strl123118exhibit1e04






      FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND                 AMENDMENT TO SUBORDINATION AGREEMENT         This FOURTH AMENDMENT TO LOAN         AND SECURITY AGREEMENT AND   AMENDMENT  TO  SUBORDINATION  AGREEMENT           (this  “Amendment”),  dated  as  of   December  11,  2018,  is  entered  into  by  and  among  Sterling  Construction  Company,  Inc.,  a  Delaware corporation (the “Borrower”), Wilmington Trust, National Association, as agent (the  “Agent”) for the lenders identified on Schedule 2 to the Loan Agreement (as defined below) (the  “Lenders”),  the  Lenders,  the  undersigned  creditors  in  their  capacity  as  Creditors  under  the  Subordination Agreement (as defined below) (the “Creditors”) and with respect to Sections 5.2  and  5.3  hereto  only,  the  Persons  listed  on  the  signature  pages hereto  as  Guarantors  (the  “Guarantors” and, together with the Borrower, collectively, the “Loan Parties”).                                    R E C I T A L S          WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders are parties to that   certain Loan and Security Agreement, dated as of April 3, 2017, providing for certain extensions   of  credit  to  Borrower  as  provided  therein  (as  amended  prior  to the date hereof, the “Existing   Loan Agreement”; and the Existing Loan Agreement, as the same is amended hereby and may   be further amended, supplemented or otherwise modified from time to time, including by this   Amendment, is referred to herein as the “Loan Agreement”);           WHEREAS,  the  Agent  and  the  Creditors  are  parties  to  that  certain  Subordination   Agreement, dated as of April 3, 2017, providing for the subordination of the Subordinated Debt   (as  defined  therein)  to  the  Senior  Debt  (as  defined  therein)  (the  “Existing Subordination   Agreement”;  and  the  Existing  Subordination  Agreement,  as  the  same  is  amended  hereby  and   may be further amended, supplemented or otherwise modified from time to time, including by   this Amendment, is referred to herein as the “Subordination Agreement”);           WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the   Existing  Loan  Agreement  and  by  execution  of  this  Amendment,  each  of  the  undersigned  is   agreeing to certain amendments to the Existing Loan Agreement as more fully set forth herein;   and          WHEREAS, the Borrower has requested that the Agent and the Creditors amend certain   provisions of the Existing Subordination Agreement;          NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  agreements,  provisions   and covenants herein contained, the parties hereto agree as follows:           Section 1. Defined Terms.  Each capitalized term used herein but not otherwise defined   herein has the meaning given such term in the Loan Agreement or the Subordination Agreement,   as  applicable.   Unless  otherwise indicated,  all  section  references  in  this  Amendment  refer  to   sections  of  the  Existing  Loan  Agreement  or  the  Existing  Subordination  Agreement,  as   applicable.      KE 58040255.3  





 






