that it intends
to conduct such an audit or investigation.

 

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2.23. Labor and Employment Compliance. Except as set forth on Schedule 2.23:

(a) The Company and each of its Subsidiaries is in compliance with all
applicable Laws respecting employment practices and the employment of labor,
including those related to wages and hours, worker classification (including the
proper classification of independent contractors and consultants), tax
withholding, collective bargaining, unemployment insurance, workers’
compensation, immigration, harassment and discrimination, disability rights and
benefits, affirmative action, employee layoffs and pay equity, except where the
failure to be in compliance would not reasonably be expected to result in a
Material Adverse Effect.

(b) There is no Proceeding pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries alleging a violation
of any labor or employment Law that is before any Governmental Body or
arbitrator, except for such Proceedings (or threatened Proceedings) that, if
adversely determined, would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

(c) No trade union or other labor organization is the collective bargaining
representative of any employees of the Company or any of its Subsidiaries.

(d) To the Knowledge of the Company, no union organizing or decertification
activities are underway or threatened at the Company or any of its Subsidiaries.

(e) There is not presently pending, and for the previous three (3) years there
has not been, any material labor strike, lockout, slow-down, work stoppage or
other material labor dispute against or affecting the Company or any of its
Subsidiaries.

(f) As of the date hereof, no collective bargaining agreement is currently being
negotiated by the Company or any of its Subsidiaries.

(g) With respect to this transaction, any notice required by any Law or
collective bargaining agreement has been or prior to the Closing will be
provided, and any bargaining obligations required by Law have been or prior to
the Closing will be satisfied.

(h) Within the ninety (90) days prior to the Closing, neither the Company nor
any of its Subsidiaries have implemented any employee layoffs that would result
in an obligation to give notice before Closing under the Worker Adjustment and
Retraining Notification Act of 1988, as amended (the “WARN Act”), or any similar
state or local Law.

2.24. Arm’s Length. The Aquilex Parties acknowledge and agree that the Backstop
Parties are acting solely in the capacity of arm’s length contractual
counterparties to the Company with respect to the

 

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Contemplated Transactions (including in connection with determining the terms of
the Rights Offering) and not as financial advisors or fiduciaries to, or agents
of, the Company or any other Person. Additionally, the Backstop Parties are not
advising the Company or any other Person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the Contemplated
Transactions, and the Backstop Parties shall have no responsibility or liability
to the Company with respect thereto. Any review by the Backstop Parties of the
Company, the Contemplated Transactions or other matters relating to the
Contemplated Transactions will be performed solely for the benefit of the
Backstop Parties and shall not be on behalf of the Company.

2.25. No Inconsistent Transaction. None of the Aquilex Parties, or any of their
respective Affiliates, or, to the Knowledge of the Company, any Person acting on
their behalf, is party to any Contract or other binding commitment to pursue,
implement or effectuate any Inconsistent Transaction, or any discussions, plans,
efforts, negotiations, or activities related to any transaction, which if
consummated, would be an Inconsistent Transaction.

2.26. Investment Company Act. Neither the Company nor any Subsidiary is an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder.

2.27. Accounting Controls. The Company and its Subsidiaries maintain a system of
internal accounting controls (as such term is defined in Rule 13a-15 under the
Exchange Act) sufficient to provide assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

2.28. Insurance. Schedule 2.28 sets forth a description of all insurance
maintained by or on behalf of the Company and its Subsidiaries as of the date
hereof, and such policies are in full force and effect and will continue to be
in full force and effect following the Effective Date. As of the date hereof,
all premiums due and payable in respect of such insurance have been paid. The
Company reasonably believes that the insurance maintained by or on behalf of the
Company and its Subsidiaries is adequate in all material respects. As of the
date hereof, to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has received written notice from any insurer or agent of such
insurer with respect to any of such policies of cancellation or termination of
such policies.

 

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2.29. Transactions with Related Parties. Except as set forth in Schedule 2.29,
there are no Contracts between the Company or any of its Subsidiaries, on the
one hand, and any executive officer, director or Affiliate of the Company or any
of its Subsidiaries, or any Affiliate, relative or spouse of any such officer,
director or Affiliate or any greater than 5% equityholder of the Company or and
any other Person of which any of the foregoing Persons directly or indirectly
owns any equity interest, on the other hand, except with respect to compensation
and benefits for services rendered by employees in the ordinary course of
employment.

3. Representations and Warranties of the Backstop Parties. Each Backstop Party,
severally and not jointly, hereby represents and warrants to the Company as set
forth below. Except for representations and warranties that are expressly
limited as to a particular date, each representation and warranty is made as of
the date hereof.

3.1. Organization of Such Backstop Party. Such Backstop Party is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
incorporation or organization (as applicable), with full corporate, partnership
or limited liability company (as applicable) power and authority to conduct its
business as it is now or currently proposed to be conducted, and to own or use
the properties and assets that it purports to own or use.

3.2. Authority; No Conflict.

(a) Such Backstop Party has the requisite corporate, partnership or limited
liability company (as applicable) power and authority to enter into, execute and
deliver this Agreement and to consummate the Contemplated Transactions, and has
taken all necessary corporate, partnership or limited liability company (as
applicable) action required for the due authorization, execution and delivery of
this Agreement and the consummation of the Contemplated Transactions. This
Agreement has been duly executed and delivered by such Backstop Party, and this
Agreement constitutes the legal, valid and binding obligation of such Backstop
Party, enforceable against such Backstop Party in accordance with its terms.

(b) Neither the execution and delivery by such Backstop Party of this Agreement
nor the consummation or performance on the part of such Backstop Party of any of
the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time or both):

(i) contravene, conflict with, or result in a violation of (1) any provision of
the Organizational Documents of such Backstop Party, or (2) any resolution
adopted by the board of directors (or similar governing body) or the
stockholders (or members or partners, as applicable) of any such Backstop Party;
or

(ii) contravene, conflict with or result in a violation of any existing Law as
in effect on the date of this Agreement or as in effect on the Effective Date to
which such Backstop Party, or any of the properties, assets, rights or interests
owned or used by such Backstop Party, may be subject.

 

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except, in the case of clause (ii), where such occurrence, event or result would
not reasonably be expected to prohibit, materially delay or materially and
adversely impact such Backstop Party’s performance of its obligations under this
Agreement.

(c) Except (i) for Consents that have been obtained, notices which have been
given and filings which have been made, (ii) where the failure to give any
notice, obtain any Consent or make any filing would not, individually or in the
aggregate, reasonably be expected to prevent or materially delay the
consummation of any of the Contemplated Transactions and (iii) compliance with
any foreign competition Laws, if required, such Backstop Party is not and will
not be required to give any notice to, make any filing with (including any
filing under the HSR Act) or obtain any Consent from, any Person in connection
with the execution and delivery by such Backstop Party of this Agreement or the
consummation or performance by such Backstop Party of any of the Contemplated
Transactions.

3.3. Units Not Registered. Such Backstop Party understands that the Units have
not been registered under the Securities Act. Such Backstop Party also
understands that the Units are, to the extent not acquired pursuant to section
1145 of the Bankruptcy Code, being offered and sold pursuant to an exemption
from registration contained in the Securities Act, based in part upon such
Backstop Party’s representations contained in this Agreement and cannot be sold
unless subsequently registered under the Securities Act or an exemption from
registration is available.

3.4. Acquisition for Own Account. Such Backstop Party is acquiring the Units for
its own account (or for the accounts for which it is acting as investment
advisor or manager) for investment and not with a present view toward
distribution, within the meaning of the Securities Act.

3.5. Accredited Investor. Such Backstop Party is an “accredited investor” as
that term is defined in Regulation D promulgated under the Securities Act and
has such knowledge and experience in financial and business matters that such
Backstop Party is capable of evaluating the merits and risks of its investment
in the Units. Such Backstop Party understands and is able to bear any economic
risks with such investment.

3.6. Brokers or Finders. Except as set forth on Schedule 3.6, such Backstop
Party has not, and its agents have not, incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payments in connection with this Agreement, for which the
Company may be liable.

 

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3.7. Legal Proceedings. There is no pending, outstanding or, to the knowledge of
such Backstop Party, threatened Proceedings against such Backstop Party that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Contemplated Transactions, which, if
adversely determined, would reasonably be expected to have a material adverse
effect on the ability of such Backstop Party to consummate the Contemplated
Transactions.

Anything herein to the contrary notwithstanding, nothing contained in any of the
representations, warranties or acknowledgments made by any Backstop Party in
this Section 3 or elsewhere in this Agreement will operate to modify or limit in
any respect the representations and warranties of the Company or to relieve the
Company from any obligations to the Backstop Parties for breach thereof or the
making of misleading statements or the omission of material facts in connection
with the Contemplated Transactions.

4. Covenants of the Aquilex Parties. The Aquilex Parties hereby agree with the
Backstop Parties as set forth in this Section 4.

4.1. Agreement Motion and Agreement Order. On the Petition Date, the Aquilex
Parties shall file the Agreement Motion seeking the Agreement Order, in each
case, in form and substance reasonably acceptable to the Required Backstop
Interest, approving the assumption of this Agreement by the Aquilex Parties that
are debtors in the Chapter 11 Cases, and the consummation of the Contemplated
Transactions, including the payment by the Aquilex Parties of the Backstop
Commitment Fee and the Transaction Expenses on the terms set forth herein, and
the indemnification provisions in favor of the Indemnified Parties set forth
herein; provided that the signature pages, exhibits and schedules to any copy of
this Agreement that is filed with the Bankruptcy Court shall, subject to
Bankruptcy Court approval, be subject to redaction as the Backstop Parties
determine to be reasonably necessary and appropriate, including redacting the
names of the Backstop Parties and the Total Commitment Percentage and the
Backstop Investment Amount of each Backstop Party. The Aquilex Parties agree
that they shall use their commercially reasonable efforts to (a) obtain a waiver
of Bankruptcy Rule 6004(h) and request that the Agreement Order be effective
immediately upon its entry by the Bankruptcy Court, which Agreement Order shall
not be revised, modified or amended by the Confirmation Order or any other
further order of the Bankruptcy Court, (b) fully support the Agreement Motion
and any application seeking Bankruptcy Court approval and authorization to pay
the fees and expenses under this Agreement, including the Transaction Expenses
and the Backstop Commitment Fee, as an administrative expense of the Aquilex
Parties’ estates, and (c) obtain approval of the Agreement Order on the Petition
Date or as soon as practicable thereafter.

4.2. Rights Offering. The Aquilex Parties shall, following preparation thereof,
promptly provide copies of drafts of all documents, instruments, agreements and
other materials to be entered into, delivered, distributed or otherwise used in
connection with the Rights Offering (the “Rights Offering Documentation”) for
review and comment by, and reasonable approval of, the Required

 

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Backstop Interest. The Agreement Order shall include provisions expressly
approving the Rights Offering Documentation. No Rights Offering Documentation
shall be entered into, delivered, distributed or otherwise used without the
prior written consent of the Required Backstop Interest, which consent shall not
be unreasonably withheld, conditioned or delayed.

4.3. Conditions Precedent. The Aquilex Parties shall, and shall cause their
respective Subsidiaries to, use their commercially reasonable efforts to satisfy
or cause to be satisfied all the conditions precedent set forth in Section 6.1
and to procure and obtain all Consents, authorizations and waivers of, make all
filings with, and give all notices to, third parties (including Governmental
Bodies) that may be necessary or required on its part in order to effect the
Contemplated Transactions.

4.4. Notification.

(a) The Aquilex Parties shall on request by any of the Backstop Parties and, if
not requested, no less frequently than every two (2) Business Days, notify the
Backstop Parties, or cause the applicable subscription agent for the Rights
Offering (the “Subscription Agent”) to notify the Backstop Parties, of the
aggregate Noteholder Cash Option Amount and the aggregate number of Rights
exercised pursuant to the Rights Offering or Restructuring, in each case, to the
extent known by the Company or the Subscription Agent as of the close of
business on the preceding Business Day or the most recent practicable time
before such request, as the case may be.

(b) In the event that the Company or any of its Subsidiaries or Representatives
receives a written proposal or offer (binding or nonbinding) with respect to any
Inconsistent Transaction, the Company shall provide the Backstop Parties with
written notice thereof within forty-eight (48) hours and such notice shall
include a summary of the material terms of such proposal or offer, including
economic terms and the conditions to entering into definitive documentation with
respect to such proposed Inconsistent Transaction, including the identity of all
parties and financing sources involved in or making such proposal or offer.

