Document:

Exhibit

Exhibit 10.1
EXECUTION

                                
FOURTH MODIFICATION AGREEMENT
This Fourth Modification Agreement (“Agreement”) is made as of August 17, 2015, by and among KENNEDY-WILSON, INC., a Delaware corporation (“Borrower”), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as administrative agent, lead arranger and book manager (“Agent”) under the Loan Agreement described below, U.S. BANK NATIONAL ASSOCIATION, a national banking association, as a Lender (“U.S. Bank National Association”), EAST-WEST BANK, a California banking corporation (“East-West Bank”), THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND (“Bank of Ireland”) BANK OF AMERICA, N.A., a national banking association (“Bank of America”) DEUTSCHE BANK AG NEW YORK BRANCH (“Deutsche Bank”) and J.P. MORGAN CHASE BANK, N.A., a national banking association (“J.P. Morgan Bank”).  As used in this Agreement, U.S. Bank National Association, East-West Bank, Bank of Ireland, Bank of America, Deutsche Bank and J.P. Morgan Bank, and any bank that becomes a party to the Loan Agreement in the future, shall collectively be referred to herein as “Lenders”.  
Factual Background
A.    Under a Revolving Loan Agreement dated July 22, 2010 (as amended by the First Modification Agreement (as defined below), the Second Modification Agreement (as defined below), the Consent Letters (as defined below) and the Third Modification Agreement (as defined below), the “Loan Agreement”), Lenders agreed to make unsecured revolving loans of up to $140,000,000 to Borrower (the “Loan”), subject to the terms and conditions specified therein.  Borrower, Agent, U.S. Bank National Association and East-West Bank previously executed that certain Modification Agreement dated as of June 29, 2012 (the “First Modification Agreement”), pursuant to which the parties thereto agreed to modify the terms of the Loan to, among other things, extend the term of the Loan to June 30, 2015, modify the interest rate payable under the Loan, and make additional Loan proceeds available under the Loan, as more fully set forth therein.  Borrower, Agent, U.S. Bank National Association, East-West Bank, and Bank of Ireland previously executed that certain Second Modification Agreement dated as of September 19, 2013 (the “Second Modification Agreement”), pursuant to which the parties thereto agreed to modify the terms of the Loan to, among other things, extend the term of the loan to October 1, 2016, modify certain financial covenants, and make additional loan proceeds available under the Loan, as more fully set forth therein.  Borrower, Agent, U.S. Bank National Association, East-West Bank, Bank of Ireland, Bank of America, Deutsche Bank, and J.P. Morgan Bank previously executed that certain Third Modification Agreement dated as of July 16, 2014 (the “Third Modification Agreement”), pursuant to which the parties thereto agreed to modify the terms of the Loan to, among other things, modify certain financial covenants, and make additional loan proceeds available under the Loan, as more fully set forth therein.  Borrower, Agent, U.S. Bank National Association, East-West Bank, and Bank of Ireland have previously executed various consent letters (collectively, the “Consent Letters”), pursuant to which the Lenders parties thereto consented to the issuance of Senior Notes on the terms and conditions set forth in the Consent Letters.

B.    The parties hereto wish hereby to amend certain provisions of the Loan Agreement with respect to “Change of Control” and to update various provisions thereof with respect to OFAC, Sanctions, Anti-Corruption and similar matters, to conform such provisions to the current standards of Agent and Lenders.
C.    As used in this Agreement, the term “Loan Documents” means the Loan Agreement, the Notes (as defined below), the Initial Repayment Guaranty, the Additional Guaranty, the First Modification Agreement, the Second Modification Agreement, the Third Modification Agreement, the Consent Letters, the Assumption Agreements and the other “Loan Documents” described in the Loan Agreement, all as amended or modified hereby.  This Agreement shall also constitute a Loan Document.  Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement, as modified by this Agreement.
Agreement
Therefore, Borrower, Agent and Lenders agree as follows:
1.Recitals.  The recitals set forth above in the Factual Background are true, accurate and correct, and such recitals hereby are incorporated herein as an agreement of Borrower, Agent and Lenders.
2.Reaffirmation of Obligations.  Borrower reaffirms all of its Obligations under the Loan Documents, and Borrower acknowledges that it has no claims, offsets or defenses with respect to the payment of sums due under the Existing Notes or any other Loan Document.  Without limiting the foregoing, Borrower (a) reaffirms Agent’s right, following the occurrence of any Event of Default, subject to the terms and conditions of Section 1.14 of the Loan Agreement, to apply any and all payments made by Borrower or otherwise received by Agent or Lenders with respect to the Loan to the obligations owing by Borrower under the Loan Documents in such order and manner deemed appropriate by Agent in its sole discretion (subject only, as between Agent and Lenders, to the provisions of Section 9.5(b) of the Loan Agreement, as amended hereby), and (b) expressly waives all of its rights under applicable law or otherwise to direct Agent as to such application or to designate the portion of the obligations to be satisfied.
3.Modifications to the Loan Agreement.  The Loan Documents are hereby amended as follows:
(a)Section 4.16 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:
“4.16    Sanctions and Anti-Corruption Compliance; PATRIOT Act.  The Borrower, each Guarantor, each agent of Borrower and each Guarantor, their respective officers and employees and, to the knowledge of the Borrower, its directors, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  None of the Borrower, any Subsidiary, or to the knowledge of the Borrower or such Subsidiary, any of its respective directors, officers or employees, is a Sanctioned Person.  No Advance or use of the proceeds of any 

Advance, other financial accommodation or other transactions contemplated hereby will violate Anti-Corruption Laws or applicable Sanctions.  Each of Borrower, Guarantors, and each Affiliate or agent of Borrower or any Guarantor, is in compliance in all material respects with the PATRIOT Act.  Neither the making of the Advances hereunder, nor the use of any of the proceeds thereof, will violate the PATRIOT Act, the Trading with the Enemy Act, as amended, any of the foreign asset control regulations of the United States Treasury (31. C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statute thereto.”
(b)Section 5.11 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:
“5.11    Compliance with Laws.  (a) Except as set forth in clause (b) below, substantially comply with the requirements of all applicable laws, rules, regulations, and orders of any governmental authority, including the Fair Labor Standards Act and the Americans With Disabilities Act, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, would not have and could not reasonably be expected to cause a Material Adverse Change, and (b) comply in all material respects, and cause each Subsidiary to comply in all material respects, with all Anti-Corruption Laws and any applicable Sanctions.’
(c)Section 5.17 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:
“5.17    Sanctions and Anti-Corruption Compliance.  Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by Borrower, each Guarantor, and all Affiliates and agents of Borrower with the restrictions described in Section 4.16 hereof.
(d)Section 6.26 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:
“6.26    Sanctions and Anti-Corruption; Use of Proceeds.  Borrower shall not request any Advances hereunder, or use the proceeds of the Advances made hereunder, whether directly or indirectly, and whether immediately, incidentally or ultimately, (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person or in any Sanctioned Country.”
(e)Section 9.18 of the Loan Agreement is hereby amended by including a new clause (e):

