Document:

Exhibit 10.54 ESPP

TRIQUINT SEMICONDUCTOR, INC.
2007 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 2007 Employee Stock Purchase Plan of TriQuint Semiconductor, Inc.
1.Purpose.  The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to purchase Common Stock at a discount.  It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code, although the Company makes no undertaking or representation to maintain such qualification.  The provisions of the Plan, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.  In addition, the Plan authorizes the purchase of Common Stock under a Non-423(b) Component, pursuant to rules, procedures or sub-plans adopted by the Administrator and designed to achieve tax, securities law or other objectives, provided, however, that U.S. Eligible Employees will not be permitted to purchase Stock under the Non-423(b) Component.
2.Definitions.
(a)“Affiliate” means any entity, other than a Subsidiary, in which the Company has an equity or other ownership interest.
(b)“Administrator” means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14.
(c)“Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where awards are, or will be, granted under the Plan.
(d)“Board” means the Board of Directors of the Company.
(e)“Change in Control” means the occurrence of any of the following events:
(i)Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities; or
(ii)The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; or

(iii)The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or
(iv)A change in the composition of the Board occurring within a two (2)-year period, as a result of which less than a majority of the Directors are Incumbent Directors.  “Incumbent Directors” means Directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of Directors to the Company).
(f)“Code” means the Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
(g)“Code Section 423(b) Component” shall mean an employee stock purchase plan which is designed to meet the requirements set forth in Section 423(b) of the Code.  The provisions of the Code Section 423(b) Component shall be construed, administered and enforced in accordance with Section 423(b) of the Code.
(h)“Committee” means a committee of the Board appointed in accordance with Section 14 hereof.
(i)“Common Stock” means the common stock of the Company.
(j)“Company” means TriQuint Semiconductor, Inc., a Delaware corporation. 
(k)“Compensation” means an Employee's base straight time gross earnings, commissions (to the extent such commissions are an integral, recurring part of compensation), overtime and shift premium, but exclusive of payments for incentive payments, bonuses and other compensation.  The Administrator has the exclusive discretion to determine what constitutes Compensation for purposes of the Plan.
(l)“Designated Company” means any Affiliate or Subsidiary that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.  For purposes of the Code Section 423(b) Component, only the Company and its Subsidiaries may be Designated Companies, provided, however, that at any given time, a Subsidiary that is a Designated Company under the Code Section 423(b) Component shall not be a Designated Company under the Non-423(b) Component.
(m)“Director” means a member of the Board.
(n)“Eligible Employee” means any individual who is a common law employee of an Employer and is customarily employed for at least twenty (20) hours per week and more than five (5) months 

in any calendar year by the Employer, provided, however, that employees of a Designated Company in the Non-423(b) Component may be Eligible Employees even if their customary employment is less than five (5) months per calendar year and/or twenty (20) hours per week, to the extent required by Applicable Laws.  For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves.  Where the period of leave exceeds ninety (90) days and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated on the ninety-first (91st) day of such leave.  To the extent permitted by Applicable Laws, the Administrator, in its discretion, from time to time may, prior to an Offering Date for all options to be granted on such Offering Date, determine that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is an officer or other manager, or (v) is a highly compensated employee under Section 414(q) of the Code, provided, however, that for Eligible Employees participating in the Code Section 423(b) Component, such determination must be made on a uniform and nondiscriminatory basis.
(o)“Employer” means any one or all of the Company and its Designated Companies.
(p)“Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(q)“Exercise Date” means the first Trading Day on or after June 1 and December 1 of each year.  The first Exercise Date under the Plan will be the first Trading Day on or after December 1, 2007.  The Administrator, in its discretion, from time to time may, prior to an Offering Date for all options to be granted on such Offering Date, determine when the Exercise Dates will occur during an Offering Period.
(r)“Fair Market Value” means, as of any date and unless the Administrator determines otherwise, the value of Common Stock determined as follows:
(i)If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Stock Market, LLC its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii)If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid and asked prices for 

the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii)In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator.
(s)“Fiscal Year” means the fiscal year of the Company.
(t)“Non-423(b) Component” means the grant of an option under the Plan which is not intended to meet the requirements set forth in Section 423(b) of the Code.
(u)“Offering Date” means the first Trading Day of each Offering Period.
(v)“Offering Periods” means the period of time the Administrator may determine prior to an Offering Date, for options to be granted on such Offering Date, during which an option granted under the Plan may be exercised, not to exceed twenty-seven (27) months.  Unless the Administrator provides otherwise, Offering Periods will have a duration of approximately six (6) months (i) commencing on the first Trading Day on or after June 1 of each year and terminating on the first Trading Day on or following December 1, approximately six (6) months later, and (ii) commencing on the first Trading Day on or after December 1 of each year and terminating on the first Trading Day on or following June 1, approximately six (6) months later; provided, however, that the first Offering Period under the Plan will commence on the later of (i) the first Trading Day on or after June 1, 2007, or (ii) the first Trading Day on or after the Company's 2007 Annual Meeting of Stockholders, and will end on the first Trading Day on or after December 1, 2007.  The duration and timing of Offering Periods may be changed pursuant to Sections 4 and 20.
(w)“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(x)“Plan” means this TriQuint Semiconductor, Inc. 2007 Employee Stock Purchase Plan, which includes a Code Section 423(b) Component and a Non-423(b) Component.
(y)“Purchase Period” means the period during an Offering Period which shares of Common Stock may be purchased on a participant's behalf in accordance with the terms of the Plan.  Unless and until the Administrator provides otherwise, the Purchase Period will have the same duration and coincide with the length of the Offering Period.
(z)“Purchase Price” shall be determined by the Administrator (on a uniform and nondiscriminatory basis) prior to an Offering Date for all options to be granted on such Offering Date, subject to compliance with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule) or pursuant to Section 20.  Unless and until the Administrator provides otherwise, the Purchase Price will be equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Offering Date or the Exercise Date, whichever is lower.

