Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 6, 2023

SMG INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Delaware	000-54391	51-0662991
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

20475 State Hwy 249, Suite 450
Houston, Texas		77070
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(713-955-3497)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
None		N/A		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01. Entry Into a Material Definitive Agreement.

Transaction Agreement

On July 7, 2023, SMG Industries Inc. (the “Company”) entered into a transaction agreement (the “Transaction Agreement”) with Bryan S. Barnhart (“Bryan”), Timothy W. Barnhart (“Tim”), Timothy W. Barnhart, as Trustee of the Timothy W. Barnhart 2017 Irrevocable Trust (the “Trust,” and collectively with Bryan and Tim, the “Sellers”) and certain affiliates, pursuant to which the Company agreed to acquire (the “Acquisition”) from the Sellers, either directly or by merger, all of the membership interests of: (i) Barnhart Fleet Maintenance, LLC, a Pennsylvania limited liability company (“Fleet”), (ii) Barnhart Transportation, LLC, a Pennsylvania limited liability company (“Transportation”), (iii) Lake Shore Global Solutions LLC, a Pennsylvania limited liability company (“Global”), (iv) Lake Shore Logistics, LLC, a Pennsylvania limited liability company (“Logistics”), (v) Legend Equipment Leasing, LLC, a Pennsylvania limited liability company (“Legend”), and (vi) Route 20 Tank Wash LLC, a Pennsylvania limited liability company (“Wash,” and collectively with Fleet, Transportation, Global, Logistics and Legend, the “Barnhart Companies,” and each a “Barnhart Company”).

At the closing of the Acquisition (the “Closing”), the Company purchased from Sellers all of the membership interests of each of Fleet, Transportation, Global, Logistics, and Wash. Skyline Merger Sub, Inc., a wholly owned subsidiary of the Company, merged with and into Legend’s holding company, Legend Holding RO, Inc., a Delaware limited liability company (“Legend Holding”), with Legend Holding surviving the merger as a wholly owned subsidiary of the Company. Legend Holding subsequently merged with and into Skyline Holding, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Skyline Holding”), with Skyline Holding surviving the merger. Following the Closing, each Barnhart Company became a direct and wholly owned subsidiary of the Company, except for Legend, which became a direct and wholly owned subsidiary of Skyline Holding.

The Company paid a purchase price (the “Purchase Price”) for the Acquisition consisting of (i) $26.0 million in cash, subject to customary net working capital, cash, indebtedness, and transaction expense adjustments, less (A) $3.0 million for the Indemnification Escrow Amount (as defined below) and $250,000 for the purchase price adjustment escrow amount, (ii) $3.0 million in the form of an unsecured, non-negotiable promissory note (the “Promissory Note”) that (A) will bear interest at a fixed rate of six percent (6%) per annum, and (B) will mature on the 72-month anniversary of the Closing, with principal and accrued interest to be paid on the maturity date, and (C) will be subordinated to all senior indebtedness of the Company to the extent required by the holders thereof, (iii) 77 million shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), and (iv) 500 shares of the Company’s 5% Series C Convertible Preferred Stock, par value $0.001 per share (“Series C Preferred Stock”), with a stated value of $10,000 per share (the “Stated Value”).

An indemnification escrow in the amount of $3.0 million (the “Indemnification Escrow Amount”) was held back from the Purchase Price paid at the Closing and retained in an escrow account as security (but not the sole source of recovery) for the performance of the indemnification and other covenants, obligations and agreements of the Sellers arising under the Transaction Agreement, any other transaction agreement or otherwise. Any portion of the Indemnification Escrow Amount not used to satisfy indemnification claims will be released to the Sellers on the 18-month anniversary of the Closing. A purchase price adjustment escrow in the amount of $250,000 was held back from the Purchase Price paid at the Closing and retained in an escrow account as a source of recovery for the purchase price adjustment process.

The Transaction Agreement contains customary representations and warranties, covenants and indemnification provisions for a transaction of this nature, including, without limitation, confidentiality, non-compete and non-solicitation undertakings by the Sellers.

The Company funded a portion of the cash consideration payable at Closing with the net proceeds of the Private Placement (as defined below) and the remainder from cash received pursuant to the Credit Agreements (as defined below).

The foregoing description of the Transaction Agreement is a summary, does not purport to be complete and is qualified by reference to the full text of the Transaction Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

The Transaction Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Transaction Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The Company does not believe that these schedules contain information that is material to an investment decision. Investors are not third-party beneficiaries under the Transaction Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective affiliates.

Securities Purchase Agreement

On July 7, 2023, the Company entered into a securities purchase agreement (the “SPA”) with Steven H. Madden, a director and the Company’s Chief Transition Officer. The SPA provides for the sale of up to an aggregate of 1,500 shares (“Shares”) of Series C Preferred Stock, at a price of $10,000 per share. Mr. Madden purchased 500 Shares for aggregate gross proceeds to the Company of $5.0 million (the “Private Placement”), while the remaining 1,000 Shares may be issued and sold in one or more subsequent closings on or before August 31, 2023. Because Mr. Madden is an affiliate of the Company, his participation in the Private Placement was approved by the Board of Directors of the Company (the “Board”). The Private Placement closed with respect to Mr. Madden’s Shares on July 7, 2023.

The Series C Preferred Stock is convertible, from time to time at the option of the holder, into a number of shares of Common Stock equal to the quotient of (A) the sum of (x) the Stated Value of such share(s) of Series C Preferred Stock to be converted as of the date of conversion plus any accrued dividends thereon and (B) a conversion price of $0.25 per share of Common Stock (the “Conversion Price”). To the extent not already converted on the 24-month anniversary of the Closing, the Series C Preferred Stock and any accrued dividends thereon will automatically convert into a number of shares of Common Stock equal to the quotient of (A) the sum of (x) the Stated Value of such share(s) of Series C Preferred Stock subject to automatic conversion plus any accrued dividends thereon and (B) the Conversion Price . The Preferred Stock will accrue a 5.0% annual dividend that is only payable in the form of Common Stock on the 24 month anniversary of the Closing Date (unless otherwise earlier converted into Common Stock at the option of the holder) with the number of shares of Common Stock to be issued to be determined by dividing such accrued dividend by the Conversion Price.

Upon the liquidation, dissolution or winding up of the Company, after payment to the holders of the Company’s outstanding 3.0% Series A Secured Convertible Preferred Stock (the “Series A”) and 5.0% Series B Convertible Preferred Stock (the “Series B”), each holder of Series C Preferred Stock will be entitled to receive a preferential amount in cash equal to $10,000 per share, plus all accrued and unpaid dividends. The Series C Preferred Stock will rank senior to all classes of Common Stock and each other class of capital stock of the Company, except the Series A and Series B, and has the right to vote on all matters submitted to a vote of the holders of Common Stock on an as converted basis.

The parties to the SPA have each made customary representations, warranties and covenants that are typical for transactions of this type. The net proceeds of the Private Placement shall be used by the Company for general corporate purposes, working capital, or other related business as approved by the Board. Pursuant to the SPA, the Company also agreed to use reasonable efforts to file a registration statement covering the shares of Common Stock underlying the Shares within 150 calendar days of the Closing.

The foregoing description of the SPA is a summary, does not purport to be complete and is qualified by reference to the full text of the SPA, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Notices to Convert Promissory Notes

On or about July 7, 2023, the Company entered into Notices to Convert Promissory Note(s) with holders of certain convertible and non-convertible promissory notes (the “Notes”) issued by the Company (the “Notices”), as further described in the Company’s Information Statement, included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on June 16, 2023 (the “Information Statement”). Upon the conversion of approximately $23.2 million of principal and accrued, unpaid interest due on the Notes on July 7, 2023, the Company issued 141,829,788 shares of Common Stock, including 72,929,300 shares to Mr. Madden and his affiliates, 22,512,474 shares to James E. Frye, 13,400,800 shares to Newton Dorsett, 11,997,828 shares to Richard W. Fallin, 6,107,186 shares to Brady Crosswell, 5,289,788 shares to Dane Stewart, 3,207,368 shares to Amerisource Funding, Inc. and Amerisource Leasing Corporation, and 740,972 shares to George Gilman, at a conversion price of $0.25 per share for non-convertible promissory notes and at a conversion price between $0.10 and $0.25 per share for the convertible promissory notes, based upon the underlying conversion price(s) of such debt (the “Conversion”). The foregoing description of the Notices is a summary, does not purport to be complete and is qualified by reference to the full text of the form of Notice, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

The information in Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

Item 2.01. Completion of a Material Acquisition.

The information in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.01.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Term Loan

On July 7, 2023, the Company, 5J Trucking, LLC, 5J Oilfield Services, LLC, 5J Specialized LLC, 5J Transportation LLC, 5J Logistics Services LLC, 5J Driveaway LLC and, upon the consummation of the Acquisition, the Barnhart Companies (collectively, the “Borrowers”) entered into a Credit Agreement (the “Term Loan Credit Agreement”) among the Borrowers, the other loan parties party thereto from time to time, the lenders party thereto from time to time and Great Rock Capital Partners Management, LLC (“Great Rock”), as the administrative agent.

The Term Loan Credit Agreement provides for a $31.7 million term loan (the “Term Loan”). The availability of the Term Loan on the date of Closing was based on 80% of the net orderly liquidation value of certain eligible equipment and rolling stock of the Borrowers (the “Term Loan Borrowing Base”). The principal amount of the Term Loan shall be repaid in equal monthly installments of $396,075 commencing on September 1, 2023, and the Borrowers may also be required to make certain other mandatory prepayments from time to time, including with a required prepayment premium, if the Term Loan Borrowing Base does not support the existing amount of the Term Loan outstanding and for certain other prepayment events, including from dispositions of assets, casualty events and certain extraordinary events. Borrowings under the Term Loan Credit Agreement will bear interest at a fluctuating rate of interest per year based on a Term SOFR Rate (as defined in the Term Loan Credit Agreement) plus a margin of 6.50%, which Applicable Rate (as defined in the Term Loan Credit Agreement) may adjust lower (but no lower than 5.50%) based on the leverage ratio of the Borrowers and their subsidiaries commencing on the six-month anniversary of the date of Closing.

The Borrowers’ obligations to repay the amounts borrowed under the Term Loan Credit Agreement are secured by liens on substantially all of the assets of the Borrowers, including any rolling stock owned by the Borrowers. The Term Loan Credit Agreement contains customary representations, warranties, affirmative and negative covenants, limitations, and events of default for a transaction of this type, including maintenance of a minimum fixed charge coverage ratio of not less than 1.0 to 1.0, minimum EBITDA levels and minimum availability of not less than $3,750,000 at any time and other restrictions, including restrictions on net maximum capital expenditures as set forth in the Term Loan Credit Agreement.

In connection with the Term Loan and related transactions described in this Current Report on Form 8-K, the Company’s borrowings and obligations under the First Amended and Restated Commercial Promissory Note, dated September 7, 2021, in the original principal amount of $16,740,000 with Amerisource Funding, Inc. have been satisfied in full.

Asset Based Lending

Also on July 7, 2023, the Borrowers entered into a Credit Agreement (the “ABL Credit Agreement” and, collectively with the Term Loan Credit Agreement, the “Credit Agreements”) among the Borrowers, the other loan parties party thereto from time to time, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A. (“JPMorgan”), as the administrative agent.

The ABL Credit Agreement provides for a $25.0 million revolving credit agreement. Availability under the ABL Credit Agreement is based upon 90% of certain eligible accounts receivable of the Borrowers (the “ABL Borrowing Base”) and the ABL Borrowing Base supported borrowings of approximately $16.4 million as of the date of Closing. The Borrowers borrowed approximately $10.9 million under the ABL Credit Agreement on July 7, 2023, leaving approximately $5.5 million of availability. The maturity date of the ABL Credit Agreement is July 7, 2026, and all principal amounts are due and payable on the maturity date or, upon certain mandatory prepayment events, including if the ABL Borrowing Base no longer supports outstanding borrowings and certain other asset dispositions and casualty events. Borrowings under the ABL Credit Agreement bear interest at a floating rate elected by the Borrowers (which includes a base rate, Term SOFR and REVSOFR30 rate), as well as an applicable rate of between 1.25% and 2.50% based upon the leverage ratio of the Borrowers, as well as a commitment fee of between 0.375% and 0.50% based upon the average daily amount of the facility available but unused during the most recent quarter.

The Borrowers’ obligations to repay amounts borrowed under the ABL Credit Agreement are secured by liens on substantially all of the assets of the Borrowers. The ABL Credit Agreement contains customary representations, warranties, affirmative and negative covenants, limitations, and events of default for a transaction of this type, including maintenance of a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 and minimum availability of not less than $3.75 million at any time when the Term Loan is outstanding.

Intercreditor Agreement

On July 7, 2023, the lenders under the Credit Agreements and the loan parties entered into an intercreditor agreement (the “Intercreditor Agreement”). The Intercreditor Agreement identifies JPMorgan as Administrative Agent and ABL Representative under the ABL Credit Agreement. The Intercreditor Agreement identifies Great Rock as the Term Loan Representative. The Intercreditor Agreement also specifies the relative priority of the lenders as to the Borrowers’ accounts, inventory, cash, and the lenders’ priority on all other assets of the Borrowers.

The foregoing descriptions of the Term Loan Credit Agreement, the ABL Credit Agreement and the Intercreditor Agreement are summaries, do not purport to be complete and are qualified by reference to the Term Loan Credit Agreement, the ABL Credit Agreement and the Intercreditor Agreement, which are attached hereto as Exhibits 10.3, 10.4 and 10.5 and are incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 under “Securities Purchase Agreement” and “Notices to Convert Promissory Notes” of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02. Based in part upon the representations of Mr. Madden in the SPA, the offering and sale of the securities in the Private Placement was made in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated under the Securities Act. The offering and sale of the securities in the Conversion was made in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act, Rule 506 of Regulation D promulgated under the Securities Act, and Section 3(a)(9) of the Securities Act.

Item 3.03. Material Modification to Rights of Security Holders.

The information contained above in Item 1.01 under “Securities Purchase Agreement” and “Notices to Convert Promissory Notes” and below in Item 5.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.03.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Chief Executive Officer and Chief Financial Officer

In connection with the Closing disclosed above in Item 1.01, effective July 7, 2023, Matthew C. Flemming stepped down as the Company’s Interim Chief Executive Officer and Interim Chief Financial Officer. Mr. Flemming will continue as chair of the Board and will transition to the role of Business Development Officer. Mr. Flemming’s compensation will remain unchanged.

Effective July 7, 2023, the Board appointed Bryan, age 45, as Chief Executive Officer and Tim, age 47, as Chief Financial Officer of the Company. Bryan’s and Tim’s appointments were made in connection with the Acquisition described in Item 1.01 above.

The Company has entered into employment agreements (the “Employment Agreements”) with Bryan and Tim in connection with their new roles at the Company. The term of each Employment Agreement is 36 months, commencing on July 7, 2023, with automatic one-year extensions. Pursuant to their respective Employment Agreements, Tim and Bryan will each have a base salary of $275,000 and both will be eligible for an annual performance bonus based on quarterly and annual goals to be established by the compensation committee of the Board.

Each Employment Agreement also provides that if either executive is terminated without Cause (as defined in the Employment Agreement), or he resigns for Good Reason (as defined in the Employment Agreement), he will be entitled to a cash payment in an amount equal to six months of his annual base salary in effect on the last day of employment, plus (a) any owed or accrued past due base compensation, (b) unreimbursed business expenses, and (c) accrued, but unused benefits due under applicable law.

In connection with the Acquisition and their appointments, Bryan, Tim, and Tim’s Trust also received allocations of the Purchase Price described in Item 1.01 above. Prior to his appointment as Chief Executive Officer of the Company, Bryan served as president and chief executive officer of Barnhart Transportation since its founding in 2003. Similarly, prior to his appointment as Chief Financial Officer of the Company, Tim served alongside his brother, Bryan, as chief financial officer of Barnhart Transportation since 2003.

The foregoing description of the Employment Agreements is a summary, does not purport to be complete, and is qualified by reference to the full text of the Employment Agreements, which are attached hereto as Exhibits 10.6 and 10.7 and are incorporated herein by reference.

Appointment of Directors

On July 7, 2023, in connection with the Closing, the Company increased the size of the Board from seven directors to nine directors and elected Bryan and Tim, effective immediately, to fill the vacancies created by the increase in the size of the Board. Each will serve until the Company’s next annual meeting of stockholders or until his successor is duly elected and qualified.

Bryan and Tim will not be compensated for their service as directors apart from the compensation previously described in this Item 5.02. In connection with the Acquisition, the Barnhart Companies entered into new leases with Jet Park Warehousing, LLC, a South Carolina limited liability company (“Jet Park”), and Lakeshore Warehousing, LLC, a Pennsylvania limited liability company (“Lakeshore”), as landlords. The Barnhart Companies pay aggregate rent of approximately $157,000 per month to Jet Park and Lakeshore. Each of Jet Park and Lake Shore are directly or indirectly owned by Bryan and Tim or their affiliates.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

As disclosed in the Company’s Definitive Information Statement filed with the SEC on June 2, 2023, the Company’s stockholders previously approved an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to increase the number of authorized shares of Common Stock from 250,000,000 to 500,000,000 (the “Charter Amendment”). The Charter Amendment became effective on July 6, 2023 upon filing of a Certificate of Amendment of the Certificate of Incorporation with the Secretary of State of Delaware.

On July 6, 2023, the Company also filed a Certificate of Designation of Preferences, Rights and Limitations of 5% Series C Convertible Preferred Stock with the Secretary of State of Delaware, effective as of the time of filing. The description of the Preferred Stock set forth above in Item 1.01 under “Securities Purchase Agreement” of this Current Report on Form 8-K is hereby incorporated by reference into this Item 5.03.

Item 7.01. Regulation FD Disclosure.

On July 10, 2023, the Company issued a press release announcing the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in Item 7.01 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

The financial statements and pro forma financial information required to be filed with this Current Report on Form 8-K with respect to the Acquisition reported in Item 1.01 above will be provided by amendment within 71 calendar days of this report, as permitted by this section.

(d) Exhibits.

Exhibit No.		Description
2.1		Transaction Agreement, by and among Barnhart Fleet Maintenance, LLC, Barnhart Transportation, LLC, Lake Shore Global Solutions LLC, Lake Shore Logistics, LLC, Legend Equipment Leasing, LLC, Route 20 Tank Wash LLC, Legend Holding RO, Inc., and Bryan S. Barnhart, Timothy W. Barnhart, Timothy W. Barnhart, as Trustee of the Timothy W. Barnhart 2017 Irrevocable Trust, Timothy W. Barnhart, in his capacity as Sellers’ Representative, SMG Industries Inc. and Skyline Merger Sub, Inc., dated July 7, 2023
3.1		Certificate of Amendment of the Certificate of Incorporation of SMG Industries Inc., dated July 6, 2023
3.2		Certificate of Designation of Preferences, Rights and Limitations of 5% Series C Convertible Preferred Stock, dated July 6, 2023
10.1		Securities Purchase Agreement, by and among SMG Industries Inc. and the Investors party thereto, dated July 7, 2023
10.2		Form of Notice to Convert Promissory Note(s)
10.3*		Credit Agreement (Term Loan), dated July 7, 2023, by and among SMG Industries, Inc., 5J Trucking, LLC, 5J Oilfield Services, LLC, 5J Specialized LLC, 5J Transportation LLC, 5J Logistics Services LLC, and 5J Driveaway LLC
10.4*		Credit Agreement (ABL), dated July 7, 2023, by and among SMG Industries, Inc., 5J Trucking, LLC, 5J Oilfield Services, LLC, 5J Specialized LLC, 5J Transportation LLC, 5J Logistics Services LLC, and 5J Driveaway LLC
10.5		Intercreditor Agreement, dated July 7, 2023, by and among JPMorgan Chase Bank, N.A., Great Rock Capital Partners Management, LLC, and the Loan Parties thereto
10.6		Employment Agreement, dated July 7, 2023, by and between SMG Industries Inc. and Bryan S. Barnhart
10.7		Employment Agreement, dated July 7, 2023, by and between SMG Industries Inc. and Timothy W. Barnhart
99.1		Press Release, dated July 10, 2023.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

Schedules and attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules and attachments upon request by the SEC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 12, 2023	SMG Industries Inc.

	By:	/s/ Bryan S. Barnhart
	Name:	Bryan S. Barnhart
	Title:	Chief Executive Officer

Exhibit 2.1

Execution Version

TRANSACTION AGREEMENT

by and among

Barnhart Fleet Maintenance, LLC, Barnhart Transportation, LLC, Lake Shore Global Solutions LLC, Lake Shore Logistics, LLC, Legend Equipment Leasing, LLC, Route 20 Tank Wash LLC, Legend Holding RO, Inc.,

and

Bryan S. Barnhart, Timothy W. Barnhart, Timothy W. Barnhart, as Trustee of the Timothy W. Barnhart 2017 Irrevocable Trust, and Timothy W. Barnhart, in his capacity as Sellers’ Representative

and

SMG Industries Inc. and Skyline Merger Sub, Inc.

July 7, 2023

TABLE OF CONTENTS

Section 1.		Defined Terms	2

Section 2.		Purchase and Sale; Merger	13
2.1	Merger; Purchase and Sale		13
2.2	Consideration		14
2.3	Purchase Price Adjustment		15
2.4	Closing		17
2.5	Closing Deliverables		18
2.6	Required Withholding		19

Section 3.		Representations and Warranties Regarding the Companies and Holdco	19
3.1	Organization and Qualification; Enforceability		19
3.2	Capitalization		20
3.3	No Conflict; Required Filings and Consents		20
3.4	Financial Statements		21
3.5	Undisclosed Liabilities		22
3.6	Compliance; Permits; Operation of the Companies		22
3.7	Absence of Certain Changes or Events		23
3.8	Litigation and Proceedings		24
3.9	Real Property		25
3.10	Material Contracts		26
3.11	Material Contracts Representation		28
3.12	Employee Benefit Plans		28
3.13	Title to Assets; Sufficiency of Assets		30
3.14	Compliance with Environmental Laws		31
3.15	Taxes		32
3.16	Insurance		34
3.17	Related Party Transactions		35
3.18	Labor Matters		35
3.19	Books and Records		37
3.20	Brokers		37
3.21	Intellectual Property; IT Assets; Privacy		37
3.22	Major Suppliers		39
3.23	Major Customers		39
3.24	Bank Accounts		39
3.25	Operations of Holdco		39

Section 4.		REPRESENTATIONS AND WARRANTIES OF THE SELLERS	40
4.1	Ownership of the Interests		40
4.2	Capacity; Authority Relative to this Agreement		40
4.3	Non-Contravention; Conflicts		40
4.4	Litigation		40
4.5	Restricted Securities		40
4.6	Legend		40

Section 5.		REPRESENTATIONS AND WARRANTIES OF BUYER	41
5.1	Organization		41
5.2	Capitalization		41
5.3	Certain Corporate Matters		41

5.4	Authority Relative to this Agreement		41
5.5	Consents and Approvals; No Violations		42
5.6	SEC Documents; Market		42
5.7	Litigation		43
5.8	Operations of the Merger Subs		43
5.9	Broker’s Fees		43
5.10	Disclosure		43

Section 6.		COVENANTS AND AGREEMENTS OF THE PARTIES	43
6.1	General, After Closing		43
6.2	Confidentiality		43
6.3	Restrictive Covenants		44
6.4	Tax Matters		44
6.5	Public Announcements		46
6.6	Post-Closing Access		46
6.7	Post-Closing Merger		47

Section 7.		INDEMNIFICATION AND RELATED MATTERS	47
7.1	Survival of Representations and Warranties		47
7.2	Indemnification		47
7.3	Certain Limitations		48
7.4	Notice of Indemnification		49
7.5	Exclusive Remedies		50
7.6	Indemnification Adjusts Purchase Price for Tax Purposes		50

Section 8.		GENERAL PROVISIONS	50
8.1	Disclosure Schedule		50
8.2	Notices		50
8.3	Interpretation		52
8.4	Severability		53
8.5	Miscellaneous		53
8.6	Separate Counsel		53
8.7	Governing Law; Venue		53
8.8	Counterparts and Signatures		53
8.9	Amendment		54
8.10	Parties in Interest: No Third-Party Beneficiaries		54
8.11	Waiver		54
8.12	Expenses		54
8.13	Recitals Incorporated		54
8.14	Equitable Remedies		54
8.15	Non-Recourse		54

TRANSACTION AGREEMENT

This TRANSACTION AGREEMENT (this “Agreement”), dated as of July 7, 2023, is by and among SMG Industries Inc., a Delaware corporation (“Buyer” or “SMGI”), Barnhart Fleet Maintenance, LLC, a Pennsylvania limited liability company (“Fleet”), Barnhart Transportation, LLC, a Pennsylvania limited liability company (“Transportation”), Lake Shore Global Solutions LLC, a Pennsylvania limited liability company (“Global”), Lake Shore Logistics, LLC, a Pennsylvania limited liability company (“Logistics”), Legend Equipment Leasing, LLC, a Pennsylvania limited liability company (“Legend”), Route 20 Tank Wash LLC, a Pennsylvania limited liability company (“Wash,” and collectively with Fleet, Transportation, Global, Logistics and Legend, the “Companies” and each a “Company”), Legend Holding RO, Inc., a Delaware limited liability company (“Holdco”), Skyline Merger Sub, Inc., a Delaware corporation (“Merger Sub”), each of Bryan S. Barnhart, an individual (“Bryan”), Timothy W. Barnhart, an individual (“Tim”), and Timothy W. Barnhart, Trustee of the Timothy W. Barnhart 2017 Irrevocable Trust (the “Trust,” and collectively with Bryan and Tim, being the owners, directly or indirectly, of one hundred percent (100%) of the membership interests in the Companies and Holdco, the “Sellers” and each a “Seller”), and Timothy W. Barnhart, in his capacity as the representative of each Seller (the “Sellers’ Representative”).

RECITALS

Sellers are the owners (beneficially and of record), directly or indirectly, of one hundred percent (100%) of the outstanding membership interests of the Companies (collectively, the “Company Interests”) and Holdco (the “Holdco Interests,” and together with the Company Interests, the “Interests”). The respective Interests of each of Sellers and Holdco is set forth on Exhibit A attached hereto.

Buyer owns all of the issued and outstanding membership interests in Merger Sub.

Prior to the date hereof, Tim and Bryan effectuated (i) the contribution of the outstanding Company Interests of Legend to Holdco in exchange for the issuance of all of the issued and outstanding Holdco Interests in Holdco (the “Contribution”) such that, following the Legend Contribution, Holdco is owned by Tim and Bryan in the same proportion as Legend was owned by Tim and Bryan immediately prior to the Contribution, immediately followed by (ii) a properly and timely filed election by Holdco to treat Legend as a qualified subchapter S subsidiary of Holdco on and effective as of the date of the Contribution (the “QSub Election”) followed at least one day later by (iii) the conversion of Legend from a corporation for U.S. federal income tax purposes to a disregarded entity for U.S. federal income tax purposes (the “Conversion”) and the filing of an entity classification election (on IRS Form 8832) effective as of the date of the Conversion that establishes such classification (the “Classification Election” and, together with the Contribution, the QSub Election, and the Conversion, the “Restructuring”).

Following the Restructuring and in accordance with the terms set forth herein, Buyer will cause Merger Sub to merge with and into Holdco, with Merger Sub ceasing to exist and Holdco surviving as a wholly owned subsidiary of Buyer (the “Merger”).

Promptly following the Closing and in accordance with the terms of the Agreement and Plan of Merger attached as Exhibit F attached hereto, Buyer will cause Holdco to be merged with and into Skyline Holding, Inc., a Delaware corporation, with Holdco ceasing to exist and Skyline Holding, Inc. surviving as a wholly owned subsidiary of Buyer (the “Post-Closing Merger”).

The board of directors of Holdco (the “Holdco Board”) has unanimously (a) approved and declared advisable this Agreement and the Transactions, including the Merger, (b) declared that it is in the best interests of the stockholders of Holdco that Holdco enter into this Agreement and consummate the Transactions, including the Merger, on the terms and subject to the conditions set forth in this Agreement, (c) directed that the adoption of this Agreement and approval of the Transactions, including the Merger, be submitted to a vote of the stockholders of Holdco, and (d) recommended to the stockholders of Holdco that they adopt this Agreement (the “Holdco Board Recommendation”).

Tim and Bryan, as the holders of all of the issued and outstanding Interests of Holdco, will, immediately after the date hereof, adopt and approve this Agreement and the Transactions, including the Merger.

The board of directors of Merger Sub (the “Merger Sub Board”) has unanimously (a) approved and declared advisable this Agreement and the Transactions, including the Merger, (b) declared that it is in the best interests of the stockholder of Merger Sub that Merger Sub enter into this Agreement and consummate the Transactions, including the Merger, on the terms and subject to the conditions set forth in this Agreement, (c) directed that the adoption of this Agreement and approval of the Transactions, including the Merger, be submitted to a vote of the stockholder of Merger Sub, and (d) recommended to the stockholder of Merger Sub that it adopt this Agreement (the “Merger Sub Board Recommendation”).

Buyer, as the sole stockholder of Merger Sub, will, immediately after the date hereof, adopt and approve this Agreement and the Transactions, including the Merger.

At the Closing, Buyer will also purchase from Sellers, and Sellers will sell to Buyer, all of the issued and outstanding Company Interests of each of Fleet, Transportation, Global, Logistics and Wash (collectively, the “Membership Interest Purchase,” and together with the Merger, Restructuring, and the Post-Closing Merger, the “Transactions”).

In consideration for the Transactions, Buyer will deliver the Purchase Price (defined below) to Sellers as provided herein.

AGREEMENT

NOW, THEREFORE, the Parties hereto, intending to be legally bound, agree as follows:

Section 1.             DEFINED TERMS. In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

1.1          “Action” means any Claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, assessment, hearing, complaint, examination, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity, pending by or before any court, tribunal, arbitrator or other Governmental Authority.

1.2          “Affiliate” shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person; including any partnership or joint venture in which such Person (either alone, or through or together with any other Subsidiaries) has, directly or indirectly, an equity interest of 50% or more. For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) shall mean the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of equity interests or as trustee or executor, by Contract or credit arrangement or otherwise.

1.3          “Business” shall mean logistics and transportation solutions, including the transportation of goods throughout the United States and into Canada, equipment leasing, equipment maintenance, tank wash services and brokerage services.

1.4          “Business Day” shall mean any day other than a day on which banks in the state of Texas are required or authorized by Law to be closed.

1.5          “Buyer Fundamental Representations” means the representations and warranties of Buyer set forth in Sections 5.1, 5.2, 5.3, 5.4, 5.5 and 5.9.

1.6          “CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, 134 Stat. 281 (2020).

1.7          “Cash” means the cash on deposit of the Companies to the extent such cash is free and releasable.

1.8          “CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended.

1.9          “Claim” shall mean any claim, demand, cause of action, investigation, inquiry, suit, action, notice of violation or legal, administrative, arbitrative or other proceeding.

1.10        “Closing Cash Adjustment” means (a) Estimated Closing Company Cash, minus (b) $1,750,000; provided that if Estimated Closing Company Cash is less than $1,750,000, the Closing Cash Adjustment will decrease Closing Cash Consideration.

1.11        “Closing Cash Consideration” means (a) $26,000,000, plus or minus, as applicable, (b) the Closing Cash Adjustment, minus (c) Estimated Indebtedness, plus or minus, as applicable, (d) the Closing NWC Adjustment, minus (e) Estimated Transaction Expenses, minus (f) the Indemnity Escrow Amount, minus (g) the Purchase Price Adjustment Escrow Amount.

1.12        “Closing Company Cash” means Cash of the Companies as of the Closing Date.

1.13        “Closing Indebtedness” means Indebtedness of the Companies as of the Closing Date.

1.14        “Closing NWC Adjustment” means the difference between Estimated NWC and the NWC Target; provided that if Estimated NWC is more than the NWC Target, the Closing NWC Adjustment will increase Closing Cash Consideration and if Estimated NWC is less than the NWC Target, the Closing NWC Adjustment will decrease Closing Cash Consideration.

1.15        “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations, rulings, and forms issued thereunder.

1.16        “Common Stock” means SMGI’s common stock, par value $0.001 per share.

1.1          “Common Stock Consideration” means 77,000,000 shares of Common Stock, which number of shares is equal to (a) $19,250,000 divided by (b) $0.25.

1.2          “Company Benefit Plan” shall have the meaning assigned thereto in Section 3.12(a) of this Agreement.

1.3          “Company Intellectual Property” shall mean Owned Intellectual Property and all Intellectual Property licensed to the Companies.

1.4          “Confidential Information” means any and all technical, business and other information of or relating to the Companies, Sellers, and Buyer, their respective businesses or assets that derives value, actual, potential, economic or otherwise, from not being generally known to other Persons, including technical or non-technical data, compositions, devices, methods, techniques, drawings, inventions, processes, financial data, financial plans, product plans, lists of, or information relating to, actual or potential customers or suppliers, acquisition and investment plans and strategies, marketing plans, business plans or operations. Confidential Information includes information of third parties that Buyer, Sellers or the Companies are obligated to or do keep or treat as confidential. Notwithstanding anything to the contrary set forth herein, Confidential Information shall not include (i) information which comes into the public domain without a breach of this Agreement by the Parties or their Affiliates, or (ii) any information that becomes available to the Buyer or Sellers after the Closing on a non-confidential basis from a source, other than, as applicable, the Companies, Sellers, Buyer, or any of their respective representatives, that is not bound by any contractual or other obligation of confidentiality to the Companies, Sellers, Buyer, or to any other Person with respect to any of such information.

1.5          “Contract” shall mean any written or oral agreement, contract, debenture, note, bond, mortgage, indenture, deed of trust, lease, license, promises, understanding, commitment or other instrument or agreement or any other legally binding obligation of a Person (including any supplements, amendments and other modifications thereto).

1.6          “DOT” shall mean the United States Department of Transportation.

1.7          “Employee Benefit Plan” shall mean each “employee pension benefit plan” as defined in Section 3(2) of ERISA (whether or not subject to ERISA), “employee welfare plan” as defined in Section 3(1) of ERISA (whether or not subject to ERISA) and each other plan, program, arrangement or agreement providing bonus or incentive compensation, deferred compensation, restricted stock, stock option, other stock based incentive, retention, severance pay, sick leave, vacation pay, tuition expense, dependent care assistance, cafeteria plan, salary continuation, bonus plan, employment or other service related change in control benefit, or other similar employment or service related benefit, but excluding governmental program that an employer is required by Law to maintain or contribute to (such as unemployment compensation insurance and the U.S. federal Social Security program).

1.8          “Encumbrance” shall mean, with respect to any property or asset (including any security), any claim, debt, lien, pledge, security interest, option, right of first refusal and similar rights such as (but not limited to) easement, mortgage, charge, indenture, deed of trust, option, right of way, covenant, condition or restriction on the use of real property, encroachment or any other encumbrance on the use of real or personal property or asset, restriction on transfer of any nature, any conditional, installment or contingent sale or other title retention agreement or lease in the nature thereof.

1.9          “Environmental Laws” shall mean all applicable Laws, Orders, Permits, binding determinations, and decisions or remediation and risk standards of any Governmental Authority, relative to or that govern or purport to govern air quality, soil quality, water quality, sub-slab and indoor contaminant air vapors, wetlands, natural resources, solid waste, hazardous waste, hazardous or toxic substances, pollution or the protection of employee health and safety, public health, human health or the environment in effect on the date hereof, including, but not limited to, CERCLA, the Hazardous Materials Transportation Act (49 U.S.C. § 1801), the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.), the Safe Drinking Water Act (42 U.S.C. § 300f, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Clean Air Act (42 U.S.C. § 7401, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.), and the Federal Insecticide, Fungicide, Rodenticide Act (7 U.S.C. § 136, et seq.) as each of these Laws have been amended from time to time.

1.10        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations and forms promulgated thereunder.

1.11        “ERISA Affiliate” shall mean any entity (whether or not incorporated) which is or was, together with the Companies, treated as a single employer under Section 414(b), (c), (m), or (o) of the Code.

1.12        “Estimated Closing Company Cash” means Sellers’ good faith estimate of Closing Company Cash, as set forth on Exhibit D.

1.13        “Estimated Indebtedness” means Sellers’ good faith estimate of Indebtedness as of the Closing Date, as set forth on Exhibit D.

1.14        “Estimated NWC” means Sellers’ good faith estimate of Net Working Capital as of the Closing Date, as set forth on Exhibit D.

1.15        “Estimated Transaction Expenses” means Sellers’ good faith estimate of Transaction Expenses as of the Closing Date, as set forth on Exhibit D.

1.16        “Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.17        “Final Cash Adjustment” means (a) Final Closing Company Cash, minus (b) $1,750,000; provided that if Final Closing Company Cash is less than $1,750,000, the Final Cash Adjustment will decrease the Purchase Price.

1.18        “FMCSA” shall mean the Federal Motor Carrier Safety Administration of the DOT.

1.19        “Fraud” means misrepresentation of a fact with respect to a representation or warranty set forth in Section 3 or Section 4 (as applicable); provided that, at the time such representation was made:

(a)        such representation was inaccurate;

(b)        such Person making such representation had actual knowledge (excluding imputed or constructive knowledge) of the inaccuracy of such representation;

(d)        the other Party acted in reliance on such inaccurate representation.

1.20        “GAAP” shall mean generally accepted accounting principles in the United States of America in effect at any relevant time, provided that, in the case of the Financial Statements, GAAP shall be as in effect on the date of the relevant Financial Statement.

1.21        “Governmental Authority” shall mean any federal, state, county, municipal, foreign, international or other governmental department, subdivision, commission, board, tribunal, court, bureau, agency or instrumentality, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitration panel or alternative dispute resolution body.

1.22        “Hazardous Substance” shall mean hazardous substances as that term is defined in CERCLA, or any solid waste, hazardous waste and any other individual, class or mixture of pollutants, contaminants, toxins, chemicals, substances, wastes or materials in their solid, liquid or gaseous phase, defined, listed, designated, regulated, classified or identified as such under any Environmental Law, and shall include, without limitation, petroleum, petroleum byproducts, polychlorinated biphenyls, per- and polyfluoroalkyl substances, asbestos, radon, urea-formaldehyde insulation, or any other chemicals, materials or substances which are regulated under any Environmental Law because of their hazardous or deleterious properties.

1.23        “Indebtedness” shall mean the outstanding amount of any obligations of the Companies as of immediately prior to the Closing, including any and all principal or scheduled payments, accrued interest or finance charges, and other fees, penalties or payments relating to the foregoing components of Indebtedness in clauses (a) through (l) below (including any prepayment penalties, premiums, costs, breakage or other amounts), excluding trade payables, for:

(a)        indebtedness for borrowed money (including if guaranteed or for which a Person is otherwise liable or responsible, an obligation to assume indebtedness) and including current and long-term portions of bank debt, mortgages, indenture, deed of trust or other purchase money lien or conditional sale or other title retention agreement, member loans and other loans, unpaid installment obligations, make-whole payments, notes payable and negative cash balances;

(b)        installment purchases of real or personal property or services;

(c)        all capital or financing lease obligations which have been capitalized in past practice or which would be required to be capitalized in accordance with GAAP;

(d)        obligations evidenced by any note, bond, debenture, or other similar instrument or debt security;

(e)        obligations under any interest rate swap, forward contract or other hedging arrangement of any of the Companies;

(f)        off-balance sheet financing, including synthetic leases and project financing;

(g)        all reimbursement and other obligations with respect to letters of credit, surety bonds, bank guarantees, bankers’ acceptances or other similar instruments, in each case, solely to the extent drawn;

(h)        all liabilities for any deferred purchase price of property or services with respect to which any Company is liable, contingently or otherwise, as obligor or otherwise and including any earnouts, seller notes, contingent payments or similar obligations related to past acquisitions at the maximum amount of such payments or obligations;

(i)         any compensation or benefit plan obligations that are earned with respect to services performed for or on behalf of any Company prior to the Closing by any employee or independent contractor or other service provider of such Company to the extent unpaid as of Closing (and the employer portion of any payroll, social security or employment Taxes with respect to such payments (without regard to any ability to defer such Taxes under the CARES Act)), including any severance or similar liabilities owed in respect of employees, independent contractors or other service providers of such Company whose employment, service or engagement is terminated prior to Closing;

(j)        all obligations of the Companies in respect of any unsatisfied obligation for “withdrawal liability” to a “multiemployer plan” as such terms are defined under ERISA;

(k)        guarantees of any Liability of a third party of the type described in clauses (a) through (j); and

(l)        any Taxes of the Companies.

1.24        “Indemnity Escrow Amount” means $3,000,000.

1.25        “Intellectual Property” shall mean all intellectual property rights, worldwide, including all of the rights arising from or in respect of the following:

(a)        patents, patent applications of any kind (and any renewals, reissues, reexaminations, extensions, continuations, continuations-in-part, divisions, provisionals and substitutions relating to any patents and patent applications), patent rights, and inventions and discoveries and invention disclosures (whether or not patented);

(b)        trademarks, service marks, logos, service names, trade dress, trade names, brand names, Internet domain names, web sites, URLs, and other source or business identifiers, whether registered or unregistered and goodwill associated therewith and symbolized thereby (“Trademarks”);

(c)        copyrights, proprietary rights in works of authorship (including software and website content), database rights and design rights;

(d)        all trade secrets, inventions, technology, formulas, know-how, confidential information, computer software programs and applications, tangible and intangible proprietary information or materials (“Trade Secrets”); and

(e)        all applications filed, applications to be filed, and registrations relating to any of the foregoing clauses (a)-(d) above.

1.26        “IRS” shall mean the United States Internal Revenue Service.

1.27        “IT Assets” means software, systems, servers, computers, hardware, firmware, middleware, networks, data communications lines, routers and all other information technology equipment, and all associated documentation, in each case, owned or controlled (including as a cloud service) by the Companies and used or held for use in the operation of the Business as currently conducted.

1.28        “Key Employee” means each of Bryan, Tim, Brandon Exley, Brandie Bernatowitz and Jeff Hollenbeck.

1.29        “Knowledge” shall mean, with respect to the Companies, the actual knowledge of each of the Key Employees, after reasonable inquiry of their direct reports.

1.30        “Laws” shall mean all laws, statutes, ordinances, codes, rules, regulations, Orders, treaty, judgments, and decrees of Governmental Authorities.

1.31        “Liability” shall mean any obligation, indebtedness, expense, Claim, damage, fine, judgment, penalty, guaranty, or other liability of any kind or nature (whether primary or secondary, known or unknown, direct or indirect, accrued or unaccrued, absolute or contingent, matured or unmatured, liquidated or unliquidated, disputed or undisputed, or otherwise) and whether or not required under GAAP to be accrued on the financial statements of such Person.

1.32        “Material Adverse Effect” means any change, event, development or occurrence that:

(a)           has had, or could reasonably be expected to have, individually or with all other changes, events, developments or occurrences in the aggregate, a material adverse effect on the Business, assets, results of operations or financial condition of the Companies taken as a whole; or

(b)           prevents or materially delays the Companies’ ability to consummate the transactions contemplated hereby;

(c)           provided, however, that for purposes of clause (a), none of the changes, events, developments or occurrences arising out of, resulting from or attributable to the following shall be taken into account in determining whether there has been a Material Adverse Effect:

(1)        changes in conditions in the United States or the capital or financial markets or the world economy generally and which changes, in each case, do not have a disproportionately adverse effect on the Companies, relative to the Companies’ industry peers in the United States;

(2)        changes in general legal, regulatory, political, economic or business conditions or changes in GAAP that, in each case, do not have a disproportionately adverse effect on the Companies, relative to the Companies’ industry peers in the United States;

(3)        acts of God or any civil unrest or riots, hostilities, acts of war, sabotage, terrorism or military actions, or any escalation or worsening of any such hostilities that, in each case, do not have a disproportionately adverse effect on the Companies, relative to the Companies’ industry peers in the United States;

(4)        the execution, announcement or pendency of the transactions contemplated by this Agreement;

(5)        compliance with the terms of, or the taking of any action required by, this Agreement;

(6)        the taking of any action, or failing to take any action, at the request of the Buyer, or the taking of any action by the Buyer;

(7)        any failure by the Companies to meet financial forecasts, projections or estimates, or the distribution to Buyer, following the date hereof of updated monthly or year-to-date financial information as results are finalized in the ordinary course of business (it being understood that the facts or occurrences giving rise to such failure may be deemed to constitute, or be taken into account in determining whether there has been or will be, a Material Adverse Effect); or

(8)        any impact of the Coronavirus or COVID-19, and any regulations or orders of any Governmental Authority that has jurisdiction over the Companies related thereto providing for business closures, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak.

1.33        “Net Working Capital” means the current assets of the Companies, including (i) accounts receivable, (ii) prepaid expenses, (iii) inventory and (iv) any other current assets set forth on Exhibit D, minus the current liabilities of the Companies, including (1) accounts payable, (2) accrued expenses, and (3) other current liabilities set forth on Exhibit D, as determined in accordance with Section 2.3; provided that Net Working Capital will not include any current assets included in Cash or any current liabilities included in Indebtedness or Transaction Expenses.

1.34        “Note Consideration” means $3,000,000, which amount will be reflected in promissory notes substantially in the form attached hereto as Exhibit B.

1.35        “NWC Target” means $5,829,619.

1.36        “Order” shall mean any order, writ, injunction, judgment, decree, ruling, determination, award, plan, stipulation or decree of any Governmental Authority.

1.37        “Organizational Documents” shall mean: (a) any Person’s certificate of organization, certificate of incorporation or similar document and operating agreement, bylaws or similar document; and (b) any amendment to or restatement of any of the foregoing.

1.38        “Owned Intellectual Property” means all Intellectual Property owned or purported to be owned by the Companies.

1.39        “Party” or “Parties” means Buyer, Seller, the Companies, Holdco and Merger Sub individually or collectively, as the case may be.

1.40        “Permitted Encumbrances” shall mean:

(a)        statutory and contractual landlord liens securing rental payments that are not yet due and payable, for which adequate reserves have been established on the Companies’ books in accordance with GAAP;

(b)        pledges or deposits made to secure payment by any of the Companies of worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits or to participate in any fund in connection with worker’s compensation or unemployment insurance, in each case incurred in the ordinary course of business consistent with past practice;

(c)        statutory liens for current Taxes that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established on the Companies’ books in accordance with GAAP;

(d)        liens arising from municipal and zoning ordinances and easements for public utilities, none of which interfere with the conduct of the Business by the Companies as currently conducted, or adversely affect the marketability of the assets of the Companies, in any material respect, or materially interfere with the present use of the real property leased, subleased, licensed or otherwise used or occupied by the Companies related thereto, or materially detract from the value of the real property leased, subleased, licensed or otherwise used or occupied by the Companies related thereto; or

(e)        statutory mechanic’s liens and materialmen’s liens for services or materials and other similar statutory Encumbrances for amounts not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.

1.41        “Person” shall mean an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Authority (or any department, agency or political subdivision thereof).

1.42        “Personal Information” shall mean any information defined as “personal data”, “personally identifiable information” or “personal information” under any Privacy Laws, and any and all information that identifies an individual person.

1.43        “Preferred Stock” means Series C Preferred Stock of the Company, with a stated value of $10,000 per share in accordance with the Certificate of Designation of Preferences, Rights and Limitations of 5% Series C Convertible Preferred Stock dated as of July 6, 2023.

1.44        “Preferred Stock Consideration” means 500 shares of Preferred Stock, which number of shares is equal to (a) $5,000,000, divided by (b) $10,000, which is the stated value per share of Preferred Stock.

1.45        “Privacy Laws” means all Laws that pertain to privacy, the collection, receipt, storage, compilation, transfer, disposal, security (both technical and physical), disclosure, transfer, processing, protection, sharing, breach or other use of Personal Information, including the Federal Trade Commission Act, including any predecessor, successor or implementing legislation in respect of the foregoing, any amendments or re-enactments of the foregoing, and any and all applicable Laws relating to breach notification in connection with Personal Information.

1.46        “Purchase Price Adjustment Escrow Amount” means $250,000.

1.47        “Registered Company Intellectual Property” shall mean all Company Intellectual Property owned or purported to be owned by any Company that is the subject of a registration or application with any Governmental Authority or internet domain name registration.

1.48        “SEC” means the United States Securities and Exchange Commission.