      Section 2. Amendment to Loan Agreement.  The Existing Loan Agreement is, subject to  the satisfaction of the conditions precedent set forth in Section 4 hereof, hereby amended as of  the date set forth above to delete the stricken text (indicated textually in the same manner as the  following example: stricken text) and to add the double underlined text (indicated textually in the  same  manner  as  the  following  example: double  underlined  text)  as  set  forth  in  the  Loan  Agreement attached hereto as Annex I.         Section 3. Amendment  to  Subordination  Agreement.   The  Existing  Subordination  Agreement is, subject to the satisfaction of the conditions precedent set forth in Section 4 hereof,  hereby amended as of the date set forth above by inserting the following language at the end of  Section 3 of the Existing Subordination Agreement:         “Notwithstanding anything herein to the contrary, the Loan Parties shall be permitted to       repay any of the Subordinated Debt in accordance with the Loan Agreement.”        Section 4. Effectiveness.   This  Amendment  shall  become  effective  as  of  the  date  on  which the following conditions precedent shall have been satisfied:         4.1   The  Agent  shall  have  received  duly  executed  counterparts  of  this  Amendment  from  Borrower,  each  Guarantor,  each  Lender  required  to  execute such  Amendment  and  each  Creditor, in each case, party hereto.         4.2   The Loan Parties shall pay to the Agent and Lenders, in each case, all costs and  expenses described in Section 5.8 hereof.          4.3   The representations and warranties set forth in Section 5.2 hereof must be true and  correct  in  all  material  respects  (without  duplication  of  materiality  qualifiers)  as  of  the  date  hereof.         Section 5. Miscellaneous.         5.1   Confirmation.  (a) The provisions of the Existing Loan Agreement, as amended  by  this  Amendment,  and  each  other  Loan  Document  shall  remain  in  full  force  and  effect  following  the  effectiveness  of  this  Amendment  and  are  hereby  ratified  and  confirmed  as  so  amended. This Amendment shall not constitute a novation or satisfaction and accord of the Loan  Agreement  and/or  other  Loan  Document,  but  shall  constitute  an  amendment  thereof.  Each  reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words  of  similar  import  shall  mean  and  be  a  reference  to  the  Loan  Agreement  as  amended  by  this  Amendment, and each reference herein or in any other Loan Document to the “Loan Agreement”  shall  mean  and  be  a  reference  to  the  Loan  Agreement  as  amended and  modified  by  this  Amendment; and (b) the provisions  of  the  Existing  Subordination  Agreement,  as  amended  by  this  Amendment,  shall  remain  in  full  force  and  effect  following the effectiveness of this  Amendment and are hereby ratified and confirmed as so amended. This Amendment shall not  constitute  a  novation  or  satisfaction  and  accord  of  the  Subordination  Agreement,  but  shall  constitute  an  amendment  thereof.  Each  reference  in  the  Subordination  Agreement  to  “this  Agreement,”  “hereunder,”  “hereof,”  “herein”  or  words  of  similar  import  shall  mean  and  be  a  reference to the Subordination Agreement as amended by this Amendment, and each reference                                          2  KE 58040255.3  





 






 herein  to  the  “Subordination  Agreement”  shall  mean  and  be  a  reference  to  the  Subordination   Agreement as amended and modified by this Amendment.          5.2   Ratification  and  Affirmation  of  Loan  Party  Obligations;  Representations  and   Warranties of the Loan Parties.  Each of the Loan Parties hereby (a) acknowledges the terms of   and  consents  to  this  Amendment;  (b)  ratifies  and  affirms  its  obligations  under,  and   acknowledges, renews and extends its continued liability under, each Loan Document to which it   is a party and agrees that each Loan Document to which it is a party remains in full force and   effect,  including  as  expressly amended  hereby,  and  the  Loan  Agreement  and  the  other  Loan   Documents  shall  constitute  the  legal,  valid,  binding  and  enforceable  obligations  of  such  Loan   Party party thereto; and (c) represents and warrants to the Lenders that as of the date hereof, after   giving  effect  to  the  terms  of  this  Amendment:   (i)  all  of  the  representations  and  warranties   contained  in  each  Loan  Document  to  which  it  is  a  party  are  true  and  correct  in  all  material   respects  (or,  with  respect  to  representations  and  warranties  qualified  by  materiality,  in  all   respects), except to the extent any such representations and warranties are expressly limited to an   earlier  date,  in  which  case,  such  representations  and  warranties  shall  continue  to  be  true  and   correct as of such specified earlier date and (ii) no Default or Event of Default has occurred and   is continuing or will result from the execution, delivery or performance of this Amendment. Each   Loan Party, as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in   which  such  Loan  Party  grants  liens  or  security  interests  in  its property or otherwise acts as   accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its   payment  and  performance  obligations,  contingent  or  otherwise,  under  each  of  the  Loan   Documents to which it is a party (after giving effect hereto) and (ii) to the extent such Loan Party   granted liens on or security interests in any of its property pursuant to any such Loan Document   as  security  for  or  otherwise  guaranteed  the  Obligations  under  or  with  respect  to  the  Loan   Documents,  ratifies and  reaffirms  such  guarantee  and  grant  of  security  interests  and  liens  and   confirms and agrees that such security interests and liens hereafter secure all of the Obligations   as amended hereby. To the extent any terms and conditions in any of the other Loan Documents   shall  contradict  or  be  in  conflict  with  any  terms  or  conditions  of  the  Loan  Agreement,  after  giving  effect  to  this  Amendment,  such  terms  and  conditions  are hereby  deemed  modified  and  amended accordingly to reflect the terms and conditions of the Loan Agreement as modified and  amended hereby.           5.3   Reaffirmation  of  Guarantor  Obligations.   Each  Guarantor  consents  to  the   execution  and  delivery  by  Borrower  and  the  other  Loan  Parties  of  this  Amendment  and  the   consummation  of  the transactions  described  herein,  and  ratifies and confirms the terms of the   Guaranty to which such Guarantor is a party with respect to the indebtedness now or hereafter   outstanding  under  the  Loan  Agreement  as  amended  hereby  and  all promissory  notes  issued   thereunder.   Each  Guarantor  acknowledges  that,  notwithstanding anything  to  the  contrary   contained herein or in any other document evidencing any indebtedness of Borrower or any other   Loan Party to the Lenders or any other obligation of Borrower or any other Loan Party, or any   actions  now  or  hereafter  taken by  the  Agent  or  the  Lenders  with  respect  to  any  obligation  of   Borrower or any other Loan Party, the Guaranty to which such Guarantor is a party (a) is and   shall continue to be a primary obligation of such Guarantor, (b) is and shall continue to be an   absolute,  unconditional,  continuing  and  irrevocable  guaranty  of  payment  and  (c)  is  and  shall   continue to be in full force and effect in accordance with its terms.  Nothing contained herein to                                           3   KE 58040255.3  