(aa)“Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(ab)“Trading Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading.
(ac)“U.S. Eligible Employee” means an Eligible Employee who (i) resides in the United States, and (ii) is employed by the Company or by a Designated Company located in the United States.

3.Eligibility.
(a)First Offering Period.  Any individual who is an Eligible Employee immediately prior to the first Offering Period under the Plan will be automatically enrolled in the first Offering Period.
(b)Subsequent Offering Periods.  Any individual who is an Eligible Employee on a given Offering Date of any future Offering Period will be eligible to participate in the Plan, subject to the requirements of Section 5.
(c)Limitations.  Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time.
4.Offering Periods.  The Plan will be implemented by consecutive Offering Periods with a new Offering Period commencing on the first Trading Day on or after June 1 and December 1 each year, or on such other date as the Administrator will determine; provided, however, that the first Offering Period under the Plan will commence on the later of (i) the first Trading Day on or after June 1, 2007, or (ii) the first Trading Day on or after the Company's 2007 Annual Meeting of Stockholders, and will end on the first Trading Day on or after December 1, 2007.  The Administrator will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5.Participation.
(a)First Offering Period.  An Eligible Employee who has become a participant in the first Offering Period under the Plan pursuant to Section 3(a) will be entitled to continue his or her participation in such Offering Period only if he or she submits to the Company's payroll office (or its designee) a properly completed subscription agreement authorizing contributions to the Plan in the form provided by the Administrator for such purpose or following an electronic or other enrollment procedure prescribed by the Administrator (i) no earlier than the effective date of the filing of the Company's Registration Statement on Form S-8 with respect to the shares of Common Stock issuable under the Plan (the “Effective Date”) and (ii) no later than ten (10) business days from the Effective Date or such other period of time as the Administrator may determine (the “Enrollment Window”).  A participant's failure to submit the subscription agreement during the Enrollment Window pursuant to this Section 5(a) will result in the automatic termination of his or her participation in the first Offering Period under the Plan.
(b)Subsequent Offering Periods.  An Eligible Employee who is eligible to participate in the Plan pursuant to Section 3(b) may become a participant by (i) submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Offering Date, a properly completed subscription agreement authorizing contributions to the Plan in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure prescribed by the Administrator.
6.Payroll Deductions/Contributions.
(a)At the time a participant enrolls in the Plan pursuant to Section 5, he or she will elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation which he or she receives on each pay day during the Offering Period; provided, however, that should a pay day occur on an Exercise Date, a participant will have the payroll deductions made on such day applied to his or her account under the subsequent Offering Period.  To the extent required by Applicable Laws, the Administrator, in its discretion, may decide that a participant may contribute to the Plan by means other than payroll deductions, provided that contributions other than payroll deductions will be permissible only for Eligible Employees participating in the Non-423(b) Component.  A participant's subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
(b)Payroll deductions or other contributions authorized by a participant will commence on the first pay day following the Offering Date and will end on the last pay day prior to the Exercise Date of such Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof; provided, however, that for the first Offering Period under the Plan, payroll deductions or other contributions will commence on the first pay day on or following the Enrollment Window.

(c)All payroll deductions or other contributions made for a participant will be credited to his or her account under the Plan and will be withheld in whole percentages only.  A participant may not make any additional payments into such account, unless required by local law.
(d)A participant may discontinue his or her participation in the Plan as provided in Section 10, or may increase or decrease the rate of his or her payroll deductions or other contributions during the Offering Period by (i) properly completing and submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Exercise Date, a new subscription agreement authorizing the change in payroll deduction or contribution rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by the Administrator.  If a participant has not followed such procedures to change the rate of payroll deductions or other contributions, the rate of his or her payroll deductions or contributions will continue at the originally elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in Section 10).  The Administrator may, in its sole discretion, limit the nature and/or number of payroll deduction or contribution rate changes that may be made by participants during any Offering Period.  Any change in payroll deduction or contribution rate made pursuant to this Section 6(d) will be effective as of the first full payroll period following five (5) business days after the date on which the change is made by the participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction or contribution rate more quickly).
(e)Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), or if the Administrator reasonably anticipates a participant has contributed a sufficient amount to purchase a number of shares of Common Stock equal to or in excess of the applicable limit for such Offering Period (as set forth in Section 7 or as established by the Administrator), a participant's payroll deductions or other contributions may be decreased to zero percent (0%) at any time during an Offering Period.  Subject to Section 423(b)(8) of the Code and Section 3(c) hereof, or for participants who have had their contributions reduced due to the applicable limits on the maximum number of shares that may be purchased in any Offering Period, payroll deductions or other contributions will recommence at the rate originally elected by the participant effective as of the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10.
(f)At the time the option is exercised, in whole or in part, at the time some or all of the Common Stock issued under the Plan is disposed of, or at the time of any other relevant taxable event, the participant must make adequate provision for the Company's or Employer's federal, state, or any other tax liability payable to any authority, national insurance, social security or other tax withholding obligations, if any, which arise upon the relevant taxable event.  At any time, the Company or the Employer may, but will not be obligated to, withhold from the participant's compensation the amount necessary for the Company or 

