Document:

exh10_2.htm

 

Exhibit 10.2

 

COMMERCIAL PLEDGE AGREEMENT

	
Principal

	
Loan Date

	
Maturity

	
Loan No

	
Call / Coll

	
Account

	
Officer

	
Initials

	
$4,450,000.00

	
10-27-2014

	
10-27-2034

	
1800060

	
            31/660/5 / 890, 36, 39

	
009

	
 

References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

 

Any item above containing "***" has been omitted due to text length limitations.

	
Borrower:

	
Pure Cycle Corporation (TIN:  84-0705083)

1490 Lafayette St. Suite 203

Denver, CO  80218

	
Lender:

	
The First National Bank of Las Animas

Las Animas

P.O. Box 270

535 Bent Avenue

Las Animas, CO  81054

	
Grantor:

	
Pure Cycle Corporation (TIN:  84-0705083)

PCY Holdings, LLC (TIN:  27-2869190)

1490 Lafayette St. Suite 203

Denver, CO  80218

 

THIS COMMERCIAL PLEDGE AGREEMENT dated October 27, 2014, is made and executed among Pure Cycle Corporation; and PCY Holdings, LLC ("Grantor"); Pure Cycle Corporation ("Borrower"); and The First National Bank of Las Animas ("Lender").

 

GRANT OF SECURITY INTEREST.  For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

 

COLLATERAL DESCRIPTION.  The word "Collateral" as used in this Agreement means Grantor's present and future rights, title and interest in and to the following described investment property, together with any and all present and future additions thereto, substitutions therefor, and replacements thereof, together with any and all present and future certificates and/or instruments evidencing any stock or securities and further together with all Income and Proceeds as described herein:

 

83 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10344

 

112 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10343

 

67 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10342

 

144 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10341

 

144 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10340

 

144 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10345

 

200 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10347

 

108 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10348

 

72 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 985

 

216 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 9511

 

248.4 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 9510

 

144 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10110

 

122 Shares of Fort Lyon Canal Company Stock, Represented be Certificate No. 10111

 

144 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10112

 

213 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10113

 

200 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10209

 

200 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10211 and 10212

 

140 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10210

 

288 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10235 and 10236

 

322 Shares of Fort Lyon Canal Company Stock, Represented by Certifiate No. 10222

 

860 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10166, 10167, 10168, 10169 and 10170

 

216 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 10215

 

121 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 9772

 

100 Shares of Fort Lyon Canal Company Stock, Represented by Certificate No. 9643

 

Assignment of Promissory Note between Magro LLC and Johnnie J. Weber and Marilyn V. Weber dated 04/7/2003 in the principal amount of $949,375.00 and an Assignment of Mortgage between Magro LLC and Johnnie J. Weber and Marilyn V. Weber for real property and water rights in Prowers County, Colorado.  Mortgage recorded by Register of Deeds, Prowers County, Colorado on April 17, 2003 at 11:50 A.M. at reception number 499869 securing 623 Shares of Ft. Lyon Canal Company. Said note, mortgage and security documents reassigned to PCY Holdings, LLC via Assignment and various assignments dated 12/5/2012.

 

Assignment of Promissory Note between High Plains A&M LLC and Donald Spady dated June 24th, 2002 in the principal amount of $352,800.00 and Assignment of Mortgage between High Plains A&M LLC and Donald Spady for real property and water rights in Bent County Colorado Mortgage recorded by Register of Deeds June 24, 2002 Securing Real Property & 464.4 Shares of Fort Lyon Canal Company, said note mortgage and security documents reassigned to PCY Holdings via various assignments July 30, 2014.

 

BORROWER'S WAIVERS AND RESPONSIBILITIES.  Except as otherwise required under this Agreement or by applicable law,  (A)  Borrower agrees that Lender need not tell Borrower about any action or inaction Lender takes in connection with this Agreement;  (B)  Borrower assumes the responsibility for being and keeping informed about the Collateral; and  (C)  Borrower waives any defenses that may arise because of any action or inaction of Lender, including without limitation any failure of Lender to realize upon the Collateral or any delay by Lender in realizing upon the Collateral; and Borrower agrees to remain liable under the Note no matter what action Lender takes or fails to take under this Agreement.

 

GRANTOR'S REPRESENTATIONS AND WARRANTIES.  Grantor warrants that:  (A)  this Agreement is executed at Borrower's request and not at the request of Lender;  (B)  Grantor has the full right, power and authority to enter into this Agreement and to pledge the Collateral to Lender;  (C)  Grantor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and  (D)  Lender has made no representation to Grantor about Borrower or Borrower's creditworthiness.

 

GRANTOR'S WAIVERS.  Grantor waives all requirements of presentment, protest, demand, and notice of dishonor or non-payment to Borrower or Grantor, or any other party to the Indebtedness or the Collateral.  Lender may do any of the following with respect to any obligation of any Borrower, without first obtaining the consent of Grantor:  (A)  grant any extension of time for any payment,  (B)  grant any renewal,  (C)  permit any modification of payment terms or other terms, or  (D)  exchange or release any Collateral or other security.  No such act or failure to act shall affect Lender's rights against Grantor or the Collateral.

 

  

  

  

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account).  This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future.  However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law.  Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.

 

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.  Grantor represents and warrants to Lender that:

 

Ownership.  Grantor is the lawful owner of the Collateral free and clear of all security interests, liens, encumbrances and claims of others except as disclosed to and accepted by Lender in writing prior to execution of this Agreement.

 

Right to Pledge.  Grantor has the full right, power and authority to enter into this Agreement and to pledge the Collateral.

 

Authority; Binding Effect.  Grantor has the full right, power and authority to enter into this Agreement and to grant a security interest in the Collateral to Lender.  This Agreement is binding upon Grantor as well as Grantor's successors and assigns, and is legally enforceable in accordance with its terms. The foregoing representations and warranties, and all other representations and warranties contained in this Agreement are and shall be continuing in nature and shall remain in full force and effect until such time as this Agreement is terminated or cancelled as provided herein.

 

No Further Assignment.  Grantor has not, and shall not, sell, assign, transfer, encumber or otherwise dispose of any of Grantor's rights in the Collateral except as provided in this Agreement.

 

No Defaults.  There are no defaults existing under the Collateral, and there are no offsets or counterclaims to the same.  Grantor will strictly and promptly perform each of the terms, conditions, covenants and agreements, if any, contained in the Collateral which are to be performed by Grantor.

 

No Violation.  The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement, and its membership agreement does not prohibit any term or condition of this Agreement.