1.49        “Seller Fundamental Representations” means the representations and warranties of Sellers and the Companies set forth in Sections 3.1, 3.2, 3.3, 3.15 and 3.20 and Sections 4.1, 4.2 and 4.3.

1.50        “Straddle Period” shall have the meaning assigned thereto in Section 6.4(a) of this Agreement.

1.51        “Subsidiary” means, with respect to a Person, any corporation or other organization (including a limited liability company or a general or limited partnership), whether incorporated or unincorporated, of which such Person directly or indirectly owns or controls a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization or any organization of which such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.

1.52        “Tax” or “Taxes” shall mean any and all taxes, charges, fees, levies or other assessments, including income, gross receipts, value added, excise, real or personal property, sales, withholding, social security, retirement, unemployment, occupation, use, escheat, net worth, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the IRS or any other taxing authority (whether domestic or foreign including any state, county, local or foreign government or any subdivision or taxing agency thereof (including a United States possession)), whether computed on a separate, consolidated, unitary, combined or any other basis; and such term shall include any interest whether paid or received, fines, penalties or additional amounts imposed by the IRS or any other taxing authority attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments.

1.53        “Tax Returns” shall mean any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, the IRS or any other taxing authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax.

1.54        “Threatened” shall mean that a demand or statement has been made in writing, or any other form of notice (whether written or oral) has been given, that would lead a reasonable Person to conclude that such a Claim is likely to be asserted.

1.55        “Transaction Expenses” means (a) all expenses of the Companies and the Sellers incurred in connection with the Acquisition (including but not limited to attorney fees, auditor fees, broker fees and 50% of any fees of the Escrow Agent) and (b) any fees, commissions, costs and expenses or amounts related to any transaction bonus, discretionary bonus, change-of-control payment, retention, severance or other compensatory payments to any current or former employee, officer, director or consultant, including all applicable Taxes, the employer portion of any Taxes, withholding or gross-up obligations or other amounts associate therewith and any related benefit plan obligations, in the case of each of the foregoing clauses above, in connection with the negotiation, execution and delivery of this Agreement, the Transaction Documents or the consummation of the Transactions.

1.56        “Transactions” means the transactions contemplated by this Agreement, including the Restructuring, the Merger, the Post-Closing Merger and the acquisitions of the membership interests of each of Fleet, Transportation, Global, Logistics and Wash.

In addition to the terms defined above, as used herein, each capitalized term listed below has the meaning identified in the Section set forth opposite such term below.

Defined Term	Section

Agreement	Preamble
Allocation Statement	6.4(h)
Audited Balance Sheet	3.5
Audited Balance Sheet Date	3.5(a)
Audited Financial Statements	3.4(a)
Bankruptcy and Equity Exception	3.11
Bryan	Preamble
Buyer	Preamble
Cap	7.3(c)
Capital Stock	5.2
Certificate of Merger	2.1(a)(2)
Classification Election	Recitals
Closing	2.4
Closing Date	2.4
Closing Net Working Capital	2.3(b)(1)
Companies	Preamble
Company	Preamble
Company Benefit Plan	3.12(a)

Defined Term	Section

Company Interests	Recitals
Contribution	Recitals
Conversion	Recitals
Deductible	7.3(b)
DGCL	2.1(a)(1)
Disclosure Schedule	8.1
Disputed Amounts	2.3(c)(3)
DOT	3.3(b)
Effective Time	2.1(a)(2)
Employment Agreements	2.5(a)(4)
Environmental Permits	3.14(f)
Escrow	2.2(g)
Escrow Agent	2.2(g)
Escrow Agreement	2.2(g)
Exchange Act	5.6(b)
Existing Related Party Leases	3.9(e)
Final Closing Company Cash	2.3(b)(1)
Final Closing Indebtedness	2.3(b)(1)
Final Net Working Capital	2.3(b)(1)
Final Transaction Expenses	2.3(b)(1)
Financial Statements	3.4
Fleet	Preamble
Generational Capital	3.20
Global	Preamble
Holdco	Preamble
Holdco Board	Recitals
Holdco Board Recommendation	Recitals
Holdco Interests	Recitals
Improvements	3.9(d)
Indemnifying Party	7.3(d)
Indemnitee	7.3(d)
Indemnity Claim	7.3(a)
Independent Accountants	2.3(c)(3)
Insurance Policies	3.16
Intended Tax Treatment	6.4(h)
Interests	Recitals
Leased Real Property	3.9(a)
Leases	3.9(a)
Legend	Preamble
Logistics	Preamble
Losses	7.2(a)
Material Contract	3.10
Material Contracts	3.10
Material Customers	3.23
Material Suppliers	3.22
Materiality Qualifier	7.3(g)
Membership Interest Purchase	Recitals
Merger	Recitals
Merger Sub	Preamble

Defined Term	Section

Merger Sub Board	Recitals
Merger Sub Board Recommendation	Recitals
New Related Party Lease	2.5(a)(5)
New Related Party Leases	2.5(a)(5)
Per Claim Deductible	7.3(a)
Permits	3.6(b)
Post-Closing Adjustment	2.3(d)(1)
Post-Closing Merger	Recitals
Post-Closing Statement	2.3(b)(1)
PPP Loan	3.4(f)
PPP Loan Account Agent	3.4(f)
Preferred Stock	5.2
Purchase Price	2.2
QSub Election	Recitals
Related Person	3.17
Resolution Period	2.3(c)(2)
Restricted Period	6.3(a)
Restructuring	Recitals
Review Period	2.3(c)(1)
SEC Documents	5.6(a)
Securities Act	4.5
Seller	Preamble
Sellers	Preamble
Sellers’ Representative	Preamble
SMGI	Preamble
SMGI Representatives	7.2(b)
SMGI Shares	4.5
Statement of Objections	2.3(c)(2)
Straddle Period	6.4(a)
Tim	Preamble
Transactions	Recitals
Transportation	Preamble
Trust	Preamble
Wash	Preamble

Section 2.              PURCHASE AND SALE; MERGER.

2.1           Merger; Purchase and Sale.

(a)           Merger.

(1)        Merger. Upon the terms of this Agreement, at the Effective Time, Merger Sub shall be merged with and into Holdco in accordance with the Delaware General Corporation Law (the “DGCL”), the separate company existence of Merger Sub shall cease, and Holdco shall continue as the surviving company and as a wholly owned subsidiary of SMGI; and all of the properties, rights, privileges, powers and franchises of Merger Sub and Holdco will vest in Holdco as the surviving company, and all of the debts, liabilities, obligations and duties of Merger Sub and Holdco shall become the debts, liabilities, obligations and duties of the surviving company.

(2)        Certificate of Merger. As soon as practicable on the Closing Date, and after approval of the Merger by SMGI as the sole stockholder of Merger Sub and Tim and Bryan as the stockholders of Holdco, Merger Sub and Holdco shall file a duly executed certificate of merger in form and substance reasonably acceptable to SMGI and Sellers (the “Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or at such other time as the Parties shall agree and as shall be specified in the Certificate of Merger.

(3)        Organizational Documents. At the Effective Time, the certificate of incorporation and bylaws of Merger Sub as in effect immediately prior to the Effective Time shall become the certificate of incorporation and bylaws of the surviving company, until thereafter supplemented or amended in accordance with applicable Law.

(4)        Directors and Officers. The Parties shall take all necessary actions such that, from and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable Law, or until their earlier death, resignation or removal in accordance with the organizational documents of Holdco as the surviving company, (a) the directors of Merger Sub immediately prior to the Effective Time shall be the directors of Holdco as the surviving company and (b) the officers of Holdco immediately prior to the Effective Time shall be the officers of Holdco as the surviving company, in each case in accordance with the terms of the organizational documents of Holdco in effect after the Effective Time.

(5)        Conversion of Equity Interests. Each share of common stock in Holdco issued and outstanding immediately prior to the Effective Time shall automatically be converted into the right to receive the Common Stock Consideration and Preferred Stock Consideration issued or paid by SMGI to the applicable Sellers in accordance with Section 2.2(c). The outstanding shares of common stock in Merger Sub issued and outstanding immediately prior to the Effective Time automatically shall be converted into and exchanged for all of the outstanding shares of common stock in Holdco as of immediately following the Effective Time. From and after the Effective Time, the shares of common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock into which they were converted in accordance with the immediately preceding sentence.

(b)           Purchase and Sale of Fleet, Transportation, Global, Logistics and Wash Company Interests. In accordance with, and subject to, the provisions of this Agreement, at the Closing SMGI shall purchase from the applicable Sellers, and the applicable Sellers shall sell to the Buyer, all of the Company Interests of Fleet, Transportation, Global, Logistics and Wash, free and clear of all Encumbrances (other than Encumbrances under federal and state securities laws).

2.2          Consideration. Upon the terms of this Agreement, in consideration of the Transactions, the consideration to be paid by Buyer to the Sellers at the Closing (the “Purchase Price”) with respect to each of the Companies shall consist of the following:

(a)           Fleet. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the purchase of the Fleet Company Interests shall consist of:

(1)        $1,961,413.64 of the Closing Cash Consideration; and

(2)        $600,000 of the Note Consideration.

(b)           Transportation. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the purchase of the Transportation Company Interests shall consist of:

(1)        $18,154,345.44 of the Closing Cash Consideration; and

(2)        $600,000 of the Note Consideration.

(c)           Legend. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the Merger shall consist of:

(1)        500 shares of Preferred Stock; and

(2)        77,000,000 shares of Common Stock.

(d)           Logistics. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the purchase of the Logistics Company Interests shall consist of:

(1)        $1,961,413.64 of the Closing Cash Consideration; and

(2)        $600,000 of the Note Consideration.

(e)           Global. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the purchase of the Global Company Interests shall consist of:

(1)        $1,961,413.64 of the Closing Cash Consideration; and

(2)        $600,000 shares of the Note Consideration.

(f)            Wash. The aggregate consideration to be paid by Buyer to the applicable Sellers at the Closing in connection with the purchase of the Wash Company Interests shall consist of:

(1)        $1,961,413.64 of the Closing Cash Consideration; and

(2)        $600,000 shares of the Note Consideration.

(g)           Escrow. Notwithstanding the foregoing, the Parties agree that the Indemnity Escrow Amount and the Purchase Price Adjustment Escrow Amount shall be set aside and deposited into an escrow account (“Escrow”) with JPMorgan Chase Bank, N.A. (“Escrow Agent”), with the Indemnity Escrow Amount held for a period of eighteen (18) months from the Closing Date to cover Claims of Buyer against Sellers arising out of a breach of this Agreement or Sellers’ indemnity obligations hereunder and the Purchase Price Adjustment Escrow Amount held until the Purchase Price adjustment amount is finalized pursuant to Section 2.3. The Escrow shall be governed by an escrow agreement substantially in the form attached as Exhibit C (“Escrow Agreement”).

2.3           Purchase Price Adjustment.

(a)           Adjustment at Closing. Exhibit D, which was provided by Sellers to Buyer at least three (3) Business Days before Closing, sets forth the calculation of the NWC Target, Estimated NWC, Estimated Closing Company Cash, Estimated Indebtedness and Estimated Transaction Expenses. The NWC Target, Estimated NWC, Estimated Closing Company Cash, Estimated Indebtedness and Estimated Transaction Expenses are calculated in accordance with GAAP as applied by the Companies in connection with preparation of their 2022 audited financial statements. Any adjustments to the Closing Cash Consideration will be allocated among the Companies pro rata, in accordance with the allocation of Closing Cash Consideration set forth in Section 2.2.

(b)           Post-Closing Adjustment.

(1)           On or before the ninetieth (90^th) day after the Closing Date, Buyer shall prepare and deliver to the Sellers’ Representative a statement setting forth its calculation of Net Working Capital as of the Closing (the “Closing Net Working Capital”), Closing Company Cash, Closing Indebtedness and Transaction Expenses as of the Closing (the “Post-Closing Statement”). The Post-Closing Statement shall be prepared in accordance with GAAP as applied by the Companies in connection with preparation of their 2022 audited financial statements. The Sellers’ Representative and Buyer will cooperate with each other and their respective representatives in good faith and in all reasonable respects as may be requested by the opposite Party in preparing and reviewing the Post-Closing Final Statement. The final determination of Closing Net Working Capital, Closing Company Cash, Closing Indebtedness and Transaction Expenses as of the Closing pursuant to this Section 2.3 is the “Final Net Working Capital,” “Final Closing Company Cash,” “Final Closing Indebtedness,” and “Final Transaction Expenses”, respectively. If Final Net Working Capital is within $500,000 of Estimated NWC, the Parties agree that there shall be no adjustment to the Purchase Price relating to such difference between Final Networking Capital and Estimated NWC.

(1)           Examination. After receipt of the Post-Closing Statement, the Sellers’ Representative shall have thirty (30) days (the “Review Period”) to review the Post-Closing Statement. During the Review Period, the Sellers’ Representative and Sellers’ accountants shall have full access to the books and records of the Companies to the extent that they relate to the Post-Closing Statement.

(2)           Objection. On or prior to the last day of the Review Period, the Sellers’ Representative may object to the Post-Closing Statement by delivering to Buyer a written statement setting forth Buyer’s objections in reasonable detail, indicating each disputed item or amount and the basis for Buyer’s disagreement therewith (the “Statement of Objections”). If the Sellers’ Representative fails to deliver the Statement of Objections before the expiration of the Review Period, the Post-Closing Statement and the Post-Closing Adjustment, as the case may be, reflected in the Post-Closing Statement shall be deemed to have been accepted by the Sellers’ Representative. If the Sellers’ Representative delivers the Statement of Objections before the expiration of the Review Period, Buyer and the Sellers’ Representative shall negotiate in good faith to resolve such objections within 30 days after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution Period, the Post-Closing Adjustment and the Post-Closing Statement with such changes as may have been previously agreed in writing by Buyer and the Sellers’ Representative, shall be final and binding.

(3)           Resolution of Disputes. If the Sellers’ Representative and Buyer fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then either the Sellers’ Representative or Buyer may submit any amounts remaining in dispute (“Disputed Amounts”) for resolution to the office of Katz, Sapper & Miller, in Indianapolis, Indiana or such other independent public accounting firm as is reasonably acceptable to Buyer and the Sellers’ Representative (the “Independent Accountants”), who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post-Closing Adjustment, as the case may be, and the Post-Closing Statement. Buyer and the Sellers’ Representative will jointly engage the Independent Accountants and will enter into an engagement letter with the Independent Accountants promptly after retention, which will include customary indemnification, confidentiality and other provisions proposed by the Independent Accountants. The Sellers’ Representative and Buyer will cooperate with the Independent Accountants in good faith and in all reasonable respects as may be requested by the Independent Accountants, including providing the Independent Accountants reasonable access during normal business hours and on reasonable advance notice to any relevant personnel, properties, and books and records of the Companies. The Parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountants shall only decide the specific items under dispute by the Parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Post-Closing Statement and the Statement of Objections, respectively.

(4)           Fees of the Independent Accountants. The fees and expenses of the Independent Accountant shall be paid by Sellers, on the one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Sellers or Buyer, respectively, bears to the aggregate amount actually contested by Sellers and Buyer.

(5)           Determination by Independent Accountants. The Independent Accountants shall make a determination as soon as practicable within thirty (30) days (or such other time as the Parties hereto shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Post-Closing Statement and/or the Post-Closing Adjustment shall be conclusive and binding upon the Parties hereto.

(d)           Payments of Post-Closing Adjustment.

(1)           The post-closing adjustment shall be an amount equal to the sum of (I) Final Net Working Capital plus (or minus) the Final Cash Adjustment minus Final Closing Indebtedness minus Final Transaction Expenses, minus the sum of (II) Estimated NWC plus (or minus) the Closing Cash Adjustment minus Estimated Indebtedness minus Estimated Transaction Expenses (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall pay to Sellers, as directed by the Sellers’ Representative, an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, Sellers shall pay to Buyer an amount equal to the Post-Closing Adjustment out of the Purchase Price Adjustment Escrow Amount or, if the amount of the Post-Closing Adjustment exceeds the Purchase Price Adjustment Escrow Amount, by Sellers directly.

(2)           Except as otherwise provided herein, any payment of the Post-Closing Adjustment shall be due within five (5) Business Days of acceptance of the applicable Post-Closing Statement; or if there are Disputed Amounts, then within five (5) Business Days of the final resolution of such disputes in accordance with this Section 2.3; and be paid by wire transfer of immediately available funds to such account as is directed by Buyer or Sellers, as the case may be. Any Post-Closing Adjustment will be allocated among the Companies pro rata, in accordance with the allocation of Closing Cash Consideration set forth in Section 2.2.

(e)           Adjustments for Tax Purposes. Any payments made pursuant to Section 2.3 shall be treated as an adjustment to the Purchase Price by the Parties for Tax purposes, unless otherwise required by Law.

2.4           Closing. The closing of the transactions set forth herein (the “Closing”) shall take place (a) on the date hereof or (b) at such other time as Buyer and the Sellers may mutually agree in writing. Such date is referred to herein as the “Closing Date.” All actions to be taken and all documents to be executed or delivered at Closing will be deemed to have been taken, executed and delivered simultaneously, and no action will be deemed taken and no document will be deemed executed or delivered until all have been taken, delivered and executed, except in each case to the extent otherwise stated in any such document.

2.5           Closing Deliverables.

(a)           SMGI. At the Closing, SMGI shall have delivered or caused to be delivered to the Sellers the following:

(1)           resolutions duly adopted by the board of directors of SMGI authorizing and approving the Acquisition and the execution, delivery and performance of this Agreement;

(2)           resolutions duly adopted by the board of directors appointing each of Bryan and Tim as members of SMGI’s board of directors;

(3)           this Agreement duly executed by SMGI;

(4)           the employment agreements between Buyer or the applicable Company and each of the Key Employees, in the form agreed by Buyer and each such Key Employee (the “Employment Agreements”), executed on behalf of Buyer or the applicable Company;

(5)           the Escrow Agreement executed by SMGI and the Escrow Agent;

(6)           IRS Forms W-9 from each Seller;

(7)           a side letter among Buyer and Sellers relating to the purchase and sale of Jet Park Warehousing LLC and LakeShore Warehousing LLC executed by Buyer; and

(8)           such other documents as the Companies or Sellers may reasonably request in connection with the transactions contemplated hereby.

(b)           Sellers. On the Closing Date, the Companies and Sellers shall have delivered to SMGI the following:

(1)           certificates representing the Holdco Interests and the Company Interests of Fleet, Transportation, Global, Logistics and Wash, duly endorsed in blank or each accompanied by a stock power effecting the transfer thereof to SMGI;

(2)           this Agreement duly executed by the Companies and Sellers;

(3)           resolutions duly executed by the managers and members of the Companies authorizing and approving the Acquisition and the execution, delivery and performance of this Agreement;

(4)           the Companies’ audited financial statements for the years ended December 31, 2022 and 2021;

(5)           the Employment Agreements executed by each of the Key Employees;

(6)           the Escrow Agreement executed by the Sellers’ Representative and the Escrow Agent;

(7)           terminations of each of the Existing Related Party Leases executed by the landlord and tenant thereunder, and new leases for each parcel of Leased Real Property subject to an Existing Related Party Lease, substantially in the form attached hereto as Exhibit E (each a “New Related Party Lease” and collectively the “New Related Party Leases”), executed by the landlord and tenant under each such New Related Party Lease;

(8)           documents evidencing each Restructuring, in form and substance reasonably acceptable to Buyer;

(9)           a side letter among Buyer and Sellers relating to the purchase and sale of Jet Park Warehousing LLC and LakeShore Warehousing LLC executed by each of the Sellers; and

(10)         such other documents as SMGI may reasonably request in connection with the transactions contemplated hereby.

2.6           Required Withholding. Buyer shall be entitled to deduct and withhold from any consideration otherwise payable under this Agreement such amounts as may be required to be deducted or withheld therefrom under the Code, or any other applicable state, local or foreign Law. To the extent that any amounts are so deducted and withheld and paid to the appropriate Governmental Authorities, those amounts shall be treated as having been paid to the Person in respect of whom such deduction or withholding was made for all purposes under this Agreement.

Section 3.              REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES AND HOLDCO. Except as set forth in the applicable section of the Disclosure Schedule, the Sellers, jointly and severally, represent and warrant to Buyer that:

3.1           Organization and Qualification; Enforceability.

(a)           Each Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Pennsylvania, and Holdco is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Each Company and Holdco has all requisite organizational power and authority to own, operate and lease its respective properties, and to carry on its business, including the Business, as and where it is currently being conducted. Each Company and Holdco is legally qualified to transact business as foreign entities and is in good standing in each of the jurisdictions in which its business or property is located such as to require that it be thus qualified, except for such jurisdictions where the failure to so qualify or be in good standing would not have a Material Adverse Effect. This Agreement has been duly executed and delivered by the Companies and, assuming the due authorization, execution and delivery by the other Parties hereto, constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by the Companies and Holdco pursuant hereto, assuming the due authorization, execution and delivery by the other Parties thereto, will constitute, valid and binding agreements of the Companies and Holdco, enforceable in accordance with their respective terms, subject to the Bankruptcy and Equity Exception. True, correct and complete copies of the Organizational Documents of the Companies and Holdco as presently in effect have been delivered to Buyer. None of the Companies own any outstanding equity interests in any Persons, including any Subsidiaries, and Holdco does not own any outstanding equity interests in any Person other than the applicable Companies. None of the Companies or Holdco is in violation of any of the provisions of their respective Organizational Documents.

(b)           The Holdco Board has unanimously (i) approved and declared advisable this Agreement and the Transactions, including the Merger, (ii) declared that it is in the best interests of the stockholders of Holdco that Holdco enter into this Agreement and consummate the Transactions on the terms and subject to the conditions set forth in this Agreement, (iii) directed that the adoption of this Agreement be submitted to a vote at a meeting of the stockholders of Holdco and (iv) recommended to the stockholders of Holdco that they adopt this Agreement and approve the Transactions, including the Merger. The vote of a majority of the outstanding Holdco Interests is the only vote of the holders of stock of Holdco necessary to adopt this Agreement and approve the Transactions. Assuming that such vote is received, the execution, delivery and performance of this Agreement by Holdco and the consummation by Holdco of the Transactions have been duly and validly authorized by all necessary corporate action on the part of Holdco.

3.2           Capitalization.

(a)           Immediately prior to the Closing, the outstanding Interests of Holdco, Fleet, Transportation, Global, Logistics and Wash shall consist solely of the Interests being sold to Buyer or subject to the Merger. There are no commitments to issue, and there are no outstanding options, convertible securities or debt, or any other securities of Holdco or the Companies as of the date of Closing. All of the Interests were, when issued, duly authorized and validly issued, fully paid and nonassessable and are owned (beneficially and of record), directly or indirectly, by the Sellers.

(b)           Immediately prior to the Closing, all of the outstanding Interests of Legend are held by Holdco.

(1)           in violation of any agreement, arrangement or commitment to which any of the Companies are a party;

(2)           in violation of any of the provisions of each of the Companies’ or Holdco’s Organizational Documents; or

(3)           in violation of any preemptive or similar rights of any Person.

(d)           There are no voting trusts, member agreements, operating agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Interests in the Companies or Holdco.

(e)           Upon consummation of the transactions contemplated by this Agreement, Buyer shall own, directly or indirectly, all of the Interests in the Companies and Holdco free and clear of Encumbrances (other than Encumbrances under federal and state securities laws).

3.3           No Conflict; Required Filings and Consents. Neither the execution and delivery of this Agreement nor the consummation by the Companies and Holdco of the Transactions:

(a)           violates any Law or any Order, in each case applicable to the Companies or Holdco or by which any of their properties are bound or affected,

(b)           requires any authorization, consent, approval, exemption or other action by or notice to any Governmental Authority, except for the United States Department of Transportation (“DOT”) qualification and permits and except for those consents, approvals, authorizations, permits, filings or notifications, the failure to be made or obtained would not reasonably be expected to have a Material Adverse Effect; or

(c)           violates or conflicts with, or constitutes a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of or require consent or the provision of notice, or result in the creation or imposition of any Encumbrance, under any term or provision:

(1)           of the Organizational Documents of any of the Companies or Holdco: or

(2)           of any Material Contract, except in the case of any Material Contract, as would not, individually or in the aggregate, be material to the Companies or Holdco.

3.4           Financial Statements. The Companies have delivered or made available to Buyer copies of the following financial statements prepared by the Companies, including in each case, if applicable, all notes thereto (the “Financial Statements”):

(a)           audited consolidated financial statements consisting of the balance sheets of the Companies as of December 31, 2022, and the related statements of income and retained earnings, members equity and cash flow for the years ended December 31, 2022 and 2021 (the “Audited Financial Statements”).

(b)           The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby. The Financial Statements are based on the books and records of the Companies and fairly present, in all respects, the financial condition of the Companies as of such dates and for such periods.

(c)           To the Companies’ Knowledge, since January 1, 2021, no auditor, Affiliate, accountant or representative of the Companies has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or Claim, or significant weakness or deficiency, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Companies, or its internal accounting controls, including any complaint, allegation, assertion or Claim that the Companies have engaged in questionable accounting or auditing practices. The Companies’ internal accounting controls are sufficient to ensure financial reporting is in accordance with GAAP.

(d)           Except as set forth in Section 3.4(d) of the Disclosure Schedule or the Audited Financial Statements, as of the date hereof, there is no Indebtedness of the Companies. There are no off-balance sheet financing arrangements to which any Company is a party.

(e)           All inventory of the Companies reflected in the balance sheets within the Audited Financial Statements as such amount has been adjusted since such date and through the date hereof consists of a quality and quantity usable and saleable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established. All inventory (and any reserves or allowances thereto) of the Companies reflected in the balance sheets within the Audited Financial Statements have been calculated and recorded in accordance with GAAP. All such inventory is owned by the Companies, free and clear of all Encumbrances (other than security interests which will be satisfied and discharged upon payment of Indebtedness or other Permitted Encumbrances), and no inventory is held on a consignment basis. The quantities of each such item of inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of the Companies, consistent with past practice.

(f)           The Companies were granted loans in the aggregate principal amount of $1,214,214 received on January 21, 2021 (the “PPP Loan”) pursuant to the Paycheck Protection Program from Citizens Bank (the “PPP Loan Account Agent”). The PPP Loan was forgiven in full as of December 31, 2021. As of the date on which the Companies submitted the application for the PPP Loan, all such application documentation (and all certifications made therein) were true and accurate in all material respects, and were made in compliance in all material respects with all applicable Laws and other requirements of the Paycheck Protection Program. At the time of application, the Companies met all eligibility requirements for receiving the PPP Loan. The usage of all proceeds from the PPP Loan constituted only “permitted uses” within the meaning of the Paycheck Protection Program requirements, and the Companies met all eligibility requirements for receiving forgiveness of the PPP Loan. To the Companies’ Knowledge, the Companies are not currently the subject of an audit, investigation or other inquiry by the Small Business Administration or any other Governmental Entity with respect to the PPP Loan. The Sellers or Companies were not granted any loans under the Paycheck Protection Program other than the PPP Loan.

3.5           Undisclosed Liabilities. None of the Companies have any liabilities or obligations of any nature (whether accrued, absolute, fixed, contingent or otherwise) that are not reflected on the balance sheet included in the Audited Financial Statements as of December 31, 2022 (“Audited Balance Sheet”) or in the notes thereto in compliance with GAAP, other than:

(a)           liabilities or obligations incurred in the ordinary course of business consistent with past practice after December 31, 2022 (“Audited Balance Sheet Date”);

(b)           liabilities or obligations incurred in connection with the transactions contemplated hereby; or

(c)           any other liabilities or obligations which, individually or in the aggregate, are not, or would not reasonably be expected to be, material to the Companies; or

(d)           as set forth in Section 3.5(d) of the Disclosure Schedule.

3.6           Compliance; Permits; Operation of the Companies.

(a)           Compliance. Each Company is, and since January 1, 2018 has been, in compliance in all material respects with all Laws and Orders applicable to the Company, the ownership or use of its properties or assets or the conduct or operation of its Business. Since January 1, 2018, no Company has received any written notice from any Governmental Authority or other Person with respect to the operation of the Business or the ownership or use of any of its assets claiming any violation or alleged violation of any Law or Order which remains unresolved. To the Knowledge of the Companies, no investigation or review by any Governmental Authority with respect to the Companies, the ownership or use of properties or assets or the conduct or operation of the Business is pending or Threatened.

(b)           Permits. Each Company has all licenses, permits, approvals, registrations, filings, certifications, consents and listings (collectively, the “Permits”) of all Governmental Authorities required for the conduct of the Business and the ownership, leasing and operation of its property and assets, except where the failure to have one or more Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All such Permits are set forth in Section 3.6(b) of the Disclosure Schedule and are in full force and effect on the date hereof. Each Company is in compliance in all material respects with all such Permits. Since January 1, 2018, no Company has received any written notice, or to the Companies’ Knowledge any oral notice, of any material Action relating to the revocation, nonrenewal, suspension or modification of any Permit that remains unresolved.

(c)           Safety. The Companies, as applicable, have reasonable procedures in place to validate its contractual counterparties compliance with contractual obligations for insurance coverage, operating authority, safe operations, and other relevant factors. Transportation is the only Company that is subject to the safety regulations of the FMCSA, and is in all material respects in compliance with all FMCSA regulations, including, without limitation, the leasing regulations set forth in 49 C.F.R. Part 376, and the intermodal equipment regulations set forth in 49 C.F.R. Part 385, and 390. Transportation currently has a “Satisfactory” with the FMCSA, and has not received an unsatisfactory or conditional rating from the FMCSA.

3.7           Absence of Certain Changes or Events. Since January 1, 2022 to the date of this Agreement, each of the Companies has conducted the Business only in the ordinary course consistent with past practices, and there has not occurred any effect, event, state of facts, condition, circumstance, change, event, occurrence or development that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, and other than as required under the terms of this Agreement, since January 1, 2022, except as set forth in Schedule 3.7 of the Disclosure Schedule, no Company has:

(a)           incurred or assumed any Indebtedness (whether directly or by way of guarantee or otherwise), other than draws on established lines of credit or financing of equipment acquisitions;

(b)           issued, sold, distributed, split, reclassified, purchased or disposed of any membership interests, equity securities, notes or other securities, or committed itself to do so;

(c)           placed or permitted any Encumbrance, other than a Permitted Encumbrance, on any of its Leased Real Property or assets, tangible or intangible;

(d)           suffered any material loss, damage or destruction, not covered by insurance, relating to or affecting the Business or the assets of the Company;

(e)           terminated, amended, adopted or instituted any Company Benefit Plan;

(f)           changed its credit or accounting policies or practices, except as disclosed in the notes to the Financial Statements, as required by concurrent changes in GAAP or applicable Laws;

(g)           made any material change in the cash management practices of the Company or its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

(h)           made any new Tax election, changed or revoked any Tax election, amended any Tax Return or changed in any manner any position on any Tax Return, changed any accounting period or method with respect to Taxes, entered into any closing agreement, settled any Tax Claim or assessment, surrendered any right to Claim a refund of Taxes, consented to any extension or waiver of the limitation period applicable to any Tax Claim or assessment;

(i)           entered into any merger, consolidation, recapitalization or other business combination or reorganization (except with respect to the transactions contemplated herein);

(j)           entered into any settlement, or offer or proposal to settle:

(1)           any material Claim involving or against the Company;

(2)           any member litigation or dispute against the Company or any of its officers or directors; or

(3)           any Claim that relates to the transactions contemplated hereby;

(k)           amended its Organizational Documents;

(l)           entered into any Contract that would constitute a Material Contract that has not been disclosed as a Material Contract and set forth in Section 3.10 to the Disclosure Schedule;

(m)           acquired, transferred, leased (as lessor or lessee), subleased, licensed, assigned, sold or otherwise disposed of any Leased Real Property or of the assets shown or reflected in the Financial Statements or cancelled any debts or entitlements;

(n)           transferred, assigned or granted any license or sublicense of any material rights under or with respect to any Intellectual Property (other than a revocable, non-exclusive license or sublicense granted in the ordinary course of business);

(o)           made any capital investment in, or any loan to, any other Person;

(p)           accelerated, terminated, renewed (other than renewed automatically), made a material modification to or cancelled any Material Contract to which the Company is a party or by which it is bound;

(q)           waived, released or assigned any material rights under any Material Contract;

(r)           granted any bonuses, whether monetary or otherwise, or any general wage or salary increases in respect of its employees, other than as provided for in any written agreements or consistent with past practice, or entered into or changed any terms of employment for any employee, other than as set forth in Section 3.7(r) of the Disclosure Schedule;

(s)           entered into or terminated any employment agreement or collective bargaining agreement, whether written or oral, or modified the terms of any such existing agreement;

(t)           made any loan to, or entered into any other transaction with, any of its directors, officers and employees;

(u)           entered into a new line of business or abandoned or discontinued existing lines of business;

(v)           undertaken or entered into a Contract to undertake capital expenditures in excess of $250,000, in the aggregate;

(w)           acquired, or agreed to acquire in any manner, any fee interest in any real property; or

(x)           entered into any agreement or commitment (whether written or oral) to do any of the foregoing.

3.8           Litigation and Proceedings. Except as set forth in Section 3.8 of the Disclosure Schedule, there are no outstanding Orders and there are no unsatisfied judgments, penalties or awards against or affecting the Companies or any of their properties or assets or Actions pending or, to the Knowledge of the Companies, Threatened:

(a)           against or by any Company affecting any of its properties or assets;

(b)           against or by any Company that would, or would reasonably be expected to, individually or in the aggregate, be material to such Company; or

(c)           against or by any Company that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

3.9           Real Property.

(a)           Leased Real Property. Section 3.9(a) of the Disclosure Schedule sets forth a true and complete list and description of the real property leased, subleased or licensed by the Companies, or for which a right to use or occupy real property has been granted to a Company (the “Leased Real Property”). Section 3.9(a) of the Disclosure Schedule also identifies each lease, sublease, license or other Contract or agreement under which a Company leases, subleases, licenses or otherwise uses or occupies the Leased Real Property (including all amendments, modifications, supplements, renewals and extension thereto and guarantees thereof, the “Leases”). Except as set forth in Section 3.9(a) of the Disclosure Schedule, there are no leases, subleases, options or other agreements relating to or affecting the Leased Real Property to which a Company is a party. No Company is currently in default of or in violation of any of the terms of any Lease. All of the Leases are in full force and effect, valid, and binding on the applicable Company and, to the Knowledge of the applicable Company, on each counterparty thereto, and enforceable in accordance with their respective terms, subject to the Bankruptcy and Equity Exception. The applicable Company has a valid and enforceable leasehold interest under each Lease, free and clear of all Encumbrances, other than Permitted Encumbrances, and the applicable Company has not given or received any written notice of any default (including written notice of any accrued default that is subject only to a notice or cure period) under any Lease which remains unresolved, and to the Knowledge of the applicable Company, no other party is in default thereof, and no party to any Lease has exercised any termination rights with respect thereto. To the Knowledge of the applicable Company, no event has occurred and no circumstance exists which, if not remedied, and whether with or without notice or the passage of time or both, would result in a material default or violation of any Lease. The transactions contemplated by this Agreement do not require the consent of or notice to any landlord or other counterparty under any of the Leases. The applicable Companies have delivered to Buyer true, correct and complete copies of all of the Leases. Each applicable Company has either paid and discharged, or accrued as a liability in the Financial Statements, all current payment obligations with respect to the Leased Real Property and there is no payment amount due or payable other than as set forth as a “current liability” in the Audited Balance Sheet or incurred in the ordinary course of business consistent with past practice after the date of the Audited Balance Sheet. The Leased Real Property constitute all of the parcels and tracts of land used in the Business. None of the Companies has assigned, transferred, conveyed, mortgaged, deed in trust, or encumbered its interest in any of the Leased Real Property or any of its rights under any Leases.

(b)           Third Party Rights to the Leased Real Property. Except as set forth in Section 3.9(b) of the Disclosure Schedule, there are no written or oral subleases, licenses, concessions, occupancy agreements, options, rights or other Contracts or agreements to which any Person other than the applicable Companies have the right to lease, sublease, license, use or occupy the Leased Real Property.

(c)           Owned Property. None of the Companies own or possess any fee or similar interest in any real property or improvements, nor have any of the Companies previously owned any real property.

(d)           Improvements. All buildings, structures, fixtures and other improvements included within the Leased Real Property (the “Improvements”) are in reasonable operating condition, subject only to ordinary wear and tear, and the Improvements are adequate for the purposes for which they are presently being used or held for use.

(e)           Existing Related Party Leases. Except as set forth in Section 3.17 of the Disclosure Schedule (the “Existing Related Party Leases”), no landlord under any Real Property Lease is an Affiliate of, or is a Related Party to or has any economic interest in, any of the Companies.

3.10         Material Contracts. Section 3.10 of the Disclosure Schedule lists each of the following Contracts of the Companies (such contracts being a “Material Contract” and, collectively, as the “Material Contracts”):

(a)           any Contract with any Material Supplier as to which there is a remaining non-contingent payment or delivery obligation that exceeds $100,000;

(b)           any Contract with a representative, broker or sales agency involving in any one case payments of more than $25,000 per year in 2022 or projected for 2023;

(c)           any Contract with respect to the use of personal property with annual rental payments in excess of $25,000, under which any Company is either a lessor or lessee, or any Lease;

(d)           any Contract relating to Indebtedness, the borrowing or lending of money, or the guaranty of another Person’s borrowing of money or other obligation, including any note, debenture, bond, conditional sale agreement, equipment trust agreement, letter of credit agreement, loan agreement or other Contract or commitment for the borrowing or lending of money (including loans to or from officers, managers, directors, members, or any member of their immediate families), agreement or arrangement for a line of credit or guarantee, pledge or undertaking of the Indebtedness of any other Person;

(e)           any Contract relating to any joint venture, partnership or other arrangement (however named) involving a sharing of the profits, losses, costs or liabilities of a Company with any other Person;

(f)           any Contract containing covenants or conditions that, in any material respect, purports to restrict the business activity of a Company or any of its Affiliates, or limit the freedom of a Company or any of its Affiliates to engage in any line of business or to compete with any third party, or soliciting any customers or any individuals for employment;

(g)           any Contract relating to the acquisition or disposition of any business, material assets or any securities (whether by merger, sale of equity, sale of assets or otherwise) or similar transaction, which contain representations, covenants, indemnities or current or future rights or obligations, including any indemnification, “earnout” or other deferred or contingent consideration;

(h)           any labor agreement, collective bargaining agreement or similar labor-related agreement with any labor organization, works council, trade union or other similar employee representative or employee representative body representing, or to the Companies’ Knowledge, purporting to, or seeking to, represent any employee of a Company;

(i)           any Contract that prohibits the payment of dividends or distributions in respect of Interests of the Companies, prohibits the pledging of Interests of the Companies, or prohibits the issuance of guarantees by the Companies;

(j)           any Contract that contains obligations of the Companies secured by, or otherwise provides for, an Encumbrance (other than Permitted Encumbrances) on any asset (tangible or intangible) of the Companies;

(k)           any Contract that is a settlement or similar agreement with any Person or Governmental Authority entered into since January 1, 2021, in each case, requiring payments in excess of $25,000 or otherwise limiting the operation of a Company (or any of its Affiliates) in any material respect after the Closing;

(l)           any employment, consulting or engagement agreement with any Person involving aggregate annual salary and potential bonus payments by a Company in excess of $100,000 per annum;

(m)           any Contract of a Company with an Affiliate, including, without limitation, any severance, retention or change of control agreements or arrangements in connection with the transactions contemplated by this Agreement;

(n)           any voting trust agreement, registration rights agreement or other similar Contract or understanding relating to any equity interests of the Companies, or any other agreement relating to the disposition, voting, dividends or other payments or repurchase obligations with respect to any equity interests of the Companies;

(o)           any requirements in any Contract or Contracts obligating a Company to any minimum purchase or “take-or-pay” obligation;

(p)           any Contract containing a “most-favored-nation” clause or similar term that provides preferential pricing or treatment or establishing any exclusive sale or distribution or exclusive purchase obligation;

(q)           any Contract granting any rights of first refusal, rights of first offer, rights of first negotiation or other similar rights to any Person with respect to the sale (by merger or otherwise) of the securities or assets of any Company;

(r)           any Contract that:

(1)           relates to:

a.           the licensing of, or grant of other rights under, Intellectual Property to or from a Company, excluding: (i) non-exclusive end-user licenses granted to a Company for unmodified, commercially available, off-the-shelf software, with an annual fee of less than $25,000; and (ii) non-exclusive licenses granted by a Company and related to a Company’s provision of its products and services to end customers in the ordinary course of business consistent with past practice with an annual fee of less than $25,000; or

b.           the development of any Intellectual Property; or

(2)           affects a Company’s ability to enforce any Intellectual Property in connection with the resolution of any Claim or dispute related to Intellectual Property;

(s)           any agreement of indemnification by a Company, other than any agreement providing for indemnification entered into in connection with the sale or license of products or services in the ordinary course of business consistent with past practice;

(t)           all Contracts that provide for the indemnification by a Company of any Person or the assumption of any Tax, retirement, environmental or other Liability of any Person, other than services agreements, purchase orders and sales orders entered into with customers, suppliers and vendors in the ordinary course of business;

(u)           any Contract to acquire any real property;

(v)           any Contract containing any future capital expenditure obligations of any Company in excess of $100,000;

(w)          all employment agreements and Contracts with independent contractors or consultants (or similar arrangements) to which any Company is a party and which are not cancellable without material penalty or without more than ninety (90) days’ notice; and

(x)           any Contract to enter into any one of the foregoing.

3.11         Material Contracts Representation. The Companies have delivered or made available to Buyer prior to the date hereof complete copies (including all amendments, modifications, supplements, annexes and schedules thereto and written waivers thereunder) of each written Material Contract and a written summary of the terms of any oral Material Contract. No Company is in default in any material respect under any Material Contract. To the Companies’ Knowledge, no third party is in material breach or material default under any Material Contract. No Company has received written notice of a third party’s intent to terminate, modify or seek renegotiation of, such Material Contract, and there are no material disputes pending, or, to the Knowledge of the Companies, Threatened with regard to any Material Contract. Each Material Contract is in full force and effect and is a valid and binding agreement enforceable against the applicable Company and, to the applicable Companies’ Knowledge, the other party or parties thereto, in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium, and other similar laws affecting the rights and remedies of creditors generally and by general principles of equity (including without limitation the availability of specific performance or injunctive relief and the application of concepts of materiality, reasonableness, good faith and fair dealing) (the “Bankruptcy and Equity Exception”). To the Knowledge of the Companies, there has not been any event, condition or circumstance that has occurred or that exists which with or without notice, the passage of time and/or the happening of an event would, by, or for, a Company or any other party to such Material Contract, under any such Material Contract:

(a)           result in a material default, material breach or event of material noncompliance;

(b)           result in a right of termination; or

(c)           cause or permit the acceleration of or other material changes to any right or obligation or the loss of any material benefit.

3.12         Employee Benefit Plans.

(a)           Section 3.12(a) of the Disclosure Schedule contains a true and complete list of each Employee Benefit Plan that is maintained, sponsored, or contributed to by the Companies or under which a Company has or would reasonably be expected to have any Liability (each, a “Company Benefit Plan”). True and complete copies of all plan documents for all Company Benefit Plans, including all amendments thereto (or, for any Company Benefit Plan not in writing, a written summary of its material terms) have been provided to Buyer, together with, to the extent applicable, copies for each Company Benefit Plan of:

(1)           all trust agreements, custodial agreements, insurance policies, and administrative, investment, investment management and investment advisory agreements;

(2)           all summary plan descriptions, summaries of material modifications;

(3)           all annual reports (Forms 5500) required to have been filed for the three (3) most recent plan years, with all applicable schedules and attachments;

(4)           the most recent financial statements and actuarial or other valuations reports prepared with respect thereto;

(5)           the most recent determination or opinion letter, if any, issued by the IRS; and

(6)           all material non-routine correspondence to and from any Governmental Authority within the last three (3) years.

(b)           No Company has made any commitment to create any additional Company Benefit Plan or to amend, modify or terminate any existing Company Benefit Plan, other than with respect to any amendment, modification or termination required by ERISA, the Code or other applicable Law.

(c)           No Company or any respective ERISA Affiliate maintains, contributes to or has any obligation (contingent or otherwise) to contribute to, or within the past six (6) years has maintained, contributed to or had any obligation (contingent or otherwise) to contribute to, any:

(1)           “multiemployer plan” as defined in Section 3(37) of ERISA;

(2)           pension plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code;

(3)           “multiple employer plan” (within the meaning of Section 413(c) of the Code); or

(4)           a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA.

(d)         None of the assets of any Company are the subject of any Encumbrance arising under Title IV of ERISA or pursuant to Section 430(k) of the Code or a violation of Section 436 of the Code. No liability under Title IV or Section 302 of ERISA has been incurred by any Company or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a risk to any Company or any ERISA Affiliate of incurring any such liability.

(e)           With respect to each Company Benefit Plan:

(1)           all contributions, premium payments, benefit payments and other payments due to or from the Company Benefit Plan (or from any Company with respect to each such Company Benefit Plan) have been made on a timely basis;

(2)           the Company Benefit Plan has been established and administered in accordance with its terms in all material respects and in compliance with all applicable Laws and Orders;

(3)           each Company Benefit Plan that is intended to qualify under Section 401 of the Code has received a favorable determination letter from the IRS (or a favorable opinion letter that may be relied on) regarding the tax-qualified status of such Company Benefit Plan under Section 401(a) of the Code and the exempt status of the related trust(s) under Section 501(a) of the Code, and to the Companies’ Knowledge, no event has occurred or condition exists that would reasonably be expected to result in a loss of such tax-qualification or adversely affect tax exemption; and

(4)           there is no Claim pending (other than routine claims for benefits) or, to the Companies’ Knowledge, Threatened with respect to the Company Benefit Plan or against the assets of the Company Benefit Plan and there is no governmental audit in process or pending with respect to any such Company Benefit Plan.

(f)            Except as expressly required under Sections 601 through 609 of ERISA or similar state insurance law, no Company Benefit Plan provides benefits, including death or medical benefits (whether or not insured), beyond an individual’s retirement or other termination of service from the Companies.

(g)           Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, either singly or in conjunction with any other event, will:

(1)           entitle any current or former employee, director, manager or independent contractor or any other Person to any change in control, retention or severance pay, unemployment compensation or any other payment or benefit, except as set forth in Section 3.12(g)(1) of the Disclosure Schedule;

(2)           accelerate the time of payment or vesting or increase the amount of compensation or benefit due to any current or former employee, director or independent contractor or any other Person; or

(3)           require any of the Companies to transfer or set aside any assets to fund or otherwise provide for any benefits for any Person pursuant to any Company Benefit Plan.

(h)           No amount to be received (whether in cash, property, the vesting of property or otherwise) as a result of or in connection with the consummation of the transactions contemplated by this Agreement (either alone or in combination with any other event) by any employee, officer, director or other service provider of the Companies who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).

(i)           Each Company Benefit Plan that constitutes in whole or in part a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code is in a written form that complies with, and is administered in compliance with, Section 409A of the Code and the final regulations and other IRS guidance promulgated and in effect under Section 409A of the Code.

(j)           No Company has incurred any material liability for any Tax or civil penalty imposed under Chapter 43 of the Code or Sections 409 or 502 of ERISA that has not been satisfied in full.

(k)           No Company has incurred (whether or not assessed) any Tax or penalty under Sections 4980B, 4980D, 4980H, 6721 or 6722 of the Code, and no circumstances exist or events have occurred that would reasonably be expected to result in the imposition of any such Taxes or penalties. Each Company has maintained adequate records to enable that Company to comply with any reporting obligations it may have under Sections 6055 and 6056 of the Code.

3.13         Title to Assets; Sufficiency of Assets.

(a)           Each Company has good and valid title to, or, in the case of leased or subleased assets, a valid and binding leasehold interest in, all of its assets, including its respective Company Intellectual Property (in the case of any portions thereof which are subject to license, a valid and binding license interest), and other assets reflected in the Financial Statements (or acquired after the date thereof) free and clear of all Encumbrances other than Permitted Encumbrances. Except as set forth in Section 3.13(a) of the Disclosure Schedule, the Improvements, furniture, machinery, equipment, vehicles and other items of tangible personal property of the Companies are structurally sound, are in reasonable operating condition and repair (ordinary wear-and-tear (after taking into account the age of the asset) excepted) and are adequate for the uses to which they are being put, and none of such Improvements, furniture, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs.