the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Eligible Employee.
7.Grant of Option.  On the Offering Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such Eligible Employee's contributions accumulated prior to such Exercise Date and retained in the Eligible Employee's account as of the Exercise Date by the applicable Purchase Price; provided that in no event will an Eligible Employee be permitted to purchase during each Offering Period more than twenty thousand (20,000) shares of the Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13.  The Eligible Employee may accept the grant of such option (i) with respect to the first Offering Period under the Plan, by submitting a properly completed subscription agreement in accordance with the requirements of Section 5(a) on or before the last day of the Enrollment Window, and (ii) with respect to any future Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5(b).  The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that a participant may purchase during each Offering Period.  Exercise of the option will occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10.  The option will expire on the last day of the Offering Period.
8.Exercise of Option.
(a)Unless a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option will be purchased for such participant at the applicable Purchase Price with the accumulated contributions in his or her account.  No fractional shares of Common Stock will be purchased; any contributions accumulated in a participant's account which are not sufficient to purchase a full share will be retained in the participant's account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10.  Any other funds left over in a participant's account after the Exercise Date will be returned to the participant.  During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her.
(b)Notwithstanding any contrary Plan provision, if the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion provide that the 

Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and either (x) continue all Offering Periods then in effect or (y) terminate any or all Offering Periods then in effect pursuant to Section 20.  The Company may make a pro rata allocation of the shares available on the Offering Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company's stockholders subsequent to such Offering Date.
9.Delivery.  As soon as administratively practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator.  The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer.  The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying or other dispositions of such shares.  No participant will have any voting, dividend, or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9.
10.Withdrawal.
(a)Pursuant to procedures established by the Administrator, a participant may withdraw all but not less than all the contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company's payroll office (or its designee) a written notice of withdrawal in the form prescribed by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator.  All of the participant's contributions credited to his or her account will be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant's option for the Offering Period will be automatically terminated, and no further payroll deductions or other contributions for the purchase of shares will be made for such Offering Period.  If a participant withdraws from an Offering Period, payroll deductions or other contributions will not resume at the beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in accordance with the provisions of Section 5.
(b)A participant's withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in 

succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.
11.Termination of Employment.  Upon a participant's ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the contributions credited to such participant's account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such participant's option will be automatically terminated.
12.Interest.  No interest will accrue on the contributions of a participant in the Plan, unless required by Applicable Laws.
13.Stock.
(a)Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of Common Stock which will be made available for sale under the Plan will be 20,353,896 shares.  Any or all of such shares of Common Stock may be granted under the Code Section 423(b) Component.
(b)Until the shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a participant will only have the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares.
(c)Shares of Common Stock to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse.
14.Administration.  The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws.  The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.  Notwithstanding any provision to the contrary in this Plan, the Administrator may adopt rules, procedures or sub-plans relating to the operation and administration of the Plan to accommodate the specific requirements of Applicable Laws and procedures for jurisdictions outside of the United States.  Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules, procedures and sub-plans regarding eligibility to participate, the definition of Compensation, handling of payroll deductions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates which vary with local requirements.

15.Designation of Beneficiary.
(a)Except as otherwise provided by the Administrator, a participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash.  In addition, except as otherwise provided by the Administrator, a participant may designate a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option.  If a participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(b)Such designation of beneficiary may be changed by the participant at any time by notice in a form determined by the Administrator.  In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(c)All beneficiary designations under this Section 15 will be made in such form and manner as the Administrator may prescribe from time to time.
16.Transferability.  Neither contributions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant.  Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10.
17.Use of Funds.  The Company may use all contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such payroll deductions, unless required by Applicable Laws.  Until shares of Common Stock are issued, participants will only have the rights of an unsecured creditor with respect to such shares.
18.Reports.  Individual accounts will be maintained for each participant in the Plan.  Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of contributions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any.
		