(c) Between the date hereof and the Effective Date, the Aquilex Parties shall
provide prompt written notice to the Backstop Parties of (i) the occurrence, or
failure to occur, of any event of which any of the Aquilex Parties is aware
which occurrence or failure would be likely to cause (A) any representation or
warranty of any of the Aquilex Parties contained in this Agreement to be untrue
or inaccurate in any material respect, (B) any covenant of any of the Aquilex
Parties contained in this Agreement not to be complied with or satisfied in all
material respects or (C) any condition precedent contained in the Plan or this
Agreement not to occur or become impossible to satisfy, (ii) receipt of any
written notice from any third party alleging that the Consent of such party is
or may be required in connection with the Contemplated Transactions, (iii) any
notice or other communication from any Governmental Body in connection with this
Agreement or the Contemplated Transactions, (iv) any Proceeding commenced or, to
the Knowledge of the Company, threatened, against any of the Company or its
Subsidiaries relating to or involving the Contemplated Transactions, and (v) any
failure of any of the Aquilex Parties to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it hereunder.

 

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(d) The Company shall provide draft copies of all Exchange Act Documents the
Company intends to file with the Commission to counsel to the Backstop Parties
at least three (3) Business Days prior to the date when the Company intends to
file such document and shall consult in good faith with such counsel regarding
the form and substance of any such proposed filing with the Commission.

4.5. Financial Information. For each month, beginning December 2011 until the
Effective Date, the Company shall provide to the Backstop Parties an unaudited
consolidated balance sheet and related unaudited consolidated statements of
operations and consolidated statements of cash flows for the month then ended
(the “Monthly Financial Statements”) and the Management Business Reviews
(“MBRs”) for each segment of the business of the Company and its Subsidiaries,
in each case, promptly after such materials are available to the Company and in
any event within the earlier of (a) thirty (30) calendar days following the last
day of such month and (b) if applicable, when such materials are provided to the
lenders under the Bridge Facility; provided that the Company shall not provide
the Monthly Financial Statements or MBRs to any Backstop Party that has notified
the Company in writing that such Backstop Party desires not to receive any
Monthly Financial Statements or MBRs (unless and until such Backstop Party
revokes in writing any such written notice). The Monthly Financial Statements,
except as indicated therein and except for the absence of footnotes, shall be
prepared in accordance with GAAP and shall fairly present in all material
respects the consolidated financial position, consolidated results of operations
and consolidated cash flows of the Company and its Subsidiaries as of the dates
indicated and for the periods specified, subject to year-end adjustments.

4.6. Use of Proceeds. The Aquilex Parties shall apply the net proceeds from the
sale of the Rights Offering Units from the Rights Offering and the sale of the
Units pursuant to this Agreement in accordance with the terms of the
Restructuring Support Agreement, including, if applicable, to fund the payment
of claims and administrative claims as provided in the Plan and the Disclosure
Statement.

4.7. HSR Act and Foreign Competition Filings. The Aquilex Parties shall use
their commercially reasonable efforts to prepare and file as soon as reasonably
practicable all necessary documentation and effect all applications that are
necessary or advisable under the HSR Act or any applicable foreign competition
Laws so that all applicable waiting periods shall have expired or been
terminated thereunder with respect to the purchase of Units hereunder, the
issuance and purchase of Rights Offering Units in connection with the Rights
Offering or any of the other Contemplated Transactions in time for such
transactions to be consummated within the timeframes contemplated, and not take
any action, or fail to take any action, that is intended or reasonably likely to
materially impede or delay the ability of the parties to obtain any necessary
approvals required for the Contemplated Transactions. Without limiting the
provisions of Section 1.5, the Aquilex Parties shall bear all filing fees
incurred by the Aquilex Parties and the Backstop Parties in connection with any
filing under the HSR Act or applicable foreign competition Laws.

 

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4.8. Access. Promptly following the Execution Date, each of the Aquilex Parties
will, and will use commercially reasonable efforts to cause its employees,
officers, directors, accountants, attorneys and other advisors (collectively,
“Representatives”) to, provide each of the Backstop Parties and its
Representatives with reasonable access, upon reasonable prior notice, and
without disruption to the conduct of the Company’s business, during normal
business hours, to officers, executive management employees and other
Representatives of any of the Company and any of its Subsidiaries, including
telephone conferences as contemplated by the Restructuring Support Agreement,
and to books, records and facilities and any other material information
concerning the business and operations of any of the Company and its
Subsidiaries as any of the Backstop Parties or any of its Representatives may
reasonably request for the purpose of evaluating the Company’s business plans
and participating in the planning process with respect to the Restructuring
Transactions.

4.9. Amended LLC Agreement. No later than the Effective Date, the Company shall
execute and deliver the Amended LLC Agreement.

4.10. Exit Facility. The Aquilex Parties shall use their commercially reasonable
efforts, at the sole cost and expense of the Aquilex Parties, to take all
commercially reasonable actions to enter into and consummate (and secure on or
prior to the Effective Date the financing contemplated by) the Exit Facility,
including by using their commercially reasonable efforts to (a) negotiate,
execute and deliver the Exit Facility Documentation (as defined below) and
(b) satisfy all conditions in the Exit Facility Documentation. The Aquilex
Parties shall promptly provide copies of all drafts and final execution copies
of all documents, instruments, agreements and other materials to be entered
into, delivered or otherwise used in connection with the Exit Facility (the
“Exit Facility Documentation”) for review and comment by, and the reasonable
approval of, the Required Backstop Interest. No Exit Facility Documentation
shall be entered into, delivered, distributed or otherwise used without the
prior written consent of the Required Backstop Interest, which consent shall not
be unreasonably withheld, conditioned or delayed. The Aquilex Parties shall
comply in all material respects, in a timely manner, with all of the terms,
conditions and covenants contained in the Exit Facility Documentation. The Exit
Facility Documentation shall be consistent in all material respects with the
terms set forth in the applicable exhibit hereto, except as otherwise reasonably
agreed by the Required Backstop Interest. In connection with the foregoing, no
Backstop Party shall be required to (i) disclose to any Person any information
that such Backstop Party, in its sole and reasonable discretion, deems
confidential or (ii) expend any funds, make any payments or provide any
indemnities, reimbursement obligations, commitments, guarantees or any other
form of credit support. Notwithstanding the foregoing, each of the Aquilex
Parties acknowledges and agrees that neither the Backstop Parties nor any of
their respective Affiliates or Representatives shall have any responsibility for
the Exit Facility and shall not be liable or otherwise responsible for any
statements, assertions, facts, projections, forecasts, data or other information
contained or referred to in any offering memorandum, bankers’ book or other
materials prepared by or on behalf of the Aquilex Parties, the agents or lenders
under the Exit Facility, or any of their respective Affiliates or
Representatives in connection with the Exit Facility.

 

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4.11. DIP Facility. The Aquilex Parties shall promptly provide copies of all
drafts and final execution copies of all documents, instruments, agreements and
other materials to be entered into, delivered or otherwise used in connection
with the DIP Facility (the “DIP Facility Documentation”) for review and comment
by, and the reasonable approval of, the Required Backstop Interest. No DIP
Facility Documentation shall be entered into, delivered, distributed or
otherwise used without the prior written consent of the Required Backstop
Interest, which consent shall not be unreasonably withheld, conditioned or
delayed. The Aquilex Parties shall comply in all material respects, in a timely
manner, with all of the terms, conditions and covenants contained in the DIP
Facility Documentation. The DIP Facility Documentation shall be consistent in
all material respects with the terms set forth in the applicable exhibit hereto,
except as otherwise reasonably agreed by the Required Backstop Interest.

4.12. Specified Issuances. The Aquilex Parties shall:

(a) consult with the Backstop Parties with respect to the steps (the “Specified
Issuance Steps”) to be taken by the Aquilex Parties to ensure that each of the
Specified Issuances are exempt from the registration and prospectus delivery
requirements of Section 5 of the Securities Act pursuant to Section 1145(a) of
the Bankruptcy Code or Section 4(2) of the Securities Act; and

(b) following preparation thereof, promptly provide copies of drafts of all
documents, instruments, questionnaires, agreements and other materials to be
entered into, delivered, distributed or otherwise used in connection with the
Specified Issuances (the “Specified Issuance Documentation”) for review and
comment by the Backstop Parties. Any comments received by the Aquilex Parties
from the Backstop Parties or their respective Representatives with respect to
the Specified Issuance Steps or the Specified Issuance Documentation shall be
considered by them in good faith and, to the extent the Aquilex Parties disagree
with any such comments, they shall inform the Backstop Parties thereof and
discuss the same with the Backstop Parties prior to taking such Specified
Issuance Steps or delivering, distributing, entering into or using any such
Specified Issuance Documentation.

4.13. Conduct of the Business. Except as expressly set forth in this Agreement
or the Restructuring Support Agreement, or as required by applicable Law, during
the period from the date of this Agreement to the Effective Date, the Company
shall, and shall cause each of its Subsidiaries to, operate in the ordinary
course of business in accordance with their business judgment and, to the extent
consistent therewith, use their commercially reasonable efforts to preserve
intact in all material respects their current business organizations, keep
available the services of their current officers and material employees (in each
case, other than voluntary resignations, terminations for cause or consistent
with applicable fiduciary duties) and preserve in all material respects their

 

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relationships with customers, sales representatives, suppliers, distributors and
others, in each case, having material business dealings with the Company or its
Subsidiaries. Without limiting the generality of the foregoing, and except as
otherwise expressly provided by this Agreement or as set forth on Schedule 4.13,
prior to the Effective Date, the Company shall not, and shall cause its
Subsidiaries not to, take any of the following actions without the prior written
consent of the Required Backstop Interest, which consent shall not be
unreasonably withheld, conditioned or delayed; provided that in solely the case
of clause (m) below, the prior written consent of only the Backstop Sponsor
(which consent shall not be unreasonably withheld, conditioned or delayed) and
not the Required Backstop Interest shall be required, so long as all materials
and other information that have been provided to the Backstop Sponsor in
connection with such consent shall have been made available to the Board of
Directors (or other governing body) of the Company and the other Backstop
Parties (unless a Backstop Party has requested not to receive such information)
substantially contemporaneously with such materials and information being made
available to the Backstop Sponsor:

(a) directly or indirectly, through any Person, seek, solicit, propose, support,
assist, engage in negotiations in connection with or participate in the
formulation, preparation, filing or prosecution of, any plan, plan proposal,
restructuring proposal, offer of dissolution, winding up, liquidation, sale or
disposition, reorganization, merger or restructuring of the Company, Parent or
any of their respective Subsidiaries, other than the Plan, or take any other
action that would reasonably be expected to prevent, interfere with, delay or
impede the Exchange Offer in any way, the solicitation of votes on the Plan, the
approval of the Disclosure Statement or the implementation or consummation of
the Plan or the Restructuring Transactions;

(b) amend or modify (other than technical, non-substantive modifications, which
changes shall not in any event be adverse in any material respect to the
Backstop Parties) the Restructuring Support Agreement or the Plan;

(c) withdraw or revoke the Restructuring Support Agreement or the Plan or
publicly announce its intention not to pursue the Restructuring Support
Agreement or the Plan;

(d) file any motion or pleading or other Definitive Document or pleading with
the Bankruptcy Court (including any modifications or amendments thereof) that,
in whole or in part, is not consistent in any material respect with this
Agreement, the Restructuring Support Agreement or the Plan;

(e) incur or commit to incur any capital expenditures in excess of the amounts
permitted under the DIP Facility in the ordinary course of business;

(f) acquire or agree to acquire by merging or consolidating with, or purchase
any portion of the stock of, or other ownership interests in, or substantial
portion of assets of, or by any other manner, any business or any corporation,
partnership, association, joint venture or limited liability company;

(g) sell, lease, mortgage, pledge, grant any Encumbrance (other than a Permitted
Encumbrance) on or otherwise encumber or dispose of any of its properties or
assets

 

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including the capital stock or equity interests of any Aquilex Party, other than
sales or disposals of tangible assets in the ordinary course of business or as
contemplated by the DIP Facility;

