Exhibit 10.12

SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

Dated as of August 14, 2013

SCHUFF INTERNATIONAL INC., a Delaware corporation (“Schuff International”), and
the other Persons listed in Schedule 1.1 (collectively, jointly and severally,
the “Borrower”), and WELLS FARGO CREDIT, INC., a Minnesota corporation (the
“Lender”), hereby agree as follows:

RECITALS

The Borrower and the Lender have entered into an Amended and Restated Credit and
Security Agreement dated as of December 18, 2008, as amended from time to time
prior to the date hereof (as so amended, the “Original Amended and Restated
Credit Agreement”).

The Lender has agreed to make certain loan advances to the Borrower pursuant to
the terms and conditions set forth in the Original Amended and Restated Credit
Agreement.

The parties wish to amend and restate the Original Amended and Restated Credit
Agreement in its entirety.

NOW THEREFORE, in consideration of the premises and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided, the following terms shall have the meanings assigned to them
in this Section or in the Section referenced after such term:

“Accounts” means, with respect to any Person, all of the accounts of the Person,
as such term is defined in the UCC, including each and every right of the Person
to the payment of money, whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a sale, lease or other
disposition of goods or other property, out of a rendering of services, out of a
loan, out of the overpayment of taxes or other liabilities, or otherwise arises
under any contract or agreement, whether such right to payment is created,
generated or earned by the Person or by some other person who subsequently
transfers such person’s interest to the Person, whether such right to payment is
or is not already earned by performance, and howsoever such right to payment may
be evidenced, together with all other rights and interests (including ail Liens)
which the Person may at any time have by law or agreement against any account
debtor or other obligor obligated to make any such payment or against any
property of such account debtor or other obligor; all including but not limited
to all present and future accounts, contract rights, loans and obligations
receivable, chattel papers, bonds, notes and other debt instruments, tax refunds
and rights to payment in the nature of general intangibles.

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“Advance” means a Revolving Advance or the Real Estate Term Advance, as the
context requires.

“Affiliate” or “Affiliates” means, with respect to any Person, any other Person
controlled by, controlling or under common control with the Borrower, including
any Subsidiary of the Person. For purposes of this definition, “control,” when
used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.

“Agreement” means this Amended and Restated Credit and Security Agreement.

“Airplane Security Agreement” means the Aircraft and Engine Security Agreement
encumbering the Plane.

“Availability” means the difference of (i) the Borrowing Base and (ii) the sum
of (A) the outstanding principal balance of the Revolving Note and (B) the L/C
Amount.

“Banking Day” means a day on which the Federal Reserve Bank of New York is open
for business.

“Book Net Worth” means the aggregate of the common and preferred stockholders’
equity in the Borrower, determined in accordance with GAAP.

“Borrowing Base” means at any time the lesser of:

(a) the Maximum Line; or

(b) the sum of:

(i) 85% of Eligible Quincy Accounts plus the lesser of (x) $3,000,000.00, or
(y) 85% of Accounts owed by Mollycorp to Borrower (which do not constitute
Eligible Non-Quincy Accounts solely as a result of a failure to satisfy
Romanette (i) of the definition of Eligible Accounts) through December 31, 2013,
plus

(ii) the lesser of (a) $15,000,000.00, or (b) 20% of Eligible Non-Quincy
Accounts, plus

(iii) the lesser of (a) $9,324,000.00, which amount shall be automatically
reduced by $225,000.00 on the first day of each month commencing on September 1,
2013, by all amounts which are paid to Lender pursuant to Section 6.2(c) of the
Credit Agreement and by all amounts paid to Lender pursuant to Section 6.28 of
the Credit Agreement until such time as said amount is equal to $0.00), or
(b) 85% of the Net Orderly Liquidation Value of Eligible Equipment, plus

 

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(iv) the lesser of (a) the lesser of (x) 49% of Eligible Inventory, or (y) 85%
of the Net Orderly Liquidation Value of the Eligible Inventory, or
(b) $15,000,000.00, plus

(v) $2,762,000.00 (the “Plane Amount”), which Plane Amount shall be
automatically reduced by $31,250.00 on the first day of each month and which
amount shall automatically be reduced to $0.00 on May 1, 2018, plus

(vi) the lesser of (a) $7,500,000.00 (which amount shall automatically be
reduced by $62,500.00 on September 1, 2013, and on the first day of each month
thereafter through and until the Real Estate Facility Termination Date, at which
point it shall be equal to $0.00), or (b) 20% of the fair market value of the
Real Property, as determined by appraisals which are acceptable to the Lender in
its sole discretion (such lesser amount, the “Real Estate Sublimit”), minus

(vii) $5,000,000.00.

“Capital Expenditures” means for a period, any expenditure of money during such
period for the lease, purchase or construction of assets, or for improvements or
additions thereto, which are capitalized on the Borrower’s balance sheet.

“Cash” means, when used in connection with any Person, all monetary and
non-monetary items (other than currency of any country of the United States of
America) owned by that Person that are treated as cash in accordance with GAAP,
consistently applied.

“Cash Equivalents” means, when used in connection with any Person, that Person’s
investments in:

(a) Government Securities due within one year after the date of the making of
the investment;

(b) readily marketable direct obligations of any State of the United States of
America or any political subdivision of any such State given on the date of such
investment a credit rating of at least Aa by Moody’s Investors Service, Inc. or
AA by Standard & Poor’s Rating Group (a division of McGraw-Hill, Inc.), in each
case due within one year after the date of the making of the investment;

(c) certificates of deposit issued by, bank deposits in, eurodollar deposits
through, bankers’ acceptances of, and reverse repurchase agreements covering
Government Securities executed by, the Lender or any bank, savings and loan or
savings bank doing business in and incorporated under the laws of the United
States of America or any State thereof and having on the date of such investment
combined capital, surplus and undivided profits of at least $250,000,000.00, in
each case due within one year after the date of the making of the investment;

 

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(d) certificates of deposit issued by, bank deposits in, eurodollar deposits
through, bankers’ acceptances of, and reverse repurchase agreements covering
Government Securities executed by, any branch or office located in the United
States of America of a bank incorporated under the laws of any jurisdiction
outside the United States of America having on the date of such investment
combined capital surplus and undivided profits of at least $500,000,000.00, in
each case due within one year after the date of the making of the investment;
and

(e) readily marketable commercial paper of corporations doing business in and
incorporated under the laws of the United States of America or any State thereof
given on the date of such investment the highest credit rating by Moody’s
Investors Service, Inc. and Standard & Poor’s Rating Group (a division of
McGraw-Hill, Inc.), in each case due within two hundred seventy (270) days after
the date of the making of the investment.

“Cash Equivalent Value” means, with respect to any Cash Equivalents, the value
of the Cash Equivalents, in form and amount as valued by the Lender.

“Change of Control” means that the Schuff family shall cease to directly or
indirectly control at least 51% of the voting rights in each entity constituting
the Borrower.

“Collateral” means all of the Accounts, chattel paper, deposit accounts,
documents, the Real Estate, the Plane, Equipment, General Intangibles, goods,
instruments, Inventory, Investment Property, letter-of-credit rights, and
letters of credit of the Borrower (or any of them), all sums on deposit in any
Collateral Account, any items in any Lockbox and all other personal property of
the Borrower; together with (i) all substitutions and replacements for and
products of any of the foregoing; (ii) in the case of all goods, all accessions;
(iii) all accessories, attachments, parts, equipment and repairs now or
hereafter attached or affixed to or used in connection with any goods; (iv) all
warehouse receipts, bills of lading and other documents of title now or
hereafter covering such goods; (v) all collateral subject to the Lien of any
Security Document; (vi) any money, or other assets of the Borrower (or any of
them) that now or hereafter come into the possession, custody, or control of the
Lender; (vii) all sums on deposit in the Special Account; and (viii) proceeds of
any and all of the foregoing, in each case, whether now owned or hereafter
acquired.

“Collateral Account” has the meaning given to it in Section 2.11.

“Commitment” means the Lender’s commitment to make Advances to, and to cause the
Issuer to issue Letters of Credit for the account of, the Borrower pursuant to
Article II.

“Constituent Documents” means with respect to any Person, as applicable, such
Person’s certificate of incorporation, articles of incorporation, by-laws,
certificate of formation, articles of organization, limited liability company
agreement, management agreement, operating agreement, shareholder agreement,
partnership agreement or similar document or agreement governing such Person’s
existence, organization or management or concerning disposition of ownership
interests of such Person or voting rights among such Person’s owners.

 

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“Credit Facility” means the credit facility being made available to the Borrower
by the Lender under Article II.

“Daily Three Month LIBOR” means for any day, the rate of interest equal to LIBOR
then in effect for delivery for a three (3) month period. When interest is
determined in relation to Daily Three Month LIBOR, each change in the interest
rate shall become effective each Business Day that Lender determines that Daily
Three Month LIBOR has changed.

“Debt” of a Person means as of a given date, all items of indebtedness or
liability which in accordance with GAAP would be included in determining total
liabilities as shown on the liabilities side of a balance sheet for such Person
and shall also include the aggregate payments required to be made by such Person
at any time under any lease that is considered a capitalized lease under GAAP.

“Default” means an event that, with giving of notice or passage of time or both,
would constitute an Event of Default.

“Default Period” means any period of time beginning on the day an Event of
Default occurs and ending on the date the Lender notifies the Borrower in
writing that such Default or Event of Default has been waived.

“Default Rate” means an annual interest rate equal to three percent (3%) over
the Floating Rate and the Term Floating Rate, as applicable, which interest
rates shall change when and as the Floating Rate and Term Floating Rate, as
applicable, change.

“Director” means, with respect to any Person, a director if the Person is a
corporation, a manager or a Person with similar authority if the Person is a
limited liability company, or a general partner if the Person is a partnership.

“EBITDA” means, with respect to any fiscal period, Borrower’s consolidated Net
Income (or loss), minus extraordinary gains, interest income, non-operating
income and income tax benefits and decreases in any change in LIFO reserves,
plus non-cash extraordinary losses, Interest Expense, income taxes, depreciation
and amortization and increases in any change in LIFO reserves for such period,
in each case, determined on a consolidated basis in accordance with GAAP.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate”, with respect to any Person, means any trade or business
(whether or not incorporated) that is a member of a group which includes the
Person and which is treated as a single employer under Section 414 of the IRC.

 

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“Eligible Accounts” means all unpaid Accounts of Borrower arising from the sale
or lease of goods or the performance of services, net of any credits, but
excluding any such Accounts having any of the following characteristics:

(i) That portion of Accounts unpaid 90 days or more after the invoice date or,
if the Lender in its discretion has determined that a particular dated Account
may be eligible, that portion of such Account which is unpaid more than 30 days
past the stated due date or more than 120 days past the invoice date;

(ii) That portion of Accounts that is disputed or subject to a claim of offset
or a contra account;

(iii) That portion of Accounts in excess of ten percent (10%) of Accounts in the
aggregate which are not yet earned by the final delivery of goods or rendition
of services, as applicable, by Borrower to the customer, including progress
billings, and that portion of Accounts for which an invoice has not been sent to
the applicable account debtor;

(iv) Accounts constituting (i) proceeds of copyrightable material unless such
copyrightable material shall have been registered with the United States
Copyright Office, or (ii) proceeds of patentable inventions unless such
patentable inventions have been registered with the United States Patent and
Trademark Office;

(v) Accounts owed by any unit of government, whether foreign or domestic
(provided, however, that there shall be included in Eligible Accounts that
portion of Accounts owed by such units of government for which Quincy Joist has
provided evidence satisfactory to the Lender that (A) the Lender has a first
priority perfected security interest and (B) such Accounts may be enforced by
the Lender directly against such unit of government under all applicable laws);

(vi) Accounts owed by an account debtor located outside the United States which
are not (A) backed by a bank letter of credit naming the Lender as beneficiary
or assigned to the Lender, in the Lender’s possession or control, and with
respect to which a control agreement concerning the letter-of-credit rights is
in effect, and acceptable to the Lender in all respects, in its sole discretion,
or (B) covered by a foreign receivables insurance policy acceptable to the
Lender in its sole discretion;

(vii) Accounts owed by an account debtor that is insolvent, the subject of
bankruptcy proceedings or has gone out of business;

(viii) Accounts owed by an Owner, Subsidiary, Affiliate, Officer or employee of
the Borrower or any of its Subsidiaries;

 

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(ix) Accounts not subject to a duly perfected security interest in the Lender’s
favor or which are subject to any Lien in favor of any Person other than the
Lender;

(x) That portion of Accounts that has been restructured, extended, amended or
modified;

(xi) That portion of Accounts that constitutes advertising, finance charges,
service charges or sales or excise taxes;

(xii) Accounts owed by an account debtor, regardless of whether otherwise
eligible, to the extent that the balance of such Accounts exceeds 15% of the
aggregate amount of all Eligible Accounts;

(xiii) Accounts owed by an account debtor, regardless of whether otherwise
eligible, if 15% or more of the total amount due under Accounts from such debtor
is ineligible under clauses (i), (ii) or (x) above; and

(xiv) Accounts, or portions thereof, otherwise deemed ineligible by the Lender
in its sole discretion.

“Eligible Equipment” means that Equipment of Borrower designated by Lender as
eligible from time to time in its sole discretion, but excluding Equipment
having any of the following characteristics:

(a) Equipment that is subject to any Lien other than in favor of Lender or the
Term Lenders;

(b) Equipment that has not been delivered to the Premises;

(c) Equipment in which Lender does not hold a first priority security interest;

(d) Equipment that is obsolete or not currently saleable;

(e) Equipment that is not covered by standard “all risk” hazard insurance for an
amount equal to its forced liquidation value;

(f) Equipment that requires proprietary software in order to operate in the
manner in which it is intended when such software is not freely assignable to
Lender or any potential purchaser of such Equipment;

(g) Equipment consisting of computer hardware, software, tooling, or molds; and

(h) Equipment otherwise deemed unacceptable by Lender in its sole discretion.

 

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“Eligible Inventory” means all raw steel Inventory of the Borrower, valued at
the lower of cost or market in accordance with GAAP; but excluding any raw steel
Inventory having any of the following characteristics:

(i) Inventory that is: in-transit; located at any warehouse, job site or other
premises not approved by the Lender in writing; not subject to a duly perfected
first priority security interest in the Lender’s favor; subject to any lien or
encumbrance that is subordinate to the Lender’s first priority security
interest; covered by any negotiable or non-negotiable warehouse receipt, bill of
lading or other document of title; on consignment from any Person; on
consignment to any Person or subject to any bailment unless such consignee or
bailee has executed an agreement with the Lender;

(ii) Work-in-process Inventory;

(iii) Inventory that is damaged, defective, obsolete, slow moving (taking into
consideration the nature and circumstances of Borrower’s business, together with
industry norms, customs and practices) or not currently saleable in the normal
course of the Borrower’s operations, or the amount of such Inventory that has
been reduced by shrinkage;

(iv) Inventory that the Borrower has returned, has attempted to return, is in
the process of returning or intends to return to the vendor thereof;

(v) Inventory manufactured by the Borrower pursuant to a license unless the
applicable licensor has agreed in writing to permit the Lender to exercise its
rights and remedies against such inventory;

(vi) Inventory that is subject to a Lien in favor of any Person other than the
Lender;

(vii) Inventory otherwise deemed ineligible by the Lender in its sole
discretion.

“Eligible Non-Quincy Accounts” means that portion of Eligible Accounts owed to
the Borrower entities other than Quincy Joist.

“Eligible Quincy Accounts” means that portion of Eligible Accounts owed to
Quincy Joist.

“Environmental Law” means any federal, state, local or other governmental
statute, regulation, law or ordinance dealing with the protection of human
health and the environment.

“Equipment” means, with respect to any Person, all of the Person’s equipment, as
such term is defined in the UCC, whether now owned or hereafter acquired,
including but not limited to all present and future machinery, vehicles,
furniture, fixtures, manufacturing equipment, shop equipment, office and

 

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recordkeeping equipment, parts, tools, supplies, and including specifically the
goods described in any equipment schedule or list herewith or hereafter
furnished to the Lender by the Person.

“Event of Default” has the meaning specified in Section 7.1.

“Financial Covenants” means the covenants set forth in Section 6.2.

“Fixed Charge Coverage Ratio” means (i) EBITDA, minus (a) unfinanced Capital
Expenditures made (to the extent not already incurred in a prior period) or
incurred during such period, and (b) cash taxes paid during such period, to the
extent greater than zero, to (ii) Fixed Charges for such period. “Fixed Charges”
means, with respect to any fiscal period and with respect to a Borrower
determined on a consolidated basis in accordance with GAAP, the sum, without
duplication, of (a) cash Interest Expense paid during such period (other than
interest paid-in-kind, amortization of financing fees, and other non-cash
Interest Expense) and (b) principal payments paid in cash in respect of
Indebtedness paid during such period, including cash payments with respect to
capital leases, but excluding principal payments made with respect to the
Revolving Advances (unless there is a corresponding reduction in the Lender’s
Commitment).

“Floating Rate” means an interest rate equal to the sum of (i) Daily Three Month
LIBOR, which interest rate shall change whenever Daily Three Month LIBOR
changes, plus (ii) four percent (4.00%).

“Free Cash Flow” means, for the applicable period, EBITDA minus principal
payments minus cash interest minus unfinanced Capital Expenditures minus
distributions minus cash taxes paid.

“Funding Date” has the meaning given in Section 2.1.

“GAAP” means generally accepted accounting principles, applied on a basis
consistent with the accounting practices applied in the financial statements
described in Section 5.6.

“General Intangibles” means, with respect to any Person, all of the Person’s
general intangibles, as such term is defined in the UCC, whether now owned or
hereafter acquired, including all present and future Intellectual Property
Rights, customer or supplier lists and contracts, manuals, operating
instructions, permits, franchises, the right to use the Person’s name, and the
goodwill of the Person’s business.

“Government Securities” means readily marketable direct full faith and credit
obligations of the United States of America or obligations unconditionally
guaranteed by the full faith and credit of the United States of America.

“Guarantor(s)” means 19th Avenue/Buchanan Limited Partnership, and any other
Person now or hereafter guarantying the Obligations.

“Hazardous Substances” means pollutants, contaminants, hazardous substances,
hazardous wastes, petroleum and fractions thereof, and all other chemicals,
wastes, substances and materials listed in, regulated by or identified in any
Environmental Law.

 

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“IRC” means the Internal Revenue Code of 1986.

“Infringe” means when used with respect to Intellectual Property Rights, any
infringement or other violation of Intellectual Property Rights.

“Intellectual Property Rights” means all actual or prospective rights arising in
connection with any intellectual property or other proprietary rights, including
all rights arising in connection with copyrights, patents, service marks, trade
dress, trade secrets, trademarks, trade names or mask works.

“Interest Expense” means, with respect to the Borrower, for a fiscal
year-to-date period, the total gross interest expense of the Borrower on a
consolidated basis during such period (excluding interest income), and shall in
any event include (i) interest expense (whether or not paid) on all Debt of the
Borrower (on a consolidated basis), (ii) the amortization of debt discounts,
(iii) the amortization of all fees payable in connection with the incurrence of
Debt of the Borrower (on a consolidated basis) to the extent included in
interest expense, and (iv) the portion of any capitalized lease obligation
allocable to interest expense.

“Inventory” means, with respect to any Person, all of the Person’s inventory, as
such term is defined in the UCC, whether now owned or hereafter acquired,
whether consisting of whole goods, spare parts or components, supplies or
materials, whether acquired, held or furnished for sale, for lease or under
service contracts or for manufacture or processing, and wherever located.

“Investment Property” means, with respect to any Person, all of the Person’s
investment property, as such term is defined in the UCC, whether now owned or
hereafter acquired, including but not limited to all securities, security
entitlements, securities accounts, commodity contracts, commodity accounts,
stocks, bonds, mutual fund shares, money market shares and U.S. Government
securities.

“Issuer” means the issuer of any Letter of Credit.

“L/C Amount” means the sum of (i) the aggregate face amount of any issued and
outstanding Letters of Credit and (ii) the unpaid amount of the Obligation of
Reimbursement.

“L/C Application” means an application and agreement for letters of credit in a
form acceptable to the Issuer and the Lender.

“Lender Affiliate” means with respect to the Lender, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Lender, including any
Subsidiary of the Lender.

“Letter of Credit” has the meaning specified in Section 2.4.

 

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“LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest
whole 1/8th of one percent (1%)) determined pursuant to the following formula:

 

  LIBOR =   

Base LIBOR

        100% - LIBOR Reserve Percentage   

(a) “Base LIBOR” means the rate per annum for United States dollar deposits
quoted by Lender for the purpose of calculating the effective Floating Rate for
loans that reference Daily Three Month LIBOR as the Inter-Bank Market Offered
Rate in effect from time to time for three (3) month delivery of funds in
amounts approximately equal to the principal amount of such loans. Borrower
understands and agrees that Lender may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as Lender in its discretion deems appropriate, including but
not limited to the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

(b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
“Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Lender for expected changes in such reserve
percentage during the applicable term of the Revolving Note.

“Licensed Intellectual Property” has the meaning given in Section 5.11(c).

“Lien” means any security interest, mortgage, deed of trust, pledge, lien,
charge, encumbrance, title retention agreement or analogous instrument or
device, including the interest of each lessor under any capitalized lease and
the interest of any bondsman under any payment or performance bond, in, of or on
any assets or properties of a Person, whether now owned or hereafter acquired
and whether arising by agreement or operation of law.

“Loan Documents” means this Agreement, the Revolving Note, the Real Estate Term
Note, the Security Documents, any guaranty entered into by any Guarantor, and
each L/C Application, together with every other agreement, note, document,
contract or instrument to which the Borrower or any Guarantor now or in the
future may be a party and which is required by the Lender.

“Lockbox” shall have the meaning given to it in Section 2.11.

“Maturity Date” means June 30, 2018.

“Maximum Line” means $50,000,000.00.

“Multiemployer Plan” means, with respect to any Person, a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) to which such Person or any ERISA
Affiliate contributes or is obligated to contribute.

“Net Cash Proceeds” means the cash proceeds of any asset sale (including cash
proceeds received as deferred payments pursuant to a note,

 

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installment receivable or otherwise, but only upon actual receipt) net of
(a) attorney, accountant, and investment banking fees, (b) brokerage
commissions,(c) amounts required to be applied to the repayment of debt secured
by a Lien not prohibited by this Agreement on the asset being sold, and
(d) taxes paid or reasonably estimated to be payable as a result of such asset
sale.

“Net Income” (or “Net Loss”) means, with respect to any Person, the fiscal
year-to-date after-tax net income (or net loss) from continuing operations as
determined in accordance with GAAP.

“Net Orderly Liquidation Value” means a professional opinion of the probable Net
Cash Proceeds that could be realized at a properly advertised and professionally
conducted liquidation sale, conducted under orderly sale conditions for an
extended period of time (usually six to nine months), under the economic trends
existing at the time of the appraisal.

“Note” or “Notes” collectively means the Third Replacement Revolving Note and
the Real Estate Term Note and any note issued in substitution or replacement
thereof.

“Obligation of Reimbursement” has the meaning given in Section 2.6(a).

“Obligations” means the Advances (whether or not evidenced by the Notes), the
Obligation of Reimbursement, any and all Swap Obligations and each and every
other debt, liability and obligation of every type and description which the
Borrower may now or at any time hereafter owe to the Lender or any Lender
Affiliate under this Agreement or any Loan Document, whether such debt,
liability or obligation now exists or is hereafter created or incurred, whether
it arises in a transaction involving the Lender alone, a Lender Affiliate alone,
and whether it is direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquid or unliquid, or sole, joint, several or
joint or joint and several, and including all indebtedness and obligations of
the Borrower arising under any Loan Document, Swap Agreement or guaranty between
Borrower and the Lender or between Borrower and any Lender Affiliate, whether
now in effect or hereafter entered into.

“Officer” means with respect to any Person, an officer if the Person is a
corporation, a manager or a Person with similar authority if the Person is a
limited liability company, or a partner if the Person is a partnership.

“Owned Intellectual Property” has the meaning given in Section 5.11(a).

“Owner” means with respect to any Person, each Person having legal or beneficial
title to an ownership interest in such Person or a right to acquire such an
interest.

“Pass-Through Tax Liabilities” means the amount of state and federal income tax
paid or to be paid by Borrower’s Owners on taxable income earned by Borrower and
attributable to the Owners as a result of Company’s “pass-through” tax status,
assuming the highest marginal income tax rate for federal and state (for the
state or states in which the highest marginal income tax rate for

 

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federal and state (for the state or states in which any Owner is liable for
income taxes with respect to such income) income tax purposes, after taking into
account any deduction for state income taxes in calculating the federal income
tax liability and all other deductions, credits, deferrals and other reductions
available to the Owners from or through Borrower.

“Pension Plan” means, with respect to any Person, a pension plan (as defined in
Section 3(2) of ERISA) maintained for employees of the Person or any ERISA
Affiliate and covered by Title IV of ERISA.

“Permitted Lien” has the meaning given in Section 6.3(a).

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

“Plan” means, with respect to any Person, an employee benefit plan (as defined
in Section 3(3) of ERISA) maintained for employees of the Person or any ERISA
Affiliate.

“Plane” means that certain 2006 Hawker Beechcraft airplane, model Hawker 850XP,
serial number 258761, registration mark N761XP, with two TFE731-5BR engines,
serial numbers P129175 and P129171, including all avionics and options installed
therein, together with all present and future accessories, parts, repairs,
replacements, substitutions, attachments, modifications, renewals, additions,
improvements, up-grades and accessions thereto, but shall not include any
equipment or parts installed on a temporary, loaner or exchange basis.

“Premises” means all premises where the Borrower conducts its business and has
title or any rights of possession, including the premises legally described in
Exhibit C attached hereto.

“Quincy Joist” means Quincy Joist Company, a Delaware corporation.

“Real Estate” means the real property encumbered by the Real Property Security
Documents.

“Real Estate Facility Maturity Date” means June 30, 2018.

“Real Estate Facility Termination Date” means the earliest of (i) the Real
Estate Facility Maturity Date, (ii) the date the Borrower terminates the Credit
Facility, (iii) the Maturity Date, or (iv) the date the Lender demands payment
of the Obligations after an Event of Default pursuant to Section 7.2.

