Document:

First Amendment to the Loan Agreement

 Exhibit 10.1 
 FIRST AMENDMENT TO LOAN AGREEMENT 
 This First Amendment to Loan Agreement
is entered into as of August 24, 2012 (this “Amendment”) by and among BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (“Bank”), and BROOKWOOD COMPANIES INCORPORATED, a Delaware
corporation (“Brookwood”), KENYON INDUSTRIES, INC., a Delaware corporation (“Kenyon”), BROOKWOOD LAMINATING, INC., a Delaware corporation (“Laminating”), ASHFORD BROMLEY, INC., a Delaware
corporation (“Ashford”), and STRATEGIC TECHNICAL ALLIANCE, LLC, a Delaware limited liability company (“STA,” together with Brookwood, Kenyon, Laminating, and Ashford, each individually, a “Borrower”
and collectively, the “Borrowers”). Capitalized terms used but not defined herein shall have the respective meanings given to such terms in the Loan Agreement referenced below. 

W I T N E S S E T H: 
 WHEREAS, Bank and the Borrowers entered into that certain Loan Agreement (as the same may be amended, amended and restated, supplemented and/or otherwise modified from time to time, the “Loan
Agreement”) dated as of March 30, 2012 and certain other Loan Documents executed in connection therewith, pursuant to which Bank has extended certain financial accommodations to Borrowers; 

WHEREAS, Borrowers have requested that Bank make certain amendments to the Loan Agreement; and 

WHEREAS, Bank has agreed to such amendments, in each case, upon the terms and conditions set forth herein. 

NOW THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: 
 Section 1
DEFINITIONS 
 Capitalized terms used in this Amendment and not defined herein shall have the meanings ascribed to them
in the Loan Agreement, as amended hereby, unless otherwise stated. 
 Section 2 AMENDMENTS TO LOAN AGREEMENT

 From and after the date hereof, Borrowers agree to the following amendments to the Loan Agreement: 

2.1 Funded Debt to EBITDA Ratio. The Funded Debt to EBITDA financial covenant contained in Section 5 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows: 
 “Funded Debt to EBITDA. A ratio of
Funded Debt to EBITDA (for the trailing four-quarter period ending on the test date) of not greater than 4.00 to 1.00. Funded Debt is defined as Total Liabilities which are for borrowed money, capital leases and/or are interest bearing. EBITDA is
defined as net profit before taxes, plus depreciation and amortization and interest.” 

 2.2 Section 6.06. Section 6.06 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows: 
 “6.06. Dividends or Distributions; Acquisition of Capital
Stock or Other Ownership Interests. Declare or pay any dividends or distributions of any kind, or purchase or redeem, retire, or otherwise acquire any of the Borrowers’ capital stock or other ownership interests, now or hereafter
outstanding, provided, however, that so long as no Event of Default has occurred and is continuing or would result from any such payment, the Borrowers may pay to The Hallwood Group Incorporated (a) periodic payments for tax
sharing obligations, (b) discretionary dividends in an aggregate amount not to exceed 50% of Borrowers’ net income for the fiscal year with respect to which such dividends are made, and (c) other dividends or distributions in an
aggregate amount not to exceed $15,000,000 (of which, as of August 24, 2012, it is agreed, $8,000,000 has been previously disbursed).” 
 2.3 Amended Definition. The definition of “Pricing Grid” set forth in Section 10.01 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 “Pricing Grid” shall mean the following grid setting forth by Tier, the applicable margin
with respect to the LIBOR interest rate and unused line fees: 
  

											
	 Tier
	  	 Funded Debt to EBITDA Ratio
	  	Applicable
Margin	 	 	Unused
Fee	 
	 I
	  	<1.0 : 1.0	  	 	1.00	% 	 	 	0.10	% 
	 II
	  	31.0 : 1.0, but <1.5 : 1.0	  	 	1.25	% 	 	 	0.15	% 
	 III
	  	31.5 : 1.0, but <2.0 : 1.0	  	 	1.50	% 	 	 	0.20	% 
	 IV
	  	32.0 : 1.0, but <2.75 : 1.0	  	 	2.00	% 	 	 	0.25	% 
	 V
	  	32.75 : 1.0, but <3.25 : 1.0	  	 	2.50	% 	 	 	0.25	% 
	 VI
	  	33.25 : 1.0	  	 	3.00	% 	 	 	0.25	% 