 

Financing Statements.  Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender's security interest.  At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Lender's security interest in the Property.  This includes making sure Lender is shown as the first and only security interest holder on the title covering the Property.  Grantor will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs.  Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default.  Lender may file a copy of this Agreement as a financing statement.

 

LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL.  Lender may hold the Collateral until all Indebtedness has been paid and satisfied.  Thereafter Lender may deliver the Collateral to Grantor or to any other owner of the Collateral.  Lender shall have the following rights in addition to all other rights Lender may have by law:

 

Maintenance and Protection of Collateral.  Lender may, but shall not be obligated to, take such steps as it deems necessary or desirable to protect, maintain, insure, store, or care for the Collateral, including paying of any liens or claims against the Collateral.  This may include such things as hiring other people, such as attorneys, appraisers or other experts.  Lender may charge Grantor for any cost incurred in so doing.  When applicable law provides more than one method of perfection of Lender's security interest, Lender may choose the method(s) to be used.  If the Collateral consists of stock, bonds or other investment property for which no certificate has been issued, Grantor agrees, at Lender's request, either to request issuance of an appropriate certificate or to give instructions on Lender's forms to the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its books or records Lender's security interest in the Collateral.  Grantor also agrees to execute any additional documents, including but not limited to, a control agreement, necessary to perfect Lender's security interest as Lender may desire.

 

Income and Proceeds from the Collateral.  Lender may receive all Income and Proceeds and add it to the Collateral.  Grantor agrees to deliver to Lender immediately upon receipt, in the exact form received and without commingling with other property, all Income and Proceeds from the Collateral which may be received by, paid, or delivered to Grantor or for Grantor's account, whether as an addition to, in discharge of, in substitution of, or in exchange for any of the Collateral.

 

Application of Cash.  At Lender's option, Lender may apply any cash, whether included in the Collateral or received as Income and Proceeds or through liquidation, sale, or retirement, of the Collateral, to the satisfaction of the Indebtedness or such portion thereof as Lender shall choose, whether or not matured.

 

Transactions with Others.  Lender may  (1) extend time for payment or other performance,  (2) grant a renewal or change in terms or conditions, or  (3) compromise, compound or release any obligation, with any one or more Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems advisable, without obtaining the prior written consent of Grantor, and no such act or failure to act shall affect Lender's rights against Grantor or the Collateral.

 

All Collateral Secures Indebtedness.  All Collateral  shall be security for the Indebtedness, whether the Collateral is located at one or more offices or branches of Lender.  This will be the case whether or not the office or branch where Grantor obtained Grantor's loan knows about the Collateral or relies upon the Collateral as security.

 

Collection of Collateral.  Lender at Lender's option may, but need not, collect the Income and Proceeds directly from the Obligors.    Grantor authorizes and directs the Obligors, if Lender decides to collect the Income and Proceeds, to pay and deliver to Lender all Income and Proceeds from the Collateral and to accept Lender's receipt for the payments.

 

Power of Attorney.  Grantor irrevocably appoints Lender as Grantor's attorney-in-fact, with full power of substitution, (a) to demand, collect, receive, receipt for, sue and recover all Income and Proceeds and other sums of money and other property which may now or hereafter become due, owing or payable from the Obligors in accordance with the terms of the Collateral;  (b) to execute, sign and endorse any and all instruments, receipts, checks, drafts and warrants issued in payment for the Collateral;  (c) to settle or compromise any and all claims arising under the Collateral, and in the place and stead of Grantor, execute and deliver Grantor's release and acquittance for Grantor;  (d) to file any claim or claims or to take any action or institute or take part in any proceedings, either in Lender's own name or in the name of Grantor, or otherwise, which in the discretion of Lender may seem to be necessary or advisable; and  (e) to execute in Grantor's name and to deliver to the Obligors on Grantor's behalf, at the time and in the manner specified by the Collateral, any necessary instruments or documents.

 

Perfection of Security Interest.  Upon Lender's request, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral.  When applicable law provides more than one method of perfection of Lender's security interest, Lender may choose the method(s) to be used.  Upon Lender's request, Grantor will sign and deliver any writings necessary to perfect Lender's security interest.  If any of the Collateral consists of securities for which no certificate has been issued, Grantor agrees, at Lender's option, either to request issuance of an appropriate certificate or to execute appropriate instructions on Lender's forms instructing the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its books or records, by book-entry or otherwise, Lender's security interest in the Collateral.  Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties.

 

LENDER'S EXPENDITURES.  If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral.  All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor.  All such expenses will become a part of the Indebtedness and, at Lender's option, will  (A)  be payable on demand;  (B)  be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either  (1)  the term of any applicable insurance policy; or  (2)  the remaining term of the Note; or  (C)  be treated as a balloon payment which will be due and payable at the Note's maturity.  The Agreement also will secure payment of these amounts.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default.

 

LIMITATIONS ON OBLIGATIONS OF LENDER.  Lender shall use ordinary reasonable care in the physical preservation and custody of the Collateral in Lender's possession, but shall have no other obligation to protect the Collateral or its value.  In particular, but without limitation, Lender shall have no responsibility for  (A)  any depreciation in value of the Collateral or for the collection or protection of any Income and Proceeds from the Collateral,  (B)  preservation of rights against parties to the Collateral or against third persons,  (C)  ascertaining any maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Collateral, or  (D)  informing Grantor about any of the above, whether or not Lender has or is deemed to have knowledge of such matters.  Except as provided above, Lender shall have no liability for depreciation or deterioration of the Collateral.

 

  

  

  

DEFAULT.  Each of the following shall constitute an Event of Default under this Agreement:

 

Payment Default.  Borrower fails to make any payment when due under the Indebtedness.

 

Other Defaults.  Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor.

 

False Statements.  Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Defective Collateralization.  This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

 

Insolvency.  The dissolution or termination of Borrower's or Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor.

 

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any governmental agency against any collateral securing the Indebtedness.  This includes a garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender.  However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.  Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or guarantor, endorser, surety, or accommodation party dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

 

Adverse Change.  A material adverse change occurs in Borrower's or Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

 

Insecurity.  Lender in good faith believes itself insecure.

 

Cure Provisions.  If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after Lender sends written notice to Borrower demanding cure of such default:  (1)  cures the default within twenty (20) days; or  (2)  if the cure requires more than twenty (20) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

 

RIGHTS AND REMEDIES ON DEFAULT.  If an Event of Default occurs under this Agreement, at any time thereafter, Lender may exercise any one or more of the following rights and remedies:

 

Accelerate Indebtedness.  Declare all Indebtedness, including any prepayment penalty which Borrower would be required to pay, immediately due and payable, without notice of any kind to Borrower or Grantor.