(h) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of the capital stock of the Company, except for
intracompany dividends or distributions (other than to any direct or indirect
parent of the Company) or (ii) purchase, redeem or otherwise acquire or offer to
acquire any shares of capital stock of the Company or any direct or indirect
parent of the Company or any other securities thereof or any rights including
capital stock, units, limited liability company interests or partnership
interests, warrants or options to acquire any such shares or other securities;

(i) adjust, split, combine or reclassify any capital stock or equity interests
or issue or propose or authorize the issuance of any other securities (including
options, profits interests, warrants or any similar security exercisable for, or
convertible into, such other security) of the Company;

(j) incur or suffer to exist any Indebtedness for borrowed money in excess of
$100,000, except for Indebtedness arising pursuant to and in accordance with the
terms of the DIP Facility, if applicable; the Bridge Facility; Section 1.3(a);
the proposed amendment and restatement of the First Lien Credit Agreement as
described in the Term Sheet; or other Indebtedness permitted under the DIP
Facility, if applicable, or the Bridge Facility, in either case, incurred in the
ordinary course of business;

(k) incur or suffer to exist any Encumbrances, except as expressly permitted
under the DIP Facility, if applicable, or the Bridge Facility and any other
Permitted Encumbrances;

(l) enter into any commitment or agreement with respect to debtor-in-possession
financing or the use of cash collateral, other than (i) in connection with the
DIP Facility and consistent with the terms of an order approving the DIP
Facility or (ii) any other debtor-in-possession facility provided by the “Second
Lien Lenders” (as defined in the Restructuring Support Agreement) that is junior
in priority to “First Lien Facility” (as defined in the Restructuring Support
Agreement);

(m) enter into, assume or reject or amend, restate, supplement, modify, waive or
terminate any Material Contract (or Contract that would be a Material Contract
if entered into prior to the date hereof) that is not a Company Benefit Plan, a
Contract or group of related Contracts with any of the Company’s customers or
suppliers involving amounts not in excess of $5,000,000 or as otherwise
permitted pursuant to Sections 4.13(e) or 4.13(q);

(n) move for an order from the Bankruptcy Court authorizing or directing the
assumption or rejection of any Material Contract (or Contract that would be a
Material Contract if entered into prior to the date hereof) (including any
employment agreement or employee benefit plan) or unexpired lease other than in
accordance with the Restructuring Support Agreement or the Plan;

 

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(o) guarantee any Indebtedness of any Person (other than of the Company or any
of its Subsidiaries) or enter into any “keep well” or other agreement to
maintain any financial condition of another Person (other than a Subsidiary of
the Company) or enter into any arrangement having the economic effect of any of
the foregoing;

(p) adopt or propose any amendments to any of the Company’s or its Subsidiaries’
respective certificates or articles of incorporation, bylaws or other
Organizational Documents; except, in furtherance of the Restructuring or the
Contemplated Transactions (and approved by the Required Backstop Interest to the
extent not expressly set forth in this Agreement, the Restructuring Support
Agreement or the Definitive Documents);

(q) except (i) as required by the terms of an existing Contract, agreement,
arrangement, plan or policy disclosed to the Backstop Parties on a Schedule to
this Agreement or (ii) as required to comply with Law, (A) enter into, adopt,
amend or terminate any Company Benefit Plan, other than in the ordinary course
of business in connection with a new plan year that would not result in a
material increase in cost to the Company or its Subsidiaries, (B) increase in
any manner the compensation or benefits (including severance) of any director,
officer or management level employee of the Company or any of its Subsidiaries
with an annual salary or severance that is (or after giving effect to any such
increase would be) in excess of $175,000, other than in the ordinary course of
business in connection with a new welfare plan year applicable to all employees
under such plan that would not result in a material increase in cost to the
Company or any of its Subsidiaries, or (C) terminate the employment of or hire
any officer or management level employee of the Company or any of its
Subsidiaries with an annual salary or severance in excess of $175,000, other
than (1) a termination of employment for cause or if the failure to do so would
be inconsistent with the exercise of applicable fiduciary duties or (2) a hiring
in order to fill a vacancy resulting from the termination of employment of an
employee on terms that are substantially similar to those of the terminated
employee;

(r) implement any employee layoffs that would result in an obligation to give
notice at or before Closing under the WARN Act;

(s) commence any Proceeding (other than a Proceeding as a result of a Proceeding
commenced against the Company or any of its Subsidiaries), or compromise, settle
or agree to settle any Proceeding, other than compromises, settlements or
agreements in the ordinary course of business consistent with past practice that
involve only the payment of money damages not in excess of $250,000 individually
or $1,000,000 in the aggregate (excluding any damages covered by insurance), in
any case without the imposition of any equitable relief;

(t) change materially its financial or tax accounting methods, except insofar as
may have been required by a change in GAAP or applicable Law, or revalue any of
its material assets;

(u) pursue, implement or effectuate any Inconsistent Transaction, or engage in
any discussions, plans, efforts, negotiations, or activities related to any
transaction, which if consummated, would be an Inconsistent Transaction; or

 

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(v) commit or agree to take any of the foregoing.

5. Covenants of the Backstop Parties. Each of the Backstop Parties hereby
agrees, severally and not jointly, with the Company as set forth in this
Section 5.

5.1. Conditions Precedent. Each Backstop Party shall use its commercially
reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent applicable to such Backstop Party set forth in Section 6.2; provided,
however, in no event shall this Section 5.1 obligate any of the Backstop Parties
to waive any right or condition under this Agreement.

5.2. HSR Act and Foreign Competition Filings. Each Backstop Party shall use
commercially reasonable efforts to prepare and file as soon as reasonably
practicable all necessary documentation and effect all applications that are
necessary, if any, under the HSR Act or any applicable foreign competition Laws
so that all applicable waiting periods shall have expired or been terminated
thereunder with respect to the purchase of Units hereunder, the issuance and
purchase of Rights Offering Units in connection with the Rights Offering or any
of the other Contemplated Transactions within the timeframes contemplated, and
not take any action that is intended or reasonably likely to materially impede
or delay the ability of the parties to obtain any necessary approvals required
for the Contemplated Transactions. Anything herein to the contrary
notwithstanding, none of the Backstop Parties (or their respective ultimate
parent entities, as such term is used in the HSR Act) shall be required to
(a) disclose to any other party hereto any information contained in its HSR
Notification and Report Form or filings under any applicable foreign competition
Laws that such party, in its sole discretion, deems confidential as a condition
to the expiration or termination of all applicable waiting periods under the HSR
Act and any applicable foreign competition Laws, (b) agree to any condition,
restraint or limitation relating to its or any of its Affiliates’ ability to
freely own or operate all or a portion of its or any of its Affiliates’ business
or assets, (c) hold separate (including by trust or otherwise) or divest any of
its or any of its Affiliates’ businesses or assets or (d) hold separate
(including by trust or otherwise) or divest any assets of the Company or any of
its Subsidiaries. Without limiting the provisions of Section 1.5, the Aquilex
Parties shall bear all filing fees incurred by the Aquilex Parties and the
Backstop Parties in connection with any filing under the HSR Act or applicable
foreign competition Laws.

5.3. Confidential Information. Notwithstanding anything in this Agreement to the
contrary, if the Company determines that any information (whether written or
oral) required to be delivered under this Agreement is material non-public
information within the meaning of Regulation FD of the Exchange Act (“MNPI”),
the Company shall not be obligated to deliver any such MNPI to any party hereto
unless and until, such party has executed a confidentiality agreement, in a form
reasonably satisfactory to the Company, under which such recipient has agreed to
hold as confidential, subject to customary exceptions, and not disclose, subject
to customary exceptions, any such MNPI for a period ending no earlier than
April 11, 2013 (which confidentiality agreement shall

 

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contain confidentiality arrangements substantially similar to the arrangements
set forth in those certain confidentiality agreements between the Company and
Centerbridge Advisors II, LLC, dated as of October 13, 2011, and the Company and
Redwood Capital Management, LLC, dated as of October 17, 2011, other than with
respect to the release date of April 11, 2013).

5.4. Definitive Documents. Each of the parties hereto shall negotiate in good
faith with the other parties hereto to enter into, and shall enter into
concurrently with the Closing, the Definitive Documents in accordance with the
terms set forth in this Agreement, the Restructuring Support Agreement and the
other term sheets and agreements referred to herein and therein, including the
Amended LLC Agreement in accordance with the terms set forth in Exhibit C.

6. Conditions to Closing.

6.1. Conditions Precedent to Obligations of the Backstop Parties. The
obligations of the Backstop Parties to subscribe for and purchase Units pursuant
to their respective Commitments (and to exercise their respective Rights) are
subject to satisfaction as of the Closing of the following conditions precedent,
each of which may be waived in writing by the Required Backstop Interest;
provided that, solely in the event that the Restructuring is consummated
out-of-court, the conditions set forth in Sections 6.1(a), (d), (e), (f), (i)(A)
and (w) shall automatically be deemed to have been waived by the Required
Backstop Interest as of immediately prior to the Effective Date.

(a) Agreement Order. The Agreement Order shall have been entered by the
Bankruptcy Court in a form satisfactory to the Required Backstop Interest, and
the Agreement Order shall have become a Final Order.

(b) Material Adverse Effect. Since the date of this Agreement, there shall not
have occurred any changes or events that, individually or in the aggregate, have
had or would reasonably be expected to result in a Material Adverse Effect.

(c) Inconsistent Transaction. The Company shall not have made a public
announcement, entered into any Contract, or filed any pleading or document with
the Bankruptcy Court, evidencing its intention to support, or otherwise agreed
to, consented to, supported, participated in or encouraged the formulation of,
any Inconsistent Transaction, or otherwise breached Section 4.13(u).

(d) Confirmation Order. The Confirmation Order, in form and substance reasonably
acceptable to the Required Backstop Interest, shall have been entered by the
Bankruptcy Court and such order shall have become a Final Order. Without
limiting the generality of the foregoing, the Confirmation Order shall contain
the following specific findings of fact, conclusions of law and orders: (i) each
of the Specified Issuances are exempt from the registration and prospectus
delivery requirements of Section 5 of the Securities Act pursuant to
Section 1145(a) of the Bankruptcy Code or Section 4(2) of the Securities Act;
(ii) the solicitation of acceptance or rejection of the Plan by the Backstop
Parties, or any of their respective Affiliates (if any such solicitation was
made) was done in good faith and in

 

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compliance with the applicable provisions of the Bankruptcy Code and, as such,
the Backstop Parties and any of their respective Affiliates are entitled to the
benefits and protections of Section 1125(e) of the Bankruptcy Code; and
(iii) the participation by the Backstop Parties or any of their respective
Affiliates in the offer, issuance, sale or purchase of any security offered or
sold under the Plan (if any such participation was made) was done in good faith
and in compliance with the applicable provisions of the Bankruptcy Code and, as
such, the Backstop Parties and any of their respective Affiliates are entitled
to the benefits and protections of Section 1125(e) of the Bankruptcy Code.

(e) Plan. The Plan, as confirmed by the Bankruptcy Court, shall be consistent
with the Term Sheet attached hereto as Exhibit A and otherwise in form and
substance reasonably acceptable to the Required Backstop Interest.

(f) Disclosure Statement. The Disclosure Statement, as approved by the
Bankruptcy Court, shall be in form and substance reasonably acceptable to the
Required Backstop Interest and the Bankruptcy Court shall have entered the order
approving the Disclosure Statement (the “Disclosure Statement Order”) in form
and substance reasonably acceptable to the Required Backstop Interest and the
Disclosure Statement Order shall be a Final Order.

(g) Definitive Documents. All Definitive Documents, including the Amended LLC
Agreement and any offering memorandum prepared by or on behalf of the Aquilex
Parties, shall be in form and substance reasonably acceptable to the Required
Backstop Interest and shall have been executed by the parties thereto.

(h) Company Equity. All of the interests and rights to acquire limited liability
company, membership, ownership, or equity interests (or to exchange therefor or
convert thereto) of the Company shall have been cancelled, other than the New
Participating Preferred Units and the New Common Units to be issued in
connection with the Restructuring and pursuant to the terms of the Restructuring
Support Agreement. All equityholders of the Company prior to the Effective Date
shall have withdrawn as members of the Company, and each of the Backstop Parties
and each of the Eligible Noteholders that properly exercised Rights in
accordance with the Rights Offering Procedures shall have been admitted as a
member of the Company pursuant to the Amended LLC Agreement.