“Real Estate Term Advance” has the meaning specified in Section 2.19(a).

“Real Estate Term Note” means the $10,000,000.00 Real Estate Term Note in favor
of the Lender, as the same may be renewed and amended from time to time, and all
replacements thereto.

“Real Property Security Documents” means the mortgages, deeds of trust, deeds to
secure debt and any other documents delivered to the Lender from time to time to
encumber the Real Estate and assign the rents, issues and profits therefrom.

 

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“Reportable Event” means a reportable event (as defined in Section 4043 of
ERISA), other than an event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the Pension Benefit Guaranty
Corporation.

“Revolving Advance” has the meaning given in Section 2.1.

“Revolving Note” means the $50,000,000.00 Third Replacement Revolving Note in
favor of the Lender, as the same may be renewed and amended from time to time
and all replacements thereto.

“Security Documents” means this Agreement, the Real Property Security Documents,
the Airplane Security Agreement and any other document delivered to the Lender
from time to time to secure the Obligations.

“Security Interest” has the meaning given in Section 3.1.

“Special Account” means a specified cash collateral account maintained by a
financial institution acceptable to the Lender in connection with Letters of
Credit, as contemplated by Section 2.6.

“Subsidiary” means, with respect to any Person, any corporation of which more
than 50% of the outstanding shares of capital stock having general voting power
under ordinary circumstances to elect a majority of the board of Directors of
such corporation, irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency, is at the time directly or indirectly owned by the
Person, by the Person and one or more other Subsidiaries of the Person, or by
one or more other Subsidiaries of the Person.

“Swap Agreement” means any agreement between the Borrower, the Lender or any
affiliate of Lender with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or any Subsidiary
shall be a Swap Agreement.

“Swap Obligations” of Borrower means any and all obligations of Borrower,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.

“Term Floating Rate” means an interest rate equal to the sum of (i) the greater
of (A) 1.00%, and (B) Daily Three Month LIBOR, which interest rate shall change
whenever Daily Three Month LIBOR changes, plus (ii) 6.00%.

 

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“Termination Date” means the earliest of (i) the Maturity Date, (ii) the date
the Borrower terminates the Credit Facility, or (iii) the date the Lender
demands payment of the Obligations after an Event of Default pursuant to
Section 7.2.

“Total Debt” means all indebtedness of the Borrower.

“UCC” means the Uniform Commercial Code as in effect in the state designated in
Section 8.13 as the state whose laws shall govern this Agreement, or in any
other state whose laws are held to govern this Agreement or any portion hereof.

“Wells Fargo Bank” means Wells Fargo Bank Arizona, National Association, unless
the context otherwise requires.

Section 1.2 Other Definitional Terms; Rules of Interpretation. The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP. All terms defined in
the UCC and not otherwise defined herein have the meanings assigned to them in
the UCC. References to Articles, Sections, subsections, Exhibits, Schedules and
the like, are to Articles, Sections and subsections of, or Exhibits or Schedules
attached to or a part of, this Agreement unless otherwise expressly provided.
The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” Defined terms include in the singular number
the plural and in the plural number the singular. Reference to any agreement
(including the Loan Documents), document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof (and, if applicable, in accordance with the
terms hereof and the other Loan Documents), except where otherwise explicitly
provided, and reference to any promissory note includes any promissory note
which is an extension or renewal thereof or a substitute or replacement
therefor. Reference to any law, rule, regulation, order, decree, requirement,
policy, guideline, directive or interpretation means as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect on the
determination date, including rules and regulations promulgated thereunder.

ARTICLE II

AMOUNT AND TERMS OF THE CREDIT FACILITY

Section 2.1 Revolving Advances. The Lender agrees, on the terms and subject to
the conditions herein set forth, to make advances to the Borrower from time to
time from the date all of the conditions set forth in Section 4.1 are satisfied
(the “Funding Date”) to the Termination Date (the “Revolving Advances”) in an
aggregate principal amount at any time outstanding not to exceed the
Availability. The Lender shall have no obligation to make a Revolving Advance to
the extent the amount of the requested Revolving Advance exceeds Availability.

The Borrower’s obligation to pay the Revolving Advances shall be evidenced by
the Revolving Note and shall be secured by the Collateral. Within the limits set
forth in this Section 2.1, the Borrower may borrow, prepay pursuant to
Section 2.12, and reborrow.

 

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Section 2.2 Procedures for Requesting Advances. The Borrower shall comply with
the following procedures in requesting Revolving Advances:

(a) Time for Requests. The Borrower shall request each Advance not later than
11:00 a.m., Phoenix, Arizona time (the “Cut-Off Time”) on the Banking Day which
is the date the Advance is to be made. Each such request shall be effective upon
receipt by the Lender, shall be in writing or by telephone or telecopy
transmission, to be confirmed in writing by the Borrower if so requested by the
Lender, shall be by (i) an Officer of the Borrower; or (ii) a person designated
as the Borrower’s agent by an Officer of the Borrower in a writing delivered to
the Lender; or (iii) a person whom the Lender reasonably believes to be an
Officer of the Borrower or such a designated agent. The Borrower shall repay all
Advances even if the Lender does not receive such confirmation and even if the
person requesting an Advance was not in fact authorized to do so. Any request
for an Advance, whether written or telephonic, shall be deemed to be a
representation by the Borrower that the conditions set forth in Section 4.2 have
been satisfied as of the time of the request.

(b) Disbursement. Upon fulfillment of the applicable conditions set forth in
Article IV, the Lender shall disburse the proceeds of the requested Advance by
crediting the same to the Borrower’s demand deposit account maintained with
Wells Fargo Bank unless the Lender and the Borrower shall agree in writing to
another manner of disbursement.

Section 2.3

Section 2.3.1 [INTENTIONALLY DELETED]

Section 2.3.2 Increased Costs; Capital Adequacy; Funding Exceptions. If a
Related Lender (as defined below) determines at any time that its Return (as
defined below) has been reduced as a result of any Rule Change, such Lender may
so notify the Borrower and require the Borrower, beginning fifteen (15) days
after such notice, to pay it the amount necessary to restore its Return to what
it would have been had there been no Rule Change. For purposes of this
Section 2.3:

(a) “Capital Adequacy Rule” means any law, rule, regulation, guideline,
directive, requirement or request regarding capital adequacy, or the
interpretation or administration thereof by any governmental or regulatory
authority, central bank or comparable agency, whether or not having the force of
law, that applies to any Related Lender (as defined below), including rules
requiring financial institutions to maintain total capital in amounts based upon
percentages of outstanding loans, binding loan commitments and letters of
credit. Notwithstanding anything herein to the contrary (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith, and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Capital
Adequacy Rule”, regardless of the date enacted, adopted or issued.

(b) “L/C Rule” means any law, rule, regulation, guideline, directive,
requirement or request regarding letters of credit, or the interpretation or
administration thereof by any governmental or regulatory authority, central bank

 

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or comparable agency, whether or not having the force of law, that applies to
any Related Lender, including those that impose taxes, duties or other similar
charges, or mandate reserves, special deposits or similar requirements against
assets of, deposits with or for the account of, or credit extended by any
Related Lender, on letters of credit.

(c) “Related Lender” includes (but is not limited to) the Lender, any parent of
the Lender, any assignee of any interest of the Lender hereunder and any
participant in the Credit Facility.

(d) “Return,” for any period, means the percentage determined by dividing
(i) the sum of interest and ongoing fees earned by the Related Lender under this
Agreement during such period, by (ii) the average capital such Lender is
required to maintain during such period as a result of its being a party to this
Agreement, as determined by such Lender based upon its total capital
requirements and a reasonable attribution formula that takes account of the
Capital Adequacy Rules and L/C Rules then in effect, costs of issuing or
maintaining any Advance or Letter of Credit and amounts received or receivable
under this Agreement or the Notes with respect to any Advance or Letter of
Credit. Return may be calculated for each calendar quarter and for the shorter
period between the end of a calendar quarter and the date of termination in
whole of this Agreement.

(e) “Rule Change” means any change in any Capital Adequacy Rule or L/C Rule
occurring after the date of this Agreement, or any change in the interpretation
or administration thereof by any governmental or regulatory authority, but the
term does not include any changes that at the Funding Date are scheduled to take
place under the existing Capital Adequacy Rules or L/C Rules or any increases in
the capital that the Lender is required to maintain to the extent that the
increases are required due to a regulatory authority’s assessment of such
Related Lender’s financial condition.

The initial notice sent by the Related Lender shall be sent as promptly as
practicable after such Lender learns that its Return has been reduced, shall
include a demand for payment of the amount necessary to restore such Lender’s
Return for the quarter in which the notice is sent, and shall state in
reasonable detail the cause for the reduction in its Return and its calculation
of the amount of such reduction. Thereafter, such Related Lender may send a new
notice during each calendar quarter setting forth the calculation of the reduced
Return for that quarter and including a demand for payment of the amount
necessary to restore its Return for that quarter. The Related Lender’s
calculation in any such notice shall be conclusive and binding absent
demonstrable error.

Section 2.4 Letters of Credit.

(a) The Lender agrees, on the terms and subject to the conditions herein set
forth, to cause an Issuer to issue, from the Funding Date to the Termination
Date, one or more irrevocable standby or documentary letters of credit (each, a
“Letter of Credit”) for the Borrower’s account by guaranteeing payment of the
Borrower’s obligations or being a co-applicant. The Lender shall have no
obligation to cause an Issuer to issue any Letter of Credit if the face amount
of the Letter of Credit to be issued would exceed the lesser of
(i) $5,000,000.00 less the Letter of Credit Amount, or (ii) Availability.

 

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Each Letter of Credit, if any, shall be issued pursuant to a separate L/C
Application entered into between the Borrower and the Lender for the benefit of
the Issuer, completed in a manner satisfactory to the Lender and the Issuer. The
terms and conditions set forth in each such L/C Application shall supplement the
terms and conditions hereof, but if the terms of any such L/C Application and
the terms of this Agreement are inconsistent, the terms hereof shall control.

(b) No Letter of Credit shall be issued with an expiry date later than the
Termination Date in effect as of the date of issuance.

(c) Any request to cause an Issuer to issue a Letter of Credit shall be deemed
to be a representation by the Borrower that the conditions set forth in
Section 4.2 have been satisfied as of the date of the request.

Section 2.5 Special Account. If the Credit Facility is terminated for any reason
while any Letter of Credit is outstanding, the Borrower shall thereupon pay the
Lender in immediately available funds for deposit in the Special Account an
amount equal to the L/C Amount. The Special Account shall be an interest bearing
account maintained for the Lender by any financial institution acceptable to the
Lender. Any interest earned on amounts deposited in the Special Account shall be
credited to the Special Account. The Lender may apply amounts on deposit in the
Special Account at any time or from time to time to the Obligations in the
Lender’s sole discretion. The Borrower may not withdraw any amounts on deposit
in the Special Account as long as the Lender maintains a security interest
therein. The Lender agrees to transfer any balance in the Special Account to the
Borrower when the Lender is required to release its security interest in the
Special Account under applicable law.

Section 2.6 Payment of Amounts Drawn Under Letters of Credit; Obligation of
Reimbursement. The Borrower acknowledges that the Lender, as co-applicant, will
be liable to the Issuer for reimbursement of any and all draws under Letters of
Credit and for all other amounts required to be paid under the applicable L/C
Application. Accordingly, the Borrower shall pay to the Lender any and all
amounts required to be paid under the applicable L/C Application, when and as
required to be paid thereby, and the amounts designated below, when and as
designated:

(a) The Borrower shall pay to the Lender on the day a draft is honored under any
Letter of Credit a sum equal to all amounts drawn under such Letter of Credit
plus any and all reasonable charges and expenses that the Issuer or the Lender
may pay or incur relative to such draw and the applicable L/C Application, plus
interest on all such amounts, charges and expenses as set forth below (the
Borrower’s obligation to pay all such amounts is herein referred to as the
“Obligation of Reimbursement”).

(b) Whenever a draft is submitted under a Letter of Credit, the Borrower
authorizes the Lender to make a Revolving Advance in the amount of the
Obligation of Reimbursement and to apply the proceeds of such Revolving Advance
thereto. Such Revolving Advance shall be repayable in accordance with and be
treated in all other respects as a Revolving Advance hereunder.

 

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(c) If a draft is submitted under a Letter of Credit when the Borrower is
unable, because a Default Period exists or for any other reason, to obtain a
Revolving Advance to pay the Obligation of Reimbursement, the Borrower shall pay
to the Lender on demand and in immediately available funds, the amount of the
Obligation of Reimbursement together with interest, accrued from the date of the
draft until payment in full at the Default Rate. Notwithstanding the Borrower’s
inability to obtain a Revolving Advance for any reason, the Lender is
irrevocably authorized, in its sole discretion, to make a Revolving Advance in
an amount sufficient to discharge the Obligation of Reimbursement and all
accrued but unpaid interest thereon.

(d) The Borrower’s obligation to pay any Revolving Advance made under this
Section 2.6 shall be evidenced by the Revolving Note and shall bear interest as
provided in Section 2.8.

Section 2.7 Obligations Absolute. The Borrower’s obligations arising under
Section 2.6 shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of Section 2.7, under all circumstances
whatsoever, including (without limitation) the following circumstances:

(a) any lack of validity or enforceability of any Letter of Credit or any other
agreement or instrument relating to any Letter of Credit (collectively the
“Related Documents”);

(b) any amendment or waiver of or any consent to departure from all or any of
the Related Documents;

(c) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time, against any beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such beneficiary or
any such transferee may be acting), or other person or entity, whether in
connection with this Agreement, the transactions contemplated herein or in the
Related Documents or any unrelated transactions;

(d) any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;

(e) payment by or on behalf of the Issuer under any Letter of Credit against
presentation of a draft or certificate which does not strictly comply with the
terms of such Letter of Credit; or

(f) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

Section 2.8 Interest; Default Interest; Participations; Usury.

(a) Note. Except as set forth in subsections (b) and (d), (i) the outstanding
principal balance of the Revolving Note and each Revolving Advance shall bear
interest at the Floating Rate, and (ii) the outstanding principal balance of the
Real Estate Term Note and the Real Estate Term Advance shall bear interest at
the Term Floating Rate.

 

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(b) Default Interest Rate. Upon notice to the Borrower from the Lender from time
to time, the principal of the Advances outstanding from time to time shall bear
interest at the Default Rate, effective as of the first day of the fiscal month
during which any Default Period begins through the last day of such Default
Period. The Lender’s election to charge the Default Rate shall be in its sole
discretion and shall not be a waiver of any of its other rights and remedies.
The Lender’s election to charge interest at the Default Rate for less than the
entire period during which the Default Rate may be charged shall not be a waiver
of its right to later charge the Default Rate for the entire such period.

(c) Participations. If any Person shall acquire a participation in the Advances
or the Obligation of Reimbursement, the Borrower shall be obligated to the
Lender to pay the full amount of all interest calculated under this
Section 2.8(c), along with all other fees, charges and other amounts due under
this Agreement, regardless if such Person elects to accept interest with respect
to its participation at a lower rate than that calculated under this
Section 2.8, or otherwise elects to accept less than its pro rata share of such
fees, charges and other amounts due under this Agreement.

(d) Usury. In any event no rate change shall be put into effect which would
result in a rate greater than the highest rate permitted by law. Notwithstanding
anything to the contrary contained in any Loan Document, all agreements which
either now are or which shall become agreements between the Borrower and the
Lender are hereby limited so that in no contingency or event whatsoever shall
the total liability for payments in the nature of interest, additional interest,
Default Interest, fees payable hereunder, and other charges exceed the
applicable limits imposed by any applicable usury laws. If any payments in the
nature of interest, additional interest, Default Interest, fees payable
hereunder, and other charges made under any Loan Document are held to be in
excess of the limits imposed by any applicable usury laws, it will be deemed a
mutual mistake and any such amount held to be in excess shall be considered
payment of principal hereunder, and the indebtedness evidenced hereby shall be
reduced by such amount (or if there is no existing indebtedness, refunded to the
Borrower) so that the total liability for payments in the nature of interest,
additional interest and other charges shall not exceed the applicable limits
imposed by any applicable usury laws, in compliance with the desires of the
Borrower and the Lender. All amounts constituting interest will be spread
throughout the full term of the indebtedness evidenced hereby in determining
whether interest exceeds lawful amounts. The Borrower agrees that the interest
rate contracted for herein includes the interest rate set forth in this
Section 2.8 plus any other charges or fees set forth herein and costs and
expenses incident to this transaction paid by the Borrower to the extent that
they are deemed interest under applicable law. This provision shall never be
superseded or waived and shall control every other provision of the Loan
Documents and all agreements between the Borrower and the Lender, or their
successors and assigns.

 

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Section 2.9 Fees.

(a) Amended and Restated Fee. The Borrower shall pay to the Lender, on the date
hereof, a fully earned, non-refundable, amended, restated and origination fee in
the amount of $37,500.00.

(b) Audit Fees. The Borrower shall pay the Lender, on demand, reasonable audit
fees in connection with any audits or inspections conducted by or on behalf of
the Lender of any Collateral or the Borrower’s operations or business at the
rates established from time to time by the Lender as its audit fees (which fees
are currently $125.00 per hour per auditor), together with all actual
out-of-pocket costs and expenses reasonably incurred in conducting any such
audit or inspection.

(c) Letter of Credit Fees. The Borrower shall pay to the Lender a fee with
respect to each Letter of Credit, if any, accruing on a daily basis and computed
at the annual rate of three percent (3.00%), of the aggregate amount that may
then be drawn under it assuming compliance with all conditions for drawing (the
“Aggregate Face Amount”), from and including the date of issuance of such Letter
of Credit until such date as such Letter of Credit shall terminate by its terms
or be returned to the Lender, due and payable monthly in arrears on the first
day of each month and on the Termination Date; provided, however, that during
Default Periods, in the Lender’s sole discretion and without waiving any of its
other rights and remedies, such fee shall increase to six percent (6.0%) of the
Aggregate Face Amount. The foregoing fee shall be in addition to any and all
fees, commissions and charges of the Issuer with respect to or in connection
with such Letter of Credit.

(d) Letter of Credit Administrative Fees. The Borrower shall pay to the Lender,
on written demand, the administrative fees charged by the Issuer in connection
with the honoring of drafts under any Letter of Credit, amendments thereto,
transfers thereof and all other activity with respect to the Letters of Credit
at the then-current rates published by the Issuer for such services rendered on
behalf of customers of the Issuer generally.

(e) Termination and Line Reduction Fees. If (i) the Lender terminates the Credit
Facility as a result of the occurrence of an Event of Default, or if (ii) the
Borrower terminates the Credit Facility or reduces the Maximum Line on a date
prior to the Maturity Date, then the Borrower shall pay the Lender as liquidated
damages and not as a penalty a termination fee in an amount equal to a
percentage of the Maximum Line (or the reduction of the Maximum Line, as the
case may be) calculated as follows: (A) three percent (3.0%) if the termination
or reduction occurs on or before June 30, 2015; (B) two percent (2.0%) if the
termination or reduction occurs after June 30, 2015 but on or before June 30,
2017; and (C) one percent (1.0%) if the termination or reduction occurs after
June 30, 2017.

(f) Waiver of Termination Fees. The Borrower will not be required to pay the
termination fees otherwise due under subsection (e) if such termination is made
because of refinancing by an affiliate of the Lender.

 

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(g) Unused Line Fee. For the purposes of this Section 2.9(g), “Unused Amount”
means the Maximum Line reduced by outstanding Revolving Advances. The Borrower
agrees to pay to the Lender an unused line fee at the rate of one-half of one
percent (0.50 %) per annum on the average daily Unused Amount from the date of
this Agreement to and including the Termination Date, due and payable monthly in
arrears on the first Banking Day of the month and on the Termination Date.

(h) Other Fees. The Lender may from time to time charge additional fees: (i) for
Revolving Advances made and Letters of Credit issued in excess of Availability
(which over-advance fees are currently $500 per day when there is no Default
Period and $1,000 per day when a Default Period exists, and may be charged for
each day that the over-advance exists); (ii) in lieu of imposing interest at the
Default Rate during a Default Period; (iii) for wire transfer fees; and (iv) for
other fees which are customarily charged by the Lender and are reasonable in
amount. Fees charged pursuant to clause (ii) above will not exceed the Default
Rate which could be charged because of the Default or Event of Default
permitting the fees. Neither the charging nor the payment of overadvance fees
shall be deemed to excuse or waive the Borrower’s obligation to comply with
provisions of Section 2.13 or to waive any Default of the Borrower arising from
the Borrower’s failure to comply with the provisions of Section 2.13. The
Borrower’s request for a Revolving Advance in excess of Availability, the
issuance of a Letter of Credit in excess of Availability or the Borrower’s
failure to comply with the provisions of Section 2.13 shall constitute the
Borrower’s agreement to pay the over-advance fees described in such notice.

(i) Real Estate Term Advance Closing Fee. The Borrower shall pay to the Lender,
on the date hereof, a fully earned, non-refundable Real Estate Term Advance
origination fee in the amount of $100,000.00

(j) Real Estate Term Advance Prepayment Fee. If the Real Estate Term Advance is
prepaid in whole or in part prior to the Real Estate Facility Maturity Date for
any reason, then on the date of any such prepayment, the Borrower shall pay to
the Lender as liquidated damages and not as a penalty a prepayment fee in an
amount equal to (i) three percent (3.0%) of the amount prepaid, if prepayment
occurs on or before [insert date that is first anniversary of closing]; and
(ii) two percent (2.0%) of the amount prepaid, if prepayment occurs after
[insert date that is first anniversary of closing] but on or before [insert date
that is second anniversary of closing].

(k) [Intentionally Deleted]

(l) [Intentionally Deleted]

(m) [Intentionally Deleted]

(n) [Intentionally Deleted]

(o) [Intentionally Deleted]

 

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(p) Facility Fee. The Borrower agrees to pay an annual facility fee in the
amount of $100,000.00 on each February 1st. All such amounts shall be paid in
full when due regardless of whether they become due in any partial year.

(q) [Intentionally Deleted]

Section 2.10 Time for Interest Payments; Payment on Non-Banking Days;
Computation of Interest and Fees.

(a) Time For Interest Payments. Accrued and unpaid interest accruing on Advances
shall be due and payable on the first day of each month and on the Termination
Date (each an “Interest Payment Date”), or if any such day is not a Banking Day,
on the next succeeding Banking Day. Interest will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of advance to the Interest Payment Date. If an Interest Payment Date is not
a Banking Day, payment shall be made on the next succeeding Banking Day.

(b) Payment on Non-Banking Days. Whenever any payment to be made hereunder shall
be stated to be due on a day which is not a Banking Day, such payment may be
made on the next succeeding Banking Day, and such extension of time shall in
such case be included in the computation of interest on the Advances or the fees
hereunder, as the case may be.

(c) Computation of Interest and Fees. Interest accruing on the outstanding
principal balance of the Advances and fees hereunder outstanding from time to
time shall be computed on the basis of actual number of days elapsed in a year
of 360 days.

Section 2.11 Lockbox; Collateral Account; Application of Payments.

(a) Lockbox and Collateral Account.

(i) If an Event of Default occurs and the Lender requests that they do so, or
regardless of whether or not an Event of Default or Default Period exists, if
the sum of Availability plus Cash and Cash Equivalents on deposit with Lender at
any time is less than $7,500,000.00 for five consecutive business days, then in
either event (A) the Borrower shall instruct all account debtors to pay all its
Accounts directly to a lockbox (the “Lockbox”) established with Wells Fargo Bank
or another bank selected by the Lender and reasonably satisfactory to the
Borrower and (B) the Borrower shall execute and deliver to the Lender a lockbox
agreement in form and substance satisfactory to the Lender in its sole and
absolute judgment. If, notwithstanding such instructions, the Borrower receives
any payments on their Accounts, the Borrower shall deposit such payments into a
collateral account maintained with Lender (the “Collateral Account”). The
Borrower shall also deposit all other cash proceeds of Collateral directly to
the Collateral Account if received at a time that the Borrower is required to
deposit payments on their Accounts into the Collateral

 

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Account. In addition, and regardless of whether or not an Event of Default or
Default Period exists, if the sum of Availability plus Cash and Cash Equivalents
on deposit with Lender at any time is less than $7,500,000.00 for five
consecutive business days, then in such event, all proceeds of Collateral
received by Borrower shall be immediately deposited in the Collateral Account.
In all such events, until so deposited, the Borrower shall hold all such
payments and cash proceeds received by it in trust for and as the property of
the Lender and shall not commingle such property with any of its other funds or
property. All deposits in the Collateral Account shall constitute proceeds of
Collateral and shall not constitute payment of the Obligations.

(ii) All items deposited in the Collateral Account shall be subject to final
payment. If any such item is returned uncollected, the Borrower will immediately
pay the Lender, or, for items deposited in the Collateral Account, the bank
maintaining such account, the amount of that item, or such bank at its
discretion may charge any uncollected item to the commercial or other accounts.
Borrower shall be liable as an endorser on all items deposited by it in the
Collateral Account, whether or not in fact endorsed by it.

(b) Application of Payments.

(i) If a Collateral Account has been established and there are funds in the
Collateral Account, the Borrower may, from time to time, cause funds in the
Collateral Account to be transferred to the Lender’s general account for payment
of the Obligations. Except as provided in the preceding sentence, amounts
deposited in the Collateral Account shall not be subject to withdrawal by the
Borrower, except after full payment and discharge of all Obligations and
termination of the Credit Facility.

(ii) All payments to the Lender shall be made in immediately available funds and
shall be applied to the Obligations upon receipt by the Lender. Funds received
from the Collateral Account shall be deemed to be immediately available. The
Lender may hold all payments not constituting immediately available funds for
three (3) additional days before applying them to the Obligations.