 Notwithstanding the foregoing, at any time the Bank is not one of Borrowers’ primary factoring
service providers, then the Borrowers shall pay to Bank a one time fee in the amount of $62,500 and the Pricing Grid shall be as follows: 
  

											
	 Tier
	  	 Funded Debt to EBITDA Ratio
	  	Applicable
Margin	 	 	Unused
Fee	 
	 I
	  	<1.0 : 1.0	  	 	1.50	% 	 	 	0.10	% 
	 II
	  	31.0 : 1.0, but <1.5 : 1.0	  	 	1.75	% 	 	 	0.15	% 
	 III
	  	31.5 : 1.0, but <2.0 : 1.0	  	 	2.00	% 	 	 	0.20	% 
	 IV
	  	32.0 : 1.0, but <2.75 : 1.0	  	 	2.50	% 	 	 	0.25	% 
	 V
	  	32.75 : 1.0, but <3.25 : 1.0	  	 	3.00	% 	 	 	0.25	% 
	 VI
	  	33.25 : 1.0	  	 	3.50	% 	 	 	0.25	% 

  
 2 

 Section 3 CONDITIONS PRECEDENT 

3.1 Conditions Precedent to this Amendment. The effectiveness of this Amendment against Bank is conditioned upon the satisfaction
of the following conditions precedent. The determination as to whether each condition has been satisfied may be made in Bank’s sole discretion. 
 (A) Bank shall have received an executed copy of this Amendment duly executed by Borrowers, and Bank shall have duly executed and delivered to Borrowers a copy of this Amendment. 

(B) Bank shall have received evidence that all proceedings and authorizations necessary to authorize the execution,
delivery and performance of this Amendment and the transactions contemplated hereby have been taken or received. 

(C) All representations, warranties, covenants and agreements of the Borrowers contained in the Loan Documents shall be
true and correct in all material respects (except that, for those representations and warranties already qualified by concepts of materiality, those representations and warranties shall be true and correct in all respects) at and as of the date
hereof as though then made, except for such representations and warranties or parts thereof that, by their terms, expressly relate solely to a specific date, in which case such representations and warranties shall be true and correct in all material
respects as of such specific date. 
 (D) No Event of Default shall have occurred and be continuing. 

(E) Borrowers shall pay on demand all reasonable and documented fees and expenses incurred by Bank in connection with this
Amendment and the other Loan Documents, including, but not limited to, the reasonable and documented fees and expenses of Bank’s counsel (it being understood, without limitation of the Borrowers’ obligation to pay such fees and expenses,
that the effectiveness of this Amendment shall only be conditioned on the payment of such fees and expenses that are invoiced at least two business days prior to the date on which the other conditions in this Section 3.1 have been met).

 (F) Borrowers shall pay an amendment fee of $31,250 to Bank. 

Section 4 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES 

4.1 Ratification of Loan Documents and Liens. Except as expressly modified and superseded by this Amendment, the terms and
provisions of the Loan Documents are ratified and confirmed and shall continue in full force and effect. Each Borrower and Bank agrees that the Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their
respective terms. Each Borrower further expressly acknowledges and agrees that Bank has a valid, non-avoidable, enforceable and perfected security interest in and lien against each item of collateral described in the Loan Documents and that such
security interest and lien secures the payment and the performance of all obligations of the Borrowers under the Loan Documents. 