 






 the  contrary  shall  release,  discharge,  modify,  change  or  affect  the  original  liability  of  any   Guarantor under the Guaranty to which such Guarantor is a party.          5.4   Counterparts.  This Amendment may be executed by one or more of the parties   hereto in any number of separate counterparts, and all of such counterparts taken together shall   be deemed to constitute one and the same instrument.  Delivery of this Amendment by facsimile   or electronic transmission in portable document format (.pdf) shall be effective as delivery of a   manually  executed  counterpart  hereof;  provided  that,  upon  request  of  any  party  hereto,  such   facsimile or electronic transmission shall be promptly followed by the original thereof.          5.5   NO  ORAL  AGREEMENT.   THIS  AMENDMENT,  THE  EXISTING  LOAN   AGREEMENT  AND  THE  OTHER  LOAN  DOCUMENTS  EXECUTED  IN  CONNECTION   HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE   PARTIES  AND  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,   CONTEMPORANEOUS  OR  UNWRITTEN  ORAL  AGREEMENTS  OF  THE  PARTIES.    THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.          5.6   GOVERNING  LAW.   THIS  AMENDMENT  (INCLUDING,  BUT  NOT   LIMITED  TO,  THE  VALIDITY  AND  ENFORCEABILITY  HEREOF)  SHALL  BE   GOVERNED  BY,  AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE   STATE OF NEW YORK.          5.7   Effect of This Agreement.  This Amendment shall not by implication or otherwise   limit, impair, constitute a waiver of or otherwise affect the rights and remedies of any Lender or   Agent  under  the  Loan  Agreement  or  any  other  Loan  Document,  and shall  not  alter,  modify,   amend or in any way affect any of the terms, conditions, obligations, covenants or agreements   contained  in  the  Loan  Agreement  or  any  other  Loan  Document,  all  of  which  are  ratified  and   affirmed  in  all  respects  and  shall  continue  in  full  force  and  effect.   Nothing  herein  shall  be   deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other   change of, any of the terms, conditions, obligations, covenants or agreements contained in the   Loan  Agreement  or  any  other  Loan  Document  in  similar  or  different  circumstances.  This   Amendment shall constitute a Loan Document for all purposes of the Loan Agreement.         5.8   Payment of Expenses.  In accordance with Section 11.03 of the Loan Agreement,   the  Borrower  agrees to pay  or reimburse the  Agent  and  the  Lenders for all of their costs and   expenses  incurred  in  connection  with  this  Amendment  and  any  other  documents  prepared  in   connection herewith and the transactions contemplated hereby, including, without limitation, the   reasonable fees, costs and expenses of counsel to each of the Agent and the Lenders.          5.9   Severability.  Any  provision  of  this  Amendment  which  is  prohibited  or   unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such  prohibition  or  unenforceability  without  invalidating  the  remaining  provisions  hereof,  and  any  such  prohibition  or  unenforceability  in  any  jurisdiction  shall not  invalidate  or  render  unenforceable such provision in any other jurisdiction.         5.10  Successors and Assigns.  This Amendment shall be binding upon and inure to the   benefit of the parties hereto and their respective successors and assigns.                                          4   KE 58040255.3  





