Document:

strl033118exhibit1964

             SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT         This  SECOND  AMENDMENT  TO  LOAN  AND  SECURITY  AGREEMENT          (this  “Amendment”), dated as of January 9, 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”) and the Lenders, and with respect to Sections 4.2  and  4.3  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 and the Waiver (as defined below), is referred to herein as the “Loan Agreement”);   and          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;           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.  Unless otherwise indicated, all   section references in this Amendment refer to sections of the Existing Loan Agreement.           Section 2. Amendment to Loan Agreement.  The Existing Loan Agreement is, subject to   the satisfaction of the conditions precedent set forth in Section 3 hereof, hereby amended as of   the date set forth above as follows:          2.1   The  Existing  Loan  Agreement  is  hereby  amended  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 pages of the Loan Agreement attached hereto as Annex I.          2.2   Each  of  Schedule  9(a),  Schedule 9(b)  and  Schedule  9(c)  of  the  Perfection   Certificate is hereby amended, restated and updated in its entirety to read as set forth in Annex II   and Annex III, respectively, attached hereto.     KE 51033241.3  

 

         Section 3. Effectiveness.   This  Amendment  shall  become  effective  as  of  the  date  on  which the following conditions precedent shall have been satisfied:         3.1   The  Agent  shall  have  received  duly  executed  counterparts  of  this  Amendment  from Borrower, each Guarantor and each Lender required to execute such Amendment, in each  case, party hereto.         3.2   The Agent shall have received the Waiver No. 1 to Loan and Security Agreement,  effective as of December 30, 2017 (the “Waiver”), duly executed by Borrower, each Guarantor,  Agent, and each Lender required to execute such Waiver.         3.3   The Loan Parties shall pay to the Agent and Lenders, in each case, all costs and  expenses described in Section 4.8 hereof.          3.4   The representations and warranties set forth in Section 4.2 hereof must be true and  correct  in  all  material  respects  (without  duplication  of  materiality  qualifiers)  as  of  the  date  hereof.         Section 4. Miscellaneous.         4.1   Confirmation.  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.        4.2   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                                         2  KE 51033241.3  

 

     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.           4.3   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   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.          4.4   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.          4.5   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.          4.6   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.                                          3   KE 51033241.3  

 

           4.7   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.         4.8   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.          4.9   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.         4.10  Successors and Assigns.  This Amendment shall be binding upon and inure to the   benefit of the parties hereto and their respective successors and assigns.                               [SIGNATURE PAGES FOLLOW]                                          4   KE 51033241.3  

 

 

 

 

 

 

 

 

 

 

 

                                                                          Annex I                              Amended Loan Agreement                                         A-1  KE 51033241.3  

 

          “Event of Default” shall have the meaning set forth in Article 9 of this Loan Agreement.          “Event of Loss” shall mean the theft, loss, physical destruction or damage, seizure, taking or similar event  with respect to any property or assets owned by any Loan Party or any of its Subsidiaries which results in the receipt  by any Loan Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason  thereof, whether by a third party or any Governmental Authority.          “Excluded Accounts” shall mean those deposit or other bank accounts that are used (a) solely by the Loan  Parties to fund payroll, (b) to cash collateralize letter of credit obligations in the aggregate amount outstanding at any  time not to exceed $5,000,000 and (c) solely as a cash management account for Project Specific JVs to fund the initial  capitalization of project costs or the ongoing operational costs of the project for which such Project Specific JV was  created or formed.          “Excluded Property” means the “Collateral Security” as defined in each of those certain Deeds of Trust,  Security Agreements, Assignments of Rents and Financing Statements, dated as of March 11, 2016, granted by Texas  Sterling Construction Co. in favor of Christopher B. Welsh, Trustee, for the benefit of RHB LLC and Myers for  property commonly known as (a) 3475 High River Rd., Fort Worth, Texas 76115, (b) 20800 Fernbush Lane, Houston,  Texas 77073, (c) St. Hedwig Rd., San Antonio, Texas 78220 and (d) 5638 FM 1346, San Antonio, Texas 78220.          “Excess Cash Flow” shall mean for any fiscal quarter (or other period specified herein) of the Borrower, the  excess, if any, of (a) the sum of (i) Consolidated EBITDA for such period plus (ii) proceeds received by the Loan  Parties or any of its Subsidiaries from Transfers (except, in each case and without duplication, to the extent any such  proceeds (A) arise from the Permitted Dispositions and/or the NTTA Matter and are used to prepay the Loans pursuant  to  Section  2.02(d)(i)(B)  or  (B)  are  used  to  prepay  the  Loans,  are  reinvested  or  otherwise  remain  available  to  be  reinvested pursuant to Section 2.02(d)(ii)(C)), minus, (b) without duplication (and only to the extent added back or  not deducted in determining Consolidated EBITDA for such period):          (i)   Consolidated  Interest  Expense  (excluding  any  Consolidated  Interest  Expense  associated  with               intercompany Indebtedness) paid in cash by the Loan Parties or any of its Subsidiaries (other than               interest income), minus           (ii)  the aggregate amount actually paid by the Loan Parties or any of its Subsidiaries in cash before the               date the Excess Cash Flow payment for such period is actually made (provided that any amount so               deducted  in  respect  of  any  period  is  not  also  deducted  in  respect  of  any  subsequent  period)  on               account of taxes accrued in respect of such period based on income of the Loan Parties or any of its               Subsidiaries (other than Tax refunds, credits and benefits), minus          (iii)  the aggregate amount actually paid by the Loan Parties or any of its Subsidiaries in cash before the               date the Excess Cash Flow payment for such period is actually made (provided that any amount so               deducted  in  respect  of  any  period  is  not  also  deducted  in  respect  of  any  subsequent  period)  on               account of Consolidated Capital Expenditures to the extent paid in cash (but excluding the principal               amount of Loans or other Indebtedness incurred in connection with such expenditures, any such               expenditures  financed  with  the  proceeds  of  any  issuance  of  Equity  Securities  or  any  amount               reinvested pursuant to Section 2.02(d)(ii)(C)) and any such expenditures financed with insurance               proceeds related to any Event of Loss), minus           (iv)  any extraordinary, unusual, non-recurring or non-operating cash loss or expense paid or incurred by               the Loan Parties or any of its Subsidiaries during such period, minus          (v)   any internally generated cash paid by the Loan Parties or any of its Subsidiaries in connection with               the Closing Date Acquisition, the Transactions and/or any other acquisition permitted hereunder;               and                                               8  KE 46048467.851041480.3  

 

          “Interest Rate Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest  rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (a)  for  the  purpose  of  hedging  the  interest  rate  exposure  associated  with  the  Loan  Parties’  and  their  respective  Subsidiaries’ operations, and (b) not for speculative purposes.          “Investment” shall mean the purchase, acquisition or beneficial ownership of any Equity Securities, or any  obligations, Indebtedness or other interest  in, or all or substantially all of the assets of, any Person, or the making of  any advance, loan, extension of credit or capital contribution to, or any other investment in, any Person.          “IRC”  shall  mean  the  Internal  Revenue  Code  of  1986,  as  in  effect  from  time  to  time,  and  regulations  promulgated thereunder.          “Joinder Requirements” shall have the meaning given such term in Section 6.10.          “Landlord Waiver” shall mean the Landlord Waiver substantially in the form attached as Exhibit C hereto.          “Lending Office” shall have the meaning given such term in the definition of Excluded Taxes.          “LIBOR Rate” shall mean for any Interest Period, (i) the rate per annum appearing on the page of the Reuters  Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited  (such page currently being the LIBOR01 page) (the “LIBOR Rate”) for deposits with a term equivalent to such Interest  Period in Dollars, determined as of approximately 11:00 a.m. (London, England time), two Business Days prior to the  commencement of such Interest Period, or (ii) in the event the rate referenced in the preceding clause (i) does not  appear on such page or service or if such page or service shall cease to be available, the rate determined by the Agent  (acting at the direction of the Required Lenders) or the Required Lenders to be the offered rate on such other page or  other service which displays the LIBO Rate for deposits with a term equivalent to such Interest Period in Dollars,  determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the commencement  of such Interest Period; provided, that, the LIBOR Rate shall not be less than 1.00% per annum.          “Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge  or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest  of  a  vendor  or  lessor  under  a  conditional  sale  agreement,  capital  lease  or  other  title  retention  agreement,  or  any  agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the  Code or comparable law of any jurisdiction.          “Loan”, “Loans” or “Term Loan” or “Term Loans” shall mean the loans now or hereafter made by or on  behalf of any Lender or by Agent for the account of any Lender pursuant to this Loan Agreement as set forth in Article  2 hereof.          “Loan  Agreement”  shall  mean  this  Loan  and  Security  Agreement,  as  amended,  restated,  amended  and  restated, modified or supplemented from time to time.          “Loan Documents” shall mean, collectively, the Loan Agreement, the Guaranty, the Pledge Agreement, the  Notes, the Intellectual Property Security Agreements, the Perfection Certificate, the Landlord Waivers, the Mortgages,  the Agent Fee Letter, the Fee Letter, the Collateral Agency Agreement, any Subordination Agreement, and the other  documents or agreements executed in connection herewith or therewith including any other collateral or security  document or agreement executed by a Loan Party in favor of Agent, for the benefit of the Agent and the Lenders, in  each case, as amended, restated, amended and restated, modified or supplemented from time to time.          “Loan Party” shall have the meaning given such term in the recitals hereof.          “Loan Party Registered Intellectual Property” shall have the meaning given such term in Section 5.15.          “Loan Party Intellectual Property” shall have the meaning given such term in Section 5.15.                                              12  KE 46048467.851041480.3  

 

          “Loan Party Intellectual Property Licenses” shall have the meaning given such term in Section 5.15.          “Loan Percentage” shall mean, with respect to a Lender, the percentage of each Loan specified opposite  such Lender’s name on Schedule 2 hereto.          “LTIP” shall mean the Borrower’s 2017 Incentive Compensation Plan, as approved by the stockholders of  the Borrower, as amended, restated or otherwise modified from time to time so long as such amendment, restatement  or  modification  is  approved  by  the  requisite  vote  of  the  stockholders  of  the  Borrower,  to  the  extent  required  by  applicable law or the organizational documents of the Borrower.          “Make-Whole Amount” shall mean, on any date of prepayment of all or any portion of a Loanthe Loans, an  amount in cash equal to (a) the present value, as determined by the Agent (acting at the direction of the Required  Lenders) or the Required Lenders in consultation with the Borrower, of all required interest payments (calculated at  the Default Rate if such Make-Whole Amount is due as a result of an acceleration of the Loans) due on the portion of  the Loans that are prepaid from the date of prepayment through and including the second anniversary of the Closing  Date plus (b) the prepayment premium that would be due under Section 2.02(e) if such prepayment were made on the  first date after the second anniversary of the Closing Date, in each case, discounted to the date of prepayment on a  quarterly basis (assuming a 360-day year and actual days elapsed) at a rate equal to the sum of the Treasury Rate plus  0.50%.          “Material  Adverse  Effect”  shall mean  a  material  adverse  effect on (i) the business,  assets, performance,  operations or financial or other condition of the Loan Parties and their respective Subsidiaries, taken as a whole; (ii) the  ability of the Loan Parties and their respective Subsidiaries to pay or perform the Obligations in accordance with the  terms of this Loan Agreement and the other Transaction Documents and to avoid an Event of Default under any  Transaction Document; (iii)  the legality, validity, enforceability, perfection or priority of the Liens of Agent upon the  Collateral; (iv) the Collateral or its value; or (v) the rights and remedies of any Lender under this Loan Agreement and  the other Transaction Documents.          “Material Indebtedness” shall mean, with respect to any Person, Indebtedness (other than the Obligations)  of such Person in an aggregate principal amount exceeding $5,000,000.          “Material Titled Assets” shall have the meaning given such term in Section 6.08(a).          “Minority Subsidiary” shall mean any entity in which a Person, directly or indirectly, beneficially owns 50%  or less of the Equity Securities.          “Mortgages” shall mean all mortgages, deeds of trust, or deeds to secure debt, as applicable, delivered with  respect to the Real Property substantially in the form of Exhibit M (with such changes as are reasonably approved by  the Required Lenders to account for local law matters), as they may be amended, supplemented or otherwise modified  from time to time.          “Multiemployer Plan” shall mean any employee benefit plan of the type described in Section 4001(a)(3) of  ERISA and subject to Title IV of ERISA to which a Loan Party or any ERISA Affiliate makes or is obligated to make  contributions, or with respect to which any Loan Party or ERISA Affiliate has or could reasonably be expected to  have any liability or obligation.           “Myers” shall have the meaning given such term in the definition of “Affiliated Entity.”          “Negotiable Collateral” shall mean letters of credit, letter-of-credit rights, instruments, promissory notes,  drafts and documents (as each such term is defined in the Code).          “Net Cash Proceeds” shall mean (a) in connection with any Transfer or Event of Loss, the proceeds thereof  in  the  form  of  cash  and  cash  equivalents  (including  any  such  proceeds  received  by  way  of  deferred  payment  of  principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only  as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be                                             13  KE 46048467.851041480.3  

 

   compensation and other types of social security (excluding Liens arising under ERISA); (xiv) easements, rights of  way, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any property that do not  secure any monetary obligations and which in the aggregate do not materially impair the use of such property for the  purposes of which such property is held or materially impair the value of such property subject thereto; (xv) Liens  securing the Indebtedness described in clause (xiii) of the definition of Permitted Indebtedness; and (xvi) any other  Liens approved by the Required Lenders.           “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a  joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a  Governmental Authority.          “Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA maintained for  employees of a Loan Party or any such Plan to which a Loan Party is required to contribute or has or could reasonably  be expected to have any liability or obligation (other than a Multiemployer Plan).          “Pledge Agreement” shall mean that certain Pledge Agreement in favor of the Agent, for the benefit of the  Agent and the Lenders, executed by the Loan Parties party thereto, in form and substance reasonably satisfactory to  the Lenders, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.          “Pledged Companies”  shall mean  each  Person listed on Schedule  9(a) of  the  Perfection  Certificate as  a  “Pledged Company” or “Pledged Issuer”, together with each other Person, all or a portion of whose Equity Securities  are acquired or otherwise owned by a Loan Party after the Closing Date.  As of the Closing Date, Pledged Companies  shall not include (y) RHB LLC, a Nevada limited liability company, or (z) Sterling Hawaii Asphalt, LLC, a Hawaii  limited liability company; provided, that if at any time either RHB LLC and/or Sterling Hawaii Asphalt, LLC becomes,  or is required to become, a Required Guarantor Party or the Borrower is otherwise able to cause the Equity Securities  in such entity to be pledged, in each case, pursuant to the terms of the Loan Documents, such entity shall automatically  and immediately be included in the term “Pledged Companies.”          “Pledged Operating Agreements” shall mean all of each Loan Party’s rights, powers, and remedies under  the  limited  liability  company  operating  agreements  of  each  of  the  Pledged  Companies  that  are  limited  liability  companies.          “Pledged Partnership Agreements” shall mean all of each Loan Party’s rights, powers, and remedies under  the partnership agreements of each of the Pledged Companies that are partnerships.          “Pledged Shares” shall have the meaning given such term in the Pledge Agreement.          “Prepayment Premium” shall mean :                 (i)    in the case of prepayments made pursuant to Section 2.02(d) (other than pursuant to Section         2.02(d)(i)(B) or Section 2.02(d)(iii)),), which are covered in subclauses (ii) and (iii) below, respectively), (a)         with respect to a prepayment of all or any portion of a Loan occurring on or prior to the second anniversary         of the Closing Date, the Make-Whole Amount, (b) with respect to a prepayment of all or any portion of a         Loan occurring after the second anniversary of the Closing Date but on or prior to the third anniversary of         the Closing Date, 5.00% of the aggregate principal amount (including any interest, fees or amounts added to         principal) of the Loans held by such Lender that is being prepaid, (c) with respect to a prepayment of all or         any portion of a Loan occurring after the third anniversary of the Closing Date but on or prior to the fourth         anniversary of the Closing Date, 2.50% of the aggregate principal amount (including any interest, fees or         amounts added to principal) of the Loans held by such Lender that is being prepaid, or (d) with respect to a         prepayment of all or any portion of a Loan after the fourth anniversary of the Closing Date and thereafter,         0.00% of the aggregate principal amount of the Loans held by such Lender that is being prepaid,                 (ii)   in the case of prepayments made pursuant to Section 2.02(d)(i),)(B) or in accordance with         clause (vi) of Schedule 3 hereto, 1.00% of the aggregate principal amount (including any interest, fees or         amounts added to principal) of the Loans held by such Lender that is being prepaid, or                                              18  KE 46048467.851041480.3  

 

                (iii)  (a)  in  the  case  of  prepayments  made  pursuant  to  Section  2.02(d)(iii)(A),  1.00%  of  the         aggregate principal amount (including any interest, fees or amounts added to principal) of the Loans held by         such Lender that is being prepaid, or (b) in the case of prepayments made pursuant to Section 2.02(d)(iii)(C)         or in accordance with clause (vi) of Schedule 3 hereto,), 3.00% of the aggregate principal amount (including         any interest, fees or amounts added to principal) of the Loans held by such Lender that is being prepaid.          “Project Specific JVs” shall mean any project-specific joint ventures, whether created through a contractual  arrangement or the ownership of Equity Securities, by a Loan Party or any of its Subsidiaries, including any such  project-specific joint ventures described in the Borrower’s SEC filings pursuant to which a partner of such Project  Specific JV acts as a sponsor or manager but may not hold Equity Securities in such Project Specific JV.          “PTO” shall mean the United States Patent and Trademark Office.          “Qualified ECP Guarantor” shall mean, in respect of any Swap Agreement, each Guarantor that has total  assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes  effective with respect to such Swap Agreement or such other person as constitutes an “eligible contract participant”  under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to  qualify as an “eligible contract participant” with respect to such Swap Agreement at such time by entering into a  keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.           “Real Property” shall mean all right, title and interests in and to a parcel of real property, land, together with  all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interest  appurtenant  thereto,  owned,  leased  or  operated  by  Borrower  or  its  Subsidiaries,  including  such  described  on  the  Perfection Certificate.          “Recipient” shall mean (a) the Agent and (b) any Lender.          “Record” shall mean information that is inscribed on a tangible medium or which is stored in an electronic  or other medium and is retrievable in perceivable form.          “Registration Rights Agreement” shall mean the Registration Rights Agreement, dated as of the Closing  Date, by and among the Borrower and the holders of the Warrant(s), as amended, restated, amended and restated,  modified or supplemented from time to time.          “Required Guarantor Party” shall have the meaning given such term in Section 6.10.          “Required Lenders” shall mean, at any time, Lenders having Term Loans representing more than 50% of the  aggregate outstanding Term Loans at such time.          “Requirement of Law” applicable to any Person shall mean (i) any Governmental Rule applicable to such  Person, (ii) any license, permit, approval or other authorization granted by any Governmental Authority to or for the  benefit of such Person and (iii) any judgment, decision or determination of any Governmental Authority or arbitrator,  in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its  property is subject.          “Responsible Officer” shall mean the chief executive officer, president, vice president, chief financial officer,  treasurer,  controller  or  comptroller  or  other  similar  officer  of  the  Loan  Parties  or,  solely  where  applicable,  their  respective  Subsidiaries,  but  in  any  event,  with  respect  to  financial  matters,  the  chief  financial  officer,  treasurer,  controller, comptroller, vice president finance or other similar officer of such Loan Parties or solely, where applicable,  their respective Subsidiaries.          “Restricted Payment” shall have the meaning given such term in Section 7.04.          “RHB Inc.” shall have the meaning given such term in the definition of “Affiliated Entity.”                                              19  KE 46048467.851041480.3  

 

                different Interest Period, the same Interest Period shall be used to determine the LIBOR Rate for the               immediately succeeding Interest Period.  If the Borrower provides written notice electing a new               Interest Period, then such new Interest Period and the corresponding LIBOR Rate shall be used.          (c)   Payments of Principal.  The principal amount of the Term Loan shall be repaid in full in cash on the               Termination Date.          (d)   Prepayment.                  (i)    Voluntary Prepayment with Proceeds from.                       (A)     the                        (A)    General.  Upon ten (10) Business Days’ prior written notice to Agent and the                             Lenders,  Borrower  may,  at  its  option, prepay all  or  any part of  the remaining                             unpaid payments on the Loans, in principal amounts not less than $1,000,000 and                             in $1,000,000 increments in excess thereof, at a prepayment price equal to (A) the                             principal amount of the Loans being prepaid, plus (B) accrued and unpaid interest                             thereon  through  and  including  the  date  of  such  prepayment,  plus  (C)  the                             applicable Prepayment Premium, plus (D) any other amounts then due to Agent                             and Lenders.  All repayments or prepayments under this Section 2.02(d)(i)(A)                             shall be subject to any Prepayment Premium set forth in Section 2.02(e), but shall                             otherwise  be  prepaid  without  premium  or  penalty.   Interest  on  the  principal                             amount prepaid shall be payable on any date that a repayment is made hereunder                             through the date of repayment.                       (B)    Permitted Dispositions and/or NTTA Matter.  Upon ten (10) Business Days’ prior                             written notice to Agent  and the Lenders,  Borrower  may,  at  its  option, use  the                             proceeds  arising  from  the  Permitted  Dispositions  and/or  the  NTTA  Matter  to                             make one or more prepayments on the Loans, in principal amounts not less than                             $1,000,000 and in $1,000,000 increments in excess thereof, up to an amount not                             to exceed $30,000,000 in the aggregate, at a prepayment price equal to (A) the                             principal amount of the Loans being prepaid, plus (B) accrued and unpaid interest                             thereon  through  and  including  the  date  of  such  prepayment,  plus  (C)  the                             applicable Prepayment Premium, plus (D) any other amounts then due to Agent                             and Lenders.  The notice of prepayment shall state the amount of principal to be                             prepaid  under  the  Loan.  All  repayments  or  prepayments  under  this  Section                             2.02(d)(i)(B) shall be subject to any Prepayment Premium set forth in Section                             2.02(e), but shall otherwise be prepaid without premium or penalty.  Interest on                             the principal amount prepaid shall be payable on any date that a repayment is                             made hereunder through the date of repayment.                       (C)    Voluntary Prepayment Notice.  The Borrower shall deliver to the Agent and the                             Lenders notice of each prepayment of Loans in whole or in part pursuant to this                             Section 2.02(d)(i)(C) not less than ten (10) Business Days (or such shorter period                             agreed to by the Required Lenders) prior to the date such prepayment shall be                             made.  Each notice of prepayment shall specify the proposed prepayment date,                             the  principal  amount  of  each  Loan  (or  portion  thereof)  to  be  prepaid  and  the                             calculation  of  the  total  amount  of  such  prepayment  proposed  to  be  made  in                             accordance  with  this  Section  2.02(d)(i)  and  indicate  whether  such  voluntary                             prepayment  is  being  made  pursuant  to  Section  2.02(d)(i)(A)  or  Section                             2.02(d)(i)(B).                       (D)    Officer’s Certificate.  The Borrower shall deliver to the Agent and the Lenders, at                             the time of each prepayment required under this Section 2.02(d)(i), a certificate                             signed by a Responsible Officer of the Borrower setting forth in reasonable detail                                             23  KE 46048467.851041480.3  

 

                              the calculation of the amount of such prepayment (and the Agent shall promptly                             provide the same to each Lender).                       (E)    Prepayment  Premium.   All  prepayments  under  this  Section  2.02(d)(i)  shall be                             subject  to  any  Prepayment  Premium  set  forth  in  Section  2.02(e)  and  be                             accompanied  by  accrued  and  unpaid  interest  on  the  principal  amount  prepaid                             through the date of prepayment.                (ii)   Mandatory Prepayment. To the extent that, immediately after the prepayment of the Loans,                      the  applicable  Net  Cash  Proceeds  are  not  needed  by  the  Borrower  to  be  in  pro  forma                      compliance with Section 6.17(b) during the immediately succeeding four fiscal quarters                      following  the  required  date  of  prepayment  arising  under  this  Section  2.02(d)(ii)  with                      respect to the applicable event(s) described below:                       (A)    Debt Issuances.  Within one (1) Business Day of receipt by any Loan Party or any                             of  its  Subsidiaries  (other  than  Project  Specific  JVs)  of  proceeds  from  any                             Indebtedness other than Permitted Indebtedness, the Borrower shall prepay the                             Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of such                             Indebtedness received by the Loan Parties or any of its Subsidiaries (except that                             with respect to any Affiliated Entities, only to the extent of the Net Cash Proceeds                             received by the Loan Parties).                       (B)    Issuances of Equity Securities.  Within one (1) Business Day of receipt by any                             Loan  Party  or  any  of  their  Subsidiaries  (other  than  Project  Specific  JVs)  of                             proceeds from any issuance of any Equity Securities (other than (I) an issuance of                             Equity Securities the proceeds of which shall be used substantially concurrently                             with  the  consummation  of,  and  to  finance,  a  Permitted  Acquisition,  or  (II)                             distributions by a Loan Party, a Subsidiary of a Loan Party, an Affiliated Entity                             or a Minority Subsidiary to a Loan Party or a Subsidiary of a Loan Party that is a                             Guarantor), the Borrower shall prepay the Loans in an aggregate amount equal to                             50% of the Net Cash Proceeds of such issuance of Equity Securities received by                             the  Loan  Parties  or  any  of  its  Subsidiaries  (except  that  with  respect  to  any                             Affiliated Entities or Minority Subsidiaries, only to the extent of the Net Cash                             Proceeds received by the Loan Parties).                       (C)    Transfers or Events of Loss.  To the extentWithin five (5) Business Days of the                             date of receipt by any Loan Party or any of its Subsidiaries (other than Project                             Specific JVs) of any Net Cash Proceeds received in connection with any Transfer                             (other than Transfers permitted by Sections 7.02(i) through (iii)) or any Event of                             Loss are received by a Loan Party or any of its Subsidiaries (other than Project                             Specific JVs) and are not used to purchase, replace, substitute, restore or acquire                             fixed or capital assets of the Loan Parties or any of its Subsidiaries (other than                             Project Specific JVs) within 180 days of the receipt of such Net Cash Proceeds,                             on  the  181st  day  occurring  after  the  receipt  of  such  Net  Cash  Proceeds,  the,                             Borrower shall prepay the Loans in an aggregate amount equal to 100% of such                             Net Cash Proceeds received by the Loan Parties or any of its Subsidiaries (except                             that with respect to any Affiliated Entities, only to the extent of the Net Cash                             Proceeds received by the Loan Parties); provided that,, however, that with respect                             to any such Net Cash Proceeds received by a Loan Party or any of its Subsidiaries                             (other than Project Specific JVs), all or any portion of such Net Cash Proceeds                             may be used to purchase, replace, substitute, restore or acquire fixed or capital                             assets of the Loan Parties or any of its Subsidiaries (other than Project Specific                             JVs) within 180 days  of  the  receipt  of  such  Net  Cash  Proceeds,  subject  to  an                             aggregate cap of Ten Million Dollars ($10,000,000) per fiscal year for any such                             Net  Cash  Proceeds  that  are  being  reinvested  in  accordance  with  this  proviso;                             provided further that, (I) any such Net Cash Proceeds not so applied in accordance                                             24  KE 46048467.851041480.3  

 

                              with the immediately preceding proviso or (II) after the occurrence and during the                             continuance of an Event of Default, any Net Cash Proceeds received in connection                             with any such Transfer or any such Event of Loss, in each case, shall be promptly                             used to prepay the Loans (such prepayment to be applied as set forth in Section                             2.02(d)(ii)(E) below) and the Loan Parties and their respective Subsidiaries (other                             than Project Specific JVs) shall not have, or no longer have, the right to reinvest                             such Net Cash Proceeds; provided, further that, any Net Cash Proceeds subject to                             reinvestment in accordance with the terms of this Section 2.02(d)(ii)(C) shall be                             subject to an aggregate cap of Ten Million Dollars ($10,000,000) per fiscal year.                       (D)    Extraordinary Receipts.  Within one (1) Business Day of the date of receipt by a                             Loan  Party  or  any of  its  Subsidiaries  (other  than Project  Specific  JVs)  of  any                             Extraordinary  Receipts  in  excess  of  One  Million  Dollars  ($1,000,000)  in  the                             aggregate during the term of this Loan Agreement, Borrower shall prepay the                             outstanding  principal  amount  of  the  Obligations  in  accordance  with  Section                             2.02(d)(ii)(E)  in  an  amount  equal  to  100%  of  such  Extraordinary  Receipts                             received by the Loan Parties or any of its Subsidiaries (except that with respect to                             any Affiliated Entities, only to the extent of the Net Cash Proceeds received by                             the  Loan  Parties),  net  of  any  reasonable  expenses  incurred  in  collecting  such                             Extraordinary Receipts.                       (E)    Application of Mandatory Prepayments.  Amounts to be applied in connection                             with prepayments  made  pursuant  to  Section 2.02(d)(ii) shall be  applied  to  the                             prepayment  of  the  Term  Loans  in  accordance  with  Section  2.04(d).   Each                             prepayment of the Loans under this Section 2.02(d)(ii) shall be accompanied by                             accrued and unpaid interest to the date of such prepayment on the amount prepaid.                       (F)    Mandatory Prepayment Notice.  The Borrower shall deliver to the Agent and the                             Lenders  notice  of  each  prepayment  of  Loans  in  whole  or  in  part  pursuant  to                             Section 2.02(d)(ii)(F) not less than ten (10) Business Days (or such shorter period                             agreed to by the Required Lenders) prior to the date such prepayment shall be                             made.  Each notice of prepayment shall specify the proposed prepayment date,                             the  principal  amount  of  each  Loan  (or  portion  thereof)  to  be  prepaid  and  the                             calculation  of  the  total  amount  of  such  prepayment  proposed  to  be  made  in                             accordance with this Section 2.02(d)(ii) and indicate whether such prepayment is                             being  made  pursuant  to  Section  2.02(d)(ii)(A),  Section  2.02(d)(ii)(B),  Section                             2.02(d)(ii)(C), or Section 2.02(d)(ii)(D).                       (G)    Officer’s Certificate.  The Borrower shall deliver to the Agent and the Lenders, at                             the time of each prepayment required under this Section 2.02(d)(ii), a certificate                             signed by a Responsible Officer of the Borrower setting forth in reasonable detail                             the calculation of the amount of such prepayment (and the Agent shall promptly                             provide the same to each Lender).                       (H)    Prepayment Premium.  All prepayments under this Section 2.02(d)(ii) shall be                             subject  to  any  Prepayment  Premium  set  forth  in  Section  2.02(e)  and  be                             accompanied  by  accrued  and  unpaid  interest  on  the  principal  amount  prepaid                             through the date of prepayment.                (iii)  Offer to Prepay Loans with Excess Cash Flow.                       (A)    Excess Cash Flow.  Within two (2) Business Days after the date on which the                             Borrower files (or, if earlier, is required to file) its Form 10-Q or Form 10-K, as                             applicable,  with  the  SEC,  relating  to  the  immediately  preceding  fiscal  quarter                             (such date, the “ECF Prepayment Offer Date”), commencing with the first full                             fiscal quarter ending after the Closing Date and for every fiscal quarter thereafter,                                             25  KE 46048467.851041480.3  

 

                by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws               relating to or limiting creditors’ rights generally.  All action by any Loan Party reasonably necessary               to perfect such security interest on each item of Intellectual Property constituting Collateral has been               duly taken.          (f)   No Loan Party Intellectual Property License requires any consent of any other Person that has not               been obtained or waived in order for the applicable Loan Party to such license to grant the security               interest  granted  hereunder  in  such  Loan  Party’s  right,  title  or  interest  in  or  to  such  Loan  Party               Intellectual Property License.   Section 5.16. Subsidiaries; Affiliates; Capitalization; Solvency.          (a)   No Loan Party has any direct or indirect Subsidiaries nor does any Loan Party own any Equity               Securities except for Permitted Investments or as set forth on Schedule 9(ba) of the most recent               Perfection Certificate delivered to the Agent and the Lenders.          (b)   Each Loan Party is the record and beneficial owner of all of the issued and outstanding Equity               Securities  of  each  of  the  Subsidiaries  listed  on Schedule  9(ba) of  the  most  recent  Perfection               Certificate delivered to the Agent and the Lenders as being owned by such Loan Party and there are               no proxies, irrevocable or otherwise, with respect to such Equity Securities, and no Equity Securities               of any of the Loan Parties or their respective Subsidiaries are or may become required to be issued               by reason of any options, warrants, rights to subscribe to, calls or commitments of any kind or nature               and there are no contracts, commitments, understandings or arrangements by which any Loan Party               or Subsidiary is or may become bound to issue additional Equity Securities or securities convertible               into or exchangeable for such Equity Securities.          (c)   The issued and outstanding Equity Securities of each Loan Party (other than the Borrower) are               directly  and  beneficially  owned  and  held  by  the  Persons  indicated  on Schedule  9(ba) to  the               Perfection Certificate, and in each case all of such Equity Securities have been duly authorized and               are  fully  paid  (to  the  extent  required  by  the  Charter  or  other  organizational  documents  of  the               applicable Loan Party) and non-assessable (except as such non-assessibility may be affected by               applicable state law), free and clear of all Liens of any kind, except with respect to the security               interest therein granted to Agent pursuant to the terms of this Loan Agreement and the other Loan               Documents and restrictions on transfer arising under applicable federal and state securities laws.  As               of the Closing Date, the Equity Securities of RHB Inc. owned by Borrower are uncertificated.          (d)   As of the Closing Date, after giving effect to the consummation of the Transactions on the Closing               Date, including the making of the Loans under this Loan Agreement on the Closing Date, and after               giving effect to the application of the proceeds of such Loans, the Loan Party and their respective               Subsidiaries, taken as a whole, are Solvent and will continue to be Solvent after the creation of the               Obligations, the security interests of the Lenders and the other transactions contemplated hereunder               or under the Transaction Documents.   Section 5.17. Use of Proceeds.  The proceeds of the Loans shall be used to repay existing debt, fund the Closing  Date Acquisition, pay related fees and expenses, and for working capital.   Section 5.18. Regulatory Compliance.  No Loan Party is an “investment company” or a company “controlled”  by an “investment company” under the Investment Company Act of 1940, as amended.  No Loan Party is engaged as  one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal  Reserve Board of Governors).  Each Loan Party has complied in all material respects with the Federal Fair Labor  Standards Act.  Neither Borrower, any Guarantor, nor any of their respective Subsidiaries is a “holding company” or  an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and  used in the Public Utility Holding Company Act of 2005.  No Loan Party has violated any laws, ordinances or rules,  the violation of which could reasonably be expected to have a Material Adverse Effect on its business.  Each Loan  Party and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations                                             40  KE 46048467.851041480.3  

 

   the part of such former Agent or any of the parties to this Loan Agreement. If no successor agent is appointed prior to  the effective date of the resignation of Agent, Agent may appoint, after consulting with Lenders, a successor agent  from among Lenders. Upon the acceptance by the Lender so selected of its appointment as successor agent hereunder,  such successor agent shall succeed to all of the rights, powers and duties of the retiring Agent and the term “Agent”  as  used  herein  and  in  the  other  Loan  Documents  shall  mean  such  successor  agent,  and  the  retiring  Agent’s  appointment, powers and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as  Agent and Agent’s resignation hereunder as Agent, the provisions of this Article 10 shall inure to its benefit as to any  actions taken or omitted by it while it was Agent under this Loan Agreement.  If no successor agent has accepted  appointment as Agent by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation,  the retiring Agent’s resignation shall nonetheless thereupon become effective and Lenders shall perform all of the  duties of Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for  above.   Section 10.14. Other Agent Designation.  Oaktree may at any time and from time to time determine that a Lender  may,  in  addition,  be  a  “Co-Agent”,  “Syndication  Agent”,  “Documentation  Agent”,  “Agent”,  “Control  Agent”  or  similar designation hereunder and enter into an agreement with such Lender to have it so identified for purposes of  this Loan Agreement.  Any such designation shall be effective upon written notice by Agent or Oaktree to the Borrower  of any such designation.  Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation Agent,  Control Agent or such similar designation by Oaktree shall have no right, power, obligation, liability, responsibility  or duty under this Loan Agreement or any of the other Loan Documents other than those applicable to all Lenders as  such.  Without limiting the foregoing, the Lenders so identified shall not have or be deemed to have any fiduciary  relationship with any Lender and no Lender shall be deemed to have relied, nor shall any Lender rely, on a Lender so  identified as a Co-Agent, Syndication Agent, Documentation Agent, Control Agent or such similar designation in  deciding to enter into this Loan Agreement or in taking or not taking action hereunder.   Section 10.15. Release of Collateral. Each Lender hereby consents to the release and hereby directs Agent to  release (or in the case of clause (b)(ii) below, release or subordinate) the following:          (a)   any Guarantor if all of the Equity Securities of such Subsidiary owned by any Loan Party is sold or               transferred  in a  transaction permitted  under  the  Loan Documents  (including  pursuant  to  a valid               waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would               not be required to guaranty any Obligations pursuant to any Loan Document; and          (b)   any Lien held by Agent for the benefit of the Agent and the Lenders against (i) any Collateral that               is sold or otherwise disposed of by a Loan Party in a transaction permitted by the Loan Documents               (including pursuant to a valid waiver or consent), (ii) any Collateral subject to a Lien that is expressly               permitted under clause (v) or (vi) of the definition of the term "Permitted Lien" and (iii) all of the               Collateral and all Loan Parties, upon (A) payment in full in cash of all of the Obligations that Agent               has theretofore been notified in writing by the holder of such Obligation are then due and payable               and  (B)  receipt  by  Agent  and  Lenders  of  liability  releases  from  the  Loan  Parties  in  form  and               substance acceptable to Agent (acting at the direction of the Required Lenders).); and          (c)   any Lien held by Agent for the benefit of the Agent and the Lenders against any Collateral that is               Transferred pursuant to Section 7.02(iii) hereof, in an aggregate amount not to exceed One Million               Dollars ($1,000,000) in any fiscal quarter commencing with the fiscal quarter ending March 31,               2018.   Upon request by the Agent at any time, the Required Lenders will confirm the Agent's authority to release its interest  in any particular item of Collateral pursuant to this Section 10.15.   Section 10.16. Setoff and Sharing of Payments. In addition to any rights now or hereafter granted under any  applicable Requirements of Law and not by way of limitation of any such rights, upon the occurrence and during the  continuance of any Event of Default, each Lender is hereby authorized at any time without notice to any Loan Party  or any other Person, any such notice being hereby expressly waived, to setoff and to appropriate and to apply any and  all balances held by it at any of its offices for the account of the Loan Parties (regardless of whether such balances are  then due to the Loan Parties) and any other properties or assets at any time held or owing by that Lender or that holder                                             62  KE 46048467.851041480.3  

 

   Consolidated Capital Expenditures per fiscal year.1  Any such prepayment of the Loans made pursuant to this clause  (vi) shall be paid together with any accrued and unpaid interest to the date of such prepayment on the amount so  prepaid, plus, notwithstanding the terms of the Loan Agreement, any applicable Prepayment Premium that would have  been applicableset forth in the event a prepayment of the Loans is made pursuant to Section 2.02(d)(iii)(C).e) of the  Loan Agreement.    (vii) Prepaying the Loans with proceeds from the issuance of any Equity Securities in accordance with the terms and  conditions set forth in Section 2.02(d)(ii)(B) of the Loan Agreement.    The satisfaction of any one or more of the actions described in the foregoing clauses (i)-(vii) such that the Collateral  Enhancement Requirement is achieved shall not result in an Enhanced Rate Adjustment as described in the Loan  Agreement; provided, however, that the failure to satisfy the Collateral Enhancement Requirement to the fullest extent  possible on or prior to the first anniversary of the Closing Date shall, upon the written election of the Required Lenders  to the Agent, result in the application of the Enhanced Rate Adjustment based on the Achieved Collateral Enhancement  Value; provided, further, that the Loan Parties’ failure to satisfy, or continue to satisfy, the Collateral Enhancement  Requirement  after  the  first  anniversary  of  the  Closing  Date  shall  subject  the  Loan  Parties  to  the  Enhanced  Rate  Adjustment for so long as the Loan Parties are unable to satisfy the Collateral Enhancement Requirement.                                                               1  For purposes of this clause (vi), Consolidated EBITDA for the trailing four fiscal quarter period ending March  31, 2017 through June 30, 2018 shall be deemed to be the Consolidated EBITDA amount below set forth opposite  the applicable fiscal quarter:                Fiscal Quarter Ending:                     Consolidated EBITDA                   March 31, 2017                              $27,300,000                   June 30, 2017                               $31,700,000                 September 30, 2017                            $34,800,000                 December 31, 2017                             $36,300,000                   March 31, 2018                              $39,000,000                   June 30, 2018                               $42,000,000                                             Schedule 3  KE 46048467.851041480.3  