  
 3 

 4.2 General Representations and Warranties. Each Borrower hereby jointly and
severally represents and warrants to Bank that (a) the execution, delivery and performance of this Amendment and any and all Loan Documents executed and/or delivered in connection herewith have been duly authorized by all requisite
organizational action on the part of such Borrower and will not violate the organizational documents of such Borrower, contravene any contractual restriction, any law, rule or regulation or court or administrative decree or order binding on or
affecting such Borrower or result in, or require the creation or imposition of, any lien, security interest or encumbrance on any of the properties of such Borrower; (b) this Amendment and any and all other Loan Documents executed and/or
delivered in connection herewith have been duly executed and delivered by each Borrower and are the legal, valid and binding obligation of each Borrower, enforceable in accordance with their respective terms; (c) the representations and
warranties contained in the Loan Agreement and any Loan Document are true and correct on and as of the date hereof and on and as of the date of execution hereof as though made on and as of each such date, except for such representations and
warranties or parts thereof that, by their terms, expressly relate solely to a specific date, in which case such representations and warranties shall be true and correct in all material respects as of such specific date; (d) no Event of Default
or event or circumstance that would, with the giving of notice or the passage of time or both, result in an Event of Default, under the Loan Agreement has occurred and is continuing; (e) such Borrower is in compliance in all material respects
with all covenants and agreements contained in the Loan Documents; (f) no Borrower has amended its organizational documents after March 30, 2012; and (g) the recitals in this Amendment are true and correct in all respects. 

4.3 Full Opportunity for Review; No Undue Influence. Each Borrower reviewed this Amendment and acknowledges and agrees that it
(a) understands fully the terms of this Amendment and the consequences of the issuance hereof, (b) has been afforded an opportunity to have this Amendment reviewed by, and to discuss this Amendment with, such attorneys and other Persons as
he or it may wish, and (c) has entered into this Amendment of his or its own free will and accord and without threat or duress. This Amendment and all information furnished to Bank is made and furnished in good faith, for value and valuable
consideration. This Amendment has not been made or induced by any fraud, duress or undue influence exercised by Bank or any other Person. Bank has at all times acted in good faith and in a commercially reasonable manner in connection with the
negotiation and execution of this Amendment and the discussions and exercise of rights and remedies preceding this Amendment. 

Section 5 MISCELLANEOUS 
 5.1 Survival. All representations, warranties or covenants made in any Loan Document or this Amendment, including, without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the Loan Documents, and no investigation by Bank or any closing shall affect the representations and warranties or the right of Bank to rely upon them. 

  
 4 

 5.2 Limitation on Relationship between Parties. The relationship of Bank, on the one
hand, and the Borrowers, on the other hand, has been and shall continue to be, at all times, that of creditor and debtor. Nothing contained in this Amendment, any instrument, document or agreement delivered in connection therewith or in the Loan
Documents shall be deemed or construed to create a fiduciary relationship between the parties. 
 5.3 Successors and Assigns;
Third Party Beneficiaries. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations under
this Amendment without the prior written consent of Bank, and no other Person shall have any right, benefit or interest under or because of the existence of this Amendment, except that the provisions of Section 5.11 of this Amendment
shall inure to the benefit of the Released Parties. 
 5.4 Amendments; Interpretation. No amendment or modification of
any provision of this Amendment shall be effective without the written agreement of Borrowers and Bank, and no waiver of any provision of this Amendment or consent to any departure by any Borrower therefrom, shall in any event be effective without
the written concurrence of Bank. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand upon any Borrower in any case shall entitle any Borrower to any other
or further notice or demand in similar or other circumstances. No prior drafts of this Amendment or any negotiations regarding the terms contained in those drafts shall be admissible in any court to vary or interpret the terms of this Amendment; the
parties hereto agreeing that this Amendment constitutes the final expression of the parties’ agreement and supersedes all prior written and oral understandings regarding the terms of this Amendment. In the event of any inconsistency between the
terms of this Amendment and any other Loan Document, this Amendment shall govern and control. The parties hereto have had the opportunity to be represented by counsel in their negotiations of the terms of this Amendment, and therefore, no provision
of this Amendment shall be construed against any party hereto on the theory that such party drafted such provision. 
 5.5
Severability. Whenever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Amendment. 
 5.6 Costs and Expenses. Borrowers agree to pay on demand all reasonable and documented costs and out-of-pocket expenses incurred by Bank in connection with the preparation, negotiation, execution
and enforcement of this Amendment and the Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the reasonable and documented costs and fees of Bank’s legal
counsel, and all costs and expenses incurred by Bank in connection with the enforcement or preservation of any rights under any Loan Document, including, without limitation, the reasonable and documented costs and fees of Bank legal counsel and the
fees, costs and expenses incurred by Bank in the employment of auditors and/or consultants to perform work on Bank’s behalf to audit, appraise, monitor and otherwise review any and all portions of the Collateral. 