Section 2.12 Voluntary Prepayment; Reduction of the Maximum Line; Termination of
the Credit Facility by the Borrower. Except as otherwise provided herein, the
Borrower may prepay the Advances in whole at any time or from time to time in
part; provided that voluntary prepayments of the Real Estate Term Advance shall
be in a minimum amount of $250,000.00. The Borrower may terminate the Credit
Facility or reduce the Maximum Line at any time if it (i) gives the Lender at
least 30 days’ prior written notice and (ii) pays the Lender termination or
Maximum Line reduction fees in accordance with Section 2.9(e). Any reduction in
the Maximum Line must be in an amount of not less than $500,000.00 or an
integral multiple thereof. If the Borrower reduces the Maximum Line to zero, all
Obligations shall be immediately due and

 

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payable. Subject to termination of the Credit Facility and payment and
performance of all Obligations, the Lender shall, at the Borrower’s expense,
release or terminate the Security Interest and the Security Documents to which
the Borrower is entitled by law.

Section 2.13 Mandatory Prepayment. Without notice or demand, if the sum of the
outstanding principal balance of the Revolving Advances plus the L/C Amount
shall at any time exceed the Borrowing Base, the Borrower shall (i) first,
immediately prepay the Revolving Advances to the extent necessary to eliminate
such excess; and (ii) if prepayment in full of the Revolving Advances is
insufficient to eliminate such excess, pay to the Lender in immediately
available funds for deposit in the Special Account an amount equal to the
remaining excess. Any payment received by the Lender under this Section 2.13, or
under Section 2.12, may be applied to the Obligations, in such order and in such
amounts as the Lender, in its discretion, may from time to time determine.

Section 2.14 Revolving Advances to Pay Obligations. Notwithstanding anything in
Section 2.1, the Lender may, in its discretion at any time or from time to time,
without the Borrower’s request and even if the conditions set forth in
Section 4.2 would not be satisfied, make a Revolving Advance in an amount equal
to the portion of the Obligations from time to time due and payable.

Section 2.15 Use of Proceeds. The Borrower shall use the proceeds of Advances
and each Letter of Credit for ordinary working capital purposes and for any
other business purposes determined by Borrower.

Section 2.16 Liability Records. The Lender may maintain from time to time, at
its discretion, records as to the Obligations. All entries made on any such
record shall be presumed correct until the Borrower establishes the contrary.
Upon the Lender’s demand, the Borrower will admit and certify in writing the
exact principal balance of the Obligations that the Borrower then asserts to be
outstanding. Any billing statement or accounting rendered by the Lender shall be
conclusive and fully binding on the Borrower unless the Borrower gives the
Lender specific written notice of exception within 30 days after receipt.

Section 2.17 Appraisals. Appraisals; Environmental Site Assessments. Borrower
shall reimburse the Lender for Lender’s fees, costs and expenses incurred in
connection with (i) one appraisal which is performed on the Real Property after
June 30, 2013, (ii) one appraisal per year which is performed on Equipment,
(iii) one appraisal per year which is performed on Inventory, and (iv) any
appraisals performed during the existence of an Event of Default or Default
Period. During the existence of an Event of Default or Default Period, Borrower
shall reimburse Lender for any environmental site assessments.

Section 2.18 [INTENTIONALLY DELETED]

Section 2.19

(a) Real Estate Term Advance. Upon fulfillment of the applicable conditions set
forth in Section 4 of this Agreement, subject to the terms and conditions of
this Agreement, on the date hereof, the Lender agrees to make a term loan (the
“Real Estate Term Advance”) to the Borrower in an amount equal to $10,000,000.
The Lender shall disburse and pay the proceeds of the Real Estate Term Advance
to the Borrower or its designee (and in a manner directed by the Borrower,
including by wire transfer of cash credit or by crediting the same to the
Borrower’s demand deposit account specified in Section 2.2(b)). The Borrower’s
obligation to pay the Real Estate Term Advance shall be evidenced by the Real
Estate Term Note and shall be secured by the Collateral.

 

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(b) Payment of the Real Estate Term Advance. The outstanding principal balance
of the Real Estate Term Advance shall be due and payable as follows:

(i) In equal quarterly installments of $166,750.00, beginning on the first day
of the first full quarter following the disbursement of the Real Estate Term
Advance, and on the 1st day of each quarter thereafter.

(ii) All prepayments of principal with respect to the Real Estate Term Advance
shall be applied to the principal installments thereof in the inverse order of
maturity.

(iii) On the Real Estate Facility Termination Date, the entire unpaid principal
balance of the Real Estate Term Advance, and all unpaid interest accrued
thereon, shall also be fully due and payable.

Section 2.20 [INTENTIONALLY DELETED]

Section 2.21 [INTENTIONALLY DELETED]

ARTICLE III

SECURITY INTEREST; OCCUPANCY; SETOFF

Section 3.1 Grant of Security Interest. The Borrower hereby pledges, assigns and
grants to the Lender a lien and security interest (collectively referred to as
the “Security Interest”) in the Collateral, as security for the payment and
performance of the Obligations. Upon request by the Lender, the Borrower will
grant the Lender a security interest in all commercial tort claims it may have
against any Person. Notwithstanding anything herein or in any other Loan
Document to the contrary, in no event shall the Security Interest attach to, or
the term “Collateral” be deemed to include (a) any of the outstanding equity
interests in a foreign Subsidiary (i) in excess of 65% of the voting power of
all classes of equity interests of such foreign Subsidiary entitled to vote in
the election of directors or other similar body of such foreign Subsidiary, or
(ii) to the extent that the pledge thereof is prohibited by the laws of the
jurisdiction of such foreign Subsidiary’s organization; (b) any equity interest
in any foreign Subsidiary that is not a first-tier Subsidiary of a Borrower;
(c) any lease, license, contract, property rights or agreement to which a
Borrower is a party or any of such Borrower’s rights or interests thereunder,
if, and for so long as and to the extent that, the grant of the security
interest would constitute or result in (i) the abandonment, invalidation or
unenforceability of any material right, title or interest of such Borrower
therein, or (ii) a breach or termination pursuant to the terms of, or a default
under, any such lease, license, contract, property rights or agreement (other
than to the extent that any such breach, termination or default would be
rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the
Uniform Commercial Code (or any successor provision or provisions) of any
relevant jurisdiction, any other applicable law or principles of equity),
provided, however, that the security interest (x) shall attach immediately when
the condition causing such abandonment, invalidation or unenforceability is
remedies, (y) shall attach immediately to any severable term or such lease,
license, contract, property rights or agreement to the extent that such
attachment does not result in any of the consequences specified in (i) or
(ii) above, and (z) shall attach immediately to any such lease, license,
contract,

 

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property rights or agreement to which the account debtor or such Borrower’s
counterparty has consented to such attachment; (d) any equity interest acquired
after the date hereof that is an equity interest in an entity other than a
Subsidiary of any Borrower, solely to the extent such acquisition is permitted
under this Agreement, if the terms of the organizational documents of the issuer
of such equity interests do not permit the grant of the security interest in
such equity interests by the owner thereof or the applicable Borrower, after
employing commercially reasonable efforts, has been unable to obtain any
approval or consent to the creation of the security interest therein that is
required under such organizational documents, and (e) any application to
register any trademark or service mark prior to the filing under applicable law
of a verified statement of use (or the equivalent) for such trademark or service
mark to the extent the creation of a security interest therein or the grant of a
mortgage thereon would void or invalidate such trademark or service mark.

Section 3.2 Notification of Account Debtors and Other Obligors. The Lender may
at any time during a Default Period notify any account debtor or other person
obligated to pay the amount due that such right to payment has been assigned or
transferred to the Lender for security and shall be paid directly to the Lender.
The Borrower will join in giving such notice if the Lender so requests. At any
time after the Borrower or the Lender gives such notice to one of its account
debtors or other obligors, the Lender may, but need not, in the Lender’s name or
in the name of the Borrower, (a) demand, sue for, collect or receive any money
or property at any time payable or receivable on account of, or securing, any
such right to payment, or grant any extension to, make any compromise or
settlement with or otherwise agree to waive, modify, amend or change the
obligations (including collateral obligations) of any such account debtor or
other obligor; and (b) as the agent and attorney-in-fact of the Borrower, notify
the United States Postal Service to change the address for delivery of the mail
of the Borrower to any address designated by the Lender, otherwise intercept the
mail of the Borrower, and receive, open and dispose of the Borrower’s mail,
applying all Collateral as permitted under this Agreement and holding all other
mail for the Borrower’s account or forwarding such mail to the last known
address of either the Borrower to whom addressed or Schuff International.

Section 3.3 Assignment of Insurance. As additional security for the payment and
performance of the Obligations, the Borrower hereby assigns to the Lender any
and all monies (including proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of the Borrower with
respect to, any and all policies of insurance now or at any time hereafter
covering the Collateral or any evidence thereof or any business records or
valuable papers pertaining thereto, and the Borrower hereby directs the issuer
of any such policy to pay all such monies directly to the Lender. At any time,
whether or not a Default Period then exists, the Lender may (but need not), in
the Lender’s name or in the Borrower’s name, execute and deliver proof of claim,
receive all such monies, endorse checks and other instruments representing
payment of such monies, and adjust, litigate, compromise or release any claim
against the issuer of any such policy.

Section 3.4 Occupancy.

(a) The Borrower hereby irrevocably grants to the Lender the right to take
exclusive possession of the Premises at any time during a Default Period.

(b) The Lender may use the Premises only to hold, process, manufacture, sell,
use, store, liquidate, realize upon or otherwise dispose of goods that are
Collateral and for other purposes that the Lender may in good faith deem to be
related or incidental purposes.

 

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(c) The Lender’s right to hold the Premises shall cease and terminate upon the
earlier of (i) payment in full and discharge of all Obligations and termination
of the Credit Facility, and (ii) final sale or disposition of all goods
constituting Collateral and delivery of all such goods to purchasers.

(d) The Lender shall not be obligated to pay or account for any rent or other
compensation for the possession, occupancy or use of any of the Premises;
provided, however, that if the Lender does pay or account for any rent or other
compensation for the possession, occupancy or use of any of the Premises, the
Borrower shall reimburse the Lender promptly for the full amount thereof. In
addition, the Borrower will pay, or reimburse the Lender for, all taxes, fees,
duties, imposts, charges and expenses at any time incurred by or imposed upon
the Lender by reason of the execution, delivery, existence, recordation,
performance or enforcement of this Agreement or the provisions of this
Section 3.4.

Section 3.5 License. Without limiting the generality of any other Security
Document, the Borrower hereby grants to the Lender a non-exclusive, worldwide
and royalty-free license to use or otherwise exploit all Intellectual Property
Rights of the Borrower for the purpose of: (a) completing the manufacture of any
in-process materials during any Default Period so that such materials become
saleable Inventory, all in accordance with the same quality standards previously
adopted by the Borrower for its own manufacturing and subject to the Borrower’s
reasonable exercise of quality control; and (b) selling, leasing or otherwise
disposing of any or all Collateral during any Default Period.

Section 3.6 Financing Statement. The Borrower authorizes the Lender to file from
time to time where permitted by law, such financing statements against
collateral described as “all personal property” or describing specific items of
collateral including commercial tort claims as the Lender deems necessary or
useful to perfect the Security Interest. A carbon, photographic or other
reproduction of this Agreement or of any financing statements signed by the
Borrower is sufficient as a financing statement and may be filed as a financing
statement in any state to perfect the security interests granted hereby. For
this purpose, the following information is set forth: Name and address of each
Debtor:

The names, addresses, federal employer identification numbers and organizational
identification number of each Debtor are set forth in Schedule 3.6

Name and address of Secured Party:

Wells Fargo Bank, NA

100 West Washington Street, 15th Floor

MAC S4101-158

Phoenix, Arizona 85003

Federal Employer Identification No. 41-1712687

Section 3.7 Setoff. The Lender may at any time or from time to time, at its sole
discretion and without demand and without notice to anyone, setoff any liability
owed to the Borrower by the Lender, whether or not due, against any Obligation,
whether or not due. In addition, each other Person holding a participating
interest in any Obligations shall have the right to appropriate or setoff any
deposit or other liability then owed by such Person to the Borrower, whether or
not due, and apply the same to the payment of said participating interest, as
fully as if such Person had lent directly to the Borrower the amount of such
participating interest.

 

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Section 3.8 Collateral. This Agreement does not contemplate a sale of accounts,
contract rights or chattel paper, and, as provided by law, the Borrower is
entitled to any surplus and shall remain liable for any deficiency. The Lender’s
duty of care with respect to Collateral in its possession (as imposed by law)
shall be deemed fulfilled if it exercises reasonable care in physically keeping
such Collateral, or in the case of Collateral in the custody or possession of a
bailee or other third person, exercises reasonable care in the selection of the
bailee or other third person, and the Lender need not otherwise preserve,
protect, insure or care for any Collateral. The Lender shall not be obligated to
preserve any rights the Borrower may have against prior parties, to realize on
the Collateral at all or in any particular manner or order or to apply any cash
proceeds of the Collateral in any particular order of application. The Lender
has no obligation to clean-up or otherwise prepare the Collateral for sale. The
Borrower waives any right it may have to require the Lender to pursue any third
person for any of the Obligations.

Section 3.9 Eligible Equipment. The Borrower represents and warrants to the
Lender that the equipment listed on Schedule 3.9 is owned on the date of this
Agreement by the Borrower indicated as the owner on such Schedule.

ARTICLE IV

CONDITIONS OF LENDING

Section 4.1 [Intentionally Deleted]

Section 4.2 Conditions Precedent to All Advances and Letters of Credit. The
Lender’s obligation to make each Advance and to cause each Letter of Credit to
be issued shall be subject to the further conditions precedent that:

(a) the representations and warranties contained in Article V are correct on and
as of the date of such Advance or issuance of a Letter of Credit as though made
on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date; and

(b) no event has occurred and is continuing, or would result from such Advance
or issuance of a Letter of Credit which constitutes a Default or an Event of
Default.

Section 4.3 Conditions Precedent to Effectiveness of Amended and Restated Credit
Agreement. This Agreement shall be effective when the Lender shall have received
an executed original hereof, together with each of the following, each in
substance and form acceptable to the Lender in its sole discretion:

(a) The Real Estate Term Note, duly executed by the Borrower.

(b) Current searches of appropriate filing offices showing that (i) no Liens
have been filed and remain in effect against the Borrower except Permitted Liens
or Liens held by Persons who have agreed in writing that upon receipt of
proceeds of the initial Advances, they will satisfy, release or terminate such
Liens in a manner satisfactory to the Lender, and (ii) the Lender has duly filed
all financing statements necessary to perfect the Security Interest, to the
extent the Security Interest is capable of being perfected by filing.

 

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(c) A Certificate of the Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower approving the execution
and delivery of this Agreement, (ii) the fact that the articles of incorporation
and bylaws of the Borrower, which were certified and delivered to the Lender
pursuant to the Certificate of Authority of the Borrower’s secretary continue in
full force and effect and have not been amended or otherwise modified except as
set forth in the Certificate to be delivered, and (iii) certifying that the
officers and agents of the Borrower who have been certified to the Lender,
pursuant to the Certificate of Authority of the Borrower’s secretary or
assistant secretary dated August 13, 2003.

(d) A current certificate issued by the Secretary of State of incorporation of
the Borrower, certifying that such Person is in compliance with all applicable
organizational requirements of such State.

(e) Evidence that the Borrower is duly licensed or qualified to transact
business in all jurisdictions where the character of the property owned or
leased or the nature of the business transacted by it makes such licensing or
qualification necessary, except where failure to do so would not have a material
adverse effect on the financial condition, properties or operations of Borrower.

(f) A ratification to the guaranty executed by each Guarantor.

(g) Payment of the fees due under Section 2.9, through the date of the Real
Estate Term Advance and expenses incurred by the Lender through such date and
required to be paid by the Borrower under Section 8.5, including all legal
expenses incurred through the date of this Agreement.

(h) The Amendments to the Real Property Security Documents in the form attached
hereto as Exhibit A-4.

(i) Endorsements to all existing policies (or, as applicable, new policies)
acceptable to Lender issued by a title insurance company satisfactory to Lender
in an amount satisfactory to the Lender in its sole and absolute judgment and
insuring that the lien of the Real Property Security Documents to be a first and
prior lien upon the Real Estate as security for the Loan, subject only to such
exceptions as Lender may expressly approve in writing.

(j) Such other documents as the Lender in its sole discretion may require.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender as follows, except as
otherwise disclosed in the Disclosure Schedules at the end of this Agreement:

Section 5.1 Existence and Power; Name; Chief Executive Office; Inventory and
Equipment Locations; Federal Employer Identification Number. Each Person
comprising the

 

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Borrower is a corporation, or limited liability company, as applicable, duly
organized, validly existing and in good standing under the laws of the State
specified in Schedule 1.1 (Borrower) and is duly licensed or qualified to
transact business in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by it makes such licensing or
qualification necessary except when failure to be licensed or qualified would
not have a material adverse effect on the financial condition, properties or
operations of Borrower. The Borrower has all requisite power and authority to
conduct its business, to own its properties and to execute and deliver, and to
perform all of its obligations under, the Loan Documents. During its existence,
the Borrower has not done business except under the names set forth in Schedule
5.1. The chief executive office and principal place of business of each Person
comprising the Borrower is located at the address set forth in Schedule 5.1; all
of its records relating to its business or the Collateral given by it are kept
at that location set forth in Schedule 5.1; and all of its Inventory and
Equipment is located at that location or at one of the other locations listed in
Schedule 5.1. The Borrower’s federal employer identification number is correctly
set forth in Schedule 3.6.

Section 5.2 Capitalization. Schedule 5.2 constitutes: (a) a correct and complete
list of all Persons holding ownership interests, and/or and having rights to
acquire ownership interests which if fully exercised would cause such Person to
hold ownership interests, in excess of five percent (5%) of all ownership
interests of the Borrower on a fully diluted basis as of the date hereof and
(b) an organizational chart showing the ownership structure of all Subsidiaries
of the Borrower as of the date hereof.

Section 5.3 Authorization of Borrowing; No Conflict as to Law or Agreements. The
execution, delivery and performance by the Borrower of the Loan Documents
executed by it and the borrowings from time to time hereunder have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of its Owners; (ii) require any authorization, consent
or approval by, or registration, declaration or filing with, or notice to, any
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any third party, except such authorization, consent,
approval, registration, declaration, filing or notice as has been obtained,
accomplished or given prior to the date hereof; (iii) violate any provision of
any law, rule or regulation (including Regulation X of the Board of Governors of
the Federal Reserve System) or of any order, writ, injunction or decree
presently in effect having applicability to the Borrower or of the Borrower’s
Constituent Documents; (iv) result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other material agreement, lease
or instrument to which the Borrower is a party or by which it or its properties
may be bound or affected; or (v) result in, or require, the creation or
imposition of any Lien (other than the Security Interest) upon or with respect
to any of the properties now owned or hereafter acquired by the Borrower.

Section 5.4 Legal Agreements. This Agreement constitutes and, upon due execution
by the Borrower, the other Loan Documents executed by it will constitute the
legal, valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms.

Section 5.5 Subsidiaries. Except as set forth in the Schedule 5.5 hereto, the
Borrower has no Subsidiaries as of the date hereof.

Section 5.6 Financial Condition; No Adverse Change. The Borrower has furnished
to the Lender its audited financial statements for its fiscal year ended
December 31, 2012 and unaudited financial statements for the fiscal-year-to-date
period ended [June 30, 2013] and

 

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those statements fairly present in all material respects the financial condition
of the Borrower and its Affiliates, on a consolidated basis, on the dates
thereof and the results of its operations and cash flows for the periods then
ended and were prepared in accordance with generally accepted accounting
principles. Since the date of the most recent audited financial statements,
there has been no material adverse change in the financial condition, properties
or operations of Borrower or any of its Affiliates.

Section 5.7 Litigation. There are no actions, suits or proceedings pending or,
to the Borrower’s knowledge, threatened against or affecting the Borrower or any
of its Subsidiaries or the properties of the Borrower or any of its Subsidiaries
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, which, if determined adversely to the
Borrower or any of its Subsidiaries, could reasonably be expected to have a
material adverse effect on the financial condition, properties or operations of
the Borrower or any of its Subsidiaries.

Section 5.8 Regulation U. Neither the Borrower nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.

Section 5.9 Taxes. The Borrower and its Subsidiaries have paid or caused to be
paid to the proper authorities when due all federal, state and local taxes
required to be withheld by each of them, provided that Borrower shall not be
required to pay any such taxes, assessments, charges or claims whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which proper reserves have been made. The Borrower and its
Subsidiaries have filed all federal, state and local tax returns which to the
knowledge of the Officers of the Borrower or any Subsidiaries, as the case may
be, are required to be filed, and the Borrower and its Subsidiaries have paid or
caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by any of them to the extent such
taxes have become due, provided that Borrower shall not be required to pay any
such taxes, assessments, charges or claims whose amount, applicability or
validity is being contested in good faith by appropriate proceedings and for
which proper reserves have been made.

Section 5.10 Titles and Liens. The Borrower has good and absolute title to all
Collateral given by it free and clear of all Liens other than Permitted Liens.
No financing statement naming the Borrower as debtor is on file in any office
except to perfect only Permitted Liens.

Section 5.11 Intellectual Property Rights.

(a) Owned Intellectual Property. Schedule 5.11 is a complete list of all
patents, applications for patents, trademarks, applications for trademarks,
service marks, applications for service marks, mask works, trade dress and
copyrights for which the Borrower or any of its Subsidiaries is the registered
owner (the “Owned Intellectual Property”). Except as disclosed on Schedule 5.11,
(i) each Person identified on Schedule 5.11 as owning Intellectual Property owns
the Owned Intellectual Property free and clear of all restrictions (including
covenants not to sue a third party), court orders, injunctions, decrees,

 

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writs or Liens, whether by written agreement or otherwise, (ii) no Person other
than the Person identified on Schedule 5.11 as owning Intellectual Property owns
or has been granted any right in its Owned Intellectual Proper, (iii) all Owned
Intellectual Property is valid, subsisting and enforceable and (iv) each Person
identified on Schedule 5.11 as owning Intellectual Property has taken all
commercially reasonable action necessary to maintain and protect its Owned
Intellectual Property.

(b) Agreements with Employees and Contractors. Each Person identified on
Schedule 5.11 as owning Intellectual Property has entered into a legally
enforceable agreement with each of its employees and subcontractors obligating
each such Person to assign to it, without any additional compensation, any
Intellectual Property Rights created, discovered or invented by such Person in
the course of such Person’s employment or engagement with it (except to the
extent prohibited by law), and further requiring such Person to cooperate with
it, without any additional compensation, in connection with securing and
enforcing any Intellectual Property Rights therein; provided, however, that the
foregoing shall not apply with respect to employees and subcontractors whose job
descriptions are of the type such that no such assignments are reasonably
foreseeable.

(c) Intellectual Property Rights Licensed from Others. Schedule 5.11 is a
complete list of all agreements under which the Borrower or any of its
Subsidiaries has licensed Intellectual Property Rights from another Person
(“Licensed Intellectual Property”) other than readily available, non-negotiated
licenses of computer software and other intellectual property used solely for
performing accounting, word processing and similar administrative tasks
(“Off-the-shelf Software”) and a summary of any ongoing payments the licensee is
obligated to make with respect thereto. Except as disclosed on Schedule 5.11 and
in written agreements copies of which have been given to the Lender, the
licenses of the Borrower and its Subsidiaries to use the Licensed Intellectual
Property are free and clear of all restrictions, Liens, court orders,
injunctions, decrees, or writs, whether by written agreement or otherwise.
Except as disclosed on Schedule 5.11, neither the Borrower nor any of its
Subsidiaries is obligated or under any liability whatsoever to make any payments
of a material nature by way of royalties, fees or otherwise to any owner of,
licensor of, or other claimant to, any Intellectual Property Rights.

(d) Other Intellectual Property Needed for Business. Except for Off-the-shelf
Software and as disclosed on Schedule 5.11, the Owned Intellectual Property and
the Licensed Intellectual Property constitute all Intellectual Property Rights
used or necessary to conduct the businesses of the Borrower and its Subsidiaries
as they presently conducted or as the Borrower reasonably foresees conducting
it.

(e) Infringement. Except as disclosed on Schedule 5.11, the Borrower and its
Subsidiaries have no knowledge of, and have not received any written claim or
notice alleging, any Infringement of another Person’s Intellectual Property
Rights (including any written claim that the Borrower or any of its Subsidiaries
must license or refrain from using the Intellectual Property Rights of any third
party) nor, to the knowledge of the Borrower or any of its Subsidiaries, is
there any threatened claim or any reasonable basis for any such claim.

 

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Section 5.12 Plans. Except as disclosed to the Lender in writing prior to the
date hereof, neither the Borrower nor any of its ERISA Affiliate (i) maintains
or has maintained any Pension Plan, (ii) contributes or has contributed to any
Multiemployer Plan or (iii) provides or has provided post-retirement medical or
insurance benefits with respect to employees or former employees (other than
benefits required under Section 601 of ERISA, Section 4980B of the IRC or
applicable state law). Neither the Borrower nor any of its ERISA Affiliate has
received any notice or has any knowledge to the effect that it is not in full
compliance with any of the requirements of ERISA, the IRC or applicable state
law with respect to any Plan. No Reportable Event exists in connection with any
Pension Plan. Each Plan which is intended to qualify under the IRC is so
qualified, and no fact or circumstance exists which may have an adverse effect
on the Plan’s tax-qualified status. Neither the Borrower nor any of its ERISA
Affiliate has (i) any accumulated funding deficiency (as defined in Section 302
of ERISA and Section 412 of the IRC) under any Plan, whether or not waived,
(ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal,
partial withdrawal, reorganization or other event under any Multiemployer Plan
or (iii) any liability or knowledge of any facts or circumstances which could
result in any liability to the Pension Benefit Guaranty Corporation, the
Internal Revenue Service, the Department of Labor or any participant in
connection with any Plan (other than routine claims for benefits under the
Plan).

Section 5.13 Default. The Borrower and its Subsidiaries are in compliance with
all provisions of all agreements, instruments, decrees and orders to which they
are parties or by which they or their property is bound or affected, the breach
or default of which could have a material adverse effect on the financial
condition, properties or operations of the Borrower or any of its Subsidiaries.

Section 5.14 Environmental Matters.