 






       5.11   The Lenders signatory hereto, which constitute Required Lenders under the Loan   Agreement, hereby direct the Agent to enter into this Amendment and by execution of this  Amendment, each of the Lenders signatory hereto hereby agrees to the amendments to the  Existing Subordination Agreement as more fully set forth herein.                              [SIGNATURE PAGES FOLLOW]                                          5   KE 58040255.3  





 






 





 






 





 






 





 






 





 






 





 






 





 






 





 






 





 






[SIGNATURE PAGE TO AMENDMENT TO LOAN AND SECURITY AGREEMENT AND SUBORDINATION AGREEMENT] 





 






                                                                       Annex I                              Amended Loan Agreement                                                                                                                        A-1  KE 58040255.3  





 






                            Conformed Copy as of ThirdFourth Amendment (April 3December 11, 2018)                                                                               LOAN AND SECURITY AGREEMENT                                     Dated as of April 3, 2017                                            among                           STERLING CONSTRUCTION COMPANY, INC.,                                        as Borrower,                    CERTAIN SUBSIDIARIES OF THE BORROWER PARTY HERETO,                                        as Guarantors,                                 THE LENDERS PARTY HERETO                                             and                         WILMINGTON TRUST, NATIONAL ASSOCIATION,                                          as Agent                           ___________________________________________                                   TCB CAPITAL MARKETS,                                       as Lead Arranger                          ___________________________________________                                                                                                KE 58034100.5  





 