(i) Conditions to Confirmation. The conditions to (A) confirmation and the
conditions to the Effective Date set forth in the Plan and (B) the Restructuring
set forth in the Restructuring Support Agreement, in each case, shall have been
satisfied (or waived with the consent of the Required Backstop Interest) in
accordance with the Restructuring Support Agreement.

(j) Rights Offering. The Company shall have commenced the Rights Offering, the
Rights Offering shall have been conducted in accordance with the Rights Offering
Procedures and in accordance with this Agreement, and the Rights Expiration Date
shall have occurred.

 

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(k) Purchase Notice. The Backstop Parties shall have received a Purchase Notice
(or Satisfaction Notice, if applicable) in accordance with Section 1.1(c) from
the Company, dated as of the Determination Date, certifying as to the number of
Unsubscribed Units, if any, to be purchased pursuant to Section 1.2(a), the
Noteholder Cash Option Amount, if any, to be funded pursuant to Section 1.2(b),
the Consent Payment Amount, if any, to be funded pursuant to Section 1.2(c) and
the Plan Additional Unit Purchase Price, if any, to be funded pursuant to
Section 1.2(d).

(l) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other Order preventing the consummation
of the Contemplated Transactions shall have been entered, issued, rendered or
made, nor shall any Proceeding have been brought by or before a Governmental
Body seeking any of the foregoing be pending; nor shall there be any Law
promulgated, enacted, entered, enforced or deemed applicable to the parties
hereto which makes the consummation of the Contemplated Transactions illegal,
void or rescinded.

(m) HSR Act and Foreign Competition Laws. If the purchase of the Units by the
Backstop Parties pursuant to this Agreement or the issuance and purchase of
Rights Offering Units pursuant to the Rights Offering is subject to the terms of
the HSR Act or any foreign competition Laws, the applicable waiting periods
shall have expired or been terminated thereunder with respect to any such
purchase.

(n) Valid Issuance. The Units shall be, upon payment of the applicable price
therefor as provided herein, validly issued, fully paid and free and clear of
all taxes, Encumbrances, pre-emptive rights, rights of first refusal,
subscription and similar rights, except for any restrictions on transfer as may
be imposed by applicable Law or in the Amended LLC Agreement.

(o) Enforceability. This Agreement shall be valid and enforceable against the
Aquilex Parties.

(p) Notices and Consents. All other governmental and third party notifications,
filings, waivers, authorizations and Consents necessary or required for the
consummation of the Contemplated Transactions shall have been made or received
and shall be in full force and effect.

(q) Good Standing. The Backstop Parties shall have received on and as of the
Business Day prior to the Effective Date satisfactory evidence of the good
standing of the Company and its Subsidiaries that are organized in the United
States (other than SMS Global, Inc.) in their respective jurisdictions of
organization (to the extent such concept is recognized in such jurisdiction), in
each case in writing or any standard form of telecommunication from the
appropriate Governmental Body of such jurisdictions.

(r) Representations and Warranties and Covenants. (i) Each of the
representations and warranties of the Aquilex Parties in this Agreement, other
than the Fundamental Representations, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect,
shall be true and correct at and as of the

 

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Effective Date as if made on and as of the Effective Date (except for
representations and warranties made as of a specified date, which shall be true
and correct only as of the specified date), except for such failures to be true
and correct that, individually or in the aggregate, would not be reasonably
likely to result in a Material Adverse Effect, (ii) each of the Fundamental
Representations shall be true and correct at and as of the Effective Date as if
made on and as of the Effective Date (except for representations and warranties
made as of a specified date, which shall be true and correct only as of the
specified date) and (iii) each of the Aquilex Parties shall have complied in all
material respects with all covenants in this Agreement applicable to it.

(s) Exit Facility. The Aquilex Parties shall have entered into and consummated
the Exit Facility on the terms set forth in the Exit Facility Documentation, and
with lenders that are, in each case, reasonably acceptable to the Required
Backstop Interest. The Backstop Parties hereby acknowledge and agree that, for
purposes of the satisfaction of this condition, the lenders under the First Lien
Credit Agreement set forth on Schedule 6.1(s) are satisfactory.

(t) Transaction Expenses. The Company shall have paid all Transaction Expenses
that have accrued and remain unpaid as of the Effective Date, and none of the
Transaction Expenses, or any portion thereof, shall be required to be repaid or
otherwise disgorged to the Aquilex Parties or any other Person.

(u) Backstop Commitment Fee. The Company shall have paid the Backstop Commitment
Fee accordance with Section 1.3, and no portion of the Backstop Commitment Fee
shall have been invalidated or voided, or be required to be repaid or otherwise
disgorged to the Aquilex Parties or any other Person.

(v) Restructuring Support Agreement. The Restructuring Support Agreement shall
not have been terminated.

(w) Assumption of Agreement. The Company shall have assumed this Agreement
pursuant to section 365 of the Bankruptcy Code.

(x) Unit Certificates. The Company shall have delivered to each of the Backstop
Parties validly issued certificates representing the Units to be issued to such
Backstop Party hereunder and under the Restructuring Support Agreement.

(y) Amended LLC Agreement. The Company shall have executed and delivered the
Amended LLC Agreement, substantially on the terms set forth in Exhibit C.

(z) Organizational Documents. The Organizational Documents of each of the
Aquilex Parties shall have been amended to reflect terms consistent with this
Agreement and the Restructuring Support Agreement and are otherwise reasonably
satisfactory to the Required Backstop Interest.

(aa) Officer’s Certificate. The Backstop Parties shall have received on and as
of the Effective Date a certificate of the chief financial officer or chief
accounting officer of the Company confirming that the conditions set forth in
Sections 6.1(b) and 6.1(r) have been satisfied.

 

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6.2. Conditions Precedent to Obligations of the Company. The obligations of the
Company to issue and sell the Units to each of the Backstop Parties pursuant to
this Agreement are subject to satisfaction as of the Closing of the following
conditions precedent, each of which may be waived in writing by the Company;
provided that in the event that the Restructuring proceeds other than pursuant
to the Plan, the conditions set forth in Sections 6.2(a) and (b) shall
automatically be deemed to have been waived by the Company.

(a) Confirmation Order. The Confirmation Order shall have been entered by the
Bankruptcy Court and such order shall have become a Final Order.

(b) Conditions to Confirmation. The conditions to confirmation and the
conditions to the Effective Date set forth in the Plan shall have been satisfied
(or waived with the consent of the Required Backstop Interest) in accordance
with the Plan.

(c) Rights Offering. The Rights Offering shall have been consummated.

(d) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other Order preventing the consummation
of the Contemplated Transactions shall have been entered, issued, rendered or
made, nor shall any Proceeding brought by or before a Governmental Body seeking
any of the foregoing be pending; nor shall there be any Law promulgated,
enacted, entered, enforced or deemed applicable to the parties hereto which
makes the consummation of the Contemplated Transactions illegal, void or
rescinded.

(e) HSR Act and Foreign Competition Laws. If the purchase of the Units by the
Backstop Parties pursuant to this Agreement is subject to the terms of the HSR
Act or any foreign competition Laws, the applicable waiting periods shall have
expired or been terminated thereunder with respect to such purchase.

(f) Representations and Warranties and Covenants. (i) Each of the
representations and warranties of each Backstop Party in this Agreement
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, in each case, on
and as of the Effective Date as if made on and as of the Effective Date (except
for representations and warranties made as of a specified date, which shall be
true and correct only as of the specified date) and (ii) each Backstop Party
shall have complied in all material respects with all covenants in this
Agreement applicable to it, except, in each case, to the extent that the
Backstop Sponsor or any Non-Defaulting Backstop Party purchases any Default
Units as a result of any breach of representations, warranties or covenants by a
Defaulting Backstop Party pursuant to Section 1.2(e) or Section 1.2(f).

7. Termination.

(a) This Agreement (including the Commitments) may be terminated and the
Contemplated Transactions may be abandoned at any time prior to the Closing by
the Required Backstop Interest upon written notice of termination to the Aquilex
Parties at any time following the happening, the existence or the occurrence of:

(i) if the Company does not file the Agreement Motion, together with an executed
copy of this Agreement and all of the exhibits and schedules hereto (as redacted
pursuant to Section 4.1), with the Bankruptcy Court on the Petition Date (if it
occurs);

 

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(ii) if any of the conditions set forth in Section 6.1 become incapable of
fulfillment (other than through the failure of the Backstop Parties to comply
with their obligations) and such condition is not able to be fulfilled within
five (5) days, or, if able to be fulfilled within five (5) days, is not
fulfilled prior to the earlier of (x) the End Date and (y) five (5) days after
written notice of such condition is given to the Company by the Required
Backstop Interest;

(iii) if neither the Effective Date nor the Petition Date shall have occurred on
or prior to January 27, 2012;

(iv) if the Petition Date has occurred prior to January 27, 2012, if the
Effective Date has not occurred by April 30, 2012 (the “End Date”);

(v) if the Restructuring Support Agreement shall be terminated;

(vi) if the Bankruptcy Court enters an Order (A) directing the appointment of an
examiner with expanded powers or a trustee, (B) converting any of the Chapter 11
Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing any of
the Chapter 11 Cases; or

(vii) if any Aquilex Party (or any of their direct or indirect equity owners)
makes a public announcement, enters into an agreement, or files any pleading or
document with the Bankruptcy Court, evidencing its intention to support or
participate in, or otherwise supports or participates in, any Inconsistent
Transaction.

(b) This Agreement may be terminated and the Contemplated Transactions may be
abandoned at any time prior to the Closing by the Company upon written notice of
termination to the Required Backstop Interest at any time, if the Restructuring
Support Agreement shall have been terminated pursuant to Section 5(d)(v)
thereof.

(c) This Agreement may be terminated at any time by written consent of the
Company and the Required Backstop Interest.

(d) In the event of termination of this Agreement in accordance with this
Section 7, the provisions of this Agreement shall immediately become void and of
no further force or effect (other than Sections 1.5, 7, 8, 10, 11, 12 and 13,
and other than in respect of any liability of any party for any breach of this
Agreement prior to such termination, which shall in each case expressly survive
any such termination).

 

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(e) Each of the Aquilex Parties hereby acknowledges and agrees and shall not
dispute that, after the Petition Date, the giving of notice of termination by
the Required Backstop Interest pursuant to this Agreement shall not be a
violation of the automatic stay of section 362 of the Bankruptcy Code (and each
of the Aquilex Parties hereby waives, to the greatest extent possible, the
applicability of the automatic stay to the giving of such notice).

8. Indemnification.

(a) Whether or not the Rights Offering is consummated or this Agreement is
terminated, and notwithstanding any investigation on the part of the Backstop
Parties, the Aquilex Parties (in such capacity, the “Indemnifying Parties”)
shall jointly and severally indemnify and hold harmless the Backstop Parties and
each of their respective Affiliates, stockholders, equity holders, members,
partners, managers, officers, directors, employees, Representatives, agents,
advisors and controlling persons (each, in such capacity, an “Indemnified
Person”) from and against any and all losses, claims, damages, liabilities and
expenses (including counsel fees), joint or several, imposed on, sustained,
incurred or suffered by, or asserted against, any Indemnified Person arising out
of or in connection with any claim, challenge, litigation, investigation or
Proceeding (collectively, “Actions”) with respect to the Rights Offering, this
Agreement, the Commitments, the Definitive Documents, the Plan (or the
solicitation thereof), the Chapter 11 Cases, the Exchange Offer or the
Contemplated Transactions, including payment of the Backstop Commitment Fee or
the Transaction Expenses, if any, distribution of the Rights, purchase and sale
of Rights Offering Units in the Rights Offering and purchase and sale of Units
pursuant to this Agreement, or any breach by the Aquilex Parties of this
Agreement, in each case, regardless of whether any of such Indemnified Persons
is a party thereto, and to reimburse such Indemnified Persons for any reasonable
legal or other reasonable out-of-pocket expenses as they are incurred in
connection with investigating, monitoring, responding to or defending any of the
foregoing; provided that the foregoing indemnification will not, as to any
Indemnified Person, apply to losses, claims, damages, liabilities or expenses to
the extent that they are finally judicially determined to have resulted from
gross negligence, willful misconduct or fraud on the part of such Indemnified
Person.