“(e)    If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) 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 (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  For purposes of determining withholding Taxes imposed under FATCA, from and after the effective date of this Amendment, the Borrower and the Agent shall treat (and the Lenders hereby authorize the Agent to treat) the Amended Credit Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i) or 1.471-2T(b)(2)(i).”
(f)Definitions.  
(i)The following definitions are hereby added to the “Definitions” section of the Loan Agreement in the appropriate alphabetical order:
“Anti-Corruption Laws:  Means all laws, rules and regulations of any jurisdiction applicable to Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.”
“Blocked Person:  Has the meaning set forth in Section 4.16.”
“FATCA:  Means Sections 1471 through 1474 of the Code, as of August 17, 2015 (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 and any agreement entered into pursuant to Section 1471(b)(1) of the Code.”
“Fourth Modification Agreement:  Means that certain Fourth Modification Agreement made as of August 17, 2015, by and among Borrower, Agent and the Lenders party thereto.”
“Fourth Modification Agreement Effective Date:  Means the “Effective Date” under and as defined in the Fourth Modification Agreement.”
 “PATRIOT Act:  Means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2011)), as amended from time to time, and any successor statute.”

“Sanctions: Means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.”
“Sanctioned Country: Means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person: means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).
(ii) The following definitions are hereby amended and restated in their entirety as follows:
“Change of Control:  Shall be deemed to have occurred at such time as there is (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 (i) Permitted Investors and (ii) 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 unless such plan is part of a group, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of thirty-five percent (35%) or more of the equity securities of Initial Guarantor entitled to vote for members of the board of directors or equivalent governing body of Initial Guarantor on a fully diluted basis or (b) during any period of 12 consecutive months, a majority of the members of the board of directors of Initial Guarantor cease to be composed of individuals (i) who were members of that board on the first day of such period, (ii) whose election or nomination to that board 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 (iii) whose election or nomination to that board 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.”
“Excluded Taxes:  Means, in the case of each Lender or applicable Lending Installation and Agent, (a) taxes imposed on its overall net income, and franchise taxes imposed on it, by (i) the jurisdiction under the laws of which such Lender or Agent is incorporated or organized, (ii) the jurisdiction in which Agent's or such Lender's principal executive office or such Lender's applicable Lending Installation 

is located, (b) taxes attributable to such Lender’s failure to comply with Section 9.18; or (c) any U.S. federal withholding tax imposed pursuant to FATCA.”
“LIBOR: With respect to each LIBOR Rate Period applicable to any requested LIBOR Rate Advance, a per annum rate of interest equal to the greater of (a) zero percent (0.0%) and (b) the rate which appears on the Reuters Screen LIBOROI (or any successor or substitute thereto selected by Agent in its sole discretion) as of 10:00 a.m., London time, two (2) Business Days prior to the first day of the applicable LIBOR Rate Period selected by Borrower, for United States dollar deposits having a term coinciding with the LIBOR Rate Period selected by Borrower, adjusted for any reserve requirements and any subsequent costs arising from a change in government regulation.”
“LIBOR Daily Reset Based Rate: With respect to each LIBOR Daily Reset Rate Advance, the greater of (a) zero percent (0.0%) and (b) the Applicable Spread per annum plus the one-month LIBOR rate quoted by Agent from Reuters Screen LIBOROI Page (or any successor or substitute thereto selected by Agent in its sole discretion), which shall be that one-month LIBOR rate in effect and reset each Business Day, adjusted for any subsequent costs arising from a change in government regulation.  Notwithstanding the immediately preceding sentence,  if on any date for determining the one-month LIBOR rate, Agent shall determine (which determination shall be conclusive in the absence of manifest error) that (x) because of circumstances affecting the Money Markets, adequate and fair means do not exist for ascertaining the one-month LIBOR rate, or (y) it is unlawful to maintain any Advance at a rate based on the one-month LIBOR rate, Agent shall promptly give to Borrower telephonic notice (confirmed as soon as practicable in writing) of the nature and effect of such circumstances and/or illegality. After receipt of such notice and during the existence of such circumstances and/or illegality, the one-month LIBOR rate component of this definition under clause (b), above, that shall apply to the relevant portion of the outstanding Principal Balance, shall be determined based upon an alternate index selected by Agent, in its sole discretion, reasonably comparable to that of one-month LIBOR, intended to generate a return substantially the same as that generated by the one-month LIBOR rate, and all references in the Loan Documents to the LIBOR Daily Reset Based Rate shall be deemed to incorporate such alternate rate as the operative reference with respect to the one-month LIBOR rate component under clause (b), above, of this definition, while such rate is in effect.”
(g)No Other Modifications.  Except as expressly set forth in this Agreement, the Loan Documents shall be and remain unmodified and in full force and effect.
4.General Release.  As further inducement to Agent and Lenders to enter into this Agreement, Borrower and Guarantors hereby release Agent and Lenders as follows:
(a)    Borrower and Guarantors and their heirs, successors and assigns (collectively, the “Releasing Parties”) do hereby release, acquit and forever discharge Agent and Lenders of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches 

of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses of every type, kind, nature, description, or character, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, which in any way, have, prior to the Effective Date, arisen out of, are connected with or related to the Loan Documents, this Agreement or any earlier and/or other agreement or document referred to therein (collectively, the “Released Claims”).
(b)    The agreement of the Releasing Parties, as set forth in the preceding subparagraph (a) shall inure to the benefit of the successors, assigns, insurers, administrators, agents, employees, and representatives of Agent and Lenders.
(c)    The Releasing Parties have read the foregoing release, fully understand the legal consequences thereof and have obtained the advice of counsel with respect thereto.  The Releasing Parties further warrant and represent that they are authorized to make the foregoing release.
(d)    Each Releasing Party acknowledges that the foregoing release shall extend to Released Claims which the Releasing Party does not know or suspect to exist in Releasing Party’s favor at the time of executing this Agreement, regardless of whether such Released Claims, if known by such Releasing Party, would have materially affected such Releasing Party’s decision to enter into this Agreement.  Each Releasing Party acknowledges that they are familiar with Section 1542 of the Civil Code of the State of California which provides as follows:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
(e)    Each Releasing Party waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California and any similar provision of the statutory or non-statutory law of any other jurisdiction, to the full extent that it may lawfully waive all such rights and benefits.  In connection with such waiver and relinquishment, each Releasing Party acknowledges that it is aware that it or its attorneys or agents may hereafter discover facts in addition to or different from those which it now knows or believes to exist with respect to the subject matter of this Section 4 or the other parties hereto, but that each Releasing Party intends hereby fully, finally, and forever to settle, waive and release all of the Released Claims, known or unknown, suspected or unsuspected, which now exist or may exist hereafter between Releasing Parties and Agent and Lenders in connection with the Loan, except as otherwise expressly provided in this Section 4.  This foregoing release shall be and remain in effect notwithstanding the discovery or existence of any such additional or different facts.
(f)    Each Releasing Party warrants and represents that it is the sole and lawful owner of all right, title and interest in and to all of the respective Released Claims released hereby and that it has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person or entity any such claim or any portion thereof.  This release is not to be construed and does not constitute an admission of liability on the part of Agent 