 

                                                                         Annex II                                                                                                      Perfection Certificate Schedule 9(a) and 9(b)                                                                                                                                                                                                                     A-2  KE 51033241.3  

 

                                                      Schedule 9(a) and (b)                                                   Investment Property            Issuer           Record Owners  Pledged  Issuer Certificate     Type of    Shares/Units  No. of     %                                              (Y/N)         Number       Organization  of Interest  Shares   Owned                                                                                         Owned    Outstand                                                                                                          ing         Texas Sterling Construction Co. Sterling     Yes             2          Corporation     100        100     100%                             Construction                            Company, Inc.  Texas Sterling - Banicki, JV Texas Sterling  Yes            N/A       Limited liability 50%       100%      50%  LLC                       Construction Co.                               company                                                                                                                                  J. Banicki                                                  50%                             Construction,                                 Inc.  Road and Highway Builders    Sterling        Yes            N/A         Corporation     500       1,000     50%  Inc.                       Construction                            Company, Inc.  Road and Highway Builders of Sterling        Yes             3          Corporation    10,000     10,000   100%  California, Inc.           Construction                                                                              Company, Inc.  Ralph L. Wadsworth           Sterling        Yes            N/A       Limited liability 100%      100%     100%  Construction Company, LLC  Construction                                  company                            Company, Inc.  J. Banicki Construction, Inc. Ralph L.       Yes             7          Corporation   100,000    100,000   100%                              Wadsworth                             Construction                            Company, LLC  Ralph L. Wadsworth           Sterling        Yes            N/A          Limited        99%       100%     100%  Construction Co. LP        Construction                                 partnership               

 

                                Company, Inc.                                                                                                                                                                            Ralph L.                                                   1%                              Wadsworth                             Construction                            Company, LLC  Myers & Sons Construction,   Sterling        Yes            N/A          Limited        50%       100%      50%  L.P.                       Construction                                 partnership                            Company, Inc.  Road and Highway Builders,   Sterling         No            N/A       Limited liability 50%       100%      50%  LLC                        Construction                                  company                            Company, Inc.                                                                      Sterling Hawaii Asphalt, LLC Sterling         No            N/A       Limited liability 50%       100%      50%                             Construction                                  company                            Company, Inc.  Tealstone Commercial, Inc.   Sterling        Yes            15          Corporation    2,000      2,000    100%                             Construction                            Company, Inc.  Tealstone Residential Concrete, Sterling     Yes            15          Corporation    2,000      2,000    100%  Inc.                       Construction                            Company, Inc.                                                                         

 

                                                                         Annex III                                                                                                         Perfection Certificate Schedule 9(c)                                                                                                                       A-3  KE 51033241.3  

 

         Borrower                                                 Corporate Structure: Sterling Construction Company, Inc.           Wholly-owned Subsidiaries           Non-Wholly-owned Entities                                                                         Sterling Construction           Tealstone Entities                                                                            Company, Inc.                                                                                                   (DE)                      100% Sterling                  100% Sterling                 100% Sterling                 100% Sterling                  100% Sterling                    Construction                   Construction                  Construction                  Construction                   Construction                    Company, Inc.                  Company, Inc.                 Company, Inc.                 Company, Inc.                  Company, Inc.                          Tealstone Residential              Tealstone                 Road and Highway                 Texas Sterling               Ralph L. Wadsworth                            Concrete, Inc.               Commercial, Inc.          Builders of California, Inc.       Construction Co.          Construction Company, LLC                                 (TX)                          (TX)                          (CA)                          (DE)                           (UT)                                                                                                                                                               100% RLW, LLC                                                                                                          55% Texas Sterling                       J. Banicki Construction                                                                                                         Construction Co.                            Company, Inc.                                                                                                                                                          (AZ)                                                                                                                   Texas Sterling – Banicki,                                                                                                                          JV LLC                                                                                                                             (TX)               45% J. Banicki                                                                                                                                               Construction, Inc.                                                                                                                                          1% Ralph L.  50% Sterling                                50% Sterling                  50% Sterling                  50% Sterling                 99% Sterling    Wadsworth  Construction    50% Richard                   50% Richard                   50% Richard                    Myers Family                                Construction                  Construction                  Construction                 Construction    Construction  Company, Inc.   H. Buenting                   H. Buenting                   H. Buenting                    49%1                                Company, Inc.                 Company, Inc.                 Company, Inc.                Company, Inc.   Company, LLC        Road and Highway              Road and Highway           Sterling Highway Asphalt,          Myers & Sons               Ralph L. Wadsworth         Builders, LLC                  Builders, Inc.                    LLC                    Construction, L.P.           Construction Co. LP             (NV)                          (NV)                           (HI)                         (CA)                          (CA)                                                                                                     Myers & Sons                                                                                                                         100%,                                                                                                 Construction, LLC.      MSC, L.P.                                                                                                       (CA)              Inc.   __________________________________   1 C and J Myers, Inc. (GP) – 1%                                                                                                                             Revised: 01/08/2018      Clinton Charles Myers, Trustee of the Myers Family 2011 Trust dtd.3/17/2011 – 27%      Clinton W. Myers – 22%strl033118exhibit1064

                                                                                         THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT         This  THIRD  AMENDMENT  TO  LOAN  AND  SECURITY  AGREEMENT          (this  “Amendment”), dated as of April 3, 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”) and the Lenders, and with respect to Sections 4.2  and  4.3  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”); and         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;          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.  Unless otherwise indicated, all  section references in this Amendment refer to sections of the Existing Loan Agreement.          Section 2. Amendment to Loan Agreement.  The Existing Loan Agreement is, subject to  the satisfaction of the conditions precedent set forth in Section 3 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. Effectiveness.   This  Amendment  shall  become  effective  as  of  the  date  on  which the following conditions precedent shall have been satisfied:         3.1   The  Agent  shall  have  received  duly  executed  counterparts  of  this  Amendment  from Borrower, each Guarantor and each Lender required to execute such Amendment, in each  case, party hereto.         3.2   The Loan Parties shall pay to the Agent and Lenders, in each case, all costs and  expenses described in Section 4.8 hereof.     KE 52826626.4  

 

           3.3   The representations and warranties set forth in Section 4.2 hereof must be true and   correct  in  all  material  respects  (without  duplication  of  materiality  qualifiers)  as  of  the  date   hereof.          Section 4. Miscellaneous.          4.1   Confirmation.  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.         4.2   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.                                             2   KE 52826626.4  

 

         4.3   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  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.         4.4   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.         4.5   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.         4.6   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.         4.7   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.                                          3  KE 52826626.4  

 

           4.8   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.          4.9   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.         4.10  Successors and Assigns.  This Amendment shall be binding upon and inure to the   benefit of the parties hereto and their respective successors and assigns.                               [SIGNATURE PAGES FOLLOW]                                          4   KE 52826626.4  

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                          Annex I                              Amended Loan Agreement                                                                                                                        A-1  KE 52826626.4  

 

                              Conformed Copy as of SecondThird Amendment (January 9April 3, 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 52826770.15  

 

                            LIST OF EXHIBITS AND SCHEDULES             Schedule 1   List of Guarantors         Schedule 2   List of Lenders         Schedule 3   Collateral Enhancement Requirement[Reserved]         Schedule 4   Permitted Dispositions         Schedule 5   Permitted Indebtedness         Schedule 6   Permitted Investments         Schedule 7   Permitted Liens         Schedule 8   UCC Filing Offices         Schedule 9   Collective Bargaining Agreements         Schedule 10  Post-Closing Obligations                           Exhibit A    Form of Secured Promissory Note         Exhibit B    Collateral Description         Exhibit C    Form of Landlord Waiver         Exhibit D    Form of Solvency Certificate         Exhibit E    Form of Intellectual Property Security Agreement         Exhibit F    Form of Assignment and Assumption Agreement         Exhibit G    Form of Notice of Borrowing         Exhibit H    Form of Joinder Agreement         Exhibit I    Reserved         Exhibit J    Reserved         Exhibit K    Form of Compliance Certificate         Exhibit L-1  Form of U.S. Tax Compliance Certificate         Exhibit L-2  Form of U.S. Tax Compliance Certificate         Exhibit L-3  Form of U.S. Tax Compliance Certificate         Exhibit L-4  Form of U.S. Tax Compliance Certificate         Exhibit M    Form of Mortgage         Exhibit N    Form of Guaranty         Exhibit O    Form of Assignment of Claims Under Government Contract          KE 52826770.15  

 

                              LOAN AND SECURITY AGREEMENT          This LOAN  AND  SECURITY  AGREEMENT,  dated  as  of  April  3,  2017,  is  entered  by  and between  Sterling Construction Company, Inc., a Delaware corporation (the “Borrower”); the guarantors identified on Schedule  1 hereto  (such  guarantors,  together  with  any  entities  required  to  become  Guarantors  pursuant  to  the  Joinder  Requirements, are referred to hereinafter each individually as a “Guarantor” and collectively as the “Guarantors”  and  together  with  the  Borrower  as  the  “Loan  Parties”)  and  Wilmington  Trust,  National  Association,  as  agent  (“Agent”) for the lenders identified on Schedule 2 hereto (such lenders, together with their respective successors and  assigns are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), and the Lenders.                                        W I T N E S S E T H:                WHEREAS, the Borrower (“Purchaser”) has entered into that certain Stock Purchase Agreement  dated as of March 8, 2017 (the “Acquisition Agreement”) with the sellers identified on Exhibit A  therein (each, a  “Seller”  and  collectively,  the  “Sellers”)  and  the  Sellers’  Representative  (as  defined  therein),  providing  for  the  acquisition of all of the issued and outstanding shares of common stock of each of Tealstone Residential Concrete,  Inc., a Texas corporation (“Tealstone Residential”), and Tealstone Commercial, Inc., a Texas corporation (together  with Tealstone Residential, collectively, the “Tealstone Entities”) (such acquisition, the “Closing Date Acquisition”);                WHEREAS, the Borrower desires to obtain financing for the Closing Date Acquisition, as well as  to refinance certain existing indebtedness, to finance working capital and pay fees, costs and expenses associated  therewith;                WHEREAS, the Lenders have agreed to extend term loans to the Borrower in an aggregate principal  amount not to exceed $85,000,000;                WHEREAS, the Borrower has agreed to secure all of its Obligations by granting to the Agent, for  the benefit of the Agent and the Lenders, a first priority lien on substantially all of its assets;                WHEREAS, each of the Guarantors has agreed to guarantee the Obligations of the Borrower and to  secure their respective Obligations by granting to the Agent, for the benefit of the Agent and the Lenders, a first  priority lien on substantially all of their assets; and                NOW, THEREFORE, in consideration of the covenants, conditions and agreements set forth herein  and intending to be legally bound, the parties hereto hereby agree as follows:   ARTICLE 1.   DEFINITIONS          The following capitalized terms shall have the meanings set forth below:          “Accounts” shall mean all accounts (as defined in the Code), payment intangibles (as defined in the Code)  and other obligations owed Borrower in connection with its sale or lease of goods, the licensing of Intellectual Property  or the provision of services.          “Achieved Collateral Enhancement Value” shall have the meaning given such term in Schedule 3 hereto.          “Acquisition Agreement” shall have the meaning given such term in the Recitals.          “Acquisition Documentation” shall mean the material acquisition documentation contemplating, or entered  into in connection with, the Closing Date Acquisition or any Permitted Acquisition, as applicable, including any  acquisition agreement and any other material document or agreement related thereto or entered into in connection  therewith.          “Act” shall have the meaning given such term in Section 11.18.                                               1  KE 52826770.15  

 

          “Affiliate” shall mean, with respect to any Person, any Person that owns or controls directly or indirectly  nineteen and ninety-nine one hundredths of one percent (19.99%) or more of the Equity Securities of such Person, any  Person that controls or is controlled by or is under common control with such Person or any Affiliate of such Person  and each of such Person’s officers, directors, members, joint venturers or partners.  When used with respect to a  Lender, Affiliate shall also include any Affiliate of Agent.          “Affiliated Entity” shall mean each of (a) Myers & Sons Construction, L.P., a California limited partnership  (“Myers”), (b) Road and Highway Builders, LLC, a Nevada limited liability company (“RHB LLC”), (c) Road and  Highway Builders Inc., a Nevada corporation (“RHB Inc.”) and (d) Sterling Hawaii Asphalt, LLC, a Hawaii limited  liability company (“Sterling Hawaii”).          “Agent Fee Letter” shall mean that certain fee letter agreement, dated on or about the date hereof, by and  between the Agent and the Borrower.          “Agent Indemnitee” shall have the meaning given such term in Section 10.10.          “Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of  a Lender (c) an entity or an Affiliate of an entity that administers or manages a Lender, or (d) the same investment  advisor or an advisor under common control with such Lender, Affiliate or advisor, as applicable.          “Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA  Resolution Authority in respect of any liability of an EEA Financial Institution.          “Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of  Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law  for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.           “Bonding Company” shall mean Travelers Casualty and Surety Company of America or any other bonding  company listed in the Department of Treasury’s listing of approved sureties as of the most recent date for which  financial statements have been delivered to Agent and Lenders pursuant to Sections 6.01(a), (b) or (c).          “Books” shall mean books and records (including each Loan Party’s Records indicating, summarizing, or  evidencing such Loan Party’s assets (including the Collateral) or liabilities, each Loan Party’s Records relating to such  Loan Party’s business operations or financial condition, and each Loan Party’s goods or General Intangibles related  to such information).          “Business Day” shall mean any day, except a Saturday, a Sunday or any other day on which commercial  banks are authorized or required to close in the State of California or the State of New York.          “Capital Lease Obligations” shall mean as to any Person, the obligations of such Person to pay rent or other  amounts  under  any  lease  of  (or  other  arrangement  conveying  the  right  to  use)  real  or  personal  property,  or  a  combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance  sheet of such Person under GAAP and, for the purposes of this Loan Agreement, the amount of such obligations at  any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.          “Cash Collateral Liquidity” shall mean, at any time, the aggregate amount of unrestricted cash and cash  equivalents held in accounts of the Borrower and the Guarantors that are subject to a control agreement in favor of the  Agent.          “CFC” shall mean a controlled foreign corporation as such term is defined in Section 957 of the IRC.          “Change in Law” shall mean the occurrence, after the date of this Loan Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or  treaty or in the administration, implementation, interpretation or application thereof by any Governmental Authority  or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any                                              2  KE 52826770.15  

 

   Governmental Authority; provided that 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 “Change in  Law”, regardless of the date enacted, adopted or issued.          “Change of Control” shall mean an event or series of events by which: (a) any “person” or “group” (as such  terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit  plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary  or administrator of any such plan), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the  Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all  securities that such person or group has the right to acquire, whether such right is exercisable immediately or only  after the passage of time (such right, an “option right”)), directly or indirectly, of 35% or more of the Equity Securities  of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower  on a fully-diluted basis (and taking into account all such Equity Securities that such “person” or “group” has the right  to acquire pursuant to any option right); (b) during any period of 12 consecutive months, a majority of the members  of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i)  who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or  nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above  constituting at the time of such election or nomination at least a majority of that board or equivalent governing body  or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals  referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of  that board or equivalent governing body; (c) any “change in control” (or comparable term) or mandatory redemption  event or similar event occurs under any agreement governing Material Indebtedness of any Loan Party or any of its  Subsidiaries; (d) all or substantially all of the Borrower’s and its Subsidiaries’ consolidated assets are sold, transferred  or disposed; or (e) Borrower (directly or indirectly) ceasing to own and control 100% of the economic and voting  interests of each class of the outstanding Equity Securities of each of its wholly-owned Subsidiaries, free and clear of  all Liens (other than the (i) Liens in favor of the Agent to secure the Obligations hereunder, (ii) Liens existing in such  Person’s organizational documents in effect as of the date hereof or (iii) restrictions on transfer under applicable  federal and state securities laws), except where such failure is as a result of a transaction expressly permitted hereunder.          “Charter” shall have the meaning given such term in Section 4.01(a)(iii).          “Claim” shall have the meaning given such term in Section 11.04.          “Closing Date” shall mean the date on which the conditions precedent set forth in Article IV4 shall have  been satisfied.          “Closing Date Acquisition” shall have the meaning given such term in the recitals hereof.           “Closing Date Earn-Out” shall mean the “Earn-Out Payments” as defined in the Acquisition Agreement as  in effect on the Closing Date.          “Closing  Date  Deferred  Payments”  shall  mean  the  “Deferred  Payments”  as  defined  in  the  Acquisition  Agreement as in effect on the Closing Date.          “Closing Date Seller Notes” shall mean the “Promissory Notes” as defined in the Acquisition Agreement as  in  effect  on  the  Closing  Date,  which  Promissory  Notes  shall  be  subordinated  to  the  Obligations  in  all  respects,  including in respect of payment, pursuant to the Subordination Agreement, and if so subordinated, such Closing Date  Seller Notes shall constitute Subordinated Debt.          “Closing Date Subordination Agreement” shall mean that certain Subordination Agreement, dated as of the  Closing Date, by and among the Agent, for the Lenders, and the Creditors (as defined therein) with respect to the  Closing Date Seller Notes.                                              3  KE 52826770.15  

 

          “Code” shall mean the Uniform Commercial Code as in effect from time to time in the state of New York,  and any successor statute, as in effect from time to time (except that terms used herein which are defined in the  Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same  meaning notwithstanding any replacement or amendment of such statute except as Agent or the Required Lenders  may otherwise determine).           “Collateral” shall mean property described on Exhibit B attached hereto and the Real Property subject to the  Mortgages; provided that the Excluded Property shall not become Collateral until such time as (a) the Liens thereon  in favor of Myers and RHB LLC as of the Closing Date are (i) terminated, discharged or released in their entirety or  (ii) subordinated to the Liens securing the Obligations or (b) each of Myers and RHB subordinate their respective  Liens in the Excluded Property to the Liens of the Agent securing the Obligations, in which case, such Excluded  Property shall automatically and immediately become and be deemed a part of the Collateral.          “Collateral Agency Agreement” shall mean the Collateral Agency Agreement dated on or about the date  hereof among Corporation Service Company (the “Vehicle Collateral Agent”), the Agent and the Borrower.          “Collateral Enhancement Requirement” shall have the meaning given such term in Schedule 3 hereto.          “Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended  from time to time, and any successor statute.          “Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net  income (however denominated) or that are franchise Taxes or branch profits Taxes.          “Consolidated Capital Expenditures” shall mean, for any period, the aggregate amount of all expenditures  (whether paid in cash or accrued as a liability and including any expenditures resulting in Capital Lease Obligations)  on  used  equipment  of  the  Loan  Parties  and  their  respective  Subsidiaries  during  such  period  determined  on  a  consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment”  or  similar  items  reflected  in  the  consolidated  statement  of  cash  flows  of  the  Loan  Parties  and  their  respective  Subsidiaries.          “Consolidated Current Assets” shall mean, as at any date of determination, the total assets of the Loan Parties  and their respective Subsidiaries which may properly be classified as current assets (excluding deferred tax assets) on  a consolidated balance sheet of the Loan Parties and their respective Subsidiaries in accordance with GAAP, excluding  cash and cash equivalents; provided that Consolidated Current Assets shall be calculated without giving effect to the  impact of purchase accounting.          “Consolidated Current Liabilities” shall mean, as at any date of determination, the total liabilities (excluding  deferred  taxes  and  taxes  payable)  of  the  Loan  Parties  and  their  respective  Subsidiaries  which  may  properly  be  classified as current liabilities (other than the current portion of any Loans and other long-term liabilities, and accrued  interest thereon) on a consolidated balance sheet of the Loan Parties and their respective Subsidiaries in accordance  with GAAP; provided that Consolidated Current Liabilities shall be calculated without giving effect to the impact of  purchase accounting.          “Consolidated EBITDA” shall mean for any period, Consolidated Net Income,          plus (i) the sum, without duplication, of the amounts for such period, but solely to the extent decreasing         Consolidated Net Income for such period, of:          (a)   Consolidated Interest Expense, plus           (b)   provisions for Taxes based on income, plus           (c)   non-cash expenses resulting from write-downs of assets (other than inventory, accounts receivable               or other current assets) and the impairment of goodwill, plus                                              4  KE 52826770.15  

 

          (d)   non-cash non-recurring losses (including losses on asset sales and extinguishment of debt), plus          (e)   total depreciation expense, plus           (f)   total amortization expense, plus           (g)   non-cash stock-based compensation expense, plus          (h)   to the extent less than Twelve Million Dollars ($12,000,000) is received from the NTTA Matter, an               amount equal to the difference between Twelve Million Dollars ($12,000,000) and such amount so               received; provided  that,  such  add-back pursuant  to  this  clause (i)(h)  shall  be  taken  in the  fiscal               quarter in which such amount is received by the Borrower, plus           (i)   one-time  non-recurring  costs  and  expenses  incurred  in  connection  with  the  Transactions  in  an               amount not to exceed  Six Million Dollars ($6,000,000) to the extent disclosed to Agent and the               Lenders in a sources of uses or funds flow on or prior to the Closing Date; and           minus (ii) the sum, without duplication, of the amounts for such period, but solely to the extent increasing         Consolidated Net Income for such period, of:          (a)   non-cash non-recurring gains (including gains on asset sales and extinguishment of debt), plus           (b)   interest income, plus          (c)   any benefit, including income tax credits and refunds, from income taxes (including franchise, gross               receipts and single business taxes imposed in lieu of income taxes), plus          (d)   to the extent more than Twelve Million Dollars ($12,000,000) is received from the NTTA Matter,               an amount equal to the difference between Twelve Million Dollars ($12,000,000) and such amount               so received; provided that, such deduction pursuant to this clause (ii)(d) shall be taken in the fiscal               quarter in which such amount is received by the Borrower, plus          (e)   any  amount  shown  on  the  consolidated  statement  of cash  flows of  Borrower  on  the  line  item               “distributions to non-controlling interest owners”.          For the avoidance of doubt, Consolidated EBITDA (and all component terms or definitions used therein)  shall be calculated in accordance with Borrower’s historical numbers set forth in its publicly filed Form 10-K or Form  10-Q or any other periodic or special report or registration statement which Borrower has filed with the SEC or with  any national securities exchange, as more specifically set forth on Schedule 3 hereto..  For the purposes of calculating  Consolidated EBITDA in connection with determining the Total Secured Leverage Ratio or for the calculation of  Consolidated EBITDA pursuant to Section 6.17(f), in each case, for any measurement period, if at any time during  such measurement period Borrower or any of its Subsidiaries shall have made a Closing Date Acquisition or Permitted  Acquisition, Consolidated EBITDA for such measurement period shall be calculated after giving pro forma effect  thereto  (as  if  any  such Closing  Date  Acquisition  or Permitted  Acquisition  occurred  on  the  first  day  of  such  measurement period).          “Consolidated  Interest  Expense”  shall  mean  for  any  period,  total  cash  interest expense  (including  that  attributable to Capital Lease Obligations) of the Loan Parties and their respective Subsidiaries for such period with  respect  to  all  outstanding  Indebtedness  of  the  Loan  Parties  and  their  respective  Subsidiaries  (including  all  commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance  financing and net costs under swap agreements in respect of interest rates to the extent such net costs are allocable to  such period in accordance with GAAP).          “Consolidated Net Income” shall mean for any period, the consolidated net income (or loss) of the Loan  Parties and their respective Subsidiaries, determined on a consolidated basis in accordance with GAAP, which shall                                              5  KE 52826770.15  

 

   be set forth in the Borrower’s publicly filed financial statements as the “Net Income” or “Net Loss” line item; provided  that there shall be excluded, without duplication, the income (or deficit) of any Person accrued prior to the date it  becomes a Subsidiary or is merged into or consolidated with any Loan Party or any of their respective Subsidiaries.          “Consolidated Secured Indebtedness” shall mean, as of any date of determination, the aggregate amount of  Indebtedness of the Loan Parties and their respective Subsidiaries that, as of such date, is secured by a Lien on any  asset or property of the Loan Parties or any of their respective Subsidiaries.           “Contract Backlog” shall mean an amount equal to the average of (a) the “Backlog” or “Contract Backlog”  amount, multiplied by (b) gross margin included in such “Backlog” or “Contract Backlog”, in each case, calculated  on a basis consistent with historical reporting practices reflected in, and for the four fiscal quarter period most recently  ended in, Borrower’s latest Form 10-Q or Form 10-K; provided that, no amount for Tealstone Residential shall be  included  in  such  calculation;  provided, further,  that to  the  extent  any business, division  or  assets  are  divested or  disposed of, or acquired, merged, consolidated or amalgamated, in each case, as permitted hereunder, such calculation  shall be made after giving pro forma effect to the portion of “Backlog” or “Contract Backlog” attributed to such  business, division or assets which is the subject of such divestiture, disposition, acquisition, merger, consolidated or  amalgamation.           “Contractual Obligation” of any Person shall mean, any indenture, note, security, deed of trust, mortgage,  security agreement, lease, license, sublicense, guaranty, instrument, contract, agreement or other form of obligation  or undertaking to which such Person is a party or by which such Person or any of its property is bound.          “Copyrights” shall mean any and all copyright rights, copyright applications, copyright registrations and like  protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or  not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.          “Default” shall mean any event or circumstance not yet constituting an Event of Default but which, with the  giving of any notice or the lapse of any period of time or both, would become an Event of Default.          “Default Rate” shall mean, as of any date of determination, an interest rate per annum equal to two percent  (2%) in excess of the rate per annum otherwise applicable on such date.          “ECF Declined Amount” shall have the meaning set forth in Section 2.02(d)(iii)(C).          “ECF Prepayment Offer” shall have the meaning set forth in Section 2.02(d)(iii)(A).          “ECF Prepayment Offer Date” shall have the meaning set forth in Section 2.02(d)(iii)(A).          “EEA Financial Institution” shall mean (i) any credit institution or investment firm established in any EEA  Member Country which is subject to the supervision of an EEA Resolution Authority, (ii) any entity established in an  EEA Member Country which is a parent of an institution described in clause (i) of this definition, or (iii) any financial  institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (i) or  (ii) of this definition and is subject to consolidated supervision with its parent.           “EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein  and Norway.           “EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with  public administrative authority of any EEA Member Country (including any delegee) having responsibility for the  resolution of any EEA Financial Institution.           “Enhanced Rate” shall mean, as of any date of determination, an interest rate per annum equal to the sum of  (i) an amount equal to (a) one and one-half percent (1.50%) multiplied by (b) a fraction the numerator of which is the  Achieved Collateral Enhancement Value, and the denominator of which is the Collateral Enhancement Requirement,  and (ii) the rate per annum otherwise applicable on such date.                                              6  KE 52826770.15  

 

          “Enhanced Rate Adjustment” shall mean, in the event the Collateral Enhancement Value is not satisfied on  or prior to the first anniversary of the Closing Date, Borrower shall pay interest on outstanding Obligations at a per  annum rate equal to the Enhanced Rate.          “Environmental Claims” shall mean any and all liabilities, administrative, regulatory or judicial actions,  suits, demands, demand letters, Claims, liens, notices of noncompliance or violation, investigations or proceedings  relating in any way to any Environmental Law, including, but not limited to, (i) any and all Claims by governmental  or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant  to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution,  indemnification, cost recovery, compensation or injunctive relief resulting from the release or threatened release of  Hazardous  Materials  or  arising  from  alleged  injury  or  threat  of  injury  from  the  release  or  threatened  release  of  Hazardous Materials.          “Environmental Law” shall mean any past, present or future Requirement of Law relating to pollution, the  protection of the environment or human or public health or safety, or natural resources.           “Equity Securities” of any Person shall mean (i) all common stock, preferred stock, participations, shares,  partnership  interests,  membership  interests  or  other  equity  interests  in  and  of  such  Person  (regardless  of  how  designated and whether or not voting or non-voting) and (ii) all warrants, options and other rights to acquire any of  the foregoing.          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.          “ERISA Affiliate” shall mean any Person that is treated at a relevant time as a single employer with any Loan  Party pursuant to Section 414(b) or (c) of the IRC (and Sections 414(m) and (o) of the IRC for purposes of provisions  relating to Section 412 of the IRC).          “ERISA Event” shall mean (a) any of the events set forth in Section 4043(c) of ERISA occurs with respect  to a Pension Plan, other than events for which the thirty-day notice period has been waived by Governmental Rule,  (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA  during a plan year in which such entity was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a  substantial cessation of operations by such Loan Party or ERISA Affiliate that is treated as such a withdrawal from a  Pension Plan under Section 4062(e) of ERISA; (c) a complete or partial withdrawal (as defined in Section 4203 and  4205 of ERISA, respectively) by any Loan Party or any ERISA Affiliate from a Multiemployer Plan, the assertion by  a Multiemployer Plan  that a Loan Party or any ERISA Affiliate has incurred withdrawal liabilities (as described in  Section 4201 of ERISA), or notification to a Loan Party or ERISA Affiliate by a Multiemployer Plan sponsor that  such Multiemployer Plan is or is expected to become insolvent or experience a mass withdrawal (as such terms are  defined in Title IV of ERISA); (d) a failure by a Loan Party or any ERISA Affiliate to make required contributions to  a Pension Plan or Multiemployer Plan; (e) the filing by the Pension Plan sponsor of a notice of intent to terminate or  the treatment by the PBGC of a plan amendment as a termination of a Pension Plan under Section 4041 of ERISA;  (f) the institution by the PBGC of proceedings to terminate a Pension Plan; (g) the determination by the Pension Plan  or Multiemployer Plan actuary that any Pension Plan is considered an “at-risk” plan or a Multiemployer Plan is in  “endangered” or “critical” status within the meaning of Sections 430, 431 and 432 of the IRC or Sections 303, 304  and 305 of ERISA; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due  but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (i) any failure of a  Plan intended to meet the requirements of qualification under Section 401(a) of the IRC to so qualify; and (j) any other  event that would reasonably be expected to result in a material liability or obligation to any Loan Party under ERISA  or the IRC with respect to a Plan.          “EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan  Market Association (or any successor person), as in effect from time to time.           “Event of Default” shall have the meaning set forth in Article 9 of this Loan Agreement.                                               7  KE 52826770.15  

 

          “Event of Loss” shall mean the theft, loss, physical destruction or damage, seizure, taking or similar event  with respect to any property or assets owned by any Loan Party or any of its Subsidiaries which results in the receipt  by any Loan Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason  thereof, whether by a third party or any Governmental Authority.          “Excluded Accounts” shall mean those deposit or other bank accounts that are used (a) solely by the Loan  Parties to fund payroll, (b) to cash collateralize letter of credit obligations in the aggregate amount outstanding at any  time not to exceed $5,000,000 and (c) solely as a cash management account for Project Specific JVs to fund the initial  capitalization of project costs or the ongoing operational costs of the project for which such Project Specific JV was  created or formed.          “Excluded Property” means the “Collateral Security” as defined in each of those certain Deeds of Trust,  Security Agreements, Assignments of Rents and Financing Statements, dated as of March 11, 2016, granted by Texas  Sterling Construction Co. in favor of Christopher B. Welsh, Trustee, for the benefit of RHB LLC and Myers for  property commonly known as (a) 3475 High River Rd., Fort Worth, Texas 76115, (b) 20800 Fernbush Lane, Houston,  Texas 77073, (c) St. Hedwig Rd., San Antonio, Texas 78220 and (d) 5638 FM 1346, San Antonio, Texas 78220.          “Excess Cash Flow” shall mean for any fiscal quarter (or other period specified herein) of the Borrower, the  excess, if any, of (a) the sum of (i) Consolidated EBITDA for such period plus (ii) proceeds received by the Loan  Parties or any of its Subsidiaries from Transfers (except, in each case and without duplication, to the extent any such  proceeds (A) arise from the Permitted Dispositions and/or the NTTA Matter and are used to prepay the Loans pursuant  to  Section  2.02(d)(i)(B)  or  (B)  are  used  to  prepay  the  Loans,  are  reinvested  or  otherwise  remain  available  to  be  reinvested pursuant to Section 2.02(d)(ii)(C)), minus, (b) without duplication (and only to the extent added back or  not deducted in determining Consolidated EBITDA for such period):          (i)   Consolidated  Interest  Expense  (excluding  any  Consolidated  Interest  Expense  associated  with               intercompany Indebtedness) paid in cash by the Loan Parties or any of its Subsidiaries (other than               interest income), minus           (ii)  the aggregate amount actually paid by the Loan Parties or any of its Subsidiaries in cash before the               date the Excess Cash Flow payment for such period is actually made (provided that any amount so               deducted  in  respect  of  any  period  is  not  also  deducted  in  respect  of  any  subsequent  period)  on               account of taxes accrued in respect of such period based on income of the Loan Parties or any of its               Subsidiaries (other than Tax refunds, credits and benefits), minus          (iii)  the aggregate amount actually paid by the Loan Parties or any of its Subsidiaries in cash before the               date the Excess Cash Flow payment for such period is actually made (provided that any amount so               deducted  in  respect  of  any  period  is  not  also  deducted  in  respect  of  any  subsequent  period)  on               account of Consolidated Capital Expenditures to the extent paid in cash (but excluding the principal               amount of Loans or other Indebtedness incurred in connection with such expenditures, any such               expenditures  financed  with  the  proceeds  of  any  issuance  of  Equity  Securities  or  any  amount               reinvested pursuant to Section 2.02(d)(ii)(C)) and any such expenditures financed with insurance               proceeds related to any Event of Loss), minus           (iv)  any extraordinary, unusual, non-recurring or non-operating cash loss or expense paid or incurred by               the Loan Parties or any of its Subsidiaries during such period, minus          (v)   any internally generated cash paid by the Loan Parties or any of its Subsidiaries in connection with               the Closing Date Acquisition, the Transactions and/or any other acquisition permitted hereunder;               and          adding or subtracting, as the case may be, decreases (which, if negative, shall be the absolute value of the  difference)  or  increases  (if  positive)  in  Net  Working  Capital  (such  adjustments,  the  “Net  Working  Capital  Adjustment”) during such period (measured as of the first and last days of such period).                                               8  KE 52826770.15  

 

          “Excluded Swap Obligation” shall mean, with respect to any Loan Party (other than the direct counterparty  of such Swap Obligation), any Swap Obligation of a Loan Party (other than the direct counterparty of such Swap  Obligation) if, and to the extent that, all or a portion of the Guaranty of such Loan Party of, or the grant by such Loan  Party of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal or unlawful  under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission  (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to  constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guaranty of  such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a  Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to  the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or  becomes illegal or unlawful.          “Excluded Taxes” shall mean, with respect to a Recipient of any payment to be made by or on account of  any Obligation of any Loan Party, (a) Taxes imposed on or measured by its net income (however denominated),  franchise Taxes imposed on it, and branch profits Taxes, in each case, (i) imposed by the jurisdiction (or any political  subdivision thereof) under the laws of which such Recipient is organized or in which its principal office is located or,  in the case of any Lender, in which its applicable lending office is located (“Lending Office”), or (ii) that are Other  Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding Tax that is imposed on amounts payable  to or for the account of such Lender pursuant to a law in effect at the time such Lender becomes a party hereto (for  the avoidance of doubt, whether as an original party hereto or as an assignee) (or designates a new Lending Office),  except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending  Office (or assignment), to receive additional amounts from the Loan Parties with respect to such withholding Tax  pursuant to Section 2.05, (c) Taxes attributable to a failure of a Recipient to comply with Section 2.05(f), and (d) any  U.S. federal withholding Taxes imposed under FATCA.          “Existing Bonding Letter” shall mean that certain letter dated as of March 3, 2017, provided by Travelers  Casualty and Surety Company of America to the Borrower, and delivered to Oaktree prior to the Closing Date.          “Extraordinary Receipts” shall mean any payments received by a Loan Party or any of its Subsidiaries not  in the ordinary course of business (and not consisting of proceeds described in Section 2.02(d)(i) )consisting of (a)  proceeds of judgments, proceeds of settlements or other consideration of any kind in connection with any cause of  action, (b) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a  Person that is not an Affiliate of a Loan Party or any of its Subsidiaries, or (ii) received by a Loan Party or any of its  Subsidiaries  as  reimbursement  for  any  payment  previously  made  to  such  Person),  and  (c)  any  purchase  price  adjustment  (other  than  a  working  capital  adjustment)  received  in  connection  with  any  acquisition  or  purchase  agreement.          “FATCA” shall mean Sections 1471 through 1474 of the IRC, as of the date of this Loan Agreement (or any  amended or successor version that is substantively comparable and not materially more onerous to comply with), any  current  or  future  regulations  or  official  interpretations  thereof,  any  agreements  entered  into  pursuant  to  Section  1471(b)(1) of the Code, or any intergovernmental agreement between a non-U.S. jurisdiction and the United States  with respect to the foregoing.          “Fee Letter” shall mean that certain fee letter agreement, dated as of March 8, 2017, by and between Oaktree  and the Borrower.          “Financial Covenants” shall have the meaning given such term in Section 6.17.          “Financial Statements” shall mean, with respect to any accounting period for any Person, statements of  operations, cash flows and, with respect to audited statements only, stockholder’s equity of such Person for such  period, and a balance sheet of such Person as of the end of such period, setting forth in each case in comparative form  figures for the corresponding period in the preceding fiscal year if such period is less than a full fiscal year or, if such  period is a full fiscal year, corresponding figures from the preceding fiscal year, all prepared in reasonable detail and  in accordance with GAAP, except, in the case of unaudited Financial Statements, for the absence of footnotes and  normal year-end adjustments.  Unless otherwise indicated, each reference to Financial Statements of any Person shall  be deemed to refer to Financial Statements prepared on a consolidated basis.                                              9  KE 52826770.15  

 

          “Foreign Assets Control Regulations” shall have the meaning given such term in Section 7.15.          “Foreign Holder” shall mean any Recipient that is not a U.S. Person.          “Fund”  shall  mean  any  Person  (other  than  a  natural  person)  that  is  (or  will  be)  engaged  in  making,  purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course  of its business.          “Funding Date” shall mean any date on which any Loan is made to or on account of Borrower under this  Loan Agreement.          “GAAP” shall mean generally accepted accounting principles in the United States of America as in effect  from  time  to  time  as  set  forth  in  the  opinions  and  pronouncements  of  the  Accounting  Principles  Board  and  the  American  Institute  of  Certified  Public  Accountants  and  the  statements  and  pronouncements  of  the  Financial  Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently  applied.  Notwithstanding anything to the contrary contained herein, all financial statements delivered hereunder shall  be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election  under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a  Person to value its financial liabilities or Indebtedness at the fair value thereof.          “Governmental  Official”  shall  mean any  officer  or  employee  of  a  Governmental  Authority  or  any  department, agency or instrumentality thereof, including state-owned entities, or of a public organization or any person  acting in an official capacity for or on behalf of any such government, department, agency, or instrumentality or on  behalf of any such public organization.          “Governmental  Authority”  shall  mean  any  domestic  or  foreign  national,  state  or  local  government,  any  political subdivision thereof, any department, agency, authority or bureau of any of the foregoing, or any other entity  exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.          “Governmental Rule” shall mean any law (including common law), rule, regulation, ordinance, order, code  interpretation,  judgment,  decree,  directive,  guidelines,  policy  or  similar  form  of  decision  of  any  Governmental  Authority.          “Guaranty” shall mean that certain Guaranty in favor of the Agent, for the benefit of the Agent and the  Lenders, executed by the Guarantors, in substantially the form attached hereto as Exhibit N, as amended, restated,  amended and restated, supplemented or otherwise modified from time to time.           “Hazardous Materials” shall mean any chemical, material, or substance for which liability or standards of  conduct may be imposed, or that is defined, listed, regulated, or otherwise classified as a contaminant, pollutant, toxic  pollutant, toxic, infectious or hazardous substance, extremely hazardous substance or chemical or hazardous waste,  under Environmental Laws, including any petroleum or petroleum products, radioactive materials, friable asbestos,  urea formaldehyde foam insulation, noise, odor or mold.           “Indebtedness” of any Person shall mean and include the aggregate amount of, any liability, whether or not  contingent, without duplication, consisting of: (i) all obligations of such Person for borrowed money (whether or not  the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof) and all Obligations  (including, without limitation, any Prepayment Premium or Make-Whole Amount), (ii) all obligations of such Person  evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the  deferred purchase price of property or services (whether contingent or otherwise, including, without limitation, all  earn-out obligations (determined as the greater of (x) the amount required to be shown as a liability in accordance  with GAAP at the time of the closing of the applicable acquisition pursuant to which such earn-out obligation arises  and (y) the amount of such earn-out obligation actually paid in connection with the subject transaction) and similar  deferred payment obligations) (other than accounts payable to a trade creditor incurred in the ordinary course of  business  of  such  Person  determined  in  accordance  with  GAAP  and  payable  in  accordance  with  customary  trade  practices), (iv) all obligations under Capital Lease Obligations of such Person, (v) all obligations or liabilities of others                                             10  KE 52826770.15  