(a) To the best of the Borrower’s knowledge, there are not present in, on or
under the Premises any Hazardous Substances in such form or quantity as to
create any material liability or obligation for either the Borrower, any of the
Borrower’s Subsidiaries or the Lender under common law of any jurisdiction or
under any Environmental Law, and no Hazardous Substances have ever been stored,
buried, spilled, leaked, discharged, emitted or released in, on or under the
Premises in such a way as to create any such material liability.

(b) To the best knowledge of the Borrower, neither the Borrower nor any of its
Subsidiaries has disposed of Hazardous Substances in such a manner as to create
any material liability under any Environmental Law.

(c) There are not and there never have been any requests, claims, notices,
investigations, demands, administrative proceedings, hearings or litigation,
relating in any way to the Premises, the Borrower or any Subsidiary of the
Borrower, alleging material liability under, violation of, or noncompliance with
any Environmental Law or any license, permit or other authorization issued
pursuant thereto. To the best knowledge of the Borrower, no such matter is
threatened or impending.

 

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(d) To the best knowledge of the Borrower, the businesses of the Borrower and
its Subsidiaries are and have in the past always been conducted in accordance
with all Environmental Laws and all licenses, permits and other authorizations
required pursuant to any Environmental Law and necessary for the lawful and
efficient operation of such businesses are in the possession of the Person
conducting such Business and are in full force and effect. No permit required
under any Environmental Law is scheduled to expire within 12 months and there is
no threat that any such permit will be withdrawn, terminated, limited or
materially changed.

(e) To the best knowledge of the Borrower, the Premises are not and never have
been listed on the National Priorities List, the Comprehensive Environmental
Response, Compensation and Liability Information System or any similar federal,
state or local list, schedule, log, inventory or database.

(f) The Borrower has delivered to Lender all environmental assessments, audits,
reports, permits, licenses and other documents describing or relating in any way
to the Premises or the businesses of the Borrower and the Subsidiaries of the
Persons comprising Borrower.

Section 5.15 Submissions to Lender. All financial and other information provided
to the Lender by or on behalf of the Borrower or any of its Subsidiaries in
connection with the Borrower’s request for the credit facilities contemplated
hereby is (i) true and correct in all material respects, (ii) does not omit any
material fact necessary to make such information not misleading and, (iii) as to
projections, valuations or proforma financial statements, present a good faith
opinion as to such projections, valuations and proforma condition and results.

Section 5.16 Financing Statements. The Borrower has authorized the filing of
financing statements sufficient when filed to perfect the Security Interest and
the other security interests created by the Security Documents. When such
financing statements are filed in the offices noted therein, the Lender will
have a valid and perfected security interest in all Collateral which is capable
of being perfected by filing financing statements. None of the Collateral is or
will become a fixture on real estate, unless a sufficient fixture filing is in
effect with respect thereto.

Section 5.17 Rights to Payment. Each right to payment and each instrument,
document, chattel paper and other agreement constituting or evidencing
Collateral is (or, in the case of all future Collateral, will be when arising or
issued) the valid, genuine and legally enforceable obligation, subject to no
defense, setoff or counterclaim, of the account debtor or other obligor named
therein or in the Borrower’s records pertaining thereto as being obligated to
pay such obligation.

Section 5.18 Financial Solvency. Both before and after giving effect to all of
the transactions contemplated in the Loan Documents, neither the Borrower nor
any of its Subsidiaries taken as a whole:

(a) was or will be insolvent, as that term is used and defined in
Section 101(32) of the United States Bankruptcy Code and Section 2 of the
Uniform Fraudulent Transfer Act;

 

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(b) has unreasonably small capital or is engaged or about to engage in a
business or a transaction for which any remaining assets of the Borrower or such
Subsidiary are unreasonably small;

(c) by executing, delivering or performing its obligations under the Loan
Documents or other documents to which it is a party or by taking any action with
respect thereto, intends to, nor believes that it will, incur debts beyond its
ability to pay them as they mature;

(d) by executing, delivering or performing its obligations under the Loan
Documents or other documents to which it is a party or by taking any action with
respect thereto, intends to hinder, delay or defraud either its present or
future creditors; and

(e) at this time contemplates filing a petition in bankruptcy or for an
arrangement or reorganization or similar proceeding under any law any
jurisdiction, nor, to the best knowledge of the Borrower, is the subject of any
actual, pending or threatened bankruptcy, insolvency or similar proceedings
under any law of any jurisdiction.

ARTICLE VI

COVENANTS

So long as the Obligations shall remain unpaid, or the Credit Facility shall
remain outstanding, the Borrower will comply with the following requirements,
unless the Lender shall otherwise consent in writing:

Section 6.1 Reporting Requirements. The Borrower will deliver, or cause to be
delivered, to the Lender each of the following, which shall be in form and
detail acceptable to the Lender:

(a) Annual Financial Statements. As soon as available, and in any event within
90 days after the end of each fiscal year of the Borrower, the Borrower will
deliver, or cause to be delivered, to the Lender, the Borrower’s audited
financial statements with the unqualified opinion of independent certified
public accountants selected by the Borrower and acceptable to the Lender, which
annual financial statements shall include the Borrower’s balance sheet as at the
end of such fiscal year and the related statements of the Borrower’s income,
retained earnings and cash flows for the fiscal year then ended, prepared, if
the Lender so requests, on a consolidating and consolidated basis to include any
Subsidiary of the Borrower, all in reasonable detail and prepared in accordance
with GAAP, together with (i) copies of all management letters prepared by such
accountants; (ii) a report signed by such accountants stating that in making the
investigations necessary for said opinion they obtained no knowledge, except as
specifically stated, of any Default or Event of Default and all relevant facts
in reasonable detail to evidence, and the computations as to, whether or not the
Borrower is in compliance with the Financial Covenants; and (iii) a certificate
of the Borrower’s chief financial officer stating that such financial statements
have been prepared in accordance with GAAP, fairly represent the Borrower’s
financial position and the results of its operations, and whether or not such
officer has knowledge of the occurrence of any Default or Event of Default and,
if so, stating in reasonable detail the facts with respect thereto.

 

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(b) Monthly Financial Statements. As soon as available and in any event within
20 days after the end of each month, the Borrower will deliver to the Lender an
unaudited/internal balance sheet and statements of income and retained earnings
of the Borrower as at the end of and for such month and for the year to date
period then ended, prepared, if the Lender so requests, on a consolidating and
consolidated basis to include any Subsidiary of the Borrower, in reasonable
detail and stating in comparative form the figures for the corresponding date
and periods in the previous year, all prepared in accordance with GAAP, subject
to year-end audit adjustments; and accompanied by a certificate of the
Borrower’s chief financial Officer, substantially in the form of Exhibit B
hereto stating (i) that such financial statements have been prepared in
accordance with GAAP, subject to year-end audit adjustments and fairly represent
the Borrower’s financial position and the results of its operations, (ii)
whether or not such officer has knowledge of the occurrence of any Default or
Event of Default not theretofore reported and remedied and, if so, stating in
reasonable detail the facts with respect thereto, and (iii) all relevant facts
in reasonable detail to evidence, and the computations as to, whether or not the
Borrower is in compliance with the Financial Covenants.

(c) Collateral Reports. Monthly, or more frequently if the Lender so requires,
the Borrower shall deliver to the Lender a calculation of the Borrowing Base
showing in reasonable detail the respective amounts of Eligible Accounts and
Eligible Inventory as of the date of the reporting, provided however, in the
event that the sum of Availability plus Cash and Cash Equivalents on deposit
with Lender at any time is less than $7,500,000.00, said reporting shall be
provided once every other week or more frequently if the Lender so requires.

(d) Projections. At least 30 days before the beginning of each fiscal year of
the Borrower, the Borrower will deliver to the Lender the projected balance
sheets and income statements for each month of such year, each in reasonable
detail, representing the Borrower’s good faith projections and certified by the
Borrower’s chief financial Officer as being the most accurate projections
available and identical to the projections used by the Borrower for internal
planning purposes, together with a statement of underlying assumptions and such
supporting schedules and information as the Lender may in its discretion
require.

(e) Litigation. Immediately after the commencement thereof, the Borrower will
deliver to the Lender notice in writing of all litigation and of all proceedings
before any governmental or regulatory agency affecting the Borrower or any of
its Subsidiaries (i) of the type described in Section 5.14(c) or (ii) which seek
a monetary recovery against the Borrower in excess of $250,000.00.

(f) Defaults. As promptly as practicable (but in any event not later than five
business days) after an Officer of the Borrower obtains knowledge of the
occurrence of any Default or Event of Default, the Borrower will deliver to the
Lender notice of such occurrence, together with a detailed statement by a
responsible Officer of the Borrower of the steps being taken by the Borrower to
cure the effect thereof.

 

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(g) Plans. As soon as possible, and in any event within 30 days after the
Borrower knows or has reason to know that any Reportable Event with respect to
any Pension Plan of the Borrower or any of its Subsidiaries has occurred, the
Borrower will deliver to the Lender a statement of the Borrower’s chief
financial Officer setting forth details as to such Reportable Event and the
action which the Borrower or its Subsidiary proposes to take with respect
thereto, together with a copy of the notice of such Reportable Event to the
Pension Benefit Guaranty Corporation. As soon as possible, and in any event
within 10 days after the Borrower or any Subsidiary fails to make any quarterly
contribution required with respect to any Pension Plan under Section 412(m) of
the IRC, the Borrower will deliver to the Lender a statement of the Borrower’s
chief financial Officer setting forth details as to such failure and the action
which the Borrower or its Subsidiary proposes to take with respect thereto,
together with a copy of any notice of such failure required to be provided to
the Pension Benefit Guaranty Corporation. As soon as possible, and in any event
with 10 days after the Borrower knows or has reason to know that it has or is
reasonably expected to have any liability under Section 4201 or 4243 of ERISA
for any withdrawal, partial withdrawal, reorganization or other event under any
Multiemployer Plan, the Borrower will deliver to the Lender a statement of the
Borrower’s chief financial Officer setting forth details as to such liability
and the action which Borrower proposes to take with respect thereto.

(h) Disputes. Promptly upon knowledge thereof, the Borrower will deliver to the
Lender notice of (i) any disputes or claims by the customers of the Borrower or
any of its Subsidiaries exceeding $250,000.00 individually or $500,000.00 in the
aggregate during any fiscal year; (ii) credit memos; and (iii) any goods
returned to or recovered by the Borrower.

(i) Collateral. Promptly upon knowledge thereof, the Borrower will deliver to
the Lender notice of any loss of or damage (valued in excess of $100,000.00) to
any Collateral or of any material adverse change in any Collateral or the
prospect of payment thereof.

(j) Commercial Tort Claims. Promptly upon knowledge thereof, the Borrower will
deliver to the Lender notice of any commercial tort claims it or any of its
Subsidiaries may bring against any Person, including the name and address of
each defendant, a summary of the facts, an estimate of the damages of the
Borrower or its Subsidiary, copies of any complaint or demand letter submitted
by the Borrower or its Subsidiary, and such other information as the Lender may
request.

(k) Intellectual Property.

(i) The Borrower will give the Lender 30 days prior written notice of the intent
of it or any of its Subsidiaries to acquire material Intellectual Property
Rights; except for transfers permitted under Section 6.17, the Borrower will
give the Lender 30 days prior written notice of the intent or any of its
Subsidiaries to

 

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acquire material Intellectual Property Rights to dispose of material
Intellectual Property Rights; and upon request, shall provide the Lender with
copies of all applicable documents and agreements.

(ii) Promptly upon knowledge thereof, the Borrower will deliver to the Lender
notice of (A) any Infringement by others of the Intellectual Property Rights of
it or any of its Subsidiaries to acquire material Intellectual Property Rights,
(B) claims that the Borrower or any of its Subsidiaries is Infringing another
Person’s Intellectual Property Rights and (C) any threatened cancellation,
termination or material limitation of the Intellectual Property Rights of the
Borrower or any of its Subsidiaries.

(iii) Promptly upon receipt, the Borrower will give the Lender copies of all
registrations and filings with respect to the Intellectual Property Rights of
the Borrower or any of its Subsidiaries.

(l) Reports to Owners. The Borrower will promptly file with the Securities and
Exchange Commission copies of all financial statements, reports and proxy
statements which the Borrower has sent to its Owners and endeavor to deliver
them to the Lender.

(m) SEC Filings. The Borrower will endeavor to deliver to the Lender copies of
all regular and periodic reports which the Borrower shall file with the
Securities and Exchange Commission or any national securities exchange.

(n) Violations of Law. Promptly upon knowledge thereof, the Borrower will
deliver to the Lender notice of the violation of any law, rule or regulation by
the Borrower or any of its Subsidiaries, the non-compliance with which could
materially and adversely affect the business or financial condition of the
Borrower or any of its Subsidiaries.

(o) Other Reports. From time to time, with reasonable promptness, the Borrower
will deliver, or cause to be delivered, to the Lender any and all receivables
schedules, collection reports, deposit records, equipment schedules, copies of
invoices to account debtors, shipment documents and delivery receipts for goods
sold, and such other material, reports, records or information as the Lender may
request.

Section 6.2 Financial Covenants.

(a) Fixed Charge Coverage Ratio. The Borrower, on a consolidated basis with its
Subsidiaries, will maintain a Fixed Charge Coverage Ratio (on a trailing
12-month basis) as of each fiscal quarter end of not less than 1.20: 1.00.

For 2013 only, the Fixed Charge Coverage Ratio shall be calculated without
giving regard to (i) a onetime pension plan liability, not to exceed
$2,800,000.00, (ii) not more than $1,500,000.00 in legal and other onetime
expenses related to Gordon Brothers term financing, and (iii) not more than
$500,000.00 in prepayment fees associated with the prepayment of the Gordon
Brothers term financing.1

 

1  Subject to review.

 

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(b) Total Debt to EBITDA Ratio. The Borrower, on a consolidated basis with all
Subsidiaries, shall achieve Total Debt to EBITDA ratio (on a trailing 12-month
basis) for each fiscal quarter end of not less than the amounts set forth below:

 

Quarter Ending

   Minimum Required Ratio

December 31, 2012

   3.0 to 1

March 31, 2013

   3.0 to 1

June 30, 2013

   3.0 to 1

September 30, 2013

   2.75 to 1

December 31, 2013

   2.75 to 1

For 2013 only, the Total Debt to EBITDA Ratio shall be calculated without giving
regard to a onetime pension plan liability, not to exceed $2,800,000.00.

(c) Free Cash Flow. The Borrower shall, if requested by the Lender in its sole
discretion, on the first day of the first month following Lender’s receipt of
Borrower’s audited financial statements of each year, commencing with the 2013
fiscal year, pay 30% of the Free Cash Flow generated in the immediately
preceding fiscal year to Lender for application to reduce the outstanding
principal balance of the Advances supported by the Eligible Equipment component
of the Borrowing Base.

(d) Capital Expenditures. The Borrower shall not in any fiscal year incur
unfinanced Capital Expenditures in excess of $5,000,000.00 in the aggregate in
any fiscal year.

(e) Minimum Monthly Stop Loss. The Borrower will not permit the Net Loss of
Borrower and its Subsidiaries on a consolidated basis to exceed $600,000.00 in
the aggregate in any one month or $1,000,000.00 in the aggregate during any two
consecutive months during any fiscal year.

(f) Re-Establishment of Financial Covenants. On or before January 15, 2014 and
January 15 of each year thereafter, the Borrower and the Lender shall agree in
writing on new covenant levels for Sections 6.2(a) - 6.2(f) for such fiscal
year, unless the Lender agrees in writing that the then existing covenant levels
shall continue for a longer period. The new covenant levels will be based on the
projections for such periods and shall be no less stringent than the levels in
effect immediately prior thereto. So long as the Lender has acted in good faith
in its efforts to establish new covenant levels, the failure to establish new
covenant levels by each January 15, regardless of the reason, shall be an Event
of Default.

 

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Section 6.3 Permitted Liens; Financing Statements.

(a) Neither the Borrower, any of its Subsidiaries, nor any of their ERISA
Affiliates will create, incur or suffer to exist any Lien upon or of any of its
assets, now owned or hereafter acquired, to secure any indebtedness; excluding,
however, from the operation of the foregoing, the following (collectively,
“Permitted Liens”):

(i) in the case of any property which is not Collateral, covenants,
restrictions, rights, easements and minor irregularities in title which do not
materially interfere with the Borrower’s business or operations as presently
conducted;

(ii) Liens in existence on the date hereof and listed in Schedule 6.3 hereto,
securing indebtedness for borrowed money permitted under Section 6.4;

(iii) the Security Interest and Liens created by the Security Documents;

(iv) purchase money Liens relating to the acquisition of machinery and equipment
not exceeding the lesser of cost or fair market value thereof, not exceeding
$50,000.00 for any one purchase or $200,000.00 in the aggregate for the Borrower
and its Subsidiaries during any fiscal year, and so long as no Default Period is
then in existence and none would exist immediately after such acquisition;

(v) Liens related to precautionary financing statements filed by customers of
Borrower or its Subsidiaries describing only materials sold to, and paid for in
full by, such customers;

(vi) Liens arising solely by virtue of any statutory or common law provision
relating to bankers’ liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution;

(vii) Liens imposed by law, such as landlord, carriers’, warehousemen’s and
mechanics’ liens and other similar liens arising in the ordinary course of
business that secure payment of obligations not more than 60 days past due or
that are being contested in good faith by appropriate proceedings and for which
adequate reserves have been set aside on its books;

(viii) Liens for taxes, assessments or governmental charges or levies on its
property if the same are not at the time delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its book; and

 

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(ix) attachments, appeal bonds, judgments and other similar Liens, for sums not
exceeding $1,000,000.00 arising in connection with court proceedings, provided
the execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings.

(b) The Borrower will not amend any financing statements in favor of the Lender
except as permitted by law. Any authorization by the Lender to any Person to
amend financing statements in favor of the Lender shall be in writing.

Section 6.4 Indebtedness. Neither the Borrower nor any of its Subsidiaries will
incur, create, assume or permit to exist any indebtedness or liability on
account of deposits or advances or any indebtedness for borrowed money or
letters of credit issued on behalf of Borrower or any of its Subsidiaries to, or
any other indebtedness or liability evidenced by notes, bonds, debentures or
similar obligations, except:

(a) indebtedness arising hereunder;

(b) indebtedness in existence on the date hereof and listed in Schedule 6.4
hereto;

(c) indebtedness associated with trade payables and short term debt incurred in
the ordinary course of business; and

(d) indebtedness relating to Permitted Liens.

Section 6.5 Guaranties. Neither the Borrower nor any of its Subsidiaries will
permit any of its Subsidiaries to, assume, guarantee, endorse or otherwise
become directly or contingently liable in connection with any obligations of any
other Person, except:

(a) the endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and

(b) guaranties, endorsements and other direct or contingent liabilities in
connection with the obligations of other Persons, in existence on the date
hereof and listed in Schedule 6.5 hereto.

(c) A Guaranty by Schuff International, Inc. of the obligations of Quincy Joist
for the benefit of Canam Steel Corporation (“Canam”) applicable to obligations
of Quincy Joist contained in a Purchase and Sale of Assets Agreement by and
between Quincy Joist and Canam.

(d) guaranties incurred in the ordinary course of business with respect to
surety and appeal bonds, performance bonds and other similar obligations;

(e) guaranties of the Borrower or any Subsidiary of contractual obligations
(other than indebtedness) of the Borrower or any Subsidiary that are not
prohibited by this Agreement.

 

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Section 6.6 Investments and Subsidiaries. Neither the Borrower nor any of its
Subsidiaries will purchase or hold beneficially any stock or other securities or
evidences of indebtedness of, make or permit to exist any loans or advances to,
or make any investment or acquire any interest whatsoever in, any other Person,
including any partnership or joint venture, except:

(a) investments in direct obligations of the United States of America or any
agency or instrumentality thereof whose obligations constitute full faith and
credit obligations of the United States of America having a maturity of one year
or less, commercial paper issued by U.S. corporations rated “A-1” or “A-2” by
Standard & Poors Corporation or “P-1” or “P-2” by Moody’s Investors Service or
certificates of deposit or bankers’ acceptances having a maturity of one year or
less issued by members of the Federal Reserve System having deposits in excess
of $100,000,000 (which certificates of deposit or bankers’ acceptances are fully
insured by the Federal Deposit Insurance Corporation);

(b) travel advances or loans to the Officers and employees of the Borrower and
its Subsidiaries not exceeding at any one time $ 100,000.00 for the Borrower and
its Subsidiaries in the aggregate;

(c) advances in the form of progress payments, prepaid rent not exceeding two
(2) months or security deposits; and

(d) current investments in the Subsidiaries in existence on the date hereof and
listed in Schedule 5.5 hereto.

If the Borrower acquires any new Subsidiary, the Borrower will execute a
Collateral Security Agreement covering such Subsidiary and will cause such
Subsidiary to execute a guaranty of the Obligations in favor of the Lender or,
if the Lender elects, join in this Agreement as a co-borrower.

Section 6.7 Dividends and Distributions. Except as provided in the following
sentence, neither the Borrower nor any of its Subsidiaries will declare or pay
any dividends (other than dividends payable solely in stock of the Borrower) on
any class of its stock or other ownership interests or make any payment on
account of the purchase, redemption or other retirement of any such stock or
other ownership interests or make any distribution in respect thereof, either
directly or indirectly, without the consent of the Lender, which consent may not
be unreasonably withheld. So long as Borrower is a “pass-through” tax entity for
United States federal income tax purposes, and after first providing such
supporting documentation as Wells Fargo may request (including the personal
state and federal tax returns (and all related schedules) of each Owner net of
any prior year loss carry-forward, Borrower may pay Pass-Through Tax
Liabilities.

Section 6.8 Salaries. Neither the Borrower nor any of its Subsidiaries will pay
excessive or unreasonable salaries, bonuses, commissions, consultant fees or
other compensation; or, except as required by any employment agreement listed in
Schedule 6.8 or (so long as the stock of Schuff International is publicly
traded) approved by an independent compensation committee of the Board of
Directors of Schuff International, increase the salary, bonus, commissions,
consultant fees or other compensation of any of its Directors, Officers or
consultants, or any member of their families, by more than 20% in any one year,
either individually or for all such persons in the aggregate, or pay any such
increase from any source other than profits earned in the year of payment.

 

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Section 6.9 Books and Records; Inspection and Examination. The Borrower will
keep accurate books of record and account pertaining to the Collateral. The
Borrower and its Subsidiaries will keep accurate books of record and account for
themselves and pertaining to their respective businesses and financial condition
and such other matters as the Lender may from time to time request in which true
and complete entries will be made in accordance with GAAP and, upon the Lender’s
request, will permit any officer, employee, attorney or accountant for the
Lender to audit, review, make extracts from or copy any and all of its company
and financial books and records at all times during ordinary business hours, to
send and discuss with account debtors and other obligors requests for
verification of amounts owed to it, and to discuss its affairs with any of its
Directors, Officers, employees or agents. The Borrower hereby irrevocably
authorizes all accountants and third parties to disclose and deliver to Lender,
at its expense and the expense of the Borrower, all financial information, books
and records, work papers, management reports and other information in their
possession regarding it and its Subsidiaries. The Borrower will permit the
Lender or its employees, accountants, attorneys or agents, to examine and
inspect any Collateral or any of its properties at any time during ordinary
business hours.

Section 6.10 Account Verification. At any time during the existence of an Event
of Default or Default Period or at any time that Availability is less than
$8,000,000.00, the Lender may at any time and from time to time send or require
the Borrower to send requests for verification of accounts or notices of
assignment to account debtors and other obligors. At any time during the
existence of an Event of Default or Default Period or at any time that
Availability is less than $8,000,000.00, the Lender may also at any time and
from time to time, after notice to the Borrower, telephone account debtors and
other obligors to verify accounts.

Section 6.11 Compliance with Laws.

(a) The Borrower and its Subsidiaries will (i) comply with the requirements of
applicable laws and regulations, the non-compliance with which would materially
and adversely affect their respective businesses or financial condition and
(ii) use and keep the Collateral given by it, and require that others use and
keep the Collateral given by it, only for lawful purposes, without violation of
any federal, state or local law, statute or ordinance.

(b) Without limiting the foregoing undertakings, the Borrower and each of its
Subsidiaries will comply with all applicable Environmental Laws and obtain and
comply with all permits, licenses and similar approvals required by any
Environmental Laws, and will not generate, use, transport, treat, store or
dispose of any Hazardous Substances in such a manner as to create any material
liability or obligation under the common law of any jurisdiction or any
Environmental Law.

Section 6.12 Payment of Taxes and Other Claims. The Borrower and its
Subsidiaries will pay or discharge when due (a) all taxes, assessments and
governmental charges levied or imposed upon it or upon their respective income
or profits, upon any of their respective properties (including the Collateral
given by them) or upon or against the creation, perfection or continuance of the
Security Interest, prior to the date on which penalties attach thereto, (b) all
federal, state and local taxes that they are respectively required to be
withheld by them, and

 

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(c) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which proper reserves have been made.

Section 6.13 Maintenance of Properties.

(a) The Borrower and its Subsidiaries will keep and maintain, all of their
respective property (including the Collateral given by it) and necessary or
useful in their respective businesses in good condition, repair and working
order (normal wear and tear excepted) and will from time to time replace or
repair any worn, defective or broken parts; provided, however, that nothing in
this Section 6.13 shall prevent the Borrower or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in such Person’s judgment, desirable in the conduct of such
Person’s business and not disadvantageous in any material respect to the Lender.
The Borrower and its Subsidiaries will take all commercially reasonable steps
necessary to protect and maintain their respective Intellectual Property Rights.

(b) The Borrower will defend the Collateral given by it against all Liens,
claims or demands of all other Persons claiming the Collateral or any interest
therein. The Borrower will keep all Collateral given by it free and clear of all
Liens except Permitted Liens. The Borrower and its Subsidiaries will take all
commercially reasonable steps necessary to prosecute any Person Infringing their
respective Intellectual Property Rights and to defend themselves against any
Person accusing them of Infringing any Person’s Intellectual Property Rights.