(b) If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the Indemnifying
Parties shall contribute to the amount paid or payable by such Indemnified
Person as a result of such loss, claim, damage, liability or expense in such
proportion as is appropriate to reflect not only the relative benefits received
by the Indemnifying Parties on the one hand and such Indemnified Person on the
other hand but also the relative fault of the Indemnifying Parties, on the one
hand, and such Indemnified Person, on the other hand, as well as any relevant
equitable considerations. It is hereby agreed that the relative benefits to the
Indemnifying Parties on the one hand and all Indemnified Persons on the other
hand shall be deemed to be in the same proportion as (i) the total value
received or proposed to be received by the Company pursuant to the sale of
Rights Offering Units to (ii) the Backstop Commitment Fee paid or proposed to be
paid to the Backstop Parties.

(c) The Indemnifying Parties agree also that no Indemnified Person shall have
any liability based on their exclusive or contributory negligence or otherwise
to the

 

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Indemnifying Parties, any Person asserting claims on behalf of or in right of
the Indemnifying Parties or any other Person in connection with or as a result
of the Rights Offering, this Agreement, the Commitments, the Definitive
Documents, the Plan (or the solicitation thereof), the Chapter 11 Cases, the
Exchange Offer or the Contemplated Transactions, except as to any Indemnified
Person to the extent that any losses, claims, damages, liability or expenses
incurred by the Company are finally judicially determined to have resulted from
the gross negligence, willful misconduct or fraud of, or breach of this
Agreement by, such Indemnified Person. The indemnity and reimbursement
obligations of the Indemnifying Parties under this Section 8 are in addition to,
and do not limit, the Company’s obligations under Sections 1.3, 1.5 and 12.9,
shall be in addition to any liability that the Indemnifying Parties may
otherwise have to an Indemnified Person (including as a result of any breach of
this Agreement) and shall be binding upon and inure to the benefit of any
successors, permitted assigns, heirs and personal representatives of the
Indemnifying Parties and any Indemnified Person.

(d) An Indemnified Person shall give written notice to the Indemnifying Parties
of any claim with respect to which indemnification under this Section 8 is
sought promptly after discovery by such Indemnified Person of the matters giving
rise to such claim for indemnification; provided that (i) the omission so to
notify the Indemnifying Parties will not relieve the Indemnifying Parties from
any liability that they may have hereunder except to the extent they have been
actually prejudiced by such failure and (ii) the omission so to notify the
Indemnifying Parties will not relieve the Indemnifying Parties from any
liability that they may have to an Indemnified Person otherwise than on account
of this Section 8. In case any Actions are brought against any Indemnified
Person and such Indemnified Person notifies the Indemnifying Parties of the
commencement thereof, if the Indemnifying Parties commit in writing to fully
indemnify and hold harmless the Indemnified Person with respect to such Actions,
without regard to whether the Effective Date occurs, the Indemnifying Parties
will be entitled to participate in such Actions, and, to the extent that such
Indemnifying Parties may elect by written notice delivered to such Indemnified
Person, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Person, provided that if the defendants in any such Actions
include both such Indemnified Person and the Indemnifying Parties and such
Indemnified Person shall have concluded that there may be legal defenses
available to it that are different from or additional to those available to the
Indemnifying Parties, such Indemnified Person shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Actions on behalf of such Indemnified Person. Following the
date of receipt of such indemnification commitment from the Indemnifying Parties
and notice from the Indemnifying Parties to such Indemnified Person of its
election so to assume the defense of such Actions and approval by such
Indemnified Person of counsel, the Indemnifying Parties shall not be liable to
such Indemnified Person for expenses incurred by such Indemnified Person in
connection with the defense thereof after such date (other than reasonable costs
of investigation and monitoring) unless (w) such Indemnified Person shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the immediately preceding sentence, (x) the
Indemnifying Parties shall not have employed counsel reasonably satisfactory to
such Indemnified Person to represent such Indemnified Person at the Indemnifying
Parties’ expense within a reasonable time after notice of commencement of the
Actions, (y) after the Indemnifying Parties assume the defense of such Actions,
such Indemnified Person determines that the Indemnifying Parties are failing to
diligently defend against such Actions in good faith or (z) the Indemnifying
Parties shall have authorized in writing the employment of counsel for such
Indemnified Person.

 

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(e) The Indemnifying Parties shall not, without the prior written consent of an
Indemnified Person (which consent shall not be unreasonably withheld,
conditioned or delayed), effect any settlement of any pending or threatened
Actions in respect of which indemnity has been sought hereunder by such
Indemnified Person unless such settlement (i) includes an unconditional release
of such Indemnified Person in form and substance reasonably satisfactory to such
Indemnified Person from all liability on the claims that are the subject matter
of such Actions, (ii) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified Person
and (iii) does not impose injunctive or other equitable relief against such
Indemnified Person or otherwise could interfere with or materially adversely
affect the business, operations or assets of such Indemnified Person.

9. Survival of Representations and Warranties. The indemnification rights
contained in Section 8 are not limited or deemed waived by any investigation at
any time made by or on behalf of any party hereto with respect to, or any
knowledge acquired (or capable of being acquired) about, the accuracy or
inaccuracy of or compliance with, any representation or warranty made by or on
behalf of any party hereto. The representations and warranties contained in this
Agreement, including in the certificate delivered pursuant to Section 6.1(aa),
will not survive the Effective Date.

10. Amendments and Waivers. Any term of this Agreement (including any exhibits
or schedules hereto) may be amended or modified and the compliance with any term
of this Agreement (including any exhibits or schedules hereto) may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only if such amendment, modification or waiver is signed, in the
case of an amendment or modification, by the Required Backstop Interest and the
Company or in the case of a waiver, by the party waiving compliance (which shall
be the Required Backstop Interest in the case of a waiver by the Backstop
Parties); provided, however, that (a) Schedule 1(c) hereto may be amended in
accordance with the terms of Section 12.1, (b) any modification of, or amendment
or supplement to, this Agreement that would have the effect of increasing the
Total Commitment Percentage or the Backstop Investment Amount of any Backstop
Party shall require the prior written consent of such Backstop Party, (c) any
modification of, or amendment or supplement to, Exhibit C, this Section 10 or
the definition of “Required Backstop Interest” shall require the prior written
consent of each of the Backstop Parties, and (d) any amendment, modification or
waiver that treats or affects any Backstop Party in a manner that is
disproportionately adverse, on an economic or non-economic basis, to the manner
in which any of the other Backstop Parties is treated (after taking into account
each of the Backstop Parties’ respective holdings and interests in the Aquilex
Parties and the recoveries contemplated by the Term Sheet attached as Exhibit A
to the Restructuring Support Agreement (as in effect on the date hereof)) shall
require the written consent of such Backstop Party. No delay on the part of any
party in exercising any right, power or privilege pursuant to this Agreement
will operate as a waiver thereof, nor will any waiver on the part of any party
of any

 

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right, power or privilege pursuant to this Agreement, or any single or partial
exercise of any right, power or privilege pursuant to this Agreement, preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege pursuant to this Agreement. The rights and remedies provided
pursuant to this Agreement are cumulative and are not exclusive of any rights or
remedies which any party otherwise may have at law or in equity.

11. Notices, etc.

Except as otherwise provided in this Agreement, all notices, demands and other
communications hereunder shall be in writing or by written telecommunication
(including by facsimile or electronic mail (“e-mail”)), and shall be deemed to
have been duly given if delivered personally or if mailed by certified mail,
return receipt requested, postage prepaid, or if sent by overnight courier, or
sent by written telecommunication, as follows:

(a) if to a Backstop Party, to the mailing address, facsimile number or e-mail
address set forth on Schedule 1(c) hereto or to such other mailing address,
facsimile number or e-mail address as such Backstop Party shall have furnished
to the Company in writing:

 

with a copy to: Kirkland & Ellis LLP 300 North LaSalle Street Chicago, IL 60654
Attention:    Anup Sathy, P.C.    Jon A. Ballis, P.C. Fax:    (312) 862-2200 and
   Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038 Attention:
   Kristopher M. Hansen, Esq.    Matthew A. Schwartz, Esq. Fax:    (212)
806-6006 E-mail:    khansen@stroock.com    mschwartz@stroock.com

(b) If to the Company at:

 

Aquilex Corporation 3344 Peachtree Road NE, Suite 2100 Atlanta, Georgia 30326
Attention:    Gregory M. Birge    Senior Vice President, General Counsel and
Secretary Fax:    (770) 368-9584 E-mail:    Greg.Birge@aquilex.com

 

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with a copy to: Richards, Layton & Finger (as counsel to the Company) One Rodney
Square 920 North King Street Wilmington, Delaware 19801 Attention:    Mark. D.
Collins, Esq. Fax:    (302) 651-7701 Email:    collins@rlf.com and Weil,
Gotshal & Manges LLP (as counsel to Ontario Teachers’ Pension Plan Board) 767
Fifth Avenue New York, NY 10153 Attention:    Gary T. Holtzer, Esq.    Ted S.
Waksman, Esq. Fax:    (212) 310-8007 E-mail:    gary.holtzer@weil.com   
ted.waksman@weil.com

Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by facsimile or e-mail shall be effective upon oral, facsimile
or e-mail (as applicable) confirmation of transmission.

12. Miscellaneous.

12.1. Assignments. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations under
this Agreement will be assigned by any of the parties (whether by operation of
law or otherwise) without the prior written consent of the other parties.
Notwithstanding the previous sentence, any Backstop Party’s rights, obligations
or interests hereunder may be assigned, delegated or transferred, in whole or in
part (the portion of such rights, obligations or interests being assigned,
delegated or transferred, collectively, the “Assigned Interests”): (i) to any
Person that the Backstop Parties collectively control, (ii) to any other
Backstop Party (other than pursuant to clause (iii) or (iv) below) so long as
the total amount of rights, obligations or interests hereunder to be assigned,
delegated or transferred to any such other Backstop Parties pursuant to this
clause (ii) are made available for purchase by all of the Backstop Parties
(other than the assigning, delegating or transferring Backstop Party) on a pro
rata basis (based on the Total Commitment Percentage of each such other Backstop
Party relative to the Total Commitment Percentages of all Backstop Parties
(other than the assigning Backstop Party)); (iii) to any Affiliate of such
Backstop Party over which such Backstop Party, or any of its Affiliates,
exercises control or investment authority, including with respect to voting and
dispositive rights, and (iv) to any Related Fund of such Backstop Party;
provided that (in any

 

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of the cases of (i), (ii), (iii) and (iv)) any such assignee assumes the
obligations of the assigning Backstop Party hereunder and agrees in writing
prior to such assignment to be bound by the terms of this Agreement in the same
manner as the assigning Backstop Party. Following any assignment pursuant to the
immediately preceding sentence, Schedule 1(c) hereto shall be updated by the
Company (in consultation with the assigning Backstop Party and the assignee)
solely to reflect the name and address of the applicable assignee or assignees
and the Total Commitment Percentage and the Backstop Investment Amount that
shall apply to such assignee or assignees, and any changes to the Total
Commitment Percentage and the Backstop Investment Amount applicable to the
assigning Backstop Party. Any update to Schedule 1(c) hereto described in the
immediately preceding sentence shall not be deemed an amendment to this
Agreement. Notwithstanding the foregoing or any other provisions herein, no such
assignment will relieve the assigning Backstop Party of its obligations
hereunder if any such assignee fails to perform such obligations.

12.2. Severability. Any provision of this Agreement that 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 (to the full extent permitted by Law) not invalidate or
render unenforceable such provision in any other jurisdiction.

12.3. Entire Agreement. Except as expressly set forth herein, this Agreement,
the Plan and the Restructuring Support Agreement (and the agreements referenced
therein) constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and replaces and supersedes all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof.

12.4. Counterparts. This Agreement may be executed in any number of counterparts
(including by facsimile or portable document format (PDF) or similar format
signatures), each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

12.5. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York, without giving effect to the conflicts of law principles
thereof.