(b)           The furniture, equipment, vehicles and other items of tangible personal property currently owned or leased by the Companies, together with all other properties and assets of the Companies, including, without limitation, the Leased Real Property and Improvements, are sufficient for the continued conduct of the Business after the Closing in all material respects in the same manner as conducted prior to the Closing and constitute all of the rights, property, and assets necessary to conduct the Business as currently conducted.

3.14         Compliance with Environmental Laws.

(a)           The Companies are and, except for matters which have been resolved, have been in compliance in all material respects with all Environmental Laws and Environmental Permits (as defined below).

(b)           Since January 1, 2018, no Company has received any written notice from a Governmental Authority that alleges that any Company is not in compliance with any Environmental Law, to the Knowledge of the Companies, and there are no judicial or administrative actions, Claims, suits, demands, demand letters, liens, complaints, investigations, or other legal proceedings which would reasonably be expected to result in a Company incurring material Liability under Environmental Laws.

(c)           There is no Claim pending or, to the Companies’ Knowledge, Threatened against any Company relating in any way to any Environmental Laws.

(d)           Without limiting the generality of the foregoing:

(1)         None of the Companies have released, handled, stored, disposed or arranged for the disposal of, marketed, distributed, or exposed any Person to, any Hazardous Substances, in each case so as to create any Liability under any Environmental Law for any of the Companies or in a manner that could reasonably be expected to form the basis of any Claim against a Company; and

(2)         to the Companies’ Knowledge, there are no underground storage tanks located on property owned or leased, subleased, licensed or occupied by a Company.

(e)           No Company has received any letter or written request for information under CERCLA or any other Environmental Law, and, to the Companies’ Knowledge, none of the operations of any Company are the subject of any investigation by a Governmental Authority evaluating whether any remedial action is needed to respond to an actual or threatened discharge, spill or release of any Hazardous Substance at any property owned or leased, subleased, licensed or occupied by a Company.

(f)           To the extent applicable, the Companies maintain all Permits required under Environmental Laws (“Environmental Permits”) to conduct the operations of the Business, and all such Environmental Permits are in full force and effect. Section 3.14(f) of the Disclosure Schedule includes a listing of all such Environmental Permits.

(g)           The Companies have made available to Buyer copies of all material environmental assessments (including Phase I or II Environmental Site Assessments), reports, audits and other material documents in its possession or under its control that relate to the environmental condition of any and all property owned or leased, subleased, licensed or otherwise used or occupied by a Company, or compliance with Environmental Laws by any Company in connection with the Business.

3.15         Taxes.

(a)           The Companies have duly filed or caused to be filed, in a timely manner, with the appropriate taxing authorities, all Tax Returns required to be filed (determined with regard to any timely extensions) by it. Each such Tax Return (including any amendment thereto) is true, correct, and complete in all material respects, and all Taxes due and owing by a Company (whether or not shown on any Tax Returns), have been timely paid or appropriately reserved in the Financial Statements. There are no extensions of time to file any Tax Returns that are pending and there are no agreements or waivers extending the statutory period of limitation applicable to any Taxes of the Companies for any currently open period. No Claim in writing or, to the Knowledge of the Companies, has ever been made by a taxing authority in a jurisdiction where a Company does not file Tax Returns that any Company is or may be subject to taxation by that jurisdiction.

(b)           All Taxes required to be withheld by the Companies have been withheld and have been duly and timely paid to the proper taxing authority within the time and in the manner prescribed by applicable Law, including with respect to any past or present employee, independent contractor, creditor, consultant, equity holder or other third party. There are no Encumbrances for Taxes (other than Permitted Encumbrances) on any of the assets of the Companies. No deficiencies for any Taxes are proposed, asserted or assessed in writing against any Company that have not been remedied prior to the date hereof.

(c)           The Companies are registered for the purposes of sales Taxes, use Taxes, transfer Taxes, value added Taxes or any similar Taxes in all jurisdictions where they are required by Law to be so registered, in each case in all material respects, and has complied in all material respects with all Laws relating to such Taxes.

(d)           The unpaid Taxes of the Companies:

(1)         did not, as of the Audited Balance Sheet Date, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Audited Balance Sheet (rather than in any notes thereto); and

(2)         do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Companies in filing their Tax Returns.

(e)           Since the Audited Balance Sheet Date, the Companies have not incurred any liability for Taxes outside the ordinary course of business.

(f)            No Company has ever been a member of an affiliated group filing a consolidated federal income Tax Return or any similar group for federal, state, local or foreign Tax purposes. No Company has Liability for the Taxes of any Person (other than Taxes of that Company):

(1)         under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law);

(2)         as a transferee or successor; or

(3)           by Contract.

(g)           No Company is a party to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(h)           No Company is or has been a party to any “reportable transaction,” as defined in Section 6707(a) of the Code and Treasury Regulation Section 1.6011-4(b) or any similar provision of state, local or foreign Tax Law. No Company will be required to include any item of income in, or exclude any item of deduction from, any taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

(1)           adjustment under Section 481 of the Code (or any corresponding or similar provision of state, local or foreign law) relating to any change in method of accounting made prior to the Closing or use of an improper method of accounting prior to the Closing;

(2)           closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign law) executed prior to the Closing;

(3)           use of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, or the cash method of accounting, in each case, with respect to any transaction undertaken prior to the Closing;

(4)           open transaction disposition made on or prior to the Closing;

(5)           prepaid amounts received or deferred revenue accrued prior to the Closing;

(6)           agreement with any taxing authority made or entered into prior to the Closing Date; or

(7)           intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign law) (other than any such inclusion (or exclusion, as applicable) that results from an action taken or transaction undertaken by Buyer or any of its Affiliates (including any Company) after the Closing).

(i)           No foreign, federal, state, or local Tax audits or administrative or judicial Tax proceedings are pending, being conducted or, to the Companies’ Knowledge, Threatened with respect to any Company. No Company is in receipt from any foreign, federal, state or local taxing authority any written notice indicating an intent to open an audit or other review.

(j)           The elected tax reporting status and the date of such status of each Company is set forth on Schedule 3.15(j) of the Disclosure Schedule.

(k)           The Companies have delivered or made available to Buyer true copies of the federal and state income Tax Returns relating to the Companies (and amended income Tax Returns, revenue agents’ reports, and other notices from the IRS or state taxing authorities) for each of the preceding two (2) taxable years.

(l)            No Company is a “United States real property holding company” within the meaning of Section 897 of the Code within the period specified in that section.

(m)           No Company has distributed stock of another Person, or has had its Interests distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code or Section 361 of the Code.

(n)           No Company has applied for or received any letter ruling from the IRS (or any comparable ruling from any other taxing authority).

(o)           Each of Logistics, Fleet, Transportation and Legend has been a validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code since their formation (until the Restructuring with respect to Legend) and each has made all valid elections to be Taxed in a comparable fashion under all comparable state and local Tax laws, for all applicable Taxable periods in all Taxing jurisdictions in which they are required to file income Tax Returns. As a result of the Restructuring, and on the Closing Date, Legend is a disregarded entity for all income tax purposes. Holdco has been a validly electing S corporation within the meaning of Sections 1361 and 1362 of the Code since its formation.

(p)           Neither Global nor Wash elected for the early application of the partnership audit procedures of the Bipartisan Budget Act of 2015 (or any similar state or local provisions) for any taxable period prior to 2018.

(q)           None of the Companies pays any income Taxes in any state or local or non-U.S. jurisdiction and is not obligated, and has not agreed, to pay any income Taxes of any Sellers (by means of electing to file composite returns in any state or local or non-U.S. jurisdiction) other than any Taxes paid by means of withholding by the Company in the ordinary course of business, nor has any Company made any pass-through entity tax election in any state, local or non-U.S. jurisdiction.

(r)           None of the Companies is or ever has been a party to or the beneficiary of any Tax exemption, Tax holiday or other Tax reduction Contract similar restriction.

3.16         Insurance. Section 3.16 of the Disclosure Schedule sets forth a complete and accurate list of all policies of insurance or binders of insurance presently in effect with respect to the Companies, the Business, and the Companies’ and the Business’ operations, employees, officers, managers and directors, or the Companies’ assets, or of which a Company is the owner or the beneficiary, or under which a Company is an insured or loss payee (collectively, the “Insurance Policies”), and true and complete copies of such Insurance Policies have been made available to Buyer prior to the date hereof. Section 3.16 of the Disclosure Schedule also includes any pending claims in excess of $100,000 made by or on behalf of the Companies under any of the Insurance Policies, including the amount incurred, the Insurance Policy under which the claim was made and the status of the claim. There are no claims related to the Business or the Companies pending under any Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. All Insurance Policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the date of which this representation is being made have been paid in full (other than retrospective premiums which may be payable with respect to workers’ compensation insurance policies), the limits of each Insurance Policy remain fully available, without any exhaustion or erosion, the Companies are in compliance in all material respects with all of its obligations under each Insurance Policy, and no written notice of cancellation or termination has been received with respect to each Insurance Policy.

3.17         Related Party Transactions. Except as set forth in Section 3.17 of the Disclosure Schedule, no present or, to the Knowledge of the Companies, former director, officer, manager, employee, equity holder, Affiliate or “associate” or members of any of their “immediate family” (as such terms are respectively defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act) of the Companies or Sellers (each of the foregoing, a “Related Person”), other than in his capacity as a director, officer, equity holder or employee of a Company has any material interest in or other material business relationship or arrangement with any Person that:

(a)           does business with the Companies in connection with the operation of the Business;

(b)           is engaged, directly or indirectly, in the conduct of the Business; or

3.18         Labor Matters.

(a)           Section 3.18(a) of the Disclosure Schedule contains a list of all Persons who are employees, independent contractors or consultants of the Companies as of the close of business one (1) Business Day prior to date hereof, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following:

(1)           name (or employee identification number);

(2)           title or position (including whether full or part time);

(3)           hire date;

(4)           current annual base compensation rate;

(5)           commission, bonus or other incentive-based compensation;

(6)           a description of the fringe benefits eligibility of each such individual;

(7)           classification as employee, independent contractor or consultant; and

(8)           a summary of all commitments by the Companies to increase the compensation or to modify the terms or conditions of employment of any such Person.

(b)           Except as set out in Section 3.18(b) of the Disclosure Schedule, no employee is on long-term disability leave or extended absence.

(c)           Each Person working for a Company who requires authorization from a Governmental Authority to work in such employee’s place of work has the necessary immigration documentation, work authorization or other necessary permission. The Companies are in material compliance with all applicable Laws regarding immigration and/or employment of non-citizen workers, work authorization, and the use of E-Verify or similar work authorization verification systems. There is no pending or, to the Knowledge of the Companies, Threatened investigation by any branch or department of the U.S. Immigration and Customs Enforcement, or other federal, state, local or foreign agency charged with administration and enforcement of immigration Laws.

(d)           To the Knowledge of the Companies, no Person who is an employee, independent contractor or consultant of the Companies:

(1)           is a party to, or is otherwise bound by, any agreement or arrangement with any third-party, including any employment, confidentiality, non-competition, or proprietary rights agreement, that could reasonably be expected to prohibit the performance by such Person of his/her duties for or on behalf of the Companies; or

(2)           is in any respect in violation of any term of any such agreement or other similar obligation, including any common law nondisclosure, fiduciary duty or other obligation to a Company or to a former employer of any such employee relating to:

a.         the right of any such employee, independent contractor or consultant to be employed or engaged by such Company; or

b.         the use of trade secrets or proprietary information.

(e)           No Company is a party to, or bound by, any labor agreement, collective bargaining agreement or any other labor-related agreement or arrangement with any labor union, labor organization or works council, there are no labor agreements, collective bargaining agreements or any other labor-related agreements or arrangements that pertain to any of the employees of any Company and no employees of any Company are represented by any labor union, labor organization or works council with respect to their employment with such Company.

(f)           Since January 1, 2018, there has been no actual or, to the Knowledge of the Companies, Threatened labor strike, slowdown, work stoppage or lockout with respect to any Person who is an employee, independent contractor or consultant of any Company. Moreover, no Company has agreed to recognize any union or other collective bargaining representative, there is no pending demand made or Threatened for recognition by any labor union and, to the Knowledge of the Companies, there has been no petition filed or Threatened to be filed for an election respecting such recognition of a labor union with respect to any Person who is an employee, independent contractor or consultant of the Companies. There are no efforts, to the Knowledge of the Companies, by any labor union seeking to organize any Person who is an employee, independent contractor or consultant of any Company.

(g)           No Company is engaged in any unfair labor practice and no complaint for unfair labor practice against any Company is pending, or to the Knowledge of the Companies, Threatened before the National Labor Relations Board or any comparable Governmental Authority.

(h)           The Companies are, and since January 1, 2018 have been, in all material respects, in compliance with applicable Laws relating to the employment of labor, including without limitation any provisions thereof relating to:

(1)           wages, overtime, hours, bonuses, commissions, meal or rest periods, termination pay, vacation pay, sick pay, employee benefits, and/or the payment and/or accrual of the same;

(2)           unlawful, wrongful or retaliatory or discriminatory employment or labor practices of any kind;

(3)           occupational safety and health standards;

(4)           plant closures and layoffs; or

(5)           workers’ compensation, disability, leaves of absence, unemployment compensation, whistleblower and/or other Laws.

(i)            Since January 1, 2018, each Person performing work for the Companies under a non-employee classification, including but not limited to independent contractors, consultants, interns, or otherwise, has satisfied the requirements of applicable Law to be so classified at all times when such non-employee classification has been in place.

(j)            Since January 1, 2018, each employee performing work for the Companies has been classified properly as exempt or non-exempt under applicable Law relating to regular wages and overtime compensation.

(k)           Since January 1, 2018, there have been no actions, suits, Claims, complaints, litigation, investigations, audits, arbitrations or other similar disputes of any kind relating to the employment of labor or termination of employment relating to Persons who are employees, independent contractors or consultants of the Companies or Threatened in any forum by or on behalf of any present or former employee of such entities, or any applicant for employment against any Company.

(l)            No former employee of a Company is entitled to any continuing or contingent benefits from such Company. No officer, director, manager, employee, or independent contractor of a Company is indebted to the Company except for advances for ordinary business expenses or occasional payroll advances on a basis consistent with past practices, nor is any Company indebted to any officer, director, manager, member, employee, or independent contractor except for compensation earned by any such Person during the current payroll period or unreimbursed customary and reasonable business expenses.

(m)          Since January 1, 2018, no Company has entered into a settlement agreement with a current or former officer, employee, manager or independent contractor of any Company that involves allegations relating to sexual harassment by any officer, manager, director or other employee of the Company. Since January 1, 2018, no allegations of sexual harassment have been made against any officer, manager, director or other employee of the Company.

3.19         Books and Records. The membership interest ledgers of the Companies and Holdco, which has been made available to Buyer, is complete and correct. The records of the Companies and Holdco have been maintained in accordance with reasonable business practices. At the Closing, all of those books and records of the Companies and Holdco will be in the possession of the Companies and Holdco.

3.20         Brokers. Except for Generational Capital Markets Inc., a FINRA and SIPC member (“Generational Capital”), no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Companies and Sellers. Any and all fees due to Generational Capital at Closing shall be deducted from the Cash Consideration portion of the Purchase Price and paid at Closing.

3.21         Intellectual Property; IT Assets; Privacy.

(a)           The Companies, respectively, are the sole and exclusive beneficial and record owner of all right, title, and interest in and to Owned Intellectual Property, free and clear of all Encumbrances (other than Permitted Encumbrances). The Companies, respectively, own, are properly licensed under, or otherwise possess a valid and enforceable right to use all Intellectual Property that is necessary for the operation of the Business as currently conducted. Neither the execution or performance of this Agreement will cause or give rise to a right of forfeiture, termination of or loss of rights to any Owned Intellectual Property. No funding, facilities, or personnel of any governmental body or university, college, other educational institution or research center was used in the development of any Owned Intellectual Property. No Company is, or will be as a result of the execution and delivery of this Agreement, in violation in any material respect of any licenses, sublicenses or other agreements as to which that Company is a party and pursuant to which that Company is authorized to use any such third-party Intellectual Property rights. The Company Intellectual Property will be owned or available for use by Buyer on identical terms and conditions immediately after the Closing.

(b)           To the Companies’ Knowledge, no third party is infringing upon, misappropriating or otherwise violating any Owned Intellectual Property of any Company, or has not infringed upon, misappropriated or otherwise violated any Owned Intellectual Property of the Companies since January 1, 2017.

(c)           Neither the Companies nor the current conduct of the Business are currently infringing upon, misappropriating or otherwise violating in any material respect any third-party Intellectual Property rights, or has been infringing, misappropriating or otherwise violating in any material respect any third-party Intellectual Property rights since January 1, 2017.

(d)           No Company has received, since January 1, 2017, from any third party any written notice that any Company has infringed upon, misappropriated or otherwise violated any third-party Intellectual Property rights.

(e)           No Owned Intellectual Property right of the Companies is or has been judicially determined to be invalid or unenforceable and all Registered Company Intellectual Property, if any, is subsisting, valid, enforceable and in compliance with applicable Law. No judicial, regulatory or administrative proceeding is currently pending or, to the Companies’ Knowledge, Threatened, or has been pending or, to the Companies’ Knowledge, Threatened, since January 1, 2017, which challenges the validity or enforceability of any Owned Intellectual Property right of any Company.

(f)           Section 3.21(f) of the Disclosure Schedule sets forth a complete and accurate list of:

(1)         each item of Registered Company Intellectual Property;

(2)         the jurisdiction in which such item of Registered Company Intellectual Property has been registered or filed and the applicable application, registration, or serial or other similar identification number; and

(3)         all material unregistered trademarks owned by and used in connection with the Business.

(g)           All current and former employees, consultants and contractors of the Companies who developed or created any material Intellectual Property, if any, for, or on behalf of, a Company have executed and delivered valid and enforceable proprietary information, confidentiality and invention assignment agreements that vests in such Company exclusive ownership of all right, title and interest in and to such Intellectual Property, substantially in the Companies’ standard form and the Companies have provided or made available true and complete copies of all such forms or, to the extent the executed agreements diverge from the forms in any material respect, copies of the assignment agreements, to Buyer.

(h)           The Companies have taken commercially reasonable actions to protect its rights in their Intellectual Property and to maintain the confidentiality of all information that constitutes or constituted a Trade Secret of the Companies and Confidential Information included in the Owned Intellectual Property. To the Companies’ Knowledge, there has not been any disclosure of any material Trade Secret of the Companies to any Person in a manner that has resulted or is likely to result in the loss of a Trade Secret or other rights in and to such information.

(i)           The IT Assets are reasonably sufficient for the needs of the Business as currently conducted, including as to capacity and ability to process current and anticipated peak volumes in a timely manner. Since January 1, 2017, (i) there have been no material security breaches, failure, disruption or interruption in any IT Assets used to conduct the Business, security incidents, or misuse of or unauthorized access to or disclosure of any data or information stored or contained therein or accessed or processed thereby, including Personal Information, in the possession or control of the Companies, or that has resulted in the destruction, damage, loss, corruption, alteration or misuse of any such data or information, including Personal Information, and (ii) no Company has provided or been legally or contractually required to provide any notices to any Person in connection with any disclosure of Personal Information. Since January 1, 2017, there have been no disruptions in the IT Assets that adversely affected the Business. The Companies have evaluated disaster recovery and backup needs and has implemented plans and systems that reasonably address its assessment of risk.

(j)           The Companies’ processing, collection, use, disclosure, storage and transfer of Personal Information complies in all respects with, and since January 1, 2017, have complied in all material respects with, any applicable Privacy Laws. The Companies have implemented and maintained adequate policies, procedures and systems in accordance with applicable Privacy Laws. No Company has received any complaints, notices of investigation, written notices, orders, correspondence or Claims from any Governmental Authority or Person alleging a breach of, or non-compliance with, the Privacy Laws and, to the knowledge of the Companies, no circumstances exist which are likely to result in any such complaints, investigations, notices, orders, correspondence or Claims being sent, served, given or made.

3.22         Major Suppliers. Section 3.22 of the Disclosure Schedule sets forth an accurate and complete list of the top ten (10) suppliers to the Companies (“Material Suppliers”), for the year ended December 31, 2022 (determined on the basis of the total dollar amount of purchases made by the Companies) showing the dollar amount of purchases from each such supplier during such period. None of the Companies has received a written notice from any Material Supplier that it intends to terminate, modify, fail to renew, or reduce volumes under, any Contract or otherwise adversely impact its volumes or business relations with any of the Companies.

3.23         Major Customers. Section 3.23 of the Disclosure Schedule sets forth an accurate and complete list of the top ten (10) customers of the Companies (“Material Customers”), for the year ended December 31, 2022 (determined on the basis of the total dollar amount of revenue received by the Companies) showing the dollar amount of revenue received from each such customer during such period. None of the Companies has received a written notice from any Material Customer that it intends to terminate, modify, fail to renew, or reduce volumes under, any Contract or otherwise adversely impact its volumes or business relations with any of the Companies.

3.24         Bank Accounts. Section 3.24 of the Disclosure Schedule sets forth a correct and complete list of all banks in which any Company has an account, safe deposit box, lock box or other arrangement for the collection of accounts receivable or line of credit or other loan facility relationship and the address of each such bank. The Companies have provided Buyer with all of such account numbers and the names of all Persons authorized to draw thereon or have access thereto.

3.25         Operations of Holdco. Holdco was formed solely for the purpose of engaging in the Transactions, and has not conducted any business prior to the date of this Agreement and have no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than those incidental to their respective formation and pursuant to this Agreement, and Company Interests in Legend pursuant to the Restructuring.

Section 4.              REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Sellers hereby represent and warrant to Buyer, jointly and severally, as follows:

4.1           Ownership of the Interests. Sellers own, beneficially and of record, good and marketable title to the Holdco Interests and the Company Interests of Fleet, Transportation, Global, Logistics and Wash, free and clear of all security interests, liens, adverse Claims, encumbrances, equities, proxies, options or member agreements. Sellers represent that no Person, other than the respective Seller, has any right or Claims whatsoever to any of the Holdco Interests or the Company Interests of Fleet, Transportation, Global, Logistics and Wash. At the Closing, Sellers will convey to Buyer good and marketable title to the Holdco Interests and the Company Interests of Fleet, Transportation, Global, Logistics and Wash, free and clear of any security interests, liens, adverse Claims, encumbrances, equities, proxies, options, member agreements or restrictions.

4.2           Capacity; Authority Relative to this Agreement. Each Seller that is an individual is of sound mind and is legally competent to execute and deliver this Agreement and perform his obligations hereunder. This Agreement has been duly and validly executed and delivered by Sellers and constitutes a valid and binding agreement of Sellers enforceable in accordance with its terms, except as such enforcement may be limited by the Bankruptcy and Equity Exception.

4.3           Non-Contravention; Conflicts. The execution and delivery of this Agreement, the incurrence of the obligations herein and therein set forth and the consummation of the Transactions shall not constitute a material breach of, or default under, any material instrument (including any non–competition undertaking) to which any Seller is bound or any order, rule or regulation applicable to any Seller of any court or any governmental body or administrative agency having jurisdiction over any Seller.

4.4           Litigation. None of the Sellers is subject to any judgment or order of any court or quasi-judicial or administrative agency of any jurisdiction, domestic or foreign, nor is there any charge, complaint, lawsuit or governmental investigation pending against such Seller. None of the Sellers is a plaintiff in any action, domestic or foreign, judicial or administrative. There are no existing actions, suits, proceedings against or investigations of any Seller. There are no unsatisfied judgments, orders, decrees or stipulations affecting any Seller or to which such Seller is a party.

4.5           Restricted Securities. Sellers acknowledge that the shares of common stock of SMGI and Preferred Stock (collectively, the “SMGI Shares”) to be issued to Sellers will not be registered pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws, that the SMGI Shares will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the SMGI Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this regard, Seller is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

4.6           Legend. Sellers acknowledge that the certificate(s) representing the Common Stock Consideration and Preferred Stock Consideration shall be conspicuously set forth on the face or back thereof a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

Section 5.              REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and warrants to the Companies and Sellers as follows:

5.1           Organization. Buyer is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power to carry on its business as now conducted. Merger Sub is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power to carry on its business as now conducted.

5.2           Capitalization. Buyer’s authorized capital stock consists of: (i) 500,000,000 shares of Common Stock par value $.001, of which 189,711,513 shares of Common Stock are issued and outstanding as of immediately prior to Closing, and (ii) 1,000,000 shares of preferred stock (“Preferred Stock” and, together with the Common Stock, “Capital Stock”), (A) 2,000 of which are designated as 3% Series A Secured Convertible Preferred Stock, none of which are issued and outstanding, (B) 6,000 of which are designated as 5% Series B Convertible Preferred Stock, none of which are issued and outstanding, and (C) 2,000 of which are designated as Series C Preferred Stock, 1,000 of which will be issued and outstanding as of immediately after the Closing. At the Closing, Buyer has options outstanding to purchase 1,475,000 shares of Buyer’s Common Stock pursuant to Buyer’s 2018 Equity Incentive Plan, as amended and warrants to purchase 1,763,335 shares of Buyer’s Common Stock. All issued and outstanding shares of Buyer’s Common Stock are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. When issued, the shares included in the Common Stock Consideration and Preferred Stock Consideration will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. All of the issued and outstanding equity interests in Merger Sub are owned, beneficially and of record, by Buyer, and all such equity interests are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

5.3           Certain Corporate Matters. SMGI has full corporate power and authority and all authorizations, licenses and permits necessary to carry on the business in which it is engaged and to own and use the properties owned and used by it. SMGI is not in default under or in violation of any provision of its certificate of incorporation or bylaws in any material respect. SMGI is not in any material default or in material violation of any restriction, lien, encumbrance, indenture, contract, lease, sublease, loan agreement, note or other obligation or liability by which it is bound or to which any of its assets is subject.

5.4           Authority Relative to this Agreement.

(a)           SMGI and Merger Sub has the requisite power and authority to enter into this Agreement and carry out its obligations hereunder. The execution, delivery and performance of this Agreement by SMGI and the consummation of the transactions contemplated hereby have been duly authorized by the board of directors of SMGI and no other actions on the part of SMGI are necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by SMGI and Merger Sub and constitutes a valid and binding obligation of SMGI and Merger Sub, enforceable in accordance with its terms, except as such enforcement may be limited by the Bankruptcy and Equity Exception.

(b)           The Merger Sub Board has unanimously (i) approved and declared advisable this Agreement and the Transactions, including the Merger, (ii) declared that it is in the best interests of the stockholder of Merger Sub that Merger Sub enter into this Agreement and consummate the Transactions on the terms and subject to the conditions set forth in this Agreement, (iii) directed that the adoption of this Agreement be submitted to a vote of the Merger Sub stockholder and (iv) recommended to the Holdco stockholder that it adopt this Agreement and approve the Transactions, including the Merger. The vote of a majority of the outstanding shares of common stock of Merger Sub is the only vote of the holders of stock of Merger Sub necessary to adopt this Agreement and approve the Transactions. Assuming that such vote is received, the execution, delivery and performance of this Agreement by Merger Sub and the consummation by Merger Sub of the Transactions have been duly and validly authorized by all necessary corporate action on the part of Merger Sub.

5.5           Consents and Approvals; No Violations. Except for applicable requirements of federal securities laws and state securities or blue-sky laws, no filing with, and no permit, authorization, consent or approval of, any third party, public body or authority is necessary for the consummation by SMGI of the transactions contemplated by this Agreement. Neither the execution and delivery of this Agreement by SMGI nor the consummation by SMGI of the transactions contemplated hereby, nor compliance by SMGI with any of the provisions hereof, will:

(a)           conflict with or result in any breach of any provisions of the certificate of incorporation or bylaws of SMGI;

(b)           result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, contract, agreement or other instrument or obligation to which SMGI is a party or by which it or any of its properties or assets may be bound; or

(c)           violate any Order, writ, injunction, decree, statute, rule or regulation applicable to SMGI, or any of their respective properties or assets, except in the case of clauses (ii) and (iii) for violations, breaches or defaults which are not in the aggregate material to SMGI taken as a whole.

5.6           SEC Documents; Market.

(a)           SMGI hereby makes reference to the Annual Reports on Form 10-K for the years ended December 31, 2021 and 2022 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 filed with the SEC, as posted on the SEC’s website, www.sec.gov: (collectively, the “SEC Documents”).

(b)           The SEC Documents constitute the annual reports that SMGI was required to file with the SEC pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the rules and regulations promulgated thereunder by the SEC, for the years ended December 31, 2021 and 2022 and the quarter ended March 31, 2023. The SEC Documents complied as of their filing dates in all material respects with the requirements of the Securities Act and/or the Exchange Act, as the case may require, and the rules and regulations promulgated thereunder, and the SEC Documents did not contain an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. At the Closing, SMGI is current in all SEC filings required by it to be filed with the SEC.

(c)           As of the date hereof, SMGI’s common stock is quoted and eligible for trading on the OTCQB marketplace, an inter-dealer quotation and trading system operated through OTC Market Group Inc.’s OTC Link® ATS.

5.7           Litigation. SMGI is not subject to any judgment or order of any court or quasi-judicial or administrative agency of any jurisdiction, domestic or foreign, nor is there any charge, complaint, lawsuit or governmental investigation pending against SMGI. SMGI is not a plaintiff in any action, domestic or foreign, judicial or administrative. There are no existing actions, suits, proceedings against or investigations of SMGI. There are no unsatisfied judgments, orders, decrees or stipulations affecting SMGI or to which SMGI is a party.

5.8           Operations of Merger Sub. Merger Sub was formed solely for the purpose of engaging in the Transactions, and has not conducted any business prior to the date of this Agreement and have no, and prior to the Effective Time will have no, assets, liabilities or obligations of any nature other than those incidental to their respective formation and pursuant to this Agreement.

5.9           Broker’s Fees. Except for B. Riley Securities, neither SMGI, nor anyone on its behalf, has any liability to any broker, finder, investment banker or agent, or has agreed to pay any brokerage fees, finder’s fees or commissions, or to reimburse any expenses of any broker, finder, investment banker or agent in connection with this Agreement. Any brokerage fees, finder’s fees or commissions, or expenses to be reimbursed to B. Riley Securities relative to the Acquisition are the obligations of SMGI.

5.10           Disclosure. The representations and warranties and statements of fact made by SMGI in this Agreement are, as applicable, accurate, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained herein not false or misleading.

Section 6.              COVENANTS AND AGREEMENTS OF THE PARTIES

6.1           General, After Closing. In case at any time after the Closing any further actions are necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further actions (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Section 7). Sellers acknowledge and agree that from and after the Closing, Buyer will be entitled to possession of all documents, books, records (including Tax records), agreements and financial data of any sort relating to each Company and Holdco, subject to the provisions contained herein providing for Sellers’ access thereto.

6.2           Confidentiality.

(a)           From and after the Closing, none of Sellers will, and each will cause their Affiliates and representatives not to, directly or indirectly, use or disclose (other than to or on behalf of Buyer, Holdco or the Companies) any Confidential Information of or relating to Buyer, Holdco or the Companies or their respective Business. This Section 6.2(a) shall survive the Closing and shall continue indefinitely; provided, however, that the restrictions in this Section 6.2(a) shall terminate on the fifth anniversary of the Closing with respect to any Confidential Information that does not then constitute a trade secret under applicable Law. Nothing in this Section 6.2(a) shall be construed to limit or supersede the common law of torts or statutory or other protection of trade secrets where such law provides Buyer or the Companies with greater or longer protection than provided in this Section 6.2(a).

(b)           The obligations set forth in Section 6.2(a) shall not apply to any information that Sellers demonstrate is required to be disclosed by subpoena or other mandatory legal process; provided that such Sellers promptly give Buyer notice of any request or demand for disclosure of such Confidential Information upon receipt of such request or demand along with a copy of any written correspondence, pleading or other communications concerning the request or demand, and uses reasonable efforts to obtain, and upon request, provides reasonable cooperation should Buyer or the Companies seek to obtain, an appropriate protective order.

6.3           Restrictive Covenants.

(a)           From the Closing Date through the fifth anniversary of the Closing Date (the “Restricted Period”), each Seller will not, and each Seller will cause its Affiliates not to, directly or indirectly, own, operate, invest in, lend money to, consult with, manage, act as an agent for, or otherwise engage in any business in any state east of the Mississippi River that is the same as or substantially similar to the business of any Company, Holdco or Buyer and its Affiliates; provided that nothing herein shall prohibit Sellers or any of their respective Affiliates from (i) owning or holding less than 2% of the outstanding shares of any class of stock of a publicly traded company that operates in the same industry as any Company and whose stock is traded on a recognized domestic or foreign securities exchange or over-the-counter market or (ii) leasing any real property owned by Sellers or such Affiliates to any business that is the same as or substantially similar to the business of any Company, Holdco or Buyer and its Affiliates.

(b)           During the Restricted Period, each Seller will not, and each Seller will cause its Affiliates not to, hire, employ, engage or solicit any individual who is now or later becomes an employee or independent contractor of any Company or an employee or independent contractor of Buyer, any Company or their respective Affiliates; provided that this Section 6.3(b) does not prohibit Sellers or any of their Affiliates from conducting any general solicitation of employment that is not specifically targeted towards any such employees.

(c)           During the Restricted Period, each Seller will not, and each Seller will cause its Affiliates not to, solicit or sell to any current or potential customer or supplier of any Company as of the date hereof any products or services that are competitive with the products and services of any Company or knowingly take any action to encourage any current or potential customer or supplier of any Company to terminate or reduce its purchases from, or sales to, any Company of any of the products or services that were purchased from or sold to any Company prior to the date hereof.

(d)           During the Restricted Period, each Seller will not, and each Seller will cause its Affiliates not to, publicly criticize or disparage in any manner or by any means (whether written or oral, express or implied) Buyer, the Companies, or their Affiliates or any aspect of the Companies or their or their Affiliates’ management, policies, operations, products, services, practices or personnel.

(e)           Each Seller specifically acknowledges and agrees that (i) this Section 6.3 is reasonable and necessary to ensure that Buyer receives the expected benefits of acquiring the Companies, (ii) Buyer has refused to enter into this Agreement in the absence of this Section 6.3, and (iii) breach of this Section 6.3 will harm Buyer to such an extent that monetary damages alone would be an inadequate remedy and Buyer would not have an adequate remedy at law. Therefore, in the event of a breach of this Section 6.3 by any Seller, (A) Buyer (in addition to all other remedies Buyer may have) will be entitled to an injunction and other equitable relief (without posting any bond or other security) restraining the applicable party or parties from committing or continuing such breach and to enforce specifically this Section 6.3 and its terms and (B) the duration of the Restricted Period will be extended beyond its then-scheduled termination date for a period equal to the duration of such breach.

6.4           Tax Matters. The following provisions will govern the allocation of responsibility as between Buyer, on one hand, and Sellers on the other hand, for certain Tax matters following the Closing Date: Sellers will, jointly and severally, indemnify the Companies and Buyer and hold them harmless from and against any Losses attributable to (i) all Taxes (or the non-payment thereof) of the Companies for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date, whenever arising, and (ii) any and all Taxes of any Person imposed on the Companies as a transferee or successor, by contract or pursuant to any applicable Law; provided, however, that (x) Sellers will be liable only to the extent that such Taxes exceed the amount, if any, reserved for such Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) in Closing Indebtedness and taken into account on a full dollar basis in determining Cash Consideration. Sellers will reimburse Buyer for any Taxes of the Companies that are the responsibility of Sellers pursuant to this Section 6.4 within 15 Business Days after payment of such Taxes by Buyer.

(a)           In the case of any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes based on or measured by income or receipts of the Companies for the Straddle Period, sales and use Taxes, value-added Taxes, employment Taxes, or withholding Taxes will be determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the taxable period of any partnership or other pass-through entity in which the Companies hold a beneficial interest will be deemed to terminate at such time) and the amount of other Taxes of the Companies for a Straddle Period will be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

(b)           For any Taxable period of the Companies that ends on or before the Closing Date, the Sellers’ Representative will prepare (or cause to be prepared) all Tax Returns required to be filed by the Companies and will cause such Tax Returns to be timely filed. Buyer will prepare and timely file (or cause to be prepared and timely filed) all Tax Returns required to be filed by the Companies that Sellers are not obligated to prepare and file (or cause to be prepared and filed) pursuant to this Section 6.4(b). The Sellers’ Representative will (i) provide such Tax Returns to Buyer 30 days before they are filed, and (ii) make all changes reasonably requested by Buyer.

(c)           Buyer will prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Companies that are filed after the Closing Date and not described in Section 6.4(b). Buyer will permit the Sellers’ Representative to review and comment on each such Tax Return described in the preceding sentence prior to filing if such Tax Return relates to any period ending on or before the Closing Date.

(d)           Each Party will cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Section 6.4 and any audit, litigation or other Action with respect to Taxes. Such cooperation will include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such audit, litigation or other Action and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.

(e)           All Tax-sharing agreements or similar agreements with respect to or involving the Companies will be terminated by Sellers as of the Closing Date and, after the Closing Date, the Companies will not be bound thereby or have any Liability thereunder.

(f)           All transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the Transactions will be paid by Sellers when due, and Sellers will, at their own expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, and, if required by applicable Law, Buyer will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.

(g)           The Parties shall cause Global and Wash (or cause the “partnership representative” of each of Global and Wash) to effect a “push out” election under Section 6226 of the Code (and any similar state or local applicable Law) with respect to any taxable period of Global or Wash ending on the Closing Date. Each Party shall cooperate as reasonably necessary in order to effect any such elections.

(h)           The Parties intend (i) that the Merger and the Post-Closing Merger are an integrated transaction pursuant to Revenue Ruling 2001-46 Situation 1 and therefore a reorganization pursuant to Section 368(a)(1)(A) of the Code and this Agreement is a plan of reorganization; (ii) the purchase of the Company Interests of Fleet, Transportation and Logistics is a purchase and sale of such stock, and (iii) that the Membership Interest Purchase is a deemed liquidation of each of Global and Wash and a subsequent purchase by Buyer of the assets of Global and Wash, as described in Revenue Ruling 99-6 Situation 2 (together, with (i) and (ii), the “Intended Tax Treatment”). Each of the Parties agree to file all Tax Returns and take all positions in respect of any Tax audit, examination, dispute or other proceeding consistent with the Intended Tax Treatment except as otherwise required as a result of a final “determination” pursuant to Section 1313(a) of the Code (or any corresponding provision of state or local applicable Law). Within 90 days following the final determination of the Post-Closing Adjustment, Buyer shall deliver to the Sellers a statement (the “Allocation Statement”) setting forth an allocation of all items constituting taxable consideration with respect to the Company Interests of Global and Wash under this Agreement for applicable income Tax purposes among the assets of each of them in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder. With respect to such allocation, as so adjusted, each Party will (1) be bound by such allocation, (2) act in accordance with such allocation in the preparation of all financial statements and the filing of all Tax Returns and in the course of any Tax audit, Tax review or other action relating thereto, and (3) take no position and cause its Affiliates to take no position inconsistent with such allocation for Tax purposes (including in connection with any action), unless in each case otherwise required pursuant to a “determination” within the meaning of Code Section 1313(a) or as otherwise required under any similar applicable Laws.

6.5           Public Announcements. Buyer and Sellers and the Companies shall consult with each other before issuing any press release or otherwise making any public statements about this Agreement or any of the Transactions. Neither Buyer nor the Sellers or the Companies shall issue any such press release or make any such public statement prior to such consultation, except to the extent required by applicable Law or stock exchange rules, in which case that Party shall use its reasonable best efforts to consult with the other Party before issuing any such release or making any such public statement. Notwithstanding the foregoing, without the prior consent of the other Parties, Buyer or the Sellers and the Companies may (a) communicate with its respective customers, vendors, suppliers, financial analysts, investors and media representatives in a manner consistent with its past practice in compliance with applicable Law to the extent such communications consist of information included in a press release or other document previously approved for external distribution by the other and (b) issue public statements or disseminate information to the extent solely related to the operation of the business of such Person. Each of Buyer and the Sellers and the Companies will issue a joint press release announcing the execution of this Agreement.

6.6           Post-Closing Access. Throughout the four-year period after Closing, subject to the reasonable confidentiality precautions of the Party whose information is being accessed, each Party will, during normal business hours and upon reasonable notice from any requesting Party: (a) cause such requesting Party and such requesting Party’s representatives to have reasonable access to the books and records (including financial and Tax records, Tax Returns, files, papers and related items) of such Party, and to the personnel responsible for preparing and maintaining such books and records, in each case to the extent necessary or reasonably desirable to (i) prepare or audit financial statements, (ii) prepare or file Tax Returns or (iii) address other Tax, accounting, financial or legal matters or respond to any investigation or other inquiry by or under the control of any Governmental Authority; and (b) permit such requesting Party and such requesting Party’s representatives to make copies of such books and records for the foregoing purposes, at such requesting Party’s expense.

6.7           Post-Closing Merger. Buyer shall cause the Post-Closing Merger to be consummated promptly after the Closing.

Section 7.              INDEMNIFICATION AND RELATED MATTERS

7.1           Survival of Representations and Warranties. The representations and warranties set forth in Section 3, Section 4 and Section 5 of this Agreement or in any instrument delivered pursuant to this Agreement, including any Disclosure Schedule, shall survive until eighteen (18) months after the Closing Date, except that:

(a)           the representations and warranties set forth in Sections 3.1, 3.2, 3.3 and 3.20, Sections 4.1, 4.2 and 4.3, and Sections 5.1, 5.2 and 5.9, and all Claims based on Fraud, shall survive indefinitely;

(b)           the representations and warranties set forth in Sections 3.12, 3.14, 3.15 and 3.18 shall survive for the applicable statute of limitations plus one hundred and eighty (180) days; and

(c)           covenants and all associated rights to indemnification relating thereto shall survive Closing and will continue in full force thereafter until all liability hereunder relating thereto is barred by all applicable statute of limitations.

(d)           For each Claim for indemnification under this Agreement regarding a breach of a representation or warranty that is made prior to expiration of such representation or warranty, such Claim and associated right to indemnification will not terminate before final determination and satisfaction of such Claim.

7.2           Indemnification.

(a)           SMGI shall indemnify and hold Sellers harmless for, from and against any and all liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or Threatened, or any Claim whatsoever) (collectively, “Losses”) to which the Sellers may become subject resulting from or arising out of:

(1)           any breach of a representation or warranty made by SMGI as set forth herein; or

(2)           any breach of a covenant made by SMGI as set forth herein.

(b)           Sellers shall jointly and severally indemnify and hold SMGI and SMGI’s officers and directors, agents, counsel and Affiliates (“SMGI Representatives”) harmless for, from and against any and all Losses to which SMGI or SMGI Representatives may become subject resulting from or arising out of:

(1)           any breach of a representation or warranty made by the Companies or Sellers as set forth herein;

(2)           any breach of a covenant made by the Companies or Sellers as set forth herein;

(3)           any and all liabilities arising out of or in connection with:

a.           any of the assets of the Companies prior to the Closing;

b.           the operations of the Companies prior to the Closing; or

c.           the Interests;

d.           except liabilities included in Closing Working Capital; or

(4)           any Indebtedness or Transactions Expenses that are not paid by the Companies before Closing or at Closing and reduce the Cash Consideration payable to Sellers.

(c)           In connection herewith, SMGI may, at its sole option, offset any amounts owed by SMGI to Seller(s), including the Note Consideration, subject to the provisions of Sections 7.3 and 7.4. Any amounts due to the SMGI Representatives hereunder may first be deducted from the Indemnity Escrow Amount.

7.3           Certain Limitations. The indemnification provided for in Section 7.2 shall be subject to the following limitations:

(a)           With respect to any Claim as to which Sellers may be entitled to indemnification under Section 7.2(a)(1) (other than the Buyer Fundamental Representations or with respect to Fraud or intentional misstatements, with respect to which the Per Claim Deductible would not apply) or the SMGI Representatives may be entitled to indemnification under Section 7.2(b)(1) (other than the Seller Fundamental Representations or with respect to Fraud or intentional misstatements, with respect to which the Per Claim Deductible would not apply), SMGI or Sellers, as applicable, shall not be liable for any individual or series of related Losses (an “Indemnity Claim”) until such amount exceeds $25,000 in the aggregate (the “Per Claim Deductible”), and thereafter for all amounts relating to such Indemnity Claim from the first dollar of such Loss.

(b)           With respect to any Indemnity Claim as to which Sellers may be entitled to indemnification under Section 7.2(a)(1) (other than the Buyer Fundamental Representations or with respect to Fraud or intentional misstatements, for which the Deductible shall be $0) or the SMGI Representatives may be entitled to indemnification under Section 7.2(b)(1) (other than the Seller Fundamental Representations or with respect to Fraud or intentional misstatements, for which the Deductible shall be $0), SMGI or Sellers, as applicable, and subject to the satisfaction of the Per Claim Deductible, shall not be liable for any Indemnity Claims until the amount of such Indemnity Claims exceeds $100,000 in the aggregate (the “Deductible”), and thereafter only in such amount(s) in excess of the Deductible.

(c)           The aggregate amount of all Losses for which SMGI shall be liable pursuant to Section 7.2(a)(1) (other than with respect to the Buyer Fundamental Representations, Fraud or intentional misstatements, with respect to which the Cap shall not apply) and for which Sellers shall be liable pursuant to Section 7.2(b)(1) (other than with respect to Seller Fundamental Representations, Fraud or intentional misstatements, with respect to which the Cap shall not apply) shall not exceed thirty percent (30%) of the Purchase Price (the “Cap”).

(d)           Payments by any Party obligated to provide indemnification pursuant to Section 7 of this Agreement (an “Indemnifying Party”) pursuant to Section 7.2 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by the Party entitled to indemnification pursuant to Section 7 of this Agreement (an “Indemnitee”) in respect of any such Indemnity Claim. The Indemnitee shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Losses prior to seeking indemnification under this Agreement.

(e)           In no event shall any Indemnifying Party be liable to any Indemnitee for (i) any punitive damages or (ii) any incidental, consequential, special or indirect damages, the loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple, in each case with respect to this clause (ii), that is not reasonably foreseeable.

(f)           Each Indemnitee shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

(g)           For purposes of this Section 7, in determining (i) whether a breach of a representation or warranty has occurred and (ii) the amount of Losses arising out of or resulting from a breach of a representation or warranty, all qualifications to the representation or warranty by use of the word “material,” “materially” or other variations of the root word “material” or by a reference regarding the occurrence or non-occurrence or possible occurrence or non-occurrence of a Material Adverse Effect or a “materially adverse effect” (a “Materiality Qualifier”) will be ignored and each such representation and warranty will be read and interpreted without regard to any such Materiality Qualifiers.

(h)           Sellers will not have any right to indemnification from any Company under any Company’s organizational documents, or any agreement between any Company and any Seller, for any Losses to which SMGI is entitled to indemnification under this Section 7 or would be entitled but for the limits on indemnification set forth in this Section 7.3.

7.4           Notice of Indemnification. Promptly after the receipt by an Indemnitee of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if an Indemnity Claim with respect thereto is or may be made against any Indemnifying Party pursuant to this Section 7, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such Indemnity Claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Section 7, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Within fifteen (15) Business Days after delivery of such notification, the Indemnifying Party (a) shall notify the Indemnitee as to whether it disputes the liability of the Indemnifying Party hereunder with respect to such Indemnity Claim or demand and (b) may, upon written notice thereof to the Indemnitee, assume control of the defense of such Indemnity Claim with counsel reasonably satisfactory to the Indemnitee so long as (i) the Indemnifying Party covenants to indemnify, defend and hold harmless the Indemnitee from and against the entirety of any and all Losses the Indemnitee may suffer resulting from, arising out of, relating to, in the nature of, or caused by such Indemnity Claim or demand, (ii) the Indemnifying Party provides the Indemnitee with evidence reasonably acceptable to the Indemnitee that the Indemnifying Party will have adequate financial resources to defend against such Indemnity Claim or demand and fulfill its indemnification obligations hereunder, (iii) such Indemnity Claim or demand does not relate to or otherwise arise in connection with criminal or regulatory enforcement Action, (iv) settlement of, an adverse judgment with respect to, or conduct of the defense of such Indemnity Claim or demand by the Indemnifying Party is not, in the good faith judgment of the Indemnitee, likely to be adverse to the Indemnitee’s reputation or continuing business interests (including its relationships with current or potential investors or other parties material to the conduct of its business); and (v) the Indemnifying Party conducts the defense of such Indemnity Claim or demand actively and diligently. If the Indemnifying Party does not so assume control of the defense of an Indemnity Claim or demand, the Indemnitee will control such defense. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. The party controlling any such Indemnity Claim or demand will not agree to any settlement of, or the entry of any judgment arising from, such Indemnity Claim or demand without the prior written consent of the other party, which will not be unreasonably withheld, conditioned or delayed.