 

Collect the Collateral.  Collect any of the Collateral and, at Lender's option and to the extent permitted by applicable law, retain possession of the Collateral while suing on the Indebtedness.

 

Sell the Collateral.  Sell the Collateral, at Lender's discretion, as a unit or in parcels, at one or more public or private sales.  Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender shall give or mail to Grantor, and other persons as required by law, notice at least ten (10) days in advance of the time and place of any public sale, or of the time after which any private sale may be made.  However, no notice need be provided to any person who, after an Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale.  Grantor agrees that any requirement of reasonable notice as to Grantor is satisfied if Lender mails notice by ordinary mail addressed to Grantor at the last address Grantor has given Lender in writing.  If a public sale is held, there shall be sufficient compliance with all requirements of notice to the public by a single publication in any newspaper of general circulation in the county where the Collateral is located, setting forth the time and place of sale and a brief description of the property to be sold.  Lender may be a purchaser at any public sale.

 

Sell Securities.  Sell any securities included in the Collateral in a manner consistent with applicable federal and state securities laws.   If, because of restrictions under such laws, Lender is unable, or believes Lender is unable, to sell the securities in an open market transaction, Grantor agrees that Lender will have no obligation to delay sale until the securities can be registered.  Then Lender may make a private sale to one or more persons or to a restricted group of persons, even though such sale may result in a price that is less favorable than might be obtained in an open market transaction.  Such a sale will be considered commercially reasonable.  If any securities held as Collateral are "restricted securities" as defined in the Rules of the Securities and Exchange Commission (such as Regulation D or Rule 144) or the rules of state securities departments under state "Blue Sky" laws, or if Grantor or any other owner of the Collateral is an affiliate of the issuer of the securities, Grantor agrees that neither Grantor, nor any member of Grantor's family, nor any other person signing this Agreement will sell or dispose of any securities of such issuer without obtaining Lender's prior written consent.

 

Rights and Remedies with Respect to Investment Property, Financial Assets and Related Collateral.  In addition to other rights and remedies granted under this Agreement and under applicable law, Lender may exercise any or all of the following rights and remedies: (1)  register with any issuer or broker or other securities intermediary any of the Collateral consisting of investment property or financial assets (collectively herein, "investment property") in Lender's sole name or in the name of Lender's broker, agent or nominee;  (2)  cause any issuer, broker or other securities intermediary to deliver to Lender any of the Collateral consisting of securities, or investment property capable of being delivered;  (3)  enter into a control agreement or power of attorney with any issuer or securities intermediary with respect to any Collateral consisting of investment property, on such terms as Lender may deem appropriate, in its sole discretion, including without limitation, an agreement granting to Lender any of the rights provided hereunder without further notice to or consent by Grantor;  (4)  execute any such control agreement on Grantor's behalf and in Grantor's name, and hereby irrevocably appoints Lender as agent and attorney-in-fact, coupled with an interest, for the purpose of executing such control agreement on Grantor's behalf;  (5)  exercise any and all rights of Lender under any such control agreement or power of attorney;  (6)  exercise any voting, conversion, registration, purchase, option, or other rights with respect to any Collateral;  (7)  collect, with or without legal action, and issue receipts concerning any notes, checks, drafts, remittances or distributions that are paid or payable with respect to any Collateral consisting of investment property.  Any control agreement entered with respect to any investment property shall contain the following provisions, at Lender's discretion.  Lender shall be authorized to instruct the issuer, broker or other securities intermediary to take or to refrain from taking such actions with respect to the investment property as Lender may instruct, without further notice to or consent by Grantor.  Such actions may include without limitation the issuance of entitlement orders, account instructions, general trading or buy or sell orders, transfer and redemption orders, and stop loss orders.  Lender shall be further entitled to instruct the issuer, broker or securities intermediary to sell or to liquidate any investment property, or to pay the cash surrender or account termination value with respect to any and all investment property, and to deliver all such payments and liquidation proceeds to Lender.  Any such control agreement shall contain such authorizations as are necessary to place Lender in "control" of such investment collateral, as contemplated under the provisions of the Uniform Commercial Code, and shall fully authorize Lender to issue "entitlement orders" concerning the transfer, redemption, liquidation or disposition of investment collateral, in conformance with the provisions of the Uniform Commercial Code.

 

Foreclosure.  Maintain a judicial suit for foreclosure and sale of the Collateral.

 

Transfer Title.  Effect transfer of title upon sale of all or part of the Collateral.  For this purpose, Grantor irrevocably appoints Lender as Grantor's attorney-in-fact to execute endorsements, assignments and instruments in the name of Grantor and each of them (if more than one) as shall be necessary or reasonable.

 

  

  

  

Other Rights and Remedies.  Have and exercise any or all of the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, at law, in equity, or otherwise.

 

Application of Proceeds.  Apply any cash which is part of the Collateral, or which is received from the collection or sale of the Collateral, to reimbursement of any expenses, including any costs for registration of securities, commissions incurred in connection with a sale, attorneys' fees and court costs, whether or not there is a lawsuit and including any fees on appeal, incurred by Lender in connection with the collection and sale of such Collateral and to the payment of the Indebtedness of Borrower to Lender, with any excess funds to be paid to Grantor as the interests of Grantor may appear.  Borrower agrees, to the extent permitted by law, to pay any deficiency after application of the proceeds of the Collateral to the Indebtedness.

 

Election of Remedies.  Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies.

 

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of this Agreement:

 

Amendments.  This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement.  No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

 

Attorneys' Fees; Expenses.  Grantor agrees to pay upon demand all of Lender's reasonable costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement.  Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the reasonable costs and expenses of such enforcement.  Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.  Grantor also shall pay all court costs and such additional fees as may be directed by the court.

 

Caption Headings.  Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

 

Governing Law.  This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Colorado without regard to its conflicts of law provisions.  This Agreement has been accepted by Lender in the State of Colorado.

 

Choice of Venue.  If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Bent County, State of Colorado.

 

Joint and Several Liability.  All obligations of Borrower and Grantor under this Agreement shall be joint and several, and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each and every Borrower.  This means that each Borrower and Grantor signing below is responsible for all obligations in this Agreement.  Where any one or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Agreement.

 

No Waiver by Lender.  Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement.  No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.  Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

 

Notices.  Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement.  Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address.  For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address.  Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.

 

Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance.  If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable.  If the offending provision cannot be so modified, it shall be considered deleted from this Agreement.  Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

 

Successors and Assigns.  Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns.  If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness.

 

Time is of the Essence.  Time is of the essence in the performance of this Agreement.

 

Waive Jury.  All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.