  
 5 

 5.7 Further Assurances. Each Borrower agrees to execute such other and further
documents and instruments as Bank may request to implement the provisions of this Amendment and to perfect and protect the liens and security interests created by the Loan Agreement and the other Loan Documents. 

5.8 Applicable Law. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT TO THIS AMENDMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS CHOSEN TO GOVERN THE LOAN AGREEMENT. 
 5.9 Counterparts. This Amendment may be
executed by one or more of the parties hereto in any number of separate counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument, and all
signature pages transmitted by electronic transmission shall be considered as original executed counterparts. Each party to this Amendment agrees that it will be bound by its own facsimile or electronic signature and that it accepts the facsimile or
electronic signatures of each other party. 
 5.10 Headings. Paragraph and subparagraph titles, captions and headings
herein are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Amendment or the intent of any provisions hereof. 

5.11 Release. FOR AND IN CONSIDERATION OF BANK’S AGREEMENTS CONTAINED HEREIN AND AS A MATERIAL INDUCEMENT TO BANK TO ENTER
INTO THIS AMENDMENT ON WHICH BANK IS RELYING, EACH OF THE BORROWERS, TOGETHER WITH EACH OF THEIR RESPECTIVE DIRECT AND INDIRECT PARENTS, DIVISIONS, SUBSIDIARIES, AFFILIATES, MEMBERS, MANAGERS, PARTICIPANTS, PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND
EACH OF THEIR RESPECTIVE CURRENT AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, BANKS, AND EMPLOYEES, AND EACH OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS, AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY,
“RELEASORS”), EACH INTENDING TO BE LEGALLY BOUND, HEREBY VOLUNTARILY, INTENTIONALLY AND KNOWINGLY RELEASES AND FOREVER WAIVES AND DISCHARGES BANK AND EACH OF ITS RESPECTIVE DIRECT AND INDIRECT PARENTS, DIVISIONS, SUBSIDIARIES,
AFFILIATES, MEMBERS, MANAGERS, PARTICIPANTS, PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND EACH OF THEIR RESPECTIVE CURRENT AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, BANKS, ATTORNEYS AND EMPLOYEES, AND EACH OF THEIR
RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS, AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, THE “RELEASED PARTIES”) FROM ALL POSSIBLE CLAIMS, COUNTERCLAIMS, CROSSCLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES AND
LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, MATURED OR UNMATURED, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, VESTED, FIXED, CONTINGENT OR CONDITIONAL, AT LAW OR IN EQUITY (INDIVIDUALLY AND COLLECTIVELY, “CLAIMS”)
THAT ANY OF THE RELEASORS MAY NOW OR 

  
 6 

 
HEREAFTER HAVE, IF ANY, AGAINST ANY OF THE RELEASED PARTIES ARISING OUT OF ANY ACT OR OMISSION OF ANY OF THE RELEASED PARTIES EXISTING OR OCCURRING ON OR PRIOR TO THE DATE OF THIS AMENDMENT,
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, BUT EXCLUDING ANY CLAIMS TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF BANK OR BANK AS DETERMINED BY A FINAL,
NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION. 
 5.12 Waiver of Jury Trial. UNLESS EXPRESSLY PROHIBITED
BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AMENDMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN ANY
BORROWER AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO ENTER INTO THIS AGREEMENT. FURTHER, EACH OF THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY
WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE, AGENT, OR COUNSEL OF ANY PARTY HERETO, HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION. 