or Lenders.  This release shall constitute an absolute bar to any Released Claim of any kind, whether such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable.  The Releasing Parties specifically agree that any attempt to assert a claim barred hereby shall subject each of them to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous or baseless claims or causes of action.

/s/ MW    /s/ KM
Borrower’s Initials    Guarantor’s Initials

(By Kent Mouton, authorized to initial on
behalf of each and every Guarantor)

[Remainder of page left intentionally blank] 

5.Conditions Precedent.  Before this Agreement becomes effective and any party becomes obligated under it, all of the following conditions shall have been satisfied in a manner acceptable to Agent in the exercise of Agent’s sole judgment (except as waived or reserved by Agent in writing):
(a)    Agent shall have received fully executed originals of this Agreement and the Consent of Guarantors attached hereto, and any other documents which Agent may require or request in accordance with this Agreement or the other Loan Documents.
(b)    Agent and Lenders shall have received reimbursement, in immediately available funds, of all actual, out-of-pocket costs and expenses incurred by Agent and Lenders in connection with the Loan or this Agreement, including the legal fees, charges and expenses of Agent’s counsel (determined on the basis of such counsel’s generally applicable rates, which may be higher than the rates such counsel charges Agent in certain matters).
(c)    Agent shall have received all documents evidencing the formation, organization and valid existence of the Borrower and Guarantors (to the extent such documents have been amended or modified since they were previously delivered to Agent), and the authorization for the execution, delivery, and performance of the Agreement (to the extent any new authorizations are required).
(d)    No change shall have occurred in the financial condition of Borrower, Initial Guarantor or the Borrower Parties as a whole, which would have, in Agent’s sole judgment, a material adverse effect on the ability of Borrower, Initial Guarantor or Borrower Parties as a whole to repay the Loan or otherwise perform their obligations under the Loan Documents.
(e)    Borrower’s representations and warranties set forth in Section 6 below are true and correct in all respects.
(f)    The Lenders shall have received from Borrower all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.
(g)    The conditions precedent shall have been satisfied prior to August 17, 2015 unless waived or reserved by Agent in writing.
6.Borrower’s Representations and Warranties.  Borrower represents and warrants to Agent and Lenders as follows:
(a)    Loan Documents.  Except as previously disclosed to Agent in writing, all representations and warranties made and given by Borrower in the Loan Documents are true, accurate and correct in all material respects.  Borrower is in compliance with all covenants, terms and conditions in effect and as required under the Loan Documents (as modified by this Agreement).

(b)    No Default.  No Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with notice or the passage of time or both, would be an Event of Default.
(c)    Borrowing Entity.  Borrower is a corporation which is duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to conduct business, and is in good standing, in the State of California.  Except as previously disclosed in writing by Borrower to Agent, there have been no changes in the organization, composition, ownership structure or formation documents of Borrower since the Closing Date.  Borrower’s execution and delivery of this Agreement and each Guarantor’s execution and delivery of the Consent of Guarantors attached hereto, and the continued performance by Borrower and each Guarantor of its obligations under the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of Borrower, Guarantors and any other required parties.  This Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
7.Incorporation.  This Agreement shall form a part of each Loan Document, and all references to a given Loan Document shall mean that document as modified pursuant to this Agreement.  For purposes of this Agreement, the “Effective Date” shall be the date that Agent notifies Borrower that all of the conditions precedent set forth in Section 5 hereof have been satisfied in a manner acceptable to Agent in the exercise of Agent’s sole judgment, or waived or reserved by Agent in writing.
8.No Prejudice; Reservation of Rights.  Except as expressly set forth herein, this Agreement shall not prejudice any rights or remedies of Agent or Lenders under the Loan Documents.  Agent and Lenders reserve, without limitation, all rights which it has against any endorser of the Notes.
9.No Impairment.  Except as specifically hereby amended, the Loan Documents shall each remain unaffected by this Agreement and all such documents shall remain in full force and effect.
10.Integration.  The Loan Documents, including this Agreement: (a) integrate all the terms and conditions mentioned in or incidental to the Loan Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties.  If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument in effect as of the Effective Date, including any of the other Loan Documents, the terms, conditions and provisions of this Agreement shall prevail.
11.Miscellaneous.  This Agreement and any attached consents or exhibits requiring signatures may be executed in counterparts, and all counterparts shall constitute but one and the same document.  If any court of competent jurisdiction determines any provision of this Agreement 

or any of the other Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents.  This Agreement shall be governed by the laws of the State of California, without regard to the choice of law rules of that State.  As used here, the word “include(s)” means “includes(s), without limitation,” and the word “including” means “including, but not limited to.”
12.No Reliance on Other Representations or Promises.  This Agreement constitutes the entire agreement between the parties with respect to the terms hereof.  This Agreement supersedes all previous negotiations, discussions and agreements between or among any of the parties, including, without limitation, any and all term sheets, and no parole evidence of any prior or other agreement shall be permitted to contradict or vary the terms of this Agreement.  By executing this Agreement, Borrower expressly acknowledges to Agent and Lenders that it did not rely on any promise, representation, assurance, agreement, statement or advice, oral or written, not expressly set forth in this Agreement in reaching its decision to enter into this Agreement and that no promises, representations, assurances, agreements, statements or advice, oral or written, have been made to Borrower which conflict with the written terms of this Agreement.  Borrower acknowledges to Agent and Lenders that it (i) has read and understands the terms and conditions contained in this Agreement, and (ii) has relied only on its review and interpretation of (and advice of its counsel in respect of) this Agreement (and it has not relied on any promises, representations, assurances, agreements, statements or advice from Agent, any Lender, or any of Agent’s or any Lender’s officers, employees, agents, attorneys or other representatives).  This Agreement may be amended only in a writing signed by the parties hereto.
[Signatures on following page]