7.5           Exclusive Remedies. The Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all Claims (excluding any Claim for injunctive or other equitable relief or Fraud on the part of a Party hereto in connection with the transactions contemplated by this Agreement or in connection with Section 2.3 or Section 8.14) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Section 7. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, Claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Parties hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Section 7. Nothing in this Section 7.5 shall limit any Person’s right to seek any remedy on account of Fraud by any Party hereto.

7.6           Indemnification Adjusts Purchase Price for Tax Purposes. Each Party will, including retroactively, treat indemnification payments under this Agreement as adjustments to the Purchase Price for Tax purposes to the extent permitted under applicable Law.

Section 8.              GENERAL PROVISIONS.

8.1           Disclosure Schedule. The Companies have prepared the disclosure schedule attached to this Agreement (the “Disclosure Schedule”) and delivered it to Buyer on the date hereof. The Disclosure Schedule shall be arranged by sections to correspond to the sections of this Agreement. Any fact or item disclosed on any section of the Disclosure Schedule shall be deemed disclosed on all other sections to which an appropriate cross reference is made or on all other sections where it is reasonably apparent on the face of such disclosure that such disclosure applies to such other sections of the Disclosure Schedule. The Disclosure Schedule shall qualify the representations and warranties set forth in this Agreement and/or set forth other information required by this Agreement but shall not otherwise be interpreted as additional or independent representations or warranties. The inclusion of any item on the Disclosure Schedule shall not constitute an admission that a violation, right of termination, default, liability or other obligation of any kind exists with respect to such item, but rather is intended only to qualify certain representations and warranties in this Agreement and/or to set forth other information required by this Agreement.

8.2           Notices. All notices, requests, consents, Claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:

(a)           when delivered by hand (with written confirmation of receipt);

(b)           when received by the addressee if sent by a nationally recognized overnight courier (receipt requested);

(c)           on the date sent by facsimile or e-mail of a .PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or

(d)           on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 8.2):

If to the Companies:	Barnhart Transportation, LLC 9251 West North Main Road North East, PA 16428 E-mail: Attention: Bryan Barnhart and Tim Barnhart

with a copy to:	Scopelitis Garvin Light Hanson & Feary 10 W. Market St., Suite 1400 Indianapolis, IN 46204 E-mail: tmetzger@scopelitis.com Attention: W. Todd Metzger

If to the Sellers:	Bryan S. Barnhart 9251 West North Main Road North East, PA 16428 E-mail: Timothy W. Barnhart 9251 West North Main Road North East, PA 16428 E-mail: Timothy W. Barnhart, Trustee 9251 West North Main Road North East, PA 16428 E-mail:

If to Buyer:	SMG Industries Inc. 20475 State Hwy 249, Suite 450 Houston, Texas 77070 E-mail: [***] Attention: Matthew Flemming, CEO

with a copy to:

Jody R. Samuels, Esq.

276 Fifth Avenue, Suite 704

New York, New York 10001

E-mail: jsamuels@jrsconsultingco.com

Attention: Jody R. Samuels, Esq.

Facsimile: 646.998.1969

Faegre Drinker Biddle & Reath LLP

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55422

Email:     ben.stacke@faegredrinker.com

jon.nygren@faegredrinker.com

Attention:      Ben Stacke

Jon Nygren

8.3           Interpretation. Unless the express context otherwise requires

(a)           the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b)           terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa;

(d)           references herein to a specific Section, Subsection, Recital, Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Recitals, Schedules or Exhibits of this Agreement;

(e)           wherever the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;

(f)           references herein to any gender shall include each other gender;

(g)           references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained in this Section 8.3 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement;

(h)           with respect to the determination of any period of time, (i) the word “from” means “from and including” and the words “to” and “until” each means “to but excluding” and (ii) time is of the essence;

(i)            the word “or” shall be disjunctive but not exclusive;

(j)            references herein to any Law shall be deemed to refer to such Law as amended, modified, codified, reenacted, supplemented or superseded in whole or in part and in effect from time to time, and also to all rules and regulations promulgated thereunder;

(k)           references herein to any Contract mean such Contract as amended, supplemented or modified (including by any waiver thereto) in accordance with the terms thereof;

(l)            the headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement;

(m)           if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day; and

(n)           references herein to “ordinary course of business” shall refer to ordinary course of business consistent with past practice.

8.4           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated and the Parties shall negotiate in good faith to modify this Agreement to preserve each Party’s anticipated benefits under this Agreement.

8.5           Miscellaneous. This Agreement (together with all schedules, documents and instruments referred to herein):

(a)           constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof;

(b)           except as expressly set forth herein, is not intended to confer upon any other Person any rights or remedies hereunder; and

(c)           shall not be assigned by operation of law or otherwise, except as may be mutually agreed upon by the Parties hereto.

8.6           Separate Counsel. Each Party hereby expressly acknowledges that it has been advised to seek its own separate legal counsel for advice with respect to this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

8.7           Governing Law; Venue. This Agreement shall be deemed to have been made in the State of Texas and is governed by, and construed and enforced in accordance with, the laws of the State of Texas without reference to its choice of law analysis. Each Party hereby submits to the jurisdiction of the State of Texas to resolve any and all Claims brought by a Party or their representatives under this Agreement. Any and all actions brought under this Agreement shall be brought in the federal or state courts of Texas, and each Party hereby waives any right to object to the convenience of such venue.

8.8           Counterparts and Signatures. This Agreement may be executed in two or more counterparts, which together shall constitute a single agreement. This Agreement and any documents relating to it may be executed and transmitted to any other Parties by facsimile or email as a .pdf copy, which facsimile or email shall be deemed to be, and utilized in all respects as, an original, wet-inked document.

8.9           Amendment. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by SMGI, the Companies and Sellers.

8.10         Parties in Interest: No Third-Party Beneficiaries. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the Parties hereto. This Agreement shall not be deemed to confer upon any Person not a party hereto any rights or remedies hereunder. No Party to this Agreement may assign or delegate, by operation of law or otherwise, all or any portion of its rights or liabilities under this Agreement without the prior written consent of the other Parties to this Agreement. Notwithstanding the foregoing, each Party shall have the right to assign all or certain provisions of this Agreement, or any interest herein, and may delegate any duty or obligation hereunder, without the consent of any other Party to any financing source for purposes of creating a security interest herein or otherwise assigning as collateral security.

8.11         Waiver. No waiver by any Party of any default or breach by another Party of any representation, warranty, covenant or condition contained in this Agreement shall be deemed to be a waiver of any subsequent default or breach by such Party of the same or any other representation, warranty, covenant or condition. No act, delay, omission or course of dealing on the part of any Party in exercising any right, power or remedy under this Agreement or at law or in equity shall operate as a waiver thereof or otherwise prejudice any of such Party’s rights, powers and remedies. All remedies, whether at law or in equity, shall be cumulative and the election of any one or more shall not constitute a waiver of the right to pursue other available remedies.

8.12         Expenses. Except as otherwise provided for herein, at or prior to the Closing, the Parties hereto shall pay all of their own fees and expenses relating to the transactions contemplated by this Agreement, including, without limitation, the fees, costs and expenses of their respective counsel and financial advisers.

8.13         Recitals Incorporated. The recitals of this Agreement are incorporated herein and made a part hereof.

8.14         Equitable Remedies. Each Party acknowledges and agrees that each other Party may be damaged irreparably in the event any term of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a Party may be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms hereof in addition to any other remedy to which such Party may be entitled, at law or in equity. In particular, each Party acknowledges that the business of each Company is unique and recognizes and affirms that in the event any Party breaches this Agreement, money damages may be inadequate and such non-breaching Party may have no adequate remedy at law, so that such non-breaching Party will have the right, in addition to any other rights and remedies existing in its favor, to seek enforcement of its rights and each other Party’s obligations hereunder not only by action for damages but also by action for specific performance, injunctive or other equitable relief.

8.15         Non-Recourse. This Agreement may only be enforced against the named Parties. All legal proceedings, Actions, obligations, losses, damages, Claims or causes of action (whether in contract, in tort, in law or in equity, or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or otherwise) that may be based upon, arise under, out or by reason of, be connected with, or relate in any manner to (a) this Agreement or any of the other agreements or documents contemplated hereby, (b) the negotiation, execution or performance of this Agreement or any of the documents contemplated hereby (including any representation or warranty made in connection with, or as an inducement to, this Agreement or any of the other agreements or documents contemplated hereby), (c) any breach or violation of this Agreement (including the failure of any representation and warranty to be true or accurate) or any of the other agreements or documents contemplated hereby, and (d) any failure of the Transactions contemplated by this Agreement or the other agreements or documents contemplated hereby to be consummated, in the case of clauses (a) and (d), may be made only against (and are those solely of) the Persons that are expressly named as Parties to this Agreement, and then only to the extent of the specific obligations of such Persons set forth in this Agreement.

8.16         Sellers’ Representative.

(a)           Each Seller hereby irrevocably appoints Sellers’ Representative as such Seller’s representative, attorney-in-fact and agent, with full power of substitution (and such appointment is coupled with an interest and is irrevocable) to act in the name, place and stead of such Seller, to act on behalf of such Seller in any amendment of or litigation or arbitration involving this Agreement, including defending, negotiating, settling or otherwise dealing with Claims under Sections 2 or 7, and to do or refrain from doing all such further acts and things, and to execute all such documents, as Sellers’ Representative deems necessary or appropriate in conjunction with any of the Transactions, including the power:

(1)           to negotiate, execute and deliver all ancillary agreements, statements, certificates, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with the consummation of the Transactions, including pursuant to this Agreement and the Escrow Agreement (it being understood that each Seller will be deemed to have executed and delivered any such documents which Sellers’ Representative agrees to execute);

(2)           to give and receive all notices and communications to be given or received under this Agreement, the Escrow Agreement and the Transactions and to receive service of process in connection with any indemnification notice, the Escrow Agreement and the Transactions, including service of process; and

(3)           to take all actions that under this Agreement and the Transactions may be taken by Sellers and to do or refrain from doing any further act or deed on behalf of Sellers that Sellers’ Representative deems necessary or appropriate in its sole discretion relating to the subject matter of this Agreement and the Transactions as fully and completely as such Seller could do if personally present or represented.

(b)           Sellers’ Representative will not be liable to any Seller for any act taken or omitted by it as permitted under this Agreement, the Escrow Agreement and the Transactions, except if such act is taken or omitted in bad faith or by willful misconduct. Sellers’ Representative will also be fully protected against Sellers, and will not be liable in any way, in relying upon any written notice, demand, certificate or document that he in good faith believes to be genuine (including facsimiles thereof). As to any matters not expressly provided for in this Agreement, Sellers’ Representative will not be required to exercise any discretion or take any action on behalf of Sellers. Buyer may conclusively rely upon, without independent verification or investigation, all decisions made by Sellers’ Representative in connection with this Agreement, and will have no liability for any actions taken by Sellers’ Representative.

(c)           Sellers agree, severally but not jointly, to indemnify Sellers’ Representative for, and to hold Sellers’ Representative harmless against, any loss, liability or expense arising out of, relating to or resulting from any action taken or omitted to be taken without gross negligence, willful misconduct or bad faith on the part of Sellers’ Representative, in connection with Sellers’ Representative’s carrying out its duties under this Agreement, the Escrow Agreement and the Transactions, including costs and expenses of successfully defending Sellers’ Representative against any Claim of liability with respect thereto. Sellers’ Representative may consult with counsel, accountants or experts of its own choice and will have full and complete authorization and will not be liable for any action taken or omitted to be taken in good faith in accordance with the opinion of such counsel, accountants or experts.

(d)           If Timothy Barnhart becomes unable to serve as Sellers’ Representative, such other Person or Persons as may be designated by Sellers or their successors will succeed as Sellers’ Representative. If no such successor is designated by Sellers within five Business Days after the withdrawal of Sellers’ Representative, Sellers’ Representative will designate such successor.

(e)           Sellers’ Representative’s reasonable out-of-pocket expenses will be paid by Sellers.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Parties have caused the execution of this Agreement by their duly authorized representatives as of the date first written above.

	COMPANIES

	BARNHART TRANSPORTATION, LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	BARNHART FLEET MAINTENANCE, LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LAKE SHORE GLOBAL SOLUTIONS LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LAKE SHORE LOGISTICS, LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LEGEND EQUIPMENT LEASING, LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	ROUTE 20 TANK WASH LLC,
	a Pennsylvania limited liability company

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

IN WITNESS WHEREOF, the Parties have executed this Agreement or, as applicable, caused this Agreement to be executed by its duly authorized representative as of the date first written above.

	SELLERS

	BRYAN S. BARNHART

	By:	/s/ Bryan S. Barnhart
	Name:	Bryan S. Barnhart

	TIMOTHY W. BARNHART

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart

	THE TIMOTHY W. BARNHART 2017 IRREVOCABLE TRUST

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Trustee

	SELLERS’ REPRESENTATIVE

	TIMOTHY W. BARNHART

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart

IN WITNESS WHEREOF, the Parties have caused the execution of this Agreement by their duly authorized representatives as of the date first written above.

	HOLDCO

	LEGEND HOLDING RO, INC,
	a Delaware corporation

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	President

IN WITNESS WHEREOF, the Parties have caused the execution of this Agreement by their duly authorized representatives as of the date first written above.

	BUYER

	SMG INDUSTRIES INC.,
	a Delaware corporation

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Interim CEO

	MERGER SUB

	SKYLINE MERGER SUB, INC.,
	a Delaware corporation

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

Exhibit 3.1

CERTIFICATE OF AMENDMENT

OF THE

CERTIFICATE OF INCORPORATION

SMG INDUSTRIES INC.

SMG Industries Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), DOES HEREBY CERTIFY:

The name of the corporation (hereinafter called the “Corporation”) is SMG Industries Inc.

The Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) is hereby amended by deleting Article Fourth thereof and by substituting in lieu of said Article the following new Article:

“FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have the authority to issue is 501,000,000 shares, consisting of 500,000,000 shares of Common Stock with a par value of $.001 per share (the “Common Stock”) and 1,000,000 shares of Preferred Stock with a par value of $.001 per share (the “Preferred Stock”).

A description of the respective classes of stock and a statement of the designations, preferences, voting powers (or no voting powers), relative, participating, optional or other special rights and privileges and the qualifications, limitations and restrictions of the Preferred Stock and Common Stock are as follows:

PREFERRED STOCK

The Preferred Stock may be issued in one or more series at such time or times and for such consideration or considerations as the Corporation’s Board of Directors may determine. Each series of Preferred Stock shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. Except as otherwise provided in this Certificate of Incorporation, different series of Preferred Stock shall not be construed to constitute different classes of shares for the purpose of voting by classes.

The Board of Directors is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more series, each with such designations, preferences, voting powers (or no voting powers), relative, participating, optional or other special rights and privileges and such qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions adopted by the Board of Directors to create such series, and a certificate of said resolution or resolutions shall be filed in accordance with the General Corporation Law of the State of Delaware. The authority of the Board of Directors with respect to each such series shall include, without limitation of the foregoing, the right to provide that the shares of each such series may: (i) have such distinctive designation and consist of such number of shares; (ii) be subject to redemption at such time or times and at such price or prices; (iii) be entitled to the benefit of a retirement or sinking fund for the redemption of such series on such terms and in such amounts; (iv) be entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series of stock; (v) be entitled to such rights upon the voluntary or involuntary liquidation, dissolution or winding up of the affairs, or upon any distribution of the assets of the Corporation in preference to, or in such relation to, any other class or classes or any other series of stock; (vi) be convertible into, or exchangeable for, shares of any other class or classes or any other series of stock at such price or prices or at such rates of exchange and with such adjustments, if any; (vii) be entitled to the benefit of such conditions, limitations or restrictions, if any, on the creation of indebtedness, the issuance of additional shares of such series or shares of any other series of Preferred Stock, the amendment of this Certification of Incorporation or the Corporation’s By-Laws, the payment of dividends or the making of other distributions on, or the purchase, redemption or other acquisition by the Corporation of, any other class or classes or series of stock, or any other corporate action; or (viii) be entitled to such other preferences, powers, qualifications, rights and privileges, all as the Board of Directors may deem advisable and as are not inconsistent with law and the provisions of this Certificate of Incorporation.

COMMON STOCK

1. Relative Rights of Preferred Stock and Common Stock. All preferences, voting powers, relative, participating, optional or other special rights and privileges, and qualifications, limitations, or restrictions of the Common Stock are expressly made subject and subordinate to those that may be fixed with respect to any shares of the Preferred Stock.

2. Voting Rights. Except as otherwise required by law or this Certificate of Incorporation, each holder of Common Stock shall have one vote in respect of each share of stock held by him of record on the books of the Corporation for the election of directors and on all matters submitted to a vote of stockholders of the Corporation.

3. Dividends. Subject to the preferential rights of the Preferred Stock, if any, the holders of shares of Common Stock shall be entitled to receive, when and if declared by the Board of Directors, out of the assets of the Corporation which are by law available therefor, dividends payable either in cash, in property or in shares of capital stock.

4. Dissolution, Liquidation or Winding Up. In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of the Preferred Stock, holders of Common Stock shall be entitled, unless otherwise provided by law or this Certificate of Incorporation, to receive all of the remaining assets of the Corporation of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them respectively.”

	3.	This Certificate of Amendment to the Certificate of Incorporation was duly adopted pursuant to the provisions of Sections 141 and 242 of the DGCL.

	4.	Pursuant to Section 228(a) of the DGCL, the holders of outstanding shares of the Corporation having no less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted, consented to the adoption of the aforesaid amendments without a meeting, without a vote and without prior notice and that written notice of the taking of such actions has been given in accordance with Section 228(e) of the DGCL.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Matthew C. Flemming, its Chief Executive Officer, on July 6, 2023.

	SMG INDUSTRIES INC.

	By:	/s/ Matthew C. Flemming
		Name: Matthew C. Flemming
		Title: Chief Executive Officer

Exhibit 3.2

SMG INDUSTRIES INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

5% SERIES C CONVERTIBLE PREFERRED STOCK

The undersigned officer of SMG Industries Inc., a corporation organized and existing under the General Corporation Law of Delaware (the “Corporation”), does hereby certify:

That, pursuant to the authority conferred upon the Board of Directors of the Corporation (the “Board of Directors”) by its Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law of Delaware (the “DGCL”), the Board of Directors, by unanimous written consent, duly adopted the following recitals and resolution, which resolution remains in full force and effect on the date hereof (“Effective Date”):

WHEREAS, the Board of Directors is authorized within the limitations and restrictions stated in the Certificate of Incorporation of the Corporation, as amended to date, to provide by resolution or resolutions for the issuance of 1,000,000 shares of Preferred Stock, par value $0.001 per share, of the Corporation, including the 3% Series A Secured Convertible Preferred Stock (the “Series A Preferred Stock”), the 5% Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and the 5% Series C Convertible Preferred Stock (the “Series C Preferred Stock”) described herein and such other junior series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Corporation’s Board of Directors shall fix by resolution or resolutions providing for the issuance thereof duly adopted by the Board of Directors; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of a series of Preferred Stock to be referred to as Series C Preferred Stock and the number of shares constituting such series;

NOW, THEREFORE, BE IT RESOLVED:

Section 1. Designation and Authorized Shares. The Corporation shall be authorized to issue two thousand (2,000) shares of Series C Convertible Preferred Stock with a par value of $0.001 per share. The Corporation shall not be authorized to issue any additional Series C Convertible Stock without the consent of the vote or written consent of the holders of at least a majority of the then outstanding shares of the Series C Preferred Stock; provided that the Corporation has a sufficient number of authorized shares of Preferred Stock (each such holder referred to as a “Holder” and collectively, the “Holders”).

Section 2. Stated Value. Each share of Series C Preferred Stock shall have a stated value of $10,000 per share (the “Stated Value”).

Section 3. Liquidation.

(a) Upon the liquidation, dissolution or winding up of the business of the Corporation, whether voluntary or involuntary, after payment to the holders of the Series A Preferred Stock and Series B Preferred Stock, each Holder of Series C Preferred Stock shall be entitled to receive, for each share thereof, out of assets of the Corporation legally available therefor, a preferential amount in cash equal to (and not more than) the Stated Value (the “Liquidation Amount”) plus all accrued and unpaid dividends thereon. Other than the payment to the Holders of the Series A Preferred Stock and Series B Preferred Stock, all preferential amounts to be paid to the holders of Series C Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Corporation to the holders of (i) any other class or series of Capital Stock and (ii) the Common Stock. If upon any such distribution the assets of the Corporation shall be insufficient to pay the Holders of the outstanding shares of Series C Preferred Stock (or the holders of any class or series of capital stock ranking on a parity with the Series C Preferred Stock as to distributions in the event of a liquidation, dissolution or winding up of the Corporation) the full amounts to which they shall be entitled, such holders shall share ratably in any distribution of assets in accordance with the sums which would be payable on such distribution if all sums payable thereon were paid in full.

(b) Any distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency proceeding, shall be made in cash to the extent possible. Whenever any such distribution shall be paid in property other than cash, the value of such distribution shall be the Fair Market Value of such property.

Section 4. Rank and Security. Other than the Series A Preferred Stock and the Series B Preferred Stock, the Series C Preferred Stock shall, with respect to dividend distributions and distributions upon liquidation, winding up or dissolution of the Corporation, rank senior to all classes of Common Stock and to each other class of Capital Stock of the Corporation, or series of Preferred Stock of the Corporation hereafter created (collectively referred to, together with all classes of Common Stock, as “Junior Securities”).

Section 5. Dividends.

(a) The Series C Preferred Stock shall accrue a five percent (5%) annual dividend on the outstanding Stated Value of the Series C Preferred Stock, and such dividend shall be paid on the twenty-four (24) month anniversary date of the issuance of the Series C Preferred Stock through the issuance of shares of Common Stock, with the number of shares of Common Stock to be issued to be determined by dividing such accrued dividend by the Conversion Price.

(b) In the event that the Corporation shall at any time declare and pay a dividend or distribution of assets on any pari passu or junior shares of capital stock of the Corporation (other than a dividend or distribution payable solely in shares of Common Stock), it shall, at the same time, declare and pay to each Holder of Series C Preferred Stock a dividend equal to the dividend that would have been payable to such Holder as if the shares of Series C Preferred Stock held by such Holder had been converted pursuant to Section 6(a) hereof into Common Stock on the date of determination of holders of Common Stock entitled to receive such dividend.

(c) The Corporation may not declare or pay any dividend or make any distribution of assets on, or redeem, purchase or otherwise acquire, shares of capital stock of the Corporation ranking pari passu or junior to the Series C Preferred Stock as to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, unless all unpaid dividends on the Series C Preferred Stock have been or are contemporaneously paid.

Section 6. Conversion.

(a) Conversion Option. At any time and from time to time on or after the Effective Date, the Stated Value of each outstanding share of Series C Preferred Stock, plus accrued dividends thereon, shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), into a number of shares of Common Stock equal to the quotient of (A) the sum of (x) the Stated Value of such share(s) of Series C Preferred Stock to be converted as of the Conversion Date (as defined herein) plus any accrued dividends thereon and (B) the conversion price of $0.25 per share (the “Conversion Price”) on the date (the “Conversion Date”) on which the Holder provides notice of conversion (the “Conversion Notice”), substantially in the form of Exhibit A attached hereto, duly executed, to the Corporation (20475 State Hwy 249, Suite 450 Houston, Texas 77070; E-mail: matt@smgindustries.com; Attn.: Matthew Flemming (or current CEO, President or CFO)), provided, however, that the Conversion Price shall be subject to adjustment as described in Section 10 below. The Holder shall deliver the stock certificate representing the Series C Preferred Stock to be converted to the Corporation at such time that the Series C Preferred Stock is fully converted. With respect to partial conversions of the Series C Preferred Stock, the Corporation shall keep written records of the number of shares of Series C Preferred Stock converted as of each Conversion Date, and the Holder shall not be required to return the stock certificate until fully converted or upon an Automatic Conversion. Not less than 10 shares of Series C Preferred Stock may be converted in connection with the delivery of a Conversion Notice, except in the event that the Holder owns less than 10 shares of Series C Preferred Stock. In the event that a Holder owns less than 10 shares of Series C Preferred Stock, then all such shares shall be converted upon any such conversion.

(b) Automatic Conversion. All outstanding shares of Series C Preferred Stock, and accrued Dividends thereon, shall automatically convert into shares of Common Stock on the date that is twenty-four (24) months after the date of the issuance thereof (“Automatic Conversion”) into a number of shares of Common Stock equal to the quotient of (A) the sum of (x) the Stated Value of such share(s) of Series C Preferred Stock subject to Automatic Conversion plus any accrued dividends thereon and (B) the Conversion Price.

(c) Mechanics of Conversion. Not later than five (5) Business Days after any Conversion Date (the “Delivery Date”), the Corporation or its designated transfer agent, as applicable, shall issue and deliver to the Holder by express courier a certificate or certificates, registered in the name of the Holder or its designee, the number of shares of Common Stock to which the Holder shall be entitled.

Section 7. Other Provisions.

(a) Reservation of Common Stock. In accordance with Section 10(g), the Corporation shall at all times reserve from its authorized Common Stock a sufficient number of shares to provide for the full conversion of all Series C Preferred Stock authorized for issuance.

(b) Record Holders. The Corporation and its transfer agent, if any, for the Series C Preferred Stock may deem and treat the record Holder of any shares of Series C Preferred Stock as reflected on the books and records of the Corporation as the sole true and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice to the contrary.

(c) Redemption. The Series C Preferred Stock may be redeemed at any time by the Company without the Holder’s consent upon not less than 10 business days prior written at a price equal to the Stated Value of any share(s) of Series C Preferred Stock and any accrued dividends thereon.

Section 8. Restriction and Limitations. Except as expressly provided herein or as required by law so long as any shares of Series C Preferred Stock remain outstanding, the Corporation shall not, without the vote or written consent of the Holders of at least a majority of the then outstanding shares of the Series C Preferred Stock, take any action which would adversely and materially affect any of the preferences, limitations or relative rights of the Series C Preferred Stock.

Section 9. Voting Rights.

(a) Generally. The Holders shall have the right to receive notice of any meeting of holders of Common Stock or Series C Preferred Stock and to vote upon any matter submitted to a vote of the holders of Common Stock or Series C Preferred Stock, on an as-converted basis. Except as otherwise expressly set forth in the Certificate of Incorporation (including this Certificate of Designation), the Holders shall vote on each matter submitted to them with the holders of Common Stock and all other classes and series of Capital Stock entitled to vote on such matter, taken together as a single class, if any.

(b) Number of Votes. In any case in which the Holders of the Series C Preferred Stock shall be entitled to vote pursuant to this Certificate of Designation or pursuant to the DGCL or other applicable law, each Holder entitled to vote with respect to such matter shall be entitled to vote, with respect to each share of such Series C Preferred Stock, the number of votes that equals the number of shares of Common Stock into which such share(s) of Series C Preferred Stock is then convertible.

Section 10. Certain Adjustments.

(a) So long as any Series C Preferred Stock shall be outstanding, from and after the Effective Date, the Conversion Price shall be subject to adjustment from time to time as follows:

(i) Adjustments for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Effective Date, effect a forward stock split of the outstanding Common Stock, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Corporation shall at any time or from time to time after the Effective Date, combine the outstanding shares of Common Stock in the form of a reverse stock split or other combination that causes the outstanding shares of Common Stock to decrease, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 10(a)(i) shall be effective at the close of business on the date the stock split or combination occurs.

(ii) Adjustments for Certain Dividends and Distributions. If the Corporation shall at any time or from time to time after the Effective Date, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying, the applicable Conversion Price then in effect by a fraction:

(1)

the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and

(2)

the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

(iii) Adjustment for Other Dividends and Distributions. If the Corporation shall at any time or from time to time after the Effective Date, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in other than shares of Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the Holders of the Series C Preferred Stock shall receive upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Corporation which they would have received had the Series C Preferred Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the Conversion Date, retained such securities (together with any distributions payable thereon during such period), giving application to all adjustments called for during such period under this Section 10(a)(iii) with respect to the rights of the Holder; provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be adjusted pursuant to this Section 10(a)(iii) as of the time of actual payment of such dividends or distributions.

(iv) Adjustments for Reclassification, Exchange or Substitution. If the Common Stock issuable upon conversion of the Series C Preferred Stock at any time or from time to time after the Effective Date shall be changed to the same or different number of shares of any class or classes of stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Sections 10(a)(i), 10(a)(ii) and 10(a)(iii), or a reorganization, merger, consolidation, or sale of assets provided for in Section 10(a)(v)), then, and in each event, an appropriate revision to the Conversion Price shall be made and provisions shall be made (by adjustments of the Conversion Price or otherwise) so that the Holder shall have the right thereafter to convert the Series C Preferred Stock into the kind and amount of shares of stock and other securities receivable upon reclassification, exchange, substitution or other change, by holders of the number of shares of Common Stock into which such Series C Preferred Stock might have been converted immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

(v) Adjustments for Reorganization, Merger, Consolidation or Sales of Assets. If at any time or from time to time after the Effective Date there shall be a capital reorganization of the Corporation (other than by way of a stock split or combination of shares or stock dividends or distributions provided for in Section 10(a)(i), 10(a)(ii) and 10(a)(iii), or a reclassification, exchange or substitution of shares provided for in Section 10(a)(iv)), or a merger or consolidation of the Corporation with or into another Person where the holders of outstanding voting securities prior to such merger or consolidation do not own over fifty percent (50%) of the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially all of the Corporation’s properties or assets to any other Person (an “Organic Change”), then as a part of such Organic Change, (A) if the surviving entity in any such Organic Change is a public company that is registered pursuant to the Exchange Act, and its common stock is listed or quoted on a national exchange or the OTC Market, an appropriate revision to the Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the Holder shall have the right thereafter to convert the Series C Preferred Stock into the kind and amount of shares of stock and other securities or property of the Corporation or any successor corporation resulting from Organic Change, and (B) if the surviving entity in any such Organic Change is not a public company that is registered pursuant to the Exchange Act, or its common stock is not listed or quoted on a national exchange or the OTC Market, the Holder shall have the right to receive the amount of the outstanding stated value plus accrued dividends of the Series C Preferred Stock paid in cash. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 10(a)(v) with respect to the rights of the Holder after the Organic Change to the end that the provisions of this Section 10(a)(v) (including any adjustment in the applicable Conversion Price then in effect and the number of shares of stock or other securities deliverable upon conversion of the Series C Preferred Stock) shall be applied after that event in as nearly an equivalent manner as may be practicable.

(b) Record Date. In case the Corporation shall take record of the holders of Common Stock for the purpose of entitling them to subscribe for or purchase Common Stock or Common Stock Equivalents, then the date of the issue or sale of the shares of Common Stock shall be deemed to be such record date.

(c) No Impairment. The Corporation shall not, by amendment of its Certificate of Incorporation, Bylaws or other constitutional documents, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith, assist in the carrying out of all the provisions of this Section 10 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the Holder against impairment. In the event a Holder shall elect to convert any portion of the Series C Preferred Stock as provided herein, the Corporation cannot refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, violation of an agreement to which such Holder is a party or for any reason whatsoever, unless, an injunction from a court, or notice, restraining and or adjoining conversion of all or of the Series C Preferred Stock shall have issued and the Corporation posts a surety bond for the benefit of such Holder in an amount equal to one hundred twenty-five percent (125%) of the aggregate Stated Value of the Series C Preferred Stock that the Holder has elected to convert, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder (as liquidated damages) in the event it obtains judgment.

(d) Certificates as to Adjustments. Upon occurrence of each adjustment or readjustment of the Conversion Price or number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock pursuant to this Section 10, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment and readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon written request of the Holder, at any time, furnish or cause to be furnished to the Holder a like certificate setting forth such adjustments and readjustments, the applicable Conversion Price in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon the conversion of the Series C Preferred Stock. Notwithstanding the foregoing, the Corporation shall not be obligated to deliver a certificate unless such certificate would reflect an increase or decrease of at least one percent (1%) of such adjusted amount.

(e) Issue Taxes. The Corporation shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of the Series C Preferred Stock pursuant thereto; provided, however, that the Corporation shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Holder in connection with any such conversion.

(f) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series C Preferred Stock. All fractional shares shall be rounded up to the nearest whole share.

(g) Reservation of Common Stock. The Corporation shall at all times when the Series C Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all issued and outstanding Series C Preferred Stock. The Corporation shall, from time to time in accordance with Delaware law, increase the authorized number of shares of Common Stock if at any time the unissued number of authorized shares shall not be sufficient to satisfy the Corporation’s obligations under this Section 10(g).

(h) Regulatory Compliance. If any shares of Common Stock to be reserved for the purpose of conversion of the Series C Preferred Stock or any dividends accrued thereon require registration or listing with or approval of any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise before such shares may be validly issued or delivered upon conversion, the Corporation shall, at its sole cost and expense, in good faith and as expeditiously as possible, endeavor to secure such registration, listing or approval, as the case may be.

Section 11. Definitions. As used in this Certificate of Designation, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires:

“Affiliate” as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such latter Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors of such former Person.

“Board of Directors” shall have the meaning provided in the first paragraph of this Certificate of Designation.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Delaware or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close.

“Capital Stock” means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interest in (however designated) capital stock.

“Certificate of Designation” means this Certificate of Designation creating the Series C Preferred Stock.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the Effective Date such Commission is not existing and performing the duties now assigned to it under the Exchange Act, the body performing such duties at such time.

“Common Stock” means the Corporation’s Common Stock, par value $0.001 per share.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Fair Market Value” means, with respect to any asset or property, the price which would be negotiated in an arm’s-length transaction, for cash, between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market Value shall be determined by the legally adopted vote or consent of the Board of Directors and certified in a board resolution.

“Holder” means a holder of shares of Series C Preferred Stock as reflected in the register maintained by the Corporation or the transfer agent for the Series C Preferred Stock.

“Person” means an individual, corporation, partnership, limited liability company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture, court or governmental unit or any agency or subdivision thereof, or any other legally recognizable entity.

“Preferred Stock” means, with respect to any Person, Capital Stock of any class or classes (however designated) of such Person which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over Capital Stock of any other class of such Person.

[Signature Page follows]

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 6^th day of July, 2023.

	SMG INDUSTRIES INC.

	By:	/s/ Matthew C. Flemming
		Name: Matthew C. Flemming
		Title: Chief Executive Officer

EXHIBIT A

NOTICE OF CONVERSION

SERIES C CONVERTIBLE PREFERRED STOCK

The undersigned hereby elects to convert the number of shares of Series C Convertible Preferred Stock indicated below into shares of common stock, $0.001 par value per share (the “Common Stock”), of SMG Industries Inc., a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

	Date to effect conversion
	Number of shares of Series C Preferred Stock owned prior to conversion
	Accrued Dividends to be Converted
	Stated Value of Series C Preferred Stock plus accrued Dividends to be converted
	Number of shares of Common Stock to be issued upon Conversion
	Number of shares of Series C Preferred Stock owned after Conversion

	HOLDER:

	By:
	Name:
	Title:

Exhibit 10.1

Execution Version

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (“Agreement”) is made as of the 7th day of July, 2023, by and among SMG Industries Inc., a Delaware corporation, with an address at 20475 State Hwy 249, Suite 450, Houston, Texas 77070 (the “Company”), and the Investors set forth on the signature pages affixed hereto (each an “Investor” and collectively the “Investors”).

Recitals:

A. The Company and the Investors are executing and delivering this Agreement in connection with an offering of securities of the Company (the “Offering”), in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), or Regulation D promulgated thereunder (“Regulation D”); and

B. The Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, in one or more Closings to occur on or prior to August 31, 2023 (the “Closing Deadline”), up to 1,500 shares of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (“Shares”), having the powers, designations, preferences, rights, qualifications, limitations and restrictions, as specified in the form of Certificate of Designations attached hereto as Exhibit A (the “Certificate of Designations”), and to be issued in accordance with the terms and conditions of the Certificate of Designations and this Agreement:

C. Pursuant to its terms, not less than $2,000,000 of proceeds from the sale of the Shares (the “Minimum Offering Amount”) and not more than $15,000,000 of proceeds from the sale of the Shares (the “Maximum Offering Amount”) shall be raised in this Offering; and

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Commission” or “SEC” means the United States Securities and Exchange Commission.

“Common Stock” means the Company’s common stock, par value $0.001 per share, and any securities into which the common stock may be reclassified.

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

“Confidential Information” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Escrow Agent” means JPMorgan Chase Bank, N.A.

“Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation).

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise) or business of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents.

“Offering Price” means $10,000.00 per Share.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition) whether commenced or threatened.

“Prohibited Transaction” means any short sale, whether or not against the box, establishing any “put equivalent position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granting any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derives any significant part of its value from the Common Stock or otherwise seeks to hedge a position in the Securities.

“Securities” means the Shares.

“Subsidiary(ies)” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Transaction Documents” means this Agreement and certain other agreements, documents, instruments and certificates necessary to carry out the purposes thereof.

““Underlying Shares” means the shares of Common Stock that may be issued upon the conversion of the Shares in accordance with the terms of the Certificate of Designations.

2. Purchase and Sale of Shares.

(a) Subject to the terms and conditions of this Agreement, at each Closing (as defined in Section 3 below), the applicable Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to such Investors, the Shares in the respective amounts set forth opposite the Investors’ names on the signature pages attached hereto in exchange for payment by each Investor for the number of Shares purchased in this Offering multiplied by the Offering Price.

(b) No less than 5 Shares may be purchased by each Investor, unless the Company consents to a lesser amount in its sole discretion.

(c) Each Investor hereby acknowledges and agrees that at any time prior to the applicable Closing Date (as defined below), the Company, in its sole discretion, reserves the right to: (i) accept or reject any Investor’s purchase of Shares; and/or (ii) allot to any Investor a lesser number of Shares than the number of Shares set forth on the Investor’s signature page attached hereto.

(d) Each Person that does not provide a signature page to this Agreement on the date hereof, but subsequently executes and delivers a counterpart signature page to this Agreement and delivers the purchase price in accordance with Section 3(a) hereof for the Shares it is purchasing prior to the Closing Deadline shall be considered an Investor pursuant to this Agreement and shall receive the rights, preferences and privileges and be subject to the obligations of an Investor pursuant to this Agreement.

3. Closing.

(a) Each Investor shall deliver, or cause to be delivered, their respective purchase price for the number of Shares being purchased by them in this Offering, in immediately available funds, to the Escrow Agent, via wire transfer or a certified check. Upon the Escrow Agent’s receipt of the Minimum Offering Amount, the Company may give notice to the Escrow Agent to schedule an initial Closing (as defined below). Following the initial Closing where at least the Minimum Amount is sold, subsequent closings may be held up to the sale of the Maximum Amount. Provided each of the conditions set forth in Section 6 hereof have been satisfied or waived by the appropriate party or parties, the sale of the Shares to the Investors hereunder shall be completed (each such date, the “Closing”), and for purposes hereof, the date a Closing actually takes place shall be referred to as a “Closing Date.” Each Closing shall take place at the offices of the Company at 20475 State Hwy 249, Suite 450, Houston, Texas 77070, or at such other location and on such other date as the Company shall determine.

(b) The Company shall have the right to conduct multiple Closings; provided, however, that any additional Closing(s) shall occur on or prior to August 31, 2023.

(c) Within ten (10) business days of each Closing, the Company shall cause its transfer agent to deliver the Shares to the Investors in book-entry form.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors that, except as set forth in the SEC Filings (as defined below):

4.1 Organization, Good Standing and Qualification. Each of the Company and each of its Subsidiaries are duly organized, validly existing and in good standing under the laws of the jurisdiction of their respective states of incorporation and organization and have all requisite corporate power and authority to carry on their business as now conducted and to own their properties. Each of the Company and its Subsidiaries are duly qualified to do business as a foreign corporation and are in good standing in each jurisdiction in which the conduct of their business or their ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect.

4.2 Authorization. The Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, as applicable, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Securities. The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

4.3 Capitalization. The SEC Filings set forth (a) the authorized capital stock of the Company; (b) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (c) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable for, or convertible into, or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, non-assessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal securities law and any rights of third parties. No Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. There are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or its Subsidiaries are or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement. There are no voting agreements, buy-sell agreements, option or right of first refusal purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. No Person has the right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other Person. The issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

4.4 Valid Issuance. The Shares to be issued under this Agreement have been duly authorized and, when issued and sold and paid for by the Investors in accordance with this Agreement, will be duly authorized and validly issued and shall be free and clear of all encumbrances and restrictions (other than those created by the Investors), except for restrictions on transfer set forth in the Transaction Documents. The Underlying Shares to be issued upon the conversion of the Shares have been duly authorized, and when issued upon conversion of the Shares, will be validly issued, fully paid and nonassessable and free of pre-emptive or similar rights.

4.5 Consents. The execution, delivery and performance by the Company of the Transaction Documents, the Certificate of Designations and the offer, issuance and sale of the Securities and the issuance of the Underlying Shares, require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws or any other notices required thereby, other than as would not reasonably be expected to have a Material Adverse Effect, all of which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Shares and the Underlying Shares, and (ii) the other transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Amended and Restated Certificate of Incorporation, as amended, or Amended and Restated Bylaws that is or is reasonably expected to become applicable to the Investors as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investors or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents.

4.6 Delivery of SEC Filings; Business. The Company has made available to the Investors through the EDGAR system, true and complete copies of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”). Except as indicated in the SEC Filings, the SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

4.7 Use of Proceeds. The proceeds from this Offering may be have various uses, including, but not limited to, general working capital purposes. Notwithstanding the foregoing, the Company may use the proceeds from this Offering to fund its strategy for growth and to make acquisitions.

4.8 No Material Adverse Change. Since March 31, 2023, there has not been:

(a) any change in the consolidated assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, except for changes in the ordinary course of business which have not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

(b) any declaration or payment of any dividend, or any authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company;

(c) any material damage, destruction or loss, whether or not covered by insurance to any assets or properties of the Company or its Subsidiary which has had or could reasonably be expected to have a Material Adverse Effect;

(d) any waiver, not in the ordinary course of business, by the Company or any Subsidiary of a material right or of a material debt owed to it;

(e) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company or a Subsidiary, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company and its Subsidiary taken as a whole (as such business is presently conducted);

(f) any change or amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, or Amended and Restated Bylaws, or material change to any material contract or arrangement by which the Company or any Subsidiary is bound or to which any of their respective assets or properties is subject;

(g) any material labor difficulties or labor union organizing activities with respect to employees of the Company or any Subsidiary;

(h) any material transaction entered into by the Company or a Subsidiary other than in the ordinary course of business;

(i) the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company or any Subsidiary;

(j) the loss or threatened loss of any customer which has had or could reasonably be expected to have a Material Adverse Effect; or

(k) any other event or condition of any character that has had or could reasonably be expected to have a Material Adverse Effect.

4.9 SEC Filings. At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

4.10 No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Amended and Restated Certificate of Incorporation, as amended, or the Company’s Amended and Restated Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investors through the EDGAR system), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties except as would not reasonably be expected to have a Material Adverse Effect, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

4.11 Tax Matters. The Company and each Subsidiary has timely prepared and filed all tax returns required to have been filed by the Company or such Subsidiary with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it, subject to allowable extensions to file. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against the Company or any Subsidiary nor, to the Company’s Knowledge, any reasonable basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company and its Subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any Subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Company or any Subsidiary or any of their respective assets or property. There are no outstanding tax sharing agreements or other such arrangements between the Company and any Subsidiary or other corporation or entity.

4.12 Title to Properties. The Company and each Subsidiary has good and marketable title to all real properties and all other properties and assets owned by it, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or currently planned to be made thereof by them; and the Company and each Subsidiary holds any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or currently planned to be made thereof by them.

4.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect.

4.14 Labor Matters.

(a) The Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company has not violated in any material respect any laws, regulations, orders or contract terms affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours, except as would not reasonably be expected to have a Material Adverse Effect.

(b) (i) There are no labor disputes existing, or to the Company’s Knowledge, threatened, involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions for election pending or, to the Company’s Knowledge, threatened before any governmental agency or labor commission relating to the Company’s employees, (iii) no demand for recognition or certification heretofore made by any labor organization or group of employees is pending with respect to the Company, and (iv) to the Company’s Knowledge, the Company enjoys good labor and employee relations with its employees and labor organizations.

(c) The Company is, and at all times has been, in compliance in all material respects with all applicable laws respecting employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization.

(d) The Company is not a party to, or bound by, any employment or other contract or agreement that contains any severance, termination pay or change of control liability or obligation, including, without limitation, any “excess parachute payment,” as defined in Section 280G of the Internal Revenue Code.

(e) To the Company’s Knowledge, the Company has no liability for the improper classification by the Company of any of its employees as independent contractors or leased employees prior to the Closing.

4.15 Intellectual Property.

(a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance in all material respects with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable. No Intellectual Property of the Company or its Subsidiaries which are necessary for the conduct of the Company’s and its Subsidiaries’ respective businesses as currently conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no such action is threatened. No patent of the Company or its Subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition proceeding.

(b) All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary for the conduct of the Company’s and its Subsidiaries’ respective businesses as currently conducted to which the Company or any Subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively, “License Agreements”) are valid and binding obligations of the Company or its Subsidiaries that are parties thereto and, to the Company’s Knowledge, the other parties thereto, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and there exists no event or condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any Subsidiary under any such License Agreement.

(c) The Company and each of its Subsidiaries own or have the valid right to use all of the Intellectual Property that is necessary for the conduct of the Company’s and its Subsidiaries’ respective businesses as currently conducted and for the ownership, maintenance and operation of the Company’s and its Subsidiaries’ properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property, other than licenses entered into in the ordinary course of the Company’s and its Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and enforceable right to use all third-party Intellectual Property used in the respective businesses of the Company and its Subsidiaries.

(d) To the Company’s Knowledge, the conduct of the Company’s and each of its Subsidiaries’ businesses as currently conducted does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s Knowledge, the Intellectual Property and Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s and its Subsidiaries’ respective businesses as currently conducted are not being Infringed by any third party, except as would not reasonably be expected to have a Material Adverse Effect. There is no litigation or order pending or outstanding or, to the Company’s Knowledge, threatened or imminent, that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential Information owned by a third party, and, to the Company’s Knowledge, there is no reasonable basis for the same.

(e) The consummation of the transactions contemplated hereby and by the other Transaction Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential Information which is necessary for the conduct of the Company’s and its Subsidiaries’ respective businesses as currently conducted.

(f) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each employee, consultant and contractor who has had access to Confidential Information which is necessary for the conduct of the Company’s and its Subsidiaries’ respective businesses as currently conducted has executed an agreement to maintain the confidentiality of such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms thereof, except where the failure to do so has not had and would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.

4.16 Environmental Matters. To the Company’s Knowledge, neither the Company nor any Subsidiary (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim has had or could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.

4.17 Litigation. There are no material pending actions, suits or proceedings against the Company, its Subsidiaries or any of their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened.

4.18 Financial Statements. The financial statements included in each SEC Filing present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis (“GAAP”) (except as may be disclosed therein or in the notes thereto, and, in the case of quarterly financial statements, as permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof, neither the Company nor its Subsidiaries have incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or could reasonably be expected to have a Material Adverse Effect.

4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and effect insurance coverage that is customary for comparably situated companies for the business being conducted and properties owned or leased by the Company and each Subsidiary, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies to insure.

4.20 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

4.21 No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

4.22 No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) of the 1933 Act for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act.

4.23 Private Placement. Assuming the accuracy of the representations of the Investors set forth in Sections 5.3 through 5.9 hereof (the “Investment Representations”), the offer and sale of the Securities and the issuance of the Underlying Shares to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act.

4.24 Questionable Payments. Neither the Company nor its Subsidiaries nor, to the Company’s Knowledge, any of their respective current or former stockholders, directors, officers, employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious entries on the books and records of the Company or any Subsidiary; (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature; or (f) taken any actions that would violate the U.S. Foreign Corrupt Practices Act of 1977, as amended.