5.13 Submission to Jurisdiction THE BORROWERS HEREBY IRREVOCABLY AGREE THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT MAY BE INSTITUTED IN THE DISTRICT COURT IN DALLAS COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS OR IN SUCH OTHER APPROPRIATE COURT AND VENUE AS BANK MAY CHOOSE IN ITS SOLE
DISCRETION. BANK AND THE BORROWERS EACH CONSENT TO THE JURISDICTION OF SUCH COURTS AND WAIVES ANY OBJECTION RELATING TO THE BASIS FOR PERSONAL OR IN REM JURISDICTION OR TO VENUE WHICH BANK OR THE BORROWERS MAY NOW OR HEREAFTER HAVE IN ANY SUCH LEGAL
ACTION OR PROCEEDINGS. 
 5.14 Final Agreement. THE LOAN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE ENTIRE EXPRESSION
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AND THE LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AGREEMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY EACH BORROWER AND BANK. 

  
 7 

 5.15 Acknowledgment. The parties affirm and acknowledge that this Amendment
constitutes a Loan Document and any reference to the Loan Documents under the Loan Agreement contained in any notice, request, certificate or other document executed concurrently with or after the execution and delivery of this Amendment shall be
deemed to include this Amendment unless the context shall otherwise specify. 
 [signature pages follow] 

  
 8 

 IN WITNESS WHEREOF, the undersigned have executed and delivered this Amendment as of the
date first written above. 
  

			
	BORROWERS:
	
	BROOKWOOD COMPANIES INCORPORATED
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	KENYON INDUSTRIES, INC.
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	BROOKWOOD LAMINATING, INC.
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	ASHFORD BROMLEY, INC.
		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	STRATEGIC TECHNICAL ALLIANCE, LLC
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 
			
	BANK:
	
	BRANCH BANKING AND TRUST COMPANY
		
	By:	 	 
	Name:	 	 
	Title:Subordination and Intercreditor Agreement

 Exhibit 10.2 
 SUBORDINATION AND INTERCREDITOR AGREEMENT 
 This SUBORDINATION AND
INTERCREDITOR AGREEMENT (this “Agreement”) is made as of August 21, 2012 and effective as of May 9, 2012, by and between HALLWOOD FAMILY (BVI), L.P., a British Virgin Islands limited partnership
(“Creditor”), and BRANCH BANKING AND TRUST COMPANY (together with its successors and assigns, “Bank”). 
 Recitals 
 A. BROOKWOOD COMPANIES INCORPORATED, a Delaware corporation
(“Brookwood”), KENYON INDUSTRIES, INC., a Delaware corporation (“Kenyon”), BROOKWOOD LAMINATING, INC., a Delaware corporation (“Laminating”), ASHFORD BROMLEY, INC., a Delaware corporation
(“Ashford”), and STRATEGIC TECHNICAL ALLIANCE, LLC, a Delaware limited liability company (“STA,” together with Brookwood, Kenyon, Laminating, and Ashford, each individually, a “Borrower” and
collectively, the “Borrowers”) have requested and/or obtained certain loans or other credit accommodations from Bank pursuant to that certain Loan Agreement dated March 30, 2012 by and among Bank and Borrowers (as amended,
restated, supplemented, or otherwise modified from time to time, the “Loan Agreement”). 
 B. Pursuant to the
Loan Agreement, THE HALLWOOD GROUP INCORPORATED, a Delaware corporation (“Hallwood Group”), entered into that certain Pledge and Security Agreement dated as of March 30, 2012 in favor of Bank (as amended, restated,
supplemented, or otherwise modified from time to time, the “Bank Pledge Agreement”) pursuant to which Hallwood Group granted a first priority lien and security interest in the Pledged Collateral (as defined in the Bank Pledge
Agreement, referred to herein as the “Collateral”) to Bank to secure the indebtedness arising under the Loan Agreement. 
 C. Subsequent to the date of the Loan Agreement, Hallwood Group (i) issued that certain Promissory Note dated as of May 9, 2012 in the original principal amount of $10,000,000 to Creditor (as
amended, restated, supplemented, or otherwise modified from time to time, the “Hallwood Note”) evidencing a loan from Creditor to Hallwood Group (the “Hallwood Loan”), and (ii) in relation to the Hallwood Note
and to secure the Hallwood Loan, entered into that certain Pledge and Security Agreement dated as of May 9, 2012 in favor of Creditor (as amended, restated, supplemented, or otherwise modified from time to time, the “Hallwood Family
Pledge Agreement”) and that certain Security Agreement dated as of May 9, 2012 in favor of Creditor (as amended, restated, supplemented, or otherwise modified from time to time, the “Hallwood Family Security
Agreement”) pursuant to which Hallwood Group granted a junior lien and security interest in certain of its assets to the Creditor, including the Collateral. 
 D. In order to induce Bank to continue to extend credit to Borrowers, Bank has required that Creditor enter into this Agreement. 
 NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 
 1. Definitions. As used in
this Agreement, the following words and terms shall have the meaning set forth below and, unless defined herein, shall have the meaning set forth in the Uniform Commercial Code, as amended from time to time. 