Borrower’s Initials:  /s/ MW  /s/ KM

Borrower:

KENNEDY-WILSON, INC., a Delaware corporation

By:        /s/ Matthew Windisch        
Name:    Matthew Windisch        
Title:    VP                    

By:        /s/ Kent Mouton        
Name:    Kent Mouton        
Title:    VP                    

[Signature Page to Fourth Modification Agreement]

Agent:

U.S. BANK NATIONAL ASSOCIATION, 
as Agent

By:        /s/ Adrian Metter        
Name:    Adrian Metter        
Title:    Senior Vice President        

Lender:

U.S. BANK NATIONAL ASSOCIATION,
as a Lender

By:        /s/ Adrian Metter        
Name:    Adrian Metter        
Title:    Senior Vice President        

[Signature Page to Fourth Modification Agreement]

Lenders:

EAST-WEST BANK,
as a Lender

By:        /s/ Flora Ling                    
Name:    Flora Ling           
Title:    SVP                                 

THE GOVERNOR AND COMPANY
OF THE BANK OF IRELAND,
as a Lender

By:        /s/ Ford Young        
Name:    Ford Young        
Title:    Director                 

By:        /s/ James Finn                         
Name:    James Finn         
Title:    VP                         

BANK OF AMERICA, N.A.,
as a Lender

By:        /s/ Dennis Kwan        
Name:    Dennis Kwan         
Title:    Vice President        

[Signature Page to Fourth Modification Agreement]

DEUTSCHE BANK AG NEW YORK
BRANCH, as a Lender

By:        /s/ J.T. Johnston Coe        
Name:    J.T. Johnston Coe        
Title:    Managing Director        

By:        /s/ Murray Mackinnon        
Name:    Murray Mackinnon        
Title: Vice President        

J.P. MORGAN CHASE BANK, N.A., 
as a Lender

By:        /s/ Chiara Carter        
Name:    Chiara Carter        
Title:    Vice President        

[Signature Page to Fourth Modification Agreement]

CONSENT OF GUARANTORS
The undersigned, having read and understood the foregoing Fourth Modification Agreement (“Agreement”), hereby (i) consent to all of the terms, conditions and provisions of the Agreement and the transactions contemplated by the Agreement, including, but not limited to, Sections 2 through 5, inclusive, thereof, (ii) agree that the Agreement does not terminate any of the obligations of the undersigned to Agent and Lenders under the Guaranties, (iii) reaffirm their obligations under the Guaranties in light of the Agreement (including, but not limited to, Sections 2 through 5, inclusive, thereof), and (iv) agree that, by their execution of this Consent of Guarantors, each of the undersigned Guarantors shall be deemed to have joined in the provisions of Section 4 of the Modification Agreement as a Releasing Party, and hereby affirmatively join in and make each of the waivers and releases set forth in said Section 4 in favor of Agent and the Lenders, which Section 4 is incorporated into this Consent of Guarantors in its entirety by this reference.  The undersigned, having reread the Guaranties and with advice of their own counsel, hereby reaffirm and restate all waivers, authorizations, agreements and understandings set forth in the Guaranties, as though set forth in full herein.  Capitalized terms used in this consent but not otherwise defined shall have the meanings ascribed to such terms in the Agreement.
Dated as of August 17, 2015.

[Remainder of page left intentionally blank]

CONSENT

Guarantors:

KENNEDY-WILSON HOLDINGS, INC., 
a Delaware corporation

By:        /s/ Kent Mouton        
Name:    Kent Mouton        
Title:    VP                    

Kennedy Wilson Property Services DI GP, LLC,
KW BASGF II Manager, LLC,
KWF Investors I, LLC,
KWF Investors II, LLC,
KWF Investors III, LLC,
KWF Manager I, LLC,
KWF Manager II, LLC,
KWF Manager III, LLC,
KW - Richmond, LLC,
SG KW Venture I Manager LLC,
KW Loan Partners I LLC,
KW Summer House Manager, LLC,
KW Montclair, LLC,
KW Serenade Manager, LLC,
KW Redmond Manager, LLC,
KW Dillingham Aina LLC,
KWF Manager IV, LLC,
KWF Manager V, LLC,
Kennedy Wilson Property Equity IV, LLC,
KWF Investors IV, LLC,
KWF Investors V, LLC,
KW Annacost, LLC,
Santa Maria Land Partners Manager, LLC,
KW Captowers Partners, LLC,
KW Loan Partners VII, LLC,
KWF Investors VII, LLC,
KWF Manager VII, LLC,
KW Boise Plaza, LLC,
Kennedy Wilson Property Services IV GP, LLC,
KW/CV Third-Pacific Manager, LLC,
KW EU Loan Partners II, LLC,
KWF Investors VIII, LLC,
KWF Manager VIII, LLC,
KW 1200 Main LLC,
KW Harrington LLC,
KW 5200 Lankershim Manager, LLC,

Signature Page to Consent of Guarantors

KWF Manager X, LLC,
KWF Manager XI, LLC,
KWF Manager XII, LLC,
KW Real Estate Venture XIII, LLC,
KWF Manager XIII, LLC,
KWF Manager XV, LLC,
KW EU Loan Partners III, LLC,
KW EU Investors I, LLC,
KW Richfield Plaza, LLC,
KW Currier Square Shopping Center, LLC,
KW Creekview Shopping Center, LLC,
KW Securities, LLC,
Kennedy Wilson Property Special Equity III, LLC,
KW Ireland, LLC,
KW Four Points LLC,
KW Loan Partners VIII, LLC,
KW Residential Capital, LLC,
KW Fund IV—Kohanaiki, LLC,
Meyers Research, LLC,
KW Investment Adviser, LLC,
Dillingham Ranch Aina LLC,
each a Delaware limited liability company

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

Kennedy-Wilson Properties, Ltd., 
Kennedy-Wilson Property Services, Inc., Kennedy‐Wilson Property Services II, Inc., Kennedy-Wilson Property Equity, Inc., Kennedy‐Wilson Property Equity II, Inc., Kennedy‐Wilson Property Special Equity, Inc.,

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

Signature Page to Consent of Guarantors

Kennedy-Wilson Property Special Equity II, Inc., Kennedy Wilson Overseas Investments, Inc., Fairways 340 Corp.,
each a Delaware corporation

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

K-W Properties,
K-W Santiago Inc.,
Kennedy Wilson Auction Group Inc.,
Kennedy-Wilson Capital,
Kennedy-Wilson International,
Kennedy-Wilson Tech Ltd.,
KW Builder Marketing Services, Inc.,
KWP Financial I,
each a California corporation