4.25 Transactions with Affiliates. None of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than as holders of stock options or other equity awards and/or warrants, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

5. Representations and Warranties of the Investors. Each of the Investors hereby severally, and not jointly, represents and warrants to the Company that:

5.1 Organization and Existence. Such Investor is an individual or a validly existing corporation, limited partnership, or limited liability company and has all requisite individual, corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.

5.2 Authorization. The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

5.3 Purchase Entirely for Own Account. The Securities to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time. Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4 Investment Experience. Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5 Disclosure of Information. Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities. Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

5.6 Restricted Securities. Such Investor understands that the Securities and the Underlying Shares are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

5.7 Legends. It is understood that, except as provided below, certificates evidencing the Securities and the Underlying Shares may bear the following or any similar legend:

(a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

(b) If required by the authorities of any state in connection with the issuance of sale of the Securities and the Underlying Shares, the legend required by such state authority.

5.8 Accredited Investor. Such Investor is an “accredited investor” within the meaning of Rule 501(a) of Regulation D promulgated under the 1933 Act for the reasons checked on Schedule 1 hereto.

5.9 No General Solicitation. Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

5.10 Brokers and Finders. Such Investor has not entered into an agreement with a broker or finder for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

5.11 Prohibited Transactions. During the last thirty (30) days prior to the date hereof, neither such Investor nor any Affiliate of such Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments, including in respect of the Securities, or (z) is subject to such Investor’s review or input concerning such Affiliate’s investments or trading has, directly or indirectly, effected or agreed to effect any Prohibited Transaction. Such Investor acknowledges that the representations, warranties and covenants contained in this Section 5.11 are being made for the benefit of the Investors as well as the Company and that each of the other Investors shall have an independent right to assert any claims against such Investor arising out of any breach or violation of the provisions of this Section 5.11.

5.12 Reliance on Exemptions. Such Investor understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability of such exemptions and the eligibility of such Investor to acquire the Securities.

6. Conditions to Closing.

6.1 Conditions to the Investors’ Obligations. The obligation of each Investor to purchase the number of Shares that it agrees to purchase at a Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the applicable Closing Date, of the following conditions, any of which may be waived by such Investor in its sole discretion (as to itself only):

(a) The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of a specific date, in which case such representation or warranty shall be true and correct as of such date, and the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such specific date.

(b) The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(c) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents to be consummated on or prior to the Closing Date, all of which shall be in full force and effect.

(d) The Company shall have instructed its transfer agent to issue and deliver the certificates representing the Shares to the Investor (such Shares not to be issued until full payment has been made therefor).

(e) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(f) No stop order or suspension of trading shall have been imposed by the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

(g) The Company shall have executed and delivered a copy of this Agreement to the Investors.

6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and issue the Shares at a Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the applicable Closing Date of the following conditions, any of which may be waived by the Company:

(a) The representations and warranties made by the Investors in Section 5 hereof, other than the representations and warranties contained in the Investment Representations, shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investors shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date.

(b) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(c) Each Investor shall have delivered, or cause to be delivered, their purchase price for the respective number of Shares they have purchased to the Escrow Agent, via wire transfer or a certified check.

(d) The Investors shall have executed and delivered a copy of this Agreement to the Company, along with Schedule 1 hereto.

6.3 Termination of Obligations to Effect Closing; Effects.

(a) The outstanding obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:

(i) Upon the mutual written consent of the Company and the Investors;

(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii) By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor;

(iv) Automatically, with respect to any Shares not previously sold, on or before August 31, 2023;

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect a Closing shall not then be in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents.

(b) Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

7. Covenants and Agreements of the Company.

7.1 Insurance. For such time as an Investor holds any of the Shares being sold hereunder, the Company shall not materially reduce the insurance coverages described in Section 4.19.

7.2 Compliance with Laws. For such time as an Investor holds any of the Shares being sold hereunder, the Company will comply in all material respects with all applicable laws, rules, regulations, orders and decrees of all governmental authorities.

7.3 Registration Rights.

(a) Filing of Registration Statement.

(i) The Company will use reasonable efforts to file a registration statement (“Registration Statement”) to register all of the Underlying Shares issuable upon the conversion of the Shares pursuant to the terms of this Agreement and the Certificate of Designations (“Registrable Securities”), within 150 calendar days after each Closing Date; provided, however, that this paragraph shall not apply to any Registrable Securities if such Registrable Securities may then be sold under Rule 144 (assuming the holder’s compliance with the provisions of the Rule) and the Company delivers an opinion to that effect to the transfer agent.

(ii) At least five (5) business days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request and provide such information and documents to the Company within five (5) business days of a request for such information or documents. If such requested information and/or documents are not provided to the Company within such time period, the Company may exclude such Investor’s Registrable Securities from the Registration Statement.

(iii) Each Investor agrees that, upon receipt of any notice from the Company of the issuance of any stop order or other suspension of effectiveness with respect to a Registration Statement or the happening of an event that as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, which requires the Company to file an amendment to the Registration Statement, such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary herein, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described above and for which such Investor has not yet settled.

(iv) Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.

(b) Expenses. The Company shall bear all fees and expenses attendant to registering the Registrable Securities (except any underwriters’ discounts and commissions and fees and expenses of any of the holders’ own professionals, if any). The Company agrees to use its reasonable best efforts to qualify to register the Registrable Securities in such states as are reasonably requested by the holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a state in which such registration would cause (i) the Company to be obligated to register or license to do business in such state, or (ii) the principal stockholders of the Company to be obligated to escrow any of their shares of capital stock of the Company.

(c) Indemnification. The Company shall indemnify and hold harmless each holder of the Registrable Securities to be sold pursuant to any Registration Statement hereunder and each of such holder’s officers, directors, employees, agents, partners, legal counsel and accountants, and each person, if any, who controls each of the foregoing within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever incurred by the indemnified party in any action or proceeding between the indemnitor and indemnified party or between the indemnified party and any third party or otherwise) to which any of them may become subject under the 1933 Act, the 1934 Act or any other statute or at common law or otherwise under laws of foreign countries, arising from such Registration Statement or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any preliminary prospectus, Registration Statement or prospectus (as from time to time each may be amended and supplemented); (ii) in any post-effective amendment or amendments or any new Registration Statement and prospectus in which is included the Registrable Securities; or (iii) any application or other document or written communication (collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Registrable Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; unless such statement or omission is made in reliance upon, and in strict conformity with, written information furnished to the Company with respect to the holders expressly for use in a preliminary prospectus, Registration Statement or prospectus, or any amendment or supplement thereof, or in any application, as the case may be. The Company agrees promptly to notify the holders of the Registrable Securities of the commencement of any litigation proceedings against the Company or any of its officers, directors or controlling persons in connection with the issue and sale or resale of the Registrable Securities or in connection with any such Registration Statement or prospectus.

8. Survival and Indemnification.

8.1 Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

8.2 Indemnification of the Investors. Subject to the provisions of this Section 8.2, the Company will indemnify and hold each Investor and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Investor (within the meaning of Section 15 of the 1933 Act and Section 20 of the 1934 Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Investor Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Investor Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Investor Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Investor Party may have with any such stockholder or any violations by such Investor Party of state or federal securities laws or any conduct by such Investor Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Investor Party. Any Investor Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Investor Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Investor Party under this Agreement (y) for any settlement by an Investor Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Investor Party’s breach of any of the representations, warranties, covenants or agreements made by such Investor Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 8.2 shall be made by periodic payments of the amount thereof during the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Investor Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

8.3 Indemnification of the Company. Subject to the provisions of this Section 8.3, each Investor, severally and not jointly, will indemnify and hold the Company and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Company (within the meaning of Section 15 of the 1933 Act and Section 20 of the 1934 Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Company Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Company Party may suffer or incur as a result of or relating to any breach of any of the representations, warranties, covenants or agreements made by such Investor in this Agreement or in the other Transaction Documents, with respect to any of the transactions contemplated by the Transaction Documents; provided, however, in no event shall any indemnity under this Section 8.3 exceed the purchase price paid by an Investor. If any action shall be brought against any Company Party in respect of which indemnity may be sought pursuant to this Agreement, such Company Party shall promptly notify the applicable Investor(s) in writing, and such Investor(s) shall have the right to assume the defense thereof with counsel of their own choosing reasonably acceptable to the Company Party. Any Company Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Company Party except to the extent that (i) the employment thereof has been specifically authorized by the applicable Investor(s) in writing, (ii) the applicable Investor(s) have failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the applicable Investor(s) and the position of such Company Party, in which case the applicable Investor(s) shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. No Investor will be liable to any Company Party under this Agreement (y) for any settlement by a Company Party effected without such Investor’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Company Party’s breach of any of the representations, warranties, covenants or agreements made by such Company Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 8.3 shall be made by periodic payments of the amount thereof during the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Company Party against any Investor or others and any liabilities any Investor may be subject to pursuant to law.

9. Miscellaneous.

9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investors (in accordance with Section 9.6), as applicable; provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company or the other Investors, after notice duly given by such Investor to the Company, provided that no such assignment or obligation shall affect the obligations of such Investor hereunder. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile or .pdf, which shall be deemed an original.

9.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

9.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by mail or electronic mail, then such notice shall be deemed given upon the receipt of such notice by the recipient, and (iii) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

SMG Industries Inc.

20475 State Hwy 249, Suite 450

Houston, Texas 77070

Attn: Chief Executive Officer

Email: [***]

with a copy, not constituting notice, to:

Faegre Drinker Biddle & Reath LLP

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Attention: Ben A. Stacke

Email: ben.stacke@faegredrinker.com

If to the Investors:

To the addresses set forth on the signature pages hereto.

9.5 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

9.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and all of the Investors. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.

9.7 Publicity. No public release or announcement concerning the transactions contemplated hereby shall be issued by the Investors. The Company will make a public release or announcement concerning the transactions contemplated hereby within four business days of the initial closing hereof, which shall not require the prior consent of the Investors.

9.8 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

9.9 Entire Agreement. This Agreement, including the Exhibits and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

9.10 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Texas without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of Texas located in Houston, Texas and the United States District Court located in Houston, Texas for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. Each of the parties hereto hereby agrees that process in any suit, action or proceeding referred to in this Section 9.11 may be served on any party anywhere in the world.

9.12 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Securities pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

	SMG INDUSTRIES INC.


	By:	/s/ Matthew Flemming
		Name: Matthew Flemming
		Title: Interim Chief Executive Officer

SECURITIES PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE

By signing below, the undersigned agrees to the terms of the Securities Purchase Agreement and to purchase the number of Shares for the purchase price set forth below.

	INVESTOR:
	_________
Number of Shares being purchased:

_____________________
Purchase Price:	By:	/s/ Steve H. Madden
500 x $10,000 per share = $5,000,000		Name: Steve H. Madden
		Title: President
		Address:	[***]

		Facsimile:
	with a copy to:

Please complete the following:

1.	The exact name that your Shares are to be registered in. You may use a nominee name if appropriate:	Apex Heritage Investments, LLC

2.	The relationship between the Investor and the registered holder listed in response to item 1 above:	Same

3.	The mailing address and facsimile number of the
	registered holder listed in response to item 1
	above (if different from above):	Facsimile:

4.	(For United States Investors): The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above:	[***]

Schedule 1

Accredited Investor Status

Investor Name (please print):

Please initial below the items which apply to your status as an Accredited Investor.

__________	An individual having a net worth with spouse (excluding automobiles, principal residence and furnishings) at the time of purchase, individually or jointly, in excess of $1,000,000.

__________	An individual whose individual net income was in excess of $200,000 in each of the two most recent years, or whose joint net income with his or her spouse was in excess of $300,000 in each of those years, and who reasonably expects his individual or joint income with such investor’s spouse to reach such level in the current year.

__________	A corporation or partnership, not formed for the specific purpose of acquiring the purchased securities, having total assets in excess of $5,000,000.

__________	A small business investment company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958.

__________	A self-directed benefit plan within the meaning of ERISA, with investment decisions made solely by persons who are accredited investors as defined in Rule 501(2) of Regulations D.

__________	A trust with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the purchased securities, whose purchase is directed by a sophisticated person (i.e., a person who has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the purchased securities).

__________	An entity in which all of the equity owners are accredited investors.

__________	Other (describe):

Exhibit 10.2

NOTICE TO CONVERT PROMISSORY NOTE(S)

The undersigned hereby agree to convert all of the outstanding principal and accrued and unpaid interest on the following promissory note(s) held by the undersigned holder into shares of SMG Industries Inc.’s (the “Company”) common stock at the indicated conversion price(s) per share (the “Conversion”), effective on the closing date (the “Closing Date”) of a merger transaction or other combination (the “Transaction”) between the Company and/or its affiliates and Barnhart Transportation LLC and/or its affiliates. The amount(s) in the “Principal and Accrued and Updated Interest” column below are as of May 31, 2023; the actual number of shares of Company common stock to be issued will be based upon the aggregate principal and accrued and unpaid interest as of the Closing Date. For the avoidance of doubt, the Conversion shall not occur if the Transaction does not close.

Title of Note	Principal and Accrued and Unpaid Interest (as of May 31, 2023)	Conversion Price per Share	Estimated Conversion Shares (as of May 31, 2023)



		Total

* Rounded up to the nearest whole share.

[Remainder of page intentionally left blank]

[NAME]


Signature:


SMG Industries Inc.


Signature:

By: Matthew Flemming, Interim Chief Executive Officer

Exhibit 10.3

EXECUTION VERSION

CREDIT AGREEMENT

dated as of

July 7, 2023

among

SMG Industries Inc.,

5J Trucking, LLC,

5J Oilfield Services, LLC,

5J Specialized LLC,

5J Transportation LLC,

5J Logistics Services LLC,

5J DRIVEAWAY LLC,

and, upon the consummation of the Closing Date Transactions,

Barnhart Transportation, LLC,

Legend Equipment Leasing, LLC

Barnhart Fleet Maintenance, LLC,

Route 20 Tank Wash LLC,

Lake Shore Logistics, LLC, and

Lake Shore Global Solutions LLC,

as Borrowers,

SKYLINE HOLDING, INC.,

as a Loan Guarantor,

the other Loan Parties party hereto,

the Lenders party hereto

and

GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC,

as Administrative Agent

TABLE OF CONTENTS

		Page

ARTICLE I Definitions		1

Section 1.01.	Defined Terms	1
Section 1.02.	[Reserved]	39
Section 1.03.	Terms Generally	39
Section 1.04.	Accounting Terms; GAAP	39
Section 1.05.	Interest Rates; Benchmark Notifications	40
Section 1.06.	Pro Forma Adjustments for Acquisitions and Dispositions	40
Section 1.07.	Status of Obligations	40
Section 1.08.	[Reserved]	41
Section 1.09.	Divisions	41

ARTICLE II The Credits		41

Section 2.01.	Commitments	41
Section 2.02.	Loans and Borrowings	41
Section 2.03.	Method for the Term Loan	41
Section 2.04.	Protective Advances	42
Section 2.05.	[Reserved]	42
Section 2.06.	[Reserved]	42
Section 2.07.	Funding of Borrowings	42
Section 2.08.	Interest	42
Section 2.09.	Termination of Term Loan Commitments	44
Section 2.10.	Repayment of Loans; Scheduled Amortization; Evidence of Debt	44
Section 2.11.	Optional Prepayments; Mandatory Prepayments	45
Section 2.12.	Fees	48
Section 2.13.	[Reserved]	48
Section 2.14.	Alternate Rate of Interest	48
Section 2.15.	Increased Costs	50
Section 2.16.	Break Funding Payments	51
Section 2.17.	Withholding of Taxes; Gross-Up	51
Section 2.18.	Payments Generally; Allocation of Proceeds; Sharing of Setoffs	55
Section 2.19.	Mitigation Obligations; Replacement of Lenders	56
Section 2.20.	[Reserved]	57
Section 2.21.	Returned Payments	57

ARTICLE III Representations and Warranties		58

Section 3.01.	Organization; Powers	58
Section 3.02.	Authorization; Enforceability	58
Section 3.03.	Governmental Approvals; No Conflicts	58
Section 3.04.	Financial Condition; No Material Adverse Change	58
Section 3.05.	Properties	59
Section 3.06.	Litigation and Environmental Matters	59
Section 3.07.	Compliance with Laws and Agreements; No Default	60
Section 3.08.	Investment Company Status	60
Section 3.09.	Taxes	60
Section 3.10.	ERISA	60
Section 3.11.	Disclosure	60
Section 3.12.	Material Agreements	61

Section 3.13.	Solvency	61
Section 3.14.	Insurance	61
Section 3.15.	Capitalization and Subsidiaries	61
Section 3.16.	Security Interest in Collateral	61
Section 3.17.	Employment Matters	62
Section 3.18.	Margin Regulations	62
Section 3.19.	Use of Proceeds	62
Section 3.20.	No Burdensome Restrictions	62
Section 3.21.	Anti-Corruption Laws and Sanctions	62
Section 3.22.	Rolling Stock Subject to Title Documents	62
Section 3.23.	Common Enterprise	63
Section 3.24.	Affected Financial Institutions	63
Section 3.25.	Plan Assets; Prohibited Transactions	63
Section 3.26.	TRAC Lease Agreements	63
Section 3.27.	Closing Date Transactions	63

ARTICLE IV Conditions		64

Section 4.01.	Effective Date	64

ARTICLE V Affirmative Covenants		68

Section 5.01.	Financial Statements; Term Loan Borrowing Base and Other Information	68
Section 5.02.	Notices of Material Events	71
Section 5.03.	Existence; Conduct of Business	72
Section 5.04.	Payment of Obligations	72
Section 5.05.	Maintenance of Properties	72
Section 5.06.	Books and Records; Inspection Rights; Appraisals	72
Section 5.07.	Compliance with Laws and Material Contractual Obligations	73
Section 5.08.	Use of Proceeds	73
Section 5.09.	Accuracy of Information	73
Section 5.10.	Insurance	73
Section 5.11.	Casualty and Condemnation	74
Section 5.12.	Rolling Stock; Certificates of Title	74
Section 5.13.	Depository Banks	74
Section 5.14.	Additional Collateral; Further Assurances	75
Section 5.15.	Post-Closing Obligations	76

ARTICLE VI Negative Covenants		76

Section 6.01.	Indebtedness	76
Section 6.02.	Liens	78
Section 6.03.	Fundamental Changes	79
Section 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	80
Section 6.05.	Asset Sales	81
Section 6.06.	Sale and Leaseback Transactions	82
Section 6.07.	Swap Agreements	82
Section 6.08.	Restricted Payments; Certain Payments of Indebtedness	83
Section 6.09.	Transactions with Affiliates	84
Section 6.10.	Restrictive Agreements	85
Section 6.11.	Amendment of Certain Material Documents	85
Section 6.12.	No Interline Trust Arrangements	85
Section 6.13.	Financial Covenants	86

iii

ARTICLE VII Events of Default		89

Section 7.01.	Events of Default	89

ARTICLE VIII The Administrative Agent		92

Section 8.01.	Authorization and Action	92
Section 8.02.	Administrative Agent’s Reliance, Limitation of Liability, Etc	94
Section 8.03.	[Reserved]	95
Section 8.04.	The Administrative Agent Individually	95
Section 8.05.	Successor Administrative Agent	95
Section 8.06.	Acknowledgements of Lenders	96
Section 8.07.	Collateral Matters	98
Section 8.08.	Credit Bidding	99
Section 8.09.	Certain ERISA Matters	100
Section 8.10.	Flood Laws	101
Section 8.11.	Merger	101

ARTICLE IX Miscellaneous		101

Section 9.01.	Notices; Approved Electronic Communications	101
Section 9.02.	Waivers; Amendments	103
Section 9.03.	Expenses; Limitation of Liability; Indemnity; Etc	105
Section 9.04.	Successors and Assigns	107
Section 9.05.	Survival	110
Section 9.06.	Counterparts; Integration; Effectiveness; Electronic Execution	111
Section 9.07.	Severability	112
Section 9.08.	Right of Setoff	112
Section 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	112
Section 9.10.	WAIVER OF JURY TRIAL	113
Section 9.11.	Headings	113
Section 9.12.	Confidentiality	113
Section 9.13.	Several Obligations; Nonreliance; Violation of Law	114
Section 9.14.	USA PATRIOT Act	114
Section 9.15.	Disclosure	115
Section 9.16.	Appointment for Perfection	115
Section 9.17.	Interest Rate Limitation	115
Section 9.18.	Marketing Consent	115
Section 9.19.	Acknowledgement and Consent to Bail-In of Affected Financial Institutions	115
Section 9.20.	No Fiduciary Duty, Etc	116
Section 9.21.	[Reserved]	117
Section 9.22.	Joint and Several	117

ARTICLE X Loan Guaranty		117

Section 10.01.	Guaranty	117
Section 10.02.	Guaranty of Payment	118
Section 10.03.	No Discharge or Diminishment of Loan Guaranty	118
Section 10.04.	Defenses Waived	118
Section 10.05.	Rights of Subrogation	119
Section 10.06.	Reinstatement; Stay of Acceleration	119
Section 10.07.	Information	119

Section 10.08.	Termination	119
Section 10.09.	Taxes	119
Section 10.10.	Maximum Liability	120
Section 10.11.	Contribution	120
Section 10.12.	Liability Cumulative	120

ARTICLE XI The Borrower Representative		121

Section 11.01.	Appointment; Nature of Relationship	121
Section 11.02.	Powers	121
Section 11.03.	Employment of Agents	121
Section 11.04.	Notices	121
Section 11.05.	Successor Borrower Representative	121
Section 11.06.	Execution of Loan Documents; Term Loan Borrowing Base Certificate	121
Section 11.07.	Reporting	122
Section 11.08.	Intercreditor Agreement	122

SCHEDULES:

Commitment Schedule

Schedule 1	--	Existing Indebtedness to be Repaid
Schedule 3.05	--	Properties
Schedule 3.06	--	Disclosed Matters
Schedule 3.12		Material Agreements
Schedule 3.14	--	Insurance
Schedule 3.15	--	Capitalization and Subsidiaries
Schedule 3.22	--	Rolling Stock Subject to Title Documents
Schedule 3.26	--	TRAC Lease Agreements
Schedule 5.15	--	Post-Closing Obligations
Schedule 6.01	--	Existing Indebtedness
Schedule 6.02	--	Existing Liens
Schedule 6.04	--	Existing Investments
Schedule 6.10	--	Existing Restrictions

EXHIBITS:

Exhibit A	--	Form of Assignment and Assumption
Exhibit B	--	Form of Term Loan Borrowing Base Certificate
Exhibit C	--	Form of Compliance Certificate
Exhibit D	--	Form of Joinder Agreement
Exhibit E-1	--	U.S. Tax Certificate (For Foreign Lenders that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-2	--	U.S. Tax Certificate (For Foreign Participants that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-3	--	U.S. Tax Certificate (For Foreign Participants that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-4	--	U.S. Tax Certificate (For Foreign that are Partnerships for U.S. Federal Income Tax Purposes)

ANNEXES:

Annex A	--	Administrative Agent’s Account Information

This CREDIT AGREEMENT dated as of July 7, 2023 (as it may be amended or modified from time to time, this “Agreement”) is by and among (a) SMG Industries Inc., a Delaware corporation (“SMG”), (b) 5J Trucking, LLC, a Texas limited liability company (“5J Trucking”), (c) 5J Oilfield services, LLC, a Texas limited liability company (“5J Oilfield Services”), (d) 5J Specialized LLC, a Texas limited liability company (“5J Specialized”), (e) 5J Transportation LLC, a Texas limited liability company (“5J Transportation”), (f) 5J Logistics Services LLC, a Texas limited liability company (“5J Logistics”), (g) 5J DRIVEAWAY LLC, a Texas limited Liability company (“5J Driveaway”) and, upon the consummation of the Closing Date Transactions, (h) Barnhart Transportation, LLC, a Pennsylvania limited liability company (“Barnhart Transportation”), (i) LEGEND EQUIPMENT LEASING, LLC, a Pennsylvania limited liability company (“Barnhart Leasing”), (j) BARNHART FLEET MAINTENANCE, LLC, a Pennsylvania limited liability company (“Maintenance”), (k) ROUTE 20 TANK WASH LLC, a Pennsylvania limited liability company (“Tank Wash”), (l) LAKE SHORE LOGISTICS, LLC, a Pennsylvania limited liability company (“Barnhart Logistics”), (m) LAKE SHORE GLOBAL SOLUTIONS LLC, a Pennsylvania limited liability company (“Global Solutions”), as Borrowers, (n) SKYLINE HOLDING, INC., a Delaware corporation, and successor by merger with Legend Holding (“Skyline”), as a Loan Guarantor, (o) the other Loan Parties party hereto, (p) the Lenders party hereto, and (q) GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC, as Administrative Agent.

PRELIMINARY STATEMENTS:

(1)            Contemporaneously with the transactions contemplated by this Agreement, the Loan Parties are entering into the Closing Date Transaction Agreement and consummating a series of transactions pursuant to which, among other things (a) SMG will purchase the Barnhart Target Companies and (b) SMG will cause Skyline Merger Sub to merge with and into Legend Holding with Skyline Merger Sub ceasing to exist and Legend Holding surviving as a wholly-owned subsidiary of SMG, after which SMG will cause Legend Holding to merge with and into Skyline with Legend Holding ceasing to exist and Skyline surviving as a wholly-owned subsidiary of SMG (the “Skyline Merger”).

(2)            The Borrowers have requested that the Lenders extend credit to the Borrowers to (a) refinance the Existing Indebtedness, (b) facilitate the consummation of the Closing Date Transactions and (c) to pay fees and expenses in connection with the closing of this Agreement and the Closing Date Transactions.

(3)            Subject to and upon the terms and conditions set forth herein, the Administrative Agent and Lenders are willing to extend credit and make available to the Borrowers the credit facilities provided for herein for the foregoing purposes.

AGREEMENT:

In consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01.         Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“5J Driveaway” has the meaning assigned to such term in the introductory paragraph.

“5J Logistics” has the meaning assigned to such term in the introductory paragraph.

“5J Oilfield Services” has the meaning assigned to such term in the introductory paragraph.

“5J Specialized” has the meaning assigned to such term in the introductory paragraph.

“5J Transportation” has the meaning assigned to such term in the introductory paragraph.

“5J Trucking” has the meaning assigned to such term in the introductory paragraph.

“ABL Agent” means JPMCB, in its capacity as administrative agent on behalf of the ABL Lenders under the ABL Debt Documents.

“ABL Borrowing Base” means the “Borrowing Base” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“ABL Borrowing Base Certificate” means “Borrowing Base Certificate” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“ABL Credit Agreement” means that certain Credit Agreement dated as of the Effective Date, by and among the Borrowers, the other Loan Parties, the ABL Lenders and the ABL Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted under this Agreement and the Intercreditor Agreement.

“ABL Debt” means the Indebtedness and other obligations owing to the ABL Agent and the ABL Lenders from time to time under the ABL Debt Documents.

“ABL Debt Documents” means the “Loan Documents” as defined in the ABL Credit Agreement.

“ABL Lenders” means the financial institutions party to the ABL Credit Agreement as lenders from time to time.

“ABL Liens” mean the Liens granted by any Loan Party in favor of the ABL Agent to secure ABL Debt permitted hereby, so long as such Liens are subject to, and permitted by, the Intercreditor Agreement.

“ABL Revolving Loans” means the “Revolving Loans” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“Acceptable Appraisal” means, with respect to an appraisal of M&E and/or Rolling Stock, the most recent appraisal of such property received by the Administrative Agent (a) from an appraisal company satisfactory to the Administrative Agent, (b) the scope and methodology (including, to the extent relevant, any sampling procedure employed by such appraisal company) of which are satisfactory to the Administrative Agent, and (c) the results of which are satisfactory to the Administrative Agent, in each case under this definition, in the Administrative Agent’s Permitted Discretion.

“Account” has the meaning assigned to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

“Adjusted Term SOFR Rate” means, for any Interest Period, an interest rate per annum equal to the Term SOFR Rate for such Interest Period; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Administrative Agent” means Great Rock Capital Partners Management, LLC (or any of its designated affiliates), in its capacity as administrative agent for the Lenders hereunder.

“Administrative Agent’s Account” has the meaning assigned to such term in Section 2.03.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

“Agent-Related Person” has the meaning assigned to it in Section 9.03(d).

“Aggregate Term Loan Commitment” means, at any time, the aggregate of the Term Loan Commitments of all of the Lenders, as increased or reduced from time to time pursuant to the terms and conditions hereof. As of the Effective Date, the Aggregate Term Loan Commitment is $31,686,058.

“Aggregate Term Loan Exposure” means, at any time, the aggregate Term Loan Exposure of all the Lenders at such time.

“Agreement” has the meaning assigned to such term in the introductory paragraph.

“Ancillary Document” has the meaning assigned to such term in Section 9.06(b).

“Annualized Basis” means, for purposes of calculating any amount for any period ending before twelve (12) full calendar months have elapsed after the Effective Date, the product of (a) the actual amount of such item during such period, multiplied by (b) a ratio, the numerator of which is twelve (12), and the denominator of which is the number of full calendar months that have elapsed after the Effective Date through the end of such period.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Loan Party or any of their Subsidiaries from time to time concerning or relating to bribery or corruption.

“Applicable Percentage” means, with respect to any Lender, (a) with respect to Term Loans, a percentage equal to a fraction the numerator of which is such Lender’s Term Loan Commitment and the denominator of which is the Aggregate Term Loan Commitment, and (b) with respect to Protective Advances or with respect to the Aggregate Term Loan Exposure, a percentage based upon its share of the Aggregate Term Loan Exposure.

“Applicable Rate” means, as of any date of determination (a) from the Effective Date until the Initial Applicable Rate Reset Date, (i) with respect to Base Rate Loans, 5.50% and (ii) with respect to Term Benchmark Loans, 6.50%, and (b) commencing on the Initial Applicable Rate Reset Date, and continuing on each Applicable Rate Reset Date, then on each such Applicable Rate Reset Date, the Applicable Rate shall be as set forth in the following table that corresponds to the Leverage Ratio of the Loan Parties as of the end of each of the most recently completed trailing twelve (12) consecutive month period. Any changes in the Applicable Rate shall be determined by the Administrative Agent in accordance with the provisions set forth in this definition. Any such determination by the Administrative Agent shall be conclusive absent manifest error.

Leverage Ratio	Applicable Rate for Base Rate Loans	Applicable Rate for Term Benchmark Loans
Category 1 ≥ 2.50	5.50%	6.50%
Category 2 ≥ 2.00 <2.50	5.00%	6.00%
Category 3 <2.00	4.50%	5.50%

The Applicable Rate shall be re-determined as of each Applicable Rate Reset Date in accordance with the Compliance Certificate (and related financial statements) of the Borrowers most recently delivered pursuant to Section 5.01(d) in form and substance reasonably satisfactory to the Administrative Agent. If at any time the Administrative Agent determines that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise) and (x) a proper calculation would have resulted in a higher Applicable Rate, the Borrowers shall be required to retroactively pay any additional amount that the Borrowers would have been required to pay if such financial statements had been accurate at the time they were delivered or (y) a proper calculation would have resulted in a lower Applicable Rate, so long as no Event of Default shall have occurred and be continuing, upon written request from Borrower, the Administrative Agent shall apply a credit against the Borrowers’ succeeding interest payments equal to the difference between the amount that was actually paid and the amount that would have been paid, provided that, in the case of this clause (y), such readjustment shall be limited to the time period covered by the most recently ended fiscal quarter of SMG. For the avoidance of doubt, the Administrative Agent shall have no responsibility or obligation to determine the accuracy of any such financial statements or Compliance Certificate.

“Applicable Rate Reset Date” shall mean the first calendar day of the calendar month following (i) so long as no Event of Default has occurred and is continuing, the six (6) month anniversary of the Effective Date (the “Initial Applicable Rate Reset Date”), and (ii) each six (6) month anniversary of the Initial Applicable Rate Reset Date thereafter.

“Approved Electronic Communication” means each notice, demand, communication, information, document and other material transmitted, posted or otherwise made or communicated by e-mail or facsimile that any party is obligated to, or otherwise chooses to, provide to the Administrative Agent or any Lender pursuant to this Agreement or any other Loan Document, including any financial statement, financial and other report, notice, request, certificate and other information or material; provided, that Approved Electronic Communications shall not include any notice, demand, communication, information, document or other material that the Administrative Agent or any Lender specifically instructs a Person to deliver in physical form.

“Approved Fund” has the meaning assigned to such term in Section 9.04(b).

“Asset Sale” means the sale, lease, transfer or other disposition (including by means of sale and lease-back transactions, and by means of mergers, consolidations, amalgamations and liquidations of a corporation, partnership or limited liability company of the interests therein of Borrower Representative or any Subsidiary) by any Borrower or any Subsidiary to any Person of such Borrower’s or such Subsidiary’s respective assets, including, without limitation, the sale of any Equity Interests in any Subsidiary; provided that the term Asset Sale specifically excludes (i) any sales, leases, transfers or other dispositions of inventory, or obsolete, worn-out or excess furniture, fixtures, Equipment or other property, real or personal, tangible or intangible, in each case in the ordinary course of business; (ii) any actual or constructive total loss of property or the use thereof, resulting from destruction, damage beyond repair or other rendition of such property as permanently unfit for normal use from any casualty or similar occurrence whatsoever; (iii) the destruction or damage of a portion of such property from any casualty or similar occurrence whatsoever under circumstances in which such damage cannot reasonably be expected to be repaired, or such property cannot reasonably be expected to be restored to its condition immediately prior to such destruction or damage, within ninety (90) days after the occurrence of such destruction or damage or such longer reasonable time period as determined under the Company’s plan of restoration or replacement for such property established within a ninety (90) day period after such occurrence provided such plan is acceptable to the Administrative Agent in its Permitted Discretion; (iv) the condemnation, confiscation or seizure of, or requisition of title to or use of any property; or (v) in the case of any unmovable property located upon a leasehold, the termination or expiration of such leasehold.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.14(e).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Barnhart Leasing” has the meaning assigned to such term in the introductory paragraph.

“Barnhart Logistics” has the meaning assigned to such term in the introductory paragraph.

“Barnhart Seller Note” means that certain Subordinated Promissory Note dated as of the Effective Date, issued by SMG, as maker, in favor of Timothy W. Barnhart, Seller Representative, as payee, in the original principal amount of $3,000,000, which shall constitute Subordinated Indebtedness, as the same may be amended, restated or otherwise modified from time to time, to the extent permitted in this Agreement.

“Barnhart Sellers” means, collectively, Bryan S. Barnhart, Timothy W. Barnhart and Timothy W. Barnhart, in his capacity as Trustee of the Timothy W. Barnhart 2017 Revocable Trust.

“Barnhart Target Companies” means, collectively, Barnhart Transportation, LLC, Barnhart Fleet Maintenance, LLC, Lake Shore Global Solutions LLC, Lake Shore Logistics, LLC, Legend Equipment Leasing LLC, and Route 20 Tank Wash LLC, each a Pennsylvania limited liability company, and each individually is a “Barnhart Target Company”.

“Barnhart Transportation” has the meaning assigned to such term in the introductory paragraph.

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1.50%, (c) Term SOFR Rate for a one (1) month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, or (d) 2.50%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. If for any reason the Administrative Agent shall have determined in good faith that it is unable to ascertain the Federal Funds Effective Rate, including the failure of the NYFRB to publish rates or the inability of the Administrative Agent to obtain quotations in accordance with the terms thereof, the Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist.

“Base Rate Borrowing” means, as to any Borrowing, the Base Rate Loans comprising such Borrowing.

“Base Rate Loan” means a Loan that bears interest at a rate based on the Base Rate.

“Benchmark” means, initially, Term SOFR Rate; provided, that if a Benchmark Transition Event has occurred with respect to the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.14(d).

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date, the sum of (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower Representative as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower Representative for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan or any Base Rate Loan, any technical, administrative or operational changes (including changes to the definition of “Base Rate”, the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1)            in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2)            in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

(1)            a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2)            a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3)            a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Borrower” or “Borrowers” means, individually or collectively, SMG, 5J Trucking, 5J Oilfield Services, 5J Specialized, 5J Transportation, 5J Logistics, 5J Driveaway, and, upon consummation of the Closing Date Transactions, Barnhart Transportation, Barnhart Leasing, Maintenance, Tank Wash, Barnhart Logistics, Global Solutions, and each Subsidiary of a Borrower that becomes a party to this Agreement as a “Borrower” after the Effective Date pursuant to Section 5.14, in each case, until such time as any such Person is released from its obligations under the Loan Documents in accordance with this Agreement.

“Borrower Representative” has the meaning assigned to such term in Section 11.01.

“Borrowing” means (a) a Term Loan Borrowing, and (b) a Protective Advance.

“Borrowing Base Overadvance” has the meaning assigned to such term in Section 2.11(c).

“Borrowing Request” means a request by the Borrower Representative for the Term Loans in accordance with Section 2.03.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in Section 6.10(a) or 6.10(b).

“Business Day” means any day (other than a Saturday or a Sunday) on which banks are open for business in New York City; provided that, in relation to Term Benchmark Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such Term Benchmark Loans, or any other dealings of such Term Benchmark Loans, any such day that is only an U.S. Government Securities Business Day.

“Capital Expenditures” means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of SMG and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Casualty Event” means any involuntary loss of title, any involuntary loss of, damage to or any destruction of, or any condemnation or other taking of, any property of any Loan Party.

“Certificates of Title” means any certificates of title, certificates of ownership or any other registration certificates (including those in electronic form) issued under the laws of any State or Commonwealth of the United States of America or any political subdivision thereof with respect to trucks, trailers, motor vehicles or other vehicles or equipment.

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of SMG; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of SMG by Persons who were not (i) directors of SMG on the date of this Agreement, nominated, appointed or approved for consideration by shareholders for election by the board of directors of SMG, (ii) approved by the board of directors of SMG as director candidates prior to their election, nor (iii) appointed by directors so nominated, appointed or approved; or (c) SMG shall cease to own, free and clear of all Liens or other encumbrances, directly or indirectly, at least 100% (other than directors’ qualifying shares) of the outstanding voting Equity Interests of any other Borrower on a fully diluted basis (other than pursuant to a transaction expressly permitted by this Agreement).

“Change in Law” means the occurrence after the date of this Agreement of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Closing Appraisal” means, collectively, (a) that certain written appraisal prepared by Hilco Valuation Services with respect to Rolling Stock and other M&E owned by SMG and its consolidated Subsidiaries as of February 6, 2023 and with a valuation as of June 13, 2023, and (b) that certain written appraisal prepared by Taylor & Martin, Inc. with respect to Rolling Stock and other M&E owned by the Barnhart Target Companies as of June 9, 2023 and with a valuation as of June 9, 2023.

“Closing Date Transactions” means the acquisition of all of the Equity Interests of the Barnhart Target Companies by SMG pursuant to the Closing Date Transaction Agreement, the consummation of the Skyline Merger and the consummation of the related transactions contemplated under the Closing Date Transaction Documents to occur on the Effective Date.

“Closing Date Transaction Agreement” means that certain Transaction Agreement dated as of the Effective Date, by and among the Barnhart Target Companies, SMG, Legend Holding, Skyline Merger Sub, the Barnhart Sellers and the Seller Representative (as defined therein) together with all schedules, exhibits and other attachments thereto.

“Closing Date Transaction Documents” means the Closing Date Transaction Agreement and all agreements, documents instruments executed or delivered pursuant thereto or in connection therewith (other than the Loan Documents or the ABL Debt Documents).

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term SOFR (or a successor administrator).

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means any and all property owned by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations, except for Excluded Property.

“Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

“Collateral Documents” means, collectively, the Security Agreement, and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether theretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent.

“Commitment” means, with respect to each Lender, the sum of such Lender’s Term Loan Commitment, together with the commitment of such Lender to acquire participations in Protective Advances hereunder. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Commitment Schedule” means the Schedule attached hereto identified as such.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate of a Financial Officer of the Borrower Representative in substantially the form of Exhibit C.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, including the ability to nominate or appoint a majority of the board of directors or equivalent governing body of a Person. “Controlling” and “Controlled” have meanings correlative thereto.

“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Covered Entity” means any of the following:

(i)            a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii)            a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii)           a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Cox Note” means that certain 6% Secured Promissory Note, dated December 7, 2018, issued by SMG in favor of Denice Cox in the principal amount of $800,000.

“Cox Subordination Agreement” means that certain Subordination Agreement, dated as of the Effective Date, by and among Denice Cox, the Administrative Agent and the ABL Agent, as amended from time to time.

“Credit Party” means the Administrative Agent or any other Lender.

“Custodial Agreement” means any Collateral Agency Agreement or similar agreement in form and substance acceptable to the Administrative Agent, among the Administrative Agent, the ABL Agent, the Loan Parties and the Servicing Agent, as the same may hereafter be amended, modified, supplemented, renewed, restated or replaced.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Rate” means, for any day, with respect to any Loans and other monetary Obligations, a rate per annum equal to 2% per annum above the interest rate that would otherwise be applicable thereto.

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Deposit Account Control Agreement” means a control agreement, in form and substance satisfactory to the Administrative Agent, executed and delivered by a Loan Party or one of its Subsidiaries, the Administrative Agent, and the applicable depository bank acceptable to the Administrative Agent.

“Disclosed Matters” means the actions, suits, proceedings and environmental matters disclosed in Schedule 3.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Disqualified Stock” means any Equity Interests which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the date which is 180 days after the Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) cash, (ii) debt securities or (iii) any Equity Interests referred to in clause (a) above, in each case at any time prior to the date which is 180 days after the Maturity Date. Notwithstanding the foregoing, any Equity Interests that would constitute Disqualified Stock solely because holders of the Equity Interests have the right to require the issuer of such Equity Interests to repurchase such Equity Interests upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Equity Interests provide that the issuer may not repurchase or redeem any such Equity Interests pursuant to such provisions unless such repurchase or redemption is permitted under the terms of this Agreement.

“Dividing Person” has the meaning assigned to such term in the definition of “Division.”

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

“Document” has the meaning assigned to such term in the Security Agreement.

“Dollars”, “dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the U.S.

“E-Signature” means the process of attaching to or logically associating with an Approved Electronic Communication an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Approved Electronic Communication) with the intent to sign, authenticate or accept such Approved Electronic Communication.

“EBITDA” means, for any period, for SMG and its Subsidiaries on a consolidated basis, the sum of:

(a)            Net Income for such period, plus

(b)            without duplication and to the extent deducted in determining Net Income for such period, the sum of:

(i)               Interest Expense for such period,

(ii)              income tax expense for such period net of tax refunds,

(iii)            all depreciation expense for such period,

(iv)            all amortization expense for such period,

(v)             out-of-pocket transaction costs incurred in connection with the Transactions contemplated by this Agreement to occur on or before the Effective Date in an amount not to exceed $3,000,000, unless otherwise approved in writing by the Administrative Agent in its Permitted Discretion, and reasonable out-of-pocket costs and expenses incurred (or reimbursed) in connection with any amendment, waiver or other modification to this Agreement or the ABL Credit Agreement,

(vi)            any non-recurring fees, cash charges and other cash expenses (including severance costs) made or incurred in connection with the Closing Date Transactions that are paid or otherwise accounted for within 90 days of the consummation of the Closing Date Transactions in an amount not to exceed $500,000,

(vii)            out-of-pocket costs, fees and expenses payable to non-Affiliates of any Loan Party and incurred in connection with any Permitted Acquisition, permitted investment, permitted issuance of equity, permitted asset disposition or permitted issuance of debt, in each case, to the extent permitted by the Loan Documents, whether or not consummated; provided, that, the amount of such costs, fees and expenses associated with any such transactions that are not consummated shall not exceed $250,000 in any trailing twelve-month period,

(viii)          non-cash charges (including non-cash charges from asset sales or Acquisition-related non-cash charges, but excluding any non-cash charge that relates to the write-down or write-off of accounts),

(ix)             costs, fees and expenses paid or reimbursed by any Loan Party to independent directors in an aggregate amount not to exceed $100,000 during any twelve (12) month period,

(x)              other non-recurring charges paid in cash during such period which are infrequent or unusual in nature (as determined in accordance with GAAP) and approved by the Administrative Agent in its Permitted Discretion, minus

(c) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (b)(viii) taken in a prior period, (ii) any non-cash or non-operating income and (iii) any non-recurring gains which are infrequent or unusual in nature (as determined in accordance with GAAP).]

Notwithstanding the foregoing, (x) the amount included in the calculation of EBITDA pursuant to clause (b)(x) in the aggregate for any measurement period shall not exceed twenty percent (20%) of EBITDA for such measurement period (calculated prior to adding any amounts described in such clause), and (y) for each of the monthly periods set forth below, EBITDA shall be deemed to be the amount set forth opposite such monthly period:

Month Ended	EBITDA
May 31, 2022	$1,254,906
June 30, 2022	$1,798,235
July 31, 2022	$615,284
August 31, 2022	$1,812,861
September 30, 2022	$1,025,635
October 31, 2022	$815,224
November 30, 2022	$2,009,212
December 31, 2022	$196,929
January 31, 2023	$1,394,495
February 28, 2023	$757,001
March 31, 2023	$571,391
April 30, 2023	$2,426,840

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“EIDL Note-Momentum” means that certain Note, dated June 17, 2020, issued by Momentum in favor of the Small Business Administration in the principal amount of $90,000.

“EIDL Note-Trinity” means that certain Note, dated May 27, 2020, issued by Trinity in favor of the Small Business Administration in the principal amount of $150,000.

“EIDL Notes” means, collectively, the EIDL Note-Momentum and the EIDL Note-Trinity.

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for such Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and any of its Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Eligible M&E” means M&E of a Borrower that is included in the Closing Appraisal (or, with respect to Eligible M&E acquired by a Borrower after the Effective Date, an Acceptable Appraisal of such M&E has been completed) that complies with each of the representations and warranties respecting Eligible M&E made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided that such criteria may be revised from time to time by the Administrative Agent in the Administrative Agent’s Permitted Discretion with at least three (3) Business Days’ prior notice to the Borrower Representative so long as any such revisions address the results of any due diligence information with respect to the Loan Parties’ business or assets of which the Administrative Agent becomes aware after the Effective Date, including any field examination or appraisal performed or received by the Administrative Agent from time to time after the Effective Date and any such revisions shall not duplicate any Reserve. An item of M&E shall not be included in Eligible M&E if:

(a)            it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent,

(b)            a Borrower does not have good, valid, and marketable title thereto,

(c)            a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent or an employee of such Borrower in the ordinary course of business, including pursuant to a TRAC Lease Agreement),

(d)            it is not located at one of the locations in the continental United States set forth on Schedule 2(b) to the Perfection Certificate or as set forth in a TRAC Lease Agreement (or in-transit from one such location to another such location),

(e)            other than an item of M&E subject to a TRAC Lease Agreement, it is and has been in-transit to or from a location of Borrowers for more than fifteen (15) Business Days (other than in-transit from one location set forth on Schedule 2(b) to the Perfection Certificate to another location set forth on Schedule 2(b) to the Perfection Certificate),

(f)             it is “subject to” (within the meaning of Section 9-311 of the UCC) any Certificate of Title (or comparable) statute (unless the Administrative Agent has a first priority, perfected Lien under such statute (including that the Administrative Agent’s Lien is noted on the Certificate of Title in a manner satisfactory to the Administrative Agent) and the Administrative Agent or the Servicing Agent has possession and custody of such certificate),

(g)            it does not meet in each case in all material respects, all applicable safety or regulatory requirements applicable to it by law for the use for which it is intended or for which it is being used (other than (i) M&E that for a period not in excess of sixty (60) days has been under repair or held for repair for such purpose and (ii) M&E that for a period not in excess of one hundred eighty days (180) days with an appraised value less than $500,000 has been under repair or held for repair for the purpose or meeting such requirements),

(h)            it is not used or usable in the ordinary course of the Loan Parties’ business due to a damaged or inoperable condition (other than (i) M&E that for a period not in excess of sixty (60) days has been under repair or held for repair for such purpose and (ii) M&E that for a period not in excess of one hundred eighty days (180) days with an appraised value less than $500,000 has been under repair or held for repair for such purpose),

(i)             it does not meet, or is not under repair or held for repair for the purpose of meeting, in each case in all material respects, all applicable requirements of all motor vehicle laws or other statutes and regulations established by any Governmental Authority then applicable to such Equipment, or is subject to any licensing or similar requirement,

(j)             it is located on Real Property leased by Borrowers, in each case, unless either (i) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from Equipment of others, if any, stored on the premises, or (ii) the Administrative Agent has established a Rent and Charges Reserve with respect to such location, or

(k)            its use or operation requires proprietary software that is not freely assignable to the Administrative Agent.