 

DEFINITIONS.  The following capitalized words and terms shall have the following meanings when used in this Agreement.  Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.  Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require.  Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:

 

Agreement.  The word "Agreement" means this Commercial Pledge Agreement, as this Commercial Pledge Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Pledge Agreement from time to time.

 

Borrower.  The word "Borrower" means Pure Cycle Corporation and includes all co-signers and co-makers signing the Note and all their successors and assigns.

 

Collateral.  The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement.

 

Default.  The word "Default" means the Default set forth in this Agreement in the section titled "Default".

 

Event of Default.  The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.

 

Grantor.  The word "Grantor" means Pure Cycle Corporation; and PCY Holdings, LLC.

 

Guaranty.  The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note.

 

Income and Proceeds.  The words "Income and Proceeds" mean all present and future income, proceeds, earnings, increases, and substitutions from or for the Collateral of every kind and nature, including without limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due and to become due, proceeds of any insurance on the Collateral, shares of stock of different par value or no par value issued in substitution or exchange for shares included in the Collateral, and all other property Grantor is entitled to receive on account of such Collateral, including accounts, documents, instruments, chattel paper, investment property, and general intangibles.

 

  

  

  

Indebtedness.  The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.

 

Lender.  The word "Lender" means The First National Bank of Las Animas, its successors and assigns.

 

Note.  The word "Note" means the Note dated October 27, 2014 and executed by Pure Cycle Corporation in the principal amount of $4,450,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

 

Obligor.  The word "Obligor" means without limitation any and all persons obligated to pay money or to perform some other act under the Collateral.

 

Property.  The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description" section of this Agreement.

 

Related Documents.  The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.

 

BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE AGREEMENT AND AGREE TO ITS TERMS.  THIS AGREEMENT IS DATED OCTOBER 27, 2014.

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

GRANTOR:

 

PURE CYCLE CORPORATION

By: /s/ Mark Harding                                                                           

Mark Harding, President of Pure Cycle Corporation

 

PCY HOLDINGS, LLC

By: /s/ Mark Harding                                                                            

Mark Harding, President of Pure Cycle Corporation, 

Managing Member  of PCY Holdings, LLCEX-10.1

 Exhibit 10.1 

EXECUTION VERSION 

VOTING AGREEMENT 
 This
Voting Agreement (this “Agreement”) is made and entered into as of October 28, 2014, by and among Engility Holdings, Inc., a Delaware corporation (“Parent”), and Birch Partners, LP, a Delaware limited
partnership (the “Stockholder”), and, for purposes of Section 2.1 only, the KKR Investors (as defined below) and the GA Investors (as defined below). 

RECITALS 
 A. On the date
of this Agreement, Parent, New East Holdings, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub Three”), East Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned
subsidiary of Merger Sub Three (“Merger Sub Four”), TASC Parent Corporation, a Delaware corporation (the “Company”), Toucan Merger Corporation I, a Delaware corporation (“Merger Sub One”) and Toucan
Merger Corporation II, a Delaware corporation (“Merger Sub Two”), entered into that certain Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger
Agreement”), which provides for, among other things, (A) the merger of Merger Sub Two with and into the Company (the “Toucan Merger”), whereupon (i) the separate corporate existence of Merger Sub Two shall cease
and the Company shall be the surviving corporation and (ii) each share of Company Common Stock (as defined below) issued and outstanding immediately prior to the Toucan Effective Time shall be converted into the right to receive one share of
common stock, par value $0.01 per share, of Merger Sub One (the “Merger Sub One Common Stock”), (B) the merger of Parent with and into Merger Sub Three (the “East Merger”), whereupon (i) the separate
corporate existence of Parent shall cease and Merger Sub Three shall be the surviving corporation (“Holdco”) and (ii) each share of Parent Common Stock issued and outstanding immediately prior to the East Effective Time shall
be converted into the right to receive the East Per Share Merger Consideration and (C) the merger of Merger Sub One with and into Merger Sub Four (the “East/Toucan Merger” and, together with the Toucan Merger, the
“Mergers”), whereupon (i) the separate corporate existence of Merger Sub One shall cease and Merger Sub Four shall be the surviving company and (ii) each share of Merger Sub One Common Stock issued and outstanding
immediately prior to the East/Toucan Effective Time shall be converted into the right to receive the Toucan Per Share Merger Consideration; 

B. The Stockholder agrees to enter into this Agreement with respect to all common stock, par value $0.01 per share, of the Company (the
“Company Common Stock”) and all of the Merger Sub One Common Stock that the Stockholder owns, beneficially (as defined in Rule 13d-3 under the Securities Exchange Act) or of record on the date of this Agreement and any additional
shares of the Company Common Stock or Merger Sub One Common Stock that the Stockholder may hereinafter acquire. 
 C. On the date of this
Agreement, the Stockholder is the beneficial or record owner of, and has either sole or shared voting power over, such number of shares of Company Common Stock and Merger Sub One Common Stock as are indicated opposite its name on Schedule A.

 D. Parent and the Company desire that the Stockholder agrees, and the Stockholder is willing to agree, on the terms and conditions set
forth herein, not to transfer any of its Company Common Stock or Merger Sub One Common Stock, and to vote all of its shares of Company Common Stock and Merger Sub One Common Stock in a manner so as to facilitate consummation of the Mergers. 

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 

1. Definitions. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the
Merger Agreement. When used in this Agreement, the following terms in all of their tenses, cases and correlative forms shall have the meanings assigned to them in this Section 1 or elsewhere in this Agreement. 

 “Co-Investor Partner” shall mean the limited partners of the Stockholder on the
date hereof other than the KKR Investors and the GA Investors. 
 “Expiration Time” shall mean the earlier to occur of
(a) East/Toucan Effective Time and (b) such date and time as the Merger Agreement shall be validly terminated pursuant to Article VIII thereof. 