 

   secured by a lien on any asset of such Person, whether or not such obligation or liability is assumed, (vi) all guaranties  of such Person of the obligations of another Person or any contractual obligation, contingent or otherwise, of such  Person to pay or be liable for the payment of any indebtedness described in this definition of another Person, including,  without limitation, any such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase,  or otherwise acquire such indebtedness, obligation or liability or any security therefor, or to provide funds for the  payment or discharge thereof, or to maintain solvency, assets, level of income, or other financial condition, (vii) all  obligations created or arising under any conditional sale or other title retention agreement with respect to property  acquired by such Person (even if the rights and remedies of the seller or lender under such agreement upon an event  of default are limited to repossession or sale of such property), (viii) all reimbursement and other payment obligations,  contingent or otherwise, in respect of surety bonds (whether bid, performance or otherwise), letters of credit, banker’s  acceptances, drafts or similar documents or instruments issued for such Person’s account, (ix) all obligations with  respect to redeemable stock and redemption or repurchase obligations under any Equity Securities or other equity  securities issued by such Person (including any obligation to pay dividends, other than dividends payable in shares of  common stock), (x) all obligations, liabilities and indebtedness of such Person (marked to market) arising under swap  agreements, cap agreements and collar agreements and other agreements or arrangements designed to protect such  person against fluctuations in interest rates or currency or commodity values, (xi) all obligations owed by such Person  under license agreements with respect to non-refundable, advance or minimum guarantee royalty payments, (xii) to  the extent not bonded by a Bonding Company, indebtedness or obligations of any partnership or joint venture in which  such Person is a general partner or a joint venturer to the extent such Person is liable therefor pursuant to a contractual  obligation or as a result of such Person’s ownership interest in such entity, except for the avoidance of doubt, any  direct or indirect Subsidiary of such Person and (xiii) the principal and interest portions of all rental obligations of  such Person under any synthetic lease or similar off-balance sheet financing where such transaction is considered to  be borrowed money for tax purposes but is classified as an operating lease in accordance with GAAP.          “Indemnified Person” shall have the meaning given such term in Section 11.04.          “Indemnified Taxes” shall mean (a) Taxes imposed on or with respect to any payment made by or on account  of any Obligation of any Loan Party under any Transaction Document, other than Excluded Taxes, and (b) to the  extent not otherwise described in clause (a), Other Taxes.          “Information Declination Notice” shall have the meaning given such term in Section 6.01.          “Intellectual Property” shall mean: (i) all inventions, designs, know-how, methods, processes, drawings,  specifications or other data or information and all memoranda, notes and records with respect to any research and  development,  and  all  embodiments  or  fixations  thereof  whether  tangible  or  intangible  form;  (ii) Copyrights,  Trademarks, Patents and mask works; (iii) any and all trade secrets, and any and all intellectual property rights in  computer software and computer software products; (iv) any and all design rights; (v) any and all claims for damages  by  way  of  past,  present  and  future  infringement  of  any  of the  rights  included  above,  with  the  right,  but  not  the  obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified  above; (vi) all licenses or other rights to use any of the Copyrights, Patents, Trademarks, mask works, or any other  property rights described above; (vii) all amendments, renewals and extensions of any of the Copyrights, Trademarks,  Patents or mask works; and (viii) all proceeds and products of the foregoing.          “Intellectual  Property  Security  Agreement”  shall  mean  each  Intellectual  Property  Security  Agreement  executed and delivered by one or more Loan Parties and Agent, in substantially the form of Exhibit E.          “Interest Period” shall mean the period commencing on the Closing Date or the applicable date that the  previous Interest Period is continued or the date on which the Borrower selects a new Interest Period pursuant to   Section 2.02(b) and ending on the date one, two, three or six months thereafter, as determined pursuant to Section  2.02(b); provided that any Interest Period that would otherwise end on a day that is not a Business Day shall be  extended to the next succeeding Business Day.          “Interest Rate Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest  rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (a)  for  the  purpose  of  hedging  the  interest  rate  exposure  associated  with  the  Loan  Parties’  and  their  respective  Subsidiaries’ operations, and (b) not for speculative purposes.                                             11  KE 52826770.15  

 

          “Investment” shall mean the purchase, acquisition or beneficial ownership of any Equity Securities, or any  obligations, Indebtedness or other interest  in, or all or substantially all of the assets of, any Person, or the making of  any advance, loan, extension of credit or capital contribution to, or any other investment in, any Person.          “IRC”  shall  mean  the  Internal  Revenue  Code  of  1986,  as  in  effect  from  time  to  time,  and  regulations  promulgated thereunder.          “Joinder Requirements” shall have the meaning given such term in Section 6.10.          “Landlord Waiver” shall mean the Landlord Waiver substantially in the form attached as Exhibit C hereto.          “Lending Office” shall have the meaning given such term in the definition of Excluded Taxes.          “LIBOR Rate” shall mean for any Interest Period, (i) the rate per annum appearing on the page of the Reuters  Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited  (such page currently being the LIBOR01 page) (the “LIBOR Rate”) for deposits with a term equivalent to such Interest  Period in Dollars, determined as of approximately 11:00 a.m. (London, England time), two Business Days prior to the  commencement of such Interest Period, or (ii) in the event the rate referenced in the preceding clause (i) does not  appear on such page or service or if such page or service shall cease to be available, the rate determined by the Agent  (acting at the direction of the Required Lenders) or the Required Lenders to be the offered rate on such other page or  other service which displays the LIBO Rate for deposits with a term equivalent to such Interest Period in Dollars,  determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the commencement  of such Interest Period; provided, that, the LIBOR Rate shall not be less than 1.00% per annum.          “Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge  or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest  of  a  vendor  or  lessor  under  a  conditional  sale  agreement,  capital  lease  or  other  title  retention  agreement,  or  any  agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the  Code or comparable law of any jurisdiction.          “Loan”, “Loans” or “Term Loan” or “Term Loans” shall mean the loans now or hereafter made by or on  behalf of any Lender or by Agent for the account of any Lender pursuant to this Loan Agreement as set forth in Article  2 hereof.          “Loan  Agreement”  shall  mean  this  Loan  and  Security  Agreement,  as  amended,  restated,  amended  and  restated, modified or supplemented from time to time.          “Loan Documents” shall mean, collectively, the Loan Agreement, the Guaranty, the Pledge Agreement, the  Notes, the Intellectual Property Security Agreements, the Perfection Certificate, the Landlord Waivers, the Mortgages,  the Agent Fee Letter, the Fee Letter, the Collateral Agency Agreement, any Subordination Agreement, and the other  documents or agreements executed in connection herewith or therewith including any other collateral or security  document or agreement executed by a Loan Party in favor of Agent, for the benefit of the Agent and the Lenders, in  each case, as amended, restated, amended and restated, modified or supplemented from time to time.          “Loan Party” shall have the meaning given such term in the recitals hereof.          “Loan Party Registered Intellectual Property” shall have the meaning given such term in Section 5.15.          “Loan Party Intellectual Property” shall have the meaning given such term in Section 5.15.          “Loan Party Intellectual Property Licenses” shall have the meaning given such term in Section 5.15.          “Loan Percentage” shall mean, with respect to a Lender, the percentage of each Loan specified opposite  such Lender’s name on Schedule 2 hereto.                                              12  KE 52826770.15  

 

          “LTIP” shall mean the Borrower’s 2017 Incentive Compensation Plan, as approved by the stockholders of  the Borrower, as amended, restated or otherwise modified from time to time so long as such amendment, restatement  or  modification  is  approved  by  the  requisite  vote  of  the  stockholders  of  the  Borrower,  to  the  extent  required  by  applicable law or the organizational documents of the Borrower.          “Make-Whole Amount” shall mean, on any date of prepayment of all or any portion of the Loans, an amount  in cash equal to (a) the present value, as determined by the Agent (acting at the direction of the Required Lenders) or  the Required Lenders in consultation with the Borrower, of all required interest payments (calculated at the Default  Rate if such Make-Whole Amount is due as a result of an acceleration of the Loans) due on the portion of the Loans  that are prepaid from the date of prepayment through and including the second anniversary of the Closing Date plus  (b) the prepayment premium that would be due under Section 2.02(e) if such prepayment were made on the first date  after the second anniversary of the Closing Date, in each case, discounted to the date of prepayment on a quarterly  basis (assuming a 360-day year and actual days elapsed) at a rate equal to the sum of the Treasury Rate plus 0.50%.          “Material  Adverse  Effect”  shall mean  a  material  adverse  effect on (i) the business,  assets, performance,  operations or financial or other condition of the Loan Parties and their respective Subsidiaries, taken as a whole; (ii) the  ability of the Loan Parties and their respective Subsidiaries to pay or perform the Obligations in accordance with the  terms of this Loan Agreement and the other Transaction Documents and to avoid an Event of Default under any  Transaction Document; (iii)  the legality, validity, enforceability, perfection or priority of the Liens of Agent upon the  Collateral; (iv) the Collateral or its value; or (v) the rights and remedies of any Lender under this Loan Agreement and  the other Transaction Documents.          “Material Indebtedness” shall mean, with respect to any Person, Indebtedness (other than the Obligations)  of such Person in an aggregate principal amount exceeding $5,000,000.          “Material Titled Assets” shall have the meaning given such term in Section 6.08(a).          “Minority Subsidiary” shall mean any entity in which a Person, directly or indirectly, beneficially owns 50%  or less of the Equity Securities.          “Mortgages” shall mean all mortgages, deeds of trust, or deeds to secure debt, as applicable, delivered with  respect to the Real Property substantially in the form of Exhibit M (with such changes as are reasonably approved by  the Required Lenders to account for local law matters), as they may be amended, supplemented or otherwise modified  from time to time.          “Multiemployer Plan” shall mean any employee benefit plan of the type described in Section 4001(a)(3) of  ERISA and subject to Title IV of ERISA to which a Loan Party or any ERISA Affiliate makes or is obligated to make  contributions, or with respect to which any Loan Party or ERISA Affiliate has or could reasonably be expected to  have any liability or obligation.           “Myers” shall have the meaning given such term in the definition of “Affiliated Entity.”          “Negotiable Collateral” shall mean letters of credit, letter-of-credit rights, instruments, promissory notes,  drafts and documents (as each such term is defined in the Code).          “Net Cash Proceeds” shall mean (a) in connection with any Transfer or Event of Loss, the proceeds thereof  in  the  form  of  cash  and  cash  equivalents  (including  any  such  proceeds  received  by  way  of  deferred  payment  of  principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only  as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be  applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the  subject of such Transfer or Event of Loss (other than any Lien pursuant to any Loan Document) and other customary  and reasonable fees and expenses actually incurred in connection therewith and net of Taxes paid and the Borrower’s  reasonable and good faith estimate of income, franchise, sales, and other applicable Taxes required to be paid by any  Loan Party or any of its respective Subsidiaries in connection with such Transfer or Event of Loss in the taxable year  that such Transfer or Event of Loss is consummated, the computation of which shall, in each such case, take into                                             13  KE 52826770.15  

 

   account the reduction in Tax liability resulting from any available operating losses and net operating loss carryovers,  Tax credits, and Tax credit carry forwards, and similar Tax attributes and, with respect to any Transfer, net of amounts  provided  as  a  reserve,  in  accordance  with  GAAP,  against  any  liabilities  under  any  indemnification  obligations  associated with such Transfer (provided that, to the extent and at the time any such amounts are released from such  reserve, such amounts shall constitute Net Cash Proceeds), and (b) in connection with any issuance or sale of Equity  Securities (other than under the LTIP) or any incurrence of Indebtedness (other than the Loans), the cash proceeds  received  from  such  issuance  or  incurrence,  net  of  attorneys’  fees,  investment  banking  fees,  accountants’  fees,  underwriting discounts and commissions and other customary and reasonable fees and expenses actually incurred in  connection therewith.          “Net  Working  Capital”  shall  mean,  at  any  time,  Consolidated  Current  Assets  at  such  time  minus  Consolidated Current Liabilities at such time.          “Net Working Capital Adjustment” shall have the meaning ascribed to such term in the definition of “Excess  Cash Flow”.          “NTTA Matter” shall mean any settlement of any claim that the Borrower and/or any of its Subsidiaries  (including Texas Sterling Construction Co., a Delaware corporation) holds against, or relating to, the North Texas  Transit Authority.          “Note” shall mean a promissory note or notes of Borrower substantially in the form attached as Exhibit A  hereto.          “Oaktree” shall mean Oaktree Capital Management, L.P., on behalf of the funds and accounts within its  Strategic Credit Strategy, and its successor, and permitted assigns.          “Obligations”  shall  mean  and  include  all  loans,  advances,  debts,  liabilities,  and  obligations,  including,  without limitation, the noncancelable obligation to make each payment scheduled to be made under each subsection  of Section 2.02, howsoever arising, owed by Loan Parties to Agent or any Lender and/or any of their Affiliates of  every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment  of money), whether as principal, surety, endorser, guarantor or otherwise, now existing or hereafter arising under or  pursuant to the terms of this Loan Agreement or the other Transaction Documents, including, without limitation, all  principal, interest, premium (including, without limitation, any Prepayment Premium or Make-Whole Amount), fees,  charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Loan  Parties hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become  due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11  U.S.C. Section 101 et seq.), as amended from time to time (including post-petition interest), or any similar statute  (including the payment of interest and other amounts which would accrue and become due but for the commencement  of such case, whether or not such amounts are allowed or allowable in whole or in part in such case) and whether or  not allowed or allowable as a claim in any such proceeding and whether direct or indirect, absolute or contingent, joint  or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured; provided that,  notwithstanding anything  to  the  contrary,  the  Obligations  of  any  Guarantor  shall  exclude  any  Excluded  Swap  Obligations solely of such Guarantor.          “OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.          “Other Taxes” shall mean any present or future stamp or documentary Taxes or any other excise or recording  Taxes,  charges  or  similar  levies  which  arise  from  any  payment  made  hereunder  or  from  the  execution,  delivery,  performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise  with respect to, this Loan Agreement or any other Transaction Documents except any such Taxes that are Other  Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.08).          “Patents”  shall  mean  all  patents,  patent  applications  and  like  protections,  including  without  limitation  improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same, now or  hereafter existing, created, acquired or held.                                             14  KE 52826770.15  

 

          “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any of its principal  functions under ERISA.          “Pension Plan” shall mean any employee pension benefit plan within the meaning of Section 3(2) of ERISA  (other than a Multiemployer Plan) that is maintained or is contributed to by a Loan Party or any ERISA Affiliate and  is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the IRC.           “Perfection Certificate” shall mean the Perfection Certificate delivered by the Loan Parties to Agent and  Lenders as of the Closing Date, as amended, restated, amended and restated, modified, supplemented or updated from  time to time.          “Permitted Acquisition” shall mean an acquisition, directly or indirectly, by Borrower of the assets or equity  interests of a Person and its respective Subsidiaries pursuant to a purchase, sale, merger or other similar acquisition  agreement in form and substance acceptable to the Required Lenders, and subject to the satisfaction or waiver in  writing by the Required Lenders in their sole discretion of the conditions set forth below:                (a)    such  acquisition  shall  be  structured  as (a)  an  asset  acquisition  by  the  Borrower  or         Subsidiary of Borrower that is a Loan Party, (b) a merger or consolidation of the target with and into Borrower         or a Subsidiary of Borrower that is a Loan Party, with Borrower or such Subsidiary, as applicable, as the         surviving  entity  in  such  merger  or  consolidation,  or  (c) a purchase  by  the  Borrower  or  a  Subsidiary  of         Borrower that is a Loan Party of 100% of the Equity Securities of the target;                (b)    the  Total  Consideration  paid  or  payable  in  connection  with  such  acquisition  shall  not         exceed a total of $50,000,000 in the aggregate, or individually, for each such transaction (or series of related         transactions); provided, that, such consideration shall only be permitted to be paid with (i) the cash proceeds         received by Borrower from a substantially concurrent issuance of Equity Securities consisting of common         stock or (ii) shares of common stock of Borrower;                (c)    no  Default  or  Event  of  Default  shall  have  occurred  or  be  continuing  both  before  and         immediately after giving effect to such acquisition;                (d)    such acquisition shall not result in the incurrence by any Loan Party or any of its respective         Subsidiaries (both before and after giving effect to such acquisition) of any additional Indebtedness (except         Permitted Indebtedness) or the granting of any additional Liens (except Permitted Liens);                (e)    (i) Agent, for the benefit of Agent and Lenders, shall be granted a first priority perfected         Lien (subject only to Permitted Liens) on all real and personal property being acquired pursuant to such         acquisition (and, in the case of an acquisition involving the purchase of any applicable Equity Securities of         the target or its respective Subsidiaries, all of such purchased Equity Securities shall be pledged to Agent for         the benefit of Agent and Lenders, and such target and its respective Subsidiaries shall be required to become         a Required Guarantor Party and grant to Agent, for the benefit of Agent and Lenders, a first priority perfected         Lien (subject only to Permitted Liens) on its assets) and (ii) such Loan Party shall comply with the Joinder         Requirements described in Section 6.10, and provide such other customary documents and instruments as         Agent or the Lenders shall reasonably request to perfect or maintain the perfection of its Lien on substantially         all of the real and personal property of the target and its respective Subsidiaries, as the case may be), all such         documents to be delivered within five (5) Business Days of the closing of such acquisition;                (f)    all  material  consents  necessary  for  such  acquisition  shall  have  been  acquired  and  such         acquisition  shall  be  consummated  in  accordance  with  the  applicable  Acquisition  Documentation  and         applicable law;                 (g)    as soon as practicable after the closing of such acquisition (and in any event within five (5)         Business Days after such closing), the Loan Parties shall deliver to Agent and Lenders copies of all the         Acquisition Documentation executed in connection with such acquisition, and any other material documents         or agreements reasonably requested by the Required Lenders;                                             15  KE 52826770.15  

 

                (h)    such acquisition shall have been approved by the Board of Directors of the target (or similar         governing body if such target is not a corporation) which is the subject of such acquisition and such target         shall not have announced that it will oppose such acquisition or shall not have commenced any action which         alleges that such acquisition shall violate applicable law;                (i)    the Borrower shall have furnished Agent with ten (10) Business Days’ prior written notice         of  such  intended  acquisition  and  shall  have  furnished  the  Agent  with  a  current  draft  of  the  Acquisition         Documentation to be entered into in connection with such acquisition (and final copies thereof as and when         executed),  a  summary  of  any  due  diligence  undertaken  by  the  Loan  Parties  in  connection  with  such         acquisition, appropriate financial statements of the target and its Subsidiaries, pro forma projected financial         statements for the twelve (12) month period following such acquisition after giving effect to such acquisition         (including  balance  sheets,  cash  flows  and  income  statements  by  quarter  for  the  acquired  target  and  its         Subsidiaries, individually, and on a consolidated basis with all Loan Parties), and such other information as         the Required Lenders may reasonably require, all of which shall be in form reasonably satisfactory to the         Required Lenders; and                (j)    on  a  pro  forma  basis,  after  giving  effect  to  such  acquisition,  the  Borrower  shall  be  in         compliance with each of the Financial Covenants as of the last day of the most recent fiscal quarter for which         Financial Statements are required to have been delivered hereunder, with evidence of such compliance to be         reflected in a certificate from the Responsible Officer of the Borrower delivered to the Lenders as of the         consummation of such acquisition, certifying as to such compliance.          “Permitted Dispositions” shall mean the matters described on Schedule 4 hereto.          “Permitted Indebtedness” shall mean: (i) Indebtedness of the Loan Parties in favor of Agent and Lenders  arising under this Loan Agreement or any other Loan Document; (ii) Indebtedness existing on the Closing Date and  disclosed on Schedule 5 hereto; (iii) Indebtedness secured by Liens described in clauses (v) and (vi) of the defined  term “Permitted Liens,” provided (A) such Indebtedness does not exceed the lesser of the cost or fair market value of  the  equipment  financed  with  such  Indebtedness  and  (B) such  Indebtedness  does  not  exceed  Six  Million  Dollars  ($6,000,000)  in the aggregate amount outstanding at any given time; (iv) amounts in respect of the Closing Date Earn- Out up to an aggregate amount that does not exceed $15,000,000 outstanding at any time; (v) amounts in respect of  the Closing Date Deferred Payments up to an aggregate amount that does not exceed $10,000,000 outstanding at any  time; (vi) Indebtedness incurred under the Closing Date Seller Notes up to an aggregate principal amount that does  not exceed $5,000,000 outstanding at any time; (vii) Indebtedness incurred for the acquisition of supplies or inventory  on normal trade credit; (viii) Indebtedness under Swap Agreements permitted by Section 7.09; (ix) endorsements for  collection or deposit in the ordinary course of business; (x) Indebtedness arising in the ordinary courses of business  with  respect  to  surety,  bid,  appeal,  indemnity  and  performance  bonds,  insurance  obligations  and  other  similar  obligations, in each case, issued by a Bonding Company; (xi) amounts in respect of the earn-out obligations set forth  in Section 2.6.3 of that certain Purchase Agreement, dated as of August 1, 2011 (as amended January 23, 2014), by  and between Jerry Banicki, Ralph L. Wadsworth Construction Company, LLC and the Borrower, in effect as of the  date hereof; (xiii) Indebtedness of Borrower under that certain Secured Revolving Promissory Note dated as of March  11, 2016 (the “Secured Intercompany Note”) in the original principal amount of $13,000,000 in favor of RHB LLC  and Myers; provided, that, commencing on the date that is thirty (30) days following the Closing Date, the aggregate  principal amount outstanding at any time under such Secured Intercompany Note shall not exceed $2,000,000; (xivii)  letters of credit to secure self-insurance liabilities and obligations under project contracts in an aggregate amount that  does not exceed $5,000,000 outstanding at any time; and (vxiv) extensions, refinancings, modifications, amendments  and restatements of any item of Permitted Indebtedness (i) through (iii) above.          “Permitted Investments” shall mean: (i) Investments existing on the Closing Date and disclosed on Schedule  6 hereto; (ii) (A) marketable direct obligations issued or unconditionally guaranteed by the United States of America  or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (B) commercial  paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A 2  or P 2 from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and (C) certificates of deposit  maturing no more than one (1) year from the date of investment therein; (iii) Investments consisting of (A) travel  advances, employee relocation loans and other employee loans and advances in the ordinary course of business not to  exceed Five Hundred Thousand Dollars ($500,000) during the term of this Loan Agreement, (B) non-cash loans to                                             16  KE 52826770.15  

 

   employees, officers or directors relating to the purchase of Equity Securities of Borrower pursuant to employee stock  purchase plans or arrangements approved by Borrower’s board of directors and (C) advances in the form of progress  payments, prepaid rent or security deposits with respect to operating leases and other similar deposits, in each case,  made in the ordinary course of business; (viv) Investments (including debt obligations) received in connection with  the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other  disputes with, customers or suppliers arising in the ordinary course of business; (viv) Investments consisting of notes  receivable of, or prepaid royalties from and other credit obligations of, customers, suppliers and debtors of Loan  Parties, who are not Affiliates, in the ordinary course of business; (vii) intercompany Investments made by, or the  holding of Equity Securities of, (A) a Loan Party or any of its respective Subsidiaries in a Loan Party and (B) a  Subsidiary that is not a Loan Party in or to any other Subsidiary that is not a Loan Party; (viii) Investments in the  ordinary course of business consisting of endorsements of negotiable instruments for collection or deposit; (ixviii)  Permitted Acquisitions; (xix) Investments by any of the Loan Parties or its Subsidiaries in the Affiliated Entities in an  aggregate amount not to exceed Five Million Dollars ($5,000,000) in the aggregate outstanding at any time; (xix)  Investments in Project Specific JVs solely for the purpose of forming or capitalizing such Project Specific JVs for the  limited purpose of performing construction work on a specific project in an aggregate amount not to exceed Ten  Million Dollars ($10,000,000) outstanding at any time; and (xii) so long as no Default or Event of Default exists prior  to and immediately after giving pro forma effect thereto, other Investments not otherwise permitted in each of the  preceding  clauses  described  in  this  definition  hereof  in  an  aggregate  amount  not  to  exceed  One  Million  Dollars  ($1,000,000) during the term of this Loan Agreement.          “Permitted Liens” shall mean and include:  (i) Liens in favor of Agent, for the benefit of the Agent and the  Lenders, and Liens securing payment of the Obligations; (ii) Liens existing on the Closing Date and disclosed on  Schedule 7 hereto; (iii) Liens of carriers, warehousemen, mechanics, materialmen, vendors, and landlords incurred in  the ordinary course of business for sums not overdue or being contested in good faith that are not overdue for a period  of more than 30 days or that are being contested in good faith by appropriate proceedings and for which appropriate  reserves in accordance with GAAP have been provided, provided provision is made to the reasonable satisfaction of  the Required Lenders for the eventual payment thereof if subsequently found payable; (iv) non-exclusive licenses and  sublicenses granted by a Loan Party and their respective Subsidiaries and leases or subleases (by a Loan Party or any  of its Subsidiaries as lessor or sublessor) to third parties in the ordinary course of business not interfering in any  material respect with the business of the Loan Parties and their respective Subsidiaries; (v) Liens upon or in any  equipment which was acquired or held by a Loan Party or any of its Subsidiaries to secure the purchase price of such  equipment (and any accessions, attachments, replacements or improvements thereon) or indebtedness incurred solely  for the purpose of financing the acquisition of such equipment (and any accessions, attachments, replacements or  improvements  thereon);  (vi)  Liens existing  on  any  equipment  (and  any  accessions,  attachments,  replacements  or  improvements thereon) at the time of its acquisition, provided that the Lien is confined solely to the property so  acquired and any accessions, attachments, replacements or improvements thereon, and the proceeds of such equipment  (and any accessions, attachments, replacements or improvements thereon); (vii) bankers’ liens, rights of setoff and  similar Liens incurred on deposits or securities accounts made in the ordinary course of business; (viii) Liens arising  from judgments, decrees or attachments in circumstances not constituting an Event of Default; (ix) Liens for taxes,  assessments or governmental charges or levies not yet due or delinquent or that are being contested in good faith by  appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the Books of any  Loan  Party  or  its  respective  Subsidiaries,  as  the  case  may  be,  in  conformity  with  GAAP;  (x) Liens  incurred  in  connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in  clauses (i) and (ii) above, provided that any extension, renewal or replacement Lien shall be limited to the property  encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced  does not increase; (xi) restrictions on transfer or other Liens contained in the Charter or other organizational documents  of a Loan Party; (xii) restrictions on transfer under applicable federal and state securities laws; (xiii) Liens arising in  the  ordinary  course  of  business  on  cash  or  securities  in  connection  with  worker’s  compensation,  unemployment  compensation and other types of social security (excluding Liens arising under ERISA); (xiv) easements, rights of  way, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any property that do not  secure any monetary obligations and which in the aggregate do not materially impair the use of such property for the  purposes of which such property is held or materially impair the value of such property subject thereto; (xv) Liens  securing the Indebtedness described in clause (xiii) of the definition of Permitted Indebtedness; and (xvi) any other  Liens approved by the Required Lenders.                                               17  KE 52826770.15  

 

          “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a  joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a  Governmental Authority.          “Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA maintained for  employees of a Loan Party or any such Plan to which a Loan Party is required to contribute or has or could reasonably  be expected to have any liability or obligation (other than a Multiemployer Plan).          “Pledge Agreement” shall mean that certain Pledge Agreement in favor of the Agent, for the benefit of the  Agent and the Lenders, executed by the Loan Parties party thereto, in form and substance reasonably satisfactory to  the Lenders, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.          “Pledged Companies”  shall mean  each  Person listed on Schedule  9(a) of  the  Perfection  Certificate as  a  “Pledged Company” or “Pledged Issuer”, together with each other Person, all or a portion of whose Equity Securities  are acquired or otherwise owned by a Loan Party after the Closing Date.  As of the Closing Date, Pledged Companies  shall not include (y) RHB LLC, a Nevada limited liability company, or (z) Sterling Hawaii Asphalt, LLC, a Hawaii  limited liability company; provided, that if at any time either RHB LLC and/or Sterling Hawaii Asphalt, LLC becomes,  or is required to become, a Required Guarantor Party or the Borrower is otherwise able to cause the Equity Securities  in such entity to be pledged, in each case, pursuant to the terms of the Loan Documents, such entity shall automatically  and immediately be included in the term “Pledged Companies.”          “Pledged Operating Agreements” shall mean all of each Loan Party’s rights, powers, and remedies under  the  limited  liability  company  operating  agreements  of  each  of  the  Pledged  Companies  that  are  limited  liability  companies.          “Pledged Partnership Agreements” shall mean all of each Loan Party’s rights, powers, and remedies under  the partnership agreements of each of the Pledged Companies that are partnerships.          “Pledged Shares” shall have the meaning given such term in the Pledge Agreement.          “Prepayment Premium” shall mean:                 (i)    in the case of prepayments made pursuant to Section 2.02(d) (other than pursuant to Section         2.02(d)(i)(B) or Section 2.02(d)(iii), which are covered in subclauses (ii) and (iii) below, respectively), (a)         with respect to a prepayment of all or any portion of a Loan occurring on or prior to the second anniversary         of the Closing Date, the Make-Whole Amount, (b) with respect to a prepayment of all or any portion of a         Loan occurring after the second anniversary of the Closing Date but on or prior to the third anniversary of         the Closing Date, 5.00% of the aggregate principal amount (including any interest, fees or amounts added to         principal) of the Loans held by such Lender that is being prepaid, (c) with respect to a prepayment of all or         any portion of a Loan occurring after the third anniversary of the Closing Date but on or prior to the fourth         anniversary of the Closing Date, 2.50% of the aggregate principal amount (including any interest, fees or         amounts added to principal) of the Loans held by such Lender that is being prepaid, or (d) with respect to a         prepayment of all or any portion of a Loan after the fourth anniversary of the Closing Date and thereafter,         0.00% of the aggregate principal amount of the Loans held by such Lender that is being prepaid,                 (ii)   in the case of prepayments made pursuant to Section 2.02(d)(i)(B) or in accordance with         clause (vi) of Schedule 3 hereto,), 1.00% of the aggregate principal amount (including any interest, fees or         amounts added to principal) of the Loans held by such Lender that is being prepaid, or                 (iii)  (a)  in  the  case  of  prepayments  made  pursuant  to  Section  2.02(d)(iii)(A),  1.00%  of  the         aggregate principal amount (including any interest, fees or amounts added to principal) of the Loans held by         such Lender that is being prepaid, or (b) in the case of prepayments made pursuant to Section 2.02(d)(iii)(C),         3.00% of the aggregate principal amount (including any interest, fees or amounts added to principal) of the         Loans held by such Lender that is being prepaid.                                              18  KE 52826770.15  

 

          “Project Specific JVs” shall mean any project-specific joint ventures, whether created through a contractual  arrangement or the ownership of Equity Securities, by a Loan Party or any of its Subsidiaries, including any such  project-specific joint ventures described in the Borrower’s SEC filings pursuant to which a partner of such Project  Specific JV acts as a sponsor or manager but may not hold Equity Securities in such Project Specific JV.          “PTO” shall mean the United States Patent and Trademark Office.          “Qualified ECP Guarantor” shall mean, in respect of any Swap Agreement, each Guarantor that has total  assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes  effective with respect to such Swap Agreement or such other person as constitutes an “eligible contract participant”  under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to  qualify as an “eligible contract participant” with respect to such Swap Agreement at such time by entering into a  keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.           “Real Property” shall mean all right, title and interests in and to a parcel of real property, land, together with  all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interest  appurtenant  thereto,  owned,  leased  or  operated  by  Borrower  or  its  Subsidiaries,  including  such  described  on  the  Perfection Certificate.          “Recipient” shall mean (a) the Agent and (b) any Lender.          “Record” shall mean information that is inscribed on a tangible medium or which is stored in an electronic  or other medium and is retrievable in perceivable form.          “Registration Rights Agreement” shall mean the Registration Rights Agreement, dated as of the Closing  Date, by and among the Borrower and the holders of the Warrant(s), as amended, restated, amended and restated,  modified or supplemented from time to time.          “Required Guarantor Party” shall have the meaning given such term in Section 6.10.          “Required Lenders” shall mean, at any time, Lenders having Term Loans representing more than 50% of the  aggregate outstanding Term Loans at such time.          “Requirement of Law” applicable to any Person shall mean (i) any Governmental Rule applicable to such  Person, (ii) any license, permit, approval or other authorization granted by any Governmental Authority to or for the  benefit of such Person and (iii) any judgment, decision or determination of any Governmental Authority or arbitrator,  in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its  property is subject.          “Responsible Officer” shall mean the chief executive officer, president, vice president, chief financial officer,  treasurer,  controller  or  comptroller  or  other  similar  officer  of  the  Loan  Parties  or,  solely  where  applicable,  their  respective  Subsidiaries,  but  in  any  event,  with  respect  to  financial  matters,  the  chief  financial  officer,  treasurer,  controller, comptroller, vice president finance or other similar officer of such Loan Parties or solely, where applicable,  their respective Subsidiaries.          “Restricted Payment” shall have the meaning given such term in Section 7.04.          “RHB Inc.” shall have the meaning given such term in the definition of “Affiliated Entity.”          “RHB LLC” shall have the meaning given such term in the definition of “Affiliated Entity.”          “Sanctioned Country” shall mean a country subject to a Sanctions program identified on the list maintained  by  OFAC  and  available  at http://www.treas.gov/resource-center/sanctions/pages/default.aspx or  as  otherwise  published from time to time.                                              19  KE 52826770.15  

 

          “Sanctioned Person” shall mean any individual or entity that is the subject or target of Sanctions, including  (a) (i) any Person named on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including,  without limitation, the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC and the  EU Consolidated List, or (ii) any entity that is, in the aggregate, 50 percent or greater owned, directly or indirectly, or  otherwise  controlled  by  a  Person or  Persons  described in  clause  (i), or (b) (i)  an agency of  the  government  of  a  Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a Person resident in or national  of a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.          “Sanctions” shall mean all U.S. and non-U.S. laws relating to economic or trade sanctions, including, without  limitation, the laws administered or enforced by the United States (including by OFAC or the U.S. Department of  State), the United Nations Security Council, and the European Union.          “SEC” shall mean the Securities and Exchange Commission, or any Governmental Authority succeeding to  any of its principal functions.          “Secured  Intercompany  Note”  shall  have  the  meaning  given  such  term  in  the  definition  of  “Permitted  Indebtedness.”          “Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay  its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and  not unreasonably small capital) to carry on its business consistent with its practices as of the date hereof, and (b) the  assets and properties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all  rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are  greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the  amount which, such Person has a reasonable basis to believe, represents an amount which can reasonably be expected  to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee  the face amount of such liability as reduced to reflect the probability of it becoming a matured liability).          “Specified Keyman” shall mean any of Con L. Wadsworth, Ronald A. Ballschmiede, Richard H. Buenting,  Joseph A. Cutillo, Gary Roger Engasser II or Billy Lee Wolff.           “Subordinated Debt” shall mean indebtedness incurred by any Loan Party that is subordinated to all of such  Loan Party’s Obligations (pursuant to a subordination, intercreditor, or other similar agreement in form and substance  satisfactory to the Required Lenders entered into among Agent, Lenders and the creditor of such Subordinated Debt),  on terms acceptable to the Required Lenders.  As of the Closing Date, the Closing Date Seller Notes shall constitute  Subordinated Debt.          “Subordination Agreement” shall mean a Subordination Agreement, by and among the Agent and Lenders,  on the one hand, and the creditors of Subordinated Debt, on the other hand, in form and substance satisfactory to the  Required Lenders, as amended, restated, amended and restated, modified or supplemented from time to time.  As of  the Closing Date, the Closing Date Subordination Agreement shall constitute a Subordination Agreement.          “Subsidiary” of any Person shall mean (i) any corporation of which more than fifty percent (50%) of the  issued and outstanding Equity Securities having ordinary voting power to elect a majority of the Board of Directors  of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation  shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned  or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such  Person’s other Subsidiaries, (ii) any partnership, limited liability company, joint venture, or other business entity of  which more than fifty percent (50%) of the equity interest having the power to vote, direct or control the management  of such partnership, limited liability company, joint venture or other business entity is at the time owned and controlled  by such Person, by such Person and one or more of the other Subsidiaries or by one or more of such Person’s other  Subsidiaries, and (iii) any Person, whether majority- or minority-owned, required by GAAP to be consolidated in the  financial reporting of Borrower or any of its Subsidiaries, including, for the avoidance of doubt, any Affiliated Entities.   Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or  Subsidiaries of a Loan Party or any of its Subsidiaries and any reference to a Subsidiary without designation of the  ownership of such Subsidiary shall be deemed to refer to a Subsidiary of Borrower.                                             20  KE 52826770.15  

 

          “Supporting  Obligations”  shall  mean  supporting  obligations  (as  such  term  is  defined  in  the  Code),  and  includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles,  instruments or Investment Property.          “Swap Agreement” shall mean any agreement with respect to any swap, hedge, forward, future or derivative  transaction or option or similar agreement (including without limitation, any Interest Rate 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.          “Swap Obligation” shall mean, with respect to any Loan Party, any obligation to pay or perform under any  agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity  Exchange Act.          “Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments,  fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties  applicable thereto.          “Termination Date” shall mean the earliest to occur of (i) the Term Loan Maturity Date and (ii) the date the  Obligations (including, without limitation, any Prepayment Premium)  are required to be paid in full (whether on  acceleration or otherwise), including pursuant to Section 10.01.          “Term Loan Maturity Date” shall mean April 3, 2022.          “Total Consideration” shall mean (without duplication), with respect to a Permitted Acquisition, the sum of  (a) the cash purchase price paid or payable as consideration in connection with such Permitted Acquisition, plus (b)  Indebtedness payable to or on behalf of the seller or any other similar Person in connection with such Permitted  Acquisition plus (c) earn-outs (determined in accordance with the definition of Indebtedness), plus (d) any other  deferred or contingent payment (determined as the greater of (x) the amount required to be shown as a liability in  accordance with GAAP at the time of the closing of such Permitted Acquisition and (y) the amount of such deferred  or contingent payment actually paid in connection with the subject transaction ), plus (e) the amount of Indebtedness  assumed or incurred in connection with such Permitted Acquisition, plus (f) all transaction costs incurred in connection  therewith.          “Total Secured Leverage Ratio” shall mean, as of the last day of any fiscal quarter, the ratio of (a) the  Consolidated Secured Indebtedness outstanding on such date to (b) Consolidated EBITDA for the four-fiscal quarter  period ending on such date.          “Trademarks” shall mean any trademark and service mark rights, whether registered or not, applications to  register and registrations of the same and like protections, and the entire goodwill connected with and symbolized by  such trademarks, now or hereafter existing, created, acquired or held.          “Trading With the Enemy Act” shall have the meaning given such term in Section 7.15.          “Transactions” shall have the meaning given such term in Section 4.01(a)(ii).          “Transaction Documents” shall mean, collectively, the Loan Documents, the Warrants, the Registration  Rights Agreement and the other documents or agreements executed in connection herewith or therewith, in each case,  as amended, restated, amended and restated, modified or supplemented from time to time.          “Transfer” shall have the meaning given such term in Section 7.02 hereof.          “Treasury Rate” shall mean with respect to the Make-Whole Amount, a rate equal to the then current yield  to maturity on actively traded U.S. Treasury securities having a constant maturity and having a duration equal to (or                                              21  KE 52826770.15  