12.6. Submission to Jurisdiction. Each of the parties hereto irrevocably agrees
that any Proceeding arising out of or relating to this Agreement brought by any
party or its successors or assigns shall be brought and determined

 

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in any federal or state court in the Borough of Manhattan, the City of New York,
and each of the parties hereto hereby irrevocably submits to the exclusive
jurisdiction of the aforesaid courts for itself and with respect to its
property, generally and unconditionally, with regard to any such Proceeding
arising out of or relating to this Agreement and the Contemplated Transactions.
Each of the parties hereto agrees not to commence any Proceeding relating hereto
or thereto except in the courts described above in New York, other than
Proceedings in any court of competent jurisdiction to enforce any judgment,
decree or award rendered by any such court in New York as described herein. Each
of the parties hereto further agrees that notice as provided herein shall
constitute sufficient service of process and the parties further waive any
argument that such service is insufficient. Each of the parties hereto hereby
irrevocably and unconditionally waives, and agrees not to assert, by way of
motion or as a defense, counterclaim or otherwise, in any Proceeding arising out
of or relating to this Agreement or the Contemplated Transactions, (a) any claim
that it is not personally subject to the jurisdiction of the courts in New York
as described herein for any reason, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) that (i) the Proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such Proceeding is improper or (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
Notwithstanding the foregoing, during the pendency of the Chapter 11 Cases, all
Proceedings contemplated by this Section 12.6 shall be brought in the Bankruptcy
Court.

12.7. WAIVER OF TRIAL BY JURY. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE CONTEMPLATED TRANSACTIONS (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.7.

12.8. Further Assurances. From time to time after the date of this Agreement,
the parties hereto will execute, acknowledge and deliver to the other parties
hereto such other documents, instruments and certificates, and will take such
other actions, as any other party hereto may reasonably request in order to
consummate the Contemplated Transactions.

 

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12.9. Specific Performance. The Aquilex Parties and the Backstop Parties
acknowledge and agree that (a) irreparable damage would occur in the event that
any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached, and (b) remedies at law would
not be adequate to compensate the non-breaching party. Accordingly, the Aquilex
Parties and the Backstop Parties agree that each of them shall have the right,
in addition to any other rights and remedies existing in its favor, to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce its rights and obligations hereunder not only by a
Proceeding or Proceedings for damages but also by a Proceeding or Proceedings
for specific performance, injunctive or other equitable relief. The right to
equitable relief, including specific performance or injunctive relief, shall
exist notwithstanding, and shall not be limited by, any other provision of this
Agreement. Each of the Aquilex Parties and the Backstop Parties hereby waives
any defense that a remedy at law is adequate and any requirement to post bond or
other security in connection with actions instituted for injunctive relief,
specific performance or other equitable remedies.

12.10. Headings. The headings in this Agreement are for reference purposes only
and will not in any way affect the meaning or interpretation of this Agreement.

12.11. Interpretation; Rules of Construction. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section, Exhibit or Schedule, respectively, of or attached to this Agreement
unless otherwise indicated. Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or
similar words refer to this entire Agreement; (iv) the words “include”,
“includes” and “including” when used herein shall be deemed in each case to be
followed by the words “without limitation”, (v) the word “or” shall not be
exclusive and shall be read to mean “and/or” and (vi) references herein to an
agreement, instrument, document, disclosure statement or offering memorandum
means such agreement, instrument, document, disclosure statement or offering
memorandum as amended, supplemented or modified from time to time (including all
exhibits, term sheets and schedules annexed thereto and certificates,
instruments or any other documents delivered pursuant thereto) to the extent
permitted by the provisions thereof and not prohibited by this Agreement. Unless
expressly set forth herein to the contrary, any provision of this Agreement
granting a party the right to approve, accept, adopt or consent to any action or
document shall be deemed to grant to such party the right to do so in such
party’s sole and absolute discretion with regard to its own interest only and
without regard to the interest of any other Person. If any payment or other
obligation is due on any day which is not a Business Day, such obligation shall
be automatically extended to the next Business Day. The parties hereto agree
that they have been represented by legal counsel during the negotiation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document shall be construed against the party drafting such
agreement or document.

 

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12.12. Several, Not Joint, Obligations. The agreements, representations and
obligations of the Backstop Parties under this Agreement are, in all respects,
several and not joint.

12.13. Disclosure. Unless otherwise required by applicable Law, the Aquilex
Parties will not, without the applicable Backstop Party’s prior written consent,
disclose to any Person the Total Commitment Percentage or the Backstop
Investment Amount of such Backstop Party, other than to the Aquilex Parties’
Representatives, in each case in connection with the Contemplated Transactions
and subject to their agreement to be bound by the confidentiality provisions
hereof.

13. Definitions. As used in this Agreement the following terms have the
following respective meanings.

“Acquisition Sub III” has the meaning given to such term in the preamble.

“Actions” has the meaning given to such term in Section 8(a).

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” (including with its correlative
meanings, “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).

“Affiliated Group” has the meaning given to such term in Section 1504(a) of the
Code.

“Aggregate Rights Offering Amount” has the meaning given to such term in the
Recitals.

“Agreement” has the meaning given to such term in the preamble.

“Agreement Motion” means the motion and supporting papers to be filed by the
Aquilex Parties with the Bankruptcy Court seeking entry of the Agreement Order
and requesting (among other things) that the Bankruptcy Court approve the
Aquilex Parties’ entry into and performance under this Agreement and authorizing
the Aquilex Parties to pay all (and, if applicable, ratifying the prior payment
of any) fees and expenses in connection with this Agreement, including the
payment of the Backstop Commitment Fee and any other amounts payable under
Sections 1.5, 4.10 and 5.2, as such motion may be amended, supplemented or
otherwise modified from time to time.

“Agreement Order” means an order entered by the Bankruptcy Court granting the
Agreement Motion, which shall be in form and substance reasonably acceptable to
the Required Backstop Interest and shall include, among other things, provisions
expressly approving the Rights Offering Documentation and the payment of (and,
if applicable, ratifying the prior payment of) the Backstop Commitment Fee and
any other amounts payable under Sections 1.5, 4.10 and 5.2, as may be
applicable.

 

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“Allowed Noteholder Claim” has the meaning given to such term in the Plan.

“Amended LLC Agreement” means the Third Amended and Restated Limited Liability
Company Agreement of Effective Date Aquilex to be entered into as of the
Effective Date by Effective Date Aquilex and the members of Effective Date
Aquilex having the terms set forth in Exhibit C and in form and substance
reasonably acceptable to the Required Backstop Interest.

“Aquilex Parties” has the meaning given to such term in the Recitals.

“Audited Financial Statements” has the meaning given to such term in
Section 2.21.

“Assigned Interests” has the meaning given to such term in Section 12.1.

“Backstop Commitment Fee” has the meaning given to such term in Section 1.3(a).

“Backstop Default” has the meaning given to such term in Section 1.2(e).

“Backstop Investment Amount” means, with respect to any Backstop Party (other
than the Backstop Sponsor), the dollar amount set forth opposite the name of
such Backstop Party under the heading “Backstop Investment Amount” on
Schedule 1(c) hereto, as such amount may be modified from time to time in
accordance with the terms of this Agreement.

“Backstop Part(y)(ies)” has the meaning given to such term in the preamble.

“Backstop Sponsor” means CCP II Debt Acquisition, L.P.

“Backstop Units” has the meaning given to such term in Section 1.2(f).

“Bankruptcy Code” has the meaning given to such term in the Recitals.

“Bankruptcy Court” has the meaning given to such term in the Recitals.

“Bankruptcy Documents” has the meaning given to such term in Section 2.10.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as
promulgated by the United States Supreme Court under section 2075 of title 28 of
the United States Code, as amended from time to time, applicable to the
Chapter 11 Cases or the Contemplated Transactions, and any Local Rules of the
Bankruptcy Court.

“Bridge Facility” means the $15,000,000 Credit Agreement, dated as of
November 15, 2011, by and among the Company, as borrower, each of the guarantors
named therein, the lenders party thereto, and U.S. Bank, as Administrative Agent
and Collateral Agent, as amended, modified or otherwise supplemented from time
to time prior to the date hereof.

 

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“Bridge Units” means an aggregate number of additional New Participating
Preferred Units equal to the Fully Diluted Unit Number, multiplied by a fraction
(i) the numerator of which is equal to the aggregate principal amount
outstanding under the Bridge Facility as of immediately prior to the Effective
Date and (ii) the denominator of which is equal to the Equity Value.

“Business Day” means any day other than a Saturday, Sunday or a “legal holiday,”
as defined in Bankruptcy Rule 9006(a) or any other day on which commercial banks
in New York, New York are not required to be open for business.

“Cash Flow Shortfall Amount” has the meaning given to such term in
Section 1.4(b).

“Cash Flow Shortfall Portion” has the meaning given to such term in
Section 1.4(b).

“Cash Flow Shortfall Units” has the meaning given to such term in
Section 1.4(b).

“Chapter 11 Cases” has the meaning given to such term in the Recitals.

“Closing” has the meaning given to such term in Section 1.2(g).

“Code” has the meaning given to such term in Section 2.15(b).

“Commission” means the United States Securities and Exchange Commission.

“Commitment” means, with respect to any Backstop Party, the commitment of such
Backstop Party, subject to the terms and conditions set forth in this Agreement,
to purchase Units pursuant to, and on the terms set forth in, Section 1.2.

“Company” has the meaning given to such term in the preamble.

“Company Benefit Plan” has the meaning given to such term in Section 2.15(a).

“Company IP Rights” has the meaning given to such term in Section 2.12(a).

“Company Multiemployer Plan” has the meaning given to such term in
Section 2.15(a).

“Confirmation Order” means the order of the Bankruptcy Court confirming the Plan
pursuant to section 1129 of the Bankruptcy Code, which shall be in form and
substance reasonably acceptable to the Required Backstop Interest.

“Consent” means any approval, consent, ratification, waiver or other
authorization of any Person (including any Governmental Body).

“Consent Payment Amount” has the meaning given to such term in Section 1.2(c).

 

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“Consent Payment Units” means an aggregate number of additional New
Participating Preferred Units equal to the Fully Diluted Unit Number, multiplied
by a fraction (i) the numerator of which is equal to the Consent Payment Amount
and (ii) the denominator of which is equal to the Equity Value.

“Contemplated Transactions” means all of the transactions contemplated by this
Agreement and the Restructuring Support Agreement, including the issuance of the
Rights Offering Units and the Units.

“Contract” means any written agreement, contract, obligation, promise,
understanding, commitment or undertaking.

“Defaulting Backstop Party” has the meaning given to such term in
Section 1.2(e).

“Default Units” has the meaning given to such term in Section 1.2(f).

“Definitive Documents” means the definitive documents (including the Amended LLC
Agreement) implementing, achieving and relating to the Restructuring and the
transactions contemplated thereby, by the Restructuring Support Agreement and by
this Agreement.

“Determination Date” has the meaning given to such term in Section 1.1(c).

“DIP Facility” means a debtor-in-possession credit facility in the amount of not
less than $10,0 million (plus certain other obligations to be rolled-up into the
DIP Facility) to be entered into by the Aquilex Parties on the Petition Date
with financial institutions reasonably acceptable to the Required Backstop
Interest (which may include the lenders under the First Lien Credit Agreement
set forth on Schedule 6.1(s), which the Required Backstop Interest hereby deems
satisfactory) on terms and conditions materially consistent with the terms and
conditions set forth in Exhibit E and are otherwise in form and substance
reasonably satisfactory to the Required Backstop Interest.

“DIP Facility Documentation” has the meaning given to such term in Section 4.11.

“Disclosure Statement” means the disclosure statement or offering memorandum
that relates to the Restructuring, as such disclosure statement may be amended,
modified or supplemented (including all exhibits, term sheets and schedules
annexed thereto or referred to therein).

“Disclosure Statement Order” has the meaning given to such term in
Section 6.1(f).

“Effective Date” means the first to occur of (i) the closing of the Exchange
Offer and (ii) the effective date of the Plan, in each case, in accordance with
the Restructuring Support Agreement.

 

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“Effective Date Aquilex” means Aquilex Holdings, LLC, or any successor thereto,
on or after the Effective Date.

“Effective Date Aquilex Units” means all New Common Units and New Preferred
Units.

“Eligible Noteholders” means each holder of (i) a Senior Note as of the date
that the Exchange Offer is commenced (in the event that the Restructuring is
consummated pursuant to clause (a) of the definition thereof) or (ii) an Allowed
Noteholder Claim as of the Voting Record Date (in the event the Restructuring is
consummated pursuant to clause (b) of the definition thereof), or, in each case,
its investment advisor, manager, intermediary or nominee, that, in any case, is
an accredited investor as defined in Rule 501 of the Securities Act and that
timely delivers a certification to that effect to the Rights Offering Agent.