	19.
	Adjustments, Dissolution, Liquidation, Merger or Change in Control.

(a)Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall, in such manner as it may deem equitable, adjust the number and class of Common Stock which may be delivered under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Section 7.
(b)Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a new Exercise Date (the “New Exercise Date”), and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator.  The New Exercise Date will be before the date of the Company's proposed dissolution or liquidation.  The Administrator will notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
(c)Merger or Change in Control.  In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a new Exercise Date (the “New Exercise Date”) and will end on the New Exercise Date.  The New Exercise Date will occur before the date of the Company's proposed merger or Change in Control.  The Administrator will notify each participant in writing prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
20.Amendment or Termination.
(a)The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason.  If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire in 

accordance with their terms (and subject to any adjustment pursuant to Section 19).  If the Offering Periods are terminated prior to expiration, all amounts then credited to participants' accounts which have not been used to purchase shares of Common Stock will be returned to the participants (without interest thereon, except as otherwise required under Applicable Laws) as soon as administratively practicable.
(b)Without stockholder consent and without limiting Section 20(a), the Administrator will be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll deductions or contributions in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan.
(c)In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
(i)amending the Plan to conform with the safe harbor definition under Statement of Financial Accounting Standards 123(R), including with respect to an Offering Period underway at the time;
(ii)altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;
(iii)shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action;
(iv)reducing the maximum percentage of Compensation a participant may elect to set aside as payroll deductions; and
(v)reducing the maximum number of Shares a participant may purchase during any Offering Period or Purchase Period.
Such modifications or amendments will not require stockholder approval or the consent of any Plan participants.
21.Notices.  All notices or other communications by a participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and 

manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22.Conditions Upon Issuance of Shares.  Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
23.Term of Plan.  The Plan will become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company.  It will continue in effect for a term of ten (10) years, unless sooner terminated under Section 20.
24.Stockholder Approval.  The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board.  Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
25.Automatic Transfer to Low Price Offering Period.  To the extent permitted by Applicable Laws, if the Fair Market Value of the Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock on the Offering Date of such Offering Period, then all participants in such Offering Period will be automatically withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period.
26.Severability.  If any particular provision of this Plan is found to be invalid or unenforceable, such provision shall not affect the other provisions of the Plan, but the Plan shall be construed in all respects as if such invalid provision had been omitted.
27.Section 409A.  The Code Section 423(b) Component is exempt from the application of Section 409A of the Code.  The Non-423(b) Component is intended to be exempt from Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent.  In the case of a participant who would otherwise be subject to Section 409A of the Code, to the extent an option to purchase Common Stock or the payment, settlement or deferral thereof is subject 

to Section 409A of the Code, the option to purchase Common Stock shall be granted, paid, exercised, settled or deferred in a manner that will comply with Section 409A of the Code, including the final regulations and other guidance issued with respect thereto, except as otherwise determined by the Administrator.  Notwithstanding the foregoing, the Company shall have no liability to a participant or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Administrator with respect thereto.
28.Governing Law.  The provisions of the Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of law rules.ex101to8k07962_04102014.htm

Exhibit 10.1

 

 

 

First Financial Bank, National Association

	
Borrowers:

	
Environmental Quality Management, Inc.

	
  

	
EQ Engineers, LLC

	
  

	
Vertterre Corporation

Loan Number: 820106477

 

THIRD AMENDMENT TO LOAN AGREEMENT

THIS THIRD AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is executed as of April 8, 2014 (the “Signature Date”), and dated to be effective as of April 1, 2014 (the “Effective Date”), by and among ENVIRONMENTAL QUALITY MANAGEMENT, INC., an Ohio corporation (“EQMI”), EQ ENGINEERS, LLC, an Indiana limited liability company (“EQE”), VERTTERRE CORPORATION, a New Mexico corporation (“Vertterre”; and together with EQMI and EQE, each a “Borrower” and collectively, the “Borrowers”), and FIRST FINANCIAL BANK, NATIONAL ASSOCIATION, a national banking association (“Bank”).  Each Borrower and Bank hereby agrees as follows:

 

Preliminary Statements

 

A.           Borrowers and Bank are parties to that certain Loan Agreement dated as of September 28, 2012 (as amended, the “Loan Agreement”).  Capitalized terms which are used, but not defined, in this Amendment will have the meanings given to them in the Loan Agreement.

 

B.           Borrowers have requested that Bank (i) provide additional Revolving Loan Availability under the Borrowing Base in an aggregate amount not to exceed $1,000,000 for the limited period beginning on April 1, 2014 and continuing through, and including, May 30, 2014, (ii) modify the calculation of the Fixed Charge Coverage Ratio for the Fiscal Quarters ending on March 31, 2014 and June 30, 2014, and (iii) increase the annual capital expenditures threshold from $250,000 to $500,000.  Bank is willing to consent to such requests and amend the Loan Agreement to reflect such modifications, all on the terms, and subject to the conditions, of this Amendment.

 

Statement of Agreement

 

In consideration of the mutual covenants and agreements set forth in this Amendment, and for other good and valuable consideration, Bank and each Borrower hereby agree as follows:

 

1.           Amendments to Loan Agreement.  Subject to the satisfaction of the conditions of this Amendment, the Loan Agreement is hereby amended as follows:

 

1.1           The following new definitions are hereby added to Section 1.1 of the Loan Agreement, in their proper alphabetical order, to provide in their entirety as follows:

 

“Alternate LIBOR Source” means any successor or replacement of ICE Benchmark Administration Limited, in each case, as approved by Bank.

 

“Approved Bloomberg Successor” means any successor or replacement of Bloomberg LP, in each case, as approved by Bank.

 

“Temporary Advance Cap” means an aggregate amount equal to $1,000,000.

 

“Temporary Overadvance Availability” has the meaning given in Section 2.2(ii).

 

“Temporary Overadvance Termination Date” has the meaning given in Section 2.2(ii).