“GA Investor” shall mean each of General Atlantic Partners 85, L.P., GAP Coinvestments III, LLC, GAP Coinvestments IV, LLC,
GAP Coinvestments CDA, L.P. and GAPCO GmbH & Co. KG. 
 “KKR Investor” shall mean each of KKR 2006 Fund L.P., KKR
Partners III, L.P., OPERF Co-Investment LLC and 8 North America Investor L.P. 
 2. Agreement to Retain the Company Common Stock, Merger
Sub One Common Stock and New Common Stock.  
 2.1 No Transfer and Encumbrance. Until the Expiration Time, (i) the
Stockholder shall not sell or transfer any of the shares of Company Common Stock or Merger Sub One Common Stock directly held by the Stockholder, (ii) no KKR Investor or GA Investor (x) shall permit (by providing consent thereto or
otherwise) any direct or indirect sale or transfer of an equity interest in a KKR Investor or a GA Investor by any Person who holds any direct or indirect equity interest in any of the KKR Investors or GA Investors, respectively (other than pursuant
to a redemption of such an equity interest in a KKR Investor or a GA Investor) that would result in an “owner shift” under Section 382(g) of the Code with respect to the Company or (y) shall permit (by providing consent thereto
or otherwise) any transfer of the limited partnership interests of the Stockholder directly held by any Co-Investor Partner and (iii) neither the Stockholder nor any KKR Investor or GA Investor shall otherwise effect any transaction that would
result in a direct or indirect transfer of shares of Company Common Stock or Merger Sub One Common Stock (including pursuant to a redemption of an equity interest in a KKR Investor or GA Investor). For the avoidance of doubt, a transfer subject to
this Section 2.1 includes, without limitation, a hedging or other transaction that transfers ownership for U.S. federal income tax purposes. Until the Expiration Time, the Stockholder shall not effect a distribution of any Company Common Stock
or Merger Sub One Common Stock. Until the Expiration Time, the Stockholder agrees, with respect to any Company Common Stock or Merger Sub One Common Stock currently or hereinafter beneficially owned by the Stockholder, not to deposit any such
Company Common Stock or Merger Sub One Common Stock into a voting trust or enter into a voting agreement or arrangement with respect to such Company Common Stock or Merger Sub One Common Stock or grant any proxy (except as otherwise provided herein)
or power of attorney with respect thereto (other than pursuant to this Agreement). The Stockholder hereby represents and warrants to Parent that, pursuant to the terms of the limited partnership agreement of the Stockholder, until the Expiration
Time, no Co-Investor Partner is permitted to transfer any limited partnership units of the Stockholder without the consent of the KKR Investors and the GA Investors (other than in connection with a redemption of the limited partnership units of the
Stockholder upon a distribution of any Company Common Stock or Merger Sub One Common Stock by the Stockholder). Notwithstanding anything to the contrary herein, nothing herein shall prevent or prohibit a transfer of Company Common Stock or Merger
Sub One Common Stock in connection with the transactions contemplated by the Merger Agreement. 
 2.2 Additional Purchases. The
Stockholder agrees that any Company Common Stock or Merger Sub One Common Stock, other shares of the Company Common Stock or Merger Sub One Common Stock that the Stockholder purchases or otherwise hereinafter acquires or with respect to which the
Stockholder otherwise acquires sole voting power after the execution of this Agreement and prior to the Expiration Time (the “New Common Stock”) shall be subject to the terms and conditions of this Agreement to the same extent as if
they constituted the Company Common Stock or Merger Sub One Common Stock. 
 2.3 Unpermitted Transfers. Any transfer or attempted
transfer of any Company Common Stock, Merger Sub One Common Stock, or New Common Stock in violation of this Section 2 shall, to the fullest extent permitted by Law, be null and void ab initio and the Company agrees not to register any
such attempted transfer on the Company’s records. 

  
 2 

 3. Agreement to Consent and Approve.  

3.1 Hereafter until the Expiration Time, the Stockholder agrees to (a) promptly following receipt by the Stockholder of a registration
statement on Form S-4 in connection with the issuance of the shares of Holdco Common Stock in the East Merger and the East/Toucan Merger, in which a consent solicitation statement of the Company with respect to the solicitation of consents from the
Company’s stockholders with respect to the Company Stockholder Approval is included as a prospectus (the “Form S-4”), which Form S-4 has been declared effective under the Securities Act by the SEC, duly execute and deliver a
written consent in accordance with Section 228 of the DGCL adopting the Merger Agreement, substantially in the form attached hereto as Exhibit A, and thereafter not revoke, withdraw or repudiate such consent. Any such written consent
shall be given in accordance with such procedures relating thereto so as to ensure that it is duly counted for purposes of recording the results of such consent. The Stockholder shall not enter into any tender, voting or other agreement, or grant a
proxy or power of attorney, with respect to the Company Common Stock or New Common Stock that is inconsistent with this Agreement or otherwise take any other action with respect to the Company Common Stock or New Common Stock that would in any way
restrict, limit or interfere with the performance of the Stockholder’s obligations hereunder or the transactions contemplated hereby, including the approval of the Mergers and the consummation of the Mergers. 

3.2 At any meeting of the stockholders of the Company or of Merger Sub One, or at any postponement or adjournment thereof, called to seek the
affirmative vote of the holders of outstanding shares of the Company Common Stock or Merger Sub One Common Stock to adopt the Merger Agreement or approve the Mergers, or in any other circumstances upon which a vote, consent or other approval with
respect to the Merger Agreement, the Mergers or the other transactions contemplated by the Merger Agreement is sought, the Stockholder shall vote (or cause to be voted) all shares of Company Common Stock or New Common Stock currently or hereinafter
owned by the Stockholder in favor of the foregoing. The Stockholder shall not commit or agree to take any action inconsistent with this Section 3. 

4. No Solicitation. 
 4.1
From the date of this Agreement until the Expiration Time, the Stockholder shall not, nor shall it authorize or permit any of its Affiliates or any of its or their respective directors, officers or employees or any of their respective investment
bankers, accountants, attorneys or other advisors, agents or representatives (collectively, “Representatives”) to, (i) directly or indirectly solicit or initiate, or knowingly encourage, induce or facilitate, any Company
Acquisition Transaction or any inquiry or proposal that may reasonably be expected to lead to a Company Acquisition Transaction, or (ii) directly or indirectly participate in any discussions or negotiations with any Person regarding, or furnish
to any Person any information with respect to, or cooperate in any way with any Person (whether or not a Person making a Company Acquisition Transaction) with respect to, any Company Acquisition Transaction or any inquiry or proposal that may
reasonably be expected to lead to a Company Acquisition Transaction. The Stockholder shall, and shall instruct its Affiliates and its and their respective Representatives to, immediately cease and cause to be terminated all existing discussions or
negotiations with any Person (other than Parent and its Representatives) conducted by the Stockholder, its Affiliates or its Representatives heretofore with respect to any Company Acquisition Transaction or any inquiry or proposal that may
reasonably be expected to lead to a Company Acquisition Transaction, and request the prompt return or destruction of all confidential information previously furnished to any such Person or its Representatives by the Stockholder, its Affiliates or
Representatives, and immediately terminate all physical and electronic data room access previously granted to any such Person or its Representatives by the Stockholder, its Affiliates or Representatives, in connection with any actual or potential
proposal by such Person to acquire the Company. 
 5. Representations and Warranties of Stockholder. The Stockholder hereby
represents and warrants to Parent as follows: 
 5.1 Due Authority. The Stockholder has the full power and authority to make, enter
into and carry out the terms of this Agreement. This Agreement has been duly and validly executed and delivered by the 