 

   the  nearest  available  tenor)  the  period  from  the  date  that  payment  is  received  to  the  date  that  falls  on  the  first  anniversary of the Closing Date.          “U.S. Tax Compliance Certificate” shall have the meaning given such term in Section 2.05(f)(iii).          “Vehicle Collateral Agent” shall have the meaning given such term in the definition of Collateral Agency  Agreement.          “Warrant” shall mean a warrant or warrants to purchase capital stock of the Borrower issued by Borrower  to  Lenders  or  their  Affiliates  as  provided  by  this  Loan  Agreement,  as  amended,  restated,  amended  and  restated,  modified or supplemented from time to time.          “Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write- down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for  the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In  Legislation Schedule.   All capitalized terms defined in the Code and not otherwise defined herein shall have the respective meanings specified  in the Code.   ARTICLE 2.   THE LOANS.   Section 2.01. Commitment.  Subject to the terms and conditions of this Loan Agreement and in reliance upon  the representations and warranties set forth herein, each Lender severally agrees to make available to the Agent or  directly to the Borrower on the Closing Date such Lender’s Loan Percentage of a term loan in U.S. Dollars in the  aggregate principal amount of EIGHTY FIVE MILLION DOLLARS ($85,000,000) for the purposes hereinafter  set forth.  Upon receipt by the Agent of the proceeds of the Term Loan made on the Closing Date, such proceeds will  then be made available to the Borrower by the Agent, by wiring such proceeds in accordance with the funds flow  attached  to  the  notice  of  borrowing  as  contemplated  by  Section  2.03(c).   Borrower  may  prepay  Loans  only  in  accordance with Section 2.02(d).  Amounts prepaid may not be reborrowed.   Section 2.02. Interest and Payments.          (a)   Interest.  Subject  to  Section  6.18, Borrower  shall  pay  interest  in  arrears  on  all  outstanding               Obligations (including any Prepayment Premium) at the LIBOR Rate plus 8.75% per annum on the               unpaid principal amount thereof (including, to the extent permitted by law, on interest thereon not               paid when due) from the date made or incurred until paid in full in cash.  Interest on the Loan shall               be calculated based upon a year of 360 days and actual days elapsed.  Each payment of interest only               shall be paid in cash and made on the last Business Day of each calendar month.  If Borrower pays               interest on the Loan which is determined to be in excess of the then legal maximum rate, then that               portion of each interest payment representing an amount in excess of the then legal maximum rate               shall be deemed a payment of principal and applied against the principal of the Loan.          (b)   LIBOR  Provisions.   In  the  notice  of  borrowing  delivered  pursuant  to  Section  4.01(a)(v),  the               Borrower shall specify the Interest Period used to determine the LIBOR Rate as of the Closing Date.                Upon the expiration of each Interest Period, in the absence of the Borrower providing written notice               to the Agent not less than three (3) Business Days prior to the end of such Interest Period electing a               different Interest Period, the same Interest Period shall be used to determine the LIBOR Rate for the               immediately succeeding Interest Period.  If the Borrower provides written notice electing a new               Interest Period, then such new Interest Period and the corresponding LIBOR Rate shall be used.                                              22  KE 52826770.15  

 

          (c)   Payments of Principal.  The principal amount of the Term Loan shall be repaid in full in cash on the               Termination Date.          (d)   Prepayment.                  (i)    Voluntary Prepayment.                       (A)    General.  Upon ten (10) Business Days’ prior written notice to Agent and the                             Lenders,  Borrower  may,  at  its  option, prepay all  or  any part of  the remaining                             unpaid payments on the Loans, in principal amounts not less than $1,000,000 and                             in $1,000,000 increments in excess thereof, at a prepayment price equal to (A) the                             principal amount of the Loans being prepaid, plus (B) accrued and unpaid interest                             thereon  through  and  including  the  date  of  such  prepayment,  plus  (C)  the                             applicable Prepayment Premium, plus (D) any other amounts then due to Agent                             and Lenders.  All repayments or prepayments under this Section 2.02(d)(i)(A)                             shall be subject to any Prepayment Premium set forth in Section 2.02(e), but shall                             otherwise  be  prepaid  without  premium  or  penalty.   Interest  on  the  principal                             amount prepaid shall be payable on any date that a repayment is made hereunder                             through the date of repayment.                       (B)    Permitted Dispositions and/or NTTA Matter.  Upon ten (10) Business Days’ prior                             written notice to Agent  and the Lenders,  Borrower  may,  at  its  option, use  the                             proceeds  arising  from  the  Permitted  Dispositions  and/or  the NTTA  Matter  to                             make one or more prepayments on the Loans, in principal amounts not less than                             $1,000,000 and in $1,000,000 increments in excess thereof, up to an amount not                             to exceed $30,000,000 in the aggregate, at a prepayment price equal to (A) the                             principal amount of the Loans being prepaid, plus (B) accrued and unpaid interest                             thereon  through  and  including  the  date  of  such  prepayment,  plus  (C)  the                             applicable Prepayment Premium, plus (D) any other amounts then due to Agent                             and Lenders.  All repayments or prepayments under this Section 2.02(d)(i)(B)                             shall be subject to any Prepayment Premium set forth in Section 2.02(e), but shall                             otherwise  be  prepaid  without  premium  or  penalty.   Interest  on  the  principal                             amount prepaid shall be payable on any date that a repayment is made hereunder                             through the date of repayment.                       (C)    Voluntary Prepayment Notice.  The Borrower shall deliver to the Agent and the                             Lenders notice of each prepayment of Loans in whole or in part pursuant to this                             Section 2.02(d)(i)(C) not less than ten (10) Business Days (or such shorter period                             agreed to by the Required Lenders) prior to the date such prepayment shall be                             made.  Each notice of prepayment shall specify the proposed prepayment date,                             the  principal  amount  of  each  Loan  (or  portion  thereof)  to  be  prepaid  and  the                             calculation  of  the  total  amount  of  such  prepayment  proposed  to  be  made  in                             accordance  with  this  Section  2.02(d)(i)  and  indicate  whether  such  voluntary                             prepayment  is  being  made  pursuant  to  Section  2.02(d)(i)(A)  or  Section                             2.02(d)(i)(B).                       (D)    Officer’s Certificate.  The Borrower shall deliver to the Agent and the Lenders, at                             the time of each prepayment required under this Section 2.02(d)(i), a certificate                             signed by a Responsible Officer of the Borrower setting forth in reasonable detail                             the calculation of the amount of such prepayment (and the Agent shall promptly                             provide the same to each Lender).                       (E)    Prepayment  Premium.   All  prepayments  under  this  Section  2.02(d)(i)  shall  be                             subject  to  any  Prepayment  Premium  set  forth  in  Section  2.02(e)  and  be                             accompanied  by  accrued  and  unpaid  interest  on  the  principal  amount  prepaid                             through the date of prepayment.                                             23  KE 52826770.15  

 

                (ii)   Mandatory Prepayment. To the extent that, immediately after the prepayment of the Loans,                      the  applicable  Net  Cash  Proceeds  are  not  needed  by  the  Borrower to  be  in  pro  forma                      compliance with Section 6.17(b) during the immediately succeeding four fiscal quarters                      following  the  required  date  of  prepayment  arising  under  this  Section  2.02(d)(ii)  with                      respect to the applicable event(s) described below:                       (A)    Debt Issuances.  Within one (1) Business Day of receipt by any Loan Party or any                             of  its  Subsidiaries  (other  than  Project  Specific  JVs)  of  proceeds  from  any                             Indebtedness other than Permitted Indebtedness, the Borrower shall prepay the                             Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of such                             Indebtedness received by the Loan Parties or any of its Subsidiaries (except that                             with respect to any Affiliated Entities, only to the extent of the Net Cash Proceeds                             received by the Loan Parties).                       (B)    Issuances of Equity Securities.  Within one (1) Business Day of receipt by any                             Loan  Party  or  any  of  their  Subsidiaries  (other  than  Project  Specific  JVs)  of                             proceeds from any issuance of any Equity Securities (other than (I) an issuance of                             Equity Securities the proceeds of which shall be used substantially concurrently                             with  the  consummation  of,  and  to  finance,  a  Permitted  Acquisition,  or  (II)                             distributions by a Loan Party, a Subsidiary of a Loan Party, an Affiliated Entity                             or a Minority Subsidiary to a Loan Party or a Subsidiary of a Loan Party that is a                             Guarantor), the Borrower shall prepay the Loans in an aggregate amount equal to                             50% of the Net Cash Proceeds of such issuance of Equity Securities received by                             the  Loan  Parties  or  any  of  its  Subsidiaries  (except  that  with respect  to  any                             Affiliated Entities or Minority Subsidiaries, only to the extent of the Net Cash                             Proceeds received by the Loan Parties).                       (C)    Transfers or Events of Loss.  Within five (5) Business Days of the date of receipt                             by any Loan Party or any of its Subsidiaries (other than Project Specific JVs) of                             any  Net  Cash  Proceeds  received  in  connection  with  any  Transfer  (other  than                             Transfers  permitted  by  Sections  7.02(i)  through  (iii))  or  any  Event  of  Loss  ,                             Borrower shall prepay the Loans in an aggregate amount equal to 100% of such                             Net Cash Proceeds received by the Loan Parties or any of its Subsidiaries (except                             that with respect to any Affiliated Entities, only to the extent of the Net Cash                             Proceeds received by the Loan Parties); provided, however, that with respect to                             any such Net Cash Proceeds received by a Loan Party or any of its Subsidiaries                             (other than Project Specific JVs), all or any portion of such Net Cash Proceeds                             may be used to purchase, replace, substitute, restore or acquire fixed or capital                             assets of the Loan Parties or any of its Subsidiaries (other than Project Specific                             JVs) within 180 days  of  the  receipt  of  such  Net  Cash  Proceeds,  subject  to  an                             aggregate cap of Ten Million Dollars ($10,000,000) per fiscal year for any such                             Net  Cash  Proceeds  that  are  being  reinvested  in  accordance  with  this  proviso;                             provided further that, (I) any such Net Cash Proceeds not so applied in accordance                             with the immediately preceding proviso or (II) after the occurrence and during the                             continuance of an Event of Default, any Net Cash Proceeds received in connection                             with any such Transfer or any such Event of Loss, in each case, shall be promptly                             used to prepay the Loans (such prepayment to be applied as set forth in Section                             2.02(d)(ii)(E) below) and the Loan Parties and their respective Subsidiaries (other                             than Project Specific JVs) shall not have, or no longer have, the right to reinvest                             such Net Cash Proceeds.                       (D)    Extraordinary Receipts.  Within one (1) Business Day of the date of receipt by a                             Loan  Party  or  any of  its  Subsidiaries  (other  than Project  Specific  JVs)  of  any                             Extraordinary  Receipts  in  excess  of  One  Million  Dollars  ($1,000,000)  in  the                             aggregate during the term of this Loan Agreement, Borrower shall prepay the                             outstanding  principal  amount  of  the  Obligations  in  accordance  with  Section                                             24  KE 52826770.15  

 

                              2.02(d)(ii)(E)  in  an  amount  equal  to  100%  of  such  Extraordinary  Receipts                             received by the Loan Parties or any of its Subsidiaries (except that with respect to                             any Affiliated Entities, only to the extent of the Net Cash Proceeds received by                             the  Loan  Parties),  net  of  any  reasonable  expenses  incurred  in  collecting  such                             Extraordinary Receipts.                       (E)    Application of Mandatory Prepayments.  Amounts to be applied in connection                             with prepayments  made  pursuant  to  Section 2.02(d)(ii) shall be  applied  to  the                             prepayment  of  the  Term  Loans  in  accordance  with  Section  2.04(d).   Each                             prepayment of the Loans under this Section 2.02(d)(ii) shall be accompanied by                             accrued and unpaid interest to the date of such prepayment on the amount prepaid.                       (F)    Mandatory Prepayment Notice.  The Borrower shall deliver to the Agent and the                             Lenders  notice  of  each  prepayment  of  Loans  in  whole  or  in  part  pursuant  to                             Section 2.02(d)(ii)(F) not less than ten (10) Business Days (or such shorter period                             agreed to by the Required Lenders) prior to the date such prepayment shall be                             made.  Each notice of prepayment shall specify the proposed prepayment date,                             the  principal  amount  of  each  Loan  (or  portion  thereof)  to  be  prepaid  and  the                             calculation  of  the  total  amount  of  such  prepayment  proposed  to  be  made  in                             accordance with this Section 2.02(d)(ii) and indicate whether such prepayment is                             being  made  pursuant  to  Section  2.02(d)(ii)(A),  Section  2.02(d)(ii)(B),  Section                             2.02(d)(ii)(C), or Section 2.02(d)(ii)(D).                       (G)    Officer’s Certificate.  The Borrower shall deliver to the Agent and the Lenders, at                             the time of each prepayment required under this Section 2.02(d)(ii), a certificate                             signed by a Responsible Officer of the Borrower setting forth in reasonable detail                             the calculation of the amount of such prepayment (and the Agent shall promptly                             provide the same to each Lender).                       (H)    Prepayment Premium.  All prepayments under this Section 2.02(d)(ii) shall be                             subject  to  any  Prepayment  Premium  set  forth  in  Section  2.02(e)  and  be                             accompanied  by  accrued  and  unpaid  interest  on  the principal  amount  prepaid                             through the date of prepayment.                (iii)  Offer to Prepay Loans with Excess Cash Flow.                       (A)    Excess Cash Flow.  Within two (2) Business Days after the date on which the                             Borrower files (or, if earlier, is required to file) its Form 10-Q or Form 10-K, as                             applicable,  with  the  SEC,  relating  to  the  immediately  preceding  fiscal  quarter                             (such date, the “ECF Prepayment Offer Date”), commencing with the first full                             fiscal quarter ending after the Closing Date and for every fiscal quarter thereafter,                             the Borrower shall offer (such offer, the “ECF Prepayment Offer”) to prepay the                             Loans in an aggregate amount equal to (A) 75% of the Excess Cash Flow for such                             fiscal quarter plus (B) accrued and unpaid interest thereon through and including                             the date of such prepayment, plus (C) the applicable Prepayment Premium, plus                             (D) any other amounts then due to Agent and Lenders; provided that, to the extent                             any Net Working Capital Adjustment has the effect of reducing Excess Cash Flow                             for any trailing four fiscal quarter period in an amount in excess of $5,000,000,                             the  Borrower  shall  prepay  the  Loans  in  an  aggregate  amount  equal  to  the                             difference between such amount and $5,000,000.                       (B)    Offer to Prepay Loans. The offer to prepay Loans contemplated by this Section                             2.02(d)(iii)  shall  be  an  offer to  prepay,  in  accordance with  and  subject to  this                             Section  2.02(d),  the  Loans  held  by  each  Lender  on  the  date  of  such  ECF                             Prepayment Offer Date in accordance with Section 2.04(d).                                             25  KE 52826770.15  

 

                       (C)    Rejection; Acceptance. The Required Lenders may, on behalf of each Lender,                             accept or reject the offer to prepay made pursuant to this Section 2.02(d)(iii) by                             causing a notice of such acceptance or rejection to be delivered to Borrower (with                             a  copy  to  Agent  and  the  Lenders)  not  less  than  ten  (10)  Business  Days  after                             Lender’s receipt of such offer. A failure by the Required Lenders to so respond to                             an offer to prepay made pursuant to this Section 2.02(d)(iii) shall be deemed to                             constitute an acceptance of such offer by the Required Lenders on behalf of all                             Lenders.  Notwithstanding any rejection of an offer to prepay by the Required                             Lenders (such rejected prepayment offer amount, the “ECF Declined Amount”),                             the Borrower may, at its option, nonetheless prepay the Loans in an aggregate                             amount equal to (A) 37.5% of the Excess Cash Flow for such fiscal quarter plus                             (B) accrued and unpaid interest thereon through and including the date of such                             prepayment,  plus  (C)  the  applicable  Prepayment  Premium,  plus  (D)  any  other                             amounts then due to Agent and Lenders, on a pro rata basis in accordance with                             Section 2.04(d), with any residual ECF Declined Amount being retained by the                             Borrower.                       (D)    Prepayment.   Prepayment  of  the  Loans  to  be  prepaid  pursuant  to  this  Section                             2.02(d)(iii) (whether as part of an acceptance by the Required Lenders of an ECF                             Prepayment Offer or as part of a rejection of such ECF Prepayment Offer) shall                             be  accompanied  with  the  applicable  Prepayment  Premium  on  the  principal                             amount of such Loans being prepaid, together with accrued and unpaid interest                             on such Loans accrued to the date of prepayment and will be payable in cash only.                              The prepayment shall be made within two (2) Business Days of the acceptance or                             rejection  (if  Borrower  so  elects  to  make  such  prepayment  in  accordance  with                             Section 2.02(d)(iii)(C)) of the ECF Prepayment Offer.                       (E)    Officer’s Certificate.  The Borrower shall deliver to the Agent and the Lenders, at                             the time of each prepayment required under this Section 2.02(d)(iii), a certificate                             signed by a Responsible Officer of the Borrower setting forth in reasonable detail                             the calculation of the amount of such prepayment.                       (F)    Prepayment Premium.  All prepayments under this Section 2.02(d)(iii) shall be                             subject  to  any  Prepayment  Premium  set  forth  in  Section  2.02(e)  and  be                             accompanied  by  accrued  and  unpaid  interest  on  the principal  amount  prepaid                             through the date of prepayment.          (e)   Prepayment Premium.  Notwithstanding anything herein to the contrary, in the event all or any               portion  of  the  Loans  or  other  Obligations  are  prepaid,  repaid  or  accelerated  for  any  reason               (including,  without  limitation,  an  acceleration  (whether  or  not  such  acceleration  occurs               automatically) of the Loans and the other Obligations (including as a result of any Event of Default,               including, without limitation, any Event of Default under Section 9.01(e) or Section 9.01(f)), upon               the occurrence of any Event of Default (including, without limitation, a Change of Control), or upon               any  mandatory  prepayment  or  optional  prepayment  (except  in  connection  with  any  prepayment               described in the parenthetical set forth in Section 2.02(d)(ii)(C) with proceeds received from an               Event  of  Loss)  or  any  prepayment  contemplated  by Schedule  3 hereto,), such  prepayments  or               repayments shall be accompanied by a prepayment premium equal to the Prepayment Premium.  If               the Loans are accelerated for any reason under this Loan Agreement, the Prepayment Premium shall               be calculated as if the date of acceleration of such Loans was the date of prepayment of such Loans.                The parties hereto acknowledge and agree that, in light of the impracticality and extreme difficulty               of  ascertaining  actual  damages,  the  Prepayment  Premium  set  forth  above  is  intended  to  be  a               reasonable calculation of the actual damages that would be suffered by the Agent and the Lenders               as a result of any such repayment or prepayment.  The parties hereto further acknowledge and agree               that the Prepayment Premium is not intended to act as a penalty or to punish the Borrower for any               such repayment or prepayment. The Prepayment Premium, if any, shall also be payable in the event               the Obligations (and/or this Loan Agreement) are satisfied or released by foreclosure (whether by                                             26  KE 52826770.15  

 

                power  of  judicial  proceeding),  deed  in  lieu  of  foreclosure  or  by  any  other  means.  TO  THE               MAXIMUM  EXTENT  NOT  PROHIBITED  BY  APPLICABLE  LAW,  THE  LOAN  PARTIES               EXPRESSLY  WAIVE  THE  PROVISIONS  OF  ANY  PRESENT  OR  FUTURE  STATUTE  OR               LAW  THAT  PROHIBITS  OR  MAY  PROHIBIT  THE  COLLECTION  OF  THE  FOREGOING               PREPAYMENT PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Loan               Parties expressly agree that (i) the Prepayment Premium is reasonable and is the product of an arm’s               length  transaction  between  sophisticated  business  people,  ably  represented  by  counsel,  (ii)  the               Prepayment Premium shall be payable notwithstanding the then prevailing market rates at the time               payment is made, (iii) there has been a course of conduct between Lenders and the Loan Parties               giving specific consideration in this transaction for such agreement to pay the Prepayment Premium,               (iv) the Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this               Section 2.02(e), (v) the agreement to pay the Prepayment Premium is a material inducement to the               Lenders to make the Loans, and (vi) the Prepayment Premium represents a good faith, reasonable               estimate and calculation of the lost profits or damages of the Lenders and that it would be impractical               and extremely difficult to ascertain the actual amount of damages to the Lenders or profits lost by               the Lenders as a result of any of the foregoing events.   Section 2.03. Use of Proceeds; the Loans and the Notes; Disbursement.          (a)   Use of Proceeds.  The proceeds of the Loans shall be used to repay existing debt, fund the Closing               Date Acquisition, pay related fees and expenses, and for working capital.          (b)   The  Loans  and  the Notes.  The  obligation of  Borrower  to repay  the aggregate unpaid principal               amount  of  and  interest  on  the  Loan  shall  be  evidenced  by  one  or  more  Notes  setting  forth  the               principal amount of the Loans and the payments due.  Agent shall keep a record of the payments               made under each Note on its Books which records shall be prima facie evidence of the amounts paid               under the Notes absent manifest error.  Any failure by a Lender to obtain or retain a Note shall not               limit or otherwise affect the obligations of Borrower to pay amounts due hereunder with respect to               the Loans.          (c)   Notice and Disbursement.  Whenever Borrower desires Lenders to make a Loan, Borrower shall               deliver to Agent and Lenders an irrevocable notice of borrowing in writing which shall be received               by  the  Agent  and  Lenders  prior  to  9:00  A.M.,  Pacific  time,  one  (1)  Business  Day  prior  to  the               anticipated  Closing  Date,  requesting  that  the  Lenders  make  the  Loan  on  the  Closing  Date  and               specifying the amount to be borrowed.  Not later than 1:00 P.M., Eastern time, on the Closing Date,               each Lender shall either make available to the Agent at the funding office designated by Agent or               make Loans directly available to Borrower in an amount in immediately available funds equal to               the Loan or Loans to be made by such Lender.  The Agent shall credit the account of the Borrower               on the Books of such office of the Agent with the aggregate of the amounts made available to the               Agent by the Lenders in immediately available funds.  Lenders’ obligation to make Loans shall be               subject to the satisfaction of the conditions set forth in Section 4.01(b).  Subject to the satisfaction               of the conditions set forth in this Loan Agreement, each Lender shall disburse its pro rata portion of               the Loan as specified in the funds flow attached to the notice of borrowing on the Closing Date.   Section 2.04. Other Payment Terms.          (a)   Place  and  Manner.   All  payments  to  be  made  by  the  Borrower  shall  be  made  without  set  off,               recoupment or counterclaim.  Except as otherwise expressly provided herein, all payments by the               Borrower shall be made to the Agent for the account of the Lenders, at the account designated by               the Agent and shall be made in U.S. Dollars and in immediately available funds, no later than 1:00               p.m. (Eastern time) on the date specified herein.  Any payment received by the Agent after such               time  shall  be  deemed  (for  purposes  of  calculating  interest  only)  to  have  been  received  on  the               following Business Day and any applicable interest shall continue to accrue.  For the avoidance of               doubt, notwithstanding any other provision of any Loan Document to the contrary, no payment               received directly or indirectly from any Loan Party that is not a Qualified ECP Guarantor shall be                                             27  KE 52826770.15  

 

                applied  directly  or  indirectly  by  the  Agent  or  otherwise  to  the  payment  of  any  Excluded  Swap               Obligations.          (b)   Date.  Whenever any payment due hereunder shall fall due on a day other than a Business Day, such               payment shall be made on the next succeeding Business Day, and such extension of time shall be               included in the computation of interest or fees, as the case may be.          (c)   Default Rate.  After the occurrence and during the continuance of an Event of Default, upon written               election of the Required Lenders or automatically upon any Event of Default pursuant to Section               9.01(a),  9.01(e)  or  9.01(f),  Borrower  shall  pay  interest  on  outstanding  Obligations  (including,               without limitation, any Prepayment Premium) until such past due amounts are paid in full, at a per               annum rate equal to the Default Rate.  All computations of such interest shall be based on a year of               360 days and actual days elapsed.  Interest accrued at the Default Rate shall be payable from time               to time on demand.          (d)   Pro Rata Treatment and Payments.  Except as otherwise may be agreed by the Borrower and the               Lenders, each payment (including each prepayment) by the Borrower on account of principal of and               interest  on  the  Loans  shall  be  made pro  rata according  to  the  respective  outstanding  principal               amounts of the Loans then held by the Lenders.    Amounts prepaid on account of the Loans may               not be reborrowed.          (e)   Calculation of Payments.  Notwithstanding anything to the contrary contained herein, any payment               required to be made hereunder, whether as principal, interest, fees, premiums (including Prepayment               Premiums or Make-Whole Amounts) or other amounts payable hereunder or under any of the Loan               Documents may, if requested by the Agent (acting at the direction of the Required Lenders), and               shall, if otherwise expressly set forth herein, be required be set forth in a certificate of a Responsible               Officer of the Borrower, setting forth in reasonable detail the calculation of the amount of such               payment.  Such calculation shall be reviewed by the Agent and the Lenders and the determination               of  the  accuracy  of  such  calculation  shall  be  made  by  the  Required  Lenders,  in  their  sole  but               reasonable discretion.   Section 2.05. Taxes.          (a)   Payments Free of Taxes. Any and all payments by or on account of any Obligation of any Loan               Party under any Transaction Document shall, except as required by any Requirement of Law, be               made free and clear of and without deduction or withholding for any Taxes; provided that, if any               Loan Party or the Agent shall be required by a Requirement of Law to deduct or withhold any Taxes                from such payments, then (i) the sum payable by the applicable Loan Party shall be increased as               necessary so that after making all required deductions (including deductions applicable to additional               sums payable under this Section 2.05) the applicable Recipient, as the case may be, receives an               amount equal to the sum it would have received had no such deductions and withholdings have been               made, (ii) the applicable Loan Party or Agent shall make such deductions and (iii) the applicable               Loan  Party  or  Agent  shall  timely  pay  the  full  amount  deducted  or  withheld  to  the  relevant               Governmental Authority in accordance with Requirements of Law.          (b)   Payment of Other Taxes by the Borrower. Without limiting the provisions of Section 2.05(a) above,               the  Borrower  shall  timely  pay  any  Other  Taxes  to  the  relevant  Governmental  Authority  in               accordance with Requirements of Law.          (c)   Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10)               days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified               Taxes imposed or asserted on or attributable to amounts payable under this Section 2.05) payable               or paid by such Recipient, as the case may be, and any reasonable expenses arising therefrom or               with respect thereto, whether or not such Indemnified Taxes  were correctly or legally imposed or               asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment                                             28  KE 52826770.15  

 

                or liability delivered to the Borrower by a Lender (with a copy to the Agent), or by the Agent on its               own behalf or on behalf of a Lender, shall be conclusive absent manifest error.          (d)   Indemnification by the Lender.  Each Lender shall severally indemnify the Agent, within ten (10)               days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to               the extent that any Loan Party has not already indemnified the Agent for such Indemnified Taxes               and  without  limiting  the  obligation  of  the  Loan  Parties  to  do  so),  and  (ii)  any  Excluded  Taxes               attributable to such Lender, in each case, that are payable or paid by the Agent in connection with               any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto,               whether  or  not  such  Taxes  were  correctly  or  legally  imposed  or  asserted  by  the  relevant               Governmental Authority.  A certificate as to the amount of such payment or liability delivered to               any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes               the Agent to set off and apply any and all amounts at any time owing to such Lender under any               Transaction  Document  or otherwise payable  by  the Agent  to  the  Lender from  any  other  source               against any amount due to the Agent under this paragraph (d).          (e)   Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other               Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Agent and               the  relevant  Lender  the  original  or  a  certified  copy  of  a  receipt  issued  by  such  Governmental               Authority evidencing such payment, a copy of the return reporting such payment or other evidence               of such payment reasonably satisfactory to the Agent and the relevant Lender.          (f)   Status of Lenders.                (i)    Any Lender that is entitled to an exemption from or reduction of withholding Tax under                      the law of the jurisdiction in which the Borrower is resident for Tax purposes, or any treaty                      to which such jurisdiction is a party, with respect to payments hereunder or under any other                      Transaction Document shall deliver to the Borrower (with a copy to the Agent), at the time                      or times prescribed by Requirements of Law or reasonably requested by the Borrower or                      the  Agent,  such  properly  completed  and  executed  documentation  prescribed  by                      Requirements of Law as will permit such payments to be made without withholding or at                      a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the                      Agent,  shall  deliver  such  other  documentation  prescribed by  Requirements  of  Law  or                      reasonably requested by the Borrower or the Agent as will enable the Borrower or the                      Agent  to  determine  whether  or  not  such  Lender  is  subject  to  backup  withholding  or                      information  reporting  requirements.   Notwithstanding  anything  to  the  contrary  in  the                      preceding two sentences, the completion, execution and submission of such documentation                      (other than such documentation set forth in Section 2.05(f)(ii) and Section 2.05(f)(iii)(A)                      through Section 2.05(f)(iii)(F)) shall not be required if in the Lender’s reasonable judgment                      such completion, execution or submission would subject such Lender to any unreimbursed                      cost or expense or would prejudice the legal or commercial position of such Lender.                (ii)   Without limiting the generality of the first paragraph of this Section 2.05(f), any Lender or                      Agent that is a U.S. Person shall deliver to the Borrower and the Agent (in such number of                      copies as shall be requested by the recipient) on or prior to the date on which such Person                      becomes a party to this Loan Agreement (and from time to time thereafter upon the request                      of the Borrower or the Agent), duly completed copies of Internal Revenue Service Form                      W-9 certifying that such Person is exempt from U.S. federal backup withholding tax.                (iii)  Without limiting the generality of the first paragraph of this Section 2.05(f), any Foreign                      Holder shall deliver to the Borrower and the Agent (in such number of copies as shall be                      requested by the recipient) on or prior to the date on which such Foreign Holder becomes                      a party to this Loan Agreement (and from time to time thereafter upon the request of the                      Borrower  or  the  Agent,  but  only  if  such  Foreign  Holder  is  legally  entitled  to  do  so),                      whichever one or more of the following is applicable:                                             29  KE 52826770.15  

 

                       (A)    duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E                             claiming eligibility for benefits of an income tax treaty to which the United States                             of America is a party,                       (B)    duly completed copies of Internal Revenue Service Form W-8ECI or W-8EXP,                       (C)    in the case of a Foreign Holder claiming the benefits of the exemption for portfolio                             interest under section 881(c) of the IRC, (x) a certificate substantially in the form                             of Exhibit L-1 to the effect that such Foreign Holder is not (A) a “bank” within                             the meaning of section 881(c)(3)(A) of the IRC, (B) a “10-percent shareholder”                             of the Borrower within the meaning of section 881(c)(3)(B) of the IRC, or (C) a                             “controlled foreign corporation” described in section 881(c)(3)(C) of the IRC (a                             “U.S. Tax Compliance Certificate”) and (y) duly completed copies of Internal                             Revenue Service Form W-8BEN or W-8BEN-E, as applicable,                       (D)    to the extent a Foreign Holder is not the beneficial owner, executed originals of                             IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or                             W-8BEN-E,  a  U.S.  Tax  Compliance  Certificate  substantially  in  the  form  of                             Exhibit L-2 or Exhibit L-3, IRS Form W-9, and other certification documents                             from each beneficial owner, as applicable; provided that if the Foreign Holder is                             a partnership and one or more direct or indirect partners of such Foreign Holder                             are claiming the portfolio interest exemption, such Foreign Holder may provide a                             U.S. Tax Compliance Certificate substantially in the form of Exhibit L-4 on behalf                             of each such direct and indirect partner,                       (E)    if a payment made to a Lender under any Transaction Document would be subject                             to a withholding Tax imposed by FATCA as a result of such Lender failing to                             comply with the applicable reporting requirements of FATCA (including those                             contained in Sections 1471(b) or 1472(b) of the IRC, as applicable), such Lender                             shall  deliver  such  documentation  or  certifications  as  are  required  to  evidence                             compliance by the Foreign Holder with FATCA for purposes of determining if                             the Lender is subject to such withholding Tax and such additional documentation                             reasonably requested by the Borrower or the Agent as may be necessary for the                             Borrower and the Agent to comply with their obligations under FATCA and to                             determine that such Lender has complied with such Lender’s obligations under                             FATCA or to determine the amount to deduct and withhold from such payment                             (solely for purposes of this clause (5), “FATCA” shall include any amendments                             made to FATCA after the date of this Loan Agreement), or                       (F)    any  other  form  prescribed  by  Requirements  of  Law  as  a  basis  for  claiming                             exemption  from  or  a  reduction  in  United  States  federal  withholding  Tax  duly                             completed together with such supplementary documentation as may be prescribed                             by Requirements of Law to permit the Borrower to determine the withholding or                             deduction required to be made.          Each Lender and Agent agrees that if any form or certification it previously delivered expires or becomes  obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and  the Agent in writing of its legal inability to do so. Notwithstanding anything to the contrary in the foregoing, in no  case shall a Lender be required to deliver any form, certification or documentation that it is not legally entitled to  deliver.          (g)   Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith,               that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section               2.05 (including by the payment of additional amounts pursuant to this Section 2.05), it shall pay to               the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments               made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket                                             30  KE 52826770.15  

 

                expenses (including Taxes) of such indemnified party and without interest (other than any interest               paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party,               upon the request of such indemnified party, shall repay to such indemnified party the amount paid               over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the               relevant Governmental Authority) in the event that such indemnified party is required to repay such               refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph               (g), in no event will the indemnified party be required to pay any amount to an indemnifying party               pursuant to this paragraph (g) the payment of which would place the indemnified party in a less               favorable net after-Ttax position than the indemnified party would have been in if the Tax subject               to indemnification and giving rise to such refund had not been deducted, withheld or otherwise               imposed and the indemnification payments or additional amounts with respect to such Tax had never               been paid. This paragraph shall not be construed to require any indemnified party to make available               its Tax returns (or any other information relating to its Taxes that it deems confidential) to the               indemnifying party or any other Person.          (h)   Survival.   Each  party’s  obligations  under  this  Section  2.05  shall  survive  the  resignation  or               replacement  of  Agent  or  any  assignment  of  rights  by,  or  the  replacement  of,  a  Lender,  or  the               repayment, satisfaction or discharge of all other Obligations.   Section 2.06. Increased Costs and Reduction of Return.          (a)   Increased Costs Generally.  If any Change in Law shall:                (i)    impose,  modify  or  deem  applicable  any  reserve,  special  deposit,  compulsory  loan,                      insurance charge or similar requirement against assets of, deposits with or for the account                      of, or credit extended or participated in by, any Lender; or                (ii)   subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described                      in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income                      Taxes) with respect to this Loan Agreement or any of the other Transaction Documents or                      any of its obligations hereunder or thereunder or any payments to such Lender of principal,                      interest, fees or other amounts payable hereunder, or its deposits, reserves, other liabilities                      or capital attributable thereto;                 and the result of any of the foregoing shall be to increase the cost to such Lender or other Recipient               of making or maintaining any Note (or of maintaining its obligation to make any such Note), or to               reduce  the  amount  of  any  sum  received  or  receivable  by  such  Lender  hereunder  (whether  of               principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to               such  Lender,  as  the  case  may  be,  such  additional  amount  or amounts  as  will  compensate  such               Lender, as the case may be, for such additional costs incurred or reduction suffered.          (b)   Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or               any purchasing office of such Lender or such Lender’s holding company, if any, regarding capital               or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s               capital or on the capital of such Lender’s holding company, if any, as a consequence of this Loan               Agreement or the Notes received by such Lender, to a level below that which such Lender or such               Lender’s  holding  company  could  have  achieved  but  for  such  Change  in  Law  (taking  into               consideration  such  Lender’s  policies  and  the  policies  of  such  Lender’s  holding  company  with               respect to capital adequacy and liquidity), then from time to time upon written request the Borrower               will pay to such Lender, as the case may be, such additional amount or amounts as will compensate               such Lender or such Lender’s holding company for any such reduction suffered.          (c)   Certificates  for  Reimbursement.  A  certificate  of  a Lender  setting forth  the  amount or  amounts               necessary to compensate such Lender or its holding company, as the case may be, as specified in               Section 2.06(a) or (b) and delivered to the Borrower shall be conclusive absent manifest error.  The                                             31  KE 52826770.15  

 

                Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate               within ten (10) days after receipt thereof.          (d)   Delay in Requests.  Failure or delay on the part of any Lender to demand compensation pursuant to               this Section 2.06 shall not constitute a waiver of such Lender’s right to demand such compensation,               provided that the Borrower shall not be required to compensate a Lender pursuant to this Section               2.06 for any increased costs incurred or reductions suffered more than nine months prior to the date               that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or               reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change               in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period               referred to above shall be extended to include the period of retroactive effect thereof).   Section 2.07. Certificates of Lenders.  Any Lender claiming reimbursement or compensation under this Article  2 shall deliver to the Borrower (with a copy to the Agent) a certificate setting forth in reasonable detail the amount  payable to the Lender hereunder and such certificate shall be conclusive and binding on the Borrower in the absence  of manifest error.   Section 2.08. Mitigation Obligations.  If any Lender requests compensation under Section 2.06, or requires the  Borrower to pay any Indemnified Taxes or any additional amount to any Lender or any Governmental Authority for  the account of any Lender pursuant to Section 2.05, then such Lender shall use reasonable efforts to designate a  different purchasing office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder  to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)  would eliminate or materially reduce amounts payable pursuant to Section 2.05 or 2.06, as the case may be, in the  future  and  (ii)  would  not  subject  such  Lender  to  any  unreimbursed  cost  or  expense  and  would  not  otherwise  be  disadvantageous to such Lender in its sole discretion. The Borrower hereby agrees to pay all reasonable costs and  expenses incurred by any Lender in connection with any such designation or assignment.   Section 2.09. Survival.   The  agreements  and  obligations  of  the  Borrower  in  this  Article  2  shall  survive  the  payment of all other Obligations.   ARTICLE 3.   CREATION OF SECURITY INTEREST.   Section 3.01. Grant of Security Interest.  Each Loan Party hereby unconditionally grants, assigns and pledges  to Agent on behalf of each Lender, a lien on, continuing security interest in and a right of set off against all of such  Loan Party’s right, title and interest in and to the Collateral, whether now owned or hereafter acquired or arising and  wherever  located,  in  order  to  secure  prompt  payment  of  any  and  all  Obligations  and  in  order  to  secure  prompt  performance by the Loan Parties of each of its covenants and duties under the Loan Documents.  Notwithstanding  termination of this Loan Agreement, Agent’s lien and security interest on the Collateral shall remain in effect for so  long as any Obligations (other than inchoate indemnity obligations) are outstanding.   ARTICLE 4.   CLOSING.   Section 4.01. Conditions  Precedent.   The  obligation  of  Lenders  to  fund  the  Loans  shall  be  subject  to  the  following conditions precedent (except to the extent delivery of such items has been expressly deferred pursuant to  Section 6.16):          (a)   Conditions to Closing.  Agent and Lenders shall have received in connection with the closing in               form and substance satisfactory to Agent and Lenders:                (i)    Loan Documents.  (i) This Loan Agreement, duly executed and delivered by the Agent, the                      Lenders, the Borrower and the Guarantors party thereto, (ii) the Notes, duly executed and                      delivered  by  the Borrower,  (iii)  the  Guaranty,  duly  executed  and  delivered  by  the                      Guarantors party thereto, (iv) the Pledge Agreement, duly executed and delivered by the                      Loan Parties party thereto, (v) the Perfection Certificate, duly executed and delivered by                      the  Loan  Parties,  (vi)  the  Vehicle  Collateral  Agency  Agreement,  duly  executed  and                                             32  KE 52826770.15  