“Encumbrance” means any charge, claim, community property interest, condition,
equitable interest, lien, license, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership.

“End Date” has the meaning given to such term in Section 7(a)(iv).

“Environmental Laws” means all Laws relating to pollution or the regulation or
protection of human or animal health, safety, the environment or natural
resources, including the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.); the Hazardous
Materials Transportation Uniform Safety Act, as amended (49 U.S.C. 5101 et
seq.); the National Traffic and Motor Vehicle Safety Act, as amended (49 U.S.C.
§ 30101 et seq.); Commercial Motor Safety Act, as amended (49 U.S.C. § 31101 et
seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended
(7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery Act, as amended
(42 U.S.C. § 6901 et seq.); the Toxic Substances Control Act, as amended (15
U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. § 7401 et
seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et
seq.); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.); the
rules and regulations promulgated by the Federal Motor Carrier Safety
Administration, and, in each case, their foreign, state, provincial, municipal
and local counterparts or equivalents.

“Equity Investor Units” has the meaning given to such term in Section 1.2(a).

“Equity Value” means an amount equal to $149.790 million.

“ERISA” has the meaning given to such term in Section 2.15(a).

“ERISA Affiliate” has the meaning given to such term in Section 2.15(h).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules promulgated pursuant thereto.

“Exchange Act Documents” has the meaning given to such term in Section 2.10.

 

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“Exercise Price” means an amount per Unit equal to $149.79, which is calculated
as the quotient of the Equity Value divided by the Fully Diluted Unit Number.

“Exit Facility” means (i) a revolving loan/letter of credit facility in the
amount of not less than $40.0 million and (ii) a term loan credit agreement in
the amount of not less than $132,762,500, each to be entered into by the Aquilex
Parties (other than Acquisition Sub III) on the Effective Date with financials
institutions reasonably acceptable to the Required Backstop Interest (which may
include the lenders under the First Lien Credit Agreement set forth on
Schedule 6.1(s), which the Required Backstop Interest hereby deems satisfactory)
on terms and conditions materially consistent with the terms and conditions set
forth in Exhibit D and are otherwise in form and substance reasonably
satisfactory to the Required Backstop Interest.

“Exit Facility Documentation” has the meaning set forth in Section 4.10.

“Execution Date” has the meaning set forth in Section 1.5.

“Final Order” means an order, ruling or judgment of the Bankruptcy Court (or
other court of competent jurisdiction) entered by the Clerk of the Bankruptcy
Court on the docket in the Chapter 11 Cases (or by the clerk of such other court
of competent jurisdiction on the docket of such court) that (i) is in full force
and effect and (ii) is not stayed; provided, however, that the possibility that
a motion under Rule 50 or 60 of the Federal Rules of Civil Procedure, or any
analogous rule under the Federal Rules of Civil Procedure or Bankruptcy Rules,
may be filed relating to such order, ruling or judgment shall not cause such
order, ruling or judgment not to be a Final Order.

“Financial Statements” has the meaning given to such term in Section 2.21.

“First Lien Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of April 1, 2010, by and among Aquilex Holdings LLC, as
borrower, each of the guarantors named therein, the lenders party thereto, and
Royal Bank of Canada as administrative agent and collateral agent, as amended,
modified or otherwise supplemented from time to time prior to the date hereof.

“Fully Diluted Unit Number” means the total number of Effective Date Aquilex
Units to be outstanding as of the Closing, giving effect to all of the
Contemplated Transactions but excluding any New Common Units issued, to be
issued or issuable in respect of any management equity plan implemented in
connection with or following the Closing, which number shall be equal to
1,000,000.

“Fundamental Representations” means the representations and warranties of the
Aquilex Parties set forth in Sections 2.2, 2.3(a), 2.3(b) (only the first
sentence thereof), 2.3(c), 2.4(a), 2.7 and 2.9.

“GAAP” means generally accepted accounting principles in the United States
consistently applied.

 

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“Governmental Body” means any federal, state, provincial, local or foreign
government or any agency, bureau, board, commission, court, department,
political subdivision, tribunal or other instrumentality thereof, or any
federal, state, local or foreign court or arbitrator.

“HSR Act” means the Hart Scott Rodino Antitrust Improvement Act of 1976.

“Inconsistent Transaction” means any transaction that is inconsistent with this
Agreement, the Plan, the Restructuring or the Restructuring Support Agreement,
including (i) a merger, consolidation, business combination, recapitalization or
refinancing of any of the Aquilex Parties (in one or a series of related
transactions) on terms other than as set forth in the Restructuring Support
Agreement, (ii) the issuance, sale, transfer, exchange or other disposition by
any of the Aquilex Parties of any equity interests (other than common equity
issued in respect of any employee options), or all or substantially all of its
assets, on terms other than as set forth in the Restructuring Support Agreement,
(iii) the filing of a plan of reorganization that does not contemplate a
reorganization of the Aquilex Parties on the terms set forth in the Plan,
(iv) the acceptance by the Company of parties (other than the Backstop Parties)
as “backstop parties” for the Rights Offering or sponsors of any similar
offering or transaction or (v) any other transaction or transactions rendering
the Rights Offering no longer practicable.

“Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness for borrowed money, (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services, including
“capital leases” in accordance with GAAP (other than trade payables entered into
in the ordinary course of business) and including any “earn out” obligations,
(iii) all reimbursement or payment obligations with respect to letters of
credit, surety bonds, performance bonds, bid bonds and other similar
instruments, (iv) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (v) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (vi) all monetary
obligations under any leasing or similar arrangement which, in connection with
GAAP consistently applied for the periods covered thereby, is (or should be)
classified as a capital lease, (vii) any interest rate or commodity swap
agreements, (viii) any accrued interest, prepayment penalties and premiums on
any of the foregoing, (ix) any deferred rent, revenue or compensation, (x) any
liabilities classified as non-current liabilities as of the Closing in
accordance with GAAP, (xi) any liabilities or obligations secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance upon or in any property or assets
(including accounts and contract rights) owned by such Person, whether or not
the Person that owns such assets or property has assumed or become liable for
the payment of such liabilities or obligations, and (xii) all contingent
obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (i) through (xi) above.

“Indemnified Parties” has the meaning given to such term in Section 8(a).

“Indemnifying Person” has the meaning given to such term in Section 8(a).

 

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“Indenture” means that certain Indenture (as amended, restated, supplemented or
otherwise modified from time to time), dated as of December 23, 2009, by and
among the Company and Aquilex Finance Corp., as issuers, certain of the Aquilex
Parties, as guarantors, and Wilmington Trust FSB as Indenture Trustee.

“Initial Transaction Expenses” has the meaning set forth in Section 1.5.

“IP Rights” means any and all of the following: (i) all United States,
international and foreign patents and applications therefor (including design
patents and design patent applications), and rights in patent disclosures and
inventions, (ii) all common law trademarks, service marks, trade dress, trade
names, domain names logos and corporate names and all trademark and service mark
registrations and applications therefor throughout the world, and all goodwill
associated with the foregoing, (iii) all copyrights, copyrightable works,
copyright registrations and applications therefor, (iv) all trade secrets and
other similar rights in confidential and proprietary information or know-how
(“Trade Secrets”), (v) all Web addresses, sites and domain names and other
locators associated with the Internet and (vi) all rights arising out of or
associated with any of the foregoing anywhere in the world.

“IRS” means the Internal Revenue Service and any Governmental Body succeeding to
the functions thereof.

“Knowledge of the Company” means the actual knowledge, after reasonable inquiry,
of L.W. Varner, Jr., Jay W. Ferguson, Gregory M. Birge, Pedro E Amador, Douglas
J. Vail, Douglas M. Jacobs, Roger L. Raney and Michael Pregent.

“Law” means any federal, state, local, municipal, foreign, international,
multinational, provincial or other statute, law (including common law), writ,
Order, decree, guideline, policy, ordinance, rule, treaty, constitution, code,
judicial or administrative doctrine, rule or regulation enacted, promulgated,
issued, entered or enforced by any Governmental Body.

“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy land, buildings, structures, improvements, fixtures or
other interest in real property held by the Company or its Subsidiaries.

“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral) pursuant to which the Company or any Subsidiary holds any
Leased Real Property, including the right to all security deposits and other
amounts and instruments deposited by or on behalf of the Company or any of its
Subsidiaries.

“Material Adverse Effect” means a material adverse effect on (i) the business,
assets, properties, results of operations or financial condition of the Aquilex
Parties (taken as a whole) or (ii) the ability of the Aquilex Parties, subject
to the approvals and other authorizations set forth in Section 2.4(a), to
consummate the transactions contemplated by this Agreement or the Plan, other
than, with respect to clauses (i), the effect: (A) of any change in the United
States or foreign economies or securities or financial markets in general;
(B) of any change that generally affects any industry in which the Aquilex
Parties operate; (C) of any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage
or terrorism or

 

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military actions; (D) of any changes in applicable laws or accounting rules;
(E) resulting from the filing of the Chapter 11 Cases, any reasonably
anticipated effects thereof or from any action approved by the Bankruptcy Court;
or (F) resulting from the public announcement of this Agreement, compliance with
terms of this Agreement or the consummation of the transactions contemplated
hereby, but only, in the case of each of clauses (A), (B) and (C), if such
effect or change does not have a materially disproportionate effect on the
Company and its Subsidiaries, considered as one enterprise, relative to other
participants in the industry in which the Company and its Subsidiaries operate.

“Material Contracts” has the meaning set forth in Section 2.16(a)(xi).

“Material Leases” has the meaning set forth in Section 2.20(b).

“MBRs” has the meaning set forth in Section 4.5.

“MNPI” has the meaning set forth in Section 5.3.

“Monthly Financial Statements” has the meaning given to such term in
Section 4.5.

“Multiemployer Pension Plan” has the meaning given to such term in
Section 2.15(h).

“New Common Units” means Class A Units of Effective Date Aquilex having the
rights, preferences, privileges, obligations and other terms described in
Exhibit C and as forth in the Amended LLC Agreement.

“New Participating Preferred Units” means Class B Units of Effective Date
Aquilex having the rights, preferences, privileges, obligations and other terms
described in Exhibit C and to be set forth in the Amended LLC Agreement.

“Non-Defaulting Backstop Party” has the meaning given to such term in
Section 1.2(f).

“Noteholder Cash Option Amount” has the meaning given to such term in
Section 1.2(b).

“Noteholder Cash Option Units” has the meaning given to such term in
Section 1.2(b).

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena
or verdict entered, issued, made, or rendered by any court, administrative
agency or other Governmental Body or arbitrator.

“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of formation, certificate of limited
partnership or articles of organization, and including any certificates of
designation for preferred stock or other forms of preferred equity) or which
relate to the internal governance of such Person (such as by-laws, a partnership
agreement or an operating, limited liability or members agreement).

 

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“Owned Real Property” means all land, together with all buildings, structures,
improvements and fixtures located thereon, and all easements and other rights
and interests appurtenant thereto, owned by the Company or any Subsidiary.

“Parent” means Aquilex Holdco L.P., a Delaware limited partnership and the
ultimate parent entity of the Company.

“Permitted Encumbrances” means (i) all defects, exceptions, restrictions,
easements, rights of way and encumbrances disclosed in policies of title
insurance which have been made available to the Backstop Parties; (ii) liens for
current taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by appropriate
proceedings; (iii) mechanics’, carriers’, workers’, warehousemens’, repairers’
and similar liens arising or incurred in the ordinary course of business;
(iv) zoning, entitlement and other land use and environmental regulations by any
Governmental Body provided that such regulations have not been violated;
(v) Encumbrances securing debt as disclosed in the Financial Statements;
(vi) title of a lessor under a capital or operating lease; (vii) licenses and
other grants of rights to intellectual property and technology; (viii) all liens
set forth on Schedule 13(b); and (ix) such other imperfections in title,
charges, easements, restrictions and encumbrances which would not be reasonably
likely to result in a Material Adverse Effect.

“Person” means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a
government or any department or agency thereof.

“Petition Date” means the date, if any, that the Chapter 11 Cases are commenced.

“Plan” has the meaning given to such term in the Recitals.

“Plan Additional Units” means an aggregate number of additional New
Participating Preferred Units equal to the Fully Diluted Unit Number, multiplied
by a fraction (i) the numerator of which is equal to the Plan Additional Units
Purchase Price and (ii) the denominator of which is equal to the Equity Value.