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

KW Loan Partners II LLC,
Kennedy Wilson Fund Management Group, LLC, each a California limited liability company

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

Kennedy-Wilson Properties Ltd.,
an Illinois corporation

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

Signature Page to Consent of Guarantors

Kennedy Wilson Property Services DI, L.P., Kennedy Wilson Property Services IV, L.P.,
each a Delaware limited partnership

By:        /s/ Kent Mouton        
Kent Mouton, Authorized Signatory

Signature Page to Consent of Guarantorspaos_ex41.htm

EXHIBIT 4.1
   
  SHAREHOLDER AGREEMENT
   
  THIS SHAREHOLDER AGREEMENT (this “Agreement”) is made and entered into as of January 16, 2015 (the “Effective Date”), by and among (a) PRECISION AEROSPACE COMPONENTS, INC., a Delaware corporation (the “Company”), (b) C3 CAPITAL PARTNERS III, L.P., a Delaware limited partnership (together with its successors and assigns, “C3”), and (c) PRECISION GROUP HOLDINGS LLC, a New Jersey limited liability company (together with its successors and assigns, “Holdings”). C3 and Holdings, and such other Persons who become shareholders of the Company in the future and bound by the terms of this Agreement, are collectively referred to in this Agreement as “Shareholders.”
   
  RECITALS
   
  The following recitals are a material part of this Agreement.
   
  A. The Company is authorized to issue an aggregate of up to 100,000,000 shares of common stock, $0.001 par value per share (the “Common Stock”).
   
  B. The Company and Shareholders desire to enter into an agreement among themselves concerning, among other things, the Transfer or other disposition of securities of the Company, capital calls and the governance of the Company, on the terms set forth on this Agreement.
   
  AGREEMENT
   
  NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
   
  1. Definitions. The following terms shall have the following meanings:
   
  “Act” has the meaning set forth in Section 2.1(a)(ii).
   
  “Affiliate” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by, or under common control with such Person, and (ii) any officer, director, managing member, or manager of any Person described in clause (i) of this sentence. For purposes of this definition, “controlling,” “controlled by,” or “under common control with” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, but shall not mean a Person’s spouse or any other family member of such Person.
   
  “Business Day” means any day which is not a Saturday, Sunday, or legal holiday on which banks in New Jersey are required to be closed.
   
  “Bylaws” mean the Bylaws of the Company, as certified to C3 by the Company on the Effective Date and all subsequent amendments thereto and restatements thereof.
   
  	 
	1

	  

	 

   
  “Certificate” means the Certificate of Incorporation of the Company filed in the office of the Secretary of State of Delaware on December 28, 2005, and all subsequent amendments thereto and restatements thereof.
   
  “Commission” means the United States Securities and Exchange Commission or any successor agency.
   
  “Common Stock” means the Company’s common stock, $0.001 par value per share, any stock into which such Common Stock shall have been changed or any stock resulting from any reclassification of such Common Stock, and all other stock of any class or classes (however designated) of the Company the holders of which have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference.
   
  “Company Group” means the Company and its subsidiaries.
   
  “Director” means each member of the board of directors of the Company, which on the Effective Date are John Wachter, William Golden, Andrew S. Prince and Donald Barger, and any other Person that succeeds such Directors, or any other Person elected to act as a Director of the Company as set forth in Section 4.1. “Directors” refers to such Persons as a group (or such Person, if only one is then serving). Unless otherwise specifically provided in this Agreement, an action of the Directors shall require the written approval of a majority of the Directors.
   
  “Ownership Percentage” means, as to a Shareholder, such Shareholder’s proportionate ownership of all of the issued and outstanding Shares of the Company.
   
  “Permitted Transferee” has the meaning set forth in Section 3.1(b).
   
  “Person” means any individual, general partnership, partnership, limited partnership, corporation, joint venture, trust, limited liability company, cooperative, association, unincorporated organization, benefit plan, governmental, quasi-governmental, judicial or regulatory entity or any department, agency or political subdivision thereof or any other type of entity.
   
  “Rule 144” has the meaning set forth in Section 2.2.
   
  “Sale Transaction” shall mean a transaction involving the sale of all or substantially all of the assets of the Company, the sale or exchange of all of the Shares and other interests in the Company for cash, property, shares, or securities of another Person, or the merger of the Company with or into another Person pursuant to which all of the Shares and other interests in the Company are converted or exchanged into cash, property, shares, or securities of another Person.
   
  “Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of the Effective Date, by and among the Company, C3, Freundlich Supply Company, Inc., Tiger-Tight Corp, Aero-Missile Components, Inc., and Creative Assembly Systems, Inc., as amended, modified, supplemented, restated, and replaced from time to time.
   
  	 
	2

	  

	 

   
  “Shares” means shares of Common Stock now or hereafter issued to or acquired by the Shareholder and all shares of capital stock of the Company, including the Common Stock and all or other securities of the Company or any successor of the Company issued or issuable as a result of any stock dividends on, or stock split or reclassification or conversion of, or in exchange for, any such Common Stock or issued or issuable with respect to such Common Stock in connection with any merger or reorganization or similar transaction involving the Company.
   
  “Transfer” has the meaning set forth in Section 3.1(a).
   
  “Transferring Shareholder” has the meaning set forth in Section 3.1(a).
   
  2. Compliance with Securities Laws.
   
  2.1 Restrictions on Transfer. Notwithstanding anything in this Agreement to the contrary, each Shareholder agrees that, prior to making any Transfer of any Shares (other than a Transfer to the Company or to another Shareholder as required or permitted by this Agreement), such Shareholder will give written notice to the Company describing the manner of such proposed Transfer. Each such Shareholder further agrees that such proposed Transfer will not be effected until:
   
  (a) the Company has notified such Shareholder in writing that either:
   
  (i) in the opinion of Shareholder’s counsel reasonably acceptable to the Company (which is provided on behalf of the Shareholder), no registration of such Shares under the Act is required in connection with such proposed Transfer; or
   
  (ii) a registration statement under the Securities Act of 1933, as amended (the “Act”) covering such proposed disposition has been filed by the Company with the Commission and has become effective under the Act; and
   
  (b) the Company has notified such Shareholder that either:
   
  (i) in the opinion of counsel reasonably acceptable to the Company, no registration or qualification under the securities or “blue sky” laws of any state is required in connection with such proposed disposition; or
   
  (ii) compliance with applicable state securities or “blue sky” laws has been effected.
   
  The Company will use all reasonable efforts to respond to any such notice from a Shareholder within ten (10) Business Days of its receipt of such notice.
   