 

                       delivered by the Agent and Loan Parties party thereto, and (vii) the Agent Fee Letter, duly                      executed and delivered by the Agent and the Borrower.                (ii)   Closing  Date  Acquisition.   The  following transactions  (collectively  with  the  initial                      borrowings hereunder and other transactions contemplated by the Transaction Documents                      on  the  Closing  Date,  the  “Transactions”)  shall  have  been  consummated  substantially                      simultaneously  with  the  making  of  the  Loans,  in  each  case  on  terms  and  conditions                      reasonably satisfactory to the Lenders:                       (A)    the Closing Date Acquisition shall have been consummated in accordance with                             applicable law and the Acquisition Agreement, and no such terms or conditions                             thereunder shall have been waived other than with the consent of the Lenders;                       (B)    all conditions to the consummation of the Closing Date Acquisition set forth in                             the Acquisition Documentation shall have been satisfied;                       (C)    the  Agent  and  Lenders  shall  have  received  a  fully  executed  Acquisition                             Agreement  and  all  other  material  Acquisition  Documentation  entered  into  in                             connection  therewith  (including,  without  limitation,  any  documentation                             evidencing the Closing Date Deferred Payments, the Closing Date Earn-Outs, the                             Closing Date Seller Notes and any employment agreements or non-competition                             or non-solicitation agreements), certified by a Responsible Officer to be a true and                             complete copies thereof; and                       (D)    the Closing Date Subordination Agreement, duly executed and delivered by the                             Agent and each of the holders of the Closing Date Seller Notes.                (iii)  Secretary’s  Certificate;  Certified  Certificates  of  Organization.   Copies,  certified  by  the                      Secretary or Assistant Secretary of each Loan Party, of:  (A) the Articles of Organization                      or  Articles  or  Certificate  of  Incorporation  or  Certificate  of  Formation  (“Charter”)  and                      Bylaws or Limited Liability Company, Limited Partnership or Operating Agreement of                      such  Loan  Party  (in  each  case,  as  amended  to,  and  in  effect  on,  the  date  of  this  Loan                      Agreement), (B) the resolutions adopted by such Loan Party’s board of directors, board of                      managers, managing or sole members, or general partner (or other equivalent governing                      body)  authorizing  the  transaction  and  the  Transaction  Documents  being  executed  in                      connection  therewith,  and  (C) the  incumbency  of  the  officers  executing  this  Loan                      Agreement and the other Transaction Documents on behalf of such Loan Party.                (iv)   Good Standing Certificates.  Long-form certificate(s) of good standing, existence or its                      equivalent (including tax status if available) with respect to each Loan Party from such                      Loan Party’s state of incorporation or organization and in each other jurisdiction in which                      qualification is necessary in order for such Loan Party to own or lease its property and                      conduct its business, each as of a date within 20 days prior to the Closing Date.                (v)    Notice of Borrowing.  A notice of borrowing, in the form of Exhibit G hereto, accompanied                      by  a  funds  flow,  duly  executed  by  Borrower  and  delivered  to  Agent  and  Lenders  in                      accordance with Section 2.03(c).                (vi)   Insurance.  Receipt of insurance certificates satisfying the requirements of Section 6.04                      and evidence of the insurance coverage required by such section.                (vii)  Warrants.  The Warrant(s) to be issued to the designees of the Lenders in forms provided                      by  Agent  and  agreed  to  by  Borrower,  duly  executed  by  Borrower,  together  with  a                      Registration  Rights  Agreement,  duly  executed  and  delivered  by  the  holders  of  such                      Warrant(s) and Borrower.                                             33  KE 52826770.15  

 

                (viii) Perfection Certificate.  The Perfection Certificate, duly executed by the Loan Parties.                (ix)   Control Agreements.  Control agreements sufficient to perfect a security interest in the                      Loan Parties’ deposit accounts and securities accounts (other than the Excluded Accounts)                      executed by each applicable bank or other financial institution.                (x)    Legal Opinions.  Executed legal opinions of (i) Andrews Kurth Kenyon LLP, counsel to                      the Loan Parties regarding New York, Texas and Delaware legal matters, (ii) Brownstein                      Hyatt Farber Schreck, LLP, California counsel to the Loan Parties, (iii) Sacks Tierrey P.A.,                      Arizona counsel to the Loan Parties, and (iv) Bennett, Tueller, Johnson & Deers, Utah                      counsel to the Loan Parties.                 (xi)   Fees  and  Expenses.   Payment  of  (i) all  reasonable  and  documented  fees  and  expenses                      (including attorneys’ fees) of the Agent and Lenders incurred in connection with any of the                      Transaction Documents and the transactions contemplated thereby prior to such date and                      invoiced at least one (1) Business Day prior to such date, and (ii) all fees and expenses as                      set forth in the Fee Letter and the Agent Fee Letter.                 (xii)  Financial Statements.  Audited consolidated Financial Statements of the Borrower as of the                      fiscal year ended December 31, 2016, prepared in accordance with GAAP, without any                      restatement of such financial statements and which shall include an unqualified, signed                      audit  opinion  and  which  financial  statements  and  opinion  shall  not  include  (i)  any                      qualification or exception to the scope of such audit; (ii) any qualification, exception or                      explanatory paragraph regarding the Borrower’s status or ability to continue as a going                      concern or otherwise indicate any significant financial concerns; or (iii) any indication of                      a material weakness in the Borrower’s internal control over financial reporting (whether or                      not remediated).                (xiii) Approvals.  All Governmental  Approvalsgovernmental  approvals and  consents  and                      approvals of, or notices to, any other Person required in connection with the Closing Date                      Acquisition, the execution and performance of the Transaction Documents, the continuing                      operations of the Loan Parties and their respective Subsidiaries, the operations of the Loan                      Parties  and  their  respective  Subsidiaries  as  expected  to  result  from  the  Closing  Date                      Acquisition and the other transactions contemplated hereby shall have been obtained and                      be in full force and effect (including shareholder approvals, landlords’ consents and other                      consents), and all applicable waiting periods shall have expired without any action being                      taken  or  threatened  by  any  competent  authority  that  could  reasonably  be expected  to                      restrain,  prevent  or  otherwise  impose  burdensome  conditions  on  the  Closing  Date                      Acquisition or the financing contemplated hereby.                (xiv)  Lien Searches.  The results of a recent lien search where assets of the Loan Parties are                      located, and such searches shall reveal no liens on any of the assets of the Loan Parties                      except for Permitted Liens or the discharge of such liens on or prior to the Closing Date                      pursuant to documentation satisfactory to the Required Lenders.                (xv)   Payoff Letter.  Receipt of a payoff letter in respect of the Loan Parties’ existing credit                      facilities, including with Nations Equipment Finance, LLC and Frost Bank, and all amounts                      outstanding thereunder shall have been repaid (or shall be repaid on such date in connection                      with the Transactions), and all such existing credit lines and any guarantees and security in                      respect thereof shall have been cancelled and terminated.                (xvi)  Pledged Stock; Stock Powers; Pledged Notes.  Receipt by Agent of original copies of (i)                      the certificates representing the Pledged Shares pledged pursuant to this Loan Agreement                      and the Pledge Agreement, together with an undated stock power for each such certificate                      executed  in  blank  by  a  duly  authorized  officer  of  the  pledgor  thereof,  and  (ii)  each                      promissory note (if any) pledged to the Agent pursuant to this Loan Agreement, endorsed                                             34  KE 52826770.15  

 

                       (without recourse) in blank (or accompanied by an executed transfer form in blank) by the                      pledgor thereof.                (xvii) Filings,  Registrations  and  Recordings.   Each  document  (including  any  Uniform                      Commercial Code financing statement) required by the Transaction Documents or under                      law or reasonably requested by the Agent or Lenders to be filed, registered or recorded to                      create in favor of the Agent, for the benefit of the Agent and the Lenders, a perfected Lien                      on the Collateral described therein, prior and superior in right to any other Person (other                      than with respect to Permitted Liens permitted to be superior to the Liens in favor of Agent                      pursuant  to  this  Loan  Agreement),  shall  be  in  proper  form  for  filing, registration  or                      recordation.                (xviii) Solvency Certificate.  Receipt of a solvency certificate from the Responsible Officer of the                      Borrower, substantially in the form of Exhibit D, certifying that each of the Loan Parties                      and  its  Subsidiaries,  after  giving  effect  to  the  Transactions  and  the  other  transactions                      contemplated hereby, is Solvent.                (xix)  Patriot Act.  Receipt, prior to the Closing Date, of all documentation and other information                      required by Governmental Authorities under applicable “know your customer” and anti-                     money-laundering rules and regulations, including the Patriot Act.                (xx)   No Litigation.  No litigation, investigation or proceeding of or before any arbitrator or                      Governmental Authority is pending or, to the knowledge of Borrower, any Guarantor or                      their  respective  Subsidiaries,  threatened,  that  calls  into  question  the  validity  or                      enforceability of this Loan Agreement and the extensions of credit to be made hereunder.                (xxi)  Landlord Waiver.  A Landlord Waiver covering each lease or ground lease to which a Loan                      Party or its Subsidiary (other than the Affiliated Entities) is a party, duly executed by the                      applicable landlord at such location and Agent.                (xxii) Pro Forma Compliance with Financial Covenants.  On a pro forma basis, after giving effect                      to  the  Transactions,  the  Borrower shall  be  in  compliance  with  each  of  the  Financial                      Covenants as of the last day of the most recent fiscal quarter for which Financial Statements                      are required to have been filed with the SEC, with evidence of such compliance to be                      reflected in a certificate from the Responsible Officer of the Borrower delivered to Agent                      and the Lenders as of the Closing Date, certifying as to such compliance.                (xxiii) Other  Documents.   All  other  documents  as  Agent  or  Lenders  shall  have  reasonably                      requested.                (xxiv) Business and Legal Due Diligence.  The Lenders shall be satisfied with the results of its                      business due diligence and legal due diligence, with respect to the Transactions, including,                      but not limited to review of (x) the Acquisition Agreement and other material agreements                      relative to the Closing Date Acquisition (including any non-competition or employment                      agreements  contemplated  to  be  entered  into  in  connection  with,  or  substantially                      concurrently with, the Closing Date Acquisition), and (y) the Loan Parties’ other material                      agreements.          (b)   Conditions to Funding of the Loans.  Prior to the funding of the Loans, the following conditions               with respect to the Loans shall have been satisfied by Borrower or waived by the Lenders:                (i)    Note.  Borrower shall have executed and delivered one or more Notes prepared by the                      Lenders setting forth the terms of the Loans.                                              35  KE 52826770.15  

 

                (ii)   No Event of Default.  No Event of Default or Default shall have occurred and be continuing                      or would directly or indirectly be caused as a result of the funding of the Loans.                 (iii)  Material Adverse Effect.  In Agent’s and the Lenders’ sole discretion, no event shall have                      occurred or condition shall exist that has had or could be reasonably expected to have a                      Material Adverse Effect.                (iv)   Representations and Warranties.  The representations and warranties contained in this Loan                      Agreement and the other Transaction Documents to which Borrower is a party shall be true                      and correct in all material respects as if made on the date of funding of the Loans and the                      items listed on any schedule shall be reasonably acceptable to the Required Lenders, except                      to the extent such representations and warranties expressly refer to an earlier date, in which                      case they shall be true and correct in all material respects as of such earlier date.                 (v)    Enforceability.  Each of the Transaction Documents shall be in full force and effect.                (vi)   Other Documents and Agreements.  Each of the Loan Parties shall have provided to the                      Lenders and the Agent such documents, instruments and agreements, including notices of                      borrowing, financing statements or amendments to financing statements, as the Lenders or                      the Agent shall reasonably request to evidence the perfection and priority of the security                      interests granted to Agent.          (c)   Satisfaction of Conditions. Each Lender, by delivering its signature page to this Loan Agreement,               shall be deemed to have acknowledged receipt of, consent to, and/or approved of, each document,               agreement, instrument or other item required to be delivered to, consented to, and/or approved by,               the Agent or any Lender, as applicable, pursuant to this Section 4.01 and to have acknowledged that               each of the conditions set forth in this Section 4.01 has been satisfied to its satisfaction (or otherwise               waived by the Lenders).          (d)   Instruction for Collateral Agency Agreement.  Each Lender, by delivering its signature page to this               Loan  Agreement,  hereby  instructs  the  Agent  to  execute  and  deliver  the  Collateral  Agency               Agreement and hereby agrees that the Collateral Agent (as defined therein) has been selected in               good  faith  and  that  the  Agent  shall  not  be  responsible  for  any  act,  omission,  negligence  or               misconduct of such Collateral Agent.     ARTICLE 5.   REPRESENTATIONS AND WARRANTIES.   The Loan Parties represent and warrant to Agent that:   Section 5.01. Due  Incorporation,  Qualification,  etc.   Each  of  the  Loan  Parties  and  its  Subsidiaries  (i) is  a  registered organization duly organized, validly existing and in good standing under the laws of its jurisdiction of  incorporation or formation; (ii) has the power and authority to own, lease and operate its properties and carry on its  business as now conducted; (iii) is duly qualified, licensed to do business and in good standing as a foreign registered  organization in each jurisdiction where the failure to be so qualified or licensed could reasonably be expected to have  a Material Adverse Effect and (iv) is in material compliance with all Requirements of Law.   Section 5.02. Authority.   The  execution,  delivery  and  performance  by  each  of  the  Loan  Parties  of  each  Transaction Document to be executed by such Loan Party and the consummation of the transactions contemplated  thereby (i) are within the power of such Loan Party and (ii) have been duly authorized by all necessary actions on the  part of such Loan Party.   Section 5.03. Enforceability.  Each Transaction Document executed, or to be executed, by the Loan Parties has  been, or will be, duly executed and delivered by such Loan Party and constitutes, or will constitute, a legal, valid and  binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as                                              36  KE 52826770.15  

 

   limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement  of creditors’ rights generally and general principles of equity.   Section 5.04. Non-Contravention.  The execution and delivery by each Loan Party of the Transaction Documents  executed by such Loan Party and the performance and consummation of the transactions contemplated thereby do not  and  will  not  (i) violate  its  Charter  or  other  organizational  documents,  (ii) violate  in  any  material  respect  any  Requirement  of  Law  applicable  to  such  Loan  Party;  (iii) violate  any  provision  of,  or  result  in  the  breach  or  the  acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both),  any material Contractual Obligation of such Loan Party; or (iiiiv) result in the creation or imposition of any Lien upon  any property, asset or revenue of such Loan Party (except such Liens as may be created in favor of Agent pursuant to  this Loan Agreement or the other Transaction Documents).   Section 5.05. Approvals.  No consent, approval, order or authorization of, or registration, declaration or filing  with, any Governmental Authority or other Person (including, without limitation, the shareholders of any Person) is  required in connection with the execution and delivery of the Transaction Documents executed by any Loan Party and  the  performance  and  consummation  of  the  transactions  contemplated  thereby,  other  than  (i) consents,  approvals,  orders or authorizations, or registrations, declarations or filings that have already been obtained, (ii) state securities  filings related to the Warrant, (iii) the filing with, and approval of, the SEC of a registration statement pursuant to the  Registration Rights Agreement, and (iv) the filing of financing statements, Mortgages and other security instruments  contemplated hereby or by the other Transaction Documents.   Section 5.06. No Violation or Default.  None of the Loan Parties nor any of their respective Subsidiaries is in  violation of or in default with respect to (i) its Charter or other organizational documents; (ii) any Requirement of  Law; or (iii) any Contractual Obligation (nor is there any waiver in effect which, if not in effect, would result in such  a violation or default), where, in each case, such violation or default, individually, or together with all such violations  or defaults, could reasonably be expected to have a Material Adverse Effect.  No Event of Default or Default has  occurred and is continuing.   Section 5.07. Litigation.   No  actions  (including,  without  limitation,  derivative  actions), suits,  proceedings  or  investigations  are  pending  or,  to  the  knowledge  of  any  Loan  Party,  threatened  against  such  Loan  Party  or  its  Subsidiaries at law or in equity in any court or before any other Governmental Authority which if adversely determined  (i) could reasonably be expected (alone or in the aggregate) to have a Material Adverse Effect or (ii) seeks to enjoin,  either directly or indirectly, the execution, delivery or performance by any Loan Party of the Transaction Documents  or the transactions contemplated thereby.  Except as set forth in the Perfection Certificate, no Loan Party has any  commercial tort claims.   Section 5.08. Title; Collateral; Liens; Investments.  Each of the Loan Parties has title in fee simple to, or a valid  leasehold interest in, all its Real Property, and has good and marketable title to all Collateral, in each case, free and  clear of all Liens, other than Permitted Liens.  Upon the filing of UCC-1 financing statements in the appropriate filing  offices set forth on Schedule 8 hereto, Agent has (or in the case of after-acquired Collateral, at the time a Loan Party  acquires rights therein, will have), for the benefit of the Lenders, a first priority perfected security interest in the  Collateral to the extent that a security interest in the Collateral can be perfected by such filing, except for Permitted  Liens.  The Loan Parties have no deposit accounts or securities accounts, other than the deposit accounts and securities  accounts  described  in  the  Perfection  Certificate,  including  the  Excluded  Accounts.   Except  as  described  in  the  Perfection Certificate or as permitted under Section 6.08, the Collateral as of the Closing Date is not in the possession  of any third party bailee (such as at a warehouse).  All inventory of the Loan Parties is in all material respects of good  and marketable quality, free from material defects and has been (or, in the case of hereafter produced inventory, will  be) produced in compliance in all material respects with applicable laws, including the Fair Labor Standards Act.  All  accounts receivable and payment intangibles are genuine and, to the knowledge of a Responsible Officer of a Loan  Party after due and diligent inquiry, enforceable against the party obligated to pay the same and the originals of all  documents evidencing all accounts receivable and payment intangibles of each Loan Party and the only original books  of account and records of such Loan Party relating thereto are, and will continue to be, kept at the chief executive  office or principal place of business of such Loan Party or such other location where a Loan Party has expressly  indicated that the Books and Records are maintained, in each case, to the extent set forth on the Perfection Certificate.   No Loan Party owns any Investment except Permitted Investments.  As of the Closing Date, no Loan Party has any  Accounts  or  Chattel  Paper  which  arises  out  of  a  contract  or  contracts  with  the  United  States  of  America or  any                                             37  KE 52826770.15  

 

   department, agency, or instrumentality thereof, which contract or contracts would be subject to the Federal Assignment  of Claims Act or other relevant applicable law.   Section 5.09. Financial  Statements.   The  Financial  Statements  of  the  Loan  Parties  and  their  respective  Subsidiaries which have been delivered to Agent and the Lenders (i) are in accordance with the Books and Records  of the Loan Parties and their respective Subsidiaries, which have been maintained in accordance with good business  practice; (ii) have been prepared in conformity with GAAP (other than, with respect to interim Financial Statements,  the  absence  of  footnotes  and  normal  year-end  adjustments);  and  (iii) fairly  present  in  all  material  respects  the  consolidated financial position of the Loan Parties and their respective Subsidiaries as of the dates presented therein  and the results of operations, cash flows, and, if applicable stockholders’ equity, for the periods presented therein.  As  of the Closing Date, none of the Loan Parties nor any of their respective Subsidiaries has any contingent obligations,  liability for taxes or other outstanding obligations which are material in the aggregate, except as disclosed in the most  recent audited Financial Statements (including the notes thereto) furnished by Borrower to the Lenders prior to the  date hereof.   Section 5.10. Taxes.  Each of the Loan Parties and their respective Subsidiaries has filed or caused to be filed (i)  all federal and material state and other income Tax returns and reports and (ii) all other Tax returns that are required  to be filed by it except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.   The Loan Parties and their respective Subsidiaries have paid, or made provision for the payment of, all Taxes levied  or imposed upon them or their properties which have become due pursuant to said returns or otherwise, except such  Taxes, if any, which are being contested in good faith and as to which adequate reserves (determined in accordance  with GAAP) have been provided or which could not reasonably be expected to have, individually or in the aggregate,  a Material Adverse Effect if unpaid.  There is no proposed Tax deficiency or assessment known to any Loan Party nor  any of its respective Subsidiaries against such Loan Parties or any of its respective Subsidiaries that would, if made,  individually or in the aggregate, have a Material Adverse Effect.  Neither any Loan Party nor any of its Subsidiaries  is party to any Tax sharing agreement other than any such agreement among Loan Parties.   Section 5.11. Catastrophic Events; Labor Disputes.  Neither the Loan Parties nor their respective Subsidiaries  and none of their properties is or has been affected by any fire, explosion, accident, strike, lockout or other labor  dispute, drought, storm, hail, earthquake, embargo, act of God or other casualty that could reasonably be expected to  have a Material Adverse Effect.  There are no actions, suits, proceedings, investigations, or disputes presently subject  to the grievance procedure, arbitration or litigation pending or, to the knowledge of any Loan Party, threatened, under  any law, collective bargaining agreements, employment contract or employee welfare or incentive plan to which any  Loan Party or its Subsidiaries is a party, and there are no strikes, lockouts, work stoppages or slowdowns, labor  disputes, or, to the knowledge of any Loan Party, jurisdictional disputes or organizing activity occurring or threatened  which could reasonably be expected to have a Material Adverse Effect.  As of the Closing Date, neither the Loan  Parties  nor  their  respective  Subsidiaries  are  subject  or  party  to  any  collective  bargaining  agreements,  collective  bargaining relationships, or other contracts with any labor organization except as set forth on Schedule 9 hereto.   Section 5.12. No  Material  Adverse  Effect.   No  development  or  event  has  occurred  and  no  condition  exists  (excluding general economic conditions) which could reasonably be expected to have a Material Adverse Effect.   Section 5.13. First Priority.  Assuming the timely filing of financing statements, execution of account control  agreements covering the Collateral and recording of the Mortgages, the security interest granted hereby constitutes a  first priority security interest in and Lien on all of the Collateral, subject only to Permitted Liens and the terms of any  subordination or intercreditor agreements entered into by Agent or Lenders.   Section 5.14. Perfection Certificate.  All of the information set forth in the Perfection Certificate delivered to the  Lenders and the Agent is true, complete and correct as of the Closing Date, and will be true, complete and correct as  of the date of each delivery of each updated Perfection Certificate that is required to be delivered to the Lenders and  the Agent pursuant to the terms hereof.   Section 5.15. Intellectual Property.          (a)   As of the Closing Date:  (i) Schedule 7 to the Perfection Certificate provides a complete and correct               list of all registered or issued Patents, Trademarks, and Copyrights owned by each Loan Party and                                             38  KE 52826770.15  

 

                all applications for registration of Patents, Trademarks, and Copyrights filed by such Loan Party               (“Loan Party Registered Intellectual Property,” together with all other Intellectual Property owned               or  purported  to  be  owned  by  such  Loan  Party,  “Loan  Party  Intellectual  Property”);  and  (ii)               Schedule  7 to  the Perfection  Certificate  provides  a  complete  and  correct  list  of  all  Intellectual               Property  licenses  entered  into  by  each  Loan  Party  pursuant  to  which  (A)  such  Loan  Party  has               provided any license or other material rights to use Intellectual Property owned by such Loan Party               to any other Person (other than non-exclusive agreements entered into with customers or end users               or otherwise in the ordinary course of business) (“Loan Party Intellectual Property Licenses”), or               (B) any Person has granted to a Loan Party any license or other rights to use Intellectual Property               owned  by  such  Person  that  is  material  to  the  business  of  such  Loan  Party  (other  than  license               agreements for commercially available “off the shelf” or shrinkwrap software with an annual license               fee of less than Twenty Five Thousand Dollars ($25,000)).  All Loan Party Registered Intellectual               Property is valid, subsisting and enforceable and in compliance with all legal requirements, filings,               and payments and other actions that are required to maintain such Intellectual Property in full force               and effect.          (b)   No part of such Loan Party Intellectual Property has been judged invalid or unenforceable, in whole               or in part, and no claim has been made that any part of such Loan Party Intellectual Property is               invalid or unenforceable.  Each Loan Party owns solely and exclusively free and clear of all Liens,               except for Permitted Liens, or holds a valid, enforceable, and written license in, all Intellectual               Property that is material to the conduct of its business.          (c)   To the knowledge of the Loan Parties after due and diligent inquiry, no Loan Party has ever infringed               or misappropriated, and is not currently infringing or misappropriating, any Intellectual Property               rights of any Person.  There are no infringement or misappropriation claims or proceedings pending,               or to such Loan Party’s knowledge, threatened in writing against such Loan Party.  No Loan Party               has received any written notice or other written communication within the past twelve (12) months               of any actual or alleged infringement or misappropriation of any Intellectual Property rights of any               Person.   To  such  Loan  Party’s  knowledge,  no  Person  has  infringed  or  misappropriated,  or  is               currently infringing or misappropriating, any such Loan Party Intellectual Property.          (d)   Each Loan Party has taken commercially reasonable measures to maintain the confidentiality of all               trade secrets that are its applicable Loan Party Intellectual Property.          (e)   Upon filing of any copyright security agreement with the United States Copyright Office, filing of               any patent security agreement and any trademark security agreement with the PTO, and the filing               of  appropriate  financing  statements  in  the  jurisdictions  listed  on Schedule  8 hereto,  all  action               necessary or desirable to perfect the security interest in and on each Loan Party’s United States               issued,  registered  and  filed  Patents,  Trademarks,  or  Copyrights  has  been  taken  (provided  that               additional  filings  may  be  necessary  to  perfect  any  security  interest  in  any  Intellectual  Property               acquired after the date hereof) and such perfected security interest is enforceable as such as against               any and all creditors of and purchasers from any Loan Party, except as enforcement may be limited               by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws               relating to or limiting creditors’ rights generally.  All action by any Loan Party reasonably necessary               to perfect such security interest on each item of Intellectual Property constituting Collateral has been               duly taken.          (f)   No Loan Party Intellectual Property License requires any consent of any other Person that has not               been obtained or waived in order for the applicable Loan Party to such license to grant the security               interest  granted  hereunder  in  such  Loan  Party’s  right,  title  or  interest  in  or  to  such  Loan  Party               Intellectual Property License.                                              39  KE 52826770.15  

 

   Section 5.16. Subsidiaries; Affiliates; Capitalization; Solvency.          (a)   No Loan Party has any direct or indirect Subsidiaries nor does any Loan Party own any Equity               Securities  except  for  Permitted Investments  or as  set forth on Schedule  9(a) of  the  most  recent               Perfection Certificate delivered to the Agent and the Lenders.          (b)   Each Loan Party is the record and beneficial owner of all of the issued and outstanding Equity               Securities of each of the Subsidiaries listed on Schedule 9(a) of the most recent Perfection Certificate               delivered to the Agent and the Lenders as being owned by such Loan Party and there are no proxies,               irrevocable or otherwise, with respect to such Equity Securities, and no Equity Securities of any of               the Loan Parties or their respective Subsidiaries are or may become required to be issued by reason               of any options, warrants, rights to subscribe to, calls or commitments of any kind or nature and there               are  no  contracts,  commitments,  understandings  or  arrangements  by  which  any  Loan  Party  or               Subsidiary is or may become bound to issue additional Equity Securities or securities convertible               into or exchangeable for such Equity Securities.          (c)   The issued and outstanding Equity Securities of each Loan Party (other than the Borrower) are               directly and beneficially owned and held by the Persons indicated on Schedule 9(a) to the Perfection               Certificate, and in each case all of such Equity Securities have been duly authorized and are fully               paid (to the extent required by the Charter or other organizational documents of the applicable Loan               Party) and non-assessable (except as such non-assessibility may be affected by applicable state law),               free and clear of all Liens of any kind, except with respect to the security interest therein granted to               Agent pursuant to the terms of this Loan Agreement and the other Loan Documents and restrictions               on transfer arising under applicable federal and state securities laws.  As of the Closing Date, the               Equity Securities of RHB Inc. owned by Borrower are uncertificated.          (d)   As of the Closing Date, after giving effect to the consummation of the Transactions on the Closing               Date, including the making of the Loans under this Loan Agreement on the Closing Date, and after               giving effect to the application of the proceeds of such Loans, the Loan Party and their respective               Subsidiaries, taken as a whole, are Solvent and will continue to be Solvent after the creation of the               Obligations, the security interests of the Lenders and the other transactions contemplated hereunder               or under the Transaction Documents.   Section 5.17. Use of Proceeds.  The proceeds of the Loans shall be used to repay existing debt, fund the Closing  Date Acquisition, pay related fees and expenses, and for working capital.   Section 5.18. Regulatory Compliance.  No Loan Party is an “investment company” or a company “controlled”  by an “investment company” under the Investment Company Act of 1940, as amended.  No Loan Party is engaged as  one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal  Reserve Board of Governors).  Each Loan Party has complied in all material respects with the Federal Fair Labor  Standards Act.  Neither Borrower, any Guarantor, nor any of their respective Subsidiaries is a “holding company” or  an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and  used in the Public Utility Holding Company Act of 2005.  No Loan Party has violated any laws, ordinances or rules,  the violation of which could reasonably be expected to have a Material Adverse Effect on its business.  Each Loan  Party and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations  or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective  businesses as currently conducted.   Section 5.19. Anti-Terrorism Laws.  No Loan Party or any Subsidiary thereof is or has been an “enemy” or an  “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States of  America (50 U.S.C. App. §§ 1 et seq.), as amended.  No Loan Party or any Subsidiary thereof is or has been in violation  of (a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets control regulations of the United  States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive  order relating thereto or (c) the Patriot Act.  No Loan Party or any Subsidiary thereof (i) is or has been a blocked  person described in Section 1 of the Anti-Terrorism Order or (ii) to the best of its knowledge, engages or has engaged  in any dealings or transactions, or is or has otherwise been associated, with any such blocked person.                                             40  KE 52826770.15  

 

   Section 5.20. Compliance with OFAC Rules and Regulations.  None of the Loan Parties or their Subsidiaries  nor, to the knowledge of a Responsible Officer of the Loan Parties and their Subsidiaries after due and diligent inquiry,  their respective Affiliates (a) is or has been a Sanctioned Person, (b) has or has had assets in Sanctioned Countries, or  (c) is or has been in violated of Sanctions, (d) derives or has derived its operating income from investments in, or  transactions with, Sanctioned Persons or Sanctioned Countries.  No part of the proceeds of the Loans hereunder will  be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments  to, a Sanctioned Person or a Sanctioned Country, or otherwise cause any Person to violate Sanctions.   Section 5.21. Compliance with the FCPA.  Each of the Loan Parties and their Subsidiaries and, to the knowledge  of a Responsible Officer of the Loan Parties and their Subsidiaries after due and diligent inquiry, their respective  Affiliates, are and have been in compliance with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-l, et seq  (“FCPA”), and any foreign counterpart thereto.  None of the Loan Parties or their Subsidiaries has made a payment,  offering, or promise to pay, or authorized the payment of, money or anything of value, directly or indirectly, to any  Governmental Official or other Person in violation of the FCPA or any foreign counterpart thereto.  The CompanyEach  of the Loan Parties and itstheir Subsidiaries have maintained complete and accurate books and records, including  records of payments to any agents, consultants, representatives, third parties and Governmental Officials.   Section 5.23. Transactions with Affiliates.  Borrower’s proxy statement filed pursuant to Section 14(a) of the  Securities Exchange Act of 1934 as of March 17, 2017 sets forth all transactions with Affiliates involving the Loan  Parties or their respective Subsidiaries existing as of the Closing Date.   Section 5.24. ERISA.  Except as would not reasonably be expected to have a Material Adverse Effect, (i) each  Plan has been established, maintained, funded and administered in compliance in all respects with its terms, the terms  of any applicable collective bargaining or labor agreement, the applicable provisions of ERISA, the IRC, and all other  applicable  laws.  Each  Plan  that  is  intended  to  qualify  under  Section  401(a)  of  the  IRC  has  received  a  favorable  determination, opinion or advisory letter from the Internal Revenue Service with respect to the form thereof and, to  the  knowledge  of  the  Loan  Parties,  nothing  has  occurred  which  would  prevent  or  could  cause  the  loss  of  such  qualification. No ERISA Event has occurred or is reasonably expected to occur that when taken together with all other  existing ERISA Events could reasonably be expected to result in liability of the Loan Parties of more than $50,000.   Section 5.25. Environmental.  Except to the extent it would not reasonably be expected to result in aggregate  liability to the Loan Parties (or any of them) in excess of $2,000,000 (to the extent not covered by insurance), (a) each  of the Loan Parties and their Subsidiaries are and have been in compliance with all Environmental Laws, including  obtaining, maintaining and complying with all permits required under Environmental Laws; (b) no Lien in favor of  any Person securing, in whole or in part, any liabilities under Environmental Law has attached to any property of any  Loan  Party  or  any  of  their  Subsidiaries  and  no  facts,  circumstances  or  conditions  exist  that  could  reasonably  be  expected to result in any such Lien attaching to any such property, and (c) none of the Loan Parties or any of their  respective Subsidiaries: (i) has assumed, provided an indemnity with respect to, or otherwise become subject to, any  liability of any other Person under any Environmental Law or relating to Hazardous Materials; (ii) is subject to any  pending or, to the knowledge of such Loan Party, threatened Environmental Claim alleging violations of, or liability  under,  any  Environmental  Law;  or  (iii)  manufactured,  transported,  disposed  of,  arranged  for  the  disposal  of,  distributed, released, owned or operated any property or facility which is or has been contaminated by, or exposed any  Person to, Hazardous Materials, in each case as would give rise to a liability under any Environmental Law.   Section 5.26. No Off-Balance-Sheet Liabilities.  Each of the Loan Parties and their Subsidiaries does not have  any ongoing off-balance-sheet liabilities (other than operating leases and joint-venture liabilities but including any  pension liabilities).   Section 5.27. Full Disclosure.  No written representation, warranty or other statement of any Loan Party or any  of its Subsidiaries in any certificate or written statement given to Agent or Lenders, as of the date such representation,  warranty, or other statement was made, taken together with all such written certificates and written statements given  to Agent or Lenders, contains any untrue statement of a material fact or omits to state a material fact necessary to  make the statements contained in the certificates or statements not misleading (it being recognized by Agent and  Lenders that the projections and forecasts provided by any Loan Party or any of its Subsidiaries in good faith and  based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered  by such projections and forecasts may differ from the projected or forecasted results).                                             41  KE 52826770.15  

 

   ARTICLE 6.   AFFIRMATIVE COVENANTS.   While any Obligations (other than contingent indemnity Obligations to the extent no claim giving rise thereto has been  asserted) remain outstanding or commitment to advance credit to Borrower remains outstanding:   Section 6.01. Financial Statements.  Borrower shall provide to the Lenders the financial statements or financial  reports specified in Sections 6.01(a) and (b), prepared in accordance with GAAP, consistently applied (except, in the  case of unaudited Financial Statements, for the absence of footnotes and normal year-end adjustments) and the other  information specified below.          (a)   As soon as practicable (and in any event within ninety (90) days after the end of each fiscal year),               audited  consolidated  Financial  Statements  of  the  Borrower,  the  Guarantors  and  their  respective               Subsidiaries for such fiscal year, setting forth in comparative form the corresponding figures for  the               preceding fiscal year, and accompanied by (1) a compliance certificate in the form of Exhibit K (the               “Compliance  Certificate”)  and  (2)  the  unqualified  opinion  of  independent  certified  public               accountants with respect to the audited consolidated Financial Statements, which accountants shall               be an independent accounting firm selected by the Borrower and acceptable to the Lenders (it being               understood and agreed that any “big four” accounting firm of nationally recognized standing shall               be acceptable to the Lenders), and such audited consolidated Financial Statements shall have been               prepared in accordance with GAAP, and present fairly the financial condition, results of operations               and  shareholders’  equity  and  cash  flows  for  the  Borrower,  the  Guarantors  and  their  respective               Subsidiaries as of the end of and for the fiscal year then ended and shall not be subject to any “going               concern” or like qualification or exception or any qualification or exception as to the scope of such               audit.          (b)   As soon as practicable (and in any event within forty-five (45) days after the end of each fiscal               quarter), unaudited consolidated Financial Statements of the Borrower, the Guarantors and their               respective Subsidiaries for such fiscal quarter, setting forth in comparative form the corresponding               figures for (i) the corresponding portion of the preceding fiscal year, and (ii) the corresponding fiscal               quarter  of  the  previous  fiscal  year,  certified  by  Borrower’s  Chief  Executive  Officer  or  Chief               Financial Officer to fairly present the consolidated financial condition, results of operations and               shareholders’  equity  and  cash  flows  for  the  Borrower,  the  Guarantors  and  their  respective               Subsidiaries as of the end of such fiscal quarter in accordance with GAAP (subject only to normal               year-end audit adjustments and the absence of footnotes), accompanied by a Compliance Certificate.          (c)   Substantially concurrently with the delivery of the Financial Statements required pursuant to clauses               (a) and (b) of this Section 6.01, Borrower shall hold a meeting (which meeting may, in the Lenders’               sole discretion, be held telephonically) with Lenders to, among other things, review the financial               results of the previous fiscal quarter and the financial condition of the Borrower and its Subsidiaries               as of such fiscal quarter (for the avoidance of doubt, such meeting shall be in addition to any earnings               call Borrower holds during such fiscal quarter).   Notwithstanding anything herein to the contrary, documents required to be delivered pursuant to this Section 6.01  may be delivered by (x) electronic mail in accordance with Section 11.06 or (y) Borrower’s posting such documents,  or providing a link thereto, on Borrower’s website on the Internet at http://www.strlco.com/, and such documents shall  be deemed delivered in the case of clause (y) on the date on which Agent receives written notification of such posting  (which notification may be made by electronic mail in accordance with Section 11.06).  Notwithstanding anything to  the contrary contained in Section 6.01 and Section 6.02, effective immediately upon delivery of a written notice (an  “Information Declination Notice”) by Oaktree to (x) Agent and (y) Borrower that Oaktree no longer wishes to receive  the items described in such sections (or any subclauses thereof), neither Agent nor Borrower shall deliver any such  items to Oaktree, pursuant to the terms of this Loan Agreement or otherwise; provided, that it is acknowledged and  agreed by the parties hereto that Oaktree has been deemed to have delivered such Information Declination Notice to  Agent and Borrower effective as of the Closing Date.  Oaktree may, in its sole discretion, rescind any Information  Declination Notice by the delivery of written notice of such rescission to (x) Agent and (y) Borrower, at which time  any obligations to comply with Section 6.01 and/or Section 6.02 (or any subclauses thereof) shall be reinstated as of  the date of delivery of such notice.                                             42  KE 52826770.15  

 