 “Bank Indebtedness” means all of the following:
(a) the aggregate principal indebtedness advanced from time to time under the Loan Agreement and the other Bank Loan Documents; (b) all interest accrued and accruing on the aggregate principal outstanding under the Bank Loan Documents from
time to time (including, without limitation, any interest accruing after a Proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding); (c) all other fees or monetary
obligations owed under the Bank Loan Documents (including, without limitation, any fees incurred or accruing after a Proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition fees is allowed in such proceeding);
and (d) all costs incurred by the Bank under the Bank Loan Documents in commencing or pursuing any enforcement action(s) with respect to the amounts described in clauses (a) through (c), including attorneys’ fees and
disbursements (including, without limitation, any costs incurred or accruing after any Proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition costs is allowed in such proceeding). “Bank Indebtedness”
shall also include all amendments, modifications and refinancings of any of the foregoing with the same or another lender. 
 “Bank Loan Documents” shall mean the “Loan Documents” as defined in the Loan Agreement. 
 “Creditor Documents” shall mean the Hallwood Note, the Hallwod Family Pledge Agreement, the Hallwood Family Security Agreement, and all other documents and instruments evidencing,
securing or pertaining to any portion of the Hallwood Loan, in each case, as amended, supplemented, restated, modified, renewed, extended or replaced from time to time. 

“Proceeding” shall mean the filing of any petition or the institution of any proceeding by or against any
Borrower under any provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, or any other or similar law relating to bankruptcy, insolvency, reorganization or other relief for debtors, or generally affecting creditors’
rights, or seeking the appointment of a receiver, trustee, custodian or liquidator of or for any Borrower or any of its assets. 

2. Subordination. Creditor subordinates to Bank any security interest or lien that such Creditor may have in the Collateral,
whether presently existing or arising in the future. Notwithstanding (a) the respective dates of attachment or perfection of the security interest of Creditor and the security interest of Bank or (b) any provision of the Uniform Commercial
Code or any other applicable law to the contrary, the security interest of Bank in the Collateral, shall at all times be prior to the security interest, if any, of Creditor in the Collateral. 

3. Forbearance by Creditor. Until all Bank Indebtedness has been fully paid and satisfied, any commitments to lend under the Loan
Agreement have terminated, and any letters of credit under the Loan Agreement have expired or otherwise been terminated, Creditor shall take no action, without the prior written consent of Bank, to enforce its security interest in the Collateral,
including but not limited to, attempting to collect or realize upon the Collateral or 