“Plan Additional Units Purchase Price” has the meaning given to such term in
Section 1.2(d).

“Plan Supplement” has the meaning given to such term in the Plan.

“Proceeding” means any action, complaint, charge, arbitration, audit, hearing,
investigation, inquiry, litigation or suit (whether civil, criminal,
administrative, investigative or informal), condemnation, expropriation or other
proceeding in eminent domain, commenced, pending, brought, conducted or heard by
or before, or otherwise involving, any Governmental Body, including any of the
foregoing, whether voluntary or involuntary, under the Bankruptcy Code.

 

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“Purchase Notice” has the meaning given to such term in Section 1.1(c).

“Real Property” has the meaning given to such term in Section 2.20(c).

“Registered IP Rights” has the meaning given to such term in Section 2.12(a).

“Related Fund” means, with respect to any Backstop Party, (i) any fund, account
or investment vehicle that is controlled or managed by (A) such Backstop Party,
(B) an Affiliate of such Backstop Party or (C) the same investment manager or
advisor as such Backstop Party or an Affiliate of such investment manager or
advisor or (ii) any Person formed and controlled by any of the foregoing,
individually or collectively, for the purpose of consummating the Contemplated
Transactions.

“Remaining Cash Flow Units” has the meaning given to such term in
Section 1.4(c).

“Representatives” has the meaning set forth in Section 4.8.

“Required Backstop Interest” means, as of any date of determination, Backstop
Parties as of such date (excluding any Defaulting Backstop Party) representing
in the aggregate at least a majority of the Total Commitment Percentages for all
Backstop Parties as of such date (excluding any Defaulting Backstop Party);
provided, however, that the term “Required Backstop Interest” shall mean, as of
any date of determination, Backstop Parties as of such date (excluding any
Defaulting Backstop Party) representing in the aggregate at least 66 2/3% of the
Total Commitment Percentages for all Backstop Parties as of such date (excluding
any Defaulting Backstop Party) for purposes of any waiver, change in the effect
of, consent, amendment or modification to each of the following: (i) the
definitions of, the form and substance of, and any requirement to execute and/or
deliver, each of the Amended LLC Agreement, the Definitive Documents (as it
relates to the Amended LLC Agreement), the Plan, the Disclosure Statement, the
Disclosure Statement Order, the Confirmation Order, the Agreement Motion and the
Agreement Order; (ii) the definitions of Backstop Commitment Fee, Bridge
Facility, Bridge Units, End Date, Equity Value, New Common Units, New
Participating Preferred Units, Related Fund, Transaction Expenses and Units;
(iii) any provision in this Agreement that prevents or restricts the disclosure
of, or requires the redaction of, information relating to a Backstop Party;
(iv) Section 12.1 of this Agreement; and (v) any covenants, rights of
termination or conditions in this Agreement (including any exhibits or schedules
hereto), the Term Sheet or the Plan, which would have the effect of any waiver,
change in the effect of, consent, amendment or modification to any of the items
referenced in the foregoing items (i)-(iv).

“Restructuring” has the meaning given to such term in the Recitals.

“Restructuring Support Agreement” means the Restructuring Support Agreement,
dated as of the date of this Agreement (including all exhibits, term sheets and
schedules annexed thereto and certificates and other instruments required to be
delivered thereby), by and among the Aquilex Parties, Lenders parties thereto
from time to time and the holders of the Senior Notes parties thereto from time
to time, as amended, supplemented or otherwise modified from time to time.

 

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“Rights” has the meaning given to such term in the Recitals.

“Rights Offering” has the meaning given to such term in the Recitals.

“Rights Expiration Date” has the meaning given to such term on the Rights
Offering Procedures.

“Rights Offering Funding Deadline” has the meaning given to such term on the
Rights Offering Procedures.

“Rights Offering Procedures” has the meaning given to such term in
Section 1.1(a).

“Rights Offering Units” has the meaning given to such term in the Recitals.

“Satisfaction Notice” has the meaning given to such term in Section 1.1(c).

“Securities Act” means the Securities Act of 1933, as amended, and the rules
promulgated pursuant thereto.

“Senior Notes” means the 11.125% senior unsecured notes due 2016, issued by the
Company and Aquilex Finance Corp., pursuant to the Indenture.

“Solicitation” means the solicitation of votes for the Plan pursuant to
Section 4(2) of the Securities Act, and sections 1125, 1126 and 1145 of the
Bankruptcy Code.

“Specified Issuance Documentation” has the meaning set forth in Section 4.12(b).

“Specified Issuance Steps” has the meaning set forth in Section 4.12(a).

“Specified Issuances” means, collectively, (i) the Solicitation (including the
offer of New Common Units pursuant to the Solicitation), (ii) the offer by the
Company to exchange Senior Notes for New Common Units pursuant to the Exchange
Offer, (iii) the distribution by the Company of the Rights to the Eligible
Noteholders in connection with the Rights Offering, (iv) the offer for sale of
New Participating Preferred Units pursuant to the exercise of the Rights in
connection with the Rights Offering, (v) the issuance and distribution by
Effective Date Aquilex of the New Common Units to (subject to the terms of the
Restructuring Support Agreement and, if applicable, the Plan) the holders of
Senior Notes or Allowed Noteholder Claims in connection with the Exchange Offer
or, if applicable, the Plan, (vi) the issuance and sale by Effective Date
Aquilex of Rights Offering Units to the holder of a Right upon exercise of such
Right and (vii) the issuance and sale by Effective Date Aquilex of the Units to
the Backstop Parties pursuant to this Agreement.

“Subsidiary” means, with respect to any Person (the “Owner”), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation’s or other Person’s board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has

 

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not occurred), are held by the Owner or one or more of its Subsidiaries. Unless
otherwise qualified, all references to a “Subsidiary” in this Agreement shall
refer to the Subsidiary of the Company. Notwithstanding anything to the contrary
in this Agreement, Aquilex Arabia Co., Ltd. shall not be deemed a Subsidiary of
the Company for purposes of this Agreement.

“Subscription Agent” has the meaning given to such term in Section 4.4(a).

“Total Commitment Percentage” means, with respect to any Backstop Party, the
percentage set forth opposite the name of such Backstop Party under the heading
“Total Commitment Percentage” on Schedule 1(c) hereto, as such percentage may be
modified from time to time in accordance with the terms hereof.

“Trade Secrets” has the meaning given to such term in the definition of “IP
Rights.”

“Transaction Expenses” means the reasonable and documented fees (other than the
Backstop Commitment Fee), costs, expenses, disbursements and charges of each of
the Backstop Parties paid or payable to third parties incurred in connection
with, or relating to the diligence, negotiation, preparation or implementation
of this Agreement, the Rights Offering, the Exchange Offer or any of the
Contemplated Transactions, and the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement (including the
collection of any fees or expenses owing under this Agreement), which shall
include but is not limited to, (i) the reasonable and documented fees, costs and
expenses of the advisors (including, but not limited to, the reasonable and
documented fees, costs and expenses of (x) Stroock & Stroock & Lavan LLP and its
Delaware counsel, if any, (y) Kirkland & Ellis LLP, and (z) Houlihan Lokey
Capital, Inc.), agents and Representatives for each of the Backstop Parties
(including expenses with respect to the documentation and consummation of the
Exit Facility) and (ii) filing fees (if any) required by the HSR Act or any
foreign competition Laws and any expenses related thereto in accordance with
Sections 4.7 and 5.2.

“Unaudited Financial Statements” has the meaning given to such term in
Section 2.21.

“Units” means, collectively, the Backstop Units, the Noteholder Cash Option
Units, the Consent Payment Units, the Plan Additional Units and the Cash Flow
Shortfall Units.

“Unsubscribed Units” has the meaning given to such term in the Recitals.

“Voting Record Date” has the meaning given to such term in the Disclosure
Statement.

“WARN Act” has the meaning given to such term in Section 2.23(h).

Any of the above-defined terms may, unless the context otherwise requires, be
used in the singular or plural depending on the reference.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

61

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.

 

AQUILEX ACQUISITION SUB III, LLC By:   AQUILEX HOLDCO L.P., its sole member  
By:   AQUILEX HOLDCO GP, LLC, its general partner     By:   ONTARIO TEACHERS’
PENSION PLAN BOARD, its sole member         By:  

/s/ Darren Smart

          Name: Darren Smart           Title: Portfolio Manager AQUILEX HOLDINGS
LLC By:   AQUILEX ACQUISITION SUB III, LLC   By:  

AQUILEX HOLDCO L.P.,

its sole member

    By:  

AQUILEX HOLDCO GP, LLC,

its general partner

      By:   ONTARIO TEACHERS’ PENSION PLAN BOARD, its sole member         By:  

/s/ Darren Smart

          Name: Darren Smart           Title: Portfolio Manager

AQUILEX CORPORATION (on behalf of itself and its Subsidiaries that are Aquilex
Parties) By:  

/s/ Jay W. Ferguson

  Name: Jay W. Ferguson   Title: CFO and Treasurer

 

[Signature Page to Backstop Purchase Agreement]

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BACKSTOP PARTIES:   CCP II DEBT ACQUISITION, L.P.   By:  

/s/ Jeff Gelfand

    Name: Jeff Gelfand     Title: Senior Managing Director

 

[Signature Page to Backstop Purchase Agreement]

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LOCUST STREET FUNDING LLC BY:  

GSO / BLACKSTONE DEBT FUNDS MANAGEMENT LLC,

as Sub-Adviser

By:  

/s/ Daniel H. Smith

  Name: Daniel H. Smith   Title: Authorized Signatory

 

[Signature Page to Backstop Purchase Agreement]

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SPHERE CAPITAL, LLC – SERIES D By:  

/s/ Eva Kalawski

  Name: Eva Kalawski   Title: Vice President & Secretary

 

[Signature Page to Backstop Purchase Agreement]

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REDWOOD MASTER FUND, LTD. By:   REDWOOD CAPITAL MANAGEMENT, LLC, its Investment
Manager By:  

/s/ Jonathan Kolatch

  Name: Jonathan Kolatch   Title: Managing Member

 

[Signature Page to Backstop Purchase Agreement]

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Schedule 1(b)

Aquilex Parties

1. Aquilex Acquisition Sub III, LLC

2. Aquilex Holdings LLC

3. Aquilex Corporation

4. Aquilex Finance Corp.

5. Aquilex HydroChem, Inc.

6. Aquilex HydroChem Industrial Cleaning, Inc.

7. Aquilex Specialty Repair and Overhaul, Inc.

8. Aquilex WSI, Inc.

9. Aquilex Welding Services B.V.

10. Aquilex Welding Services Poland Sp. z.o.o.

11. Aquilex SMS, Inc.

 

Schedule 1

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Schedule 1(c)

Backstop Parties

 

Name and Address of Backstop Party

  

Total

Commitment

Percentage

  

Backstop

Investment Amount

  

Mailing Address and Fax Number

CCP II Debt Acquisition, L.P.         

Centerbridge Partners, L.P,

375 Park Ave, 12 Fl.

New York, NY 10152

Attention: Kyle Cruz

 

with a copy to:

 

Centerbridge Partners, L.P,

375 Park Ave, 12 Fl.

New York, NY 10152

Attention: Susanne Clark, General Counsel

Sphere Capital, LLC – Series D         

Platinum Equity

360 North Crescent Drive

Beverly Hills, CA 90210

Attn: Eva Kalawski

Redwood Master Fund, Ltd         

Redwood Capital Management, LLC

910 Sylvan Ave.

Englewood Cliffs, NJ 07632

Attn: Jed Nussbaum

Locust Street Funding LLC         

GSO / Blackstone Debt Funds Management LLC

280 Park Avenue, 11th Floor

New York, NY 10017

Attn: Lee Shaiman or Doug Paolillo

 

Schedule 1(c)

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Exhibit A

Restructuring Term Sheet

Please see attached.

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Exhibit B

Rights Offering Procedures

Please see attached.

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Exhibit C

Certain Terms of the Amended LLC Agreement, New Common Units and New
Participating Preferred Units

Please see attached.

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Exhibit D

Certain Terms and Conditions of the Exit Facility

Please see attached.

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Exhibit E

Certain Terms and Conditions of the DIP Facility

Please see attached.