   Section 6.02. Other Information.  Each Loan Party shall, and cause each such Subsidiary to, promptly provide  to Agent and Lenders (after any of the same are available and in any event but in any event within the time periods  set forth below):          (a)   within five (5) Business Days after a Responsible Officer obtains knowledge of the availability,               occurrence,  event,  condition  or  receiving  service  of  any  action,  suit  or  proceeding  before  any               Governmental Authority, which suit or proceeding if decided adversely to such Loan Party or such               Subsidiary could reasonably be expected to result in costs or damages to such Loan Party or its               Subsidiaries of One Million Dollars ($1,000,000) or more written notice thereof;          (b)   (i) within three (3) Business Days after a Responsible Officer obtains knowledge thereof, written               notice of any Default or Event of Default, and (ii) within five (5) Business Days after a Responsible               Officer  obtains  knowledge  thereof,  (A)  any  matter  which  has  resulted  or  could  reasonably  be               expected  to  result  in  a Material  Adverse  Effect,  (B)  any  ERISA  Event,  (C)  any  termination,               suspension, material default or any other similar event arising with respect to any customer contracts               of any Loan Party or any of its Subsidiaries in existence as of the Closing Date or thereafter, in each               case, with an individual or aggregate value of Twenty-Five Million Dollars ($25,000,000) or more;               or (D) any Event of Loss for which the amount claimed exceeds Five Hundred Thousand Dollars               ($500,000);          (c)   within five (5) Business Days of a Responsible Officer obtains knowledge thereof, written notice of               the receipt by any Loan Party or any of its Subsidiaries of any notice of violation of or potential               liability or similar notice under Environmental Law that would reasonably be expected to result in               costs or damages to such Loan Party in excess of Two Million Dollars ($2,000,000) in the aggregate               (to the extent not covered by insurance);          (d)   within five (5) Business Days of a Responsible Officer obtains knowledge thereof, written notice of               the  existence  of  any  condition  that  could  reasonably  be  expected  to  result  in  violations  of  or               liabilities under, any Environmental Law that would reasonably be expected to result in costs or               damages to such Loan Party of Five Hundred Thousand Dollars ($500,000) or more;          (e)   within five (5) Business Days of a Responsible Officer obtains knowledge thereof, written notice of               the receipt by any Loan Party of notification that any property of any Loan Party is subject to any               Lien in favor of any Person securing, in whole or in part, liabilities under Environmental Law;          (f)   written notice, within two (2) Business Days, of the provision or deposit by the Borrower or any               other Loan Party to any surety or bonding company, including but not limited to, Travelers Casualty               and Surety Company of America, of any assets, cash or contract funds in excess of $100,000 as               collateral security for the obligations subject to such suretyship or bonding arrangement;          (g)   within five (5) Business Days of receipt thereof by the Loan Parties, a copy of any definitive letter               provided by its certified public accountants citing a “material weakness”;          (h)   concurrently with the delivery of the Compliance Certificate referred to in Section 6.01(a) or (b), an               updated Perfection Certificate and updated schedules relating to the Collateral (including Schedule               8 hereto) (or a certification by the Borrower that there have been no changes to the most recent               Perfection Certificate and Collateral schedules delivered by the Borrower to the Agent hereunder);               and           (i)   any additional information (including but not limited to tax returns, income statements, balance               sheets, and names of principal creditors) as Agent or Lenders shall reasonably request which is               necessary to evaluate such Loan Party’s continuing financial obligations, including such additional               information regarding the business affairs, financial condition or operations of any Loan Party or its               Subsidiaries, or compliance with the terms of the Loan Documents.                                              43  KE 52826770.15  

 

   Section 6.03. Corporate Identity.  Each Loan Party shall notify Agent and Lenders in writing thirty (30) days  prior to any change in Borrower’s principal place of business or chief executive office and any change of such Loan  Party’s name, identity, state of incorporation or organization or corporate structure.   Section 6.04. Insurance.  Borrower shall, at its own expense, obtain and carry insurance in amounts and forms   as are customarily carried or maintained by similarly situated companies engaged in similar businesses, including  insurance against loss or damage to the Collateral and commercial general liability insurance and the key man life  insurance policies required to be maintained by the Loan Parties pursuant to the organizational documents of the  Affiliated Entities.  The insurance against loss or damage to the Collateral shall name Agent as sole loss payee with  respect to the Collateral, shall not be invalidated by any action of or breach of warranty by Borrower of any provision  thereof and shall waive subrogation against Agent.  The liability policy(ies) shall name Agent as an additional insured  in the full amount of Borrower’s liability coverage limits (or the coverage limits of any successor to Borrower or such  successor’s parent which is providing coverage), be primary and without contribution as respects any insurance carried  by Agent and contain cross liability and severability of interest clauses.  All policies of insurance shall provide that  Agent shall be given thirty (30) days’ notice of cancellation of coverage.  On or prior to the Closing Date and prior to  each  policy  renewal,  Borrower  shall  furnish  to  Agent,  certificates  of  insurance  or  other  evidence  reasonably  satisfactory to Agent and Lenders that insurance complying with all of the above requirements is in effect.  The  proceeds  of  any  key  man  life  insurance  policies  required  to  be  maintained  by  the  Loan  Parties  pursuant  to  the  organizational documents of the Affiliated Entities, including Myers and RHB LLC, shall be used to purchase or buy  out all of the Equity Securities of such Affiliated Entity held by a Person that is not a Loan Party or Subsidiary such  that upon consummation of such purchase or buy out, such Affiliated Entity shall become a wholly-owned direct  Subsidiary of a Loan Party and provide a Guaranty in accordance with Section 6.10.   Section 6.05. Taxes.  Each Loan Party shall pay, discharge or otherwise satisfy as the same shall become due and  delinquent in the normal conduct of its business, all of its obligations and liabilities in respect of material Taxes  imposed upon it or upon its income and its profits or in respect of its property and all other Governmental Authority  assessments  or  before  any  penalty  attaches  thereto,  except  as  may  be  contested  in  good  faith  by  the  appropriate  procedures and for which such Loan Party shall maintain adequate reserves in accordance with GAAP; and timely file  all required Tax returns and reports described in Section 5.10.   Section 6.06. Title.  Each Loan Party shall promptly notify Agent and the Lenders in writing of any event which  would adversely affect the value of the Collateral in an amount equal to One Million Dollars ($1,000,000) in the  aggregate or more, the ability of such Loan Party or Agent to dispose of the Collateral, or the rights or remedies of  Agent in relation thereto, including, but not limited to, the levy of any legal process against the Collateral.   Section 6.07. Collateral.  Each Loan Party hereby agrees (a) to perform all acts that may be necessary to maintain  (ordinary wear and tear excepted), preserve, protect and perfect the Collateral, the Lien granted to Agent herein, for  the benefit of the Agent and the Lenders, and the perfection and priority of such Lien, except for Permitted Liens;  (b) not to use or permit any Collateral to be used (i) in violation in any material respect of any Requirement of Law,  or (ii) in violation of any policy of insurance covering the Collateral; (c) to pay promptly when due all material Taxes  and all Liens and all other charges (other than Permitted Liens) now or hereafter imposed upon or affecting any  Collateral, before delinquency or before any penalty attaches thereto, except as may be contested in good faith by the  appropriate procedures and for which such Loan Party shall maintain adequate reserves in accordance with GAAP;  (d) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other  writings reasonably deemed necessary or appropriate by Agent or any Lender to perfect, maintain and protect its Lien  hereunder and the priority thereof and to deliver promptly to Agent, for the benefit of the Agent and the Lenders, all  originals of Collateral consisting of instruments having an aggregate value or face amount of Two Hundred Fifty  Thousand Dollars ($250,000) or more; (e) to appear in and defend any action or proceeding which may affect its title  to or Agent’s or any Lender’s interest in the Collateral; (f) if Agent or any Lender gives value to enable any Loan  Party to acquire rights in or the use of any Collateral, to use such value for such purpose; (g) to keep separate, accurate  and complete Books and Records of the Collateral and to provide Agent or Lender with such Books and Records and  such other reports and information relating to the Collateral as Agent or Lender may reasonably request from time to  time; (h) to collect, enforce and receive delivery of the accounts receivable and payment intangibles in accordance  with past practice until otherwise notified by Agent or Lender; (i) to comply with all material Requirements of Law  relating to the production, possession, operation, maintenance and control of the Collateral (including the Fair Labor  Standards Act) and (j) to permit Agent and Lenders (at the sole cost of Borrower) and their respective representatives                                             44  KE 52826770.15  

 

   the right at any time, but no more than two times per calendar year for the Agent and Lenders, collectively (or, during  the continuation of an Event of Default, at any time), during normal business hours, upon reasonable prior notice, to  visit and inspect the properties of the Loan Parties and their respective Subsidiaries and its corporate, financial and  operating Records, and make abstracts therefrom, and to discuss such Loan Parties’ or their respective Subsidiaries’  affairs, finances and accounts with its directors, officers and, if reasonably requested by Borrower, in the presence of  an  officer  or  other  representative  of  Borrower  designated  by  Borrower  for  such  purpose,  independent  public  accountants.   Section 6.08. Collateral Control; Motor Vehicles.            (a)   Except for Collateral that is of a type that is moved from location to location in the ordinary course               of business, each Loan Party shall keep all items of Collateral at (a) the Loan Parties’ chief executive               office located at the address specified in the Perfection Certificate, (b) the other locations specified               in the Perfection Certificate, (c) any supplier’s facility located outside the United States or (d) such               other places agreed to in writing by Agent and Lenders.  Each Loan Party shall be obligated to               deliver, or note Agent’s Lien on, any certificates of title with respect to any vehicles, airplanes or               other assets subject to certificates of title, in each case, having an aggregate value in excess of Fifty               Thousand Dollars ($50,000) (such assets, the “Material Titled Assets”).  Each Loan Party shall               furnish to Agent and Lenders from time to time such statements and schedules further identifying               and describing the Collateral and such other reports in connection with the Collateral as Agent or               Lenders may reasonably request, all in reasonable detail.          (b)   Each  Loan  Party  shall  take such  actions  as  are reasonably necessary or  as Agent (acting  at  the               direction of the Required Lenders) or the Required Lenders may reasonably request from time to               time to cause Agent to be listed as the lienholder on each certificate of title or ownership covering               any vehicles, airplanes or other assets subject to certificates of title (“Titled Assets”); provided, that:                (i)    with respect to any Titled Assets owned by a Loan Party on the Closing Date, within thirty                      (30) days after the Closing Date (or such later date as agreed to by the Required Lenders                      in their sole discretion) the Vehicle Collateral Agent, on behalf of the Agent, shall have                      received  all  certificates  of  title  (or  equivalent  certificate  or  document)  evidencing  any                      Titled Assets, together with evidence that all Liens noted on such certificates of title have                      been  released  or  arrangements,  to  the  satisfaction  of  the  Vehicle  Collateral  Agent  and                      Agent, shall have been made for such release;                (ii)   subsequent to the Closing Date, in the event that any Loan Party obtains any Titled Assets,                      such Loan Party shall notify the Agent and within thirty (30) days of such acquisition (or                      such later date as agreed to by the Required Lenders in their sole discretion), (A) deliver to                      the Agent (1) with respect to a new Titled Asset, a copy of the manufacturer’s certificate                      or statement of origin or (2) with respect to a used Titled Asset, a copy of the certificate of                      title  (or  equivalent  certificate  or  document)  reflecting  the  transfer  of  ownership  to  the                      applicable Loan Party, in each case reflecting the Agent’s Lien thereon and (B) deliver to                      the Vehicle Collateral Agent the original certificate of title (or equivalent certificate or                      document) evidencing such Titled Asset and reflecting the Agent’s Lien thereon (together                      with evidence that all Liens noted on such certificate of title (or equivalent certificate or                      document) have been released, other than Liens in favor of the Agent); and                (iii)  unless an Event of Default has occurred and is continuing, the requirements of this Section                      6.08(b) shall apply only to Material Titled Assets.   Section 6.09. Intellectual Property.            (a)   Upon the reasonable request of Agent or Lenders, in order to facilitate filings with the PTO and the               United States Copyright Office, each Loan Party shall execute and deliver to Agent one or more               Intellectual Property Security Agreements to further evidence Agent's Lien on such Loan Party’s               United States issued or filed Patents, registered or filed Trademarks (other than any United States                                             45  KE 52826770.15  

 

                intent-to-use trademark application to the extent that, and solely during the period in which, the               grant,  attachment,  or  enforcement  of  a  security  interest  therein  would  impair  the  validity,               registrability, or enforceability of such intent-to-use trademark application under applicable federal               law  or  any  trademark  registration  that  issues  therefrom;  provided,  that  upon  submission  and               acceptance by the PTO of a statement of use or an amendment to allege use pursuant to 15 U.S.C.               Section 1060(a) (or any successor provision), a trademark security agreement shall be delivered for               such  intent-to-use  trademark  application),  or  registered  or  filed  Copyrights,  and  the  General               Intangibles  of  such  Loan  Party  relating  thereto  or  represented  thereby.   Each  Loan  Party  at  its               expense  shall execute  and deliver, or  cause  to be  executed  and  delivered,  to Agent any  and  all               documents and instruments, in form and substance reasonably satisfactory to Agent and Lenders,               and take any and all action, which Agent or Lenders may reasonably request from time to time, to               perfect  and  continue  perfected,  maintain  the  priority  of  or  provide  notice  of  Agent’s  security               interests, for the benefit of Lenders, in the Loan Party Intellectual Property.  If a Loan Party refuses               to execute and deliver, or fails timely to execute and deliver, any of the documents it is requested to               execute and deliver by Agent in accordance with the foregoing, Agent shall have the right, in the               name of such Loan Party, or in the name of Agent or otherwise, without notice to or assent by such               Loan Party, and such Loan Party hereby irrevocably constitutes and appoints Agent (and any of               Agent's  officers  or  employees  or  agents  designated  by  Agent)  as  Loan  Party's  true  and  lawful               attorney-in-fact with full power and authority, (i) to sign the name of such Loan Party on all or any               of such documents or instruments and perform all other acts that Agent reasonably deems necessary               or advisable in order to perfect or continue perfected, maintain the priority or enforceability of or               provide notice of Agent's security interests in, the applicable Loan Party Intellectual Property, and               (ii) to execute any and all other documents and instruments, and to perform any and all acts and               things  for  and  on  behalf  of  such  Loan  Party,  which  Agent  or  Lenders  reasonably  may  deem               necessary or advisable to maintain, preserve and protect such Loan Party Intellectual Property and               to  accomplish  the  purposes  of  this  Loan  Agreement,  including  (A)  to  defend,  settle,  adjust  or               institute any action, suit or proceeding with respect to such Loan Party Intellectual Property, (B) to               assert  or  retain  any  rights  under  any  license  agreement  for  any  of  such  Loan  Party  Intellectual               Property, and (C) to execute any and all applications, documents, papers and instruments for Agent               to use such Loan Party Intellectual Property, to grant or issue any exclusive or non-exclusive license               with respect to any Loan Party Intellectual Property, and to assign, convey or otherwise transfer title               in or dispose of such Loan Party Intellectual Property.  The power of attorney set forth in this Section               6.09(a), being coupled with an interest, is irrevocable so long as this Loan Agreement shall not have               terminated in accordance with the terms set forth herein.          (b)   Each Loan Party shall protect and diligently enforce and defend at such Loan Party's expense, to the               extent deemed appropriate in such Loan Party's reasonable business judgment, all material Loan               Party Intellectual Property.  Each Loan Party further agrees, unless otherwise determined by such               Loan Party in its reasonable business judgment, not to abandon any material Loan Party Intellectual               Property or Loan Party Intellectual Property License (in each case, respectively, other than at the               end of its statutory or contractual term).  Each Loan Party hereby agrees, subject to the terms and               conditions set forth herein, to take the steps described in this Section 6.09(b) with respect to all               newly developed or acquired Intellectual Property to which it is now or later becomes entitled that               is included in the Collateral.          (c)   Except as otherwise expressly provided herein, (i) each Loan Party acknowledges and agrees that               the Lenders shall have no duties with respect to any Loan Party Intellectual Property or Loan Party               Intellectual Property Licenses; and (ii) without limiting the generality of this Section 6.09(c), each               Loan Party acknowledges and agrees that no Lender shall be under any obligation to take any steps               necessary to preserve rights in the Collateral consisting of Loan Party Intellectual Property or Loan               Party Intellectual Property Licenses against any other Person, but any Lender may do so at its option               from and after the occurrence and during the continuance of an Event of Default, and all expenses               incurred in connection therewith (including reasonable fees and out-of-pocket expenses of attorneys               and other professionals) shall be for the sole account of Loan Party and shall be chargeable to the               account of such Loan Party.                                              46  KE 52826770.15  

 

          (d)   Any updated Perfection Certificate delivered pursuant to Section 6.02(h) shall include a list of all               new Copyrights, Patents and Trademarks that are registered or the subject of pending applications               for registrations, and of all Loan Party Intellectual Property Licenses, in each case, which were, as               applicable, acquired, registered, or for which applications for registration were filed by, or with               regard to Loan Party Intellectual Property Licenses, were entered into by, any Loan Party during the               prior  period  and  any  statement  of  use  or  amendment  to  allege  use  with  respect  to  intent-to-use               trademark  applications.   In  the  case  of  such  registrations  or  applications  therefor,  which  were               acquired by a Loan Party, such Loan Party shall file the necessary documents with the appropriate               Governmental Authority identifying such Loan Party as the owner (or as a co-owner thereof, if such               is the case) of such Intellectual Property.  In each of the foregoing cases, such Loan Party shall               promptly cause to be prepared, executed, and delivered to Agent supplemental schedules to the               applicable Loan Documents to identify such Patent, Trademark and Copyright registrations and               applications therefor (with the exception of Trademark applications filed on an intent-to-use basis               for which no statement of use or amendment to allege use has been filed) and Loan Party Intellectual               Property Licenses as being subject to the security interests created thereunder.   Section 6.10. Creation/Acquisition of Subsidiaries.  Each Loan Party shall provide Agent and Lenders with at  least fifteen (15) days (or such shorter period as the Required Lenders may accept in their sole discretion) prior written  notice of Borrower’s, any Loan Party’s, or any of their respective Subsidiaries’ intention to create or, to the extent  permitted pursuant to this Loan Agreement, acquire (a) a new Subsidiary (other than any Project Specific JV) and (b)  any Minority Subsidiary (other than a Project Specific JV) and shall cause any such Subsidiary described in clause (a)  or any such Minority Subsidiary described in clause (b) (unless such Minority Subsidiary is contractually or otherwise  prohibited from providing a Guaranty; provided, that to the extent any such Minority Subsidiary (i) becomes a direct  or indirect Subsidiary of a Loan Party or (ii) a Loan Party or any Subsidiary is permitted or able to cause such Minority  Subsidiary to become a Guarantor, whether by virtue of becoming a majority-owned or wholly-owned Subsidiary of  a  Loan  Party  or  otherwise,  then  such  Minority  Subsidiary  shall  no  longer  be  excluded  from  the  requirements  of  becoming a Required Guarantor Party hereunder and shall immediately provide a Guaranty and become a Required  Guarantor Party hereunder) to provide a Guaranty; provided, that (i) any Minority Subsidiary that is contractually or  otherwise prohibited from providing a Guaranty shall not be required to provide a Guaranty hereunder, unless (A)  such Minority Subsidiary becomes a direct or indirect Subsidiary of a Loan Party or (B) a Loan Party or any Subsidiary  is permitted or able to cause such Minority Subsidiary to become a Guarantor, whether by virtue of becoming a  majority-owned or wholly-owned Subsidiary of a Loan Party or otherwise, in which case, such Minority Subsidiary  shall no longer be excluded from the requirements of becoming a Required Guarantor Party hereunder and shall  immediately provide a Guaranty and become a Required Guarantor Party hereunder and (ii) to the extent that a Loan  Party is unable under the organizational documents of an Affiliated Entity (as in effect as of the Closing Date) to  restrict the creation of a Subsidiary of an Affiliated Entity, whether by the taking of any action or the refraining from  taking of such action  any Subsidiary created by  an Affiliated  Entity shall  not be required  to  provide  a  Guaranty  hereunder (such persons and entities in clauses (a) and (b), each a “Required Guarantor Party” and collectively, the  “Required Guarantor Parties”).  Upon such creation or, to the extent permitted hereunder, acquisition of any Required  Guarantor Party or, upon any entity becoming, or upon any entity required to become, a Required Guarantor Party  pursuant to the terms hereof, any such Loan Party or Subsidiary shall promptly (and in any event within five (5)  Business Days of such creation or acquisition) take all such action (including any action as may be reasonably required  by Agent and the Required Lenders) to cause each such Required Guarantor Party to guarantee the Obligations under  the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the assets of such  Required Guarantor Party (substantially as described on Exhibit B hereto); and the relevant Loan Party or Subsidiary  shall grant and pledge to Agent, for the ratable benefit of the Lenders, a perfected security interest in all of the stock,  units  or  other  evidence  of  ownership  of  each  Required  Guarantor  Party,  and  execute  and  deliver,  or  cause  such  Required Guarantor Party to execute and deliver, such other documentation as Agent or the Lenders may reasonably  request  in  connection  with  the  foregoing,  including,  without  limitation,  appropriate  UCC-1  financing  statements,  Mortgages, any pledge amendments or supplements required pursuant to the Pledge Agreement, certified resolutions  and other organizational and authorizing documents of such Person and favorable opinions of counsel to such Person  (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation  referred  to  in  this  Section  6.10),  a  Joinder  Agreement  in  substantially  the  form  of Exhibit  H hereto,  an  updated  Schedule 8 hereto and an updated Perfection Certificate, in each case, covering such new Person and its respective  assets, all in form, content and scope reasonably satisfactory to the Required Lenders (the foregoing collectively, the  “Joinder Requirements”).  For the avoidance of doubt, (i) any Subsidiaries (other than Project Specific JVs) that are                                             47  KE 52826770.15  

 

   owned more than 50%, directly or indirectly, by a Loan Party or any of its Subsidiaries shall be required to become a  Guarantor  hereunder  and  be  deemed  a  Required  Guarantor  Party  and  (ii)  any  Loan  Party  that  holds  any  Equity  Securities in a joint venture (whether minority- or majority-controlled), Minority Subsidiary or any other Subsidiary  (including any Affiliated Entities) (other than those which are not permitted to be pledged as of the Closing Date  pursuant to the terms of its organizational documents) shall be required to pledge its Equity Securities in such entity  to the Agent, for the benefit of the Agent and the Lenders, as collateral security for the Obligations.   Section 6.11. Environmental Matters.  Except to the extent not reasonably expected to result in liability to the  Loan Parties (or any of them) in excess of Two Million Dollars ($2,000,000) (to the extent not covered by insurance),  (i) each of the Loan Parties shall, and shall cause each of its Subsidiaries to, comply with, and maintain its properties  and  facilities  (whether  owned,  leased,  subleased  or  otherwise  operated  or  occupied)  in  compliance  with,  all  Environmental Laws; and (ii) in the event of the presence of any Hazardous Material on any property of any Loan  Party, each Loan Party and its respective Subsidiaries, upon discovery thereof, shall take all necessary steps to initiate  and expeditiously complete all response, corrective and other action to mitigate and eliminate any such violation or  potential liability, and shall keep the Lenders reasonably informed on a regular basis of their material actions and the  results of such actions.  Without limiting the foregoing, if an Event of Default is continuing, then each Loan Party  shall, promptly upon receipt of written request from the Required Lenders, cause the performance of, and allow the  Lenders (or their designees) and its representatives access to its properties and facilities for the purpose of conducting,  such environmental audits and assessments, including  subsurface sampling of soil and groundwater, and cause the  preparation of such reports, in each case as the Required Lenders may from time to time reasonably request.  Such  audits,  assessments  and  reports,  to  the  extent  not  conducted  by  the  Lenders  (or  their  designees) or  any  of  its  representatives, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable  to the Required Lenders and shall be in form and substance reasonably acceptable to the Required Lenders.   Section 6.12. Maintenance as Public Entity.  Borrower shall maintain its status as a publicly-listed entity and  SEC filer.   Section 6.13. Real Property.  With respect to each parcel of Real Property included as Collateral, Borrower shall  provide prompt notice to the Agent of any re-designation into or out of a “Special Flood Hazard Area” as determined  by  the  Federal  Emergency  Management  Agency.   Without  limiting  any  other  restrictions  set  forth  in  this  Loan  Agreement, if a Loan Party or any of its Subsidiaries (other than (i) Affiliated Entities to the extent such Affiliated  Entity is not a Required Guarantor Party or Guarantor and (ii) Project Specific JVs) at any time acquires or otherwise  comes to own any fee interests in any Real Property, or the Permitted Liens on the Excluded Property are terminated,  unless otherwise agreed by the Required Lenders, such Loan Party or applicable Subsidiary shall promptly (but in no  event later than sixty (60) days after the acquisition of such Real Property or the termination of such Liens, subject to  extension in the Required Lender’s sole discretion) execute and deliver to the Agent such Mortgages, as may be  necessary to cause the Agent to have a Lien in such property subject only to Permitted Liens.  To the extent any  property in which a Mortgage is required is located in a jurisdiction with mortgage recording or similar tax, the amount  secured by the Mortgage with respect to such Real Property shall be limited to the fair market value of such Real  Property as determined in good faith based on the appraisal to be obtained by the Agent with respect to such Real  Property subject to any applicable laws in the relevant jurisdiction or such lesser amount agreed to in its sole discretion  by the Required Lenders.  In addition, unless otherwise waived by Agent (acting at the direction of the Required  Lenders) or the Required Lenders, Borrower shall deliver:          (a)   an  opinion  of  counsel  in  each  state  in  which  Real  Property  is  located  with  respect  to  the               enforceability of the Mortgages to be recorded in such state and such other matters as the Required               Lenders may reasonably request;          (b)   Phase  I  environmental  site  assessment  reports  (to  the  extent  not  already  provided)  and  reliance               letters with respect thereto and any other due diligence with respect to environmental due diligence               on  such  Real  Property  as  is  deemed  necessary  upon  review  of  such  Phase  I  environmental  site               assessment reports;          (c)   the documents and instruments necessary in order to comply with the National Flood Insurance               Reform Act of 1994 and related legislation (including the regulations of the Board of Governors of               the Federal Reserve System), including, without limitation:  (1) a completed standard flood hazard                                             48  KE 52826770.15  

 

                determination form, (2) if the improvement(s) to the improved Real Property is located in a special               flood hazard area, a notification to the Borrower that flood insurance coverage under the National               Flood Insurance Program is not available because the community does not participate in the National               Flood Insurance Program, (3) documentation evidencing Borrower’s receipt of the notification in               clause (2), and (4) if flood insurance is available in the community in which the property is located,               a copy of the flood insurance policy, the Borrowers’ application for a flood insurance policy plus               proof of premium payment, a declaration page confirming that flood insurance has been issued, or               such other evidence of flood insurance reasonably satisfactory to the Required Lenders;          (d)   ALTA extended coverage lenders’ policies of title insurance or unconditional commitments therefor               insuring the Lien of each Mortgage on the Real Property described therein, free of any other Liens               other than Permitted Liens, issued by one or more nationally recognized title insurance companies               reasonably satisfactory to the Required Lenders with respect to such Real Property (each, a “title               policy”), in amounts not to exceed the  fair market value of such Real Property, together with such               customary endorsements as the Required Lenders may reasonably request and which are available               at reasonable rates in the jurisdiction where the applicable Real Property is located, and evidence               satisfactory to the Required Lenders that Borrower has paid to the title insurance company or to the               appropriate Governmental Authorities all expenses and premiums of the title insurance company               and all other sums required in connection with the issuance of such title policy and all recording and               stamp  taxes  (including  mortgage  recording  and  intangible  Taxes)  payable  in  connection  with               recording the Mortgages for such Real Property in the appropriate real estate records;          (e)   a survey of all Real Property (including all improvements, easements and other customary matters               thereon  reasonably  required  by  the  Required  Lenders)  or  the  equivalent  (including,  without               limitation, ExpressMaps) certified to the Agent which: (i) is sufficient to cause the title insurance               company to omit as an exception to each Title Policy the standard printed survey exception, (ii) does               not create any new exceptions to the Title Policy that are not Permitted Liens, and (iii) otherwise               meets Required Lender’s reasonable requirements; and          (f)   such  Uniform  Commercial  Code  financing  statements  as  are  necessary  to  perfect  the  security               interests  created  thereby,  in  each  case  in  form  appropriate  for  recording  in  the  relevant               jurisdictionGovernment Contracts.  Other than Accounts and Chattel Paper of a Loan Party the               aggregate value of which does not at any one time exceed One Million Dollars ($1,000,000), if any               Account or Chattel Paper of a Loan Party arises out of a contract or contracts with the United States               of America or any department, agency, or instrumentality thereof, each Loan Party shall promptly               (and in any event within five (5) Business Days of the creation thereof) notify Agent and the Lenders               thereof and, promptly (and in any event within five (5) Business Days) after request by Agent (acting               at the direction of the Required Lenders) or the Required Lenders, execute any instruments or take               any steps reasonably required by Agent (acting at the direction of the Required Lenders) or the               Required Lenders in order that all moneys due or to become due under such contract or contracts               shall be assigned to Agent, for the benefit of the Lenders, and shall provide written notice thereof               under the Federal Assignment of Claims Act or other relevant applicable law, in substantially the               form attached hereto as Exhibit O.   Section 6.15. Further Assurances.  Each Loan Party shall promptly furnish to Agent and the Lenders from time  to  time  such statements  and schedules  further  identifying  and describing  the  Collateral  and  such other  reports  in  connection with the Collateral as Agent (acting at the direction of the Required Lenders) or the Required Lenders may  reasonably request by prior written notice, all in reasonable detail.  The Loan Parties shall take such further actions as  Agent (acting at the direction of the Required Lenders) or the Required Lenders may reasonably request to perfect or  maintain Agent’s security interest granted in this Loan Agreement or to otherwise further the purposes of this Loan  Agreement.   Section 6.16. Post-Closing  Obligations.   Borrower  shall,  and  shall  cause  each  Loan  Party  and  each  of  their  respective Subsidiaries to, complete each of the post-closing obligations and/or deliver to Agent and the Lenders each  of the documents, instruments, agreements and information listed on Schedule 10 hereto, the Post-Closing Obligations  Schedule, on or before the date set forth for each such item thereon (as the same may be extended by the Required                                             49  KE 52826770.15  

 

   Lenders in writing in their sole discretion), each of which shall be completed or provided in form and substance  reasonably satisfactory to the Required Lenders.   Section 6.17. Financial  Covenants.   Borrower  covenants  and  agrees  that,  until  termination  of  all  of  the  commitments hereunder and payment in full of the Obligations (other than contingent indemnity obligations) (such  covenants set forth below, the “Financial Covenants”):          (a)   Total Secured Leverage Ratio.  Borrower shall not permit the Total Secured Leverage Ratio, as of               the last day of any fiscal quarter ending on the date set forth in the table below, to exceed the ratio               set forth opposite such period:                         Period Ending           Total Secured Leverage Ratio                 June 30, 2017                           3.10:1.00                 September 30, 2017                      2.70:1.00                 December 31, 2017                       2.45:1.00                 March 31, 2018                          2.35:1.00                 June 30, 2018                           2.20:1.00                 September 30, 2018                      2.00:1.00                 December 31, 2018                       2.00:1.00                 March 31, 2019                          2.00:1.00                 June 30, 2019                           1.90:1.00                 September 30, 2019 and each             1.80:1.00                quarter thereafter          (b)   Cash Collateral Liquidity.  Borrower shall maintain, at all times, Cash Collateral Liquidity in an               amount of not less than (i) commencing on June 30, 2017 and continuing through September 30,               2017, $10,000,000, and (ii) commencing on October 1, 2017 and continuing through April 3, 2018,               $15,000,000, and (iii) commencing April 4, 2018 and continuing thereafter, $18,000,000; provided,               however, that in the event (A) the Secured Intercompany Note is repaid in full and no longer in full               force and effect, (B) the Liens on the Excluded Property securing such Secured Intercompany Note               are released in their entirety and (C) such Excluded Property becomes and is deemed a part of the               Collateral,  the  Cash  Collateral  Liquidity  required  pursuant  to  this  Section  6.17(b)  shall  be               $15,000,000 at all times from and after April 4, 201815,000,000.          (c)   Contract Backlog. Borrower shall maintain Contract Backlog, as of the last day of each fiscal quarter               ending on the date set forth in the table below, at a minimum amount equal to or greater than the               corresponding level set forth opposite such period:                         Period Ending                Contract Backlog                 June 30, 2017                          $60,000,000                 September 30, 2017                     $60,000,000                                              50  KE 52826770.15  

 

                 December 31, 2017                      $60,000,000                 March 31, 2018                         $65,000,000                 June 30, 2018                          $65,000,000                 September 30, 2018                     $65,000,000                 December 31, 2018                      $65,000,000                 March 31, 2019 and each fiscal         $70,000,000                quarter thereafter          (d)   Capital Expenditures. Borrower, the Guarantors and their respective Subsidiaries shall not make or               incur,  in  each  consecutive  four-fiscal  quarter  period,  Consolidated  Capital  Expenditure,  after               deducting  Net  Cash Proceeds  received  from  the  Transfer  of  any  used  equipment,  in  excess  of               $15,000,000 in the aggregate.          (e)   Bonding Capacity. Borrower shall maintain, at all times, bonding capacity in an amount of not less               than  $1,000,000,000  (it  is  understood  and  agreed  that compliance  with  the  foregoing  may  be               evidenced by delivery to Agent and the Lenders of a letter issued by a Bonding Company, which               letter shall be in form and substance substantially consistent with the Existing Bonding Letter or any               other form acceptable to the Required Lenders).          (f)   Tealstone Residential - Consolidated EBITDA. Commencing with the fiscal quarter ending June 30,               2017,  Tealstone  Residential  shall  maintain,  as  of  the  last  day  of  any  fiscal  quarter  for  each               consecutive  four-fiscal  quarter  period, Consolidated  EBITDA  in  an  amount  of  not  less  than               $12,000,000.   Section 6.18. Collateral Enhancement. The Loan Parties shall comply with the collateral enhancement and other  requirements and obligations set forth in Schedule 3 hereto, on or before the dates set forth therein; provided, however,  that if the Loan Parties are unable to comply with such requirements and obligations set forth in Schedule 3 hereto on  or prior to the first anniversary of the Closing Date, the then-applicable interest rate hereunder shall, automatically  and immediately effective as of April 4, 2018, without any further action by any of the parties hereto, be subject to  the Enhanced Rate Adjustment; provided, further, that the failure to continue to satisfy the Collateral Enhancement  Requirement after the first anniversary of the Closing Date could further subject the Loan Parties to the Enhanced  Rate Adjustment implemented by the Required Lenders in their sole discretion.   ARTICLE 7.   NEGATIVE COVENANTS.   While any Obligations (other than contingent indemnity Obligations to the extent no claim giving rise thereto has been  asserted) remain outstanding or commitment to advance credit to Borrower remains outstanding:   Section 7.01. Liens.  The Loan Parties shall not (i) in any way create or permit to exist any Lien with respect to  any  of  their  or  their  Subsidiaries’  (other  than  Affiliated  Entities  and  Project  Specific  JVs)  property,  except  for  Permitted Liens, nor (ii) permit the inclusion in any contract to which it or a Subsidiary (other than an Affiliated Entity  or Project Specific JVs) becomes a party of any provisions that could restrict or invalidate the existence or granting  of a security interest to Agent, for the benefit of the Agent and the Lenders, in any of such Loan Party’s or such  Subsidiary’s property or revenues, whether now owned or hereafter acquired (other than (A) restrictions under this  Loan Agreement, (B) restrictions that would be unenforceable or ineffective pursuant to Section 9-408 of the Code or  the  Uniform  Commercial  Code  as  adopted  in  any  other  applicable  jurisdiction,  or  (C) restrictions  in  agreements  governing property subject to a Lien that is otherwise permitted pursuant to clause (v) or clause (vi) of the definition  of Permitted Liens).                                              51  KE 52826770.15  

 

   Section 7.02. Dispositions.  No Loan Party shall sell, transfer, assign, pledge, collaterally assign, exchange, or  otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries (other than Affiliated Entities or  Project Specific JVs) to Transfer, all or any part of its business or property, other than Transfers: (i) of inventory in  the ordinary course of business, (ii) of non-exclusive licenses and similar arrangements for the use of the property of  such  Loan  Party  or  its  Subsidiaries  in  the  ordinary  course  of  business,  (iii) of  substantially  worn-out,  damaged,  unneeded or obsolete equipment in the ordinary course of business, (iv) of equipment consistent with such Person’s  historical practice and in the ordinary course of business to the extent the Net Cash Proceeds of such Transfer are  either used to prepay the Loans in accordance with Section 2.02(d)(ii)(C) or reinvested in fixed or capital assets in  accordance with Section 2.02(d)(ii)(C), (v) of other property sold at fair market value not to exceed $1,000,000 in the  aggregate during the term of the Loan Agreement not in the ordinary course of business, or (vi) of the fee-simple  ownership interests in the Excluded Property so long as the Net Cash Proceeds of such Transfer are used to prepay  the Loans in accordance with Section 2.02(d)(ii)(C); provided, that, such Net Cash Proceeds described in this clause  (vi)  shall  not  be  permitted  to  be  reinvested  in  any  assets  of  the  Loan  Parties  or  their  respective  Subsidiaries  as  contemplated by Section 2.02(d)(ii)(C).   Section 7.03. Fundamental Changes.  No Loan Party nor any of its respective Subsidiaries (other than Affiliated  Entities or Project Specific JVs) shall enter into any merger, consolidation or amalgamation, or liquidate, wind up or  dissolve itself (or suffer any liquidation or dissolution), or Transfer all or substantially all of its property or business,  except that (i) any Subsidiary of the Borrower or a Guarantor (other than Tealstone Residential) may be merged or  consolidated  with  or  into  Borrower  (provided that  if  Borrower  is involved,  Borrower  shall  be  the  continuing  or  surviving entity) or with or into any other Loan Party (provided that such Loan Party shall be the continuing or  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)).   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-                                            52  KE 52826770.15  

 

   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 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 with the then- applicable Financial Covenants as of the last date of the most recent four-fiscal quarter period for which Financial  Statements have been delivered or were required to be delivered pursuant to Section 6.01(a) or (b).   Section 7.09. Accounts.  The Loan Parties shall not maintain any deposit accounts or securities accounts except  accounts with respect to which, concurrently with the establishment thereof, Agent has obtained a control agreement  with the bank or other financial institution sufficient to perfect a security interest in such deposit accounts or securities  accounts; provided, however, that this Section 7.09 shall not apply to Excluded Accounts.   Section 7.10. Swap  Agreements.   The  Loan  Parties  and  their  respective  Subsidiaries  (other  than  Affiliated  Entities and Project Specific JVs) shall not enter into any Swap Agreement, except (a) Swap Agreements entered into  to hedge or mitigate risks to which the Loan Parties or any of their respective Subsidiaries (other than Affiliated  Entities) has actual exposure (other than those in respect of Equity Securities), (b) Excluded Swap Obligations and (c)  Swap Agreements entered into to effectively cap, collar or exchange interest rates (from fixed to floating rates, from  one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of  the Loan Parties or any of their respective Subsidiaries (other than Affiliated Entities), in each case, for bona fide  hedging purposes and not for speculation.   Section 7.11. Changes in Fiscal Periods or Accounting Policies.  No Loan Party shall permit (i) the fiscal year  of such Loan Party or any of its Subsidiaries (other than Affiliated Entities and Project Specific JVs) to end on a day  other than December 31 or change the method of determining fiscal quarters or (ii) a change in the accounting policies  or methods of such Loan Party or any of its Subsidiaries (other than Affiliated Entities and Project Specific JVs),  except in accordance with GAAP.   Section 7.12. Lines of Business.  No Loan Party or any of its Subsidiaries (other than Affiliated Entities and  Project Specific JVs) shall enter into any business, either directly or through any Subsidiary (other than any Affiliated  Entity  or  Project  Specific  JV),  except  for  (i)  those  businesses  in  which  the  Loan  Parties  and  their  respective  Subsidiaries (other than Affiliated Entities) are engaged on the date of this Loan Agreement (after giving effect to the  Closing Date Acquisition) or that are reasonably related thereto and (ii) those business acquired pursuant to Permitted  Acquisitions to the extent the conditions and requirements set forth in the definition thereof are satisfied.   Section 7.13. Amendments to Acquisition Documentation and Subordination Agreement.  The Loan Parties  and their Subsidiaries (other than Affiliated Entities and Project Specific JVs) shall not (a) amend, supplement or  otherwise  modify  (pursuant  to  a  waiver  or  otherwise)  the  terms  and  conditions  set  forth  in  the  Acquisition  Documentation such that after giving effect thereto such terms and conditions shall be materially less favorable to the  interests of the Loan Parties or the Agent or the Lenders with respect thereto; (b) fail to enforce, in a commercially  reasonable manner, the Loan Parties’ or their respective Subsidiaries’ rights (including rights to indemnification)  under the Acquisition Documentation or (iiic) amend, supplement or otherwise modify any Subordinated Debt except  as expressly permitted by the applicable Subordination Agreement.                                             53  KE 52826770.15  