“Eligible Rolling Stock” means Rolling Stock owned by a Borrower that is included in the Closing Appraisal (or, with respect to Eligible Rolling Stock acquired by a Borrower after the Effective Date, an Acceptable Appraisal of such Rolling Stock has been completed) and that complies with each of the representations and warranties respecting Eligible Rolling Stock made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by the Administrative Agent in the Administrative Agent’s Permitted Discretion to address the results of any information with respect to the Borrowers’ business or assets of which the Administrative Agent becomes aware after the Effective Date, including any appraisal performed or received by the Administrative Agent from time to time after the Effective Date. An item of Rolling Stock shall not be included as Eligible Rolling Stock if:

(a)            the ownership of such Rolling Stock is not evidenced by a Certificate of Title or other similar document that has the name of a Borrower noted thereon as the sole owner or it is not otherwise properly registered to a Borrower in one of the States or Commonwealths of the United States where such Borrower is entitled to own and/or operate such Rolling Stock in accordance with all applicable laws, and the Administrative Agent has not received such evidence thereof as it may reasonably require,

(b)            such Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Borrower or an employee of such Borrower in the ordinary course of business, including through a TRAC Lease Agreement),

(c)            it is not subject to a valid and perfected first-priority Lien in favor of the Administrative Agent (including, without limitation, the notation on the Certificate of Title of the Administrative Agent as the first lienor, but subject to Section 5.12),

(d)            it is not used or usable in the ordinary course of the Loan Parties’ business due to a damaged or inoperable condition (other than (i) Rolling Stock that for a period not in excess of sixty (60) days has been under repair or held for repair for such purpose and (ii) Rolling Stock that for a period not in excess of one hundred eighty days (180) days with an appraised value less than $500,000 has been under repair or held for repair for such purpose),

(e)            it does not meet, in all material respects, all applicable material safety, regulatory and other material standards of all material motor vehicle laws or other material statutes and regulations established by any Governmental Authority,

(f)            it is subject to any licensing or similar requirement established by any Governmental Authority that would limit the right of Agent to sell or otherwise dispose of such Rolling Stock,

(g)            it is not described (by manufacturer, make, model, VIN number, state in which titled or certificated, title or certificate number, name and address of owner and/or such other identifying information as may be appropriate, as determined by the Administrative Agent in its Permitted Discretion) in a schedule submitted by Borrowers to the Administrative Agent in accordance with the terms of the Agreement, or

(h)            it is held for lease or rent by a Borrower (other than pursuant to a TRAC Lease Agreement) or subject to a binding letter of intent or purchase agreement for the sale of such Rolling Stock, solely if such Rolling Stock is no longer used in the ordinary course of such Borrower’s business.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (a) the environment, (b) preservation or reclamation of natural resources, (c) the management, Release or threatened Release of any Hazardous Material or (d) health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equipment” means (a) any “equipment” as such term is defined in Article 9 of the UCC and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures, tools, and vehicles now or hereafter owned by any Grantor in each case, regardless of whether characterized as equipment under the UCC and (b) and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing, but excluding any debt securities convertible into any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of any Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice, concerning the imposition upon any Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Availability” means “Excess Availability” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“Excluded Account” has the meaning assigned to such term in the Security Agreement.

“Excluded Property” means (a) (i) any leasehold interests in real property, whether now held or hereafter acquired, or (ii) any fee-owned interests in real property which (x) are outside of the United States or (y) have a fair market value of less than $1,000,000 or over which the Administrative Agent has not elected to require a mortgage; (b) any asset in respect of which granting a Lien to the Administrative Agent is prohibited by applicable Requirements of Law, other than to the extent that such prohibition would be rendered ineffective pursuant to the UCC or any other applicable law; (c) any asset to the extent a security interest therein could reasonably be expected to result in material adverse tax consequences to any Loan Party as a result of the operation of Section 956 of the Code or any similar or successor provision, as determined in good faith by the Borrower and reasonably agreed by the Administrative Agent; (d) any lease, license, instrument, contract or other agreement or any property subject to a Permitted Lien securing purchase money Indebtedness or Capital Lease Obligations permitted hereby, in each case, to the extent that a grant of a Lien in such lease, license, instrument, contract, agreement or other property would violate or invalidate such lease, license, instrument, contract or agreement or the documents governing such Indebtedness or create a right of termination in favor of, or require the consent of, any other party thereto (other than a Loan Party or any Affiliate thereof), in each case, to the extent such restriction is permitted by Section 6.10 and after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition, and unless the other party thereto has granted such consent or waived such requirement (which the Loan Parties shall use commercially reasonable efforts to obtain); (e) Margin Stock; (f) any intent-to-use trademark application prior to the filing and acceptance by the United States Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto and solely to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intellectual property or result in the cancellation or voiding thereof; (g) any Excluded Account maintained at a financial institution that is not the ABL Agent, an ABL Lender or an Affiliate of any of the foregoing and solely contains funds held for the benefit of an unaffiliated third Person; (h) any other asset to the extent that Borrowers and Administrative Agent reasonably agree that the benefits of obtaining a Lien in such asset are outweighed by the costs or burdens of providing the same; (i) letter of credit rights other than “supporting obligations” as defined in the UCC or equivalent provisions of the laws of any other applicable jurisdiction with a value of less than $200,000 except to the extent that a security interest may be granted therein by the filing of a financing statement and (j) commercial tort claims other than claims with a value greater than $200,000, except to the extent that a security interest may be granted therein by the filing of a financing statement; provided, however, the “Excluded Property” shall not include any proceeds, products, substitutions or replacements of any Excluded Property (unless such proceeds, products, substitutions or replacements would themselves otherwise constitute Excluded Property); provided, further, if any Excluded Property would have otherwise constituted Collateral ceases to be Excluded Property, such property shall automatically be deemed Collateral at all times from and after such time.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrowers under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f); and (d) any withholding Taxes imposed under FATCA.

“Existing Indebtedness” means the Indebtedness listed on Schedule 1 hereto, which will be paid in full on the Effective Date.

“Extraordinary Receipts” means any cash received by the Loan Parties or any of their Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.11(d), (f) or (g) hereof), including, without limitation, (a) pension plan reversions, (b) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (c) condemnation awards (and payments in lieu thereof) less (i) any actual and reasonable costs incurred by the Loan Parties or any of their Subsidiaries in connection with such awards or (ii) any amounts that are required to be paid to a Person that is not an Affiliate of the Loan Parties or any of their Subsidiaries in connection with such property subject to the condemnation awards, and (d) indemnity payments (other than to the extent such indemnity payments are (i) promptly payable to a Person that is not an Affiliate of the Loan Parties or any of their Subsidiaries or (ii) received by the Loan Parties or any of their Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“Federal Funds Effective Rate” for any day means the rate per annum (based on a year of three hundred sixty (360) days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the NYFRB (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such NYFRB (or any successor) in substantially the same manner as such NYFRB computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, that if such NYFRB (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced, provided further that, if the Federal Funds Effective Rate as so determined would be less than 2.50%, such rate shall be deemed to be 2.50% for the purposes of this Agreement.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Fee Letter” means that certain confidential Fee Letter by and among Borrowers and Administrative Agent, dated as of even date herewith, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of a Borrower.

“Fixed Charge Coverage Ratio” means, at any date, the ratio of (a) EBITDA minus Unfinanced Net Capital Expenditures to (b) Fixed Charges, all calculated for the period of twelve (12) consecutive calendar months ended on such date (or, if such date is not the last day of a calendar month, ended on the last day of the calendar month most recently ended prior to such date); provided that, for each of the monthly periods set forth below, the amount of Unfinanced Net Capital Expenditures included in the calculation above shall be deemed to be the amount set forth opposite such monthly period:

Month Ended	Unfinanced Net Capital Expenditures
May 31, 2022	$100
June 30, 2022	$100
July 31, 2022	$100
August 31, 2022	$100
September 30, 2022	$100
October 31, 2022	$50
November 30, 2022	$50
December 31, 2022	$78,328
January 31, 2023	$253,793
February 28, 2023	$234,001
March 31, 2023	$535,684
April 30, 2023	$180,524

“Fixed Charges” means, for any period, without duplication, cash Interest Expense, plus prepayments and scheduled payments of principal on Total Funded Indebtedness actually made (excluding any voluntary and mandatory prepayments of principal on the ABL Debt except in connection with a permanent reduction (or termination) of the Revolving Commitments (as defined in the ABL Credit Agreement), and including, for the avoidance of doubt, scheduled and voluntary payments of principal on the EIDL Notes), plus expenses for taxes paid in cash, plus Restricted Payments paid in cash (other than Restricted Payments paid to a Loan Party), plus Capital Lease Obligation payments, plus cash contributions to any Plan (to the extent not accounted for as a deduction in the calculation of EBITDA), all calculated for SMG and its Subsidiaries on a consolidated basis (other than Restricted Payments) in accordance with GAAP; provided that, for any period ending before twelve (12) full calendar months have elapsed after the Effective Date, (i) the amount of cash Interest Expense and Capital Lease Obligation payments included in Fixed Charges shall be calculated on an Annualized Basis for the period after the Effective Date through the last day of such period, and (ii) the amount of scheduled payments of principal on the Term Loans included in Fixed Charges shall be $4,752,908.76 (without duplication of any actual scheduled payments of principal on the Term Loans during such period).

“Flood Laws” has the meaning assigned to such term in Section 8.10.

“Floor” means 2.50%.

“Foreign Lender” means (a) if a Borrower is a U.S. Person, a Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the U.S.

“Global Solutions” has the meaning assigned to such term in the introductory paragraph.

“Governmental Authority” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Great Rock” means Great Rock Capital Partners Management, LLC (or any of its designated affiliates).

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Guarantors” means all Loan Guarantors, and the term “Guarantor” means each or any one of them individually.

“Hazardous Materials” means: (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

“Inactive Subsidiary” means each of (i) Momentum, (ii) Jake Oilfield, (iii) Trinity, and (iv) Big Vehicle & Equipment Company, LLC, a Texas limited liability company, in each case, so long as each such entity (a) has no business operations, (b) has no material assets other than the minimum amount of cash necessary to repay the Indebtedness of such entity existing on the Effective Date in respect of the EIDL Notes or other Indebtedness of such entity identified on Schedule 6.01, (c) owns no Intellectual Property, (d) owns no leasehold interests in real property or fee-owned interests in real property, and (e) has no Indebtedness other than the Indebtedness owing by such entity as of the Effective Date in respect of the EIDL Notes or other Indebtedness of such entity identified on Schedule 6.01; provided, that, if at any time after the Effective Date, any Subsidiary listed in the foregoing clauses (i) through (iv) shall cease to satisfy the requirements to be designated as an “Inactive Subsidiary”, the such “Subsidiary” shall be deemed to have been formed or acquired by the applicable Loan Party that owns such Subsidiary as of the date when such Subsidiary first ceased to meet the requirements of this definition for purposes of Section 5.14.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business and not overdue by more than 60 days and accounts payable disputed by such Person in its reasonable discretion so long as such Loan Party or such Subsidiary, as applicable, has set aside adequate reserves on its books), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any earn-out or other contingent payment of a similar nature, (l) any other Off-Balance Sheet Liability, (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction, and (n) obligations, contingent or otherwise, with respect to any Disqualified Stock. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a) hereof, Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.03(c).

“Independent Contractor Agreement” means an “Independent Contractor Operating Agreement” or any other similar agreement between a Loan Party and a truck contractor pursuant to which any Loan Party contracts with an independent truck driver or owner-operator to satisfy all or a portion of its or its customer’s shipping needs.

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Initial Applicable Rate Reset Date” has the meaning assigned to such term in the definition of “Applicable Rate Reset Date”.

“Intellectual Property” has the meaning assigned to such term in the Security Agreement.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the Effective Date, by and between the Administrative Agent and the ABL Agent, and acknowledged and agreed to by the Loan Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance herewith and therewith.

“Interest Expense” means, for any period, total interest expense (including that attributable to Capital Lease Obligations) of SMG and its Subsidiaries for such period with respect to all outstanding Indebtedness of SMG and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for SMG and its Subsidiaries for such period in accordance with GAAP.

“Interest Payment Date” means the first day of each calendar month and the Maturity Date.

“Interest Period” means the first day of a calendar month and ending on the last day of such calendar month; provided that with respect to the first Interest Period pursuant to this Agreement, “Interest Period” means the period commencing on the Effective Date and ending on the last day of such calendar month.

“Inventory” has the meaning assigned to such term in the Security Agreement.

“Investment” means, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor provides a Guarantee of Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon in cash (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such transfer or exchange. If any Loan Party thereof sells or otherwise disposes of less than all of the Equity Interests of any Subsidiary of a Loan Party, such Loan Party will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of all Investments made by any Loan Party in such Subsidiary.

“IRS” means the United States Internal Revenue Service.

“Jake Oilfield” means Jake Oilfield Solutions, LLC, a Texas limited liability company.

“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.

“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“Legend Holding” means Legend Holding RO, Inc., a Delaware corporation.

“Lender-Related Person” has the meaning assigned to such term in Section 9.03(b).

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to an Assignment and Assumption or otherwise, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption or otherwise.

“Leverage Ratio” means, at any date, the ratio of (a) Total Funded Indebtedness on such date to (b) EBITDA for the period of twelve consecutive calendar months ended on such date (or, if such date is not the last day of a calendar month, ended on the last day of the calendar month most recently ended prior to such date).

“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Account” means an account of the Borrower Representative at a bank in the United States of America as the Borrower Representative may specify in writing (provided that such account must be one identified on the Perfection Certificate and approved by the Administrative Agent as an account to be used for funding of Term Loan proceeds).

“Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, the Collateral Documents, each Compliance Certificate, the Loan Guaranty, the Custodial Agreement, any Obligation Guaranty, the Intercreditor Agreement, the Fee Letter, the Cox Subordination Agreement and all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Administrative Agent or any Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Guarantor” means Skyline and each other Subsidiary of SMG (other than the Borrowers) party hereto from time to time that has guaranteed the Secured Obligations pursuant to the Loan Guaranty.

“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means, collectively, the Borrowers, the Guarantors and any other Person who becomes a party to this Agreement as a Borrower or a Guarantor pursuant to a Joinder Agreement and their respective successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require. For the avoidance of doubt, the Inactive Subsidiaries do not constitute Loan Parties as of the Effective Date.

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Protective Advances.

“M&E” means all Equipment (as defined in the UCC) (other than fixtures or any equipment subject to special perfection requirements under federal law or other applicable law).

“Maintenance” has the meaning assigned to such term in the introductory paragraph.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, or financial condition of SMG and its Subsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform any of their Obligations or their respective obligations under the Loan Documents, (c) any material portion of the Collateral or the Administrative Agent’s Liens (on behalf of itself and other Secured Parties) on any material portion of the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent or the Lenders under any of the Loan Documents.

“Material Agreement” means any written agreement or arrangement to which a Loan Party or a Subsidiary is party (other than the Loan Documents) (a) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (b) that evidences or relates to any (A) Material Indebtedness or (B) Subordinated Indebtedness.

“Material Indebtedness” means (a) the ABL Debt, (b) the Barnhart Seller Note, (c) the Indebtedness evidenced by the EIDL Notes and (d) any other Indebtedness (other than the Loans), or obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties and their Subsidiaries in an aggregate principal amount exceeding $2,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Loan Parties or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Material Transfers Prohibition” has the meaning assigned to such term in Section 6.04.

“Maturity Date” means the earliest to occur of: (a) July 7, 2026, (b) the date which is ninety-one (91) days prior to the maturity date of any Material Indebtedness (other than the ABL Debt) if any such Material Indebtedness is outstanding on or after such date, or (c) any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Momentum” means Momentum Water Transfer Services LLC, a Texas limited liability company.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Income” means, for any period, the consolidated net income (or loss) of SMG and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with SMG or any of its Subsidiaries (subject to Section 1.06), (b) the income (or deficit) of any Person (other than a Subsidiary) in which SMG or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by SMG or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document), any Organizational Document or any Requirement of Law applicable to such Subsidiary, and (d) any income (or loss) from the early extinguishment, modification or forgiveness of Indebtedness.

“Net Capital Expenditures” means, for any period, any Capital Expenditures made during such period minus (a) Net Proceeds of any Disposition of any asset which the Borrowers are permitted to reinvest pursuant to the terms of this Agreement and (b) Net Proceeds of any casualty insurance policies received during such period which the Borrowers are permitted to reinvest pursuant to the terms of this Agreement.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, minus (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a Disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer of the Borrower Representative).

“NOLV” means, as of any date of determination, with respect to M&E and Rolling Stock of any Person, the value of such M&E and Rolling Stock that is estimated to be recoverable in an orderly liquidation of such M&E and Rolling Stock, net of all associated costs and expenses of such liquidation, as determined based upon the most recent Acceptable Appraisal; provided, that if such Acceptable Appraisal does not provide the costs and expenses of such liquidation on an item by item basis, then costs and expenses of liquidation for each item of M&E and Rolling Stock will be such amount as determined by the Administrative Agent in its Permitted Discretion.

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that, if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined would be less than 2.50%, such rate shall be deemed to be 2.50% for purposes of this Agreement.

“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

“Obligated Party” has the meaning assigned to such term in Section 10.02.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person (other than operating leases).

“Organizational Document” means, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan or any Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

“Overadvance Prepayment Conditions” has the meaning assigned to such term in Section 2.11(c).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

“Paid in Full” or “Payment in Full” means, (a) the payment in full in cash of all outstanding Loans, together with accrued and unpaid interest thereon, (b) [reserved], (c) the payment in full in cash of the accrued and unpaid fees, (d) the payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, and (e) the termination of all Commitments.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Payment” has the meaning assigned to such term in Section 8.06(d).

“Payment Condition” shall be deemed to be satisfied in connection with a Restricted Payment, Investment, Permitted Acquisition or other payment or transaction to which such term applies if:

(a)            no Default has occurred and is continuing or would result immediately after giving effect to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction;

(b)            the Borrowers shall have (i) Revolving Availability calculated on a pro forma basis immediately after giving effect to and at all times during the 45-day period immediately prior to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction of not less than the greater of (A) 20% of the Revolving Commitment or (B) $5,000,000, and (ii) a Fixed Charge Coverage Ratio for the trailing twelve (12) months most recently ended for which financial statements have been delivered pursuant hereto calculated on a pro forma basis after giving effect to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction of not less than 1.20 to 1.00; and

(c)            the Borrower Representative shall have delivered to the Administrative Agent (i) a certificate in form and substance reasonably satisfactory to the Administrative Agent certifying as to the items described in clauses (a) and (b) above and attaching calculations for clause (b), and (ii) a Term Loan Borrowing Base Certificate in form and substance satisfactory to the Administrative Agent, reflecting that the Aggregate Term Loan Exposure does not exceeds the Term Loan Borrowing Base.

“Payment Notice” has the meaning assigned to such term in Section 8.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any Acquisition consented to in writing by Administrative Agent and Required Lenders, and any other Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:

(a)            such Acquisition is not a hostile or contested acquisition;

(b)            the business acquired in connection with such Acquisition is (i) located in the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Effective Date and any business activities that are substantially similar, related, or incidental thereto;

(c)            both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct (except any such representation or warranty which relates to a specified prior date) and no Default exists, will exist, or would result therefrom;

(d)            as soon as available, but not less than thirty (30) days prior to such Acquisition, the Borrower Representative has provided the Administrative Agent (i) notice of such Acquisition and, (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Revolving Availability projections;

(e)            if such Acquisition is an acquisition of the Equity Interests of a Person, such Acquisition is structured so that the acquired Person shall become a Wholly-Owned Subsidiary of a Borrower and a Loan Party pursuant to the terms of this Agreement;

(f)            if such Acquisition is an acquisition of assets, such Acquisition is structured so that a Borrower or another Loan Party shall acquire such assets;

(g)            if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

(h)            if such Acquisition involves a merger or a consolidation involving a Borrower or any other Loan Party, such Borrower or such Loan Party, as applicable, shall be the surviving entity;

(i)             no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

(j)             in connection with an Acquisition of the Equity Interests of any Person, all Liens on property of such Person shall be terminated unless the Administrative Agent in its Permitted Discretion consents otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;

(k)            the Borrower Representative shall have delivered to the Administrative Agent the final executed material documentation relating to such Acquisition before the consummation thereof (or such later date as may be approved by Administrative Agent in its sole discretion); and

(l)             the Payment Condition shall be satisfied with respect to such Acquisition, as determined by the Administrative Agent in its Permitted Discretion.

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Encumbrances” means:

(a)            Liens imposed by law for Taxes that are not yet due and payable or are being contested in compliance with Section 5.04;

(b)            carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;

(c)            pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations and pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any Subsidiary;

(d)            deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including (i) those to secure health, safety and environmental obligations and (ii) letters of credit and bank guarantees required or requested by any Governmental Authority in connection with any contract or legal requirement), in each case in the ordinary course of business (but not other Liens to secure such obligations);

(e)            judgment Liens in respect of judgments that do not constitute an Event of Default under Section 7.01(k); and

(f)            matters of record affecting title to any real or leased property and any survey exceptions, encroachments, rights of parties in possession under written leases or occupancy agreements, title defects, easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business, in each case, that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere in any material respect with the ordinary conduct of business of any Borrower or any Subsidiary.

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

(a)            direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;

(b)            investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)            investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)            fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e)            money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

“Permitted Liens” means Liens that are permitted under Section 6.02.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate, as in effect from time to time (or, if such rate ceases to be so published, as quoted from such other generally available and recognizable source as Agent may select). The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Proceeding” means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

“Projections” has the meaning assigned to such term in Section 5.01(f).

“Protective Advance” has the meaning assigned to such term in Section 2.04.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public-Sider” means a Lender whose representatives may trade in securities of SMG or its Controlling Person or any of its Subsidiaries while in possession of the financial statements provided by SMG under the terms of this Agreement.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Reinvestment Proceeds” has the meaning assigned to such term in Section 2.11(g)(iii).

“Qualified Reinvestment Proceeds Blocked Account” means that certain Deposit Account number [***] maintained with ABL Agent in the name of the Borrower Representative, subject to a Deposit Account Control Agreement in form and substance satisfactory to the Administrative Agent, which restricts the Loan Parties’ access to the funds in such Deposit Account.

“Recipient” means, as applicable, (a) the Administrative Agent, and (b) any Lender, or any combination thereof (as the context requires).

“Reference Time” with respect to any setting of the then-current Benchmark means 5:00 a.m. (New York time) on the day that is two (2) Business Days preceding the date of such setting.

“Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of any substance into the environment.

“Relevant Governmental Body” means the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto.

“Rent and Charges Reserve” means a reserve, established in the Administrative Agent’s Permitted Discretion, for any location where Collateral is located, unless a Collateral Access Agreement has been obtained from such landlord, warehouseman, mortgagee or other Person.

“Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Loan Parties from information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

“Required Lenders” means, at any time, Lenders that together hold Term Loan Exposures representing more than 50% of the sum of the Aggregate Term Loan Exposures at such time; provided that, at any time there is more than one Lender, “Required Lenders” shall require at least two such Lenders (treating all Lenders that are Affiliates as a single Lender for purposes of this proviso).

“Requirement of Law” means, with respect to any Person, any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means, with respect to any Person, the president, Financial Officer or other executive officer of such Person.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in SMG or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests.

“Revolving Availability” means “Availability” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“Revolving Commitment” means “Revolving Commitment” as defined in the ABL Credit Agreement as in effect on the date hereof as amended in accordance with the terms of the Intercreditor Agreement.

“Rolling Stock” means trucks, trailers, motor vehicles or other vehicles owned by, and titled in the name of, a Loan Party, and subject to a Certificate of Title.

“Rolling Stock Report” has the meaning assigned to such term in Section 5.01(e).

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sale and Leaseback Transaction” has the meaning assigned to such term in Section 6.06.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, His Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Obligations” means all Obligations.

“Secured Parties” means (a) the Administrative Agent, (b) the Lenders, (b) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (c) the successors and assigns of each of the foregoing.

“Security Agreement” means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Servicing Agent” means Corporation Service Company, a Delaware corporation, or such other servicing company engaged by the Administrative Agent to provide titling and custodial services with respect to Certificates of Title for the Rolling Stock of the Loan Parties.

“Skyline” has the meaning assigned to such term in the introductory paragraph.

“Skyline Merger” has the meaning assigned to such term in the preliminary statements.

“Skyline Merger Sub” means Skyline Merger Sub, Inc., a Delaware corporation.

“SMG” has the meaning assigned to such term in the introductory paragraph.

“Statements” has the meaning assigned to such term in Section 2.18(f).

“Subordinated Indebtedness” of a Person means (a) the Indebtedness evidenced by the Cox Note, which is subordinated to payment of the Secured Obligations pursuant to the Cox Subordination Agreement, and (b) any other Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of SMG or a Loan Party, as applicable.

“Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

“Tank Wash” has the meaning assigned to such term in the introductory paragraph.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Benchmark” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate.

“Term Loan” means a Loan made pursuant to Section 2.01.

“Term Loan Amount” means, at any time, an amount equal to the lesser of (a) the Aggregate Term Loan Commitment and (b) the Term Loan Borrowing Base, all as determined by the Administrative Agent in its Permitted Discretion.

“Term Loan Borrowing Base” means, at any time, an amount equal to the sum of the following:

(a)            80% of NOLV of the Eligible M&E, plus

(b)            80% of NOLV of the Eligible Rolling Stock, minus

“Term Loan Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit B or another form which is acceptable to the Administrative Agent in its sole discretion.

“Term Loan Borrowing Base Reserve” or “Reserve” means Reserves, in such amounts and with respect to such matters, as the Administrative Agent in its Permitted Discretion may elect to establish from time to time (including reserves with respect to (a) past due sums that any Loan Party is required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (b) any Rent and Charges Reserve and (c) without duplication of any of the foregoing, any amounts owing by any Loan Party to any Person to the extent secured by a Lien on, or trust over, any of the Collateral, which Lien or trust, in the Permitted Discretion of the Administrative Agent likely would have a priority superior to the Administrative Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Term Loan Borrowing Base or Commitments and such reserves as the Administrative Agent from time to time determines in its Permitted Discretion as being appropriate to reflect the impediments to the Administrative Agent’s ability to realize upon the Collateral and to reflect criteria, events, conditions, contingencies or risks which adversely affect any component of the Term Loan Borrowing Base; provided that, notwithstanding the foregoing, (i) the Administrative Agent may not implement any new reserves or increase the amount of any existing Reserves without at least three (3) Business Days’ prior notice to the Borrower Representative and (ii) Reserves shall not be in duplication of any eligibility criteria.

“Term Loan Commitment” means, with respect to each Lender, the amount set forth on the Commitment Schedule opposite such Lender’s name, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C) pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable, and (b) assignments by or to such Lender pursuant to Section 9.04; provided, that at no time shall the Term Loan Exposure of any Lender exceed its Term Loan Commitment. The initial aggregate amount of the Lenders’ Term Loan Commitment is $31,686,058.

“Term Loan Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Term Loans at such time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Protective Advances outstanding at such time.

“Term Loan Priority Collateral” means the “Term Loan Priority Collateral” as defined in the Intercreditor Agreement.

“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.

“Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m. (New York time), two (2) U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.

“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.

“Total Funded Indebtedness” for any Person as of any date of determination, means, without duplication, (a) all obligations of such Person for borrowed money (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business or earn-outs or contingent payments unless overdue by more than 60 days), (e) all Guarantees by such Person of Total Funded Indebtedness of others, (f) all Capital Lease Obligations of such Person, and (g) all reimbursement obligations of such Person in respect of drawings or disbursements of letters of credit and letters of guaranty, in each case determined on a consolidated basis for SMG and its Subsidiaries.

“TRAC Lease Agreements” means any equipment lease or similar agreement entered into by either 5J Logistics or Barnhart Leasing, as lessor, pursuant to which a lessor leases certain Equipment (which may be Eligible Rolling Stock or Eligible M&E) to certain lessees who make lease payments to a lessor that grants the lessor a purchase option at the end of the lease.

“Transactions” means the execution, delivery and performance by the Borrowers of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof, the granting of Liens by the Loan Parties under the Loan Documents, the incurrence of the ABL Debt and the use of proceeds thereof, the granting of the ABL Liens, the consummation of the Closing Date Transactions and the payment of fees and expenses incurred in connection with any of the foregoing.

“Trinity” means Trinity Services, LLC, a Louisiana limited liability company.

“TTM EBITDA” means, as of any date of determination, EBITDA of the Loan Parties determined on a consolidated basis in accordance with GAAP, for the 12-month period most recently ended.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“Unfinanced Net Capital Expenditures” means, for any period, Net Capital Expenditures made during such period which are not financed from the proceeds of any Indebtedness (other than the ABL Revolving Loans).

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (a) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (b) any other obligation (including any guarantee) that is contingent in nature at such time; or (c) an obligation to provide collateral to secure any of the foregoing types of obligations.

“U.S.” means the United States of America.

“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

Section 1.02.        [Reserved].

Section 1.03.        Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

Section 1.04.        Accounting Terms; GAAP.

(a)            Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of SMG or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness under Financial Accounting Standards Board Accounting Standards Codification 470-20 or 2105-03 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

(b)            Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of “Capital Lease Obligations,” the Loan Parties have adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”) and no lease (or similar arrangement conveying the right to use) shall be treated as a capital lease or shall be included in the definition of “Capital Lease Obligations” where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

Section 1.05.        Interest Rates; Benchmark Notifications. The interest rate on a Loan denominated in dollars may be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 2.14(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrowers, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

Section 1.06.        Pro Forma Adjustments for Acquisitions and Dispositions. To the extent any Borrower or any Subsidiary makes any Permitted Acquisition or Disposition outside the ordinary course of business permitted by Section 6.05 during the period of twelve (12) fiscal months of SMG and its Subsidiaries most recently ended, the Leverage Ratio and the Fixed Charge Coverage Ratio (including each component thereof) shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the Acquisition or the Disposition, and which are (a) factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer of such Borrower), (b) supported by a third party quality of earnings report reasonably acceptable to the Administrative Agent, or (c) otherwise approved in writing by the Administrative Agent in its sole discretion (and certified in a certification by a Financial Officer of such Borrower), in each case, as if such Acquisition or such Disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such twelve-month period.

Section 1.07.        Status of Obligations. In the event that any Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

Section 1.08.        [Reserved].

Section 1.09.        Divisions. For all purposes under the Loan Documents, in connection with any Division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.

ARTICLE II

The Credits

Section 2.01.        Commitments. Subject to the terms and conditions set forth herein, on the Effective Date, each Lender severally (and not jointly) agrees to make the Term Loan in dollars to the Borrowers in an aggregate principal amount that will not result in (i) such Lender’s Term Loan Exposure exceeding such Lender’s Term Loan Commitment or (ii) the Aggregate Term Loan Exposure exceeding the lesser of (x) the Aggregate Term Loan Commitments and (y) the Term Loan Borrowing Base (based upon the Term Loan Borrowing Base Certificate delivered by the Borrowers to the Administrative Agent on the Effective Date), subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances pursuant to the terms of Section 2.04, in each case by making immediately available funds available to the Administrative Agent’s designated account, not later than 10:00 a.m. (New York time) on the Effective Date; provided that, after giving effect to the making of the Term Loan, in no event shall the aggregate outstanding Term Loan exceed the Term Loan Borrowing Base then in effect. Any principal amount of the Term Loan that is repaid or prepaid may not be reborrowed.

Section 2.02.        Loans and Borrowings.  The Term Loan shall be made by the Lenders ratably in accordance with their respective Term Loan Commitments. The failure of any Lender to make the Term Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Protective Advance shall be made in accordance with the procedures set forth in Section 2.04.

Section 2.03.        Method for the Term Loan. The Borrower Representative shall request the Term Loan in the Term Loan Amount be delivered to the Administrative Agent, in writing or via an Approved Electronic Communication, pursuant to a Borrowing Request signed by a Responsible Officer of the Borrower Representative, by no later than 6:00 p.m. on the Business Date immediately prior to the Effective Date (or such later time as may be agreed by the Administrative Agent in its sole discretion). Subject to the terms and conditions of this Agreement, each Lender with a Term Loan Commitment shall deliver its Applicable Percentage of the Term Loan Amount in accordance with the Administrative Agent’s wire transfer instructions set forth in Annex A (the “Administrative Agent’s Account”) no later than 11:00 a.m. on the Effective Date. After the Administrative Agent’s receipt in the Administrative Agent’s Account of the proceeds of the Term Loan from the Lenders, the Administrative Agent shall make the proceeds thereof available to or for the benefit of the Borrowers on the Effective Date by transferring immediately available funds equal to such proceeds received by the Administrative Agent to the Loan Account or otherwise in accordance with the funds flow attached to the Borrowing Request delivered for the Term Loan.

Section 2.04.        Protective Advances.

(a)            Subject to the limitations set forth below, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that, the aggregate amount of Protective Advances outstanding at any time shall not exceed $3,000,000. The Protective Advances shall be secured by the Liens in favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be Base Rate Borrowings. The making of a Protective Advance on any one occasion shall not obligate the Administrative Agent to make any Protective Advance on any other occasion. The Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof. The Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).

(b)            Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Protective Advance.

Section 2.05.        [Reserved].

Section 2.06.        [Reserved].

Section 2.07.        Funding of Borrowings. The obligation of each Lender hereunder to fund its Applicable Percentage of each Loan and to make payments pursuant to Section 9.03(d) are several and not joint. The failure of any Lender to fund its Applicable Percentage of each Loan, to fund any such participation or to make any payment under Section 9.03(d) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so fund its Applicable Percentage, to purchase its participation or to make its payment under Section 9.03(d).

Section 2.08.        Interest.

(a)            Rates.

(i)            Each Loan and other monetary Obligations shall bear interest at a per annum rate equal to Adjusted Term SOFR Rate plus the Applicable Rate, and accrued interest shall be payable (i) on the first Business Day of each calendar month in cash in arrears, (ii) upon a prepayment of the Loans in accordance with Section 2.11, and (iii) on the Maturity Date; provided that at any time a Term Benchmark Loan is converted to a loan bearing interest at Base Rate in accordance with Section 2.14 or Section 2.15 below, the Loans and other monetary Obligations shall bear interest at a per annum rate equal to the Base Rate plus the Applicable Rate (in each case, subject to Section 2.08(c) below). Changes in the interest rate for any Term Benchmark Loan shall be effective as of the first day of each thirty (30) day Interest Period.

(ii)            The Loans shall bear interest at the Adjusted Term SOFR Rate plus the Applicable Rate for successive thirty (30) day Interest Periods unless and until converted to loans bearing interest based upon the Base Rate in accordance with Section 2.08(a)(iv), Section 2.08(a)(v) or Section 2.14 below.

(iii)            Each Protective Advance shall bear interest at the Base Rate plus the Applicable Rate for Loans plus 2%.

(iv)            The Adjusted Term SOFR Rate may be adjusted by the Administrative Agent to take into account any additional or increased costs due to any Change in Law, which additional or increased costs would increase the cost of maintaining loans under this Agreement bearing interest based upon the Adjusted Term SOFR Rate. In any such event, the Administrative Agent shall give the Borrower Representative notice of such a determination and adjustment and, upon its receipt of the notice from the Administrative Agent, the Borrowers may, by notice from the Borrower Representative to the Administrative Agent (A) require the Administrative Agent to furnish to the Borrowers a statement setting forth the basis for adjusting the Adjusted Term SOFR Rate due to a Change in Law and the method for determining the amount of such adjustment or (B) repay the portion of the Loans bearing interest based upon the Adjusted Term SOFR Rate with respect to which such adjustment is made. Upon any such repayment, the Borrowers shall also pay accrued interest on the amount so repaid, together with any additional amounts required pursuant to the Fee Letter.

(v)            If the Administrative Agent or any Lender determines that any law has made it unlawful, or that any governmental authority has asserted that it is unlawful, for the Administrative Agent or such Lender or its applicable lending office to maintain any Loan with interest determined by reference to the Adjusted Term SOFR Rate, or to determine or charge interest rates based upon the Adjusted Term SOFR Rate, then, upon notice thereof by the Administrative Agent or such Lender to the Borrower Representative, any obligation of the Lenders to maintain any Loan at the Adjusted Term SOFR Rate shall be suspended until the Administrative Agent or such Lender notifies the Borrower Representative that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from the Administrative Agent, repay the Term Benchmark Loans or convert Loans bearing interest at the Adjusted Term SOFR Rate to Base Rate Loans, either on the last day of the thirty (30)-day Interest Period therefor, if the Lenders may lawfully continue to maintain such Term Benchmark Loans to such day, or immediately, if the Lenders may not lawfully continue to maintain such Term Benchmark Loans until the Administrative Agent and the Lenders determine that it is no longer illegal for the Administrative Agent and the Lenders to determine or charge interest rates based upon the Adjusted Term SOFR Rate. Upon any such repayment or conversion, the Borrowers shall also pay accrued interest on the amount so repaid or converted, together with any additional amounts required pursuant to the Fee Letter.

(b)            Default Rate. Upon the occurrence of an Event of Default and during the continuance thereof and after maturity, whether by acceleration or otherwise, the Loans and other monetary Obligations shall bear interest at the Default Rate. Overdue fees and other amounts payable by the Borrowers under this Agreement other than principal (“Overdue Amounts”) shall also bear interest at the Default Rate. In no event shall the rate of interest on the Loans, or the rate of interest applicable to Overdue Amounts, exceed the maximum rate of interest authorized by law.

(c)            Computation of Interest. Interest and fees shall be calculated daily on the outstanding monetary Obligations based on the actual number of days elapsed in a year of three hundred sixty (360) days. If any of the Loans are not paid when due, whether because such Loans become due on a Saturday, Sunday or bank holiday or for any other reason, the Borrowers will pay interest thereon at the aforesaid rate until the date of actual receipt of payment.

(d)            Accrued interest on each Loan (for Base Rate Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to Section 2.08(b) above shall be payable on demand, and (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (ii) in the event of any conversion of any Term Benchmark Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)            Interest computed by reference to the Term SOFR Rate shall be computed on the basis of a year of 360 days. Interest computed by reference to the Base Rate at times when the Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year). In each case interest shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All interest hereunder on any Loan shall be computed on a daily basis based upon the outstanding principal amount of such Loan as of the applicable date of determination. The applicable Base Rate, Adjusted Term SOFR Rate or Term SOFR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

Section 2.09.        Termination of Term Loan Commitments. The Term Loan Commitment shall terminate on the date of the making the Term Loan.

Section 2.10.        Repayment of Loans; Scheduled Amortization; Evidence of Debt.

(a)            The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan on the Maturity Date, and (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent.

(b)            The principal amount of the Term Loan shall be repaid on the first day of each calendar month in an amount for each installment equal to the amount set forth below during the applicable period set forth below:

Date	Installment Amount
September 1, 2023 and on the first day of each month thereafter	$396,075.73
Maturity Date	Remaining principal amount

(c)            Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(d)            The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e)            The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

(f)            Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

Section 2.11.        Optional Prepayments; Mandatory Prepayments.

(a)            Optional Partial Prepayments of the Loans. The Borrowers may, upon at least ten (10) Business Days prior written notice to the Administrative Agent, jointly and severally, prepay the outstanding amounts under the Loans in part or in whole in an aggregate minimum amount of $2,500,000 and integral multiples of $1,000,000 in excess of such amount. Each prepayment made pursuant to this Section 2.11(a) shall be accompanied by the payment of accrued interest to the date of such payment on the amount prepaid. Each such prepayment of the Term Loan shall be applied against the remaining installments of principal due on the Term Loan in the inverse order of maturity (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment). Any payment pursuant to this Section 2.11(a) shall be accompanied by payment by the Borrowers, jointly and severally, of the Prepayment Fee then required as a result of such prepayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(b)            Voluntary Termination of Facility. The Borrowers may, on at least thirty (30) days prior and irrevocable written notice received by the Administrative Agent, terminate this Agreement and any commitments hereunder by repaying all of the outstanding Obligations in full in cash, including all principal, interest and fees with respect to the Loans and any Protective Advances, and the Prepayment Fee in the amount specified in the Fee Letter under the heading “Prepayment Fee”.

(c)            Mandatory Prepayments – Term Loan Borrowing Base Exceeded. If, at any time the Aggregate Term Loan Exposure exceeds the Term Loan Borrowing Base as reflected by the Term Loan Borrowing Base Certificate most recently delivered to the Administrative Agent pursuant to Section 5.01(g) (such excess amount is referred to as the “Borrowing Base Overadvance”), the Borrowers shall, within three (3) Business Days after delivery of such Term Loan Borrowing Base Certificate, prepay the principal amount of the Term Loan in an aggregate amount equal to the Borrowing Base Overadvance (so long as, (i) the Borrowers shall have Revolving Availability, calculated on a pro forma basis immediately after giving effect to and at all times during the 30-day period immediately prior to such payment, of not less than $4,125,000 (such amount is referred to as the “Minimum Prepayment Availability”) and (ii) the Borrowers shall have a Fixed Charge Coverage Ratio for the trailing twelve months most recently ended for which financial statements have been delivered pursuant hereto, calculated on a pro forma basis after giving effect to such payment, of not less than 1.00 to 1.00 (the foregoing clauses (i) and (ii) are referred to herein, collectively, as the “Overadvance Prepayment Conditions”); provided that, if, after giving effect to the prepayment of the Borrowing Base Overadvance, the Borrowers shall have Revolving Availability less than the Minimum Prepayment Availability, the Borrowers shall prepay the Borrowing Base Overadvance by an amount equal to the greater of (A) (i) Revolving Availability of the Borrowers, minus (ii) the Minimum Prepayment Availability, and (B) zero, and the remaining Borrowing Base Overadvance shall be prepaid in three (3) equal monthly installments commencing with the first (1^st) day of the calendar month immediately following delivery of such Term Loan Borrowing Base Certificate so long as the Overadvance Prepayment Conditions have been satisfied as of such date). Any prepayment pursuant to this Section 2.11(c) shall be accompanied by payment by the Borrowers of the Prepayment Fee then required as a result of such prepayment under the terms of the Fee Letter under the heading “Prepayment Fee”. For the avoidance of doubt, there shall be no Default or Event of Default under any provision of this Agreement if the Borrowers are not able to make any mandatory prepayment pursuant to this Section 2.11(c) because they do not satisfy the Overadvance Prepayment Conditions.

(d)            Mandatory Prepayments – Asset Sale. If any Loan Party or their Subsidiaries consummates any Asset Sale of any Term Loan Priority Collateral (other than dispositions described in Section 6.05(a)), which results in the realization or receipt by the Loan Party or their Subsidiaries of Net Proceeds from such Asset Sale, the Borrowers shall cause to be prepaid on or prior to the date which is three (3) Business Days after the date of such realization or receipt by the Loan Party or other Subsidiaries of such Net Proceeds, the outstanding principal amount of the Term Loan (in the inverse order of the maturity of the installments under the Term Loan) (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment) in an amount equal to 100% of all such Net Proceeds realized or received in excess of $150,000 on an individual basis or $300,000 in the aggregate during any Fiscal Year, provided that, so long as (i) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (ii) the Borrowers shall have given the Administrative Agent prior written notice of the Borrowers’ intention to apply the proceeds of an Asset Sale to the costs to replace the properties or other assets that are the subject of such sale or disposition or the cost of purchase or construction of other assets useful in the business of the Borrowers, (iii) the monies are held in a Qualified Reinvestment Proceeds Blocked Account, and (iv) the Borrowers either have a purchase order to complete or complete such replacement or purchase within sixty (60) days after the initial receipt of such proceeds, then the Borrowers shall have the option to apply such proceeds in an amount not to exceed $300,000 from each such Asset Sale and an aggregate amount not to exceed $1,000,000 for all such Asset Sales (it being understood and agreed that any Net Proceeds in excess of such threshold amounts that are received by the Loan Parties and their Subsidiaries shall be required to prepay the Term Loans in accordance with this Section 2.11(d)) to the costs of replacement of the assets that are the subject of such sale or disposition or the cost of purchase of other assets useful in the business of the Borrowers unless and to the extent that such applicable period shall have expired without such replacement or purchase being made or completed, in which case, any amounts of such Net Proceeds which have not so been applied shall be applied to repay the Secured Obligations as provided above; provided further that, if the Borrowers (z) enter into a purchase order for the purchase or replacement of such property within sixty (60) days after the initial receipt of such Net Proceeds but (y) have not reinvested such Net Proceeds at the end of the 180 day period following initial receipt thereof, the Borrowers shall cause the Term Loan to be prepaid in accordance with this Section 2.11(d). The Borrowers shall pay the Prepayment Fee then required as a result of such repayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(e)            Mandatory Prepayment – Extraordinary Receipts. If the Loan Parties receive any Extraordinary Receipts, the Borrowers shall cause to be prepaid the outstanding principal amount of the Term Loan (in the inverse order of the maturity of the installments under the Term Loan) (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment) in an amount equal to 100% of all Net Proceeds received therefrom in excess of $100,000 on or prior to the date which is five (5) Business Days after the receipt by the Loan Parties of such Net Proceeds, and the Borrowers shall pay the Prepayment Fee then required as a result of such repayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(f)            Mandatory Prepayment – Indebtedness. If the Loan Parties receive any Net Proceeds from the incurrence of any Indebtedness (other than Indebtedness permitted under Section 6.01), the Borrowers shall cause to be prepaid the outstanding principal amount of the Term Loan (in the inverse order of the maturity of the installments under the Term Loan) (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment) in an amount equal to 100% of all Net Proceeds received therefrom on or prior to the date which is three (3) Business Days after the receipt by the Loan Parties of such Net Proceeds, and the Borrowers shall pay the Prepayment Fee then required as a result of such repayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(g)            Mandatory Prepayments – Casualty Events. If any Casualty Event occurs with respect to any Term Loan Priority Collateral, which results in the realization or receipt by the Loan Party or their Subsidiaries of Net Proceeds from such Casualty Event, the Borrowers shall cause to be prepaid on or prior to the date which is three (3) Business Days after the date of such realization or receipt by the Loan Party or other Subsidiaries of such Net Proceeds, the outstanding principal amount of the Term Loan (in the inverse order of the maturity of the installments under the Term Loan) (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment) in an amount equal to 100% of all such Net Proceeds realized or received, provided that, so long as (i) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (ii) the Borrowers shall have given the Administrative Agent prior written notice of the Borrowers’ intention to apply the proceeds of a Casualty Event to the costs to replace the properties or other assets that are the subject of such event or the cost of purchase or construction of other assets useful in the business of the Borrowers, (iii) the monies are held in a Qualified Reinvestment Proceeds Blocked Account (such monies, together with the Net Proceeds described in Section 2.11(d)(iii) are referred to herein, collectively, as the “Qualified Reinvestment Proceeds”), and (iv) the Borrowers complete such replacement, purchase, or construction within sixty (60) days after the initial receipt of such proceeds or enter into a binding agreement for such replacement, purchase or construction within such period, then the Borrowers shall have the option to apply such proceeds to the costs of replacement of the assets that are the subject of such disposition or the cost of purchase or construction of other assets useful in the business of the Borrowers unless and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made or completed, in which case, any amounts of such Net Proceeds which have not so been applied shall be applied to repay the Secured Obligations as provided above, provided further that, if the Borrowers (z) enter into a binding agreement for the replacement, purchase or construction of such property within sixty (60) days after the initial receipt of such Net Proceeds but (y) have not reinvested such Net Proceeds at the end of the 180 day period following initial receipt thereof, the Borrowers shall cause the Term Loan to be prepaid in accordance with this Section 2.11(g). The Borrowers shall pay the Prepayment Fee then required as a result of such repayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(h)            Mandatory Prepayments – Equity Issuances. If the Loan Parties receive Net Proceeds from the issuance of Equity Interests and, as of such date, either (a) a Default or Event of Default has occurred and is continuing or (b) the Loan Parties are not in compliance on a pro forma basis with the financial covenants set forth in Section 6.13, the Borrowers shall cause to be prepaid the outstanding principal amount of the Term Loan (in the inverse order of the maturity of the installments under the Term Loan) (for the avoidance of doubt, any amount that is due and payable on the Maturity Date shall constitute an installment) in an amount equal to 100% of all Net Proceeds received therefrom, and the Borrowers shall pay the Prepayment Fee then required as a result of such repayment under the terms of the Fee Letter under the heading “Prepayment Fee”.