  
 2 

 
foreclosing any security interest in the Collateral. In the event that Creditor obtains possession of any proceeds of the Collateral, said proceeds shall be held in trust by Creditor as the
property of Bank and Creditor shall promptly deliver same to Bank in precisely the form received. 
 4. Enforcement of
Bank’s Security Interest. Bank may at any time exercise all rights and remedies as are granted to it by law and/or in the Bank Loan Documents with respect to the Collateral, without the consent of Creditor. In this regard, Bank shall
account to Creditor for any surplus received from a liquidation or disposition of the Collateral in excess of the Bank Indebtedness. In liquidating or disposing of the Collateral, Bank need only use its reasonable best judgment with respect thereto
and shall not be liable to Creditor for any act or omission with respect to the liquidation of the Collateral or the fact that the proceeds realized from a liquidation of the Collateral could, under any circumstances, have been greater, excluding
any liability arising out of a sale which is not commercially reasonable. 
 5. Survival of Agreement in the Event of
Insolvency. In the event of Hallwood Group’s insolvency, reorganization or any case or Proceeding, these provisions shall remain in full force and effect, and Bank’s claims against Hallwood Group and the estate of each Borrower and
Hallwood Group shall be paid in full before any payment is made to Creditor. 
 6. Provisions Applicable After
Proceeding. 
 (a) The provisions of this Agreement shall continue in full force and effect notwithstanding the occurrence of
any Proceeding. 
 (b) Creditor agrees not to initiate or prosecute, and not to encourage any other person to initiate or
prosecute, any claim, action or other proceeding: (i) challenging the enforceability of the Bank’s claim in any Proceeding; (ii) challenging the enforceability of any liens or security interests in assets securing the Bank
Indebtedness; (iii) asserting any claims that Borrowers may hold with respect to Bank; (iv) challenging any valuation of the collateral securing the Bank Indebtedness submitted by or on behalf of Bank; or (v) objecting to any motion
by Bank for relief from the automatic stay in order for Bank to exercise its rights under the Bank Loan Documents, any motion by Bank for adequate protection, any motion by Bank to dismiss any Proceeding, any motion by Bank to appoint a bankruptcy
trustee or examiner, any 363 Sale of Collateral approved by Bank, or any motion by Bank to convert any Proceeding to any other Chapter of the Bankruptcy Code. 
 (c) If Hallwood Group becomes the subject of a Proceeding, then Bank, on behalf of Creditor, shall have the right and is hereby empowered to vote the full amount of the Hallwood Loan at such proceeding
and at any meeting of creditors of such Borrower whether or not such meeting is held in a Proceeding. Bank and any officer or employee designated by Bank for such purpose is hereby constituted and appointed attorney-in-fact for Creditor with full
power (which power, being coupled with an interest, shall be irrevocable until the Bank Indebtedness is paid in full in cash) to vote the Hallwood Loan in any of the foregoing proceedings and at any meeting of creditors of any Borrower and to file
any claim, proof of debt or proof of claim in any such proceeding, and to compromise, settle and to give releases for any of the Hallwood Loan, and to endorse Creditor’s name upon any instruments given as a payment on or distribution in
connection with the Hallwood Loan. 

  
 3 

 7. Control and Turnover of Collateral. Creditor hereby appoints Bank as its agent and
bailee solely for the purposes of perfecting Creditor’s liens on any of the Collateral that is in the possession or under the control of Bank, and Bank hereby accepts such appointment and hereby acknowledges that it holds possession of or
otherwise controls any such Collateral for the benefit of the Creditor as a secured party; provided, that Bank shall not have any duty or liability to Creditor to protect or preserve any rights pertaining to any of the Collateral and,
except for gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction, Creditor hereby waives and releases Bank from all claims and liabilities arising pursuant to Bank’s
role as bailee with respect to the Collateral, so long as Bank shall use the same degree of care with respect thereto as Bank uses for similar property pledged to Bank as collateral for indebtedness of others to Bank. Reasonably promptly after all
Bank Indebtedness has been fully paid and satisfied, any commitments to lend under the Loan Agreement have terminated, and any letters of credit under the Loan Agreement have expired or otherwise been terminated, Bank shall, without recourse,
deliver or assign control of the remainder of the Collateral, if any, in its possession or under its control to Creditor unless the Hallwood Loan shall have been paid in full or except as may otherwise be required by applicable law or court order.