 

“Third Amendment” means the Third Amendment to this Agreement dated to be effective as of the Third Amendment Effective Date.

 

“Third Amendment Effective Date” means April 1, 2014.

 

“Third Amendment Signature Date” means April 8, 2014.

 

  

  

  

 

1.2           The following definitions in Section 1.1 of the Loan Agreement are hereby amended in their entirety by substituting the following in their respective places:

 

“Borrowing Base” means, as of any time, an amount in Dollars equal to:

 

(i)           the Receivables Advance Rate applied to the then Net Amount of Eligible Receivables of Borrowers then outstanding;

 

plus           (ii)           the lesser of (a) $4,500,000 or (b) the Unbilled AR Advance Rate applied to the then Net Amount of Eligible Unbilled Revenue of Borrowers then outstanding;

 

plus           (iii)          the Temporary Overadvance Availability to the extent, for the time period, and in the manner provided for, in Section 2.2(ii); and

 

less           (iv)           the then Reserve Amount.

 

“LIBOR Rate” means the rate (adjusted for reserves if Bank is required to maintain reserves with respect to relevant advances) (rounded up to the nearest 1/8 of 1%) fixed by the ICE Benchmark Administration Limited (or any Alternate LIBOR Source) at approximately 11:00 a.m., London time (or at the relevant time established by an Alternate LIBOR Source or by Bank), relating to quotations for the one month London InterBank Offered Rates on U.S. Dollar deposits, as displayed by Bloomberg LP (or any Approved Bloomberg Successor), or such rate as shall be determined in good faith by Bank from such sources as it shall determine to be comparable to Bloomberg LP (or any Approved Bloomberg Successor), in effect two New York Banking Days prior to the beginning of each calendar month.  Notwithstanding the foregoing, at any time during which a Rate Management Agreement is then in effect with respect to the Loans or any portion thereof, the provision concerning rounding up to the nearest 1/8 of 1% contained in this definition shall be disregarded, and this provision shall not be applied again until such time as the Rate Management Agreement is no longer in effect.

 

1.3           Section 2.2 of the Loan Agreement is hereby amended in its entirety by substituting the following in its place:

 

2.2           Revolving Loans; Temporary Overadvance Availability.

 

(i)           Revolving Loans.  Until the termination of this Agreement pursuant to Section 11 and subject to the other terms and conditions of this Agreement, Bank will make loans (“Revolving Loans”) to Borrowers, which loans Borrowers may reborrow on the repayment thereof, in an amount which may not as of any time exceed an amount equal to the Revolving Loan Availability then in effect.  In no event will any Revolving Loan be made if a Borrowing Base Deficiency would be created thereby.

 

(ii)          Temporary Overadvance Availability.  Subject to the other terms and conditions of this Agreement, Bank will provide to Borrowers, and Borrowers may draw, additional Revolving Loan Availability under the line of credit with Bank (as in effect on a date, the “Temporary Overadvance Availability”).  The Temporary Overadvance Availability will be added to the Borrowing Base as provided in the definition of Borrowing Base in Section 1.1.  The Temporary Overadvance Availability will not exceed an amount, as at any time of determination, equal to: (a) the Temporary Advance Cap less (b) the sum of all outstanding amounts drawn (or deemed to be drawn) under the Temporary Overadvance Availability as of each date of drawing by any Borrower of the Temporary Overadvance Availability.  Subject to the other terms and conditions of this Agreement, the Temporary Overadvance Availability will be available until 5:00 p.m., Cincinnati, Ohio time on: (1) May 30, 2014, or (2) such later date as Bank may, in its sole discretion, designate to Borrowers in a writing signed by Bank after the Third Amendment Signature Date (the “Temporary Overadvance Termination Date”).  As of the Temporary Overadvance Termination Date, the entire unpaid principal balance of, and all accrued interest on, that portion of the Revolving Loans attributable to the Temporary Overadvance Availability, if not sooner repaid, will be due and payable in full and the Temporary Advance Cap will be equal to zero (0) Dollars; and, for purposes of this Agreement, the other Loan Documents and availability under the Borrowing Base, the Temporary Overadvance Availability will be terminated.  If, by 5:00 p.m., Cincinnati, Ohio time on the Temporary Overadvance Termination Date, the entire unpaid principal balance of, and all accrued interest on, that portion of the Revolving Loans attributable to the Temporary Overadvance Availability is not repaid in full, then it will be an immediate Event of Default.   For all purposes of this Agreement and the other Loan Documents, Borrowers will be deemed to have made a drawing of the Temporary Overadvance Availability, and the Temporary Overadvance Availability will be deemed outstanding, in the amount by which the outstanding balance of the Revolving Loans, as at any time of determination, exceeds availability under the Borrowing Base determined under clauses (i) and (ii) minus (iv) of the definition of Borrowing Base in Section 1.1 (i.e., the Borrowing Base determined exclusive of the Temporary Overadvance Availability).

 

  

  

  

 

1.4           Section 10.28 of the Loan Agreement is hereby amended in its entirety by substituting the following in its place:

 

10.28           Financial Covenants.  Borrowers will observe, perform and comply with all of the following financial covenants (collectively, the “Financial Covenants”).  The Financial Covenants will be based on Borrowers’ financial performance unconsolidated with any other Person.