(i)            In the event of any repayment or prepayment of the Term Loan, the Borrowers shall pay all accrued interest on the principal amount repaid or prepaid on the date of such repayment or prepayment.

(j)            Notwithstanding anything to the contrary set forth above, the Mandatory Prepayment provisions set forth in subsections (d) through (h) of this Section 2.11 shall be subject at all times to the terms and conditions of the Intercreditor Agreement and to the extent of any conflict with terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall prevail and supersede solely to the extent of such conflict.

Section 2.12.        Fees.

(a)            The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent, including in the Fee Letter.

(b)            All fees payable hereunder shall be paid on the dates due, in dollars in immediately available funds, to the Administrative Agent for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

Section 2.13.        [Reserved].

Section 2.14.        Alternate Rate of Interest.

(a)            Subject to clauses (b), (c), (d), (e) and (f) of this Section 2.14, if:

(i)            the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) prior to commencement of any Interest Period for a Term Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Term SOFR Rate (including because the Term SOFR Reference Rate is not available or published on a current basis), for such Interest Period; or

(ii)            the Administrative Agent is advised by the Required Lenders that prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the Adjusted Term SOFR Rate or the Term SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

(b)            Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(c)            Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(d)            The Administrative Agent will promptly notify the Borrower Representative and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14.

(e)            Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)            Upon the Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any request for a Term Benchmark Borrowing of Term Benchmark Loans to be made during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted (1) any such request for a Term Benchmark Borrowing into a request for a Base Rate Borrowing. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate. Furthermore, if any Term Benchmark Loan is outstanding on the date of the Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a Relevant Rate applicable to such Term Benchmark Loan, then until such time as a Benchmark Replacement is implemented pursuant to this Section 2.14, (1) any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute a Base Rate Loan.

Section 2.15.        Increased Costs.

(a)            If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted Term SOFR Rate);

(ii)            impose on any Lender or the applicable offshore interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or participation therein; or

(iii)            subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered as reasonably determined by the Administrative Agent or such Lender (which determination shall be made in good faith (and not on an arbitrary or capricious basis) and generally consistent with similarly situated customers of the Administrative Agent or such Lender, as applicable, under agreements having provisions similar to this Section 2.15, after consideration of such factors as the Administrative Agent or such Lender, as applicable, then reasonably determines to be relevant).

(b)            If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of, or the Loans made by, such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered as reasonably determined by the Administrative Agent or such Lender (which determination shall be made in good faith (and not on an arbitrary or capricious basis) and generally consistent with similarly situated customers of the Administrative Agent or such Lender, as applicable, under agreements having provisions similar to this Section 2.15, after consideration of such factors as the Administrative Agent or such Lender, as applicable, then reasonably determines to be relevant).

(c)            A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)            Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender, as the case may be, notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

Section 2.16.        Break Funding Payments.

(a)            In the event of (i) the payment of any principal of any Term Benchmark Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (ii) the conversion of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto, (iii) the failure to borrow, convert, continue or prepay any Term Benchmark Loan on the date specified in any notice delivered pursuant hereto, or (iv) the assignment of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

Section 2.17.        Withholding of Taxes; Gross-Up.

(a)            Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)            Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c)            Evidence of Payment. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)            Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e)            Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to setoff and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this Section 2.17(e).

(f)            Status of Lenders.

(i)            Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Representative and the Administrative Agent, at the time or times reasonably requested by the Borrower Representative or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower Representative or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower Representative or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower Representative or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), 2.17(f)(ii)(B) and 2.17(f)(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)            Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

(A)            any Lender that is a U.S. Person shall deliver to the Borrower Representative and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), an executed copy of IRS Form W-9 (or successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)            any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), whichever of the following is applicable:

(1)            in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E (or successor forms), as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E (or successor forms), as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)            in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed copy of IRS Form W-8ECI (or successor form);

(3)            in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit E-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

(4)            to the extent a Foreign Lender is not the beneficial owner, an executed copy of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-2 or Exhibit E-3, IRS Form W-9 (or successor form), and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-4 on behalf of each such direct and indirect partner;

(C)            any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)            if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Representative and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Representative or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Representative or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Representative and the Administrative Agent in writing of its legal inability to do so.

(g)            Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17(g) (including by the payment of additional amounts pursuant to this Section 2.17(g)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17(g) with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.17(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.17(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.17(g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)            Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the Payment in Full of the Secured Obligations).

(i)            Defined Terms. For purposes of this Section 2.17, the term “applicable law” includes FATCA.

Section 2.18.      Payments Generally; Allocation of Proceeds; Sharing of Setoffs.

(a)            The Borrowers shall make each payment or prepayment required to be made by them hereunder (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m. (New York City time), on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without setoff, recoupment or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 285 Riverside Avenue, Westport, CT 06880, and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

(c)            At the election of the Administrative Agent, all payments of principal, interest, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of any Borrower maintained with the Administrative Agent (and the Administrative Agent will provide reasonably prompt notice of such deduction from any deposit account to the Borrower Representative, provided that failure to provide such notice shall not limit the ability of the Administrative Agent to make such deduction). The Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (but such a Borrowing may only constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.03 or 2.04, as applicable, and (ii) the Administrative Agent to charge any deposit account of any Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d)            If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

(e)            Unless the Administrative Agent shall have received, prior to any date on which any payment is due to the Administrative Agent for the account of the Lenders pursuant to the terms hereof or any other Loan Document (including any date that is fixed for prepayment by notice from the Borrower Representative to the Administrative Agent pursuant to Section 2.11(d)), notice from the Borrower Representative that the Borrowers will not make such payment or prepayment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the NYFRB Rate.

(f)            The Administrative Agent may from time to time provide the Borrowers with account statements or invoices with respect to any of the Secured Obligations (the “Statements”). The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrowers’ convenience. Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations. If the Borrowers pay the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrowers shall not be in default of payment with respect to the billing period indicated on such Statement; provided, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at another time.

Section 2.19.        Mitigation Obligations; Replacement of Lenders.

(a)            If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)            If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Section 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each party hereto agrees that (x) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower Representative, the Administrative Agent and the assignee, and (y) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

Section 2.20.        [Reserved].

Section 2.21.        Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.21 shall survive the termination of this Agreement.

ARTICLE III

Representations and Warranties.

Each Loan Party represents and warrants to the Lenders that:

Section 3.01.        Organization; Powers. Each Loan Party and each Subsidiary is duly organized or formed, validly existing and in good standing (or the equivalent concept as applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and is qualified to do business, and is in good standing (or the equivalent concept as applicable in the relevant jurisdiction), in every other jurisdiction where such qualification is required except where the failure to be so qualified, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 3.02.        Authorization; Enforceability. The Transactions are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and, if required, actions by equity holders. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.03.        Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) do not require any consent or approval of any holder of any Equity Interests of a Loan Party or any consent or approval of any other Person under any Material Agreement of any Loan Party, except such as have been obtained or made and are in full force and effect, (c) will not violate or conflict with, or require any consent under, any Organizational Document of any Loan Party or any Subsidiary, (d) will not violate any Requirement of Law applicable to any Loan Party or any Subsidiary, (e) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary (except, in the case of this clause (e), to the extent that such violation or default, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect), and (f) will not result in the creation or imposition of, or the requirement to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

Section 3.04.        Financial Condition; No Material Adverse Change.

(a)            SMG has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2021 and December 31, 2022, reported on by MaloneBailey LLP, independent public accountants, and (ii) as of and for the fiscal month and the portion of the fiscal year ended May 31, 2023, certified by a Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of SMG and its consolidated Subsidiaries, respectively, as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)            SMG has heretofore furnished to the Lenders the consolidated balance sheet and statements of income, stockholders equity and cash flows of the Barnhart Target Companies (i) as of and for the fiscal years ended December 31, 2021 and December 31, 2022, reported on by Schneider Downs & Co., Inc., independent public accountants, and (ii) as of and for the fiscal month and the portion of the fiscal year ended May 31, 2023, certified by a Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Barnhart Target Companies on a consolidated basis as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(c)            No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2022.

Section 3.05.        Properties.

(a)            As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by any Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists. Each of the Loan Parties and each of its Subsidiaries has good title to, or (to the knowledge of the Borrowers) valid leasehold interests in, all of its real and personal property material to its business, free of all Liens other than Permitted Liens and other minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)            Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by each Loan Party and each Subsidiary does not, to their knowledge, infringe in any material respect upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, and each Loan Party’s and each Subsidiary’s rights thereto are not subject to any licensing agreement or similar arrangement.

(c)            As to each item of M&E and Rolling Stock that is identified by Borrowers as Eligible M&E and Eligible Rolling Stock in a Term Loan Borrowing Base Certificate submitted to the Administrative Agent, such M&E and Rolling Stock is of good and merchantable quality, free from known material defects and is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible M&E and Eligible Rolling Stock, as applicable.

Section 3.06.        Litigation and Environmental Matters.

(a)            There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any Loan Document or the Transactions.

(b)            Except for the Disclosed Matters (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (B) has become subject to any Environmental Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of any basis for any Environmental Liability.

(c)            Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

Section 3.07.        Compliance with Laws and Agreements; No Default. Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (a) all Requirements of Law applicable to it or its property, and (b) all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing.

Section 3.08.        Investment Company Status. No Loan Party or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

Section 3.09.        Taxes. Each Loan Party and each Subsidiary has timely filed or caused to be filed all federal income Tax returns and all other material Tax returns and reports required to have been filed and has paid or caused to be paid all federal income Taxes and all other material Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax liens have been filed.

Section 3.10.        ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.

Section 3.11.        Disclosure.

(a)            The Loan Parties have disclosed to the Lenders all Material Agreements, instruments and corporate or other restrictions to which any Loan Party or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) on or prior to the Effective Date, when taken as a whole and after giving effect to all supplements and updates thereto, did not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information delivered as of the Effective Date, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered (it being understood by the Administrative Agent and the Lenders that any such Projections are as to future events and are not to be viewed as facts are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and that no assurances can be given that such projections will be realized and that actual results during the period or periods covered by such projections may differ materially from projected results).

(b)            As of the Effective Date, to the best knowledge of any Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

Section 3.12.        Material Agreements. All Material Agreements to which any Loan Party or any Subsidiary is a party or is bound as of the date of this Agreement are listed on Schedule 3.12. No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Material Agreement to which it is a party beyond applicable notice and cure periods, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 3.13.        Solvency.

(a)            Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

(b)            No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes that it or any Subsidiary will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

Section 3.14.        Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance due and payable on or prior to the Effective Date have been paid. Each Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their real and personal property in at least such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as are adequate and customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

Section 3.15.        Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to SMG of each and all of SMG’s Subsidiaries, (b) a true and complete listing of each class of each Loan Party’s (other than SMG) authorized Equity Interests and the authorized Equity Interests of each Subsidiary of a Loan Party, all of which issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of SMG and each of its Subsidiaries. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable. There are no outstanding commitments or other obligations of any Loan Party (other than SMG) to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Loan Party (other than SMG).

Section 3.16.        Security Interest in Collateral. The provisions of the Collateral Documents will create legal and valid Liens on all of the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and, when financing statements in appropriate form are filed in the applicable filing offices and all Certificates of Title are delivered to the Servicing Agent pursuant to the Custodial Agreement (and the Servicing Agent has completed all steps necessary for perfection under Applicable Law), such Liens will constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable Requirement of Law and (b) Liens perfected only by possession to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

Section 3.17.        Employment Matters. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened. The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Loan Parties, all payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary in all material respects in accordance with and to the extent required by GAAP.

Section 3.18.        Margin Regulations. No Loan Party owns, or has any present intention of acquiring, any “margin security” or any “margin stock” within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System (herein called “margin security” and “margin stock”), except as permitted pursuant to Section 6.03.  None of the proceeds of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry, any margin security or margin stock or for any other purpose which might constitute the transactions contemplated hereby a “purpose credit” within the meaning of said Regulations T, U or X, or cause this Agreement to violate any other regulation of the Board of Governors of the Federal Reserve System or the Exchange Act, or any rules or regulations promulgated under such statute.

Section 3.19.        Use of Proceeds. The proceeds of the Loans have been used and will be used as set forth in Section 5.08.

Section 3.20.        No Burdensome Restrictions. No Loan Party is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

Section 3.21.        Anti-Corruption Laws and Sanctions. Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and, to the knowledge of such Loan Party, its employees, and agents, are in compliance with applicable Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) any Loan Party, any Subsidiary, or any of their respective directors or officers or (b) to the knowledge of any such Loan Party or Subsidiary, any of their respective employees or agents of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate applicable Anti-Corruption Laws or applicable Sanctions.

Section 3.22.        Rolling Stock Subject to Title Documents. Schedule 3.22 (as updated from time to time in connection with, and within ten (10) days following, the acquisition of Rolling Stock with an aggregate appraised value in excess of $100,000, any additions or deletions thereto) identifies each item of Rolling Stock of the Loan Parties subject to a Certificate of Title or other document of title and shall include the following information: (a) the manufacturer, (b) make, (c) model, (d) VIN number, (e) serial number, (f) state in which titled or certificated, (g) title or certificate number, (h) name and address of owner of current location, and (i) such other identifying information as may be appropriate, as determined by the Administrative Agent in its Permitted Discretion

Section 3.23.        Common Enterprise. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in furtherance of its direct and/or indirect business interests, will be of direct and/or indirect benefit to such Loan Party, and is in its best interest.

Section 3.24.        Affected Financial Institutions. No Loan Party is an Affected Financial Institution.

Section 3.25.        Plan Assets; Prohibited Transactions. No Loan Party or any of its Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement, including the making of any Loan hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

Section 3.26.        TRAC Lease Agreements. All TRAC Lease Agreements to which any Loan Party or any Subsidiary is a party or is bound as of the date of this Agreement are listed on Schedule 3.26. No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any TRAC Lease Agreement to which it is a party, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 3.27.        Closing Date Transactions.

(a)            Each Loan Party has the power and authority to enter into the Closing Date Transaction Documents to which it is a party and has duly authorized, executed and delivered such Closing Date Transaction Documents. The Closing Date Transaction Documents constitutes the legal, valid and binding obligations of each Loan Party thereto enforceable against such Loan Party in accordance with their respective terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity).

(b)            As of the Closing Date, (i) each of the representations and warranties made by the Loan Parties in the Closing Date Transaction Documents is true and correct in all material respects, except to the extent that any such representation and warranty relates to a specific date, in which case such representation shall be true and correct as of such earlier date, except for such failures as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) to the knowledge of the Loan Parties, each of the representations and warranties made by a party, other than a Loan Party, to the Closing Date Transaction Documents is true and correct in all material respects, except to the extent that such representation and warranty relates to a specific date, in which case such representation shall be true and correct as of such earlier date, except for such failures as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

ARTICLE IV

Conditions

Section 4.01.        Effective Date. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)            Credit Agreement and Other Loan Documents. The Administrative Agent (or its counsel) shall have received (i) from each party hereto a counterpart of this Agreement signed on behalf of such party (which, subject to Section 9.06(b), may include any Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), (ii) either (A) a counterpart of each other Loan Document signed on behalf of each party thereto or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page thereof) that each such party has signed a counterpart of such Loan Document and (iii) such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10(f) payable to the order of each such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to the Administrative Agent and the Lenders and the other Secured Parties, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(b)            Financial Statements and Projections. The Lenders shall have received (i) audited consolidated financial statements of SMG for the 2021 and 2022 fiscal years, (ii) satisfactory unaudited interim consolidated financial statements of SMG for each fiscal month ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements described in this clause (ii) shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of such Borrowers, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph, (iii) audited consolidated financial statements of the Barnhart Target Companies for the 2021 and 2022 fiscal years, (iv) satisfactory unaudited interim consolidated financial statements of the Barnhart Target Companies for each fiscal month ended after the date of the latest applicable financial statements delivered pursuant to clause (iii) of this paragraph as to which such financial statements are available, and such financial statements described in this clause (iv) shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of such Barnhart Target Companies, as reflected in the audited, consolidated financial statements described in clause (iii) of this paragraph, and (v) satisfactory projections through December 31, 2026.

(c)            Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of each Borrower, its Financial Officers, and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement, or other Organizational Documents, and (ii) a good standing certificate for each Loan Party from its jurisdiction of organization or the substantive equivalent available in the jurisdiction of organization for each Loan Party from the appropriate governmental officer in such jurisdiction.

(d)            No Default Certificate. The Administrative Agent shall have received a certificate, signed by a Financial Officer of each Borrower, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

(e)            Fees. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses for which summary invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date. All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower Representative to the Administrative Agent on or before the Effective Date.

(f)            Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each jurisdiction where the Loan Parties are organized and where the assets of the Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for Permitted Liens or Liens discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation described in Section 4.01(g).

(g)            Payment of Outstanding Indebtedness, Etc. The Administrative Agent shall have received evidence that immediately after the making of the Loans on the Effective Date, any Indebtedness not permitted by Section 6.01, including the Existing Indebtedness, together with all interest, all payment premiums and all other amounts due and payable with respect thereto, shall be paid in full from the proceeds of the initial Loans or otherwise, and the commitments in respect of such Indebtedness shall be permanently terminated, and all Liens securing payment of any such Indebtedness shall be released and the Administrative Agent shall have received all payoff and release letters, mortgage releases, Uniform Commercial Code Form UCC-3 termination statements or other instruments or agreements as may be suitable or appropriate in connection with the release of any such Liens and satisfactory to the Administrative Agent.

(h)            Loan Account. The Administrative Agent shall have received a notice setting forth the Loan Account to which the Administrative Agent is authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement on the Effective Date.

(i)            Equity Proceeds. The Administrative Agent shall have received evidence of the receipt of $54,000,000 in connection with the issuance of Equity Interests that are not Disqualified Stock.

(j)            Collateral Access and Control Agreements. The Administrative Agent shall have received (i) each Collateral Access Agreement required to be provided pursuant to Section 4.13 of the Security Agreement and (ii) each Deposit Account Control Agreement required to be provided pursuant to Section 4.14 of the Security Agreement.

(k)            Solvency. The Administrative Agent shall have received a solvency certificate signed by a Financial Officer of the Borrower Representative dated the Effective Date.

(l)            Term Loan Borrowing Base Certificate; ABL Borrowing Base Certificate. The Administrative Agent shall have received (i) a Term Loan Borrowing Base Certificate which calculates the Term Loan Borrowing Base as of May 31, 2023; and (ii) an ABL Borrowing Base Certificate which calculates the ABL Borrowing Base as of May 31, 2023.

(m)            Excess Availability. After giving effect to the Transactions, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current, Excess Availability shall not be less than $5,000,000.

(n)            ABL Debt. (i) All conditions precedent to the effectiveness of the ABL Credit Agreement and the other ABL Debt Documents (as applicable), on terms reasonably acceptable to Administrative Agent, shall have been satisfied or waived by the ABL Lenders in accordance with the ABL Credit Agreement, (ii) the ABL Agent, on behalf of the ABL Lenders, shall have executed and delivered the Intercreditor Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, (iii) the Administrative Agent shall have received fully-executed copies of the ABL Debt Documents, the terms and conditions of which shall be reasonably acceptable to the Administrative Agent, and (iv) the Borrowers shall have received (or will receive concurrently with the funding of the Loans on the Effective Date) at least $12,000,000 of gross proceeds of the ABL Debt funded by the ABL Lenders in accordance with the ABL Debt Documents.

(o)            Pledged Equity Interests; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(p)            Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of itself, the Lenders and the other Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Permitted Liens), shall be in proper form for filing, registration or recordation.

(q)            Approvals. All governmental and third party approvals necessary in connection with the Transactions shall have been obtained on reasonably satisfactory terms and shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Transactions.

(r)            Deliverables under Custodial Agreement. The Loan Parties shall have delivered each Certificate of Title applicable to each item of Rolling Stock to the Servicing Agent in order to perfect, under Applicable Law, the first priority Lien of the Administrative Agent in such Rolling Stock, and shall deliver to the Servicing Agent any agreements, documents, instruments or certificates required by the Administrative Agent or the Servicing Agent to remove any Lien in favor of any Person (other than the Administrative Agent and the ABL Agent) upon such Rolling Stock.

(s)            Closing Date Transactions. (i) All conditions precedent to the consummation of the Closing Date Transactions shall have been satisfied and the Closing Date Transactions shall have been consummated, or will be consummated substantially concurrently with the funding of the Loans, in all material respects in accordance with the Closing Date Transaction Documents, and (ii) the Administrative Agent shall have received a fully-executed copy of each of the Closing Date Transaction Documents, which shall be in form and substance reasonably satisfactory to the Administrative Agent.

(t)            Insurance. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.10 hereof and Section 4.12 of the Security Agreement.

(u)            Tax Withholding. The Administrative Agent shall have received a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(v)            Closing Appraisal. The Administrative Agent or its designee shall have received the Closing Appraisal, the results of which shall be satisfactory to the Administrative Agent in its sole discretion.

(w)            Employment Agreements. The Administrative Agent shall have received executed copies of the employment agreements with respect to Bryan S. Barnhart and Timothy W. Barnhart.

(x)            Legal and Regulatory Due Diligence. The Administrative Agent and its counsel shall have completed all legal, regulatory, Collateral and financial due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.

(y)            USA PATRIOT Act, Etc. (i) The Administrative Agent shall have received, at least five (5) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to the extent requested in writing of the Borrowers at least ten (10) days prior to the Effective Date, and (ii) to the extent any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has requested, in a written notice to the Borrowers at least ten (10) days prior to the Effective Date, a Beneficial Ownership Certification in relation to each Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).

(z)            Background Checks. The Administrative Agent shall have received background checks on the management team of the Borrowers, the results of which shall be satisfactory to the Administrative Agent in its sole discretion.

(aa)        Representations and Warranties. The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

(bb)        Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m. (New York time) on the date of this Agreement (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

ARTICLE V

Affirmative Covenants

Until all of the Secured Obligations have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

Section 5.01.        Financial Statements; Term Loan Borrowing Base and Other Information. The Borrowers will furnish to the Administrative Agent and each Lender:

(a)            within one hundred twenty (120) days after the end of each fiscal year of SMG, its audited consolidated balance sheet and related statements of income or operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Schneider Downs & Co., Inc., MaloneBailey LLP or any independent public accountants of recognized national standing (without a “going concern” or like qualification, commentary or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of SMG and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants, if applicable;

(b)            [reserved];

(c)            within thirty (30) days after the end of each fiscal month of SMG, its consolidated and consolidating balance sheet and related statements of income or operations, stockholders equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year and the Projections for such periods, all certified by a Financial Officer of the Borrower Representative as presenting fairly in all material respects the financial condition and results of operations of SMG and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(d)            concurrently with any delivery of financial statements under clause (a) or (c) above, a Compliance Certificate (i) certifying, in the case of the financial statements delivered under clause (c), as presenting fairly in all material respects the financial condition and results of operations of SMG and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying (A) as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto and (B) that the representations and warranties of the Loan Parties are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to materiality or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification), except to the extent that any relate to an earlier specified date, in which case, such representations and warranties shall be true and correct in all material respects as of the date made, (iii) setting forth a reasonably detailed calculation of the Fixed Charge Coverage Ratio and demonstrating compliance with Section 6.13, and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 (or the most recent audited financial statements delivered pursuant to clause (a) above) and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

(e)            on or before the date of the Compliance Certificate delivered under clause (d), a detailed report of all Rolling Stock owned by the Loan Parties (a “Rolling Stock Report”) as of the end of the previous calendar month, certified by a Financial Officer of each Loan Party as true and correct in all material respects, which report shall (i) separately identify all Rolling Stock acquired by the Loan Parties since the date of delivery to the Administrative Agent of the most recent Rolling Stock Report, (ii) separately identify all Rolling Stock which were sold, leased, transferred or otherwise disposed of by the Loan Parties since the date of delivery to the Administrative Agent of the most recent Rolling Stock Report, (iii) shall set forth for each item of Rolling Stock, among other things: (A) the applicable Loan Party which is the owner thereof, (B) the vehicle identification number, (C) the state, city and county in which each item of Rolling Stock it is titled, (D) the location at which each item of Rolling Stock is maintained, and (E) each item of Rolling Stock’s estimated book value, and (iv) attach such other invoices, purchase orders, vehicle registration or other documents or other information related to such Rolling Stock as reasonably requested by the Administrative Agent;

(f)            as soon as available but in any event on or prior to January 31 of each year of SMG, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and cash flow statement, Term Loan Borrowing Base projections and a calculation of the projected Fixed Charge Coverage Ratio as of the end of each month) of SMG for each month of the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

(g)            as soon as available but in any event within fifteen (15) days after the end of each calendar month, and at such other times as may be necessary to re-determine the Term Loan Borrowing Base or as may be requested by the Administrative Agent, as of the period then ended, a Term Loan Borrowing Base Certificate, made by the Borrower Representative and certified by an Authorized Officer of the Borrower Representative, and supporting information in connection therewith, together with any additional reports with respect to the Term Loan Borrowing Base as the Administrative Agent may reasonably request; provided that the Administrative Agent may from time to time review and (i) adjust any such calculation to the extent the calculation is not made in accordance with this Agreement or does not accurately reflect the Term Loan Borrowing Base Reserve, in each case, as determined by the Administrative Agent in its Permitted Discretion or (ii) adjust the Reserves as determined by the Administrative Agent in its Permitted Discretion);

(h)            as soon as available but in any event within fifteen (15) days after the end of each calendar month and at such other times as may be requested by the Administrative Agent, as of the month then ended, a schedule and aging of the Borrowers’ accounts payable, delivered electronically in a text formatted file acceptable to the Administrative Agent;

(i)            promptly, and in any event within five (5) Business Days, upon the Administrative Agent’s request, copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service;

(j)            promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by SMG or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by SMG to its shareholders generally, as the case may be;

(k)            promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that any Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that any Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if a Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, upon the request of the Administrative Agent or any Lender, the applicable Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof;

(l)            promptly following any request therefor, (i) such other information regarding the operations, changes in ownership of Equity Interests (other than Equity Interests of SMG), business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may reasonably request, and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation;

(m)            promptly after receipt thereof by any Borrower or any Subsidiary, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by the SEC or such other agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;

(n)            promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of such Loan Party or any Subsidiary, or any audit of any of them as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request;

(o)            concurrently with delivery thereof under the ABL Credit Agreement, copies of any reports or notices (including any compliance certificates and any ABL Borrowing Base, together with all reports and other deliverables required to be delivered in connection therewith) delivered to the ABL Agent or ABL Lenders pursuant to the ABL Credit Agreement, to the extent not otherwise required to be delivered hereunder; and

(p)            promptly upon the reasonable request therefor (and in any event within ten (10) days of such request), such other information or documents (financial or otherwise) relating to any Loan Party or any Subsidiary as the Administrative Agent may reasonably request from time to time.

Documents required to be delivered pursuant to Section 5.01(a) or (m) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such documents are posted on a Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent); provided that: (A) upon written request by the Administrative Agent (or any Lender through the Administrative Agent) to the Borrower Representative, the Borrower Representative shall deliver paper copies of such documents to the Administrative Agent or such Lender until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the Borrower Representative shall notify the Administrative Agent and each Lender (by fax or through Electronic Systems) of the posting of any such documents and provide to the Administrative Agent through Electronic Systems electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by any Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents to it and maintaining its copies of such documents.

SMG represents and warrants that each of it, and its Controlling and Controlled entities, in each case, if any (collectively with the Borrowers, the “Relevant Entities”), either (i) has no SEC registered or unregistered, publicly traded securities outstanding, or (ii) files its financial statements with the SEC and/or makes its financial statements available to potential holders of its securities, and, accordingly, SMG hereby (A) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a) and (c) above (limited, in the case of Section 5.01(c), to the financial statements provided for the last month of each calendar quarter) (collectively or individually, as the context requires, the “Financial Statements”), along with the Loan Documents, available to Public-Siders and (B) agree that at the time such Financial Statements are provided hereunder, they shall already have been made available to holders of any such securities. SMG will not request that any other material be posted to Public-Siders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Relevant Entities have no outstanding SEC registered or unregistered, publicly traded securities. Notwithstanding anything herein to the contrary, in no event shall SMG request that the Administrative Agent make available to Public-Siders budgets or any certificates, reports or calculations with respect to the Borrowers’ compliance with the covenants contained herein or with respect to the Term Loan Borrowing Base.

Section 5.02.        Notices of Material Events. The Borrower Representative will furnish to the Administrative Agent (for distribution to each Lender) prompt (but in any event within any time period that may be specified below) written notice of the following:

(a)            the occurrence of any Default hereunder or any “Default” under, and as defined in, the ABL Documents;

(b)            receipt of any notice of any investigation by a Governmental Authority or any litigation or Proceeding commenced or threatened against any Loan Party or any Subsidiary that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability, or (vi) asserts liability on the part of any Loan Party or any Subsidiary in excess of $1,000,000 in respect of any tax, fee, assessment, or other governmental charge;

(c)            any filing by a Governmental Authority with respect to a Lien imposed by law for Taxes in excess of $50,000 that are past due and payable (unless being contested in compliance with Section 5.04) or receipt of any other written notice claiming a Lien arising by operation of law that may obtain priority over the Lien in favor of the Administrative Agent by operation of law;

(d)            any loss, damage, or destruction to the Collateral in the amount of $500,000 or more, whether or not covered by insurance;

(e)            within two (2) Business Days of receipt thereof, any and all default notices received under or with respect to any leased location or public warehouse where Collateral in the amount of $500,000 or more is located;

(f)            all amendments to the ABL Documents, together with a copy of each such amendment;

(g)            within two (2) Business Days after the occurrence thereof, any Loan Party entering into a Swap Agreement or an amendment thereto, together with copies of all agreements evidencing such Swap Agreement or amendment;

(h)            the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $1,000,000;

(i)            within five (5) Business Days after any Loan Party obtains knowledge of any other development that results, or could reasonably be expected to result in, a Material Adverse Effect; and

(j)            within five (5) Business Days after any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

Each notice delivered under this Section 5.02 (i) shall be in writing, (ii) shall contain a heading or a reference line that reads “Notice under Section 5.02 of the Credit Agreement” and (iii) shall be accompanied by a statement of a Responsible Officer or other executive officer of the Borrower Representative setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.03.        Existence; Conduct of Business. Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, (b) maintain all requisite authority to conduct its business in its jurisdiction of organization and each other jurisdiction in which its business is conducted, except to the extent that the failure to be so qualified in any such other jurisdiction could not reasonably be expected to have a Material Adverse Effect, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03, and (c) carry on and conduct its business in substantially the same fields of enterprise as it is presently conducted (or such other types of business permitted by Section 6.03(c)).

Section 5.04.        Payment of Obligations. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except (i) where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) none of the Collateral would become subject to forfeiture or loss as a result of the contest, or (ii) with respect to Taxes and other material liabilities and obligations, to the extent the failure to so pay could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; provided, however, that each Loan Party will, and will cause each Subsidiary to, remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

Section 5.05.        Maintenance of Properties. Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, except to the extent such failure could not reasonably be expected to have a Material Adverse Effect.

Section 5.06.        Books and Records; Inspection Rights; Appraisals. Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries, in all material respects, are made of all material dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at such Loan Party’s premises field examinations of such Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants (and hereby authorizes the Administrative Agent and each Lender to contact its independent accountants directly) and to provide contact information for each bank where each Loan Party has a depository and/or securities account and each such Loan Party hereby authorizes the Administrative Agent and each Lender to contact the bank(s) in order to request bank statements and/or balances, all at such reasonable times and as often as reasonably requested. Each Loan Party acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to such Loan Party’s assets for internal use by the Administrative Agent and the Lenders. The Loan Parties shall be responsible for the costs of expenses of one (1) appraisal of the M&E and Rolling Stock during any 12-month period covering each Borrower; provided, that the Loan Parties shall be responsible for the costs and expenses of all appraisals initiated while an Event of Default has occurred and is continuing (and no prior notice shall be required during the continuance of an Event of Default.

Section 5.07.        Compliance with Laws and Material Contractual Obligations. Each Loan Party will, and will cause each Subsidiary to, (a) comply with each Requirement of Law applicable to it or its property (including without limitation applicable Environmental Laws) and (b) perform in all material respects its obligations under Material Agreements to which it is a party, except, in each case of clause (a) or (b), where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Loan Party will maintain in effect and enforce policies and procedures reasonably designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions.

Section 5.08.        Use of Proceeds.

(a)            The proceeds of the Loans will be used only (i) to consummate the Closing Date Transactions and the other Transactions on the Effective Date (including the refinancing of the Existing Indebtedness on the Effective Date and the payment of fees and expenses related to the Transactions), and (ii) for working capital and general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, (x) for any purpose that entails a violation of any of the regulations of the Federal Reserve Board, including Regulations T, U and X or (y) to make any Acquisition other than a Permitted Acquisition.

(b)            No Borrower will request any Borrowing, and no Borrower shall use, and each Borrower shall procure that its Subsidiaries and its and their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

Section 5.09.        Accuracy of Information. The Loan Parties will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by the Borrowers on the date thereof as to the matters specified in this Section; provided that, with respect to projected financial information, the Loan Parties will only ensure that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

Section 5.10.        Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers (a) insurance in such amounts (with no greater risk retention) and against such risks (including, without limitation: loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

Section 5.11.        Casualty and Condemnation. The Borrowers will furnish to the Administrative Agent and the Lenders prompt written notice upon obtaining knowledge of any casualty or other insured damage to any material portion of the Collateral with a book value in excess of $250,000 or the commencement of any action or proceeding for the taking of any material portion of the Collateral with a book value in excess of $250,000 or interest therein under power of eminent domain or by condemnation or similar proceeding.

Section 5.12.        Rolling Stock; Certificates of Title.

(a)            With respect to Rolling Stock not covered by the Closing Appraisal, within ten (10) days after the date of the acquisition of Rolling Stock with an aggregate appraised value equal to or greater than $100,000, each Loan Party shall deliver to the Administrative Agent or the Servicing Agent all original Certificates of Title or other documents of title (or, in the event that electronic recordation of liens on the Certificate of Title or other document of title is available, all necessary recording information with respect thereto) for all Rolling Stock owned by such Loan Party, the ownership of which is required to be evidenced by a Certificate of Title or other document of title under the laws applicable to such Rolling Stock, and ensure that the Administrative Agent or the Servicing Agent has received all documentation and information necessary for the Administrative Agent’s name to be noted on such Certificates of Title or other documents of title as a lienholder.

(b)            Unless and until the Administrative Agent may direct otherwise, the following shall be located only at the locations set forth in the Custodial Agreement: (i) any manufacturers’ statements of origin or manufacturers’ certificates of origin and other certificates, statements, bills of sale or other evidence of the transfer to or ownership of any Loan Party of any of the Rolling Stock; and (ii) any Certificates of Title at any time issued under the laws of any State with respect to any of the Rolling Stock.

(c)            The Loan Parties shall direct (or authorize the Servicing Agent to direct) the applicable Governmental Authority notating the Liens of the Administrative Agent in all Rolling Stock of the Loan Parties to deliver the duly endorsed Certificates of Title directly to the Servicing Agent (or upon the Administrative Agent’s direction, to the Administrative Agent), and to the extent any duly endorsed Certificates of Title are improperly delivered to the Loan Parties, the Loan Parties shall promptly deliver such certificates of title to the Servicing Agent (or upon the Administrative Agent’s direction, to the Administrative Agent).

(d)            All Rolling Stock will be used by the Loan Parties in the ordinary course of their business and will not be held for sale, lease or rent.

Section 5.13.        Depository Banks. From and after the date required on Schedule 5.15 (or such later date as may be approved in writing by the Administrative Agent in its sole discretion (including by e-mail notification)), each Borrower and each Subsidiary will maintain the ABL Agent as its principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity and other deposit accounts for the conduct of its business; provided, however, each Borrower may maintain certain Excluded Accounts.

Section 5.14.        Additional Collateral; Further Assurances.

(a)            Subject to applicable Requirement of Law, each Loan Party will cause each Subsidiary formed or acquired after the date of this Agreement (other than any Inactive Subsidiary) to become a Loan Party by executing a Joinder Agreement, concurrently with the formation or acquisition thereof, or such later date as may be approved in writing by the Administrative Agent in its sole discretion. In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to comply with the applicable “know your customer” rules and regulations, including the USA Patriot Act. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor or, if approved by Administrative Agent, a Borrower hereunder and thereupon shall have all of the rights, benefits, duties and obligations in such capacity under the Loan Documents, and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral. The Loan Parties will (concurrently with the formation or acquisition thereof, or such later date as may be approved in writing by the Administrative Agent in its sole discretion) cause to be delivered customary secretary’s certificates and other deliverables, including favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in this Section 5.14), in form, content and scope reasonably satisfactory to the Administrative Agent. The Loan Parties shall notify the Administrative Agent, regarding such Subsidiary, of (i) its jurisdiction of formation, (ii) the number of shares of each class of its Equity Interests outstanding, (iii) the number and percentage of outstanding shares of each class owned (directly or indirectly) by the Loan Parties or any Subsidiary and (iv) the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto.

(b)            Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and each Foreign Subsidiary that constitutes a Loan Guarantor, and (ii) 65% (or such greater percentage that, due to a change in applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in each Foreign Subsidiary (to the extent not a Loan Guarantor) directly owned by such Loan Party to be subject at all times to a first priority (subject to the ABL Liens and Permitted Encumbrances which may have priority by operation of Requirements of Law), perfected Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

(c)            Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by any Requirement of Law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.

(d)            If any material assets are acquired by any Loan Party after the Effective Date (other than Excluded Property or assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower Representative will (i) notify the Administrative Agent and the Lenders thereof and cause such assets to be subjected to a Lien securing the Secured Obligations, and (ii) take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in Section 5.14(c) above, all at the expense of the Loan Parties. For the avoidance of doubt, at all times prior to the joinder of a Subsidiary as contemplated above, no Subsidiary shall be a Loan Party and the Eligible M&E and Eligible Rolling Stock of such Subsidiary shall not be included in the Term Loan Borrowing Base.

Section 5.15.        Post-Closing Obligations. The Loan Parties shall satisfy each requirement set forth on Schedule 5.15 on or before the respective date specified for such requirement (or such later date as may be approved in writing by the Administrative Agent in its sole discretion (including by e-mail notification)).

ARTICLE VI

Negative Covenants

Section 6.01.        Indebtedness. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(a)            the Secured Obligations;

(b)            (i) the ABL Debt, so long as such ABL Debt is subject to the Intercreditor Agreement and is not in excess of the ABL Loan Maximum Amount (as defined in the Intercreditor Agreement), and (ii) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with Section 6.01(f) hereof;

(c)            Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party owing to any Borrower or any other Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party owing to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

(d)            Guarantees by any Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any Borrower or any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this Section 6.01(d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

(e)            Indebtedness of any Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with Section 6.01(f) below; provided that (i)  such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(e) together with any Refinance Indebtedness in respect thereof permitted by Section 6.01(f) below, shall not exceed $1,000,000 at any time outstanding;

(f)            Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness described in Sections 6.01(b), 6.01(e), 6.01(i), 6.01(j) and 6.01(k) hereof (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (i) such Refinance Indebtedness does not increase the principal amount or interest rate of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of such Refinance Indebtedness other than fees and interests are not less favorable to the obligor thereunder than the original terms of such Original Indebtedness, (vi) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness, and (vii) if the Original Indebtedness consists of ABL Debt, such Refinancing Indebtedness and the Liens securing such Refinancing Indebtedness must be subject to the Intercreditor Agreement;

(g)            Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(h)            Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

(i)            the Barnhart Seller Note and other Subordinated Indebtedness with terms reasonably satisfactory to the Administrative Agent in an aggregate principal amount not exceeding $3,000,000 at any time outstanding (excluding the Barnhart Seller Note) and any unsecured Indebtedness that consists of deferred purchase price obligations, earnout obligations or similar contingent obligations arising out of an Acquisition, in each case, on terms and conditions reasonably acceptable to Administrative Agent in an aggregate principal amount not exceeding $1,000,000;

(j)            Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(j), together with any Refinance Indebtedness in respect thereof permitted by Section 6.01(f) above, shall not exceed $1,000,000 at any time outstanding;

(k)            Indebtedness arising from the endorsement of instruments for collection in the ordinary course of business;

(l)            Indebtedness consisting of the financing of unpaid insurance premiums of any Loan Party in the ordinary course of business, so long as (i) such Indebtedness shall not be in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the underlying term of such insurance policy (not to exceed 1 year) and (ii) any unpaid amount of such Indebtedness is fully cancelled upon termination of the underlying insurance policy;

(m)            Indebtedness of an Inactive Subsidiary pursuant an EIDL Note in an aggregate principal amount outstanding not to exceed $265,000; and

(n)            other unsecured Indebtedness in an aggregate principal amount not exceeding $2,000,000.

Section 6.02.        Liens. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

(a)            (i) Liens created pursuant to any Loan Document, and (ii) ABL Liens;

(b)            Permitted Encumbrances;

(c)            any Lien on any property or asset of any Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of such Borrower or Subsidiary or any other Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d)            Liens on fixed or capital assets acquired, constructed or improved by any Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by Section 6.01(e), (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of such Borrower or Subsidiary or any other Borrower or Subsidiary;

(e)            any Lien existing on any property or asset prior to the acquisition thereof by any Borrower or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(f)            Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(g)            Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;

(h)            Liens on any property or assets of any Inactive Subsidiary to secure the Indebtedness evidenced by the EIDL Notes; provided that (i) such Lien shall not apply to any other property or asset of any other Loan Party and (ii) such Lien shall secure only those obligations which it secures on the date hereof;

(i)            Liens solely on any reasonable and customary cash earnest money deposits, escrow arrangements or similar arrangements made by any Loan Party in connection with any letter of intent or purchase agreement for a Permitted Acquisition or other transaction permitted hereunder;

(j)            leases or subleases of real or personal property granted to other Persons (as lessee thereof) that do not (i) interfere in any material respect with the business of any Borrower and its Subsidiaries, taken as a whole or (ii) secure Indebtedness;

(k)            Liens arising from grants of non-exclusive licenses or sublicenses of intellectual property made in the ordinary course of business;

(l)            ground leases or subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by SMG or any Subsidiary are located;

(m)            Liens purportedly evidenced by any precautionary UCC financing statement evidencing a lease intended to be an operating lease;

(n)            Liens securing Indebtedness permitted under Section 6.01(l), so long as such Liens attach solely to such insurance policies and the unearned premiums in respect of such insurance policies (including any gross unearned premiums and any payment on account of loss which results in reduction of unearned premiums); and

(o)            other Liens not otherwise described in this Section 6.02 securing obligations (other than Total Funded Indebtedness) incurred in the ordinary course of business in an aggregate outstanding amount not to exceed $500,000.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any time attach to any Loan Party’s Accounts, other than those permitted under clause (a) of the definition of Permitted Encumbrances and Section 6.02(a) above.

Section 6.03.        Fundamental Changes.

(a)            No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise Dispose of all or any substantial part of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing (i) any Subsidiary of any Borrower may merge into a Borrower in a transaction in which such Borrower is the surviving entity, (ii) any Loan Party (other than SMG) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party (or, if such Loan Party is merged with a Borrower, such Borrower shall be the surviving entity), (iii) any Subsidiary that is not a Loan Party (including any Inactive Subsidiary) may liquidate or dissolve if the Borrower which owns such Subsidiary determines in good faith that such liquidation or dissolution is in the best interests of such Borrower and such liquidation or dissolution is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04 and (iv) any Subsidiary of any Borrower may Dispose of all or any substantial part of its assets (but not its liabilities) to any Loan Party.

(b)            No Loan Party will, nor will it permit any Subsidiary to, consummate a Division as the Dividing Person, without the prior written consent of Administrative Agent. Without limiting the foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without the prior consent of Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in Section 5.14 and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

(c)            No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Borrowers and their Subsidiaries (taken as a whole) on the date hereof and businesses reasonably related, ancillary, similar, complementary or synergistic thereto or reasonable extensions thereof.

(d)            No Loan Party will, nor will it permit any Subsidiary to, change its fiscal year from the basis in effect on the Effective Date; provided that any Loan Party (other than SMG) may change their fiscal year from the basis in effect on the Effective Date to match SMG’s fiscal year, and the Loan Parties and their Subsidiaries may change their fiscal year from the basis in effect on the Effective Date subject to prior written notice to and approval from the Administrative Agent in its Permitted Discretion, subject to such adjustments to this Agreement as SMG and the Administrative Agent shall reasonably agree are necessary or appropriate in connection with such change (and the parties hereto hereby authorize SMG and the Administrative Agent to make any such amendments to this Agreement as they jointly deem necessary to give effect to the foregoing).

(e)            No Loan Party will change the accounting basis upon which its financial statements are prepared from GAAP to a different body of accounting principles.

(f)            No Loan Party will change the tax filing elections it has made under the Code without prior written notice to the Administrative Agent.

Section 6.04.        Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or make any Investment, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

(a)            cash and Permitted Investments;

(b)            Investments in existence on the date hereof and described in Schedule 6.04;

(c)            (i) Investments by a Loan Party in another Loan Party, (ii) Investments by the Loan Parties in their respective Subsidiaries that are not Loan Parties in an aggregate amount not to exceed $250,000 in the aggregate at any time outstanding for all such Investments and (iii) Investments by the Loan Parties in the Inactive Subsidiaries to make payments on the EIDL Notes;

(d)            (i)  loans and advances to a Loan Party in another Loan Party and (ii) loans and advances from the Loan Parties to their respective Subsidiaries that are not Loan Parties in an aggregate amount not to exceed $250,000 in the aggregate at any time outstanding for all such loans and advances;

(e)            Guarantees constituting Indebtedness permitted by Section 6.01, provided that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d)) shall not exceed $250,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) as of the date of any such Guarantee by a Loan Party of Indebtedness of a Subsidiary that is not a Loan Party, no Event of Default has occurred and is continuing, or would result therefrom;

(f)            (i) loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $200,000 in the aggregate at any one time outstanding and (ii) leases of Equipment in the form of TRAC Lease Agreements so long as the revenues attributable to such TRAC Lease Agreements do not, in the aggregate, exceed ten percent (10%) of the consolidated gross revenues of the Loan Parties;

(g)            notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(h)            investments in the form of Swap Agreements permitted by Section 6.07;

(i)            investments of any Person existing at the time such Person becomes a Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in connection with a permitted acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(j)            investments received in connection with Dispositions permitted by Section 6.05;

(k)            investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”;

(l)            Permitted Acquisitions;

(m)            Accounts receivable owned by any Borrower or any Subsidiary, if created in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

(n)            investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent Accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(o)            deposits made in the ordinary course of business securing obligations or performance under contracts, such as in connection with real estate or personal property leases; and

(p)            other Investments not otherwise described in this Section 6.04, subject to the satisfaction of the Payment Condition with respect to each such Investment (as determined by the Administrative Agent in its Permitted Discretion).

Notwithstanding the foregoing, in no event shall any Loan Party make, or permit any other Loan Party to make, any Investment (i) that results in or facilitates in any manner any Restricted Payment not otherwise permitted under the terms of Section 6.08 and (ii) in or to any Affiliate or Subsidiary that is not a Loan Party consisting of Intellectual Property (or exclusive rights thereto) constituting Collateral or any other Collateral that is material to the business of SMG and its Subsidiaries (it being understood that any such Collateral with a fair market value in excess of $500,000 shall be deemed to be material to the business of SMG and its Subsidiaries), (the foregoing requirement, the “Material Transfers Prohibition”).