Section 6.14 Insurance. The Borrower and its Subsidiaries will obtain and
maintain, insurance with insurers believed by them to be responsible and
reputable, in such amounts and against such risks as may from time to time be
required by the Lender, but in all events in such amounts and against such risks
as is usually carried by companies engaged in similar business and owning
similar properties in the same general areas in which they operate. Without
limiting the generality of the foregoing, the Borrower will at all times
maintain business interruption insurance including coverage for force majeure;
and the Borrower will at all times keep all tangible Collateral given by it
insured against risks of fire (including so-called extended coverage), theft,
collision (for Collateral consisting of motor vehicles) and such other risks and
in such amounts as the Lender may reasonably request, with any loss payable to
the Lender to the extent of its interest, and all policies of such insurance
shall contain a lender’s loss payable endorsement for the Lender’s benefit. All
policies of liability insurance required hereunder shall name the Lender as an
additional insured. If at any time the area in which any Real Property is
located is designated (i) a “flood hazard area” in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
obtain flood insurance in such total amount as is reasonable and customary for
companies engaged in the business of operating supermarkets, and otherwise
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as amended from time to time, or (ii) a “Zone
1” area, obtain earthquake insurance in such total amount as is reasonable and
customary for companies engaged in the same business as the Borrower.

 

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Section 6.15 Preservation of Existence. The Borrower and its Subsidiaries will
preserve and maintain their respective existence and their rights, privileges
and franchises necessary or desirable in the normal conduct of their respective
business and shall conduct their respective businesses in an orderly, efficient
and regular manner.

Section 6.16 Delivery of Instruments, Further Assurances, etc. Upon request by
the Lender, the Borrower will promptly deliver to the Lender in pledge all
instruments, documents and chattel paper constituting Collateral given by it,
duly endorsed or assigned by it.

Section 6.17 Sale or Transfer of Assets; Suspension of Business Operations.
Except for transfers among the entities constituting Borrower, neither the
Borrower nor any of its Subsidiaries will sell, lease, assign, transfer or
otherwise dispose of (i) the stock of any Subsidiary of such Person, (ii) all or
a substantial part of its assets, or (iii) any Collateral given by it or any
interest therein (whether in one transaction or in a series of transactions) to
any other Person other than the sale of Inventory in the ordinary course of
business and will not liquidate, dissolve or suspend business operations;
provided however, subject to the provisions of Section 6.2(d), the Borrower may
replace obsolete or damaged machinery, equipment, fixtures or furniture in the
ordinary course of business. Neither the Borrower nor any of its Subsidiaries
will transfer any part of its ownership interest in any Intellectual Property
Rights or permit any agreement under which it has licensed Licensed Intellectual
Property to lapse, except that such Person may transfer such rights or permit
such agreements to lapse if it shall have reasonably determined that the
applicable Intellectual Property Rights are no longer useful in its business. If
the Borrower transfers any Intellectual Property Rights for value, such Person
will pay over the proceeds to the Lender for application to the Obligations.
Neither the Borrower nor any of its Subsidiaries will and will not permit any of
its Subsidiaries to, license any other Person to use any of such Person’s
Intellectual Property Rights, except that the Borrower and its Subsidiaries may
grant licenses in the ordinary course of its business in connection with sales
of Inventory or provision of services to its customers.

Section 6.18 Consolidation and Merger; Asset Acquisitions. Except for mergers
between entities constituting the Borrower, neither the Borrower nor any of its
Subsidiaries will consolidate with or merge into any other Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in purpose
or effect to a consolidation or merger) all or substantially all the assets of
any other Person.

Section 6.19 Sale and Leaseback. Neither the Borrower nor any of its
Subsidiaries will enter into any arrangement, directly or indirectly, with any
other Person whereby the Borrower or any of its Subsidiaries, as the case may
be, shall sell or transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other property which the Person selling or
transferring the property intends to use for substantially the same purpose or
purposes as the property being sold or transferred.

Section 6.20 Restrictions on Nature of Business. Neither the Borrower nor any of
its Subsidiaries will engage in any line of business materially different from
that presently engaged in by such Person or purchase, lease or otherwise acquire
assets not related to its business.

Section 6.21 Accounting. Neither the Borrower nor any of its Subsidiaries will
make any material change in accounting principles other than as required by
GAAP. Neither the Borrower nor any of its Subsidiaries will adopt, permit or
consent to any change in such Person’s fiscal year.

 

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Section 6.22 Discounts, etc. After notice from the Lender, neither the Borrower
nor any of its Subsidiaries will grant, any discount, credit or allowance to any
customer of the Borrower or the Subsidiary, as the case may be, or accept any
return of goods sold. Neither the Borrower nor any of its Subsidiaries will
modify, amend, subordinate, cancel or terminate, the obligation of any account
debtor or other obligor of the Borrower or the Subsidiary, as the case may be.

Section 6.23 Plans. Unless disclosed to the Lender pursuant to Section 5.12,
neither the Borrower nor any ERISA Affiliate will (i) adopt, create, assume or
become a party to any Pension Plan, (ii) incur any obligation to contribute to
any Multiemployer Plan, (iii) incur any obligation to provide post-retirement
medical or insurance benefits with respect to employees or former employees
(other than benefits required by law) or (iv) amend any Plan in a manner that
would materially increase its funding obligations.

Section 6.24 Place of Business; Name. Neither the Borrower nor any of its
Subsidiaries will transfer its chief executive office or principal place of
business, or move, relocate, close or sell any business location. The Borrower
will not permit any tangible Collateral or any records pertaining to the
Collateral to be located in any state or area in which, in the event of such
location, a financing statement covering such Collateral would be required to
be, but has not in fact been, filed in order to perfect the Security Interest.
The Borrower will not change its name or jurisdiction of organization.

Section 6.25 Constituent Documents. The Borrower will not will amend its
Constituent Documents in any manner materially adverse to Lender.

Section 6.26 Performance by the Lender. If the Borrower at any time fails to
perform or observe any of the foregoing covenants contained in this Article VI
or elsewhere herein, and if such failure shall continue for a period of ten
calendar days after the Lender gives the Borrower written notice thereof, the
Lender may, but need not, perform or observe such covenant on behalf and in the
name, place and stead of the Borrower (or, at the Lender’s option, in the
Lender’s name) and may, but need not, take any and all other actions which the
Lender may reasonably deem necessary to cure or correct such failure (including
the payment of taxes, the satisfaction of Liens, the performance of obligations
owed to account debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and financing
statements, and the endorsement of instruments); and the Borrower shall
thereupon pay to the Lender on demand the amount of all monies expended and all
costs and expenses (including reasonable attorneys’ fees and legal expenses)
incurred by the Lender in connection with or as a result of the performance or
observance of such agreements or the taking of such action by the Lender,
together with interest thereon from the date expended or incurred at the Default
Rate. To facilitate the Lender’s performance or observance of such covenants of
the Borrower, the Borrower hereby irrevocably appoints the Lender, or the
Lender’s delegate, acting alone, as the Borrower’s attorney in fact (which
appointment is coupled with an interest) with the right (but not the duty) from
time to time to create, prepare, complete, execute, deliver, endorse or file in
the name and on behalf of the Borrower any and all instruments, documents,
assignments, security agreements, financing statements, applications for
insurance and other agreements and writings required to be obtained, executed,
delivered or endorsed by the Borrower under this Section 6.26.

Section 6.27 Transactions with Affiliates. Neither the Borrower nor any of its
Subsidiaries will engage in any transaction with any of such Person’s
Affiliates, except (a) for reasonable allocations of overhead to such Affiliate;
(b) in the ordinary course of business,

 

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pursuant to the reasonable requirements of such Person’s business, upon fair and
reasonable terms no less favorable to such Person than such Person would obtain
in a comparable arms’ length transaction, and with the obligations owing to the
Affiliate fully subordinated to the Obligations pursuant to a subordination
agreement executed by the Affiliate and the Lender in form and substance
satisfactory to the Lender; and the transactions described in Schedule 6.27.

Section 6.28 Proceeds of Sale, Loss, Destruction or Condemnation of Collateral.
Except as provided in Section 6.17, if the Borrower or any of its Subsidiaries
sells any of the Collateral or if any of the Collateral is lost or destroyed or
taken by condemnation, the Borrower shall, unless otherwise agreed by Lender,
pay to Lender as and when received by the Borrower or such Subsidiary and as a
mandatory reduction of the outstanding principal balance of the Revolving
Advances (and if such Collateral consists of Real Property, (x) with a
corresponding permanent reduction in the Real Estate Sublimit component of the
Borrowing Base and (y) as a mandatory prepayment of the Real Estate Term Advance
of all excess proceeds (if any) after application to the Revolving Advances in
an amount not to exceed the amount of Revolving Advances attributable to the
Real Estate Sublimit), a sum equal to the proceeds (including insurance payments
but net of reasonable costs and taxes incurred in connection with such sale or
event) received by the Borrower or such Subsidiary from such sale, loss,
destruction or condemnation. Notwithstanding the foregoing, if the proceeds of
insurance (net of reasonable costs and taxes incurred) with respect to any loss
or destruction of Equipment or Inventory (i) are less than $1,000,000.00, unless
an Event of Default or Default Period is then in existence, the Lender shall
remit such proceeds to the Borrower for use in replacing or repairing the
damaged Collateral, or (ii) are equal to or greater than $1,000,000.00 and the
Borrower has requested that the Lender agree to permit the Borrower or the
applicable Subsidiary to repair or replace the damaged Collateral, such amounts
may, with the consent of the Lender, be remitted to the Borrower to permit such
repair or replacement under this clause (ii); provided that such amounts shall
remain deposited at all times in the Collateral Account and, to the extent the
Borrower or its respective Subsidiary has not used such amounts to repair or
replace such damaged Collateral within one-hundred eighty (180) days after the
Borrower’s receipt thereof, such amounts shall be paid to the Lender for
application to the outstanding principal balance of the Revolving Advances.

ARTICLE VII

EVENTS OF DEFAULT, RIGHTS AND REMEDIES

Section 7.1 Events of Default. “Event of Default,” wherever used herein, means
any one of the following events:

(a) Default in the payment of any Obligations when they become due and payable
and the continuation of such default for three (3) Business Days;

(b) Default in the performance, or breach, of any covenant or agreement of the
Borrower contained in this Agreement, except the covenants and agreements
described in Section 7.1(d);

(c) A Change of Control shall occur;

(d) A Default in the performance, or breach of any covenant or agreement of the
Borrower in Section 6.1, 6.9, 6.10-6.13 (inclusive), 6.15 or 6.16

 

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which is not cured within ten (10) days after the Lender gives the Borrower
notice of such default, provided that no notice or cure period shall be
applicable with respect to the third and subsequent defaults in respect of the
same provisions of this Agreement during the same fiscal year of the Borrower;

(e) The Borrower, any of its Subsidiaries or any Guarantor shall be or become
insolvent, or admit in writing its or his inability to pay its or his debts as
they mature, or make an assignment for the benefit of creditors; or the
Borrower, any of its Subsidiaries or any Guarantor shall apply for or consent to
the appointment of any receiver, trustee, or similar officer for it or him or
for all or any substantial part of its or his property; or such receiver,
trustee or similar officer shall be appointed without the application or consent
of the Borrower, any of its Subsidiaries or such Guarantor, as the case may be;
or the Borrower, any of its Subsidiaries or any Guarantor shall institute (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it or him under the laws of any jurisdiction; or
any such proceeding shall be instituted (by petition, application or otherwise)
against the Borrower, any of its Subsidiaries or any such Guarantor; or any
judgment, writ, warrant of attachment or execution or similar process shall be
issued or levied against a substantial part of the property of the Borrower, any
of its Subsidiaries or any Guarantor;

(f) A petition shall be filed by or against the Borrower, any of its
Subsidiaries or any Guarantor under the United States Bankruptcy Code naming the
Borrower, any of its Subsidiaries or such Guarantor as debtor; provided,
however, that in the case of a filing of a petition against a Person, if the
Person has commenced controverting such petition within thirty (30) days after
the filing of the petition and is diligently continuing to controvert the
petition, the Lender’s remedy shall be limited to ceasing to make Revolving
Advances and to ceasing to cause Letters of Credit to be issued until the
earlier (the “Full Remedies Date”) of the date ninety (90) days after the filing
of the petition or the date an order for relief is entered against the Person;

(g) Any representation or warranty made by the Borrower in this Agreement, by
any Guarantor in any guaranty delivered to the Lender, or by the Borrower (or
any of its Officers) or any Guarantor in any agreement, certificate, instrument
or financial statement or other statement contemplated by or made or delivered
pursuant to or in connection with this Agreement or any such guaranty shall
prove to have been incorrect in any material respect when deemed to be
effective;

(h) The rendering against the Borrower or any of its Subsidiaries or any
Guarantor of an arbitration award, final judgment, decree or order for the
payment of money, which when aggregated with all other such awards, judgments,
decrees and orders against the Borrower and its Subsidiaries or any Guarantor,
exceeds the sum of $1,000,000.00 in excess of any insurance coverage plus any
reserves made for such awards, judgments, decrees and orders, and the
continuance of such award, judgment, decree or order unsatisfied and in effect
for any period of 30 consecutive days without a stay of execution;

 

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(i) A material default under any bond, debenture, note or other evidence of
material indebtedness of the Borrower or any of its Subsidiaries or any
Guarantor owed to any Person other than the Lender, or under any indenture or
other instrument under which any such evidence of material indebtedness has been
issued or by which it is governed, or under any material lease or other
contract, and the expiration of the applicable period of grace, if any,
specified in such evidence of indebtedness, indenture, other instrument, lease
or contract, provided that only in the case of a default which does not involve
the failure to pay a monetary obligation or a default which can be cured by the
payment of money alone, the default must also permit acceleration of the
obligations under such agreement or the termination of such agreement;

(j) Any Reportable Event, which the Lender determines in good faith might
constitute grounds for the termination of any Pension Plan of the Borrower or
any of its Subsidiaries or for the appointment by the appropriate United States
District Court of a trustee to administer any Pension Plan, shall have occurred
and be continuing 30 days after written notice to such effect shall have been
given to the Borrower by the Lender; or a trustee shall have been appointed by
an appropriate United States District Court to administer any Pension Plan of
the Borrower or any of its Subsidiaries; or the Pension Benefit Guaranty
Corporation shall have instituted proceedings to terminate any Pension Plan of
the Borrower or any of its Subsidiaries or to appoint a trustee to administer
any Pension Plan of the Borrower or any of its Subsidiaries; or the Borrower,
any of its Subsidiaries or any of their ERISA Affiliates shall have filed for a
distress termination of any Pension Plan under Title IV of ERISA; or the
Borrower, any of its Subsidiaries or any of their ERISA Affiliates shall have
failed to make any quarterly contribution required with respect to any Pension
Plan under Section 412(m) of the IRC, which the Lender determines in good faith
may by itself, or in combination with any such failures that the Lender may
determine are likely to occur in the future, result in the imposition of a Lien
on the assets of the Borrower or any of its Affiliates in favor of the Pension
Plan; or any withdrawal, partial withdrawal, reorganization or other event
occurs with respect to a Multiemployer Plan which results or could reasonably be
expected to result in a material liability of the Borrower or any of its
Subsidiaries to the Multiemployer Plan under Title IV of ERISA.

(k) An event of default shall occur under any Security Document;

(l) The Borrower or any of its Subsidiaries shall liquidate, dissolve, terminate
or suspend its business operations or otherwise fail to operate its business in
the ordinary course, or sell or attempt to sell all or substantially all of its
assets, without the Lender’s prior written consent;

(m) Default in the payment of any amount owed by the Borrower or any of its
Subsidiaries to the Lender other than any indebtedness arising hereunder;

(n) Any Guarantor or person signing a support agreement in favor of the Lender
shall repudiate, purport to revoke or fail to perform his obligations under his
guaranty or support agreement in favor of the Lender, or any other Guarantor
shall cease to exist;

 

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(o) Any material adverse change in the business or financial condition of the
Borrower (taken as a whole) shall occur; or

(p) [Intentionally Deleted]

(q) [Intentionally Deleted]

(r) [Intentionally Deleted]

Section 7.2 Rights and Remedies. During any Default Period, the Lender may
exercise any or all of the following rights and remedies:

(a) the Lender may, by notice to the Borrower, declare the Commitment to be
terminated, whereupon the same shall forthwith terminate;

(b) the Lender may, by notice to the Borrower (the “Actual Acceleration
Notice”), declare the Obligations to be forthwith due and payable, whereupon all
Obligations shall become and be forthwith due and payable, without demand,
presentment, protest, or other notice of any kind (including, without
limitation, notice of dishonor, notice of default, and notice of intent to
accelerate the maturity of the Obligation), all of which the Borrower waives
except for the Actual Acceleration Notice;

(c) the Lender may, without notice to the Borrower and without further action,
apply any and all money owing by the Lender to the Borrower to the payment of
the Obligations;

(d) the Lender may exercise and enforce any and all rights and remedies
available upon default to a secured party under the UCC, including the right to
take possession of Collateral, or any evidence thereof, proceeding without
judicial process or by judicial process (without a prior hearing or notice
thereof, which the Borrower hereby expressly waives) and the right to sell,
lease or otherwise dispose of any or all of the Collateral (with or without
giving any warranties as to the Collateral, title to the Collateral or similar
warranties), and, in connection therewith, the Borrower will on demand assemble
the Collateral given by and make it available to the Lender at a place to be
designated by the Lender which is reasonably convenient to both parties;

(e) the Lender may make demand upon the Borrower and, forthwith upon such
demand, the Borrower will pay to the Lender in immediately available funds for
deposit in the Special Account pursuant to Section 2.5, an amount equal to the
aggregate maximum amount available to be drawn under all Letters of Credit then
outstanding, assuming compliance with all conditions for drawing thereunder;

(f) the Lender may exercise and enforce its rights and remedies under the Loan
Documents; and

(g) the Lender may exercise any other rights and remedies available to it by law
or agreement.

 

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Notwithstanding the foregoing or anything to the contrary in any of the other
Loan Documents, upon the occurrence of an Event of Default described in
subsections (e) or (f) of Section 7.1, the Obligations shall be immediately due
and payable automatically without presentment, demand, protest or notice of any
kind; provided, however, that in the case of an involuntary petition resulting
in an Event of Default under subsection (f) of Section 7.1, the Obligations
shall be immediately due and payable automatically on the Full Remedies Date
without demand, presentment, protest, or notice of any kind (including, without
limitation, notice of dishonor, notice of default, notice of intent to
accelerate the maturity of the Obligation and actual notice of acceleration),
all of which the Borrower waives without presentment, demand, protest or notice
of any kind. If the Lender sells any of the Collateral on credit, the
Obligations will be reduced only to the extent of payments actually received. If
the purchaser fails to pay for the Collateral, the Lender may resell the
Collateral and shall apply any proceeds actually received to the Obligations.

Section 7.3 Certain Notices. If notice to the Borrower of any intended
disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in Section 8.3) at least ten calendar days before
the date of intended disposition or other action.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws. No failure or
delay by the Lender in exercising any right, power or remedy under the Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy under the
Loan Documents. The remedies provided in the Loan Documents are cumulative and
not exclusive of any remedies provided by law. The Lender may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and such compliance will not be considered adversely to affect
the commercial reasonableness of any sale of the Collateral.

Section 8.2 Amendments, Etc. No amendment, modification, termination or waiver
of any provision of any Loan Document or consent to any departure by the
Borrower therefrom or any release of a Security Interest shall be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in any
case shall entitle such Person or any other Person to any other or further
notice or demand in similar or other circumstances.

Section 8.3 Addresses for Notices; Requests for Accounting. Except as otherwise
expressly provided herein, all notices, requests, demands and other
communications provided for under the Loan Documents shall be in writing and
shall be (a) personally delivered, (b) sent by first class United States mail,
(c) sent by overnight courier of national reputation, or (d) transmitted by
telecopy, in each case addressed or telecopied to the party to whom notice is
being given at its address or telecopier number as set forth below next to its
signature or, as to each party, at such other address or telecopier number as
may hereafter be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section. All such notices,
requests, demands and other communications shall be deemed to have been given on
(a) the date received if personally delivered, (b) when deposited in the mail if
delivered

 

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by mail, (c) the date sent if sent by overnight courier, or (d) the date of
transmission if delivered by telecopy, except that notices or requests to the
Lender pursuant to any of the provisions of Article II shall not be effective
until received by the Lender. All requests under Section 9-210 of the UCC
(i) shall be made in a writing signed by a person authorized under
Section 2.2(b), (ii) shall be personally delivered, sent by registered or
certified mail, return receipt requested, or by overnight courier of national
reputation (iii) shall be deemed to be sent when received by the Lender and
(iv) shall otherwise comply with the requirements of Section 9-210. The Borrower
requests that the Lender respond to all such requests which on their face appear
to come from an authorized individual and releases the Lender from any liability
for so responding. The Borrower shall pay Lender the maximum amount allowed by
law for responding to such requests.

Section 8.4 Further Documents. The Borrower will from time to time execute and
deliver or endorse any and all instruments, documents, conveyances, assignments,
security agreements, mortgages, deeds of trust, financing statements, control
agreements and other agreements and writings that the Lender may reasonably
request in order to secure, protect, perfect or enforce the Security Interest or
the Lender’s rights under the Loan Documents (but any failure to request or
assure that the Borrower executes, delivers or endorses any such item shall not
affect or impair the validity, sufficiency or enforceability of the Loan
Documents and the Security Interest, regardless of whether any such item was or
was not executed, delivered or endorsed in a similar context or on a prior
occasion).

Section 8.5 Costs and Expenses. The Borrower shall pay on demand all costs and
expenses, including reasonable attorneys’ fees, incurred by the Lender or its
Affiliates in connection with the Obligations, this Agreement, the Loan
Documents, any Letter of Credit and any other document or agreement related
hereto or thereto, and the transactions contemplated hereby, including all such
costs, expenses and fees incurred in connection with the negotiation,
preparation, execution, amendment, administration, performance, collection and
enforcement of the Obligations and all such documents and agreements and the
creation, perfection, protection, satisfaction, foreclosure or enforcement of
the Security Interest.

Section 8.6 Indemnity. In addition to the payment of expenses pursuant to
Section 8.5, the Borrower shall indemnify, defend and hold harmless the Lender,
and any of its participants, parent corporations, subsidiary corporations,
affiliated corporations, successor corporations, and all present and future
officers, directors, employees, attorneys and agents of the foregoing (the
“Indemnitees”) from and against any of the following (collectively, “Indemnified
Liabilities”):

(i) any and all transfer taxes, documentary taxes, assessments or charges made
by any governmental authority by reason of the execution and delivery of the
Loan Documents or the making of the Advances;

(ii) any claims, loss or damage to which any Indemnitee may be subjected if any
representation or warranty contained in Section 5.14 proves to be incorrect in
any respect or as a result of any violation of the covenant contained in
Section 6.11(b); and

(iii) except to the extent arising from judgments in favor of the Borrower
against the Lender on account of the Lender’s

 

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breach of its obligations under this Agreement, any and all other liabilities,
losses, damages, penalties, judgments, suits, claims, costs and expenses of any
kind or nature whatsoever (including the reasonable fees and disbursements of
counsel) in connection with the foregoing and any other investigative,
administrative or judicial proceedings, whether or not such Indemnitee shall be
designated a party thereto, which may be imposed on, incurred by or asserted
against any such Indemnitee, in any manner related to or arising out of or in
connection with the making of the Advances and the Loan Documents or the use or
intended use of the proceeds of the Advances.

If any investigative, judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, upon such Indemnitee’s request,
the Borrower, or counsel designated by the Borrower and satisfactory to the
Indemnitee, will resist and defend such action, suit or proceeding to the extent
and in the manner directed by the Indemnitee, at the Borrower’s sole costs and
expense. Each Indemnitee will use its best efforts to cooperate in the defense
of any such action, suit or proceeding. If the foregoing undertaking to
indemnify, defend and hold harmless may be held to be unenforceable because it
violates any law or public policy, the Borrower shall nevertheless make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Borrower’s obligation
under this Section 8.6 shall survive the termination of this Agreement and the
discharge of the Borrower’s other obligations hereunder.

Section 8.7 Participants. The Lender and its participants, if any, are not
partners or joint venturers, and the Lender shall not have any liability or
responsibility for any obligation, act or omission of any of its participants.
All rights and powers specifically conferred upon the Lender may be transferred
or delegated to any of the Lender’s participants, successors or assigns.

Section 8.8 Execution in Counterparts: Electronic Transmission. This Agreement
and other Loan Documents may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument. Delivery of an executed counterpart of this Agreement by
telefacsimile or electronic transmission shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile or
electronic transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.

Section 8.9 Retention of Borrower’s Records. The Lender shall have no obligation
to maintain any electronic records or any documents, schedules, invoices,
agings, or other papers delivered to the Lender by the Borrower or in connection
with the Loan Documents for more than four months after receipt by the Lender.

Section 8.10 Binding Effect; Assignment; Complete Agreement; Exchanging
Information. The Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights
thereunder or any interest therein without the Lender’s prior written consent.
To the extent permitted by law, the Borrower waives and will not

 

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assert against any assignee any claims, defenses or set-offs which the Borrower
could assert against the Lender. This Agreement shall also bind all Persons who
become a party to this Agreement as a borrower. THIS AGREEMENT, TOGETHER WITH
THE LOAN DOCUMENTS, COMPRISES THE COMPLETE AND INTEGRATED AGREEMENT OF THE
PARTIES ON THE SUBJECT MATTER THEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS,
WRITTEN OR ORAL, ON THE SUBJECT MATTER THEREOF; AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Without
limiting the Lender’s right to share information regarding the Borrower and its
Affiliates with the Lender’s participants, accountants, participant’s
accountants, lawyers, participant’s lawyers and Lender’s and participant’s other
advisors, the Lender, Wells Fargo & Company, and all direct and indirect
subsidiaries of Wells Fargo & Company, may exchange any and all information they
may have in their possession regarding the Borrower and its Affiliates, and the
Borrower waives any right of confidentiality it may have with respect to such
exchange of such information.