 

(i)           Borrowers will not permit Borrowers’ Fixed Charge Coverage Ratio to be less than:

 

(a)           0.75 to 1 for the Fiscal Quarter ended March 31, 2014, as measured for the period beginning on October 1, 2013 through, and including, March 31, 2014;

 

(b)          1.20 to 1 for the Fiscal Quarter ending on June 30, 2014, as measured for the period beginning on October 1, 2013 through, and including, June 30, 2014; and

 

(c)           1.20 to 1 for any Fiscal Quarter or Fiscal Year ending on or after September 30, 2014, as measured on a rolling twelve month basis; and

 

(ii)           Borrowers will not purchase or otherwise acquire, or commit to purchase or otherwise acquire, any fixed or capital asset by the expenditure of cash or the incurrence of indebtedness, including the capitalized value of any leases in the aggregate, except for the purchase or other acquisition of any assets the costs of which do not exceed, in the aggregate for all Borrowers, $500,000 as of the end of the Fiscal Year ending on or after December 31, 2014.

 

1.5           Exhibit C to the Loan Agreement is hereby amended in its entirety by substituting the document attached hereto as Exhibit C in is place.

 

2.           Conditions Precedent.

 

2.1           With the signing of this Amendment, and as a condition of this Amendment, Borrowers will deliver to Bank, all in form and substance satisfactory to Bank in its sole discretion, all documents, instruments and agreements deemed necessary or desirable by Bank to effect the amendments to Borrowers’ credit facilities with Bank contemplated by this Amendment.

 

2.2           With the signing of this Amendment, and as a condition of this Amendment, Borrowers will deliver to Bank, and will cause all third parties to deliver to Bank, all in form and substance satisfactory to Bank in its sole discretion: (a) a Reaffirmation of Guaranty, dated as of the Signature Date, made by Parent for the benefit of Bank; (b) a Reaffirmation of Guaranty, dated as of the Signature Date, made by Grand Prairie and LGP in favor of Bank; (c) a Reaffirmation of Management Fee Subordination Agreement, dated as of the Signature Date, made by the Management Company for the benefit of Bank; (d) a Reaffirmation to Subordination Agreement (as it pertains to the Additional Beacon Noteholder Subordinated Debt), dated as of the Signature Date, between Bank and Subordinated Lender Agent (as defined in the Additional Beacon Noteholder Subordination Agreement); (e) a Reaffirmation to Subordination Agreement (as it pertains to the December 2011 Beacon Noteholder Subordinated Debt), dated as of the Signature Date, between Bank and Subordinated Lender Agent (as defined in the December 2011 Beacon Noteholder Subordination Agreement); and (f) all other documents, instruments and agreements deemed necessary or desirable by Bank to effect the amendments to Borrowers’ credit facilities with Bank contemplated by this Amendment.

 

  

  

  

 

2.3           With the signing of this Amendment, and as a condition of this Amendment, Borrowers will deliver to Bank, and will cause all third parties to deliver to Bank, all in form and substance satisfactory to Bank in its sole discretion, all documents, instruments, agreements, UCC amendments, UCC termination statements, certificates, opinions, payoff letters and other materials deemed necessary or desirable by Bank in connection with this Amendment and the transactions contemplated hereby, including those on the closing checklist, if any, prepared by counsel to Bank.

 

3.           Reaffirmation of Security; Joint Obligations.

 

3.1           Borrowers and Bank hereby expressly intend that this Amendment shall not in any manner (a) constitute the refinancing, refunding, payment or extinguishment of the Obligations evidenced by the existing Loan Documents; (b) be deemed to evidence a novation of the outstanding balance of the Obligations; or (c) replace, impair, or extinguish the creation, attachment, perfection or priority of the Liens on the Collateral granted pursuant to any Loan Document evidencing, governing or creating a Lien on the Collateral.  Borrowers hereby ratify and reaffirm any and all grants of Liens to Bank on the Collateral as security for the Obligations, and acknowledge and confirm that the grants of the Liens to Bank on the Collateral: (i) represent continuing Liens on all of the Collateral, (ii) secure all of the Obligations, and (iii) represent valid and first priority Liens on all of the Collateral except to the extent of any Permitted Liens.

 

3.2            All of the obligations of Borrowers under the Loan Documents are joint, several, and primary.  No Borrower will be or be deemed to be an accommodation party with respect to any of the Loan Documents.

 

4.           Representations.  To induce Bank to accept this Amendment, each Borrower hereby represents and warrants to Bank as follows:

 

4.1           Each Loan Party has full power and authority to enter into, and to perform its obligations under, as applicable, this Amendment, and the other documents, instruments and certificates being executed and/or delivered in connection herewith, including those contemplated in Section 2.2 (collectively, the “Amendment Documents”) and the execution and delivery of, and the performance of its obligations under and arising out of, the applicable Amendment Documents have been duly authorized by all necessary corporate and limited liability company action, as applicable.

 

4.2           Each Amendment Document, as applicable, constitutes the legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally.