  	 
	3

	  

	 

   
  2.2 Rule 144 Acknowledgment. Each Shareholder acknowledges that such Person is familiar with Rule 144 of the rules and regulations of the Commission, as amended, promulgated pursuant to the Act (“Rule 144”), and that such Person has been advised that Rule 144 permits, only under certain circumstances, the resale of restricted securities such as the Shares now held or being acquired by such Person contemporaneously with the execution of this Agreement, but that Rule 144 is not currently, and may not in the future become, available to permit resales by such Person of any Shares. Each Shareholder understands that, to the extent that Rule 144 is not available, such Person will be unable to sell any Shares without either registration under the Act or the existence of another exemption from such registration requirement, and that the Company has no obligation whatsoever (except as set forth in this Agreement) to any Shareholder to register any Shares.
   
  3. Additional Restrictions on Transfer.
   
  3.1 Transfers of Interests.
   
  (a) General. No Shareholder or any transferee of a Shareholder’s Shares shall directly or indirectly, or by operation of law, sell, assign, exchange, pledge, gift, transfer, or make any other disposition (collectively, “Transfer”) all or any portion of, or any interests or rights in, the Shares owned by the Shareholder (the “Transferring Shareholder”) or transferee except as may be expressly permitted by this Agreement.
   
  (b) Permitted Transfers by Shareholders. All or part of the Shares of any Shareholder may be Transferred, at the election of a Shareholder, to a transferee (a “Permitted Transferee”) as follows:
   
  (i) At any time, to any other Shareholder or an Affiliate of the Shareholder; or
   
  (ii) Pursuant to a Transfer in accordance with Section 3.2.
   
  3.2 Right of First Refusal; Tag Along-Take Along Rights. If at any time a Shareholder (“Selling Shareholder”) desires to Transfer all (but not less than all) of his or her Shares (“Subject Shares”) to a third party pursuant to a bona fide offer to purchase for cash, or cash and notes, and such Transfer would constitute a permitted Transfer in accordance with Section 3.1, the following shall apply:
   
  (a) The Selling Shareholder shall give to each other Shareholder (collectively “Other Shareholders”) a written offer describing the Subject Shares, the name of the proposed purchaser, the price and payment terms, and other terms and conditions offered by the proposed purchaser (“Offer”);
   
  (b) The Other Shareholders shall have thirty (30) days after the receipt of the Offer to accept the terms and conditions set forth in the Offer, as buyer, by giving written notice thereof to the Selling Shareholder. Subject to subsection (c) below, each Other Shareholder shall have the right to purchase a portion of the Subject Shares equal to (i) a fraction the numerator of which is the number of Shares owned by the Other Shareholder and the denominator of which is the total number of Shares owned by all of the Other Shareholders who desire to purchase part of the Subject Shares (on an as converted to common stock basis), or (ii) such other portion as shall be agreed upon by all such Other Shareholders who desire to so purchase;
   
  	 
	4

	  

	 

   
  (c) If some or all of the Other Shareholders agree to purchase all (but not less than all) of the Subject Shares, then the Selling Shareholder and the Other Shareholders who are purchasing shall close the purchase upon the terms and conditions of the Offer within 60 days after the Offer is made (or, if later, the closing date set forth in the Offer). If the purchase price set forth in the Offer includes any secured notes or third party guarantees, a pledge of the Subject Shares as collateral by the purchasing Other Shareholders shall be deemed equivalent to the collateral described in the Offer;
   
  (d) If the Other Shareholders fail to agree to purchase all of the Subject Shares within the time period set out above, the Selling Shareholder shall have the right to consummate the sale or conveyance of all of the Subject Shares so long as (i) the purchaser is the proposed purchaser named in the Offer, (ii) the price, payment, and other terms are at least as favorable to the Selling Shareholder as those set forth in the Offer, (iii) the closing occurs on or before the date set forth in the Offer (but not more than 120 days after the date of the Offer), (iv) if any Other Shareholder makes any applicable election described in subsection (e) below, the Shares of such Other Shareholder are also purchased by the proposed purchaser, and (v) unless all of the Shares are being sold under subsection (e) below, the purchaser is not a competitor (or Person affiliated or related to a competitor) of the Company (as determined by vote of the Board of Directors, other than the selling Shareholder(s), if a Director or an Affiliate of a Director);
   
  (e) If the Other Shareholders fail to agree to purchase all of the Subject Shares within the time period set out above and the Subject Shares(s) being sold under subsection (d) above constitute at least 50.1% of all of the outstanding Shares, then for a period of 15 days following the expiration of the Offer to the Other Shareholders (i) each Other Shareholder shall have the right to elect to participate in the sale as a seller of all of such Other Shareholder’s Shares along with the sale by the Selling Shareholder(s) for the same consideration per Share and upon the same terms and conditions relating to Shares as the Selling Shareholder(s), and (ii) the Selling Shareholder(s) shall have the right to require all (but not less than all) of the Other Shareholders to participate in the sale as sellers of their Shares along with the sale by the Selling Shareholder(s) for the same consideration per Share and upon the same terms and conditions relating to Shares as the Selling Shareholder(s). Shareholder(s) exercising such right shall give written notice of exercise to Corporation and the other applicable Shareholders by the end of such 15 day period. At the closing, each participating Shareholder shall execute and deliver all documents as may be reasonably required to effectuate the transfer of the applicable Shares, free and clear of all liens, claims, and encumbrances of any type, other than this Agreement, and each participating Shareholder shall execute such other instruments as may be reasonably required of all participating Shareholders. All employment, consulting, covenant not to compete, and similar payments or to be paid, directly or indirectly, to a Shareholder or its affiliates by the purchaser or its affiliates (and not all Shareholders on a per Share basis) shall be limited to reasonable amounts; and
   
  	 
	5

	  

	 

   
  (f) Any purchaser of the Subject Shares under subsection (d) or (e) above desiring to make a further sale or conveyance of any part of the Subject Shares shall be subject to this Agreement.
   
  3.3 Transferor Remains Liable for Existing Obligations. A Transfer of Shares by a Shareholder shall not relieve the Shareholder of any obligations under this Agreement, the Act, or otherwise imposed by law, arising prior to such Transfer.
   
  3.4 Transfers in Violation of this Agreement. No Shares may be Transferred unless all of the following conditions are satisfied:
   
  (a) In the case of a Transfer that is not a permitted Transfer in accordance with Section 3.1(b), all of the Directors (excluding any Director that is an Affiliate of the selling Shareholder) have consented in writing to such substitution;
   
  (b) A fully executed and acknowledged written instrument has been delivered to the Directors signed by the transferee agreeing to be bound by this Agreement; and
   
  (c) The Selling Shareholder executes a stock power in form reasonably acceptable to the Directors (excluding any Director that is an Affiliate of the Selling Shareholder).
   