Section 8.11 Severability of Provisions. Any provision of this Agreement which
is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

Section 8.12 Headings. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

Section 8.13 Governing Law; Jurisdiction, Venue; Waiver of Jury Trial. Except as
expressly provided in another Loan Document, the Loan Documents shall be
governed by and construed in accordance with the substantive laws (other than
conflict laws) of the State of Arizona. The parties hereto hereby (i) consent to
the personal jurisdiction of the state and federal courts located in the State
of Arizona in connection with any controversy related to this Agreement;
(ii) waive any argument that venue in any such forum is not convenient,
(iii) agree that any litigation initiated by the Lender or the Borrower in
connection with this Agreement or the other Loan Documents may be venued in
either the State or Federal courts located in Maricopa County, Arizona; and
(iv) agree that a final judgment in any such suit, action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

Section 8.14 Co-Borrowers.

(a) All Advances may be made solely to, and all Letters of Credit may be issued
for solely the account of, Schuff International, at the Lender’s election, any
other Person comprising the Borrower; and in such case they shall be deemed
received by all Persons comprising the Borrower. Any payments on the Advances
received by the Lender shall be credited to the Advances for the benefit of all
Persons comprising the Borrower. It is expressly agreed and understood by each
Person comprising the Borrower that Lender shall have no responsibility to
inquire into the apportionment, allocation or disposition of any Advances made
to another Borrower. Each Person comprising the Borrower hereby irrevocably
appoints Schuff International and each other Borrower as its agent and
attorney-in-fact for all purposes of the Loan Documents, including, without
limitation, the giving and receiving of notices and other communications, the
making of requests for Advances and Letters of Credit, the execution and
delivery of certificates and the receiving and allocating of Advances from the
Lender.

 

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(b) Each Person comprising the Borrower represents and warrants to Lender that
the joint handling of the Loan is jointly desired by all Persons comprising the
Borrower. Each Person comprising the Borrower expects to derive benefit,
directly or indirectly, from the joint borrowing.

(c) Neither demand on, nor the pursuit of any remedies against, any Borrower
shall be required as a condition precedent to, and neither the pendency nor the
prior termination of any action, suit or proceeding against any other Borrower
(whether for the same or a different remedy) shall bear on or prejudice the
making of a demand on any Borrower by the Lender and commencement against any
other Borrower after such demand, of any action, suit or proceeding, at law or
in equity, for the specific performance of any covenant or agreement contained
herein or for the enforcement of any other appropriate legal or equitable
remedy.

(d) Each Person comprising the Borrower agrees to perform the Obligations of the
other Persons comprising the Borrower, whether or not it is a party to the Loan
Document creating the Obligations. Each Borrower’s liability under the Loan
Documents is primary, direct, immediate, joint and several with that of the
other Persons comprising the Borrower. Neither (i) the exercise or the failure
to exercise by the Lender of any rights or remedies conferred on it under the
Loan Documents, hereunder or existing at law or otherwise, or against any
security for performance of the Obligations, (ii) the commencement of an action
at law or the recovery of a judgment at law against any other Borrower or any
surety and the enforcement thereof through levy or execution or otherwise,
(iii) the taking or institution or any other action or proceeding against any
other Borrower or any surety nor (iv) any delay in taking, pursuing or
exercising any of the foregoing actions, rights, powers or remedies (even though
requested by any of the Persons comprising Borrower) by Lender or anyone acting
for the Lender, shall extinguish or affect the obligations of any of the Persons
comprising the Borrower under the Loan Documents.

(e) Each Borrower hereby expressly waives: (i) all diligence in collection or
protection of or realization on the Obligations or any part thereof, any
obligation hereunder, or any security for or guarantee of any of the foregoing;
(ii) any defense based upon a marshaling of assets; (iii) any defense arising
because of the Lender’s election under Section 1111 (b)(2) of the United States
Bankruptcy Code (“Bankruptcy Code”) in any proceeding instituted under the
Bankruptcy Code; (iv) any defense based on post-petition borrowing or the grant
of a security interest by any other Borrower under Section 364 of the Bankruptcy
Code; (v) any duty on the part of the Lender to disclose to any other Person
comprising Borrower any facts Lender may now or hereafter know about any other
Person comprising the Borrower, regardless of whether Lender has reason to
believe that any such facts materially increase the risk beyond that which such
Person intends to assume or has reason to believe that such facts are known such
Person or has a reasonable opportunity to communicate such facts to such Person,
because each Person comprising the Borrower represents and warrants that it is
fully responsible for being and keeping informed of the financial condition

 

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of the other Persons comprising the Borrower and of all circumstances bearing on
the risk of non-payment of any Obligations; (vi) any and all suretyship defenses
and defenses in the nature thereof under Arizona and/or any other applicable
law, including, without limitation, the benefits of the provisions of Sections
12-1641 through 12-1646, of the Arizona Revised Statutes, Sections 17 and 21,
A.R.C.P., and all other laws of similar import; and (vii) all rights and
defenses arising out of an election of remedies by the Lender, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed the Person’s rights of subrogation
and reimbursement against the principal by the operation of law or otherwise.

(f) Each Person comprising the Borrower agrees that it will not assert against
the Lender any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute, fraud,
usury, illegality or unenforceability which may be available to the other
Persons comprising the Borrower with respect to the Loan Documents (or the
Loan), or any set off available to the other Persons comprising the Borrower
against the Lender, whether or not on account of a related transaction.

(g) The benefits, remedies and rights provided or intended to be provided hereby
for the Lender are in addition to and without prejudice to any rights, benefits,
remedies or security to which the Lender might otherwise be entitled.

(h) Anything else contained herein to the contrary notwithstanding, the Lender,
from time to time, without notice to any Borrower, may take all or any of the
following actions without in any manner affecting or impairing the obligations
of any other Borrower under the Loan Documents: (i) obtain a lien on or a
security interest in any property to secure any of the Obligations, either
consensually or by operation of law; (ii) retain or obtain the primary or
secondary liability of any Person(s), in addition to the Persons comprising the
Borrower, with respect to any of the Obligations; (iii) renew, extend or
otherwise change the time for payment or performance of any of the Obligations
for any period; (iv) release or compromise any liability of the other Persons
comprising the Borrower under the Loan Documents or any liability of any nature
of any other person(s) with respect to the Obligations; (v) exchange, enforce,
waive, release and apply any security for the performance of the Obligations and
direct the order or manner of the proceeds of such security for any of the
Obligations, whether or not the Lender shall proceed against any other Person
primarily or secondarily liable on any of the Obligations; (vi) agree to any
amendment (including, without limitation, any amendment which changes the amount
of interest to be paid under the Loan Documents or extends the period of time
during which the other Persons comprising the Borrower may obtain Advances or
Letters of Credit) to the Loan Documents or any waiver of any provisions of the
Loan Documents and/or exercise the Lender’s rights to consent to any action or
non-action of the Lender which may violate the covenants and agreements
contained in the Loan Documents with or without consideration, on such terms and
conditions as may be acceptable to the Lender in Lender’s discretion; or
(vii) exercise any of the Lender’s rights conferred by the Loan Documents or by
law.

 

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(i) If at any time all or any part of any payment theretofore applied by the
Lender to any of the Obligations is or must be rescinded or returned by the
Lender for any reason whatsoever (including, without limitation the insolvency,
bankruptcy or reorganization of any of the Persons comprising the Borrower),
such Obligations, for purposes of this Agreement, to the extent that such
payment is or must be rescinded or returned, shall be deemed to have never been
performed.

(j) To the extent not prohibited by law, until the Obligations have been paid
and performed in full and Lender has no further obligation to extend credit to
any Borrower under the Loan Documents, each Person comprising the Borrower shall
have no right of subrogation with respect to the Obligations or any rights of
indemnification, reimbursement or contribution from any other Person comprising
the Borrower or from any surety with respect to the Obligations regardless of
any payment made by such Person with respect to the Obligations of the other
Persons comprising the Borrower; and such Person hereby unconditionally waives
any such right of subrogation, indemnification, reimbursement or contribution
for such period.

(k) Each Borrower agrees that they shall not have or assert any such rights
against one another or their respective successors and assigns or any other
party (including any surety), either directly or as an attempted set off to any
action commenced against the other Persons comprising the Borrower or any other
Person. Each of the Persons comprising the Borrower hereby acknowledges and
agrees that this waiver is intended to benefit the other Persons comprising the
Borrower and shall not limit or otherwise affect any of such Persons liabilities
under any Loan Document, or the enforceability hereof or thereof.

(l) The obligations of the Persons comprising the Borrower in this Agreement are
joint and several.

Section 8.15 Effect of Agreement. This Agreement shall become effective only
upon the satisfaction of all of the conditions contained within Section 4.3
hereof. At such time as this Agreement becomes effective, it shall in all
respects supersede the Original Amended and Restated Credit Agreement, and all
Advances (past, present and future) made by the Lender to the Borrower shall in
all respects be governed by this Agreement. Until such time as all of the
conditions contained in Section 4.3 have been fully satisfied, this Agreement
shall be of no force and effect, and all Advances (past, present and future)
made by the Lender to the Borrower shall in all respects be governed by the
Original Amended and Restated Credit Agreement.

Section 8.16 Release. Borrower and Guarantor hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which Borrower
and Guarantor have had, now has or has made claim to have against any such
person for or by reason of any act, omission, matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this Agreement,
whether such claims, demands and causes of action are matured or unmatured or
known or unknown.

 

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THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

[See Separate Signature Page]

 

59

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.

 

For Each Person Comprising the Borrower

 

c/o Schuff International, Inc.

1841 W. Buchanan Street

Phoenix, Arizona 85007

Telecopier: (602) 452-4465

Attention: Michael R. Hill

e-mail: mike.hill@schuff.com

    SCHUFF INTERNATIONAL, INC., a Delaware corporation    

 

By

  LOGO [g739428exb_p60a.jpg]       Michael R. Hill     Its:   Vice President and
Chief Financial Officer    

 

SCHUFF STEEL COMPANY, a Delaware corporation

   

 

By:

 

LOGO [g739428exb_p60b.jpg]

      Michael R. Hill     Its:   Vice President and Chief Financial Officer    
SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability company     By:  

Schuff Steel Company, a Delaware corporation

Its Managing Member

      By:   LOGO [g739428exb_p60c.jpg]         Michael R. Hill       Its:   Vice
President and Chief Financial Officer     QUINCY JOIST COMPANY, a Delaware
corporation     By:   LOGO [g739428exb_p60d.jpg]       Michael R. Hill      
Its:   Vice President

 

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SCHUFF STEEL – GULF COAST, INC., a Delaware corporation By:   LOGO
[g739428exb_p61a.jpg]   Michael R. Hill   its:   Vice President ON-TIME STEEL
MANAGEMENT HOLDING, INC., a Delaware corporation By:   LOGO
[g739428exb_p61b.jpg]   Michael R. Hill   Its:   Vice President SCHUFF HOLDING
CO., a Delaware corporation By   LOGO [g739428exb_p61c.jpg] Name:   Michael R.
Hill Title:   Chairman, President, Secretary & Treasurer ADDISON STRUCTURAL
SERVICES, INC., a Florida corporation By   LOGO [g739428exb_p61d.jpg] Name:  
Michael R. Hill Title:   Chairman, President, Secretary & Treasurer SCHUFF STEEL
MANAGEMENT COMPANY-SOUTHEAST L.L.C., a Delaware limited liability company By  
LOGO [g739428exb_p61e.jpg] Name:   Michael R. Hill Title:   Manager

 

61

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    SCHUFF STEEL MANAGEMENT COMPANY-SOUTHWEST, INC., a Delaware corporation    
By:   LOGO [g739428exb_p62a.jpg]       Michael R. Hill       Its:   Vice
President     SCHUFF STEEL MANAGEMENT COMPANY-COLORADO, L.L.C., a Delaware
limited liability company     By:   LOGO [g739428exb_p62b.jpg]       Michael R.
Hill, Manager     SCHUFF PREMIER SERVICES LLC, a Delaware limited liability
company     By:   LOGO [g739428exb_p62c.jpg]       Michael R. Hill     Its:  
Manager

Wells Fargo Bank, NA

MAC S4101-158

100 West Washington Street, 15th Floor

Phoenix, AZ 85003

Telecopier: 602-378-6215

Attention: Dan Barkosky

e-mail: Daniel.J.Barkosky@wellsfargo.com

       

 

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Wells Fargo Bank, NA     WELLS FARGO CREDIT, INC. MAC S4101-158     100 West
Washington Street, 15th Floor      

LOGO [g739428exb_p63.jpg]

Phoenix, AZ 85003     By   Telecopier: 602-378-6215       Amber N. Wildermuth
Attention: Amber Wildermuth       Its Authorized Signatory e-mail:
amber.n.wildermuth@wellsfargo.com                  

 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

The undersigned, a guarantor of the indebtedness of Borrower to Lender pursuant
to a separate Guaranty (the “Guaranty”), hereby (i) acknowledges receipt of the
foregoing Agreement; (ii) consents to the terms (including without limitation
the release set forth in Section 8.16 of the Agreement) and execution thereof;
(iii) reaffirms its obligations to the Lender pursuant to the terms of its
Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
renew or otherwise modify the Credit Agreement and any indebtedness or agreement
of the Borrower, or enter into any agreement or extend additional or other
credit accommodations, without notifying or obtaining the consent of any of the
undersigned and without impairing its liability under its Guaranty for all of
the Borrower’s present and future indebtedness to the Lender.

 

19TH AVENUE/BUCHANAN LIMITED PARTNERSHIP By:   LOGO [g739428exb_p64.jpg]   Name:
  Scott A. Schuff   Title:   General Partner

 

63

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TABLE OF EXHIBITS AND SCHEDULES

 

Exhibit A    Amendments to existing Real Property Security Documents Exhibit B
   Compliance Certificate Exhibit C    Premises Schedule 1.1    List of Persons
Comprising Borrower Schedule 3.6    Name, Address, Federal Employee
Identification Number and Organizational Numbers of Debtors Schedule 3.9   
Eligible Equipment Value Schedule 5.1    Trade Names, Chief Executive Office,
Principal Place of Business, and Locations of Collateral Schedule 5.2   
Capitalization and Organizational Chart Schedule 5.5    Subsidiaries Schedule
5.7    Litigation Schedule 5.11    Intellectual Property Disclosures Schedule
6.3    Permitted Liens Schedule 6.4    Indebtedness Schedule 6.5    Guaranties
Schedule 6.8    Salaries Schedule 6.27    Transactions with Affiliates

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Exhibit A to Credit and Security Agreement

Prepared by and After

Recording, Return To:

Thomas E. Halter

Gust Rosenfeld P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

FIFTH AMENDMENT TO MORTGAGE, ASSIGNMENT OF

RENTS AND SECURITY AGREEMENT

 

DATE:                , 2013 PARTIES:   

SCHUFF STEEL COMPANY

1841 West Buchanan Street

Phoenix, Arizona 85007 (“Debtor”)

  

WELLS FARGO CREDIT, INC.

100 West Washington Street, 15th Floor

MAC #S4101-158

Phoenix, AZ 85003 (“Lender”)

Debtor has granted to Lender a Mortgage, Assignment of Rents and Security
Agreement (the “Mortgage”) on certain real property located in Franklin County,
Kansas, described on Exhibit A which was dated August 22, 2006, and recorded in
the records of Franklin County, Kansas (the “Official Records”) at Book 429,
Page 301, Instrument No. 4287, as amended.

Debtor and Lender have executed this Amendment to modify the Mortgage as
follows:

1. Recital A of the Mortgage is hereby deleted and replaced as follows:

A. Mortgagee has agreed to provide certain credit facilities to Mortgagor
pursuant to an Amended and Restated Credit and Security Agreement dated
December 18, 2008, as amended from time to time and as amended and restated from
time to time (the “Credit Agreement”) consisting of a variable interest rate
revolving line of credit in the original principal amount of $50,000,000.00, a
variable interest real estate term loan in the original principal amount of
$15,000,000.00 (collectively, the “Loan”). The Loan is evidenced by (i) that
certain Third Replacement Revolving Note in the original principal amount of
$50,000,000.00, and having a final maturity date of June 30, 2018, (ii) that
certain Term Note dated                      in the original principal amount of
$15,000,000.00 having a final maturity date of June 30,         , (which notes,
together with notes issued in substitution or exchange therefor and all

 

2

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amendments thereto, are hereinafter referred to collectively as the “Note”). The
Notes were made by Mortgagee and the persons or entities described in Schedule
1.1 attached hereto (collectively, the “Borrower”) in favor of Mortgagee.

2. Schedule 1.1 of the Mortgage is hereby deleted and replaced with Schedule 1.1
attached hereto.

3. Except as specifically modified herein, the Mortgage shall remain in full
force and effect unmodified in any way and nothing done pursuant hereto shall
impair or adversely affect or be construed as impairing or adversely affecting
the liens and security interests or the priority thereof over other liens and
security interests, or release or affect the liability of any party or parties
who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

3

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IN WITNESS WHEREOF, the parties hereof have executed this Amendment on the date
first set forth above.

 

DEBTOR: SCHUFF STEEL COMPANY, a Delaware corporation By:  

 

Name:  

 

Title:  

 

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel Company, a Delaware
corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

4

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LENDER: WELLS FARGO CREDIT, INC., a Minnesota corporation By:  

 

Name:  

 

Title:   Authorized Signatory

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

5

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EXHIBIT A

(Legal Description)

 

6

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SCHEDULE 1.1

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

7

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When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

SIXTH AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

DATE:                , 2013 PARTIES:   

SCHUFF STEEL – GULF COAST, INC., a Delaware corporation

(formerly known as Six Industries, Inc.)

1841 W. Buchanan Street

Phoenix, AZ 85007 (“Grantor”)

  

WELLS FARGO CREDIT, INC.

100 West Washington Street, 15th Floor

MAC S4101-158

Phoenix, AZ 85003 (“Beneficiary”)

  

JEFF DAHLEN C/O STEWART TITLE

Natl. Title Service Center

2 North La Salle St., Suite 1400

Chicago, IL 60602 (“Trustee”)

Grantor has granted to Trustee, on behalf of Beneficiary a Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing on certain real
property located in Harris County, Texas which was recorded in the records of
Harris County, Texas (the “Official Records”) at Instrument No. 300237058, as
amended (the “Deed of Trust”).

Grantor and Beneficiary have executed this Sixth Amendment to Deed of Trust to
modify the Deed of Trust as follows:

1. Section 2.1 of the Deed of Trust is deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, made by
Grantor, and the other persons or entities listed on Schedule “B” attached
hereto and by this reference made a part hereof (hereinafter Grantor and such
other persons individually and collectively called “Borrower”), payable to the
order of Beneficiary, evidencing lines of credit, all or parts of which may be
advanced to

 

8

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Borrower, repaid by Borrower and readvanced to Borrower, from time to time,
subject to the terms and conditions thereof and/or of that Amended and Restated
Credit and Security Agreement dated December 18, 2008, as amended from time to
time and as amended and restated from time to time, by and between Borrower and
Beneficiary (hereinafter called the “Loan Agreement”), provided that the
principal balance outstanding at any time shall not exceed the sum set forth
about in this Paragraph 2.1, with interest thereon, extension and other fees,
late charges, prepayment premiums and attorneys’ fees, according to the terms
thereof, and all extensions, modifications, renewals or replacements thereof
(hereinafter collectively called the “Note”). The instruments detailed above
bear interest at a variable rate in accordance with the terms and provisions
thereof which are by this reference incorporated herein.

2. Schedule B to the Deed of Trust is hereby deleted and replaced with Schedule
B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

9

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IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed to
of Trust on the date first set forth above.

 

SCHUFF STEEL – GULF COAST, INC., a

Delaware corporation

By:  

 

Its:  

 

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Gulf Coast – Inc., a Delaware
corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

10

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WELLS FARGO CREDIT, INC., a Minnesota corporation By:  

 

Its:   Authorized Signatory

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

11

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STEWART TITLE & TRUST By:  

 

  Jeff Dahlen its:  

 

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by Jeff Dahlen, the                                          of Stewart
Title, on behalf of the                                         .

 

(Seal and Expiration Date)        

 

    Notary Public

 

12

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EXHIBIT A

(Legal Description)

 

13

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

14

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Prepared By    Cross Reference Thomas E. Halter    Deed to Secure Debt and
Security Agreement Gust Rosenfeld, P.L.C.    recorded in Deed Book 2656, Page
035, One East Washington, Suite 1600    Dougherty County, Georgia Public Records
Phoenix, Arizona 85004-2553   

SEVENTH AMENDMENT TO DEED TO SECURE DEBT AND SECURITY AGREEMENT

 

DATE:                , 2013 PARTIES:   

SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability company, formerly
known as Schuff Steel – Atlantic, Inc., a Florida corporation, formerly known as
Addison Steel, Inc.

1841 W. Buchanan Street

Phoenix, AZ 85007 (“Debtor”)

 

WELLS FARGO CREDIT, INC.

100 West Washington Street, 15th Floor

MAC #S4101-158

Phoenix, AZ 85003 (“Lender”)

Debtor has granted to Lender a Deed To Secure Debt and Security Agreement (the
“Deed to Secure Debt”) on certain real property located in Dougherty County,
Georgia, described on Exhibit A which was dated August 13, 2003, and recorded in
the records of Dougherty County, Georgia at Book 2656, page 035, as amended.

Debtor and Lender have executed this Seventh Amendment to Deed to Secure Debt
(the “Amendment”) to modify the Deed to Secure Debt as follows:

Section 2.1 of the Deed to Secure Debt is hereby deleted and replaced as
follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, made by
Grantor, and the other persons or entities listed on Schedule “C” attached
hereto and by this reference made a part hereof (hereinafter Trustor and such
other persons individually and collectively called “Borrower”), payable to the
order of Lender, evidencing lines of credit, all or parts of which may be
advanced to Borrower, repaid by Borrower and readvanced to Borrower, from time
to time, subject to the terms and conditions thereof and/or of that

 

15

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Amended and Restated Credit and Security Agreement dated December 18, 2008, as
amended from time to time and as amended and restated from time to time, by and
between Borrower and Beneficiary (hereinafter called the “Loan Agreement”),
provided that the principal balance outstanding at any time shall not exceed the
sum set forth about in this Paragraph, with interest thereon, extension and
other fees, late charges, prepayment premiums and attorneys’ fees, according to
the terms thereof, and all extensions, modifications, renewals or replacements
thereof (hereinafter collectively called the “Note”). All of the instruments
detailed above bear interest at a variable rate in accordance with the terms and
provisions thereof which are by this reference incorporated herein.

Schedule C attached to the Deed to Secure Debt is hereby deleted and replaced
with Schedule B attached hereto.

Except as specifically modified herein, the Deed to Secure Debt shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the loan.

This Amendment may be executed in any number of counterparts, which counterparts
when combined together shall constitute an original document.

This Amendment shall be binding upon, and shall inure to the benefit of Debtor
and Lender and their respective successors and assigns.

 

16

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IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed to
Secure Debt on the date first set forth above.

 

Signed, sealed and delivered in the presence of:     DEBTOR:

 

   

SCHUFF STEEL - ATLANTIC, LLC,

a Florida limited liability company

Unofficial Witness           By:  

 

 

    Name:  

 

Notary Public [Affix seal and state date of expiration of commission]     Title:
 

 

Signed, sealed and delivered in the presence of:     LENDER:    

WELLS FARGO CREDIT, INC.,

a Minnesota corporation

 

    Unofficial Witness    

 

    By:  

 

Notary Public [Affix seal and state date of expiration of commission]     Name:
 

 

    Title:   Authorized Signatory

 

17

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EXHIBIT A

(Legal Description)

 

18

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

19

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This document was prepared by and

When recorded return to:

Thomas E. Halter

Gust Rosenfeld P.L.C.

One East Washington, Suite 1600

Phoenix, AZ 85004-2553

SIXTH AMENDMENT TO REVOLVING REAL ESTATE MORTGAGE, ASSIGNMENT OF

RENTS, SECURITY AGREEMENT AND FIXTURE FILING

(FL-Addison)

THIS SIXTH AMENDMENT TO REVOLVING REAL ESTATE MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (“Agreement”) is made as of the      day
of         , 2013, by and between WELLS FARGO CREDIT, INC. (“Mortgagee”), whose
mailing address is 100 West Washington Street, 15th Floor, MAC #S4101-158,
Phoenix, AZ 85003, and SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability
company, formerly known as Schuff Steel – Atlantic, Inc., a Florida corporation,
formerly known as Addison Steel, Inc. (“Mortgagor”), whose address is 1841 W.
Buchanan Street Phoenix, AZ 85007.

R E C I T A L S

Mortgagor has delivered to Mortgagee a Revolving Real Estate Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing (the “Mortgage”) on
certain real property located in Orange County, Florida which was recorded in
the Public Records of Orange County, Florida as Instrument No. 20030564043 in
Official Records Book 07126, Page 0431, as amended from time to time (the
“Mortgage”).

1. The Mortgage is hereby amended as follows:

(a) The first paragraph of the Mortgage is deleted and replaced as follows:

THE TOTAL PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE (EXCLUSIVE OF FUTURE
ADVANCES AND DISBURSEMENTS TO PAY TAXES, LEVIES OR INSURANCE ON THE PROPERTY OR
OTHERWISE TO PROTECT OR PRESERVE THE MORTGAGED PROPERTY) IS $57,500,000.00.
HOWEVER, MORTGAGEE’S RECOVERY UNDER THIS MORTGAGE AGAINST THE PREMISES, LEASES
AND RENTS IN RESPECT OF SUCH PRINCIPAL INDEBTEDNESS IS LIMITED TO $6,000,000.00.
ACCORDINGLY, DOCUMENTARY STAMP AND INTANGIBLES TAXES HAVE BEEN PAID BASED UPON
$6,000,000.00.