   surviving entity); (ii) any Loan Party (other than Borrower) or Subsidiary of the Borrower (other than Tealstone  Residential)  may  Transfer  any  or  all  of  its  assets  to  Borrower  or  any  Guarantor  (upon  voluntary  liquidation  or  otherwise) and any Subsidiary that is not a Loan Party may Transfer all or any of its assets to any other Subsidiary  that is not a Loan Party; (iii) Transfers permitted by Section 7.02 may be made; and (iv) any Permitted Investment  may be structured as a merger, consolidation or amalgamation.   Section 7.04. Restricted Payments.  Without the prior written consent of the Required Lenders, no Loan Party  shall,  nor  shall  any  of  such  Loan  Parties’  Subsidiaries  (other  than  Affiliated  Entities)  (each  of  the  following,  a  “Restricted Payment”), (i) pay any dividends or make any distributions on its Equity Securities; (ii) purchase, redeem,  retire, defease or otherwise acquire for value any of its Equity Securities; (iii) return any capital to any holder of its  Equity Securities as such; (iv) make any distribution of assets, Equity Securities, obligations or securities to any holder  of its Equity Securities as such; or (v) set apart any sum for any such purpose; provided, however, that (A) Borrower  may declare dividends payable solely in common stock, (B) any Subsidiary may make Restricted Payments to the  Borrower or any Guarantor that is its respective parent entity; and any Subsidiary that is not a Loan Party may make  Restricted Payments to any other Subsidiary that is not a Loan Party, and (C) with respect to the restrictions described  in subclause (ii) above, with respect to Borrower, repurchases pursuant to the terms of employee stock purchase plans,  employee restricted stock agreements or similar arrangements either (i) by the cancellation of Indebtedness or (ii) in  an  aggregate  amount  not  to  exceed  One  Hundred  Thousand  Dollars  ($100,000)).)  and  (D)  with  respect  to  the  restrictions described in subclause (ii) above, with respect to Borrower, on or prior to June 30, 2020, repurchases of  up to an aggregate of two million shares of Borrower’s outstanding common stock pursuant to the Borrower’s stock  repurchase program adopted by the board of directors of Borrower on or about November 2, 2018.   Section 7.05. Indebtedness; Maximum Recourse Obligations.  The Loan Parties and their Subsidiaries (other  than Affiliated Entities and Project Specific JVs) shall not create, incur, assume or suffer to exist (i) any Indebtedness,  other than Permitted Indebtedness nor (ii) any obligations for or on behalf of any of their respective non-wholly-owned  or non-controlling Subsidiaries (including, for the avoidance of doubt, joint ventures (other than Project Specific JVs),  pursuant to which the holder of such obligations has recourse against any Loan Parties.   Section 7.06. Investments.   The  Loan  Parties  and  its  Subsidiaries  (other  than  Affiliated  Entities  and  Project  Specific JVs) shall not directly or indirectly acquire or own, or make any Investment in or to any Person other than  Permitted Investments; or suffer or permit any Subsidiary (other than an Affiliated Entity or a Project Specific JV) to  be a party to, or be bound by, an agreement (other than a Loan Document) that restricts such Subsidiary from paying  dividends or otherwise distributing property to Borrower or any other Loan Party.   Section 7.07. Transactions  with  Affiliates.   The  Loan  Parties  and  their  Subsidiaries  (other  than  Affiliated  Entities) shall not  directly or indirectly enter into or permit to exist any transaction with any Affiliate, except for  transactions that are in the ordinary course of such Person’s business, upon fair and reasonable terms that are no less  favorable to such Loan Party, or such Subsidiary, than would be obtained in an arms’ length transaction with a non- affiliated Person; provided that the foregoing restriction shall not apply to (i) any transaction between such Loan Party  or any of its Subsidiaries (other than Affiliated Entities) or between any Subsidiaries (other than Affiliated Entities)  that is not otherwise prohibited by this Loan Agreement and (ii) compensation arrangements and benefit plans for  officers and other employees of the Loan Parties and their respective Subsidiaries (other than Affiliated Entities)  entered  into  or  maintained  in  the  ordinary  course  of  business  and  consistent  with  such  Loan  Parties’  and  such  Subsidiaries’ historical practices, which are, in each case, approved by such Loan Parties’ or such Subsidiaries’ board  of directors (or equivalent governing body).    Section 7.08. Indebtedness Payments.  The Loan Parties and its Subsidiaries (other than Affiliated Entities and  Project Specific JVs) shall not (i) prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the  scheduled  repayment  thereof  any  Indebtedness  for  borrowed  money,  including  any  Subordinated  Debt or(other  than the Closing Date Seller Notes (other than , amounts due under this Loan Agreement or permitted to be prepaid  under this Loan Agreement or any lease obligations permitted to be incurred under this Loan Agreement), (ii) amend,  modify or otherwise change the terms of any Indebtedness (other than the Loans) or Capital Lease Obligations so as  to accelerate the scheduled repayment thereof, (iii) repay any Indebtedness to officers, directors or shareholders or  (iv) make any payment of the Closing Date Earn-Out unless at the time of, and after giving effect to, such payment,  no Default or Event of Default has occurred and is continuing and the Borrower is in compliance on a pro forma basis                                             52  KE 58034100.15