 8. Amendment of Creditor Documents; Notice of Default. No amendment of the documents evidencing or relating to the
Hallwood Loan or the Creditor Documents shall directly or indirectly modify the provisions of this Agreement in any manner which might terminate or impair the subordination of the security interest or lien that Creditor may have in the Collateral.
Creditor shall provide Bank notice of any default under any Creditor Document simultaneously with the delivery of notice of such default to Hallwood Group. 
 9. Effectiveness of Agreement; Payments. This Agreement shall remain effective until all Bank Indebtedness has been fully paid and satisfied, any commitments to lend under the Loan Agreement have
terminated, and any letters of credit under the Loan Agreement have expired or otherwise been terminated. Creditor agrees that Bank may modify, extend, or amend the Bank Loan Documents now or hereafter executed between Borrowers and Bank, including,
without limitation, increase from time to time the maximum principal amount of the credit facility evidenced by the Bank Loan Documents, release its security interest in any of the Collateral or extend the time for the payment of any Bank
Indebtedness without effecting or impairing the rights of Bank under this Agreement. If, at any time after payment in full of the Bank Indebtedness any payments of the Bank Indebtedness must be disgorged by Bank for any reason (including, without
limitation, the bankruptcy of any Borrower), then this Agreement and the relative rights and priorities set forth herein shall be reinstated as to all such disgorged payments as though such payments had not been made and Creditor shall immediately
pay over to Bank all payments received with respect to the Creditor Documents to the extent that such payments would have been prohibited hereunder. At any time and from time to time, without notice to Creditor, Bank may take such actions with
respect to the Bank Indebtedness as Bank, in its sole discretion, may deem appropriate, including, without limitation, compromising or otherwise amending the terms of any documents affecting the Bank Indebtedness and any collateral securing the Bank
Indebtedness, and enforcing or failing to enforce any rights against Hallwood Group, Borrowers or any other person. No such action or inaction shall impair or otherwise affect Bank’s rights hereunder. 

  
 4 

 10. Successors and Assigns. Creditor shall not assign any rights or obligations under
this Agreement without the prior written consent of Bank. This Agreement shall bind any successors or assignees of Creditor and shall benefit any successors or assigns of Bank. This Agreement is solely for the benefit of Creditor and Bank and not
for the benefit of Hallwood Group, Borrowers or any other party. 
 11. Counterpart Execution. This Agreement may be
executed in two or more counterparts (including by facsimile, pdf, or other electronic transmission), each of which shall be deemed an original and all of which together shall constitute one instrument. 

12. Governing Law. This Agreement shall be governed by the internal laws of the State of Texas. Creditor hereby irrevocably agrees
that any legal action or proceeding arising out of or relating to this Agreement may be instituted in the District Court in Dallas County, Texas, or the United States District Court for the Northern District of Texas or in such other appropriate
court and venue as Bank may choose in its sole discretion. Bank and Creditor each consent to the jurisdiction of such courts and waives any objection relating to the basis for personal or in rem jurisdiction or to venue which Bank or Creditor may
now or hereafter have in any such legal action or proceedings. 
 13. WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED
BY APPLICABLE LAW, EACH OF THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN
THE CREDITOR AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO ENTER INTO THIS AGREEMENT. FURTHER, EACH PARTY HERETO HEREBY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PERSON
PARTY WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE, AGENT, OR COUNSEL OF ANY PARTY HERETO HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION. 

14. Entire Agreement; Amendments. This Agreement represents the entire agreement with respect to the subject matter hereof, and
supersedes all prior negotiations, agreements and commitments. Creditor is not relying on any representations by Bank, Hallwood Group, or Borrowers in entering into this Agreement and Creditor has kept and will continue to keep itself fully apprised
of the financial and other condition of Hallwood Group and Borrowers. This Agreement may be amended only by written instrument signed by Creditor and Bank. 
 15. Costs of Enforcement. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such other
relief as may be granted, all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in such action. 
 16. Authorization. Creditor represents and warrants to Bank that the terms and conditions of this Agreement have been authorized by all necessary action on the part of Creditor, and that the
individual signing on behalf of Creditor has all necessary approval and authority to do so. 

  
 5 

 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 

  
 6 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written. 
  

			
	CREDITOR:
	
	 HALLWOOD FAMILY (BVI), L.P.,
 a British Virgin Islands limited partnership

		
	By:	 	Hallwood G.P. (BVI) Limited, General Partner
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 
			
	BANK:
	
	BRANCH BANKING AND TRUST COMPANY
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 The undersigned approves of the terms of this Agreement. 

 

			
	HALLWOOD GROUP:
	
	 THE HALLWOOD GROUP INCORPORATED,
 a Delaware corporation

		
	By:	 	 
	Name:	 	 
	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00207-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00207-of-00352.parquet"}]]