(b) Section 2.1 is hereby deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount

 

20

--------------------------------------------------------------------------------

of $15,000,000.00, made by Mortgagor and the other persons or entities listed on
Schedule “B” attached hereto and by this reference made a part hereof
(hereinafter Mortgagor and such other persons and entities individually and
collectively called “Borrower”), each payable to the order of Mortgagee,
evidencing lines of credit, all or parts of which may be advanced to Borrower,
repaid by Borrower and readvanced to Borrower, from time to time, subject to the
terms and conditions thereof and/or of that Amended and Restated Credit and
Security Agreement dated December 18, 2008, as amended from time to time and as
amended and restated from time to time, by and between Borrower and Mortgagee
(hereinafter called the “Loan Agreement”), provided that the principal balance
outstanding at any time shall not exceed the sum set forth about in this
Paragraph 2.1, with interest thereon, extension and other fees, late charges,
prepayment premiums and attorneys’ fees, according to the terms thereof, and all
extensions, modifications, renewals or replacements thereof (hereinafter
collectively called the “Note”). The instruments detailed above bear interest at
a variable rate in accordance with the terms and provisions thereof which are by
this reference incorporated herein and the Third Replacement Revolving Note has
a scheduled maturity date of June 30, 2018, and the Term Note has a scheduled
maturity date of June 30,         .

(b) Schedule B attached to the Mortgage is hereby deleted and replaced with
Schedule B attached hereto.

2. Except as specifically modified herein, the Mortgage shall remain in full
force and effect unmodified in any way and nothing done pursuant hereto shall
impair or adversely affect or be construed as impairing or adversely affecting
the liens and security interests or the priority thereof over other liens and
security interests, or release or affect the liability of any party or parties
who may now or hereafter be liable under or on account of the loan.

3. This Agreement may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

4. This Agreement shall be binding upon, and shall inure to the benefit of
Mortgagor and Mortgagee and their respective successors and assigns.

Recorder’s Note: The principal indebtedness secured by this Agreement consists
of the principal indebtedness currently secured by the Mortgage, of which the
maximum amount recoverable is $6,000,000, upon which appropriate Documentary
Stamp Taxes and Intangible Taxes have been paid. Accordingly, no further
Documentary Stamp Taxes and Intangible Taxes are due.

 

21

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first set forth above.

 

SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability company By:  

 

Its:  

 

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel – Atlantic, LLC, a
Florida limited liability company, on behalf of the limited liability company.
He/she is personally known to me or has produced
                                         as identification.

 

    Notary:  

 

[NOTARIAL SEAL]     Print Name:  

 

    Notary Public, State of  

 

    My commission expires:  

 

 

22

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By:  

 

Its:   Authorized Signatory

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.
He/she is personally known to me or has produced
                                         as identification.

 

    Notary:  

 

[NOTARIAL SEAL]     Print Name:  

 

    Notary Public, State of  

 

    My commission expires:  

 

 

23

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

24

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

25

--------------------------------------------------------------------------------

This document was prepared by and

When recorded return to:

Thomas E. Halter

Gust Rosenfeld P.L.C.

One East Washington, Suite 1600

Phoenix, AZ 85004-2553

SIXTH AMENDMENT TO REVOLVING REAL ESTATE MORTGAGE, ASSIGNMENT OF

RENTS, SECURITY AGREEMENT AND FIXTURE FILING

(FL-Quincy)

THIS SIXTH AMENDMENT TO REVOLVING REAL ESTATE MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (“Agreement”) is made as of the      day
of         , 2013, by and between WELLS FARGO CREDIT, INC. (“Mortgagee”), whose
mailing address is 100 West Washington Street, 15th Floor, MAC #S4101-158,
Phoenix, AZ 85003, and SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability
company, formerly known as Schuff Steel – Atlantic, Inc., a Florida corporation,
formerly known as Addison Steel, Inc. and QUINCY JOIST COMPANY, a Delaware
corporation, successor by merger to Quincy Joist Company, a Florida corporation
(“Mortgagor”), whose address is 1841 W. Buchanan Street Phoenix, AZ 85007.

Mortgagor has delivered to Mortgagee a Revolving Real Estate Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing on certain real
property located in Gadsden County, Florida which was recorded in the Public
Records of Gadsden County, Florida as Instrument No. 0310463 in Official Records
Book 575, Page 0324, as amended from time to time (the “Mortgage”).

1. The Mortgage is hereby amended as follows:

(a) Section 2.1 is hereby deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, and each
of which is made by Mortgagor, and the other persons or entities listed on
Schedule “B” attached hereto and by this reference made a part hereof
(hereinafter Mortgagor and such other persons and entities individually and
collectively called “Borrower”), each payable to the order of Mortgagee,
evidencing lines of credit, all or parts of which may be advanced to Borrower,
repaid by Borrower and readvanced to Borrower, from time to time, subject to the
terms and conditions thereof and/or of that Amended and Restated Credit and
Security Agreement dated December 18, 2008, as amended from time to time and as
amended and restated from time to time, by and between Borrower and Mortgagee
(hereinafter called the “Loan Agreement”), provided that the principal balance
outstanding at any time shall not

 

26

--------------------------------------------------------------------------------

exceed the sum set forth about in this Paragraph 2.1, with interest thereon,
extension and other fees, late charges, prepayment premiums and attorneys’ fees,
according to the terms thereof, and all extensions, modifications, renewals or
replacements thereof (hereinafter collectively called the “Note”). The
instruments detailed above bear interest at a variable rate in accordance with
the terms and provisions thereof which are by this reference incorporated herein
and the Third Replacement Revolving Note has a scheduled maturity date of
June 30, 2018 and the Term Note has a scheduled maturity date of June 30,
        .

(b) Schedule B attached to the Mortgage is hereby deleted and replaced with
Schedule B attached hereto.

2. Except as specifically modified herein, the Mortgage shall remain in full
force and effect unmodified in any way and nothing done pursuant hereto shall
impair or adversely affect or be construed as impairing or adversely affecting
the liens and security interests or the priority thereof over other liens and
security interests, or release or affect the liability of any party or parties
who may now or hereafter be liable under or on account of the loan.

3. This Agreement may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

4. This Agreement shall be binding upon, and shall inure to the benefit of
Mortgagor and Mortgagee and their respective successors and assigns.

Recorder’s Note: The principal indebtedness secured by this Agreement consists
of the principal indebtedness currently secured by the Mortgage, of which the
maximum amount recoverable is $2,000,000, upon which appropriate Documentary
Stamp Taxes and Intangible Taxes have been paid. Accordingly, no further
Documentary Stamp Taxes and Intangible Taxes are due.

 

27

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first set forth above.

 

SCHUFF STEEL – ATLANTIC, LLC, a Florida limited liability company By:  

 

Its:  

 

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel – Atlantic, LLC, a
Florida limited liability company, on behalf of the limited liability company.
He/she is personally known to me or has produced
                                         as identification.

 

    Notary:  

 

[NOTARIAL SEAL]     Print Name:  

 

    Notary Public, State of  

 

    My commission expires:  

 

 

28

--------------------------------------------------------------------------------

QUINCY JOIST COMPANY, a Delaware corporation By:  

 

Its:  

 

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Quincy Joist Company, a Delaware
corporation, on behalf of the corporation. He/she is personally known to me or
has produced                                          as identification.

 

    Notary:  

 

[NOTARIAL SEAL]     Print Name:  

 

    Notary Public, State of  

 

    My commission expires:  

 

 

29

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By:  

 

Its:   Authorized Signatory

State of Arizona

County of Maricopa

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.
He/she is personally known to me or has produced
                                         as identification.

 

    Notary:  

 

[NOTARIAL SEAL]     Print Name:  

 

    Notary Public, State of  

 

    My commission expires:  

 

 

30

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

31

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

32

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

THIRD AMENDMENT TO DEED OF TRUST

AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:                , 2013 PARTIES:   

SCHUFF INTERNATIONAL, INC., a Delaware corporation

SCHUFF STEEL COMPANY, a Delaware corporation

1841 W. Buchanan Street

Phoenix, AZ 85007 (collectively, jointly and severally the “Trustor”)

  

WELLS FARGO CREDIT, INC.

100 West Washington Street, 15th Floor

MAC S4101-158

Phoenix, AZ 85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust and Assignment of Rents and
Leases on certain real property located in Pinal County, Arizona which was
recorded in the records of Pinal County, Arizona (the “Official Records”) at
Instrument No. 2009-013327, as amended (the “Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by Trustor, and the other persons or entities listed on Schedule “B”
attached hereto and by this reference made a part hereof (hereinafter Trustor
and such other persons individually and collectively called “Borrower”), payable
to the order of Beneficiary, evidencing lines of credit, all or parts of which
may be advanced to Borrower, repaid by Borrower and readvanced to Borrower, from
time to time, subject to the terms and conditions thereof and/or of that Amended
and Restated Credit and Security Agreement dated December 18, 2008, as amended
from time to time and as amended and restated from time to time, by and between
Borrower and Beneficiary

 

33

--------------------------------------------------------------------------------

(hereinafter called the “Loan Agreement”), provided that the principal balance
outstanding at any time shall not exceed the sum set forth about in this
Paragraph 2.1, with interest thereon, extension and other fees, late charges,
prepayment premiums and attorneys’ fees, according to the terms thereof, and all
extensions, modifications, renewals or replacements thereof (hereinafter
collectively called the “Note”). The instruments detailed above bear interest at
a variable rate in accordance with the terms and provisions thereof which are by
this reference incorporated herein; and

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

34

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

SCHUFF INTERNATIONAL, INC., a Delaware corporation By  

 

  Its  

 

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff International, Inc., a
Delaware corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

35

--------------------------------------------------------------------------------

SCHUFF STEEL COMPANY, a Delaware corporation By  

 

  Its  

 

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel Company, a Delaware
corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

36

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its   Authorized Signatory

State of                    

County of                    

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

37

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

38

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

39

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When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

FOURTH AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

DATE:                , 2013 PARTIES:    SCHUFF STEEL COMPANY, a Delaware
corporation    1841 W. Buchanan Street    Phoenix, AZ 85007 (“Trustor”)    WELLS
FARGO CREDIT, INC.    100 West Washington Street, 15th Floor    MAC S4101-158   
Phoenix, AZ 85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing on certain real property located in
Coconino County, Arizona which was recorded in the records of Coconino County,
Arizona (the “Official Records”) at Instrument No. 3431845, as amended (the
“Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1 of the Deed of Trust is deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by Trustor, and the other persons or entities listed on Schedule “B”
attached hereto and by this reference made a part hereof (hereinafter Trustor
and such other persons individually and collectively called “Borrower”), payable
to the order of Beneficiary, evidencing lines of credit, all or parts of which
may be advanced to Borrower, repaid by Borrower and readvanced to Borrower, from
time to time, subject to the terms and conditions thereof and/or of that Amended
and Restated Credit and Security Agreement dated December 18, 2008, as amended
from time to time and as amended and restated from time to time, by and between
Borrower and Beneficiary (hereinafter called the “Loan Agreement”), provided
that the principal

 

40

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balance outstanding at any time shall not exceed the sum set forth about in this
Paragraph 2.1, with interest thereon, extension and other fees, late charges,
prepayment premiums and attorneys’ fees, according to the terms thereof, and all
extensions, modifications, renewals or replacements thereof (hereinafter
collectively called the “Note”). The instruments detailed above bear interest at
a variable rate in accordance with the terms and provisions thereof which are by
this reference incorporated herein.

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

41

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

SCHUFF STEEL COMPANY, a Delaware corporation By  

 

  Its  

 

State of                    

County of                    

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel Company, a Delaware
corporation, on behalf of the corporation.

 

(Seal and Expiration Date)        

 

    Notary Public

 

42

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its Authorized Signatory

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

43

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

44

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

45

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

AMENDMENT TO DEED OF TRUST AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:               , 2013 PARTIES:   SCHUFF STEEL COMPANY, a Delaware
corporation   1841 W. Buchanan Street   Phoenix, AZ 85007 (“Trustor”)   WELLS
FARGO CREDIT, INC.   100 West Washington Street, 15th Floor   MAC S4101-158  
Phoenix, AZ 85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust and Assignment of Rents and
Leases on certain real property located in Maricopa County, Arizona which was
recorded in the records of Maricopa County, Arizona (the “Official Records”) at
Instrument No. 20120282390, as amended (the “Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is deleted and replaced as follows:

(a) Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by Trustor, and the other persons or entities listed on Schedule “B”
attached hereto and by this reference made a part hereof (hereinafter Trustor
and such other persons individually and collectively called “Borrower”), payable
to the order of Beneficiary, evidencing lines of credit, all or parts of which
may be advanced to Borrower, repaid by Borrower and readvanced to Borrower, from
time to time, subject to the terms and conditions thereof and/or of that Amended
and Restated Credit and Security Agreement dated December 18, 2008, as amended
from time to time and as amended and restated from time to time, by and between
Borrower and Beneficiary (hereinafter called the “Loan Agreement”), provided
that the principal balance outstanding at any time shall not exceed the sum set
forth about in this Paragraph 2.1, with interest thereon, extension and other
fees, late

 

46

--------------------------------------------------------------------------------

charges, prepayment premiums and attorneys’ fees, according to the terms
thereof, and all extensions, modifications, renewals or replacements thereof
(hereinafter collectively called the “Note”). The instruments detailed above
bear interest at a variable rate in accordance with the terms and provisions
thereof which are by this reference incorporated herein.

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

47

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

SCHUFF STEEL COMPANY, a Delaware corporation By  

 

  Its  

 

 

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel Company, a Delaware
corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

48

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its Authorized Signatory

State of                     

County of                     

The foregoing instrument was acknowledged before me this      day of          ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

49

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

50

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

51

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

AMENDMENT TO DEED OF TRUST AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:               , 2013 PARTIES:   SCHUFF HOLDING CO., a Delaware corporation
  1841 W. Buchanan Street   Phoenix, AZ 85007 (“Trustor”)   WELLS FARGO CREDIT,
INC.   100 West Washington Street, 15th Floor   MAC S4101-158   Phoenix, AZ
85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust and Assignment of Rents and
Leases on certain real property located in Maricopa County, Arizona which was
recorded in the records of Maricopa County, Arizona (the “Official Records”) at
Instrument No. 20120282395, as amended (the “Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is deleted and replaced as follows:

(a) Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by Trustor, and the other persons or entities listed on Schedule “B”
attached hereto and by this reference made a part hereof (hereinafter Trustor
and such other persons individually and collectively called “Borrower”), payable
to the order of Beneficiary, evidencing lines of credit, all or parts of which
may be advanced to Borrower, repaid by Borrower and readvanced to Borrower, from
time to time, subject to the terms and conditions thereof and/or of that Amended
and Restated Credit and Security Agreement dated December 18, 2008, as amended
from time to time and as amended and restated from time to time, by and between
Borrower and Beneficiary (hereinafter called the “Loan Agreement”), provided
that the principal balance outstanding at any time shall not exceed the sum set
forth about in this Paragraph 2.1, with interest thereon, extension and other
fees, late

 

52

--------------------------------------------------------------------------------

charges, prepayment premiums and attorneys’ fees, according to the terms
thereof, and all extensions, modifications, renewals or replacements thereof
(hereinafter collectively called the “Note”). The instruments detailed above
bear interest at a variable rate in accordance with the terms and provisions
thereof which are by this reference incorporated herein.

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

53

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

SCHUFF HOLDING CO., a Delaware corporation By  

 

  Its  

 

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Holding Co., a Delaware
corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

54

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its Authorized Signatory

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

55

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

56

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

57

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 1600

Phoenix, Arizona 85004-2553

AMENDMENT TO DEED OF TRUST AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:                , 2013 PARTIES:    19TH AVENUE/BUCHANAN LIMITED
PARTNERSHIP, an Arizona
limited partnership    1841 W. Buchanan Street    Phoenix, AZ 85007 (“Trustor”)
   WELLS FARGO CREDIT, INC.    100 West Washington Street, 15th Floor    MAC
S4101-158    Phoenix, AZ 85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust and Assignment of Rents and
Leases on certain real property located in Maricopa County, Arizona which was
recorded in the records of Maricopa County, Arizona (the “Official Records”) at
Instrument No. 20120282396, as amended (the “Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is hereby deleted and replaced as
follows:

(a) Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by the other persons or entities listed on Schedule “B” attached hereto and
by this reference made a part hereof (hereinafter such persons individually and
collectively called “Borrower”), payable to the order of Beneficiary, evidencing
lines of credit, all or parts of which may be advanced to Borrower, repaid by
Borrower and readvanced to Borrower, from time to time, subject to the terms and
conditions thereof and/or of that Amended and Restated Credit and Security
Agreement dated December 18, 2008, as amended from time to time and as amended
and restated from time to time, by and between Borrower and Beneficiary
(hereinafter called the “Loan Agreement”), with interest thereon, extension and
other fees, late charges, prepayment

 

58

--------------------------------------------------------------------------------

premiums and attorneys’ fees, according to the terms thereof, and all
extensions, modifications, renewals or replacements thereof (hereinafter
collectively, the “Note”). The instruments detailed above bear interest at a
variable rate in accordance with the terms and provisions thereof which are by
this reference incorporated herein; and

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

59

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

19TH AVENUE/BUCHANAN LIMITED PARTNERSHIP, an Arizona limited partnership By  

 

  Its  

 

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of 19th Avenue/Buchanan Limited
Partnership, an Arizona limited partnership, on behalf of the partnership.

(Seal and Expiration Date)

 

 

Notary Public

 

60

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its Authorized Signatory

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

61

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

62

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

63

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One East Washington, Suite 800

Phoenix, Arizona 85004

SECOND AMENDMENT TO DEED OF TRUST

AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:                , 2013 PARTIES:    SCHUFF STEEL COMPANY, a Delaware
corporation    1841 W. Buchanan Street    Phoenix, AZ 85007 (“Trustor”)    WELLS
FARGO CREDIT, INC.    100 West Washington Street, 15th Floor    MAC S4101-158   
Phoenix, AZ 85003 (“Beneficiary”)

Trustor has granted to Beneficiary a Deed of Trust and Assignment of Rents and
Leases on certain real property located in San Joaquin County, California which
was recorded in the records of San Joaquin County, California (the “Official
Records”) at Instrument No. 2009-185829 (the “Deed of Trust”).

Trustor and Beneficiary have executed this Amendment to Deed of Trust to modify
the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is hereby deleted and replaced as
follows:

(a) Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00 each made
by Trustor and the other persons or entities listed on Schedule “B” attached
hereto and by this reference made a part hereof (hereinafter Trustor and such
other persons individually and collectively called “Borrower”), payable to the
order of Beneficiary, evidencing lines of credit, all or parts of which may be
advanced to Borrower, repaid by Borrower and readvanced to Borrower, from time
to time, subject to the terms and conditions thereof and/or of that Amended and
Restated Credit and Security Agreement dated December 18, 2008, as amended from
time to time and as amended and restated from time to time, by and between
Borrower and Beneficiary (hereinafter called the

 

64

--------------------------------------------------------------------------------

“Loan Agreement”), provided that the principal balance outstanding at any time
shall not exceed the sum set forth about in this Paragraph 2.1, with interest
thereon, extension and other fees, late charges, prepayment premiums and
attorneys’ fees, according to the terms thereof, and all extensions,
modifications, renewals or replacements thereof (hereinafter collectively called
the “Note”). The instruments detailed above bear interest at a variable rate in
accordance with the terms and provisions thereof which are by this reference
incorporated herein; and

2. Schedule B attached to the Deed of Trust is hereby deleted and replaced with
Schedule B attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

65

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereof have executed this Amendment to Deed of
Trust on the date first set forth above.

 

SCHUFF STEEL COMPANY, a Delaware corporation By  

 

  Its  

 

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff International, Inc., a
Delaware corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

66

--------------------------------------------------------------------------------

WELLS FARGO CREDIT, INC., a Minnesota corporation By  

 

  Its Authorized Signatory

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the Authorized Signatory of
Wells Fargo Credit, Inc., a Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

67

--------------------------------------------------------------------------------

EXHIBIT A

(Legal Description)

 

68

--------------------------------------------------------------------------------

SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

69

--------------------------------------------------------------------------------

When recorded return to:

Thomas E. Halter

Gust Rosenfeld, P.L.C.

One E. Washington, Suite 1600

Phoenix, Arizona 85004-2553

THIRD AMENDMENT TO DEED OF TRUST

AND ASSIGNMENT OF RENTS AND LEASES

 

DATE:                , 2013 PARTIES:    SCHUFF STEEL – GULF COAST, INC., a
Delaware corporation    (formerly known as Six Industries, Inc.)    1841 W.
Buchanan Street    Phoenix, AZ 85007 (“Grantor”)    WELLS FARGO CREDIT, INC.   
100 West Washington Street, 15th Floor    MAC S4101-158    Phoenix, AZ 85003
(“Beneficiary”)    JEFF DAHLEN C/O STEWART TITLE    Natl. Title Service Center
   2 North La Salle St., Suite 1400    Chicago, IL 60602 (“Trustee”)

Grantor has granted to Trustee, on behalf of Beneficiary a Deed of Trust and
Assignment of Rents and Leases on certain real property located in Harris
County, Texas which was recorded in the records of Harris County, Texas (the
“Official Records”) at Instrument No. 20090064528, as amended (the “Deed of
Trust”).

The obligations secured by the Deed of Trust have been modified.

Grantor and Beneficiary have executed this Third Amendment to Deed of Trust to
modify the Deed of Trust as follows:

1. Section 2.1(a) of the Deed of Trust is deleted and replaced as follows:

2.1 Payment of the sum of Fifty-Seven Million Five Hundred Thousand Dollars
($57,500,000.00) according to the terms of (i) that Third Replacement Revolving
Promissory Note in the original principal amount of $50,000,000.00, and
(ii) that Term Note in the original principal amount of $15,000,000.00, each
made by Grantor, and the other persons or entities listed on Schedule “B”
attached hereto and by this reference made a part hereof (hereinafter Grantor
and such other persons individually and collectively called “Borrower”), payable
to the order of

 

70

--------------------------------------------------------------------------------

Beneficiary, evidencing lines of credit, all or parts of which may be advanced
to Borrower, repaid by Borrower and readvanced to Borrower, from time to time,
subject to the terms and conditions thereof and/or of that Amended and Restated
Credit and Security Agreement dated December 18, 2008, as amended from time to
time and as amended and restated from time to time, by and between Borrower and
Beneficiary (hereinafter called the “Loan Agreement”), provided that the
principal balance outstanding at any time shall not exceed the sum set forth
about in this Paragraph 2.1, with interest thereon, extension and other fees,
late charges, prepayment premiums and attorneys’ fees, according to the terms
thereof, and all extensions, modifications, renewals or replacements thereof
(hereinafter collectively called the “Note”). The instruments detailed above
bear interest at a variable rate in accordance with the terms and provisions
thereof which are by this reference incorporated herein; and

2. Exhibit B to the Deed of Trust is hereby deleted and replaced with Exhibit B
attached hereto.

3. Except as specifically modified herein, the Deed of Trust shall remain in
full force and effect unmodified in any way and nothing done pursuant hereto
shall impair or adversely affect or be construed as impairing or adversely
affecting the liens and security interests or the priority thereof over other
liens and security interests, or release or affect the liability of any party or
parties who may now or hereafter be liable under or on account of the Loan.

4. This Amendment may be executed in any number of counterparts, which
counterparts when combined together shall constitute an original document.

 

71

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as of the date first
set forth above.

 

Grantor    

Address

SCHUFF STEEL – GULF COAST, INC., a
Delaware corporation    

1841 W. Buchanan Street

Phoenix, AZ 85007

By:  

 

    Its:  

 

   

 

STATE OF                        )      )    ss. COUNTY OF                       
)   

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , the
                                         of Schuff Steel – Gulf Coast, Inc., a
Delaware corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

72

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WELLS FARGO CREDIT, INC.     Address       Wells Fargo Credit, Inc.       MAC
S4101-076 By  

 

    100 West Washington Street, 7th Floor       Phoenix, AZ 85003 Its  

 

         

 

STATE OF ARIZONA   )     )   ss. COUNTY OF MARICOPA   )  

The foregoing instrument was acknowledged before me this      day of         ,
2013, by                                         , a
                                         of Wells Fargo Credit, Inc., a
Minnesota corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

73

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STEWART TITLE & TRUST By:  

 

  Jeff Dahlen Its:  

 

 

State of                      County of                     

The foregoing instrument was acknowledged before me this      day of         ,
2013, by Jeff Dahlen, the                                          of Stewart
Title, on behalf of the                                         .

(Seal and Expiration Date)

 

 

Notary Public

 

74

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EXHIBIT A

(Legal Description)

 

75

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EXHIBIT B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

76

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Exhibit B to Credit and Security Agreement

COMPLIANCE CERTIFICATE

 

To:  

 

     Wells Fargo Credit, Inc.    Date:               , 2013   

Subject:  

 

     Financial Statements   

In accordance with our Second Amended and Restated Credit and Security Agreement
dated as of                     , as amended from time to time (the “Credit
Agreement”), attached are the financial statements of Schuff International, Inc.
and its Subsidiaries as of and for             , 20     (the “Reporting Date”)
and the year-to-date period then ended (the “Current Financials”). All terms
used in this certificate have the meanings given in the Credit Agreement.

I certify that the Current Financials have been prepared in accordance with
GAAP, subject to year-end audit adjustments, and fairly present the Borrower’s
financial condition as of the date thereof.

Events of Default. (Check one):

 

  ¨ The undersigned does not have knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement except as previously reported in
writing to the Lender.

 

  ¨ The undersigned has knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement not previously reported in writing to the
Lender and attached hereto is a statement of the facts with respect to thereto.
The Borrower acknowledges that pursuant to Section 2.8(b) of the Credit
Agreement, the Lender may impose the Default Rate at any time during the
resulting Default Period to be effective as of any date permitted under the
Agreement.

Financial Covenants. I further certify to the Lender as follows:(Check one):

 

  ¨ The Reporting Date marks the end of one of the Borrower’s fiscal months, but
not the end of a fiscal quarter or fiscal year; hence I am completing all items
below except items      and     .

 

  ¨ The Reporting Date marks the end of one of the Borrower’s fiscal quarters
but not the end of a fiscal year, hence I am completing all items below except
items      and     .

 

  ¨ The Reporting Date marks the end of the Borrower’s fiscal year, hence I am
completing all paragraphs below all items below.