 

   Section 7.14. Amendments  to  Organizational  Documents.   No  Loan  Party  shall  amend  or  permit  any  amendments to any Loan Party’s organizational documents without obtaining the prior written consent of the Required  Lenders; provided, however, that the Borrower shall be permitted to amend its organizational documents in a manner  that is not materially adverse to the interests of the Agent or the Lenders.   Section 7.15. Foreign Assets Control Regulations, Etc.  None of the requesting or borrowing of the Loans or  the use of the proceeds of any thereof will violate, or cause any Person to violate, the Trading With the Enemy Act  (50 USC §1 et seq., as amended) (the “Trading With the Enemy Act”), the FCPA or any foreign counterpart thereof,  anti-money laundering laws and regulations, or Sanctions, including but not limited to any of the foreign assets control  regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign  Assets Control Regulations”) or any enabling legislation, regulation or executive order relating thereto (including,  but not limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions  With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Anti- Terrorism  Order”)  and  (b)  the  Uniting  and  Strengthening  America  by  Providing  Appropriate  Tools  Required  to  Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).  None of the Borrower or any of its Subsidiaries  or, to the knowledge of a Responsible Officer of the Loan Parties and their Subsidiaries after due and diligent inquiry,  other Affiliates, is or will become Sanctioned Person or a “blocked person” as described in the Anti-Terrorism Order,  the Trading with the Enemy Act, applicable Sanctions, or the Foreign Assets Control Regulations or engages or will  engage in any dealings or transactions, or be otherwise associated, with any such “blocked person” or Sanctioned  Persons...   Section 7.16. ERISA. No Loan Party or ERISA Affiliate shall cause or, to the extent within the control of the  Loan Parties with respect to Affiliated Entities and Project Specific JVs, permit to exist any ERISA Event.   Section 7.17. Hazardous Materials.  Except to the extent it would not reasonably be expected to have a Material  Adverse Effect, no Loan Party shall, and no Loan Party shall permit any of its Subsidiaries (other than the Affiliated  Entities  and  Project  Specific  JVs)  to,  cause  or  suffer  to  exist  any  release  of,  or  exposure  of  any  Person  to,  any  Hazardous Material at, to or from any real property owned, leased, subleased or otherwise operated or occupied by  any Loan Party or any Subsidiary of any Loan Party that would violate any Environmental Law, form the basis for  any liabilities under Environmental Law or otherwise adversely affect the value or marketability of any real property  (whether or not owned by any Loan Party or any Subsidiary of any Loan Party).   Section 7.18. Bonding  Arrangements.  Tealstone  Residential  shall  not  enter  into  or  become  subject  to  any  suretyship or bonding arrangements.   Section 7.19. RHB  Inc.  Equity.  Borrower  shall  not  cause  the  Equity  Securities  of  RHB  Inc.  to  become  certificated at any time during the term of this Loan Agreement; provided, however, that in the event RHB Inc. issues  any stock certificates representing the Equity Securities of RHB Inc. owned by Borrower, Borrower shall pledge and  deliver such original stock certificate(s) to the Agent, together with an undated stock power for each such certificate(s)  executed in blank by a duly authorized officer of Borrower, within two (2) Business Days of the issuance of such  stock certificate.   Section 7.20. Affiliated Entities; Minority Subsidiaries; Project Specific JVs.  Notwithstanding anything to  the  contrary  contained  herein  or  in  any  other  Loan  Document,  to  the  maximum  extent  that  a  Loan  Party  or  any  Subsidiary has the right or ability under the organizational documents or any similar document of an Affiliated Entity,  Minority Subsidiary or Project Specific JV (that is not otherwise subject to this Article 7) to restrict such Affiliated  Entity,  Minority  Subsidiary  or  Project  Specific  JV  from  taking  an  action  (including  by  way  of  the  approval,  disapproval,  affirmative  vote  or  consent,  waiver  or  rejection  of  an  action  contemplated  to  be  taken  by  such  an  Affiliated Entity, Minority Subsidiary or Project Specific JV) which such Affiliated Entity, Minority Subsidiary or  Project Specific JV would otherwise be restricted from taking under this Article 7 if such Affiliated Entity, Minority  Subsidiary or Project Specific JV were a Loan Party or a Subsidiary hereunder, then such Loan Party or Subsidiary  with  such  right  or  ability  under  the organizational  documents  or  any similar  document  of  such Affiliated  Entity,  Minority Subsidiary or Project Specific JV shall restrict such Affiliated Entity, Minority Subsidiary or Project Specific  JV from taking such action.                                              54  KE 52826770.15  

 

   Section 7.21. Closing Date Seller Notes.  Within five (5) days of the Required Lenders’ request following the  acceleration by the Creditors (as defined in the Closing Date Subordination Agreement) of the Closing Date Seller  Notes in accordance with the terms of the Closing Date Seller Notes (as in effect on the date hereof), the Borrower  shall convert the obligations under the Closing Date Seller Notes into Equity Securities of the Borrower in accordance  with the terms of the Closing Date Seller Notes (as in effect on the date hereof).   ARTICLE 8.   PRESERVATION OF COLLATERAL BY AGENT.           Should Borrower fail or refuse to make any payment, perform or observe any other covenant, condition or  obligation, or take any other action which Borrower is obligated under any Loan Document to make, perform, observe,  take or do at the time or in the manner provided in any Loan Document, then the Agent, at the sole and absolute  discretion of the Lenders, without notice to or demand upon Borrower and without releasing Borrower from any  obligation, covenant or condition in any Loan Document, may make, perform, observe, take or do the same in such  manner and to such extent as Agent or Lenders may deem necessary to protect its security interest in or the value of  the  Collateral.   In  furtherance  of  the  foregoing  rights,  Borrower  does  hereby  irrevocably  appoint  Agent  (which  appointment  is  coupled  with  an  interest), the  true  and  lawful  attorney-in-fact  of  Borrower  with  full  power  of  substitution, for it and in its name (i) to perform (but Agent shall not be obligated to and shall incur no liability to  Borrower or any third party for failure to perform) any act which Borrower is obligated by this Loan Agreement to  perform,  (ii) to  ask,  demand,  collect,  receive,  receipt  for,  and  sue  for  any  and  all  rents,  issues,  profits,  avails,  distributions, income, payment draws and other sums in which a security interest is granted under Section 3.01 with  full power to settle, adjust or compromise any claim thereunder as fully as if Agent were Borrower itself, (iii) to  receive payment of and to endorse the name of Borrower to any items of Collateral (including checks, drafts and other  orders  for  the  payment  of  money)  that  come  into  Agent’s  possession  or  under  Agent’s  control,  (iv) to  make  all  demands, consents and waivers, or take any other action with respect to, the Collateral, (v) in Agent ‘s discretion, to  file any claim or take any other action or institute proceedings, either in its own name or in the name of Borrower or  otherwise, which Agent may reasonably deem necessary or appropriate to protect and preserve the right, title and  interest of Agent in and to the Collateral, and (vi) to otherwise act with respect thereto as though Agent were the  outright owner of the Collateral; provided, however, that the power of attorney herein granted shall be exercisable  only upon the occurrence and during the continuation of an Event of Default.  Borrower agrees to reimburse Agent  and Lenders upon demand for all reasonable costs and expenses, including attorneys’ fees and expenses, which Agent  or Lenders may incur while Agent is acting as Borrower’s attorney in fact or otherwise under this Article 8, all of  which costs and expenses are included within the Obligations.   ARTICLE 9.   EVENTS OF DEFAULT.   Section 9.01. Events of Default.  The occurrence of any of the following shall constitute an “Event of Default”  under the Transaction Documents:          (a)   Failure to Pay.  Borrower or any other Loan Party shall fail to pay (i) any principal on any of the               Obligations owing hereunder or under any other Transaction Document when due, whether upon               demand or otherwise, and (ii) the interest or other payment or premium on any of the Obligations               (including, without limitation, any Prepayment Premium) or any fee, expense or other amount owing               under the terms of this Loan Agreement or any other Transaction Document on the date due and in               the case of this clause (ii), such payment shall not have been made within five (5) Business Days of               the due date; or          (b)   Breaches of Other Covenants.  Any Loan Party or any of its Subsidiaries shall fail to perform or               observe (i) any of the covenants or agreements contained in Sections 6.01, 6.02(c), 6.02(h), 6.03,               6.04 (other than with respect to the second to the last sentence of 6.04 relating to delivery of renewal               certificates), 6.05, 6.10, 6.11, 6.12, 6.16 or 6.17 or Article 7 hereof or (ii) any other covenant, or               agreement contained in any Transaction Document (other than the other Events of Default specified               in this Article 9) and such failure remains unremedied for ten (10) days from the earlier of (i) the               delivery of written notice thereof by the Agent or the Required Lenders to the Borrower or (ii) the               date on which such failure shall first become actually known to any Responsible Officer of a Loan               Party or any of its Subsidiaries; or                                             55  KE 52826770.15  

 

          (c)   Representations  and  Warranties.   Any  representation,  warranty,  certificate,  or  other  statement               (financial  or  otherwise)  made or  furnished  by  or  on  behalf  of  any  Loan  Parties  or  any  of  its               Subsidiaries (including by any Responsible Officer) to Agent in writing in connection with this Loan               Agreement or any of the other Transaction Documents, or as an inducement to Agent or Lenders to               enter into the Transaction Documents, shall be false or misleading in any material respect when               made or furnished; or          (d)   Other Payment Obligations.  Any Loan Party or any of its Subsidiaries shall (i) fail to make any               payment  when  due  under  the  terms  of  any  Material  Indebtedness  to  be  paid  by  such  Person               (excluding  this  Loan  Agreement  and  the  other  Transaction  Documents  but  including  any  other               Indebtedness of any Loan Party to Agent or any Lender) and such failure shall continue beyond any               period of grace provided with respect thereto, or (ii) shall default in the observance or performance               of any other agreement, term or condition contained in any such Material Indebtedness, and the               effect of such failure or default under (i) or (ii) above is to cause, or permit the holder or holders               thereof to cause, any Material Indebtedness to become due prior to its stated date of maturity; or          (e)   Voluntary Bankruptcy or Insolvency Proceedings.  Any Loan Party or any of its Subsidiaries shall               (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or               of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its               debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its               creditors, (iv) be dissolved or liquidated in full or in part, (v) commence a voluntary case or other               proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under               any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such               relief or to the appointment of or taking possession of its property by any official in an involuntary               case or other proceeding commenced against it, or (vi) take any action for the purpose of affecting               any of the foregoing; or          (f)   Involuntary Bankruptcy or Insolvency Proceedings.  Proceedings for the appointment of a receiver,               trustee, liquidator or custodian of any Loan Party or any of its Subsidiaries or of all or a substantial               part  of  the  property  thereof,  or  an  involuntary  case  or  other  proceeding  seeking  liquidation,               reorganization or other relief with respect to any Loan Party or any of its Subsidiaries or the debts               thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be               commenced and an order for relief entered or such proceeding shall not be dismissed, stayed or               discharged within forty-five (45) days of commencement; or          (g)   Judgments.  A final judgment or order for the payment of money in excess of One Million Dollars               ($1,000,000) (that is not covered by insurance) shall be rendered against any Loan Party or any of               its Subsidiaries and the same shall remain undischarged for a period of thirty (30) days during which               execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment,               or execution or similar process shall be issued or levied against a substantial part of the property of               any Loan Party or any of its Subsidiaries and such judgment, writ, or similar process shall not be               released, stayed, vacated or otherwise dismissed within thirty (30) days after issue or levy; or          (h)   Transaction Documents.  Any Transaction Document or any material term thereof shall cease to be,               or be asserted by any Loan Party or any of its Subsidiaries not to be, a legal, valid and binding               obligation of such Loan Party enforceable in accordance with its terms or if, after a Lender has               properly  filed  financing  statements  and  obtained  control  agreements,  the  Liens  of  Agent  in  the               Collateral shall cease to be or shall not be valid, perfected Liens subject only to Permitted Liens and               the terms of any subordination or intercreditor agreements entered into by Lenders or any Loan               Party shall assert that such Liens are not valid, perfected Liens; or          (i)   Registration Statement.  A breach of Section 2(a) of the Registration Rights Agreement shall have               occurred; or                                              56  KE 52826770.15  

 

          (j)   ERISA Event.  An ERISA Event shall occur that results in, or is reasonably expected to result in,               liability,  individually  or  in  the  aggregate with  other  ERISA  Events,  to  a  Loan  Party  or  ERISA               Affiliate in an amount in excess of One Million Dollars ($1,000,000); or          (k)   Bonding Arrangements.  Any bond issued by any surety or bonding company, including, without               limitation, Travelers Casualty and Surety Company of America, on behalf of any Loan Party or any               of its Subsidiaries is called or declared to be in default and such surety or bonding company is               required to perform or pay all or any portion of the obligations under the underlying contract or               project for which such bond was posted; or          (l)   Keyman.   At  any  time  the  aggregate  principal  amount  of  outstanding  Term  Loans  exceed               $40,000,000:                (i)    Paul J. Varello shall cease to be engaged in the role (or a similar role) in which he is                      engaged as of the Closing Date at any Loan Party or any of its Subsidiaries at any time on                      or before March 9, 2018; provided that, to the extent Paul J. Varello continues to be a                      member of the board of directors of the Borrower, such an event shall not constitute an                      Event of Default hereunder;                (ii)   any Specified Keyman shall cease to be engaged in the role (or a similar role) in which he                      is engaged as of the Closing Date at any Loan Party or any of its Subsidiaries at any time                      on or before the third anniversary of the Closing Date; provided that, to the extent the                      Borrower delivers a written notice to Agent and the Lenders within 30 days of any such                      event outlining a plan and timeline to replace such Specified Keyman that is satisfactory                      to the Lenders in their sole discretion, such an event shall not constitute an Event of Default                      hereunder; provided further, that any replacement of any such Specified Keyman shall be                      acceptable to the Lenders in their sole discretion; or          (m)   Subordinated Debt.  Any document, instrument, or agreement evidencing any Subordinated Debt               shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any               Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or               deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason               be  subordinated  or  shall  not  have  the  priority  contemplated  by  this  Loan  Agreement  or  the               Subordination Agreement; or          (n)   Change of Control.  A Change of Control occurs.   ARTICLE 10.  AGENT   Section 10.01. Rights of Agent upon Default.  Upon the occurrence and during the existence of any Event of  Default (other than an Event of Default referred to in Sections 9.01(e) and 9.01(f)) and at any time thereafter during  the continuance of such Event of Default, Agent (at the direction of Required Lenders) shall, without demand or notice  to any Loan Party, declare all outstanding Obligations, including, without limitation, the noncancelable obligation to  make  each  payment  scheduled  to  be  made  under  Section 2.02  (including,  without  limitation,  any  Prepayment  Premium),  payable  by  Borrower  or  any  other  Loan  Party  hereunder  to  be  immediately  due  and  payable  without  presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything  contained herein or in the Notes to the contrary notwithstanding.  Upon the occurrence or existence of any Event of  Default  described  in  Sections 9.01(e)  and  9.01(f),  immediately  and  without  demand  or  notice,  all  outstanding  Obligations, including, without limitation, the noncancelable obligation to make each payment scheduled to be made  under Section 2.02 (including, without limitation, any Prepayment Premium), payable by Borrower hereunder shall  automatically become immediately due and payable, without presentment, demand, protest or any other notice of any  kind,  all  of  which  are  hereby  expressly  waived,  anything  contained  herein  or  in  the  Notes  to  the  contrary  notwithstanding.                                              57  KE 52826770.15  

 

   Section 10.02. Rights Regarding Collateral.  Borrower agrees that when any Event of Default has occurred and  is continuing, Lenders, or Agent on behalf of Lenders, shall have the rights, options, duties and remedies of a secured  party as permitted by law and, in addition to and without limiting the foregoing, Lenders or Agent may, at the election  of Lenders, exercise any one or more or all, and in any order, of the remedies herein set forth, including the following:   (i) Agent  or  Lenders,  personally  or  by  agents  or  attorneys,  shall  have  the  right  (subject  to  compliance  with  any  applicable mandatory legal requirements) to require Borrower to assemble the Collateral and make it available to  Agent at a place to be designated by Agent in New York or to take immediate possession of the Collateral, or any  portion thereof, and for that purpose may pursue the same wherever it may be found, and may enter any premises of  Borrower, with or without notice, demand, process of law or legal procedure, to the extent permitted by applicable  law, and search for, take possession of, remove, keep and store the same, or use and operate or lease the same until  sold; (ii) Agent or Lenders may, if at the time such action may be lawful and always subject to compliance with any  mandatory legal requirements, either with or without taking possession and either before or after taking possession,  without instituting any legal proceedings whatsoever, having first given notice of such sale by registered or certified  mail to Borrower once at least ten (10) days prior to the date of such sale, and having first given any other notice  which may be required by law, sell and dispose of the Collateral, or any part thereof, at a private sale or at public  auction, to the highest bidder, in one lot as an entirety or in separate lots, and either for cash or on credit and on such  terms as Lenders may determine, and at any place (whether or not it be the location of the Collateral or any part  thereof) designated in the notice referred to above.  Agent and its agents and any purchasers at or after foreclosure are  hereby granted a non-exclusive, irrevocable, perpetual, fully paid, royalty-free license or other right, solely pursuant  to the provisions of this Section 10.02, to use, without charge, each Loan Party’s Intellectual Property that remains  embedded or contained in the Collateral, including without limitation, labels, Patents, Copyrights, Trademarks, or any  property of a similar nature, now or at any time hereafter owned or acquired by any Loan Party or in which such Loan  Party  now  or  at  any  time  hereafter  has  any  rights; provided, however,  such  license  shall  only  be  exercisable  in  connection with the disposition of Collateral upon Agent’s or Lenders’ exercise of their remedies hereunder.  To the  extent permitted by applicable law, any such sale or sales may be adjourned from time to time by announcement at  the time and place appointed for such sale or sales, or for any such adjourned sale or sales, without further published  notice, and Borrower, Agent, Lenders, or the holder or holders of a Note, or of any interest therein, may bid and  become the purchaser at any such sale; and (iii) Agent or Lenders may proceed to protect and enforce this Loan  Agreement and the other Loan Documents by suit or suits or proceedings in equity, at law or in bankruptcy, and  whether for the specific performance of any covenant or agreement herein contained or in execution or aid of any  power herein granted; or for foreclosure hereunder, or for the appointment of a receiver or receivers for any real  property security or any part thereof, or for the recovery of judgment for the Obligations or for the enforcement of any  other proper, legal or equitable remedy available under applicable law.  With respect to any of Borrower’s owned  premises, Borrower hereby grants Agent a license to enter into possession of such premises and to occupy the same,  without charge, for up to one hundred twenty (120) days in order to exercise any of Agent’s or Lenders’ rights or  remedies provided herein, at law, in equity, or otherwise.     Section 10.03. Agent’s Liability for Collateral.  So long as Agent complies with its obligations, if any, under the  Code, neither Agent nor Lenders shall in any way or manner be liable or responsible for: (i) the safekeeping of the  Collateral; (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause other than  Agent’s or such Lender’s gross negligence or willful misconduct; (iii) any diminution in the value thereof; or (iv) any  act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person whomsoever.  All risk of loss,  damage or destruction of the Collateral shall be borne by Loan Parties.   Section 10.04. Application of Collateral Proceeds.  The proceeds of the Collateral, or any part thereof, resulting  from Agent’s or Lenders’ exercise of remedies hereunder (as well as any other amounts of any kind held by Agent at  the time of, or received by Agent after, the occurrence and during the continuance of, an Event of Default hereunder)  shall be paid to and applied as follows:  (i) First, to the payment of reasonable costs and expenses, including all  amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the  exercise of any other rights or remedies, and of all proper fees, expenses, indemnities, liability and advances, including  reasonable  legal expenses  and  attorneys’  fees,  incurred  or  made  hereunder  by,  or  owing  to,  Agent  or  Lenders;  (ii) Second, to the payment to Lenders pro rata in accordance with the Loan Percentages of the amounts then owing  or unpaid on the Notes, including each payment scheduled to be made under Sections 2.02(c), 2.02(d) and 2.02(e);  (iii) Third, to the payment of other amounts then payable to Agent or Lenders under any of the Transaction Documents;  and (iv) Fourth, to the payment of the surplus, if any, to the applicable Loan Party, its successors and assigns, or to  whomsoever may be lawfully entitled to receive the same.  In the event that, notwithstanding the foregoing, proceeds                                             58  KE 52826770.15  

 

   of the Collateral, shall be received by a Lender in excess of its ratable share, then the portion of such payment or  distribution in excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly  paid over to the other Lenders ratably for application to the payments of amounts due to the other Lenders.  For the  avoidance of doubt, notwithstanding any other provision of any Loan Document, no amount received directly or  indirectly from any Loan Party that is not a Qualified ECP Guarantor shall be applied directly or indirectly by the  Agent or otherwise to the payment of any Excluded Swap Obligations and Obligations arising under secured cash  management agreements and secured Swap Obligations shall be excluded from the application described above in  clauses (i) - (iv) if the Agent has not received written notice thereof, together with such supporting documentation  from the applicable bank product provider of such cash management agreements or Swap Obligations, as the case  may be, as may be reasonably necessary to determine the amount of the Obligations owed thereunder.   Section 10.05. Reinstatement of Rights.  If Agent or any Lender shall have proceeded to enforce any right under  this  Loan  Agreement  or  any  other  Transaction  Document  by  foreclosure,  sale,  entry  or  otherwise,  and  such  proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then  and in every such case (unless otherwise ordered by a court of competent jurisdiction), Agent and each Lender shall  be restored to its former position and its rights hereunder with respect to the property subject to the security interest  created under this Loan Agreement shall be reinstated.   Section 10.06. Agency for Perfection.  Each Lender hereby appoints Agent and each other Lender as agent and  bailee for the purpose of perfecting the security interests in and Liens upon the Collateral which, in accordance with  the  Code,  can  be  perfected  only  by  possession  or  control  (or  where  the  security  interest  of  a  secured  party  with  possession or control has priority over the security interest of another secured party), and Agent and each Lender  hereby acknowledges that it holds possession or control of any such Collateral for the benefit of the Agent as secured  party.  Should any Lender obtain possession or control of any such Collateral, such Lender shall notify the Agent  thereof, and, promptly upon the Agent’s request therefor shall deliver possession or control of such Collateral to the  Agent or in accordance with the Agent’s instructions.  Borrower by its execution and delivery of this Loan Agreement  hereby consents to the foregoing.   Section 10.07. Appointment  Powers  and  Immunities.   Each  Lender  irrevocably  designates,  appoints  and  authorizes Wilmington Trust, National Association to act as Agent hereunder and under the other Loan Documents  with such powers as are specifically delegated to Agent by the terms of this Loan Agreement and of the other Loan  Documents, together with such other powers as are reasonably incidental thereto. Agent (a) shall have no duties or  responsibilities except those expressly set forth in this Loan Agreement and in the other Loan Documents, and shall  not by reason of this Loan Agreement or any other Loan Document be a trustee or fiduciary for any Lender; provided,  however, that Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for Agent and  the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any Deposit Account  maintained by a Loan Party with, and cash and cash equivalents held by, such Lender, and may further authorize and  direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to  transfer the Collateral subject thereto to Agent, and each Lender hereby agrees to take such further actions to the  extent, and only to the extent, so authorized and directed; (b) shall not be responsible to Lenders for, or have any duty  to inquire into, any recitals, statements, representations or warranties contained in this Loan Agreement or in any of  the other Loan Documents, or in any certificate or other document referred to or provided for in, or received by any  of  them  under,  this  Loan  Agreement  or  any  other  Loan  Document,  or  for  the  value,  validity,  effectiveness,  genuineness, enforceability or sufficiency of this Loan Agreement or any other Loan Document or any other document  referred to or provided for herein or therein or for any failure by the Borrower or any Guarantor or any other Person  to perform any of its obligations, covenants, agreements or other terms or conditions set forth hereunder or thereunder;  (c) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Loan  Document or under any other document or instrument referred to or provided for herein or therein or in connection  herewith or therewith, except for its own gross negligence or willful misconduct (each as determined in a final, non- appealable  judgment  by  a  court  of  competent  jurisdiction);  and  (d)  shall  not  be  responsible  or  have  any  duty  to  ascertain or inquire into the satisfaction of any condition set forth in Section 4.01 hereof or elsewhere herein or in any  other Loan Document. The Agent shall not be required to risk or expend its own funds in performing its obligations  hereunder or under any other Loan Document. For the avoidance of doubt and notwithstanding anything in this Loan  Agreement to the contrary, the Agent shall not have any responsibility or obligation to file any financing statements  or continuation statements related hereto.  No provision of this Loan Agreement or any other Loan Document shall be  deemed to impose any duty on the Agent to take any action if such action would expose it to personal liability, is                                             59  KE 52826770.15  

 

   contrary to the terms hereof or is contrary to applicable law. The Agent shall not be responsible or liable for delays or  failures in performance resulting from acts beyond its control.  Such acts shall include acts of God, strikes, lockouts,  riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures,  computer viruses, power failures, earthquakes or other disasters.  The Agent shall not have any liability for losses  arising from (i) any cause beyond its control, (ii) any delay, error, omission or default of any mail, telegraph, cable or  wireless agency or operator or (iii) the acts or edicts of any government or governmental agency or other group or  entity exercising governmental powers.  Agent may employ agents and attorneys in fact and shall not be responsible  for any act, omission, negligence or misconduct of any such agents or attorneys in fact selected by it in good faith.  Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until the  assignment thereof pursuant to an agreement (if and to the extent permitted herein) in form and substance reasonably  satisfactory to Agent shall have been delivered to and acknowledged by Agent.  The provisions of this Article 10 are  solely for the benefit of the Agent and its successors and assigns and no Loan Party nor any other Person shall have  any rights as a third party beneficiary of any of the provisions hereof.   Section 10.08. Reliance by Agent.  Agent shall be entitled to rely upon any certification, notice, document or other  communication (including any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine  and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon the advice and  statements of legal counsel, independent accountants and other experts selected by Agent.  Agent may consult with  legal counsel (who may be counsel for the Borrower), independent accountants, and other experts selected by it, and  shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants  or experts. As to any matters not expressly provided for by this Loan Agreement or any other Loan Document, Agent  shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with  instructions given by the Required Lenders or all of Lenders as is required in such circumstance, and such instructions  of such Agents and any action taken or failure to act pursuant thereto, shall be binding on all Lenders. Notwithstanding  anything else to the contrary herein, whenever reference is made in this Loan Agreement or any other Loan Document,  to any discretionary action by, consent, designation, specification, requirement or approval of, notice, request or other  communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by  the  Agent  or  to  any  election,  decision,  opinion,  acceptance,  use  of  judgment,  expression  of  satisfaction  or  other  exercise of discretion, rights or remedies to be made (or not to be made) by the Agent, it is understood that in all cases  the Agent shall be fully justified in failing or refusing to take any such action if it shall not have received written  instruction, advice or concurrence from the Required Lenders (or such other number or percentage of the Lenders as  shall be expressly provided for herein or in any other Loan Document) in respect of such action. The Agent shall have  no liability for any failure or delay in taking any actions contemplated above as a result of a failure or delay on the  part of the Required Lenders to provide such instruction, advice or concurrence.   Section 10.09. Events of Default.          (a)   Agent shall not be deemed to have knowledge or notice of, or be required to act upon (including the  sending of any notice related thereto), the occurrence of a Default or an Event of Default or other failure of a condition  precedent to the Loans hereunder, unless and until Agent has received written notice from a Lender, or the Borrower  specifying such Event of Default or any unfulfilled condition precedent, and stating that such notice is a “Notice of  Default or Failure of Condition”.  In the event that Agent receives such a Notice of Default or Failure of Condition,  Agent shall give prompt notice thereof to the Lenders.  Agent shall (subject to Section 10.12) take such action with  respect to any such Event of Default or failure of condition precedent as shall be directed by the Required Lenders to  the extent provided for herein; provided, that, unless and until Agent shall have received such directions, Agent may  (but shall not be obligated to) take such action, or refrain from taking such action, with respect to or by reason of such  Event of Default or failure of condition precedent, as it shall deem advisable in the best interest of Lenders.          (b)   Except with the prior written consent of Agent, no Lender (other than Oaktree or any of its Affiliates)  may assert or exercise any enforcement right or remedy in respect of the Loans or other Obligations, as against any  Loan Party or any of the Collateral or other property of any Loan Party.   Section 10.10. Indemnification.  Lenders agree to indemnify Agent (to the extent not reimbursed by the Borrower  hereunder  and  without  limiting  any  obligations  of  the  Borrower  hereunder),  and  its  officers,  directors,  agents,  employees, advisors and counsel and their respective Affiliates (each such Person being an “Agent Indemnitee”)  ratably,  in  accordance with  their Loan Percentages, for  any  and  all  losses,  claims,  damages,  liabilities,  costs  and                                             60  KE 52826770.15  

 

   expenses (including attorneys’ fees and expenses) of any kind and nature whatsoever that may be imposed on, incurred  by or asserted against any Agent Indemnitee (including by any Lender) arising out of, or by reason of any investigation  in, or in any way relating to or arising out of this Loan Agreement or any other Transaction Document or any other   documents  contemplated  by  or  referred  to herein  or  therein  or  the  transactions  contemplated  hereby  or  thereby  (including the costs and expenses that Agent is obligated to pay hereunder) or the enforcement of any of the terms  hereof or thereof or of any such other documents; provided, that, no Lender shall be liable for any of the foregoing to  the extent it arises from the gross negligence or willful misconduct of the party to be indemnified as determined by a  final non-appealable judgment of a court of competent jurisdiction.  All amounts due under this Section 10.10 shall  be  payable  on  demand.   The  foregoing  indemnity  shall  survive  the  resignation  or  replacement  of  Agent  or  any  assignment of rights by, or the replacement of, a Lender, or the repayment, satisfaction or discharge of the Obligations  and the termination of this Loan Agreement.   Section 10.11. Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has, independently and  without reliance on Agent or other Lender, and based on such documents and information as it has deemed appropriate,  made its own credit analysis of the Loan Parties and has made its own decision to enter into this Loan Agreement and  that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and  information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not  taking action under this Loan Agreement or any of the other Loan Documents.  Agent shall not be required to keep  itself informed as to the performance or observance by any Loan Party of any term or provision of this Loan Agreement  or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect  the properties or Books of any Loan Party.  Agent will use commercially reasonable efforts to provide Lenders with  any information received by Agent from any Loan Party, which is required to be provided to Lenders hereunder or  under the other Loan Documents and with a copy of any Notice of Default or Failure of Condition received by Agent  from the Borrower or any Lender; provided, that, Agent shall not be liable to any Lender for any failure to do so,  except to the extent that such failure is attributable to Agent’s own gross negligence or willful misconduct.  Except  for notices, reports and other documents expressly required to be furnished to Lenders by Agent pursuant to the terms  of this Loan Agreement or the other Loan Documents or requested by Lenders hereunder or thereunder, Agent shall  not have any duty or responsibility to provide any Lender with any other credit or other information concerning the  affairs, financial condition or business of any Loan Party that may come into the possession of Agent.   Section 10.12. Failure to Act.  Except for any action expressly required of Agent hereunder and under the other  Loan Documents, Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder;  provided that the foregoing shall not prevent Agent from requiring further assurances from the Lenders, satisfactory  to Agent in its sole discretion, of their indemnification obligations under Section 10.10 hereof against any and all  liability and expenses that may be incurred by it by reason of taking or continuing to take any such action.   Section 10.13. Successor Agent.  Agent may resign as Agent upon thirty (30) days’ (or such lesser time period as  agreed to by the Required Lenders and Agent) notice to Lenders and the Borrower or may be replaced as the Agent  by the Lenders at the direction of the Required Lenders upon five (5) days’ (or such lesser time period as agreed to by  the Required Lenders and Agent) prior written notice to the Agent, the other Lenders and the Borrower.  If Agent  resigns or is replaced under this Loan Agreement, the Required Lenders shall appoint a successor agent for Lenders  whereupon such successor agent shall succeed to the rights, powers and duties of the retiring or replaced Agent, and  the term “Agent” as used herein and in the other Loan Documents shall mean such successor agent, and the retiring  or replaced Agent’s appointment, powers and duties as Agent shall be terminated, without any further act or deed on  the part of such former Agent or any of the parties to this Loan Agreement. If no successor agent is appointed prior to  the effective date of the resignation of Agent, Agent may appoint, after consulting with Lenders, a successor agent  from among Lenders. Upon the acceptance by the Lender so selected of its appointment as successor agent hereunder,  such successor agent shall succeed to all of the rights, powers and duties of the retiring Agent and the term “Agent”  as  used  herein  and  in  the  other  Loan  Documents  shall  mean  such  successor  agent,  and  the  retiring  Agent’s  appointment, powers and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as  Agent and Agent’s resignation hereunder as Agent, the provisions of this Article 10 shall inure to its benefit as to any  actions taken or omitted by it while it was Agent under this Loan Agreement.  If no successor agent has accepted  appointment as Agent by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation,  the retiring Agent’s resignation shall nonetheless thereupon become effective and Lenders shall perform all of the  duties of Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for  above.                                             61  KE 52826770.15  

 

   Section 10.14. Other Agent Designation.  Oaktree may at any time and from time to time determine that a Lender  may,  in  addition,  be  a  “Co-Agent”,  “Syndication  Agent”,  “Documentation  Agent”,  “Agent”,  “Control  Agent”  or  similar designation hereunder and enter into an agreement with such Lender to have it so identified for purposes of  this Loan Agreement.  Any such designation shall be effective upon written notice by Agent or Oaktree to the Borrower  of any such designation.  Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation Agent,  Control Agent or such similar designation by Oaktree shall have no right, power, obligation, liability, responsibility  or duty under this Loan Agreement or any of the other Loan Documents other than those applicable to all Lenders as  such.  Without limiting the foregoing, the Lenders so identified shall not have or be deemed to have any fiduciary  relationship with any Lender and no Lender shall be deemed to have relied, nor shall any Lender rely, on a Lender so  identified as a Co-Agent, Syndication Agent, Documentation Agent, Control Agent or such similar designation in  deciding to enter into this Loan Agreement or in taking or not taking action hereunder.   Section 10.15. Release of Collateral. Each Lender hereby consents to the release and hereby directs Agent to  release (or in the case of clause (b)(ii) below, release or subordinate) the following:          (a)   any Guarantor if all of the Equity Securities of such Subsidiary owned by any Loan Party is sold or               transferred  in a  transaction permitted  under  the  Loan Documents  (including  pursuant  to  a valid               waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would               not be required to guaranty any Obligations pursuant to any Loan Document;           (b)   any Lien held by Agent for the benefit of the Agent and the Lenders against (i) any Collateral that               is sold or otherwise disposed of by a Loan Party in a transaction permitted by the Loan Documents               (including pursuant to a valid waiver or consent), (ii) any Collateral subject to a Lien that is expressly               permitted under clause (v) or (vi) of the definition of the term "Permitted Lien" and (iii) all of the               Collateral and all Loan Parties, upon (A) payment in full in cash of all of the Obligations that Agent               has theretofore been notified in writing by the holder of such Obligation are then due and payable               and  (B)  receipt  by  Agent  and  Lenders  of  liability  releases  from  the  Loan  Parties  in  form  and               substance acceptable to Agent (acting at the direction of the Required Lenders); and          (c)   any Lien held by Agent for the benefit of the Agent and the Lenders against any Collateral that is               Transferred pursuant to Section 7.02(iii) hereof, in an aggregate amount not to exceed One Million               Dollars ($1,000,000) in any fiscal quarter commencing with the fiscal quarter ending March 31,               2018.   Upon request by the Agent at any time, the Required Lenders will confirm the Agent's authority to release its interest  in any particular item of Collateral pursuant to this Section 10.15.   Section 10.16. Setoff and Sharing of Payments. In addition to any rights now or hereafter granted under any  applicable Requirements of Law and not by way of limitation of any such rights, upon the occurrence and during the  continuance of any Event of Default, each Lender is hereby authorized at any time without notice to any Loan Party  or any other Person, any such notice being hereby expressly waived, to setoff and to appropriate and to apply any and  all balances held by it at any of its offices for the account of the Loan Parties (regardless of whether such balances are  then due to the Loan Parties) and any other properties or assets at any time held or owing by that Lender or that holder  to or for the credit or for the account of any Loan Party against and on account of any of the Obligations that are not  paid  when  due.  Any  Lender  exercising  a  right  of  setoff  or  otherwise  receiving  any  payment  on  account  of  the  Obligations in excess of its pro rata share thereof shall purchase for cash (and the other Lenders or holders shall sell)  such participations in each such other Lender's or holder's pro rata share of the Obligations as would be necessary to  cause such Lender to share the amount so offset or otherwise received with each other Lender or holder in accordance  with their respective pro rata shares of the Obligations. Each Loan Party agrees, to the fullest extent permitted by law,  that (a) any Lender may exercise its right to offset with respect to amounts in excess of its pro rata share of the  Obligations  and  may  purchase  participations  in  accordance  with  the  preceding  sentence  and  (b)  any  Lender  so  purchasing a participation in the Term Loan made or other Obligations held by other Lenders or holders may exercise  all rights of offset, bankers' lien, counterclaim or similar rights with respect to such participation as fully as if such  Lender or holder were a direct holder of the Term Loan and the other Obligations in the amount of such participation.  Notwithstanding the foregoing, if all or any portion of the offset amount or payment otherwise received is thereafter                                             62  KE 52826770.15  

 

   recovered from the Lender that has exercised the right of offset, the purchase of participations by that Lender shall be  rescinded and the purchase price restored without interest.   Section 10.17. Proof of Claims. Lenders hereby agree that after the occurrence of an Event of Default pursuant to  Section 9.01(e) or (f) in case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,  arrangement, adjustment, composition, or other judicial proceeding relative to Lenders, Agent (irrespective of whether  the principal amount of the Loans shall be due and payable as herein expressed or by declaration or otherwise and  irrespective  of  whether  Agent  shall  have  made  any  demand  on  Lenders)  shall  be  entitled  and  empowered,  by  intervention in such proceeding or otherwise:          (a)   to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect               of the Loans and any other Obligations that are owing and unpaid and to file such other papers or               documents as may be necessary or advisable in order to have the claims of Lenders and Agent               (including any claim for the reasonable compensation, expenses, disbursements and advances of               Lenders, Agent, and their agents and counsel and all other amounts due Lenders and Agent) allowed               in such judicial proceeding;          (b)   to collect and receive any moneys or other property payable or deliverable on any such claims and               to distribute the same; and          (c)   any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any               such judicial proceeding is hereby authorized by each Lender to make such payments to Agent and,               in the event that Agent shall consent to the making of such payments directly to Lenders, to pay to               Agent any amount due for the compensation, expenses, disbursements and advances of the Agent               and their agents and counsel, and any other amounts due to Agent.   Nothing herein contained shall be deemed to authorize Agent to authorize or consent to or accept or adopt on behalf  of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the  rights of any Lender or to authorize Agent to vote in respect of the claim of any Lender in any such proceeding.  Further, nothing contained in this Section 10.17 shall affect or preclude the ability of any Lender to (i) file and prove  such a claim in the event that Agent has not acted within ten (10) days prior to any applicable bar date and (ii) require  an amendment of the proof of claim to accurately reflect such Lender's outstanding Obligations.   ARTICLE 11.  MISCELLANEOUS.   Section 11.01. Modifications, Amendments or Waivers.            (a)   No amendment or waiver of any provision of any Loan Document, and no consent with respect to               any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing               and signed by Agent, the Required Lenders (or by Agent with the consent of Required Lenders) and               Borrower; provided that no such amendment, waiver or consent shall, unless in writing and signed               by all Lenders directly affected thereby (or by Agent with the consent of all Lenders directly affected               thereby), in addition to Agent, Required Lenders (or by Agent with the consent of Required Lenders)               and Borrower, do any of the following: (i) increase or decrease the amount of, or extend the term               of, any Loan commitment (which shall be deemed to affect all Lenders), (ii) reduce the principal of               or rate of interest on (other than waiving the imposition of the Default Rate) any Term Loan or               reduce the amount of any fees payable under any Loan Document, (iii) postpone the date fixed for               or reduce or waive any scheduled installment of principal or any payment of interest or fees due to               any Lender under the Loan Documents, (iv) release or subordinate the Lien on all or substantially               all of the Collateral, or consent to a transfer of all or substantially all of the Collateral (which shall               be  deemed  to  affect  all  Lenders),  (v)  release  a  Loan  Party  from,  or  consent  to  a  Loan  Party's               assignment or delegation of, such Loan Party's obligations under the Loan Documents (which shall               be deemed to affect all Lenders), except as otherwise may be provided in any Loan Document, (vi)               amend, modify, terminate or waive Section 10.16 or any other provision providing for the pro rata               sharing  of  payments  or  Section  11.01(a),  or  (vii)  amend  or  modify  the  definition  of  “Required               Lenders” or any provision providing for the consent or other action by all Lenders.                                             63  KE 52826770.15  