  
 3 

 
Stockholder and, assuming the due authorization and execution and delivery of this Agreement by Parent, constitutes a valid and binding agreement of the Stockholder enforceable against it in
accordance with its terms, except to the extent enforceability may be limited by the effect of applicable bankruptcy, reorganization, insolvency, moratorium or other Laws affecting the enforcement of creditors’ rights generally and the effect
of general principles of equity, regardless of whether such enforceability is considered in a proceeding at Law or in equity. 
 5.2
Ownership of the Company Common Stock and Merger Sub One Common Stock. As of the date hereof, the Stockholder (a) is the beneficial or record owner of the shares of Company Common Stock and Merger Sub One Common Stock indicated on
Schedule A hereto opposite the Stockholder’s name, free and clear of any and all Liens, other than those created by this Agreement or as disclosed on Schedule A (none of which would prevent or interfere with the Stockholder from
performing its obligations under this Agreement), and (b) has sole voting power over all of the shares of Company Common Stock and Merger Sub One Common Stock beneficially owned by the Stockholder. As of the date hereof, the Stockholder does
not own, beneficially or of record, any capital stock or other voting securities of the Company or Merger Sub One other than the shares of Company Common Stock and Merger Sub One Common Stock set forth on Schedule A opposite the
Stockholder’s name. As of the date hereof, the Stockholder does not own, beneficially or of record, any rights to purchase or acquire any shares of capital stock of the Company and Merger Sub One Common Stock except as set forth on Schedule
A opposite the Stockholder’s name and as contemplated by the Merger Agreement. 
 5.3 No Conflict; Consents. 

(a) The execution and delivery of this Agreement by the Stockholder does not, and the performance by the Stockholder of the obligations under
this Agreement and the compliance by the Stockholder with any provisions hereof do not and will not: (a) conflict with or violate any Laws applicable to the Stockholder, or (b) result in any material breach of or constitute a material
default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on, any of the
Company Common Stock and Merger Sub One Common Stock beneficially owned by the Stockholder pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the
Stockholder is a party or by which the Stockholder is bound, except for any of the foregoing as could not reasonably be expected, either individually or in the aggregate, to impair the ability of the Stockholder to perform its obligations hereunder
or to consummate the transactions contemplated hereby on a timely basis. 
 (b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or any other Person, is required by or with respect to the Stockholder in connection with the execution and delivery of this Agreement or the consummation by the Stockholder of the
transactions contemplated hereby. 
 5.4 Absence of Litigation. As of the date hereof, there is no legal action pending against, or,
to the knowledge of the Stockholder, threatened against or affecting the Stockholder that could reasonably be expected to materially impair or materially adversely affect the ability of the Stockholder to perform the Stockholder’s obligations
hereunder or to consummate the transactions contemplated hereby on a timely basis. 
 6. Covenants of the Stockholder. 

6.1 Waiver of Appraisal Rights. The Stockholder hereby irrevocably and unconditionally waives the exercise of any rights of appraisal,
rights to dissent or any similar right that the Stockholder may have by virtue of the Stockholder’s ownership of the Company Common Stock with respect to the Toucan Merger and ownership of Merger Sub One Common Stock with respect to the East/
Toucan Merger. 
 6.2 Public Announcements. Neither party hereto shall issue any press release or otherwise make any public statement
with respect to this Agreement and the transactions contemplated hereby or, in the case of the 

  
 4 

 
Stockholder, the Merger Agreement, the Mergers or any other transactions contemplated by the Merger Agreement without the prior written consent of the other party, except as may be required by
applicable Law or, in the case of the Stockholder, to the Stockholder’s or such Affiliate’s direct or indirect investors (who are bound by a customary confidentiality agreement) or in connection with normal fund raising and related
marketing or informational or reporting activities of the Stockholder or any such Affiliate. 
 7. Termination. This Agreement shall
terminate and shall have no further force or effect immediately as of and following the Expiration Time. 
 8. Fiduciary Duties. The
covenants and agreements set forth herein shall not prevent the Stockholder’s designees serving on the board of directors of the Company or serving on the board of directors of Merger Sub One from taking any action, subject to the provisions of
the Merger Agreement, while acting in such designee’s capacity as a director of the Company or of Merger Sub One. The Stockholder is entering into this Agreement solely in its capacity as the record holder or beneficial owner of the
Stockholder’s shares of Company Common Stock or Merger Sub One Common Stock. 
 9. No Ownership Interest. Nothing contained in
this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to the Stockholder’s shares of Company Common Stock or Merger Sub One Common Stock. All rights, ownership and
economic benefits of and relating to the Stockholder’s shares of Company Common Stock or Merger Sub One Common Stock shall remain vested in and belong to the Stockholder, and Parent shall have no authority to direct the Stockholder in the
voting or disposition of any of the shares of Company Common Stock or Merger Sub One Common Stock, except as otherwise provided herein. 

10. Miscellaneous. 
 10.1
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as either the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party or such party waives its rights under this Section 10.1 with respect
thereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. 
 10.2
Binding Effect and Assignment. This Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. 

10.3 Amendments and Modifications. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the
parties hereto. 
 10.4 Specific Performance; Injunctive Relief. The parties acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. It is
accordingly agreed that, prior to the termination of this Agreement pursuant to Section 7, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of terms
and provisions of this Agreement, without proof of actual damages (and each party hereby waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are
entitled at law or in equity. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an
adequate remedy for any such breach. 