 

77

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I further certify to the Lender as follows:

1. Section 6.2(a) – Fixed Charge Coverage Ratio.

 

Quarter Ending

   Minimum Required Fixed
Charge Coverage Ratio    Actual

December 31, 2012

   1.20 to 1   

March 31, 2013

   1.20 to 1   

June 30, 2013

   1.20 to 1   

September 30, 2013

   1.20 to 1   

December 31, 2013

   1.20 to 1   

2. Section 6.2(b) Total Debt to EBITDA

 

Quarter Ending

   Minimum Required Ratio    Actual

December 31, 2012

   3.0 to 1   

March 31, 2013

   3.0 to 1   

June 30, 2013

   3.0 to 1   

September 30, 2013

   2.75 to 1   

December 31, 2013

   2.75 to 1   

3. Section 6.2(c) Free Cash Flow

 

Year

   Requirement =   Actual

Each Fiscal Year from and after 2013

   30% of Free Cash Flow  

4. Section 6.2(d)

 

Year

   Maximum Permitted
Unfinanced Capital
Expenditures      Actual

2012

   $ 4,500,000.00      

Each Fiscal Year thereafter

   $ 5,000,000.00      

 

78

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5. Section 6.2(e)

 

Month

   Maximum Permitted
Net Loss      Actual

Any single month

   $ 600,000.00      

Any two consecutive months

   $ 1,000,000.00      

6. Distributions. As of the Reporting Date, the Borrower ¨ is ¨ is not in
compliance with Section 6.7 of the Credit Agreement concerning dividends
distributions, purchases, retirements and redemptions.

7. Salaries. As of the Reporting Date, the Borrower ¨ is ¨ is not in compliance
with Section 6.8 of the Credit Agreement concerning salaries and other
compensation.

8. Transactions With Affiliates. As of the Reporting Date, the Borrower ¨ is ¨
is not in compliance with Section 6.27 of the Credit Agreement concerning
transactions with Affiliates.

Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.

 

 

Chief Financial Officer of Schuff International, Inc. and authorized agent of
the other Persons comprising the Borrower

 

79

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Exhibit C to Credit and Security Agreement

PREMISES

The Premises referred to in the Credit and Security Agreement are legally
described as follows:

 

Location

  

Size

(Sq. Ft.)

  

Owned/

Leased

  

Product/Services

Phoenix, Arizona

(420 S. 19th Ave.)

   400,000    Leased    Fabrication Shop; Operations; Erection; Engineering and
Detailing Offices. Gilbert, Arizona    145,000    Owned    Fabrication Shop and
Offices

Phoenix, Arizona

(1841 W. Buchanan)

   22,000    Owned    Executive, Finance, Administration, Estimating and Sales
Offices. Eloy, Arizona    135,504    Owned    Fabrication Shop and Operations

Orlando, Florida

(7351 Overland)

   144,000    Owned    Fabrication Shop; Sales, Executive and Operations
Offices; Maintenance Yard; Steel Truss Plant Albany, Georgia    102,000    Owned
   Fabrication Shop; Executive, Operations, and Estimating Offices. Ottawa,
Kansas    153,600    Owned    Fabrication Shop and Operations Offices. Quincy,
Florida       Owned    Real Estate ONLY Houston, Texas    43,000    Owned   
Fabrication Shop; Sales, Estimating; Operation and Administrative Offices.
Humble, Texas    150,390    Owned    Fabrication Shop; Operation and
Administrative Offices. Bellemont, Arizona    132,000    Owned    Fabrication
Ship and Administrative Offices. Stockton, California    142,948    Owned   
Fabrication Shop, Operations and Administrative Offices. Mesa, Arizona    8,855
   Owned    Executive, Sales, Operations and Administrative Offices San Diego,
California    8,853    Leased    Operations, Sales, Estimating and
Administrative Offices. Overland Park, Kansas    2,468    Leased    Sales and
Estimating Offices. Buford, Georgia    1,300    Leased    Sales Office.
Lafayette, California    789    Leased    Sales Office. Murray Hills, New Jersey
   4,108    Leased    Vacant Sales Office. Currently looking for a subtenant to
take over the remainder of the lease.

 

80

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SCHEDULE 1.1

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

81

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DISCLOSURE SCHEDULE OF BORROWER

This Disclosure Schedule (“Disclosure Schedule”) is being delivered by Schuff
International, Inc., a Delaware corporation (“Schuff International” or the
“Company”), and the other persons listed in Schedule 1.1 (collectively, together
with Schuff International, the “Borrower”) to the Loan Agreement (as hereinafter
defined), in connection with the Second Amended and Restated Credit and Security
Agreement of even date herewith, executed by and among the Borrower and Wells
Fargo Credit, Inc. (the “Lender”) (with all of the exhibits appended thereto,
the “Loan Agreement”). Unless the context otherwise requires, all capitalized
terms used in this Disclosure Schedule shall have the respective meanings
assigned to them in the Loan Agreement. The representations and warranties of
the Borrower set forth in the Loan Agreement are hereby excepted to the extent
set forth hereafter.

 

82

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Schedule 1.1 (Borrower)

 

  1. Schuff International, Inc., a Delaware corporation

 

  2. Schuff Steel Company, a Delaware corporation

 

  3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

  4. Quincy Joist Company, a Delaware corporation

 

  5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

  6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

  7. Schuff Holding Co., a Delaware corporation

 

  8. Addison Structural Services, Inc., a Florida corporation

 

  9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

  10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

  11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

  12. Schuff Premier Services LLC, a Delaware limited liability company

--------------------------------------------------------------------------------

Schedule 3.6 (Debtor Information)

 

  1. Schuff International, Inc., a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan Street, Phoenix, AZ 85007

Federal Employer Identification Number: 86-1033353

Organizational Identification Number: 3399749

 

  2. Schuff Steel Company, a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W Buchanan Street, Phoenix, AZ 85007

Other Equipment & Inventory Located at: 420 S. 19th Ave, Phoenix, AZ 85009;

And 5055 Ken Morey Drive, Bellemont, AZ 86015;

And 2001 N. Davis Road, Ottawa, KS 66067;

And 1705 W Battaglia Road, Eloy, AZ 85231;

And 619 N. Cooper Road, Gilbert, AZ 85233;

And 2324 Navy Drive, Stockton, CA 95206;

And 14500 Smith Road, Humble, TX 77396;

And 4920 Airline Drive, Houston, TX 77022;

And 7351 Overland Road, Orlando, FL 32810;

And 1920 Ledo Road, Albany, GA 31707.

Federal Employer Identification Number: 86-0318760

Organizational Identification Number: 2748115

 

  3. Schuff Steel – Atlantic, LLC, a Florida limited liability company

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 7351 Overland Road, Orlando, FL 32810

Other Equipment & Inventory Located at: 1920 Ledo Rd., Albany, GA 31706

Federal Employer Identification Number: 59-0900504

Organizational Identification Number: 235785

 

  4. Quincy Joist Company, a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Real Estate Located at: 520 S. Virginia St., Quincy, FL 32351

Federal Employer Identification Number: 58-1921954

Organizational Identification Number: 3566874

 

  5. Schuff Steel – Gulf Coast, Inc., a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 14500 Smith Road, Humble, TX 77396

Other Equipment & Inventory Located at: 4920 Airline Dr., Houston, TX 77022

Federal Employer Identification Number: 76-0114030

Organizational Identification Number: 3612848

 

  6. On-Time Steel Management Holding, Inc., a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan Street, Phoenix, AZ 85007

Federal Employer Identification Number: 71-0907546

Organizational Identification Number: 3545161

--------------------------------------------------------------------------------

  7. Schuff Holding Co., a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Federal Employer Identification Number: 45-4483357

Organizational Identification Number: 5086475

 

  8. Addison Structural Services, Inc., a Florida corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Federal Employer Identification Number: 58-2178447

Organizational Identification Number: P95000037815

 

  9. Schuff Steel Management Company – Southeast L.L.C., a Delaware limited
liability company

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Federal Employer Identification Number: 20-2212372

Organizational Identification Number: 3916279

 

  10. Schuff Steel Management Company – Colorado, L.L.C., a Delaware limited
liability company

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Federal Employer Identification Number: 41-2052699

Organizational Identification Number: 3545162

 

  11. Schuff Steel Management Company – Southwest, Inc. a Delaware corporation

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 4320 E. Presidio Street, Suite 111, Mesa, AZ 85215

Federal Employer Identification Number: 86-1034262

Organizational Identification Number 3409718

 

  12. Schuff Premier Services LLC, a Delaware limited liability company

Chief Executive Office: 1841 W. Buchanan Street, Phoenix, AZ 85007

Principal Place of Business: 1841 W. Buchanan, Phoenix, AZ 85007

Airplane located at 15852 N. 81st Street, Scottsdale, AZ 85260

Federal Employer Identification Number: 36-4752531

Organizational Identification Number: 5281681

 

2

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Schedule 3.9 (Equipment)

This Schedule follows the text of this Disclosure Schedule

--------------------------------------------------------------------------------

Schedule 5.1 (Jurisdiction of Incorporation)

 

  1. Reference is hereby made to the Schedule 1.1 (Borrower) and Schedule 3.6
(Debtor Information) as set forth in this Disclosure Schedule.

 

  2. Schuff Steel – Gulf Coast, Inc., a Delaware corporation, was formerly known
as Six Industries, Inc.

 

  3. Schuff Steel Management Company – Southeast L.L.C., a Delaware limited
liability company, was formerly known as On-Time Steel Management – Southeast
L.LC.

 

  4. Schuff Steel Management Company – Colorado, L.L.C., a Delaware limited
liability company, was formerly known as On-Time Steel Management Company –
Colorado, L.L.C.

 

  5. Schuff Steel Management Company – Southwest, Inc. a Delaware corporation,
was formerly known as On-Time Steel Management Company – Southwest, Inc.

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Schedule 5.2 (Capitalization)

(a)

 

  1. Schuff International, Inc. Stock Ownership

Known Beneficial Ownership of Directors and Executive Officers Schedule 5.2

As of June 30, 2013

Common Shares issued: 10,038,707 (5,856,911 held in Treasury)

 

Name of Beneficial Owner (1)   

Shares

Beneficially

Owned (2)

    Percentage of
Issued Shares (3)  

Scott A. Schuff Family Trusts

     2,519,200  (5)      25.1 % 

David A. & Nancy Schuff

     3,000  (4)      .03 % 

19th Avenue Buchanan Partnership

     7,100  (6)      .07 % 

D. Ronald Yagoda (Director & Family Trust shares)

     20,333        .2 % 

Phillip O. Elbert (Director)

     11,000        .11 % 

Michael R. Hill

     34,631        .34 % 

Ryan S. Schuff

     39,572        .39 % 

Scott D. Sherman

     19,004        .19 % 

Robert N. Waldrep

     10,732        .11 % 

Scott E. Esmeier

     9,724        .10 % 

Shawna Willis

     2,096        .02 % 

All Directors, Executive Officers & Key Management Employees as a Group

     2,711,271        27 % 

--------------------------------------------------------------------------------

  2. Schuff Steel Company is 100% owned by Schuff Holding Co.

 

  3. Schuff Steel-Atlantic, LLC is 100% owned by Schuff Steel Company

 

  4. Quincy Joist Company is 100% owned by Addison Structural Services, Inc.

 

  5. Schuff Steel-Gulf Coast, Inc. is 100% owned by Schuff Holding Co.

 

  6. On-Time Steel Management Holding, Inc. is 100% owned by Schuff Holding Co.

 

  7. Schuff Holding Co. is 100% owned by Schuff International, Inc.

 

  8. Addison Structural Services, Inc. is 100% owned by Schuff Holding Co.

 

  9. Schuff Steel Management Company-Southeast L.L.C. is 100% owned by On-Time
Steel Management Holding, Inc.

 

  10. Schuff Steel Management Company-Colorado, L.L.C. is 100% owned by On-Time
Steel Management Holding, Inc.

 

  11. Schuff Steel Management Company-Southwest, Inc. is 100% owned by On-Time
Steel Management Holding, Inc.

 

  12. Schuff Premier Services LLC is 100% owned by Schuff International, Inc.

Notes to Schedule 5.2(a)

 

  1. All stockholders of the Company listed in Schedule 5.2(a) may be contacted
at the address: 1841 W. Buchanan St., Phoenix, AZ 85007

 

2

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  2. This information regarding beneficial ownership of the Company’s common
stock by certain beneficial owners and management of the Company is as of
June 30, 2013. Amounts are based on shareholder reports from Registrar and
Transfer Company., the transfer agent, and personal knowledge of Management.

 

  3. The common stock percentages are based upon 10,038,707 shares of common
stock issued (includes 5,856,911 shares – 58.34% - held in Treasury) as of
June 30, 2013. The persons and entities named in the table, to the Company’s
knowledge, have sole voting and sole dispositive power with respect to all
shares of common stock shown as beneficially owned by them, subject to community
property laws where applicable and the information contained in the footnotes
hereunder.

 

  4. David A. Schuff and Nancy A. Schuff, husband and wife, exercise voting and
investment power over the 3,000 shares.

 

  5. Scott A. Schuff SAS Revocable Trust, as amended owns 1,800,000 shares,
Scott A. Schuff SAS Legacy Trust owns 500,000 shares and Scott A. Schuff
Irrevocable Trust Under Trust Agreement dated December 31, 1996, as amended owns
200,000 shares. Scott A. Schuff is trustee of each of these trusts and exercises
voting and investment power over such shares.

 

  6. David A. Schuff, Nancy A. Schuff, and Scott A. Schuff are all partners in
the 19th Avenue Buchanan Partnership.

 

3

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Schedule 5.2(b)

 

LOGO [g739428exb_p155.jpg]

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Schedule 5.5 (Subsidiaries)

Subsidiaries of Schuff International, Inc. are:

 

  •   Schuff Holding Co.

 

  •   Schuff Energy Company (1)

Subsidiaries of Schuff Holding Co. are:

 

  •   On-Time Steel Management Holding, Inc.

 

  •   Schuff Steel Company

 

  •   Schuff Steel – Gulf Coast, Inc.

 

  •   Schuff Premier Services LLC

 

  •   Addison Structural Services, Inc.

 

  •   Schuff Steel Company – Panama, S de RL, (not a debtor or guarantor) (99%
ownership)

Subsidiaries of Schuff Steel Company are:

 

  •   Schuff Steel – Atlantic, LLC

Subsidiaries of Schuff Addison Structural Services, Inc. are:

 

  •   Quincy Joist Company

Subsidiaries of On-Time Steel Management Holding, Inc. are:

 

  •   Schuff Steel Management Company – Southwest, Inc.

 

  •   Schuff Steel Management Company – Colorado, LLC (winding down)

 

  •   Schuff Steel Management Company – Southeast, LLC (winding down)

Notes to Schedule 5.5

 

(1) Schuff Energy Company is a shell entity with no assets or operations.

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Schedule 5.7 (Litigation)

The Company is involved from time to time through the ordinary course of
business in certain claims, litigation, and assessments. Due to the nature of
the construction industry, the Company’s employees from time to time become
subject to injury, or even death, while employed by the Company. Except as noted
below, the Company does not believe there are any such contingencies at
August 13, 2013 for which the eventual outcome would have a material adverse
impact on the financial position, results of operations or liquidity of the
Company.

In December 2012, two lawsuits were filed against our subsidiaries that involve
fabrication work pertaining to a refinery in Whiting, Indiana (“BP Refinery”),
owned by a subsidiary of British Petroleum (“BP”). In December 2012, BP brought
suit in the United States District Court for the Northern District of Indiana
(the “Indiana suit”) against Carboline Company (“Carboline”), Trinity Steel
Fabricators, Inc. (“Trinity”), our subsidiary, Schuff Steel Company (“Schuff”),
Tecon Services, Inc. (“Tecon”) and Alfred Miller Contracting Company (“AMC”),
asserting contract and warranty claims as to Schuff, arising out of allegations
that fireproofing applied to steel that Schuff and Trinity supplied to a
modernization project at the BP Refinery was defectively fireproofed. The steel
fabricators, Trinity and a Schuff subsidiary, subcontracted the application of
the Pyrocrete® 241 to AMC and/or Tecon. These applicators purchased the
Pyrocrete® 241 from the manufacturer, Carboline. BP alleges that the Pyrocrete®
241 is defective and causing damage to BP’s property and that the defects are
caused by the preparation or application of the Pyrocrete® 241, or by defects in
the product itself. BP alleges that it has and will continue to incur
substantial damages. BP has not quantified its damages; however, they are
believed to be at least in the tens of millions of dollars. Remediation of the
fireproofing has commenced but is not expected to be completed for some time,
and total alleged damages will remain uncertain until that work is completed.

Also in December 2012, AMC and Tecon filed a Petition for Damages and
Declaratory Judgment in the State Court of Louisiana (14th Judicial District
Court, Parish of Calcasieu) (the “Louisiana suit”), against Carboline, BP
Corporation North America Inc., BP Products North America, Inc. (collectively
referred to as “BP entities”), Foster Wheeler USA Corporation, Fluor
Enterprises, Inc, Trinity, our subsidiaries, Schuff and Schuff Steel – Gulf
Coast, Inc. (“Gulf Coast”), Dynamic Industries, Inc. (“DII”) and Land Coast
Insulation, Inc. (“Landcoast”). AMC and Tecon allege, among other claims, that
the Carboline Pyrocrete® 241 on the BP Refinery project was defective and that
Carboline breached warranties relating to it and made negligent and fraudulent
misstatements concerning that product. AMC and Tecon also seek a court
determination of the rights and responsibilities of the parties involved in the
procurement, application, inspection, assembly and/or fabrication of the
structural steel that had Pyrocrete® 241 applied to it.

The Schuff entities have filed answers and cross-claims in both lawsuits denying
liability to BP and seeking indemnification and recovery on warranty from AMC
and Tecon to the extent of any improper application and from Carboline to the
extent any defect in the Pyrocrete® 241 when it was applied. Numerous complex
procedural and substantive legal and factual issues have yet to be resolved.
Formal discovery has just commenced. Schuff and Gulf Coast intend to
aggressively defend themselves in this matter.

On February 9, 2009, the Roosevelt Irrigation District (“RID”) brought suit in
the United States District Court for the District Court of Arizona against Salt
River Project Agricultural

--------------------------------------------------------------------------------

Improvement and Power District and approximately one-hundred other defendants,
including our subsidiary, Schuff Steel Company (“Schuff”). RID operates
one-hundred groundwater wells in western Maricopa County and contends that
approximately twenty of its wells are contaminated. RID asserts recovery against
the defendants under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (“CERCLA” or “Superfund”) for the recovery of
costs incurred by RID in responding to the defendants’ alleged releases or
threatened releases of hazardous substances into groundwater that allegedly
impact or threaten to impact the groundwater in the West Van Buren area of
Phoenix, Arizona. RID has submitted an Early Response Action (“ERA”) to the
Arizona Department of Environmental Quality (“ADEQ”) and has asserted future
potential remediation costs in excess of $40,000,000. ADEQ received substantial
public comment against the ERA. In July 2010, the ADEQ granted conditional
approval to RID’s remediation plan with a substantial number of conditions and
milestones. Accordingly, RID amended its complaint and Schuff was served with
the first amended complaint in late July 2010. Initially, most defendants filed
either various motions to dismiss RID’s complaint or motions for summary
judgment based on certain legal theories but the Court dismissed these motions
without prejudice to focus on substantial motions to disqualify counsel for RID
based upon various conflicts of interest with RID’s chosen counsel. The Court
granted certain motions by five defendants to disqualify RID’s counsel by order
dated August 26, 2011. In RID’s counsel recently withdrew from representation
and RID has retained new counsel. Schuff consistently had denied any liability
to RID and was aggressively defending itself against any allegation that its
operations contaminated the groundwater. On July 29, 2013, RID’s new counsel
submitted a Second Amended Complaint which dropped Schuff Steel as a defendant.
It is possible that a current defendant could file a third-party claim against
Schuff Steel Company at some future date.

On February 5, 2010, Silver Steel, Inc. (“Silver”) brought suit in Clark County,
Nevada District Court (the “Court”) against our subsidiary Schuff Steel Company
(“Schuff) and our bonding company. Silver acted as second tier subcontractor to
Schuff on the Sobella Retail project (“project”), which was part of the City
Center Project in Las Vegas, Nevada. Silver agreed in October, 2007, to a fixed
price of approximately $1,483,000 to perform metal deck installation and to
perform extra work at agreed upon hourly rates. During the project, Silver
submitted over 500 extra work orders (“EWO”), which were then bundled into
proposed change orders (“PCO”). Twenty-four executed change orders were issued
totaling approximately $3,305,000, for a total adjusted contract of
approximately $4,788,000. Schuff has paid the adjusted contract value. Silver
completed construction of the base scope of its work in August 2008. It
performed extra work on the project into January 2009. Silver never complained
during the project about any unpaid extra work or alleged impacts. Thereafter,
on February 26, 2009, Silver first gave Schuff notice of a claim in PCO 43, in
the amount of $666,000. Schuff arranged for Silver to present its claim to
Perini Construction Company (“Perini”), the general contractor, which denied the
claim, in part because there was no backup presented by Silver. Schuff claims
that it was prejudiced by the late claim, because if it had been put on notice
of an impact during the course of the project, it could have taken action to
minimize the impact or to pass the claim upstream to Perini or the owner.
Silver’s initial claims in the litigation were for breach of contract, among
other legal theories, against Schuff for allegedly unpaid work and its alleged
damages, which had increased to $2,433,000. Schuff has denied any liability. In
November 2011, Silver increased its total cost claim for damages to
approximately $4,300,000. Trial in this matter occurred between February 7 and
21, 2012. By Order dated July 16, 2013, The Court issued a decision finding in
favor of Schuff Steel Company on the extra work claim, but found that Schuff
Steel still owed Silver Steel the amount of $112,155 on its contract balance. On
August 5, 2013, Schuff filed a motion to amend the judgment on the grounds that
the Court made an error in adding the amounts paid to Silver and that Silver
had, in fact, been

 

2

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paid in full for the contract balance. A hearing on this matter is scheduled for
September 5, 2013. Schuff also intends to file a motion to recover a portion of
its attorneys’ fees and costs on the grounds that Silver did not exceed the
amount Schuff had submitted an offer of judgment to Silver prior to trial in
this matter. The matter is not yet ripe for appeal.

The Company is self-insured for its employees’ workers’ compensation claims.
Under provisions of the policies, the Company has purchased stop/loss insurance
to mitigate its risks against catastrophic injury-related events. The stop/loss
amount for workers’ compensation is $350,000 per employee per accident. At
December 31, 2012 and 2011, the Company had an accrual of approximately
$2,426,000 and $2,581,000, respectively, for workers’ compensation claims
incurred but not paid or reported and for future claims from injuries existing
at year-end.

The Company had approximately $28,181,000 of performance bonds issued on its
behalf as of December 31, 2012. The performance bonds were required by various
general contractors to guarantee the Company’s performance on projects.

 

3

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Schedule 5.11 (Intellectual Property Rights)

NONE

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Schedule 6.3 (Permitted Liens)

NONE

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Schedule 6.4 (Indebtedness)

NONE

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Schedule 6.5 (Guaranties)

NONE

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Schedule 6.8 (Salaries)

Michael R. Hill, Scott D. Sherman, and Robert N. Waldrep Employment Agreements
dated March 17, 2011.

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Schedule 6.27 (Transactions with Affiliates)

Since its inception, the Company has maintained business relationships and
engaged in certain transactions with the affiliated companies and parties
described below. Since the closing of its initial public offering in July 1997,
all transactions between the Company and its affiliated entities, executive
officers, directors, or significant stockholders have been approved by a
majority of the non-employee directors of the Company. The Company also believes
these transactions were on terms that were no less favorable to the Company than
the Company could have obtained from non-affiliated parties.

The Company leases its fabrication and office facilities located at 420 S. 19th
Avenue, Phoenix, AZ 85009 from 19th Avenue/Buchanan Limited Partnership, an
Arizona limited partnership (the “Schuff Partnership”). The general and limited
partners of the Schuff Partnership are David A. Schuff, Scott A. Schuff, and
certain of their family members. David A. Schuff is a co-founder and the
Chairman of the Board of Directors of the Company, and Scott A. Schuff is a
Director and the President and Chief Executive Officer of the Company. David A.
Schuff and Scott A. Schuff presently are the beneficial owners of approximately
25.2% of the issued and outstanding common stock of the company including
Treasury shares.

The Company has one lease with the Schuff Partnership with a 20 year term and is
subject to increases every five years based on increases in the Consumer Price
Index. All other terms and conditions remain unchanged. Rent expense with the
related party leases during 2012 total $694,000.

* * *

No disclosure in this Disclosure Schedule relating to any possible breach or
violation of any agreement, law or regulation shall be construed as an admission
or indication that any such breach or violation exists or has actually occurred.

Headings have been inserted for convenience of reference only and shall in no
way have the effect of amending or changing the express description of the
corresponding paragraphs as set forth in the Loan Agreement. The Schedule
numbers in this Disclosure Schedule correspond to the section numbers in the
Loan Agreement which are modified by the disclosures; however, any information
disclosed herein under any section number shall be deemed to be disclosed and
incorporated into any other section number under the Loan Agreement where such
disclosure would be reasonably apparent. Furthermore, this Disclosure Schedule
does not purport to disclose any agreements, contracts or instruments that may
be entered into pursuant to the terms of the Loan Agreement.

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SCHEDULE 3.9

Schuff Steel Company, Phoenix, Arizona

Machinery and Equipment Appraisal Report – See attached.

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SCHEDULE 3.9

Schuff International Inc. and Schuff Steel Company, Phoenix, Arizona

Furniture and Equipment Appraisal Report – See attached.

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SCHEDULE 3.9

Schuff Steel Company, Gilbert, Arizona

Machinery and Equipment and Leasehold Improvements Appraisal Report – See
attached.

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SCHEDULE 3.9

Quincy Joist Company, Buckeye, Arizona

None.

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SCHEDULE 3.9

Bannister Steel Company, National City, California (San Diego)

Property and Equipment Appraisal Report – See attached.

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SCHEDULE 3.9

Addison Steel Company, Orlando, FL

Property and Equipment Appraisal Report – See attached.

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SCHEDULE 3.9

Quincy Joist Company, Quincy, Florida

Property and Equipment Appraisal Report – See attached.

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SCHEDULE 3.9

Six Industries, Inc., Houston, Texas