  Any Transfer or attempted Transfer in violation of this Agreement shall be null and void and have no effect.
   
  4. Shareholder Voting Agreements.
   
  4.1 Directors. For so long as C3 or an Affiliate of C3 owns Shares, C3 shall each be entitled to elect one (1) Director of the Company (the “C3 Director”). The C3 Director shall serve at the discretion of C3 and may be removed at any time and for any reason, with or without cause, only by C3. If the C3 Director dies, resigns, is removed, becomes incapacitated, or otherwise fails or ceases to act as a Director for any reason, C3 shall have the sole and exclusive right and option to fill such vacancy in its discretion. Meetings of the Directors will be held as follows: (a) at least monthly for the first six (6) months after the Effective Date; (b) at least on a quarterly basis thereafter; and (c) at least two (2) of such meetings per year shall be in person. Directors may participate in any meeting of the Directors by means of a conference telephone or similar communications equipment, so long as all Persons participating in the meeting can hear one another. Such participation in a meeting constitutes presence in person at the meeting.
   
  4.2 Board Observation Right. The Company shall allow two (2) observers designated by C3 to attend all meetings of the Directors (including executive sessions) in a nonvoting capacity, and in connection therewith, the Company shall give such observer copies of all notices, minutes, consents, and other materials, financial or otherwise, which the Company provides to its Directors; provided, however, that the observer may be excluded from any portion of any meeting where counsel for the Company is present and such exclusion is necessary to preserve any attorney-client privilege with respect to the communications during such portion of the meeting.
   
  	 
	6

	  

	 

   
  4.3 Sale Transaction. Notwithstanding any provision of the Certificate, Bylaws or this Agreement to the contrary, the Company shall not enter, approve, cause, consent, or permit the Company or any Company Group member to enter into any Sale Transaction without the prior written consent of C3 for so long as C3 or an Affiliate of C3 owns Shares.
   
  4.4 Unanimous Director Consent. Notwithstanding any provision of the Certificate, Bylaws or this Agreement to the contrary, the Company shall not take, enter, approve, cause, consent, or permit the Company or any Company Group member to take any of the following actions without the prior unanimous written consent of the Directors (excluding any Director that either directly or through an Affiliate has a personal interest in the action):
   
  (a) change the compensation for any Director or officer or any employee of the Company or any Company Group member that is also a Shareholder or an Affiliate of a Shareholder; or
   
  (b) cause or permit the Company (or any of its Affiliates) to contract or amend, supplement, replace, or modify any contract for the services of any Director, Shareholder or Affiliate thereof (or any Affiliate of the Company).
   
  4.5 C3 Consent. Notwithstanding any provision of the Certificate, Bylaws, or this Agreement to the contrary, the Directors shall not take any of the following actions without the prior written consent of C3:
   
  (a) make any amendment to the Certificate, Bylaws, or this Agreement;
   
  (b) make, consent to, approve, cause, or permit any amendment to the charter or bylaws of any Company Group member;
   
  (c) make an assignment for the benefit of the Company’s creditors, or admit in writing the Company’s inability to pay its debts as they become due, or file a voluntary petition in bankruptcy, or file any petition or answer seeking for the Company any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief, or file any answer admitting or not contesting the material allegations of a petition filed against the Company in any such proceedings, or seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of the Company or of all or any substantial part (20% or more) of the properties of the Company;
   
  (d) approve or consent to any Company Group member making an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts as they become due, or file a voluntary petition in bankruptcy, or filing any petition or answer seeking for any Company Group member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief, or filing any answer admitting or not contesting the material allegations of a petition filed against any Company Group member in any such proceedings, or seeking or consenting to or acquiescing in the appointment of any trustee, receiver, or liquidator of any Company Group member or of all or any substantial part (20% or more) of the properties of any Company Group member;
   
  	 
	7

	  

	 

   
  (e) approve any redemption or repurchase of Shares;
   
  (f) approve any payment of dividends or other distributions;
   
  (g) approve the issuance of Shares or other capital stock of the Company or any Company Group member;
   
  (h) approve the incurrence of new indebtedness in excess of $100,000.00; or
   
  (i) enter into, agree to, or otherwise undertake any transaction with any Affiliate of Company, except for transactions disclosed in or contemplated by the Securities Purchase Agreement.
   
  4.6 Additional Restrictions. Notwithstanding any provision of the Certificate, Bylaws, or this Agreement to the contrary, no Shareholder or any Affiliate of any Shareholder may directly or indirectly loan, advance, or otherwise provide any funds or compensation or transfer any securities of the Company or any Company Group member to another Shareholder without the prior written consent of C3.
   
  4.7 Management of Company Group Members and Observer Rights. Until such time as C3 is no longer a Shareholder, the Directors shall cause each Company Group member (excluding the Company) to have one (1) director at all times to be designated by C3. The Company shall cause each such Company Group member to allow one observer designated by C3 to attend all meetings of the Board of Directors of such Company Group member (including executive sessions) in a nonvoting capacity, and in connection therewith, the Company shall cause each such Company Group member to give such observer copies of all notices, minutes, consents, and other materials, financial or otherwise, which such Company Group member provides to its Board; provided, however, that the observer may be excluded only from any portion of any meeting where counsel for the Company is present and such exclusion is necessary to preserve any attorney-client privilege with respect to the communications during such portion of the meeting.
   
  4.8 Irrevocable Proxies. The voting power of the Ownership Percentage of Holdings has been previously granted to C3 upon the occurrence of certain events pursuant to duly executed undated Irrevocable Proxies.
   
  4.9 Reimbursement of Fees and Expenses. Directors and members of committees shall receive reasonable compensation for their services. Directors and members of committees shall be reimbursed for all reasonable expenses (including travel expenses) incurred in connection with their service as a director or member of a committee. This Section shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for those services.
   
  	 
	8

	  

	 

   
  5. Termination. This Agreement shall terminate only upon the unanimous written consent of the Shareholders.
   
  6. Miscellaneous.
   
  6.1 Notices. All notices, demands, or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable overnight courier service (charges prepaid), mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid or sent via electronic mail to the email address set forth below with a copy mailed to the recipient as set forth above. Such notices, demands, and other communications shall be sent to the Company and to the Shareholders as follows:
   
   
    	   
	   If to Holdings: 
	   
	  20 Nassau Street, Ste. M

	   
	   
	   
	  Princeton, NJ 08542

	   
	   
	   
	  Attn: John Wachter

	   
	   
	   
	  Email: jfwachter@polymathescapital.com

	   
	   
	   
	   

	   
	   If to C3:
	   
	  C3 Capital Partners III, L.P.