  
 5 

 10.5 Notices. All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered in accordance with the following clauses (i) and (ii): (i) by email to the parties at the following email addresses (or at such other email address for a party
as shall be specified by like notice) and (ii) by email and hand delivery to the parties’ counsel at the following email addresses and street addresses (or at such other email address or street address for a party’s counsel as shall
be specified by like notice): 
 (i) if to the Stockholder, by email to: 

 

			
	Name:	  	Birch Partners, LP
	Attention:	  	 David Kerko
 David Topper

	Email:	  	 david.kerko@kkr.com

dtopper@generalatlantic.com

	
	and by email and hand delivery to:
		
	Name:	  	Simpson Thacher & Bartlett LLP
	Address:	  	 425 Lexington Avenue
 New York, New York
10017

	Attention:	  	Marni J. Lerner
	Email:	  	mlerner@stblaw.com
	
	and
		
	Name:	  	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	Address:	  	 1285 Avenue of the Americas
 New York, New
York 10019

		
	Name:	  	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	Attention:	  	Neil Goldman
	Email:	  	ngoldman@paulweiss.com

 (ii) if to Parent, by email to: 

 

			
	Name:	  	Engility Holdings, Inc.
	Attention:	  	Thomas O. Miiller
	Email:	  	tom.miiller@engility.com
	
	and by email and hand delivery to:
		
	Name:	  	Weil, Gotshal & Manges LLP
	Address:	  	767 Fifth Avenue
		  	New York, New York 10153
	Attention:	  	Frederick S. Green
		  	Jaclyn L. Cohen
	Email:	  	 frederick.green@weil.com

jackie.cohen@weil.com

  
 6 

 10.6 Governing Law; Consent to Jurisdiction; Venue. 

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 

(b) Each of the parties hereto hereby (i) expressly and irrevocably submits to the exclusive personal jurisdiction of the Delaware Court
of Chancery and any state appellate court therefrom within the State of Delaware (or, to the extent such court declines to accept jurisdiction over a particular matter, any Delaware state or federal court within the State of Delaware) (such courts
collectively, the “Delaware Courts”) in the event any dispute arises out of this Agreement or the transactions contemplated hereby, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it will not bring any claim or action relating to this Agreement or the transactions contemplated hereby in any court other than the Delaware Courts, (iv) agrees that each of
the other parties shall have the right to bring any action or proceeding for enforcement of a judgment entered by the Delaware Courts, (v) expressly and irrevocably waives (and agrees not to plead or claim) any objection to the laying of venue
of any action arising out of this Agreement or the transactions contemplated hereby in the Delaware Courts or that any such action brought in any such court has been brought in an inconvenient forum, and (vi) consent to service of process in
the manner provided in Section 10.5. Each of Parent and the Company agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by Law. 
 10.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10.7. 
 10.8 Entire
Agreement. This Agreement, taken together with the Exclusivity Agreement, constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the transactions
contemplated by this Agreement. 
 10.9 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 

10.10 Effect of Headings. The section headings herein are for convenience only and shall not affect the construction of interpretation
of this Agreement. 
 10.11 No Agreement Until Executed. Irrespective of negotiations among the parties or the exchanging of drafts
of this Agreement, this Agreement shall not constitute or be deemed to evidence a contract, agreement, arrangement or understanding between the parties hereto unless and until this Agreement is executed and delivered by all parties hereto. 

10.12 Legal Representation. This Agreement was negotiated by the parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation thereof. 

  
 7 

 10.13 Expenses. All costs and expenses incurred in connection with this Agreement shall be
paid by the party incurring such cost or expense (or, in the case of the Stockholder, by the Company). 
 10.14 No Recourse.
Notwithstanding anything to the contrary contained herein or otherwise, this Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution
or performance of this Agreement or the transactions contemplated hereby, may only be made against the entities and Persons that are expressly identified as parties to this Agreement in their capacities as such and no former, current or future
stockholders, equity holders, controlling persons, directors, officers, employees, general or limited partners, members, managers, agents or Affiliates of any party hereto, or any former, current or future direct or indirect stockholder, equity
holder, controlling person, director, officer, employee, general or limited partner, member, manager, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or
liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any oral representations made or alleged to be
made in connection herewith. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement
against, or seek to recover monetary damages from, any Non-Recourse Party. The parties acknowledge and agree that notwithstanding anything to the contrary contained in this Agreement, the representations, warranties, covenants and other agreements
of the Stockholder, the KKR Investor or the GA Investor shall be several and not joint representations, warranties, covenants and agreements, as applicable, of the Stockholder, the KKR Investor or the GA Investor, as applicable. 

[Signature page follows] 

  
 8 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the date and
year first above written. 
  

			
	Engility Holdings, Inc.
		
	By:	 	/s/ Anthony Smeraglinolo

 
			
	Name:	 	Anthony Smeraglinolo
	Title:	 	President and Chief Executive Officer

 STOCKHOLDER: 

 

			
	BIRCH PARTNERS, LP
		
	By:	 	Birch GP, LLC, its general partner
		
	By:	 	/s/ David M. Kerko
		 	Name: David M. Kerko
		 	Title: Manager
		
	By:	 	/s/ Steven A. Denning
		 	Name: Steven A. Denning
		 	Title: Manager

 FOR PURPOSES OF
SECTION 2.1 ONLY: 
  

			
	KKR 2006 FUND L.P.
		
	By:	 	KKR Associates 2006 L.P., its general partner
		
	By:	 	KKR 2006 GP LLC, the general partner of KKR Associates 2006 L.P.
		
	By:	 	/s/ William J. Janetschek
		 	Name: William J. Janetschek
		 	Title: Vice President
	
	GENERAL ATLANTIC PARTNERS 85, L.P.
		
	By:	 	General Atlantic GenPar, L.P., its general partner
		
	By:	 	General Atlantic LLC, its general partner
		
	By:	 	/s/ Thomas J. Murphy
		 	Name: Thomas J. Murphy
		 	Title: Managing Director
	
	KKR PARTNERS III, L.P.
		
	By:	 	        KKR III GP LLC, its general partner
		
	By:	 	/s/ William J. Janetschek
		 	Name: William J. Janetschek
		 	Title: Authorized Signatory

			
	OPERF CO-INVESTMENT LLC
		
	By:	 	        KKR Associates 2006 L.P., its general         partner
		
	By:	 	         KKR 2006 GP LLC, the general partner of

        KKR Associates 2006 L.P.

		
	By:	 	/s/ William J. Janetschek
		 	Name: William J. Janetschek
		 	Title: Vice President
	
	8 NORTH AMERICA INVESTOR L.P.
		
	By:	 	         KKR Associates 8 NA L.P., its general

        partner

		
	By:	 	        KKR 8 NA Limited, its general partner
		
	By:	 	/s/ William J. Janetschek
		 	Name: William J. Janetschek
		 	Title: Director

  

			
	GAP COINVESTMENTS III, LLC
		
	By:	 	/s/ Thomas J. Murphy
		 	Name: Thomas J. Murphy
		 	Title: Managing Director
	
	GAP COINVESTMENTS IV, LLC
		
	By:	 	/s/ Thomas J. Murphy
		 	Name: Thomas J. Murphy
		 	Title: Managing Director
	
	GAP COINVESTMENTS CDA, L.P.
		