 

4.3           Such Loan Party’s representations and warranties contained in the Loan Documents are complete and correct in all material respects as of the Signature Date with the same effect as though such representations and warranties had been made again on and as of the Signature Date, subject to those changes as are not prohibited by, or do not constitute Events of Default under, the Loan Agreement.

 

4.4           As of the Signature Date, no Event of Default has occurred and is continuing.

 

5.           Acknowledgment Regarding Fiscal Quarter Ended March 31, 2014. Borrowers hereby acknowledge and agree that: (a) the Fiscal Quarter ended March 31, 2014 has occurred prior to the Signature Date and (b) notwithstanding such occurrence, the Financial Covenants shall be tested as of the end of such Fiscal Quarter ended March 31, 2014, as set forth in, and in accordance with, the Loan Agreement, as amended by this Amendment.

 

6.           Amendment Fee; Costs and Expenses.  As a condition of this Amendment, Borrowers will (a) pay Bank an amendment fee in the amount of $30,000, payable in full on the Signature Date; such fee, when paid, will be fully earned and non-refundable under all circumstances; and (b) pay and reimburse Bank, promptly upon Bank’s request, for the costs and expenses incurred by Bank in connection with this Amendment and the transactions contemplated hereby, including, without limitation, reasonable Attorneys’ Fees.

 

  

  

  

 

7.           Entire Agreement.  This Amendment, together with the other Amendment Documents, sets forth the entire agreement of the parties with respect to the subject matter of this Amendment and supersedes all previous understandings, written or oral, in respect of this Amendment.

 

8.           Release.  Each Borrower, on such Borrower’s behalf and, as applicable, on behalf of such Borrower’s officers, directors, members, managers, shareholders, administrators, heirs, legal representatives, beneficiaries, affiliates, subsidiaries, successors and assigns, hereby voluntarily releases and forever discharges Bank and its direct or indirect parent corporation, all direct or indirect affiliates of such parent corporation, and all of the foregoing’s respective directors, officers, employees, attorneys and legal representatives, or the heirs, administrators, successors or assigns of any of them (collectively, “Bank Parties”) from any and all claims, counterclaims, setoffs, actions or causes of action, damages or liabilities of any kind or nature whatsoever, whether in law or in equity, in contract or in tort, whether now accrued or hereafter maturing that may be asserted against the Bank Parties (or any one or more of them), whether known or unknown, that directly or indirectly arise out of, are based upon or are in any manner connected with any Prior Related Event.  “Prior Related Event” means any transaction, event, circumstance, action, failure to act, occurrence of any type or sort, whether known or unknown, which occurred, existed, was taken, was permitted or begun in accordance with, pursuant to or by virtue of (a) any of the terms of any Loan Document, (b) any actions, transactions, matters or circumstances related thereto, (c) the conduct of the relationship between any Bank Party and any Loan Party, or (d) any other actions or inactions by any Bank Party, all prior to the Signature Date.  The foregoing release does not release or discharge, or operate to waive performance by, Bank of its express agreements and obligations stated in the Loan Documents on and after the Signature Date.

 

9.           Default.  Any default by any Borrower in the performance of such Borrower’s obligations under any Amendment Document shall constitute an Event of Default under the Loan Agreement.

 

10.        Continuing Effect of Loan Agreement; Reaffirmation of Loan Documents.  Except as expressly amended hereby, all of the provisions of the Loan Agreement are ratified and confirmed and remain in full force and effect.  The Loan Documents, except as amended by this Amendment or, as applicable, as amended (or amended and restated) by one of the other Amendment Documents, shall remain in full force and effect, and each of them is hereby ratified and confirmed by Borrowers and Bank.

 

11.        One Agreement; References; Fax Signature.  The Loan Agreement, as amended by this Amendment, will be construed as one agreement.  All references in any of the Loan Documents to the Loan Agreement will be deemed to be references to the Loan Agreement as amended by this Amendment.  Any Amendment Document may be signed by facsimile signatures or other electronic delivery of an image file reflecting the execution hereof or thereof, and, if so signed: (a) may be relied on by each party as if the document were a manually signed original and (b) will be binding on each party for all purposes.

 

12.        Captions. The headings to the Sections of this Amendment have been inserted for convenience of reference only and shall in no way modify or restrict any provisions hereof or be used to construe any such provisions.

 

13.        Counterparts.  This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 

14.        Governing Law; Severability.  This Amendment shall be governed by and construed in accordance with the internal laws of the State of Ohio (without regard to conflicts of law principles). If any term of this Amendment is found invalid under Ohio law or laws of mandatory application by a court of competent jurisdiction, the invalid term will be considered excluded from this Amendment and will not invalidate the remaining terms of this Amendment.

 

15.        WAIVER OF JURY TRIAL. BORROWERS AND BANK EACH WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AMENDMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

[Signature Page Follows]

 

  

  

  

IN WITNESS WHEREOF, Borrowers and Bank have executed this Amendment by their duly authorized  officers to be effective as of the Effective Date.

	  	
ENVIRONMENTAL QUALITY MANAGEMENT, INC.