	   
	   
	   
	  c/o C3 Capital, LLC

	   
	   
	   
	  1511 Baltimore, Suite 500

	   
	   
	   
	  Kansas City, MO 64108

	   
	   
	   
	  Attn: Pat Healy

	   
	   
	   
	  Email: phealy@c3cap.com

	   
	   
	   
	   

	   
	   With a copy to: 
	   
	  Polsinelli PC

	   
	   
	   
	  900 W. 48th Place, Suite 900 

	   
	   
	   
	  Kansas City, MO 64112

	   
	   
	   
	  Attn: Kraig Kohring

	   
	   
	   
	  Email: kkohring@polsinelli.com

    
  If to any other Shareholder, to such holder at his, her, or its address set forth in the Company’s stock transfer register.
   
  6.2 Changes and Modifications; Termination; Actions Under this Agreement. This Agreement may not be orally changed, modified, extended, or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may be terminated, changed, modified, or extended, and consents hereunder may be granted, only by an agreement in writing signed by Shareholders holding 80% or more of the voting power of the Shares subject to this Agreement; provided, however, no such amendment, modification or termination may adversely affect the rights of any former Shareholder to receive any amounts payable to it, him, or her hereunder.
   
  	 
	9

	  

	 

   
  6.3 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and assigns.
   
  6.4 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument.
   
  6.5 Severability. If in any judicial proceedings a court shall refuse to enforce any provision of this Agreement, then such unenforceable provision shall be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced.
   
  6.6 Jurisdiction; Governing Law; Attorneys’ Fees. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any state other than the State of New Jersey. Each of the parties: (a) submits to the jurisdiction of any state or federal court sitting in the Western District of Missouri in any legal suit, action or proceeding arising out of or relating to this Agreement; (b) agrees that all claims in respect of the action or proceeding shall be heard or determined in any such court; and (c) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Any party may make service on any other party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in Section 6.1. Each party agrees that a final non-appealable judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect the right to serve process in any other manner permitted by law, statute, rule, or regulation. In any action brought to enforce the terms of this agreement, the prevailing party shall be entitled to such award of attorneys’ fees and costs as may be determined by the court to be reasonable.
   
  6.7 Remedies. The parties hereto shall have all remedies for breach of this Agreement available to them provided by law or equity. Without limiting the generality of the foregoing, the parties agree that in addition to all other rights and remedies available at law or in equity, the parties shall be entitled to obtain specific performance of the obligations of each party to this Agreement and immediate injunctive relief, and that if any action or proceeding is brought in equity to enforce the same, no Shareholder will urge, as a defense, that there is an adequate remedy at law.
   
  6.8 Legends. Each certificate representing Shares shall bear a legend in substantially the following form:
   
  THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED BY THE HOLDER FOR INVESTMENT PURPOSES. SAID SHARES MAY NOT BE SOLD OR TRANSFERRED UNLESS (A) THEY HAVE BEEN REGISTERED UNDER SAID ACT, OR (B) THE CORPORATION IS PRESENTED A WRITTEN OPINION SATISFACTORY TO COUNSEL FOR THE CORPORATION OR A ‘NO-ACTION’ INTERPRETIVE LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR TRANSFER.
   
  	 
	10

	  

	 

   
  THE SALE, TRANSFER, OR ENCUMBRANCE OF THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO AN AGREEMENT DATED JANUARY 16, 2015 AMONG THE CORPORATION AND ITS SHAREHOLDERS. A COPY OF SUCH AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE CORPORATION AND ANY SHAREHOLDER MAY OBTAIN, UPON REQUEST AND WITHOUT CHARGE, A COPY THEREOF. THE AGREEMENT PROVIDES, AMONG OTHER THINGS, FOR CERTAIN VOTING AGREEMENTS AND CERTAIN RESTRICTIONS ON TRANSFER AND OBLIGATIONS TO SELL THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE FOR A DESIGNATED PURCHASE PRICE UPON CERTAIN EVENTS. BY ACCEPTING THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE, THE HOLDER AGREES TO BE BOUND BY SUCH AGREEMENT.
   
  Whenever any Shares shall cease to be Shares covered by this Agreement, the holder thereof shall be entitled to receive without expense a new certificate or certificates for such shares omitting the legend set forth above.
   
  6.9 Interpretive Principles. Unless the context otherwise clearly requires, as used in this Agreement, the masculine pronoun shall include the neuter and the feminine and the neuter pronoun shall include the masculine and the feminine. This Agreement shall be construed without regard to any presumption or rule requiring construction against the party causing an instrument or any portion thereof to be drafted. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires (a) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision, (b) the terms “include” and “including” mean without limitation by reason of enumeration, (c) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or,” and (d) to the extent that there is any conflict between any term of this Agreement and the Securities Purchase Agreement, the terms of the Securities Purchase Agreement shall control.
   
  6.10 Books and Records. The Company shall keep adequate books and records of the Company at the principal place of business of the Company or at such other place as the Directors may determine, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Company. Such books and records shall be open to the inspection and examination of all Shareholders or their duly authorized representatives upon forty-eight (48) hours prior written request made to the President of the Company during ordinary business hours. The books and records of the Company shall be maintained at the principal business of the Company or at such other place as the Directors may determine for at least seven (7) years.
   
  [Remainder of page intentionally left blank; signature page follows.]   
  
 
    	 
	11

	  

	 

   
  IN WITNESS WHEREOF, the parties hereto have hereunto set their hands under seal, as of the date first above written.
   
   
    	   
	PRECISION AEROSPACE COMPONENTS, INC.	   

	 	 	 	 
		By:		   

	   
	  Name:
		   

	   
	  Title:
		   

   
  Shareholder Agreement   
  
 
    	 
	12

	  

	 

   
    	   
	PRECISION GROUP HOLDINGS LLC	   

	 	 	 	 
		By:		   

	   
	  Name:
		   

	   
	  Title:
		   

   
  Shareholder Agreement   
    
  
  
  	 
	13

	  

	 

   
    	   
	  C3 CAPITAL PARTNERS III, L.P.
a Delaware limited partnership  
	   

	 	 	 	   
	 
		By:	  C3 Partners III, LLC  
	   

	   
	   
	  its General Partner  
	   

	   
	   
		   
	   

	   
	   
	  By:
	   
	   

	   
	   
	   
	  D. Patrick Curran, Manager
	   

   
  Shareholder Agreement
   
   
  14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]