 

          (b)   Notwithstanding any provision in this Section 11.01 to the contrary, (i) no amendment, modification,               termination or waiver affecting or modifying the rights or obligations of Agent under any Loan               Document shall be effective unless signed by Borrower, Agent and the Required Lenders, (ii) Agent               may amend Schedule 2 to reflect assignments permitted hereunder, and (iii) Agent (acting at the               direction of the Required Lenders) and Borrower may amend or modify any Loan Document to (A)               grant  a  new  Lien,  extend  an  existing  Lien  over  additional  property  or  assets  or  join  additional               Persons as Loan Parties, in each case for the benefit of the Agent and the Lenders and (B) correct               any obvious mistake, error or omission.   Section 11.02. No Implied Waivers; Cumulative Remedies; Writing Required.  No delay or failure of Agent or  any Lender in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall  any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or  remedy  preclude  any  further  exercise  thereof  or  of  any  other  right,  power  or  remedy.   The  rights  and  remedies  hereunder of Agent and the Lenders are cumulative and not exclusive of any rights or remedies which they would  otherwise have.  Any waiver, permit, consent or approval of any kind or character on the part of Agent or any Lender  of any breach or default under this Loan Agreement or any such waiver of any provision or condition of this Loan  Agreement must be in writing and shall be effective only in the specified instance and to the extent specifically set  forth in such writing.   Section 11.03. Reimbursement.  Borrower shall reimburse Agent and the Lenders for all costs and expenses, filing  fees and taxes paid or payable, including without limitation, reasonable attorneys’ fees and disbursements expended  or  incurred  in  any  arbitration,  mediation,  judicial  reference,  legal  action  or  otherwise,  in  connection  with  (i) the  preparation,  negotiation,  documentation,  execution  and  delivery  of  this  Loan  Agreement,  the  other  Transaction  Documents  and  the  transactions  contemplated  hereby,  (ii) the  amendment  and  enforcement  of  the  Transaction  Documents,  including,  without  limitation,  during  any  workout,  attempted  workout  and/or  in  connection  with  the  rendering of legal advice as to Agent’s or Lenders’ rights, remedies and obligations under the Transaction Documents,  (iii) enforcing the Transaction Documents or collecting any sum which becomes due Agent or Lender under any  Transaction Document, (iv) any proceeding for declaratory relief, any counterclaim to any proceeding, or any appeal,  or (v) the protection, preservation or enforcement of any rights of Agent or Lenders, including, without limitation, in  each case:  (a) all costs and expenses of filing or recording (including Uniform Commercial Code financing statement  filing taxes and fees, documentary taxes, and intangibles taxes and fees, if applicable); (b) costs and expenses and fees  for insurance premiums, environmental audits, title insurance premiums, surveys, assessments, engineering reports  and inspections, appraisal fees and search fees, background checks, costs and expenses of remitting loan proceeds,  collecting checks and other items of payment, and establishing and maintaining any deposit account subject to an  account control agreement, together with Agent’s and the Lenders’ customary charges and fees with respect thereto;  (c)  costs  and  expenses  of  preserving  and  protecting  the  Collateral;  (d)  costs  and  expenses  paid  or  incurred  in  connection with obtaining payment of the Obligations, enforcing the security interests and Liens of Agent and the  other Lenders, selling or otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Loan  Agreement and the other Transaction Documents or defending any claims made or threatened against Agent or any  Lender arising out of the transactions contemplated hereby and thereby (including preparations for and consultations  concerning any such matters); and (e) the fees and disbursements of counsel (including legal assistants) to Agent and  the Lenders, including any regulatory, local or special counsel, in connection with any of the foregoing.  For the  purpose of this Section 11.03, attorneys’ fees shall include, without limitation, fees incurred in connection with the  following:   (1) contempt  proceedings;  (2) discovery,  (3) any  motion,  proceeding  or  other  activity  of  any  kind  in  connection  with  an  insolvency  proceeding;  (4) garnishment,  levy,  and  debtor  and  third  party  examinations;  and  (5) post-judgment motions and proceedings of any kind, including, without limitation, any activity taken to collect or  enforce any judgment.  All of the foregoing costs and expenses shall be payable by Borrower upon demand by Agent,  and if not paid within thirty (30) days of presentation of invoices shall bear interest at the highest applicable Default  Rate.   Section 11.04. Indemnification.  Borrower and the Guarantors, jointly and severally, shall indemnify, reimburse  and hold Agent and the Lenders and their permitted assigns, each of Agent’s, Lenders’ or their permitted assigns’  members, and each of their respective successors, assigns, agents, officers, directors, shareholders, members, servants,  agents and employees (each, an “Indemnified Person” and collectively, the “Indemnified Persons”) harmless from  and against all liabilities, losses, damages, actions, suits, demands, claims of any kind and nature (including claims  relating to environmental liabilities, discharge, cleanup or compliance), all costs and expenses whatsoever to the extent                                             64  KE 52826770.15  

 

   they may be incurred or suffered by such indemnified party in connection therewith (including reasonable attorneys’  fees and expenses), fines, penalties (and other charges of applicable governmental authorities), licensing fees relating  to any item of Collateral, damage to or loss of use of property (including consequential or special damages to third  parties or damages to Borrower’s property), or bodily injury to or death of any person (including any agent or employee  of Borrower) and whether such claim is asserted by any Lender, the Borrower, any Guarantor or any other Person  (each, a “Claim”), (a) directly or indirectly relating to or arising out of the Loan Documents or the use of the proceeds  of the Loan, including the falsity of any representation or warranty of Borrower or Borrower’s failure to comply with  the terms of this Loan Agreement or any other Transaction Document, (b) in connection with the enforcement of any  Loan Party’s obligations under the Loan Documents (including this Section 11.04) or (c) arising out of or otherwise  involving any violation of, noncompliance with or liability under any Environmental Law or any actual or alleged  presence of Hazardous Materials applicable to the operations of any Loan Party or any of their respective Subsidiaries,  or  any  property  of  any  Loan  Party  or  their  respective  Subsidiaries; provided, however,  that  Borrower  shall  not  indemnify an Indemnified Person to the extent it is found in a final, non-appealable judgment by a court of competent  jurisdiction  to  have resulted  primarily  and  directly  from  (i)  the  gross  negligence  or  willful  misconduct  of  such  Indemnified Person or (ii) any liability of such Indemnified Person owing to any other Indemnified Person caused  solely by the actions of the first such Indemnified Person, which does not involve, result from or relate to, directly or  indirectly, any act or omission by a Loan Party (other than a Claim against the Agent solely in its capacity as the  Agent).  Such indemnities shall continue in full force and effect, notwithstanding the expiration or termination of this  Loan Agreement.  Upon Agent’s written demand, Borrower shall assume and diligently conduct, at its sole cost and  expense, the entire defense of an Indemnified Person against any indemnified Claim described in this Section 11.04.   Borrower shall not settle or compromise any Claim against or involving an Indemnified Person without first obtaining  such Person’s written consent thereto, which consent shall not be unreasonably withheld.  The obligations in this  Section 11.04 shall survive the resignation or replacement of Agent and the payment of all other Obligations until all  applicable statute of limitation periods with respect to actions that may be brought against an Indemnified Person have  run.  All amounts owing under this Section 11.04 shall be paid within thirty (30) days after written demand.  This  Section 11.04 shall not apply with respect to Taxes other than any Taxes that represent Claims arising from any non- Tax Claim.   Section 11.05. Limitation  on  Damages.   NOTWITHSTANDING  ANYTHING  TO  THE  CONTRARY  CONTAINED IN THIS LOAN AGREEMENT OR ANYWHERE ELSE, EACH LOAN PARTY AGREES THAT  IT  SHALL  NOT  SEEK  FROM  AGENT  OR  ANY  LENDER  UNDER  ANY  THEORY  OF  LIABILITY  (INCLUDING  ANY  THEORY  IN  TORTS),  ANY  SPECIAL,  INDIRECT,  CONSEQUENTIAL  OR  PUNITIVE  DAMAGES (INCLUDING LOST PROFITS) AND REGARDLESS OF THE FORUM OF ACTION.   Section 11.06. Notices.   All  notices  and  other  communications  given  to  or  made  upon  any  party  hereto  in  connection with this Loan Agreement shall be in writing and shall be delivered by certified mail, postage prepaid,  return receipt requested, by a nationally recognized overnight courier, by facsimile, by electronic mail or other means  of electronic communication or personally delivered to the respective parties, as follows:                Loan Party:   Sterling Construction Company, Inc.                             1800 Hughes Landing Blvd                             The Woodlands, TX 77380                             Telephone: (281) 214-0800                             Email: ronballschmiede@strlco.com                             Attention: Chief Financial Officer                with a copy to: Andrews Kurth Kenyon, LLP                             600 Travis, Suite 4200                             Houston, TX 77002                              Telephone: (713) 220-4200                             Fax: (713) 220-4285                             Email: solson@andrewskurth.com                             Attention: Scott Olson                Agent:        Wilmington Trust, National Association                             Rodney Square North                                             65  KE 52826770.15  

 

                              1100 North Market Street                             Wilmington, Delaware 19890                             Telephone: (302) 636-5048                             Fax: (302) 636-4145                             Email:  jkanderson@wilmingtontrust.com                             Attention: Jennifer K. Anderson                with a copy to: Oaktree Capital Management, L.P.                             333 South Grand Avenue, 28th Floor                             Los Angeles, CA 90071                             Telephone: (213) 830-6805                             Email:  nbasso@oaktreecapital.com                             Email: CorpActionAdmins@OakTreeCapital.com                             Attention: Nick Basso                with a copy to: Kirkland & Ellis LLP                             333 South Hope Street, 29th Floor                             Los Angeles, CA 90071                             Telephone: (213) 680-8111                             Fax: (213) 808-8107                             Email:  david.nemecek@kirkland.com                             Attention: David Nemecek, P.C.                with a copy to: Kirkland & Ellis LLP                             333 South Hope Street, 29th Floor                             Los Angeles, CA 90071                             Telephone: (213) 680-8695                             Fax: (213) 808-8081                             Email:  nisha.kanchanapoomi@kirkland.com                             Attention: Nisha Kanchanapoomi                Lender:       to the address specified in writing by such Lender to the Agent and the Borrower.   or in accordance with any subsequent written direction from any party to the others.  All such notices and other  communications shall be effective, (i) in the case of delivery by messenger or overnight delivery service, when left at  the appropriate address; (ii) in the case of facsimile transmission, upon the sender’s receipt of electronic confirmation  of receipt; (iii) in the case of electronic mail, upon the sender’s receipt of an acknowledgement from the intended  recipient  (such  as  by  the  “return  receipt  requested”  function,  as  available,  return  e-mail or  other  written  acknowledgement), provided that transmissions may be made by electronic mail only if delivered in compliance with  procedures of Agent or the applicable Lenders applicable at the time and previously communicated to Borrower, (iv)  in the case of notices or communications posted to an Internet website, upon the deemed receipt by the intended  recipient  at  its  e-mail  address  as  described  in  the  foregoing  clause  (iii)  of  notification  that  such  notice  or  communication is available and identifying the website address therefor; and (v) in all other cases, upon actual receipt  however evidenced.   Section 11.07. Lenders and Allocations of Loans.  Notwithstanding anything herein to the contrary, each Lender  severally commits to make such Lender’s Loan Percentage of each Loan.  No Lender shall have liability for the  commitment to make Loans of any other Lender.  Borrower agrees that by notice to Borrower, Agent may reallocate  the Loan Percentages among the Lenders or among the Lenders and other investment funds affiliated with Agent.   Whether or not specified in any provision of this Loan Agreement, all references to Agent in this Loan Agreement  shall mean Agent for the benefit of the Lenders unless the context otherwise requires.   Section 11.08. Severability.  If any provision of any Transaction Document is held invalid or unenforceable to any  extent or in any application, the remainder of such Transaction Document and all other Transaction Documents, or  the application of such provision to different Persons or circumstances or in different jurisdictions, shall not be affected  thereby.                                             66  KE 52826770.15  

 

   Section 11.09. Reliance by Agent and the Lenders.  All covenants, agreements, representations and warranties  made herein by any Loan Party shall be deemed to be material to and have been relied upon by Agent and the Lenders,  notwithstanding investigation by Agent.   Section 11.10. No Set-Offs by Borrower.  All sums payable by any Loan Party pursuant to this Loan Agreement  or any of the other Transaction Documents shall be payable without notice or demand and shall be payable without  set-off or deduction in any manner whatsoever.   Section 11.11. Survival.  All representations, warranties, covenants and agreements of Borrower contained herein  or made in writing in connection herewith shall survive the execution and delivery of the Transaction Documents, the  making of Loans hereunder, the granting of security and the issuance of the Notes.   Section 11.12. Confidentiality.  Agent and the Lenders agree to hold non-public information regarding the Loan  Parties received in confidence and shall not disclose such information to third parties except on a confidential need- to-know basis to their employees, members, partners or the partners of its affiliated investment funds, their lenders,  and professional advisors to the foregoing, including attorneys and accountants, and others under a similar duty of  confidentiality, in each case, who have been informed of the confidential nature of such information and have been  advised of the obligation to keep information of this type confidential, and as Agent or Lenders may deem necessary  in its reasonable judgment to satisfy its legal obligations or to enforce Agent’s or Lenders’ rights under any Transaction  Document; provided, however, that nothing herein shall prevent any Lender (including Oaktree) from disclosing any  such information (i) with the Borrower’s prior consent, (ii) as required by the order of any court or administrative  agency or in any legal, judicial or administrative proceeding, (iii) as otherwise required by any applicable law, rule,  regulation (including, without limitation, in connection with filings, submissions and any other similar documentation  required or customary to comply with SEC filing requirements) or compulsory legal process, (iv) upon the request or  demand  of  any  regulatory  authority  having  jurisdiction  over  a  Lender  or  its  affiliates  or  managed  funds,  (v)  in  connection  with  the  proposed  transactions  and  on  a  confidential  basis  to  the  shareholders,  employees,  directors,  officers, legal counsel, lenders, investors, limited partners, financing sources, independent auditors, professionals,  advisors  and  other  experts  or  agents  of  such  Lender  or  its  affiliates  or  managed  funds  who  are  informed  of  the  confidential nature of such information and have been advised of their obligation to keep information of this type  confidential,  (vi)  to  any  of  such  Lender’s  respective  affiliates  or  managed  funds  solely  in  connection  with  the  Transactions (provided, that any such affiliate is advised of its obligation to retain such information as confidential),  (vii)  to  the  extent  any  such information  (a)  becomes  publicly  available  other  than  by  reason  of  a  breach  of  the  confidentiality obligations set forth in this Section 11.12, (b) becomes available to such Lender on a non-confidential  basis from a source other than the Borrower or on its behalf and not in violation of any confidentiality agreement or  obligation owed to the Borrower, (3c) was available to such Lender, as applicable, on a non-confidential basis prior  to its disclosure to such Lender by the Borrower, or (4d) was independently developed by such Lender without reliance  on confidential information, (viii) for purposes of establishing any defense available under securities laws, including,  without limitation, establishing a “due diligence” defense or (ix) in protecting and enforcing such Lenders’ rights with  respect to this Loan Agreement and the other Loan Documents.  Each Loan Party acknowledges that Lenders may  issue  press  releases,  advertisements,  and  other  promotional  materials,  either  in  print  or  on  Lenders’  website(s),  describing any successful outcome of services provided on such Loan Party’s behalf; provided, that in the event any  Loan Party identifies the Lenders by name in any such press releases, advertisements or other promotional materials,  such Lenders shall have the ability to review such press releases, advertisements or other promotional materials prior  to the issuance thereof.  Each Loan Party agrees that Lenders shall have the right to identify such Loan Party by name  and  use  such  Loan  Party’s  corporate  name  and logo  in  those  materials  or  deal  terms  in  “tombstones”  or  other  advertisements, public statements or marketing materials, solely for marketing purposes, and provide information  concerning the Loans set forth herein to reporting services or industry trade organizations.  In no event shall this  Section 11.12 or any other provision of this Loan Agreement, any of the other Transaction Documents or applicable  law be deemed:  (A) to apply to or restrict disclosure of information that has been or is made public by the Loan Parties  or any third party or otherwise becomes generally available to the public other than as a result of a disclosure in  violation hereof, (B) to apply to or restrict disclosure of information that was or becomes available to Agent or any  Lender (or any Affiliate of any Lender) on a non-confidential basis from a Person other than a Loan Party, or (C) to  require Agent or any Lender to return any materials furnished by a Loan Party to Agent or a Lender or prevent Agent  or a Lender from responding to routine informational requests in accordance with the Code of Ethics for the Exchange  of Credit Information promulgated by The Robert Morris Associates or other applicable industry standards relating to  the exchange of credit information.  The obligations of Agent and Lenders under this Section 11.12 shall supersede                                             67  KE 52826770.15  

 

   and replace the obligations of Agent and Lenders under any confidentiality letter signed prior to the date hereof or any  other arrangements concerning the confidentiality of information provided by any Loan Party to Agent or any Lender.   Section 11.13. Governing Law; Choice of Law and Venue; Jury Trial Waiver; Waivers.          (a)   THIS  LOAN  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN  ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO  PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL  OBLIGATIONS LAW).  BORROWER, EACH GUARANTOR, AGENT AND THE LENDERS HEREBY SUBMIT  TO  THE  EXCLUSIVE  JURISDICTION  OF  THE  STATE  AND  FEDERAL  COURTS  LOCATED  IN  THE  SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT NOTHING IN THIS LOAN AGREEMENT SHALL  BE DEEMED TO OPERATE TO PRECLUDE AGENT OR ANY LENDER FROM BRINGING SUIT OR TAKING  OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY  OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER  IN FAVOR OF AGENT OR SUCH LENDER.          (b)   Borrower and each Guarantor expressly submit and consent in advance to such jurisdiction in any  action or suit commenced in any such court, and each Borrower and Guarantor, for itself and in connection with its  properties, further agrees that the aforesaid courts of the State of New York and of the United States of America for  the Southern District of New York shall have exclusive jurisdiction with respect to any claim or counterclaim of  Borrower or any Guarantor based upon the assertion that the rate of interest charged by or under this Loan Agreement  or under the other Transaction Documents is usurious.  Borrower and Guarantors hereby waive any objection that they  may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to  the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower and Guarantors hereby  waive personal service of the summons, complaints, and other process issued in such action or suit and agrees that  service of such summons, complaints, and other process may be made by registered or certified mail addressed to  Borrower or Guarantors at the addresses set forth in Section 11.02 of this Loan Agreement and that service so made  shall be deemed completed upon the earlier to occur of Borrower’s or any Guarantor’s, as applicable, actual receipt  thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.          (c)   BORROWER, EACH GUARANTOR, AGENT AND THE LENDERS HEREBY WAIVE THEIR  RESPECTIVE  RIGHTS  TO  A  JURY  TRIAL  OF  ANY  CLAIM  OR  CAUSE  OF  ACTION  BASED  UPON  OR  ARISING  OUT  OF  ANY  OF  THE  TRANSACTION  DOCUMENTS  OR  ANY  OF  THE  TRANSACTIONS  CONTEMPLATED  THEREIN,  INCLUDING   CONTRACT  CLAIMS,  TORT  CLAIMS,  BREACH  OF  DUTY  CLAIMS,  AND  ALL  OTHER  COMMON  LAW  OR  STATUTORY  CLAIMS.   EACH  PARTY  HERETO  ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS  RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS LOAN  AGREEMENT,  AND  THAT  EACH  WILL  CONTINUE  TO  RELY  ON  THIS  WAIVER  IN  ITS  RELATED  FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS  REVIEWED  THIS  WAIVER  WITH  ITS  LEGAL  COUNSEL  AND  THAT  IT  KNOWINGLY  AND  VOLUNTARILY  WAIVES  ITS  JURY  TRIAL  RIGHTS  FOLLOWING  CONSULTATION  WITH  LEGAL  COUNSEL.   THIS  WAIVER  IS  IRREVOCABLE,  MEANING  THAT  IT  MAY  NOT  BE  MODIFIED  EITHER  ORALLY  OR  IN  WRITING  (OTHER  THAN  BY  A  MUTUAL  WRITTEN  WAIVER  SPECIFICALLY  REFERRING TO THIS SECTION 11.13 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS  WAIVER  SHALL  APPLY  TO  ANY  SUBSEQUENT  AMENDMENTS,  RENEWALS,  SUPPLEMENTS  OR  MODIFICATIONS HERETO OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR TO ANY OTHER  DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE EVENT OF  LITIGATION, THIS LOAN AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE  COURT.          (d)   Each of Borrower and Guarantors hereby irrevocably and unconditionally waives, to the maximum  extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in  this Section 11.13 any special, exemplary, punitive or consequential damages.   Section 11.14. Successors and Assigns.  This Loan Agreement and the other Transaction Documents shall be  binding upon and inure to the benefit of Agent and the Lenders, all future holders of a Note, Borrower and their                                             68  KE 52826770.15  

 

   respective successors and permitted assigns, except that Borrower may not assign or transfer its rights hereunder or  thereunder or any interest herein or therein without the prior written consent of the Required Lenders.  Agent or  Lenders may grant a security interest or assign all or any portion of their rights hereunder and under one or more Notes  or any of the Loan Documents to any of its Affiliated investments funds or Affiliated companies or to any one or more  financial institutions or funds or companies or an agent or trustee for such financial institutions or funds or companies  (an “Assignee”) and may sell to any of its Affiliated investments funds or Affiliated companies or to any one or more  financial institutions or funds or companies or an agent or trustee for such financial institutions or funds or companies  (a  “Participant”)  participation  interests  in  Agent’s  or  Lenders’  rights  hereunder  and  under  one  or  more  Notes;  provided, however, that so long as no Event of Default has occurred and is continuing, no Lender may assign or  participate its interest under the Loan Agreement or under one or more Notes without Borrower’s prior written consent  (not  to be unreasonably withheld,  conditioned  or delayed) unless  such assignment  or  participation  is  made  to  an  Affiliate of Lender or an Approved Fund with respect to a Lender; provided, further, that (i) except as the Agent and  the Borrower may otherwise agree, no Assignee shall hold less than Five Million Dollars ($5,000,000) of the principal  amount  of  the  Loans  outstanding  and  (ii)  any  such  assignment  of  interest  in  the  Loans  by  any  Lender  shall  be  accomplished by Lender providing to Borrower and Agent a duly executed Assignment and Assumption Agreement,  in substantially the form of Exhibit F hereto, identifying the Assignee and the amount of the Loan being assigned,  together with any existing Note (or a lost note affidavit in customary form) subject to such assignment...  Agent and  the Lenders may disclose the Transaction Documents and any other financial or other information relating to Borrower  or any Subsidiary to any potential Assignee or Participant, provided that such Assignee or Participant agrees to protect  the  confidentiality  of  such  documents  and  information  using  the  same  measures  that  it  uses  to  protect  its  own  confidential information and otherwise conform to the requirements of Section 11.12.  The Agent shall maintain at  the Agent’s office listed on a register for the recordation of the names and addresses of the Lenders and principal  amounts (and stated interest) of the Notes or Loans owing to each Lender pursuant to the terms hereof from time to  time, together with any participations granted to any Participant (the “Register”).  The Register shall be available for  inspection by the Borrower, and a redacted version of the Register showing the entries with respect to any Lender  shall be available for inspection by such Lender, at any reasonable time and from time to time upon reasonable prior  notice.  The entries in the Register shall be conclusive and binding absent manifest error; provided, failure to make  any such recordation, or any error in such recordation, shall not affect the Obligations in respect of any Note or Loan.   The Borrower, the Agent and the Lenders shall treat each Person in whose name any Note or Loan hall be registered  as the owner and the Lender thereof for all purposes hereof.  Any agreement or instrument pursuant to which a Lender  sells a participation shall provide that such Lender shall retain the sole right to enforce this Loan Agreement and to  approve any amendment, modification or waiver of any provision of this Loan Agreement. The Borrower agrees that  each Participant shall be entitled to the benefits of Section 2.05 and Section 2.06 (subject to the requirements and  limitations  therein,  including  the  requirements  under  Section  2.05(f)  (it being  understood  that  the  documentation  required under Section 2.05(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender  and had acquired its interest by assignment pursuant to this Section 11.14; provided that such Participant (A) agrees  to be subject to the provisions of Section 2.08 as if it were an assignee under this Section 11.14; and (B) shall not be  entitled to receive any greater payment under Section 2.05 or Section 2.06, with respect to any participation, than its  participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater  payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each  Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate  with the Borrower to effectuate the provisions of Section 2.08 with respect to any Participant.   Section 11.15. Counterparts.   This  Loan  Agreement  may  be  executed  in  any  number  of  counterparts  and  by  different parties hereto on separate counterparts, each of which, when so executed and delivered, shall be an original,  but all such counterparts shall together constitute one and the same instrument.   Section 11.16. Further Assurances.  Borrower will, and will cause each of the other Loan Parties to, at its own  expense and at Agent’s or the Lenders’ request, from time to time do, execute, acknowledge and deliver all and every  further acts, deeds, conveyances, transfers and assurances, and all financing and continuation statements and similar  notices, reasonably necessary or proper for the perfection of the security interest being herein provided for in the  Collateral, whether now owned or hereafter acquired.   Section 11.17. Entire Agreement.  This Loan Agreement and each of the other Transaction Documents, taken  together, constitute and contain the entire agreement of the Loan Parties, Agent and the Lenders and supersede any                                              69  KE 52826770.15  

 

   and  all  prior  agreements,  negotiations,  correspondence,  understandings  and  communications  among  the  parties,  whether written or oral, respecting the subject matter hereof.   Section 11.18. USA Patriot Act.  The Agent and each Lender subject to the USA PATRIOT Act (Title III of Pub.  L.  107-56  (signed  into  law  October  26,  2001)  (the  “Act”)  hereby  notifies  the  Loan  Parties  that  pursuant  to  the  requirements of the Act, it is required to obtain, verify and record information that identifies each Person who opens  an account and/or enters into a business relationship with it, which information includes the name and address of the  Loan Parties and other information that will allow the Agent or such Lender to identify such Person in accordance  with the Act and any other applicable law.  The Loan Parties are hereby advised that any Loans hereunder are subject  to satisfactory results of such verification.   Section 11.19. Rules of Construction.  Notwithstanding anything to the contrary contained herein or in any of the  Loan Documents, whenever in this Loan Agreement or any of the other Loan Documents the words (i) “judgment”,  “discretion”  or  “determination,  or  words  of  similar  import  are  used  relating  to  the  judgment,  discretion  or  determination of the Agent, such words shall mean (unless otherwise expressly provided herein) and refer to the  judgment, discretion or determination of the Agent, in each case, acting at the direction of the Required Lenders, or  (ii) “consent”, “approval”, “satisfaction”, “establishment” or words of similar import are used relating to the consent,  approval,  satisfaction,  establishment  of  the  Agent,  such  words  shall  mean  and  refer  to  the  consent,  approval,  satisfaction  or  establishment  of  the  Agent,  in  each  case,  acting  at  the  direction  of  the  Required  Lenders.   Any  requirement herein for the delivery to or receipt by an Agent or words of similar import relating to the delivery to or  receipt by such Agent of any documents, agreements, deliverables, or any other item shall mean and refer to the  delivery to or receipt by such Agent and the Lenders. Any item or action requested by the Agent or words of similar  import relating to the request by the Agent of any documents, agreements, deliverables, or any other item or action  shall mean and refer to the request by the Agent or the Required Lenders.   Section 11.20. Termination of Security Interest.  Upon the payment in full of all Obligations (other than inchoate  indemnity obligations) and the termination of any commitment to make Loans hereunder, the security interest granted  herein shall terminate and all rights to the Collateral shall revert to the applicable Loan Party.  Upon Agent’s or the  Lenders’ written verification to Borrower of receipt of such payment, Agent and Lenders hereby authorize Borrower  to file any UCC termination statements necessary to effect such termination and Agent will return any Collateral in  its possession to the applicable Loan Party and will execute and deliver to the applicable Loan Party any additional  documents or instruments as the applicable Loan Party shall reasonably request to evidence such termination, all at  Borrower’s or any other Loan Party’s sole cost and expense.   Section 11.21. Acknowledgement  and  Consent  to  Bail-In  of  EEA  Financial  Institutions.   Notwithstanding  anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any  such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any  Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of  an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:          (a)   the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any               such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA               Financial Institution; and          (b)   the effects of any Bail-inIn Action on any such liability, including, if applicable, (i) a reduction in               full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such               liability into shares or other instruments of ownership in such EEA Financial Institution, its parent               undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that               such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect               to any such liability under this Loan Agreement or any other Loan Document or (iii) the variation               of the terms of such liability in connection with the exercise of the write-down and conversion               powers of any EEA Resolution Authority.                        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          IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first written  above.   AGENT:    WILMINGTON TRUST, NATIONAL ASSOCIATION,  as Agent   By:                                        Name:                                      Title:                                                          [SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]  KE 52826770.15  

 

          IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first written  above.   BORROWER:   Sterling Construction Company, Inc.,  a Delaware corporation   By:                                       Name:  Ronald A. Ballschmiede  Title: Executive Vice President, Chief Financial Officer          and Treasurer                        [SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]  KE 52826770.15  

 

          IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first written  above.   GUARANTORS:   Texas Sterling Construction Co.  a Delaware corporation    By:                                       Name:  Brady A. Janes  Title: Vice President & Chief Financial Officer      Ralph L. Wadsworth Construction Company, LLC  a Utah limited liability company    By:    Sterling Construction Company, Inc.,         its manager    By:                                       Name:  Ronald A. Ballschmiede  Title: Executive Vice President, Chief Financial Officer         and Treasurer      J. Banicki Construction, Inc.  an Arizona corporation    By:                                       Name:  Ronald A. Ballschmiede  Title: Chief Financial Officer & Treasurer      Texas Sterling-Banicki, JV LLC  a Texas limited liability company    By:                                       Name:  Brady A. Janes  Title: Vice President & Chief Financial Officer      Road and Highway Builders of California, Inc.  a California corporation    By:                                       Name:  Ronald A. Ballschmiede  Title: Senior Vice President & Chief Financial Officer                                                     [SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]  KE 52826770.15  

 

   Ralph L. Wadsworth Construction Co. LP  a California limited partnership    By: Ralph L. Wodsworth Construction Company, LLC,     its general partner     By: Sterling Construction Company, Inc.,     its manager    By:                                       Name:  Ronald A. Ballschmiede  Title: Executive Vice President, Chief Financial Officer         and Treasurer      Tealstone Residential Concrete, Inc.  a Texas corporation    By:                                       Name:  Ronald A. Ballschmiede  Title: Vice President - Finance      Tealstone Commercial, Inc.  a Texas corporation    By:                                       Name:  Ronald A. Ballschmiede  Title: Vice President - Finance                          [SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]  KE 52826770.15  

 

          IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first written  above.   LENDERS:                                           OCM STERLING E HOLDINGS, LLC                                                                                    By:    Oaktree Fund GP IIA, LLC                                          Its:   Manager                                                                                    By:    Oaktree Fund GP II, L.P.                                          Its:   Managing Member                                                                                                                              By:    _________________________                                          Name:                                          Title: Authorized Signatory                                                                                                                              By:    _________________________                                          Name:                                          Title: Authorized Signatory                                                                                                                                                                        OCM STERLING NE HOLDINGS, LLC                                                                                    By:    Oaktree Fund GP IIA, LLC                                          Its:   Manager                                                                                    By:    Oaktree Fund GP II, L.P.                                          Its:   Managing Member                                                                                                                              By:    _________________________                                          Name:                                          Title: Authorized Signatory                                                                                                                              By:    _________________________                                          Name:                                          Title: Authorized Signatory                                                                    [SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]  KE 52826770.15  

 

                                                                                                                               SCHEDULE 1            Guarantors                            Jurisdiction and Type of Organization            Tealstone Residential Concrete, Inc.  Texas corporation            Tealstone Commercial, Inc.            Texas corporation            Road And Highway Builders Of California, Inc. California corporation            Texas Sterling Construction Co.       Delaware corporation            Ralph  L.  Wadsworth  Construction  Company, Utah limited liability company           LLC            Texas Sterling - Banicki, JV LLC      Texas limited liability company            J. Banicki Construction, Inc.         Arizona corporation            Ralph L. Wadsworth Construction Co. LP California limited partnership                                           Schedule 1  KE 52826770.15  

 

                                                                                                                               SCHEDULE 2    Lender                       Loan Percentage              Loans   OCM Sterling NE Holdings, LLC 38.37%                      $32,610,301.96   OCM Sterling E Holdings, LLC 61.63%                       $52,389,698.04   Total                        100.00%                      $85,000,000.00                                           Schedule 2  KE 52826770.1  

 

                                                                                                                               SCHEDULE 3   On or prior to the first anniversary of the Closing Date, the Loan Parties shall grant a security interest in the assets  specified  herein  or  otherwise  take  any  of  the  following  actions  described  in  clauses  (i)-(vii)  below  such  that  an  equivalent amount of value equal to Twenty Million Dollars ($20,000,000) (which may be attributed based on the  satisfaction of certain actions set forth below) has been received, either in cash or Collateral security, by the Lenders  (the  “Collateral  Enhancement  Requirement”),  provided,  however  that  the  failure  to  satisfy  the  Collateral  Enhancement Requirement shall not result in an Event of Default but rather the sole remedy of the Lenders shall be  the  application  of  the  Enhanced  Rate  Adjustment  as  set  forth  herein.   The  value  attributed  to  such  Collateral  Enhancement Requirement shall be deemed to be (a) Ten Million Dollars ($10,000,000) upon the satisfaction of the  actions described in clauses (i), (ii) and (iv) below and (b) the dollar for dollar amount of Loans prepaid in accordance  with clauses (iii), (v), (vi) and (vii) below (with the aggregate amount of attributable value described in this sentence  achieved by the Loan Parties and determined as of the first anniversary of the Closing Date being the “Achieved  Collateral Enhancement Value”).  By way of example, if the Loan Parties satisfy the actions described in clause (i)  below and repay Loans in an amount equal to Five Million Dollars ($5,000,000) pursuant to clause (iii) below on or  prior to the first anniversary of the Closing Date, the Achieved Collateral Enhancement Value shall equal Fifteen  Million Dollars ($15,000,000) and as a result, the Enhanced Rate Adjustment shall automatically and immediately  apply.    The satisfaction of any one of the following actions shall count towards the Achieved Collateral Enhancement Value  and the Collateral Enhancement Requirement.    (i) Terminating, discharging or releasing in their entirety the Lien of RHB LLC and Myers securing Excluded Property  and subsequently granting a first priority security interest in such Excluded Property in favor of the Agent, for the  benefit of the Lenders pursuant to the Mortgage, and either terminating, paying off and discharging in full the Secured  Intercompany Note or causing the aggregate outstanding balance under the Secured Intercompany Note to be zero at  all times thereafter.  In the event such Excluded Property becomes Collateral in accordance with this clause (i), the  Loan Parties shall comply with Section 6.13 of the Loan Agreement with respect to such Excluded Property within  thirty (30) days (rather than sixty (60) days) of the termination, discharge or release of such Liens on the Excluded  Property.    (ii) Obtaining a Lien on the Excluded Property in favor of the Agent, for the benefit of the Lenders, pursuant to the  Mortgage, whether by obtaining the requisite approval of the parties necessary to cause such Excluded Property to  become Collateral or otherwise, and either terminating, paying off and discharging in full the Secured Intercompany  Note  or  causing  the  aggregate  outstanding  balance  under  the  Secured  Intercompany  Note  to  be  zero  at  all  times  thereafter.    (iii) Transferring the fee-simple ownership interests in the Excluded Property by the applicable Loan Party to a third- party buyer (that is not another Loan Party or Subsidiary or an Affiliate thereof) resulting in the receipt by such Loan  Party of Net Cash Proceeds and the subsequent application of such Net Cash Proceeds to the repayment of the Loans  in accordance with Section 2.02(d)(ii)(C) of the Loan Agreement, together with any accrued and unpaid interest to the  date of such prepayment on the amount so prepaid, plus any applicable Prepayment Premium (for the avoidance of  doubt, such Net Cash Proceeds described in this clause (iii) shall not be permitted to be reinvested in any assets of the  Loan Parties or their respective Subsidiaries as contemplated by Section 2.02(d)(ii)(C) of the Loan Agreement).    (iv) Obtaining a Lien on Equity Securities of RHB LLC owned by a Loan Party such that RHB LLC becomes a  Pledged Company under the Loan Agreement and Borrower pledges its Equity Securities in RHB LLC in accordance  with the Pledge Agreement.    (v) Using the proceeds arising from the Permitted Dispositions and/or the NTTA Matter in accordance with the terms  and conditions set forth in Section 2.02(d)(i) of the Loan Agreement.    (vi) Prepaying the Loans with proceeds in an amount equal to (a) the Consolidated EBITDA for the trailing four fiscal  quarter period ended as of the last day of the most recent fiscal quarter for which Financial Statements are required to  have been delivered under the Loan Agreement (or if no financial statements have been delivered pursuant to the Loan  Agreement, the fiscal quarter ended March 31, 2017), minus (b) Twelve Million Dollars ($12,000,000) of assumed                                          Schedule 3  KE 52826770.15  

 

   Consolidated Capital Expenditures per fiscal year.1  Any such prepayment of the Loans made pursuant to this clause  (vi) shall be paid together with any accrued and unpaid interest to the date of such prepayment on the amount so  prepaid, plus, any applicable Prepayment Premium set forth in Section 2.02(e) of the Loan Agreement.    (vii) Prepaying the Loans with proceeds from the issuance of any Equity Securities in accordance with the terms and  conditions set forth in Section 2.02(d)(ii)(B) of the Loan Agreement.      The satisfaction of any one or more of the actions described in the foregoing clauses (i)-(vii) such that the     Collateral Enhancement Requirement is achieved shall not result in an Enhanced Rate Adjustment as   described in the Loan Agreement; provided, however, that the failure to satisfy the Collateral Enhancement   Requirement to the fullest extent possible on or prior to the first anniversary of the Closing Date shall, upon    the written election of the Required Lenders to the Agent, result in the application of the Enhanced Rate  Adjustment based on the Achieved Collateral Enhancement Value; provided, further, that the Loan Parties’   failure to satisfy, or continue to satisfy, the Collateral Enhancement Requirement after the first anniversary   of the Closing Date shall subject the Loan Parties to the Enhanced Rate Adjustment for so long as the Loan                 Parties are unable to satisfy the Collateral Enhancement Requirement.                                                               1  For purposes of this clause (vi), Consolidated EBITDA for the trailing four fiscal quarter period ending March  31, 2017 through June 30, 2018 shall be deemed to be the Consolidated EBITDA amount below set forth opposite  the applicable fiscal quarter:                Fiscal Quarter Ending:                     Consolidated EBITDA                   March 31, 2017                              $27,300,000                   June 30, 2017                               $31,700,000                 September 30, 2017                            $34,800,000                 December 31, 2017                             $36,300,000                   March 31, 2018                              $39,000,000                   June 30, 2018                               $42,000,000                                             Schedule 3  KE 52826770.15

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