	  	  
	  	
By:

	

/s/ Robert R. Galvin

	  	  	
Robert R. Galvin, Chief Financial Officer

	  	
EQ ENGINEERS, LLC

	  	  
	  	
By:

	

/s/ Jack S. Greber

	  	  	
Jack S. Greber, Manager

	  	
VERTTERRE CORPORATION

	  	  
	  	
By:

	

/s/ Jon Colin

	  	  	
Jon Colin, Chief Executive Officer

 

	
BANK:

	  
	
FIRST FINANCIAL BANK, NATIONAL ASSOCIATION

	  
	  
	
By:

	

/s/ Thomas J. Fischer

	  	
Thomas J. Fischer, Vice President

  

  

  

 

EXHIBIT C

(Officer’s Certificate)

I, _____________________, the Chief Financial Officer of Environmental Quality Management, Inc., an Ohio corporation (“EQMI”), EQ Engineers, LLC, an Indiana limited liability company (“EQE”), and Vertterre Corporation, a New Mexico corporation (and, together with EQMI and EQE, each a “Borrower” and collectively, “Borrowers”), hereby certify to First Financial Bank, National Association, a national banking association (“Bank”), that the attached [choose, as applicable: financial statements/projections/financial covenant calculation comparisons on attached Schedule 1] dated ______________, 20__ for the Borrowers are accurate, complete and fairly present the matters stated therein and have been prepared on a basis consistent with such [choose, as applicable: financial statements/projections/financial covenant comparisons on attached Schedule 1] prepared for prior periods and in accordance with the Loan Agreement dated as of September 28, 2012, as amended by the First Amendment to Loan Agreement dated as February 27, 2013, the Second Amendment to Credit Agreement dated as of December 31, 2013, and the Third Amendment to Credit Agreement dated to be effective as of April 1, 2014 (as amended, and as may be further amended, supplemented, modified, restated or replace from time to time, the “Loan Agreement”) and with GAAP, as defined in the Loan Agreement.  I further certify that no “Event of Default” as defined in the Loan Agreement currently exists.  This certification is made pursuant to Section 8.9 of the Loan Agreement.

	  	  
	  	  
	  	
By:

	  
	  	
Name:

	  
	  	  	
Chief Financial Officer of

Environmental Quality Management, Inc., EQ 

Engineers, LLC, and Vertterre Corporation

	  	  	  
	  	
Date:

	  

Schedule:

1 – Financial Covenant Calculations

 

  

  

  

Schedule 1

to

Officer’s Certificate

(Financial Covenant Calculations1)

I.           Fixed Charge Coverage Ratio2:   [QUARTERLY]

	
A.           Required Covenant:

	  
	
Computation Date

	
Consolidated Fixed Charge 

Coverage Ratio

	
As of the end of the Fiscal Quarter ending on March 31, 2014

	
0.75 to 1

	
As of the end of any Fiscal Quarter

ending on or after June 30, 2014

	
1.20 to 1

	
B.           Actual Computation:                                        ________________: 1

	
1.

	
Borrowers’ Operating Cash Flow (as computed in Section I(C) below)

	
$________________

 

	  	
Divided by:

	  
	
2.

	
Fixed charges (as computed in Section I(D) below)

	
$________________

 

	
3.

	
Ratio (1 ÷ 2) =

	
________________

 

	
C.           Borrowers’ Operating Cash Flow Computation – for the applicable calculation period:

	
1.

	
EBITDA

	
$________________

 

	  	
Plus or Minus

	  
	
2.

	
Income taxes paid in cash

	
$________________

 

	
3.

	
Unfinanced capital expenditures

	
$________________

 

	
4.

	
Other non-cash charges and excluding extraordinary items, including any gain or loss from the sale or disposition of capital assets

	
$________________

	
5.

	
Total (1 - 2 - 3+/-4) =

	
$________________

 

	
D.           Fixed Charges Computation – for the applicable calculation period:

	
1.

	
Distributions to EQMI’s shareholders

 

	
$________________

	
2.

	
Paid principal payments, and scheduled principal payments (whether or not paid), on Indebtedness for borrowed money

	
$________________

	
3.

	
Paid principal payments, and scheduled principal payments (whether or not paid), on capital lease obligations

	
$________________

	
4.

	
Interest expense

	
$________________

	
5.

	
Total (1 + 2 + 3 + 4) =

 

	
$________________

 

1 Per definitions in, and as determined in accordance with, the Loan Agreement.  

2 With respect to the Fiscal Quarter(s), and, as applicable, Fiscal Years, ending on:

    (a)           March 31, 2014, the Fixed Charge Coverage Ratio will be measured for the period beginning on October 1, 2013 through, and including, March 31, 2014;

    (b)           June 30, 2014, the Fixed Charge Coverage Ratio will be measured for the period beginning on October 1, 2013 through, and including, June 30, 2014; and

    (c)           on and after September 30, 2014, the Fixed Charge Coverage Ratio will be measured on a rolling twelve month basis.

 

  

  

  

 

II.           Capital Expenditures:    [ANNUALLY]

 

	
A.           Required Covenant:

	  
	
Computation Date

	
Maximum Aggregate 

Capital Expenditures

	
For the Fiscal Year ended December 31, 2013

	
$250,000

	
For any Fiscal Year ending on or after December 31, 2014

	
$500,000

	  	  
	
B.

	
Actual Computation for the applicable calculation period: $________________

	  	
(as determined in accordance with the Loan Agreement).

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