	By:	 	        General Atlantic LLC, its general partner
		
	By:	 	/s/ Thomas J. Murphy
		 	Name: Thomas J. Murphy
		 	Title: Managing Director
	
	GAPCO GMBH & CO. KG
		
	By:	 	         GAPCO Management GmbH, its general

        partner

		
	By:	 	/s/ Thomas J. Murphy
		 	Name: Thomas J. Murphy
		 	Title: Managing Director

 SCHEDULE A 

 

							
	 Name
	  	 Address
	  	Shares of
Company
Common Stock	 
	Birch Partners, LP	  	 Birch Partners, LP
 c/o Kohlberg Kravis
Roberts & Co. L.P.
 2800 Sand Hill Road, Suite 200
 Menlo
Park, CA 94025
  
 and

 
 c/o General Atlantic Service Company, LLC

3 Pickwick Plaza
 Greenwich, CT 06830
	  	 	171,660,200	  
	 Name
	  	 Address
	  	Shares of
Merger Sub
One Common
Stock	 
	Birch Partners, LP	  	 Birch Partners, LP
 c/o Kohlberg Kravis
Roberts & Co. L.P.
 2800 Sand Hill Road, Suite 200
 Menlo
Park, CA 94025
  
 and

 
 c/o General Atlantic Service Company, LLC

Park Avenue Plaza
 55 East 52nd Street

32nd Floor
 New York, NY 10055

Attn: David Rosenstein
	  	 	100	  

 EXHIBIT A 

FORM OF WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF A MEETING 

[                , 20    ] 

The undersigned, being a stockholder of TASC Parent Corporation, a Delaware corporation (the “Company”), holding a majority
of the outstanding shares of common stock, par value $0.01 per share, of the Company (the “Stockholder”), acting by written consent in lieu of a special meeting, pursuant to the provisions of Section 228 of the General
Corporation Law of the State of Delaware (“DGCL”) and Section 2.13 of the restated bylaws of the Company, hereby consents in writing to the adoption without a meeting of the following resolutions and to the taking of each of
the actions contemplated thereby as of the date first written above: 
 WHEREAS, the Board of Directors of the Company (the
“Board”) has determined that it is advisable and in the best interests of the Company and the stockholders for the Company to enter into, and have authorized the execution and delivery of, an Agreement and Plan of Merger (the
“Merger Agreement”), dated as of October [—], 2014, by and among Engility Holdings, Inc. (“Parent”), New East Holdings, Inc., a Delaware corporation and direct
wholly owned subsidiary of Parent (“Merger Sub Three”), East Merger Sub, LLC, a Delaware limited liability company and direct wholly owned subsidiary of Merger Sub Three (“Merger Sub Four”), the Company, Toucan
Merger Corporation I, a Delaware corporation and direct wholly owned subsidiary of the undersigned (“Merger Sub One”) and Toucan Merger Corporation II, a Delaware corporation and direct wholly owned subsidiary of Merger Sub One
(“Merger Sub Two”), pursuant to which, among other things, (i) Merger Sub Two will merge with and into the Company (the “Toucan Merger”), with the Company continuing as the surviving corporation and a wholly
owned subsidiary of Merger Sub One, and (ii) thereafter, (A) Parent will merge with and into Merger Sub Three (the “East Merger”), with Merger Sub Three continuing as the surviving corporation (“Holdco”)
and (B) following the East Merger, Merger Sub One will merge with and into Merger Sub Four (the “East/Toucan Merger” and, together with the Toucan Merger, the “Mergers”), with Merger Sub Four continuing as the
surviving company and a direct wholly owned subsidiary of Holdco; and 
 WHEREAS, in accordance with the resolutions of the Board approving
the Merger Agreement, the Company has executed and delivered the Merger Agreement and submitted the Merger Agreement and the Mergers to the stockholders of the Company for their adoption and approval. 

Adoption of Merger Agreement 

NOW, THEREFORE, BE IT RESOLVED, that the Merger Agreement and the transactions contemplated thereby, including the Toucan Merger, be, and they
hereby are, adopted, ratified, approved and authorized in all respects by the Stockholder, and that the Company be, and hereby is, authorized, directed and empowered to (i) perform its obligations under the Merger Agreement and (ii) enter
into and perform its obligations under each other agreement, instrument or certificate required or permitted to be entered into by the Company under the terms of the Merger Agreement, including without limitation, certificates of merger in such form
as required by the DGCL; 
 FURTHER RESOLVED, that any of the officers of the Company be, and each hereby is, authorized, directed and
empowered, acting on behalf of the Company, to execute and deliver any certificates, documents, agreements and instruments that any officer or officers executing such documents may, in the exercise of such officer’s or officers’
discretion, deem appropriate, advisable and in the best interests of the Company pursuant to the foregoing resolution, together with such amendments and modifications thereof as shall be made therein with the approval of such officer or officers,
the execution of which shall be conclusive evidence of such approval; 
 FURTHER RESOLVED, that the officers of the Company be, and each of
them hereby is, authorized and directed, on behalf and in the name of the Company, to cause to be prepared, executed and filed with the appropriate foreign, federal, state or local governmental authorities or instrumentalities such registrations,

  
 A-1 

 
declarations or other filings as any such officer may deem necessary or desirable or as may be required by such governmental authorities or instrumentalities in connection with the transactions
contemplated by the Merger Agreement; 
 FURTHER RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and
directed, on behalf and in the name of the Company, to do or cause to be done any and all such further acts and things and to execute and deliver any and all such additional agreements, certificates, documents and instruments as any such officer may
deem necessary or appropriate in connection with the transactions contemplated by the Merger Agreement; 
 FURTHER RESOLVED, that the Board
be, and hereby is, authorized and empowered to amend the Merger Agreement and take any other action with respect to the Merger Agreement permitted under Section 251(d) of the DGCL, as the Board may, in the exercise of its discretion, deem
advisable, appropriate and in the best interests of the Company and its stockholders; and 
 FURTHER RESOLVED, that any and all acts
heretofore done, and any and all documents, instruments and certificates heretofore executed and delivered, in the name and on behalf of the Company, in connection with the transactions contemplated by the Merger Agreement are hereby ratified and
approved in all respects. 
 The undersigned hereby waives compliance with any and all notice requirements imposed by the DGCL or other
applicable law. 
 When executed by the Stockholder, this Consent shall be delivered to the Company and Parent in accordance with
Section 3 of the Voting Agreement, dated as of October [—], 2014, by and among Parent and the Stockholder. 

[Signature Page Follows] 

  
 A-2 

 IN WITNESS WHEREOF, the Stockholder has executed this written consent as of the date first
written above. 
  

			
	 BIRCH PARTNERS, LP
  

	By:    	 	Birch GP, LLC, its General Partner
		
	By:	 	  

		 	Name:
		 	Title:

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