Section 6.05.        Asset Sales. No Loan Party will, nor will it permit any Subsidiary to, Dispose of any asset, including any Equity Interest owned by it, nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to another Borrower or another Subsidiary in compliance with Section 6.04), except:

(a)            Dispositions of (i) Inventory or goods held for sale in the ordinary course of business, (ii) obsolete, worn out or surplus equipment or property in the ordinary course of business (including allowing any registrations or applications for registration of immaterial intellectual property to lapse or go abandoned in the ordinary course of business), and (iii) cash and Permitted Investments in the ordinary course of business (but not to Affiliates, except as otherwise permitted by the Loan Documents);

(b)            Dispositions of assets to any Borrower or any Subsidiary, provided that, (i) any such Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09 and (ii) any such Disposition by a Loan Party to a Subsidiary that is not a Loan Party shall only be permitted to the extent that the Payment Condition shall have been satisfied (as determined by the Administrative Agent in its Permitted Discretion) with respect to each such Disposition;

(c)            Dispositions of delinquent Accounts in connection with the compromise, settlement or collection thereof in the ordinary course of business;

(d)            Dispositions of Permitted Investments and other Investments permitted by Section 6.04, including any Disposition of Equipment pursuant to the terms of a TRAC Lease Agreement;

(e)            Sale and Leaseback Transactions permitted by Section 6.06;

(f)            Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary;

(g)            the termination of any transaction under any Swap Agreement permitted hereunder;

(h)            any Loan Party may lease real or personal property, and may license (or sublicense) intellectual property, in the ordinary course of business, to the extent not (i) interfering in any material respect with the business of any Borrower and its Subsidiaries, taken as a whole or (ii) securing Indebtedness; and

(i)            Dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets Disposed of in reliance upon this Section 6.05(i) shall not exceed $2,500,000 during any fiscal year of the Borrowers;

provided that all Dispositions permitted hereby (other than those permitted by paragraphs (b) and (f) above) shall be made for fair value and for at least 75% cash consideration. Notwithstanding the foregoing, Material Transfers Prohibition shall also apply to this Section 6.05.

Section 6.06.        Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use (or any other Loan Party or Subsidiary intends to use) for substantially the same purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

Section 6.07.        Swap Agreements. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of any Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Borrower or any Subsidiary.

Section 6.08.        Restricted Payments; Certain Payments of Indebtedness.

(a)            No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)            the Borrowers may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock;

(ii)            Subsidiaries that are wholly-owned by one or more Loan Parties may declare and pay dividends ratably to such Loan Parties with respect to their Equity Interests;

(iii)            the Loan Parties may make Restricted Payments to purchase stock or stock options of SMG (or its direct or indirect parent) from present or former officers, directors or employees thereof (or of any Loan Party), or make cash payments in lieu of the issuance of fractional shares in connection with any such stock options issued to any of the foregoing, in an aggregate amount not to exceed $1,000,000 in any fiscal year and so long as, before and after giving effect to any such payment, (x) no Default or Event of Default has occurred and be continuing and (y) the Loan Parties are in compliance on a pro forma basis with the financial covenants set forth in Section 6.13; and

(iv)            the Borrowers may make other Restricted Payments subject to the satisfaction of the Payment Condition (as determined by the Administrative Agent in its Permitted Discretion) with respect to each such Restricted Payment.

(b)            No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)            payment of Indebtedness created under the Loan Documents;

(ii)            payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under Section 6.01 (other than the ABL Debt), other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii)            refinancings of Indebtedness to the extent permitted by Section 6.01;

(iv)            payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, to the extent such sale or transfer is permitted by the terms of Section 6.05;

(v)            payments of deferred purchase price obligations, earn-out obligations or similar contingent obligations arising out of an Acquisition (including payments on the Barnhart Seller Note) as and when the same become due in with the terms thereof, in each case, so long as the Payment Condition shall have been satisfied (as determined by the Administrative Agent in its Permitted Discretion) with respect to each such payment;

(vi)            (i) payment of regularly scheduled interest (including default interest) and principal payments as and when due in respect of the ABL Debt, and (ii) payment of costs, expenses, fees, indemnity payments and similar payments (but not payments on account of principal or interest) in respect of the ABL Debt;

(vii)            voluntary and mandatory principal prepayments of the ABL Debt (other than in connection with a permanent reduction (or termination) of the Revolving Commitments (as defined in the ABL Credit Agreement) in accordance with the terms of the ABL Credit Agreement and the Intercreditor Agreement;

(viii)            voluntary or mandatory principal prepayments of the ABL Debt in connection with a permanent reduction (or termination) of the Revolving Commitments (as defined in the ABL Credit Agreement), so long as, with respect to each such payment, (A) no Default has occurred and is continuing or would result immediately after giving effect to such payment, (B) the Borrowers shall have Revolving Availability calculated on a pro forma basis immediately after giving effect to and at all times during the 45-day period immediately prior to such payment of not less than the greater of (x) 20% of the Revolving Commitment or (y) $5,000,000, (C) the Borrowers shall have a Fixed Charge Coverage Ratio for the trailing twelve months most recently ended for which financial statements have been delivered pursuant hereto, calculated on a pro forma basis after giving effect to such payment, of not less than 1.00 to 1.00, (D) the Borrowers shall have provided written notice thereof to the Administrative Agent not less than five (5) Business Days (or such shorter period as may be approved by the Administrative Agent in its sole discretion) prior to making any such payment, and (E) before making any such payment, the Borrower Representative shall have delivered to the Administrative Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent certifying as to compliance with the items described in the foregoing clauses (A), (B) and (C) of this paragraph and attaching calculations for clauses (B) and (C); provided, that, the Loan Parties may voluntarily prepay such ABL Debt without satisfaction of the Payment Condition (1) in connection with Refinance Indebtedness in respect thereof in accordance with the terms hereof, (2) by converting or exchanging such Indebtedness for Equity Interests (other than Disqualified Stock) or (3) to the extent such payment is made with the net cash proceeds of the issuance of Equity Interests by SMG (other than Disqualified Stock); and

(ix)            other payments or prepayments of Indebtedness subject to the satisfaction of the Payment Condition (as determined by the Administrative Agent in its Permitted Discretion) with respect to each such payment.

Section 6.09.        Transactions with Affiliates. No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among any Loan Parties not involving any other Affiliate, (c) any Investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04, (g) the payment of reasonable fees to directors of any Borrower or any Subsidiary who are not employees of such Borrower or Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by a Borrower’s board of directors, and (i) compensation paid to, and indemnities provided for the benefit of, consultants of the Borrowers or their Subsidiaries in the ordinary course of business pursuant to consulting agreements approved by a Borrower’s board of directors.

Section 6.10.        Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets in favor of the Administrative Agent, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions imposed by any ABL Debt Document or Refinancing Indebtedness in respect thereof, so long as such restrictions and conditions (x) permit the Liens securing the Secured Obligations under the Loan Documents, (y) permit the Loan Parties to Guarantee the Guaranteed Obligations and (z) do not otherwise violate or contravene the terms of the Intercreditor Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the Disposition of a Subsidiary or all or substantially all of the assets of any Loan Party or any of its Subsidiaries, in each case pending such transaction, provided that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and, (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

Section 6.11.        Amendment of Certain Material Documents. No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, any Material Indebtedness (other than the ABL Debt) or its Organizational Documents, to the extent any such amendment, modification or waiver would be adverse to the Lenders or otherwise prohibited by the terms of any applicable subordination or intercreditor agreement, or (b) any other Material Agreement (other than the ABL Debt Documents), the Closing Date Transaction Agreement or any other definitive acquisition agreement executed in connection with any Permitted Acquisition, to the extent any such amendment, modification or waiver would be adverse to the Lenders in any material respect. In addition, no Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under any ABL Debt Document, except to the extent permitted by, and in accordance with, the Intercreditor Agreement.

Section 6.12.        No Interline Trust Arrangements. No Loan Party will (a) enter into any Independent Contractor Agreement or similar document or agreement (or amend an existing Independent Contractor Agreement or similar document) that (i) includes or could reasonably be expected or interpreted to create an “interline arrangement” or constructive trust, (ii) requires any Loan Party to segregate, reserve or otherwise set aside or agree to segregate, reserve or otherwise set aside proceeds of such Loan Party’s customer payments or other funds to be paid onwards to independent contractors or operators, or (iii) provides that a Person other than the relevant Loan Party is responsible for payment of fees and charges or other obligations thereunder to the independent contractor or operator, (iv)  provides the independent contractor or operator recourse to such Loan Party’s customer for non-payment by the relevant Loan Party or that conditions payment to the independent contractor or operator on the Loan Party’s receipt of payment by such Loan Party’s customer, (b) receive funds from a customer deposited into a segregated account for a particular independent contractor or operator, or otherwise maintain such funds received from a customer in a manner that is segregated or identified for a particular independent contractor or operator, or (c) make payments under any Independent Contractor Agreement or to any independent contractor or operator from a segregated account.

Section 6.13.        Financial Covenants.

(a)            Fixed Charge Coverage Ratio.  The Borrowers will not permit, as of the end of any calendar month, commencing with the twelve (12) consecutive month period ended July 31, 2023, through and including the last day of each twelve (12) consecutive month period ended thereafter, the Fixed Charge Coverage Ratio to be less than 1.00 to 1.00.

(b)            Minimum Availability. The Borrowers and their Subsidiaries will not permit Availability to be less than $3,750,000 at any time.

(c)            Minimum EBITDA. The Borrowers and their Subsidiaries will not permit, as of the end of any calendar month, commencing with the month ending July 31, 2023, EBITDA to be less than the minimum amount set forth in the following table for the applicable period set forth opposite thereto:

Period	Minimum Consolidated EBITDA
Twelve (12) consecutive month period ended July 31, 2023	$11,023,140
Twelve (12) consecutive month period ended August 31, 2023	$10,819,813
Twelve (12) consecutive month period ended September 30, 2023	$11,299,881
Twelve (12) consecutive month period ended October 31, 2023	$11,982,936
Twelve (12) consecutive month period ended November 30, 2023	$11,708,089
Twelve (12) consecutive month period ended December 31, 2023	$12,661,246
Twelve (12) consecutive month period ended January 31, 2024	$13,096,448
Twelve (12) consecutive month period ended February 29, 2024	$13,868,999
Twelve (12) consecutive month period ended March 31, 2024	$14,419,060
Twelve (12) consecutive month period ended April 30, 2024	$13,986,457

Twelve (12) consecutive month period ended May 31, 2024	$14,854,892
Twelve (12) consecutive month period ended June 30, 2024	$15,741,372
Twelve (12) consecutive month period ended July 31, 2024	$15,996,910
Twelve (12) consecutive month period ended August 31, 2024	$16,181,350
Twelve (12) consecutive month period ended September 30, 2024	$16,324,635
Twelve (12) consecutive month period ended October 31, 2024	$16,445,722
Twelve (12) consecutive month period ended November 30, 2024	$16,581,982
Twelve (12) consecutive month period ended December 31, 2024	$16,952,524
Twelve (12) consecutive month period ended January 31, 2025	$17,099,036
Twelve (12) consecutive month period ended February 28, 2025	$17,247,098
Twelve (12) consecutive month period ended March 31, 2025	$17,396,710
Twelve (12) consecutive month period ended April 30, 2025	$17,547,873
Twelve (12) consecutive month period ended May 31, 2025	$17,700,586
Twelve (12) consecutive month period ended June 30, 2025	$17,854,850
Twelve (12) consecutive month period ended July 31, 2025	$18,010,664
Twelve (12) consecutive month period ended August 31, 2025	$18,168,028
Twelve (12) consecutive month period ended September 30, 2025	$18,326,943

Twelve (12) consecutive month period ended October 31, 2025	$18,487,408
Twelve (12) consecutive month period ended November 30, 2025	$18,649,423
Twelve (12) consecutive month period ended December 31, 2025	$18,812,989
Twelve (12) consecutive month period ended January 31, 2026	$18,996,878
Twelve (12) consecutive month period ended February 28, 2026	$ 19,182,712
Twelve (12) consecutive month period ended March 31, 2026	$19,370,493
Twelve (12) consecutive month period ended April 30, 2026	$19,560,219
Twelve (12) consecutive month period ended May 31, 2026	$19,751,892
Twelve (12) consecutive month period ended June 30, 2026	$19,945,510
Twelve (12) consecutive month period ended July 31, 2026	$20,141,074

(d)            Maximum Net Capital Expenditures. The Borrowers and their Subsidiaries will not permit, as of the end of any calendar month, commencing with the month ending July 31, 2023, Net Capital Expenditures in excess of the maximum amount set forth in the following table for the applicable period set forth opposite thereto; provided that (a) any amounts raised from the proceeds of any issuance of Equity Interests of SMG in a single transaction or series of related transactions (other than amounts received in connection with an Event of Default) shall increase the amounts set forth below for the entire measurement period in which SMG receives the new proceeds of such Equity Interests so long as such amounts are used to fund Capital Expenditures within sixty (60) days of such receipt and (b) if the Borrowers do not utilize the entire amount of Net Capital Expenditures permitted in any period, the Borrowers may carry forward to the immediately succeeding period only, the lesser of (i) 50% of such unutilized amount and (ii) $1,000,000:

Period

Maximum Net Capital Expenditures

Commencing on the twelve (12) consecutive month period ended July 31, 2023 through and including the twelve (12) consecutive month period ended December 31, 2023

$3,500,000

Commencing on the twelve (12) consecutive month period ended January 31, 2024 through and including the twelve (12) consecutive month period ended December 31, 2024	$4,000,000
Commencing on the twelve (12) consecutive month period ended January 31, 2025 through and including the twelve (12) consecutive month period ended December 31, 2025	$4,500,000
Each twelve (12) consecutive month period ended thereafter	$5,000,000

ARTICLE VII

Events of Default

Section 7.01.        Events of Default. If any of the following events (“Events of Default”) shall occur:

(a)            the Borrowers shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)            the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c)            any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)            any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence), 5.08, 5.14, 5.15 or in Article VI;

(e)            any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those which constitute a default under another Section of this Article), and such failure shall continue unremedied for a period of (i) 5 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) 20 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement;

(f)            any Loan Party or Subsidiary shall fail to make any payment (whether of principal, interest or fees and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to all grace periods;

(g)            any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 7.01(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by Section 6.05;

(h)            an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)            any Loan Party or Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 7.01(h) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)            any Loan Party or Subsidiary shall become unable, admit in writing its inability, or publicly declare its intention not to, or fail generally to pay its debts as they become due;

(k)            (i) one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 (excluding any portion covered by a solvent and unaffiliated insurer that has not denied coverage) shall be rendered against any Loan Party, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or Subsidiary to enforce any such judgment; or (ii) any Loan Party or Subsidiary shall fail within sixty (60) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(l)            an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect or result in a liability of the Borrowers and their Subsidiaries in an aggregate amount exceeding $1,000,000 for all periods;

(m)            a Change in Control shall occur;

(n)            the occurrence of any “default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided (or if no specific grace period therein and except as otherwise expressly provided therein, which default or breach continues beyond 20 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent);

(o)            the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 10.08;

(p)            except as permitted by the terms of any Collateral Document or the Intercreditor Agreement, (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien (other than (x) with respect to any ABL Priority Collateral, the ABL Liens or (y) solely as a result of the failure of the Administrative Agent to take any action within its control to maintain the perfection of any Liens created in favor of the Administrative Agent for the benefit of the Secured Parties (excluding any action or inaction based on facts or circumstances for which the Administrative Agent has not been notified in contravention of the provisions of the Loan Documents));

(q)            any Collateral Document shall fail to remain in full force or effect (except pursuant to the terms of any Collateral Document) or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of any Collateral Document; or

(r)             any material provision of any Loan Document for any reason (other than as expressly permitted hereunder or thereunder) ceases to be valid, binding and enforceable in accordance with its terms in all material respects (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms in any material respect, other than as expressly permitted hereunder or thereunder);

then, and in every such event (other than an event with respect to the Borrowers described in Section 7.01(h) or 7.01(i) above), and at any time thereafter during the continuation of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by written notice to the Borrower Representative, take any or all of the following actions, at the same or different times:  (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder and under any other Loan Document, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers, and (iii)  in the case of any event with respect to the Borrowers described in Section 7.01(h) or 7.01(i) above, the principal of the Loans then outstanding, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder and under any other Loan Documents, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

The Administrative Agent

Section 8.01.        Authorization and Action.

(a)             Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender’s behalf. Without limiting the foregoing, each Lender hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, and to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

(b)            As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender; provided, however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the Lenders with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided, further, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise of any such instructed action and may refrain from acting until such clarification or direction has been provided. Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)            In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature. Without limiting the generality of the foregoing:

(i)            the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term “agent” (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby; and

(ii)           nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account.

(d)            The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

(e)             [Reserved].

(f)            In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(i)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim under Sections 2.12, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and

(ii)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03). Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

(g)            The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders, and, except solely to the extent of the Borrowers’ right to consent pursuant to and subject to the conditions set forth in this Article, no Borrower nor any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

Section 8.02.        Administrative Agent’s Reliance, Limitation of Liability, Etc.

(a)             Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (including, for the avoidance of doubt, in connection with the Administrative Agent’s reliance on any Electronic Signature transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

(b)            The Administrative Agent shall be deemed not to have knowledge of any (i) notice of any of the events or circumstances set forth or described in Section 5.02 unless and until written notice thereof stating that it is a “notice under Section 5.02” in respect of this Agreement and identifying the specific clause under said Section is given to the Administrative Agent by the Borrower Representative, or (ii) notice of any Default or Event of Default unless and until written notice thereof (stating that it is a “notice of Default” or a “notice of an Event of Default”) is given to the Administrative Agent by the Borrower Representative, a Lender. Further, the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be such items) expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

(c)            Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel (including counsel to the Borrowers), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender sufficiently in advance of the making of such Loan and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

Section 8.03.        [Reserved].

Section 8.04.        The Administrative Agent Individually. With respect to its Loans, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender, as the case may be. The terms “Lenders”, “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender or as one of the Required Lenders, as applicable. The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders.

Section 8.05.        Successor Administrative Agent.

(a)            The Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to the Lenders and the Borrower Representative, whether or not a successor Administrative Agent has been appointed. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank. In either case, such appointment shall be subject to the prior written approval of the Borrower Representative (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent. Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

(b)            Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders and the Borrowers, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties and continue to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Collateral Document, including any action required to maintain the perfection of any such security interest), and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender. Following the effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

Section 8.06.        Acknowledgements of Lenders.

(a)             Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender, in each case in the ordinary course of business, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender agrees not to assert a claim in contravention of the foregoing), (iii) it has, independently and without reliance upon the Administrative Agent or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder and (iv) it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrowers and their Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b)            Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan Document pursuant to which it shall have become a Lender hereunder.

(c)             Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to a Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys’ fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

(d)            Erroneous Payments.

(i)            Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 8.06(d) shall be conclusive, absent manifest error.

(ii)           Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(iii)          Each Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by any Borrower or any other Loan Party.

(iv)          Each party’s obligations under this Section 8.06(d) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.

Section 8.07.        Collateral Matters.

(a)             Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with respect to a Secured Party’s right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof. In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the UCC. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

(b)            [Reserved].

(c)            The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(b). The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

Section 8.08.        Credit Bidding. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

Section 8.09.        Certain ERISA Matters.

(a)             Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that at least one of the following is and will be true:

(i)            such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans or the Commitments,

(ii)           the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,

(iii)          (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-Sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or

(iv)          such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)            In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that none of the Administrative Agent or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).

(c)            The Administrative Agent hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Commitments, this Agreement and any other Loan Documents, (ii) may recognize a gain if it extended the Loans or the Commitments for an amount less than the amount being paid for an interest in the Loans or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

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Section 8.10.        Flood Laws. Great Rock has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”). Great Rock, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws. However, Great Rock reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

Section 8.11.        Merger. Any entity into which the Administrative Agent in its individual capacity may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidations which the Administrative Agent in its individual capacity may be party, or any corporation to which substantially all of the corporate trust or agency business of the Agent in its individual capacity may be transferred, shall be the Administrative Agent under this Agreement without further action.

ARTICLE IX

Miscellaneous

Section 9.01.        Notices; Approved Electronic Communications.

(a)            Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i)            if to any Loan Party, to the Borrower Representative at:

SMG Industries Inc.

20475 State Hwy 249, Suite 450

Houston, TX 77070

Attention: Matthew Flemming

Email: [***]

(ii)            if to the Administrative Agent at:

Great Rock Capital Partners Management, LLC

285 Riverside Avenue

Westport, CT 06880

Attention: Tom Keefe

Email: [***]

with a copy to (which shall not constitute notice):

Blank Rome LLP

717 Texas Avenue, Suite 1400

Houston, Texas 77002

Attention: Sarah H. Frazier

Email: Sarah.Frazier@blankrome.com

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(iii)          if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.

All such notices and other communications (A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received, (B) sent by facsimile shall be deemed to have been given when sent, provided that if not given during normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (C) delivered through Approved Electronic Communications, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

(b)            The Administrative Agent and each Lender and each of their respective Affiliates is authorized to transmit, post or otherwise make or communicate, in its sole discretion (but shall not be required to do so), by Approved Electronic Communications in connection with this Agreement or any other Loan Document and the transactions contemplated therein. Each of the Loan Parties and each Lender hereby acknowledges and agrees that the use of Approved Electronic Communications is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing Lender and each of its Affiliates to transmit Approved Electronic Communications. None of any Lender or any of its Affiliates or related persons warrants the accuracy, adequacy or completeness of any electronic platform or electronic transmission and disclaims all liability for errors or omissions therein. No warranty of any kind is made by any Lender or any of its Affiliates or related persons in connection with any electronic platform or electronic transmission, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects. Each Borrower and each other Loan Party executing this Agreement agrees that Lender has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Approved Electronic Communication or otherwise required for any Approved Electronic Communication.

(c)            No Approved Electronic Communications shall be denied legal effect merely because it is made electronically. Approved Electronic Communications that are not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such Approved Electronic Communication, an E-Signature, upon which Lender and the Loan Parties may rely and assume the authenticity thereof. Each Approved Electronic Communication containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original. Each E-Signature shall be deemed sufficient to satisfy any requirement for a “signature” and each Approved Electronic Communication shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to this Agreement, any other Loan Document, the Uniform Commercial Code, the Federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural law governing such subject matter. Each party or beneficiary hereto agrees not to contest the validity or enforceability of an Approved Electronic Communication or E-Signature under the provisions of any applicable law requiring certain documents to be in writing or signed; provided, that nothing herein shall limit such party’s or beneficiary’s right to contest whether an Approved Electronic Communication or E-Signature has been altered after transmission.

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(d)            Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

Section 9.02.        Waivers; Amendments.

(a)            No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)            Subject to Section 2.14(c), 2.14(d) and 2.14(e) and Section 9.02(e) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that, a waiver of any condition precedent set forth in Section 4.01 or the waiver of any Default or mandatory prepayment shall not constitute an increase of any Commitment of any Lender, (B) reduce or forgive the principal amount of any Loan or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender directly affected thereby (provided that (x) any amendment or modification of the financial covenants in this Agreement (or any defined term used therein) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B) and (y) only the consent of the Required Lenders shall be necessary to reduce or waive any obligation of the Borrowers to pay interest or any other amount at the applicable default rate), (C) postpone any scheduled date of payment of the principal amount of any Loan, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (D) change Section 2.18(b) or 2.18(d) in a manner that would alter the ratable reduction of Commitments or the manner in which payments are shared, without the written consent of each Lender, (E) increase the advance rates set forth in the definition of Term Loan Borrowing Base or add new categories of eligible assets, without the written consent of each Lender, (F) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender directly affected thereby, (G) release any Guarantor from its obligations under the Loan Guaranty (except as otherwise permitted herein or in the other Loan Documents, including pursuant to Section 9.02(c) below), without the written consent of each Lender, or (H) except as provided in Section 9.02(c) or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender; provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent as the case may be. The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04.

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(c)            The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations, and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Subsidiary pursuant to a transaction permitted hereby, the Administrative Agent is authorized to release any Loan Guaranty provided by such Subsidiary, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $1,000,000 during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Borrowers as to the value of any Collateral to be so released, without further inquiry). Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

(d)            If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers, the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower Representative, the Administrative Agent and the assignee, and the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

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(e)             Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower Representative only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

Section 9.03.        Expenses; Limitation of Liability; Indemnity; Etc.

(a)             Expenses. The Loan Parties shall, jointly and severally, pay all (i) reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent (but limited to one primary counsel to Administrative Agent, one local counsel to Administrative Agent in each reasonably necessary jurisdiction, and one specialty counsel to Administrative Agent in each reasonably necessary specialty area) in connection with the syndication and distribution (including, without limitation, via the internet or through any Approved Electronic Communications) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) [reserved], and (iii) out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender (but limited to one primary counsel to Administrative Agent and the Lenders, taken as a whole, one local counsel in each reasonably necessary jurisdiction, and one specialty counsel in each reasonably necessary specialty area, and in the event of any actual or potential conflict of interest, additional counsel for each group of similarly situated Persons), in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. Expenses being reimbursed by the Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with:

(A)           subject to the limitations contained herein, appraisals and insurance reviews;

(B)            subject to the limitations contained herein, field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination;

(C)            background checks regarding senior management of the Loan Parties, as deemed necessary or appropriate in the sole discretion of the Administrative Agent;

(D)           Taxes, fees and other charges for (1) lien and title searches and title insurance and (2) recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

(E)            sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

(F)            forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

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All of the foregoing fees, costs and expenses may be charged to the Borrowers as Loans or to another deposit account, all as described in Section 2.18(c).

(b)            Limitation of Liability. To the extent permitted by applicable law (i) neither any Borrower nor any Loan Party shall assert, and each Borrower and each Loan Party hereby waives, any claim against the Administrative Agent and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a “Lender-Related Person”) for any Liabilities arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof; provided that, nothing in this Section 9.03(b) shall relieve any Borrower or any Loan Party of any obligation it may have to indemnify an Indemnitee, as provided in Section 9.03(c), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

(c)             Indemnity. The Loan Parties shall, jointly and severally, indemnify the Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all Liabilities and related expenses, including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, (ii) the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (iii) any Loan or the use of the proceeds therefrom, (iv) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (v) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by a Loan Party for Taxes pursuant to Section 2.17, or (vi) any actual or prospective Proceeding relating to any of the foregoing, whether or not such Proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted primarily from (x) the gross negligence or willful misconduct of such Indemnitee or (y) the material breach in bath faith by such Indemnitee of its express obligations under this Agreement pursuant to a claim initiated by a Loan Party. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF EACH BORROWER AND EACH BORROWER AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE. This Section 9.03(c) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

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(d)            Lender Reimbursement. Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraphs (a), (b) or (c) of this Section 9.03 to the Administrative Agent, and each Related Party of any of the foregoing Persons (each, an “Agent-Related Person”) (to the extent not reimbursed by a Loan Party and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which such payment is sought under this Section (or, if such payment is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), and agrees to indemnify and hold each Agent-Related Person harmless from and against any and all Liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent-Related Person in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent-Related Person under or in connection with any of the foregoing; provided that the unreimbursed expense or Liability or related expense, as the case may be, was incurred by or asserted against such Agent-Related Person in its capacity as such; provided, further, that no Lender shall be liable for the payment of any portion of such Liabilities, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted primarily from such Agent-Related Person’s gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and Payment in Full of the Secured Obligations.

(e)            Payments. All amounts due under this Section 9.03 shall be payable promptly, and in any event not later than three (3) Business Days after written demand therefor.

Section 9.04.        Successors and Assigns.

(a)            The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by any Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)            (i)  Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)            the Borrower Representative, provided that the Borrower Representative shall be deemed to have consented to any such assignment of all or a portion of the Term Loans and Commitments unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided further that no consent of the Borrower Representative shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and

(B)             the Administrative Agent.

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Notwithstanding anything set forth to the contrary in this Agreement or any other Loan Document, Great Rock may assign, without Borrower Representative’s consent as set forth in clause (b)(i)(A) of this Section 9.04, all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) to one or more assignees, whether or not related to Great Rock.

(ii)           Assignments shall be subject to the following additional conditions:

(A)            except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower Representative and the Administrative Agent otherwise consent, provided that no such consent of the Borrower Representative shall be required if an Event of Default has occurred and is continuing;

(B)            each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(C)            the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

(D)            the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about SMG, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means (a) a natural person, (b) a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that, with respect to clause (b), such holding company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business or (c) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

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(iii)          Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv)          The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)           Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.07, 2.18(d) or 9.03(d), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)            Any Lender may, without the consent of, or notice to, the Borrowers or the Administrative Agent sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrowers, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and/or obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.17(g) will be delivered to the Borrowers and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under Section 9.04(b) above; and (B) shall not be entitled to receive any greater payment under Section 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

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Each Lender that sells a participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.19(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(b) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d)            Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a NYFRB, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.05.        Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until Payment in Full of the Obligations. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

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Section 9.06.        Counterparts; Integration; Effectiveness; Electronic Execution.

(a)            This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b)            Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of any Borrower or any other Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, each Borrower and each Loan Party hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Borrowers and the Loan Parties, Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (B) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (D) waives any claim against any Lender-Related Person for any Liabilities arising solely from the Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of any Borrower and/or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND 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.

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Section 9.07.        Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 9.08.        Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other obligations at any time owing, by such Lender or any such Affiliate, to or for the credit or the account of any Loan Party against any and all of the Secured Obligations held by such Lender or their respective Affiliates, irrespective of whether or not such Lender or their respective Affiliates shall have made any demand under the Loan Documents and although such obligations may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender different from the branch office or Affiliate holding such deposit or obligated on such indebtedness. The applicable Lender or such Affiliate shall notify the Borrower Representative and the Administrative Agent of such setoff or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff or application under this Section. The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have.

Section 9.09.        Governing Law; Jurisdiction; Consent to Service of Process.

(a)            The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

(b)            Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.

(c)             Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

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(d)            Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (c) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(e)             Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

Section 9.10.        WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 9.11.        Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

Section 9.12.        Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower Representative, (h) to any Person providing a Guarantee of all or any portion of the Secured Obligations, (i) on a confidential basis to a Lender’s current or prospective investors or other financing sources, (j) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, or any Lender on a non-confidential basis from a source other than the Borrowers, or (k) on a confidential basis to (1) any rating agency in connection with rating any Borrower or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein.

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For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to disclosure by the Borrowers and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION 9.12) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY, AND ITS AFFILIATES, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

Section 9.13.        Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Federal Reserve Board) for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

Section 9.14.        USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

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Section 9.15.        Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

Section 9.16.        Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the other Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

Section 9.17.        Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the NYFRB Rate to the date of repayment, shall have been received by such Lender.

Section 9.18.        Marketing Consent.

The Borrowers hereby authorize Great Rock and its affiliates (collectively, the “Great Rock Parties”), at their respective sole expense, and without any prior approval by the Borrowers, to include any Borrower’s name and logo in advertising, marketing, tombstones, case studies and training materials, and to give such other publicity to this Agreement as the Great Rock Parties may from time to time determine in their sole discretion. The foregoing authorization shall remain in effect unless and until the Borrower Representative notifies Great Rock in writing that such authorization is revoked.

Section 9.19.        Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)            the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(b)            the effects of any Bail-In Action on any such liability, including, if applicable:

(i)            a reduction in full or in part or cancellation of any such liability;

(ii)           a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

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(iii)          the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

Section 9.20.        No Fiduciary Duty, Etc.

(a)             Each Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to each Borrower with respect to the Loan Documents and the transactions contemplated herein and therein and not as a financial advisor or a fiduciary to, or an agent of, any Borrower or any other person. Each Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, each Borrower acknowledges and agrees that no Credit Party is advising any Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. Each Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated herein or in the other Loan Documents, and the Credit Parties shall have no responsibility or liability to any Borrower with respect thereto.

(b)            Each Borrower further acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, any Borrower and other companies with which any Borrower may have commercial or other relationships. With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

(c)             In addition, each Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which a Borrower may have conflicting interests regarding the transactions described herein and otherwise. No Credit Party will use confidential information obtained from any Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with such Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies. Each Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to any Borrower, confidential information obtained from other companies.

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Section 9.21.        [Reserved].

Section 9.22.        Joint and Several. Each Borrower hereby unconditionally and irrevocably agrees it is jointly and severally liable to the Administrative Agent and the Lenders for the Secured Obligations. In furtherance thereof, each Borrower agrees that wherever in this Agreement it is provided that a Borrower is liable for a payment, such obligation is the joint and several obligation of each Borrower. Each Borrower acknowledges and agrees that its joint and several liability under this Agreement and the Loan Documents is absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever by the Administrative Agent, any Lender or any other Person. Each Borrower’s liability for the Secured Obligations shall not in any manner be impaired or affected by who receives or uses the proceeds of the credit extended hereunder or for what purposes such proceeds are used, and each Borrower waives notice of borrowing requests issued by, and loans or other extensions of credit made to, other Borrowers. Each Borrower hereby agrees not to exercise or enforce any right of exoneration, contribution, reimbursement, recourse or subrogation available to such Borrower against any party liable for payment under this Agreement and the Loan Documents unless and until the Administrative Agent and each Lender have been paid in full and all of the Secured Obligations are satisfied and discharged following termination or expiration of all commitments of the Lenders to extend credit to the Borrowers. Each Borrower’s joint and several liability hereunder with respect to the Secured Obligations shall, to the fullest extent permitted by applicable law, be the unconditional liability of such Borrower irrespective of (i) the validity, enforceability, avoidance or subordination of any of the Secured Obligations or of any other document evidencing all or any part of the Secured Obligations, (ii) the absence of any attempt to collect any of the Secured Obligations from any other Loan Party or any Collateral or other security therefor, or the absence of any other action to enforce the same, (iii) the amendment, modification, waiver, consent, extension, forbearance or granting of any indulgence by the Administrative Agent or any Lender with respect to any provision of any instrument executed by any other Loan Party evidencing or securing the payment of any of the Secured Obligations, or any other agreement now or hereafter executed by any other Loan Party and delivered to the Administrative Agent, (iv) the failure by the Administrative Agent or any Lender to take any steps to perfect or maintain the perfected status of its Lien upon, or to preserve its rights to, any of the Collateral or other security for the payment or performance of any of the Secured Obligations or the Administrative Agent’s release of any Collateral or of its Liens upon any Collateral, (v) the release or compromise, in whole or in part, of the liability of any other Loan Party for the payment of any of the Secured Obligations, (vi) any increase in the amount of the Secured Obligations beyond any limits imposed herein or in the amount of any interest, fees or other charges payable in connection therewith, in each case, if consented to by any other Borrower, or any decrease in the same, or (vii) any other circumstance that might constitute a legal or equitable discharge or defense of any Loan Party. After the occurrence and during the continuance of any Event of Default, the Administrative Agent may proceed directly and at once, without notice to any Borrower, against any or all of Loan Parties to collect and recover all or any part of the Secured Obligations, without first proceeding against any other Loan Party or against any Collateral or other security for the payment or performance of any of the Secured Obligations, and each Borrower waives any provision that might otherwise require the Administrative Agent or the Lenders under applicable law to pursue or exhaust remedies against any Collateral or other Loan Party before pursuing such Borrower or its property. Each Borrower consents and agrees that neither the Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Loan Party or against or in payment of any or all of the Secured Obligations.

ARTICLE X

Loan Guaranty

Section 10.01.      Guaranty. Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and outside attorneys’ and paralegals’ fees and expenses paid or incurred by the Administrative Agent and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”. Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

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Section 10.02.      Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent or any Lender to sue any Borrower, any Loan Guarantor, any other guarantor of, or any other Person obligated for, all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

Section 10.03.      No Discharge or Diminishment of Loan Guaranty.

(a)             Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than Payment in Full of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, any Lender or any other Person, whether in connection herewith or in any unrelated transactions.

(b)            The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

(c)            Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than Payment in Full of the Guaranteed Obligations).

Section 10.04.      Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower, any Loan Guarantor or any other Obligated Party, other than Payment in Full of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party or any other Person. Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been Paid in Full. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

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Section 10.05.      Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has against any Obligated Party or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent and the Lenders.

Section 10.06.      Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

Section 10.07.      Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

Section 10.08.      Termination. Each of the Lenders may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under Article VII hereof as a result of any such notice of termination.

Section 10.09.      Taxes. Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law. If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent or any Lender (as the case may be) receives the amount it would have received had no such withholding been made.

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Section 10.10.       Maximum Liability. Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law. In determining the limitations, if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

Section 10.11.      Contribution.

(a)            To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor Payments then previously or concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Loan Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment and the Payment in Full of the Guaranteed Obligations and the termination of this Agreement, such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

(b)            As of any date of determination, the “Allocable Amount” of any Loan Guarantor shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan Guarantors as of such date in a manner to maximize the amount of such contributions.

(c)            This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

(d)            The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and indemnification is owing.

(e)            The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations and the termination of this Agreement.

Section 10.12.      Liability Cumulative. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

120

ARTICLE XI

The Borrower Representative

Section 11.01.       Appointment; Nature of Relationship. SMG is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in the Loan Account, at which time the Borrower Representative shall promptly disburse such Loans to the appropriate Borrower(s). The Administrative Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 11.01.

Section 11.02.      Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

Section 11.03.      Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.

Section 11.04.      Notices. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Event of Default hereunder referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Administrative Agent and the Lenders. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.

Section 11.05.      Successor Borrower Representative. Upon the prior written consent of the Administrative Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative. The Administrative Agent shall give prompt written notice of such resignation to the Lenders.

Section 11.06.      Execution of Loan Documents; Term Loan Borrowing Base Certificate. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including, without limitation, the Term Loan Borrowing Base Certificates and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

121

Section 11.07.      Reporting. Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to the Borrower Representative a copy of its Term Loan Borrowing Base Certificate and any other certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Term Loan Borrowing Base Certificates and Compliance Certificate required pursuant to the provisions of this Agreement

Section 11.08.      Intercreditor Agreement. The Administrative Agent and each Lender hereunder, by its acceptance of the benefits provided hereunder, (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and (c) authorizes and instructs the Administrative Agent to enter into the Intercreditor Agreement as the Term Loan Representative (as defined in the Intercreditor Agreement) on behalf of each Lender.

(Signature Pages Follow)

122

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above written.

	Borrowers:

	SMG Industries Inc.

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Interim CEO

	5J DRIVEAWAY LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J LOGISTICS SERVICES LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J OILFIELD SERVICES, LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J SPECIALIZED LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J TRANSPORTATION LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

Signature Page to Credit Agreement

	5J TRUCKING, LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	BARNHART FLEET MAINTENANCE, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	BARNHART TRANSPORTATION, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LAKE SHORE GLOBAL SOLUTIONS LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LAKE SHORE LOGISTICS, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LEGEND EQUIPMENT LEASING, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	ROUTE 20 TANK WASH LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

Signature Page to Credit Agreement

	LOAN GUARANTORS:

	SKYLINE HOLDING,INC.

	By	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

Signature Page to Credit Agreement

	GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC, as the Administrative Agent

	By	/s/ Kathleen Auda
	Name:	Kathleen Auda
	Title:	Chief Risk Officer

	GRC SPV INVESTMENTS, LLC, as a Lender

	By	/s/ Kathleen Auda
	Name:	Kathleen Auda
	Title:	Chief Risk Officer

Signature Page to Credit Agreement

COMMITMENT SCHEDULE

Lender	Term Loan Commitment
GRC SPV INVESTMENTS, LLC	$31,686,058.00
Total	$31,686,058.00

Exhibit 10.4

Execution Version

CREDIT AGREEMENT

dated as of

July 7, 2023

among

SMG Industries Inc.,

5J DRIVEAWAY LLC

5J Logistics Services LLC,

5J Oilfield Services, LLC,

5J Specialized LLC,

5J Transportation LLC,

5J Trucking, LLC,

and, upon consummation of the Barnhart Acquisition,

Barnhart Transportation, LLC,

Barnhart Fleet Maintenance, LLC,

Lake Shore Global Solutions LLC,

Lake Shore Logistics, LLC,

Legend Equipment Leasing, LLC and

Route 20 Tank Wash LLC

as Borrowers,

The Other Loan Parties Party Hereto

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

JPMORGAN CHASE BANK, N.A.,

as Sole Bookrunner and Sole Lead Arranger

ASSET BASED LENDING

TABLE OF CONTENTS

Page

ARTICLE I Definitions	1

Section 1.01. Defined Terms	1
Section 1.02. Classification of Loans and Borrowings	44
Section 1.03. Terms Generally	45
Section 1.04. Accounting Terms; GAAP	45
Section 1.05. Interest Rates; Benchmark Notifications	46
Section 1.06. Pro Forma Adjustments for Acquisitions and Dispositions	46
Section 1.07. Status of Obligations	46
Section 1.08. Letters of Credit	47
Section 1.09. Divisions	47

ARTICLE II The Credits	47

Section 2.01. Commitments	47
Section 2.02. Loans and Borrowings	47
Section 2.03. Requests for Borrowings	48
Section 2.04. Protective Advances	49
Section 2.05. Swingline Loans and Overadvances	49
Section 2.06. Letters of Credit	51
Section 2.07. Funding of Borrowings	56
Section 2.08. Interest Elections	56
Section 2.09. Termination and Reduction of Commitments; Increase in Revolving Commitments	57
Section 2.10. Repayment of Loans; Evidence of Debt	59
Section 2.11. Prepayment of Loans	60
Section 2.12. Fees	61
Section 2.13. Interest	62
Section 2.14. Alternate Rate of Interest; Illegality	63
Section 2.15. Increased Costs	65
Section 2.16. Break Funding Payments	66
Section 2.17. Withholding of Taxes; Gross-Up	67
Section 2.18. Payments Generally; Allocation of Proceeds; Sharing of Setoffs	70
Section 2.19. Mitigation Obligations; Replacement of Lenders	73
Section 2.20. Defaulting Lenders	73
Section 2.21. Returned Payments	76
Section 2.22. Banking Services and Swap Agreements	76

ARTICLE III Representations and Warranties	76

Section 3.01. Organization; Powers	76
Section 3.02. Authorization; Enforceability	76
Section 3.03. Governmental Approvals; No Conflicts	77
Section 3.04. Financial Condition; No Material Adverse Change	77
Section 3.05. Properties	77
Section 3.06. Litigation and Environmental Matters	78
Section 3.07. Compliance with Laws and Agreements; No Default	78
Section 3.08. Investment Company Status	78
Section 3.09. Taxes	78
Section 3.10. ERISA	78

Section 3.11. Disclosure	79
Section 3.12. Material Agreements	79
Section 3.13. Solvency	79
Section 3.14. Insurance	80
Section 3.15. Capitalization and Subsidiaries	80
Section 3.16. Security Interest in Collateral	80
Section 3.17. Employment Matters	80
Section 3.18. Margin Regulations	80
Section 3.19. Use of Proceeds	81
Section 3.20. No Burdensome Restrictions	81
Section 3.21. Anti-Corruption Laws and Sanctions	81
Section 3.22. [Reserved]	81
Section 3.23. Common Enterprise	81
Section 3.24. Affected Financial Institutions	81
Section 3.25. Plan Assets; Prohibited Transactions	81

ARTICLE IV Conditions	81

Section 4.01. Effective Date	81
Section 4.02. Each Credit Event	85

ARTICLE V Affirmative Covenants	86

Section 5.01. Financial Statements; Borrowing Base and Other Information	86
Section 5.02. Notices of Material Events	90
Section 5.03. Existence; Conduct of Business	91
Section 5.04. Payment of Obligations	91
Section 5.05. Maintenance of Properties	91
Section 5.06. Books and Records; Inspection Rights	92
Section 5.07. Compliance with Laws and Material Contractual Obligations	92
Section 5.08. Use of Proceeds	92
Section 5.09. Accuracy of Information	93
Section 5.10. Insurance	93
Section 5.11. Casualty and Condemnation	93
Section 5.12. Appraisals	93
Section 5.13. Depository Banks	93
Section 5.14. Additional Collateral; Further Assurances	93
Section 5.15. Post-Closing Obligations	95

ARTICLE VI Negative Covenants	95

Section 6.01. Indebtedness	95
Section 6.02. Liens	97
Section 6.03. Fundamental Changes	98
Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions	99
Section 6.05. Asset Sales	101
Section 6.06. Sale and Leaseback Transactions	102
Section 6.07. Swap Agreements	102
Section 6.08. Restricted Payments; Certain Payments of Indebtedness	102
Section 6.09. Transactions with Affiliates	104
Section 6.10. Restrictive Agreements	104
Section 6.11. Amendment of Certain Material Documents	105
Section 6.12. No Interline Trust Arrangements	105
Section 6.13. Financial Covenants	105

iii

ARTICLE VII Events of Default	106

ARTICLE VIII The Administrative Agent	109

Section 8.01. Authorization and Action	109
Section 8.02. Administrative Agent’s Reliance, Limitation of Liability, Etc	111
Section 8.03. Posting of Communications	112
Section 8.04. The Administrative Agent Individually	113
Section 8.05. Successor Administrative Agent	114
Section 8.06. Acknowledgements of Lenders and Issuing Bank	115
Section 8.07. Collateral Matters	117
Section 8.08. Credit Bidding	117
Section 8.09. Certain ERISA Matters	118
Section 8.10. Flood Laws	119

ARTICLE IX Miscellaneous	119

Section 9.01. Notices	120
Section 9.02. Waivers; Amendments	121
Section 9.03. Expenses; Limitation of Liability; Indemnity; Etc	123
Section 9.04. Successors and Assigns	126
Section 9.05. Survival	129
Section 9.06. Counterparts; Integration; Effectiveness; Electronic Execution	129
Section 9.07. Severability	131
Section 9.08. Right of Setoff	131
Section 9.09. Governing Law; Jurisdiction; Consent to Service of Process	131
Section 9.10. WAIVER OF JURY TRIAL	132
Section 9.11. Headings	132
Section 9.12. Confidentiality	132
Section 9.13. Several Obligations; Nonreliance; Violation of Law	133
Section 9.14. USA PATRIOT Act	133
Section 9.15. Disclosure	134
Section 9.16. Appointment for Perfection	134
Section 9.17. Interest Rate Limitation	134
Section 9.18. Marketing Consent	134
Section 9.19. Acknowledgement and Consent to Bail-In of Affected Financial Institutions	134
Section 9.20. No Fiduciary Duty, Etc	135
Section 9.21. Acknowledgement Regarding Any Supported QFCs	135
Section 9.22. Joint and Several	136

ARTICLE X Loan Guaranty	137

Section 10.01. Guaranty	137
Section 10.02. Guaranty of Payment	137
Section 10.03. No Discharge or Diminishment of Loan Guaranty	137
Section 10.04. Defenses Waived	138
Section 10.05. Rights of Subrogation	138
Section 10.06. Reinstatement; Stay of Acceleration	139
Section 10.07. Information	139
Section 10.08. Termination	139
Section 10.09. Taxes	139
Section 10.10. Maximum Liability	139
Section 10.11. Contribution	140
Section 10.12. Liability Cumulative	140

Section 10.13. Keepwell	140

ARTICLE XI The Borrower Representative	141

Section 11.01. Appointment; Nature of Relationship	141
Section 11.02. Powers	141
Section 11.03. Employment of Agents	141
Section 11.04. Notices	141
Section 11.05. Successor Borrower Representative	141
Section 11.06. Execution of Loan Documents; Borrowing Base Certificate	141
Section 11.07. Reporting	142

SCHEDULES:

Commitment Schedule
Schedule 3.05	--	Properties
Schedule 3.06	--	Disclosed Matters
Schedule 3.12		Material Agreements
Schedule 3.14	--	Insurance
Schedule 3.15	--	Capitalization and Subsidiaries
Schedule 3.22	--	Affiliate Transactions
Schedule 5.15	--	Post-Closing Obligations
Schedule 6.01	--	Existing Indebtedness
Schedule 6.02	--	Existing Liens
Schedule 6.04	--	Existing Investments
Schedule 6.10	--	Existing Restrictions

EXHIBITS:

Exhibit A	--	Form of Assignment and Assumption
Exhibit B	--	Form of Borrowing Base Certificate
Exhibit C	--	Form of Compliance Certificate
Exhibit D	--	Form of Joinder Agreement
Exhibit E-1	--	U.S. Tax Certificate (For Foreign Lenders that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-2	--	U.S. Tax Certificate (For Foreign Participants that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-3	--	U.S. Tax Certificate (For Foreign Participants that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E-4	--	U.S. Tax Certificate (For Foreign that are Partnerships for U.S. Federal Income Tax Purposes)

CREDIT AGREEMENT dated as of July 7, 2023 (as it may be amended or modified from time to time, this “Agreement”) among SMG Industries Inc., a Delaware corporation (“SMG”), 5J Trucking, LLC, a Texas limited liability company (“5J Trucking, LLC”), 5J Oilfield services, LLC, a Texas limited liability company (“5J Oilfield Services”), 5J Specialized LLC, a Texas limited liability company (“5J Specialized”), 5J Transportation LLC, a Texas limited liability company (“5J Transportation”), 5J Logistics Services LLC, a Texas limited liability company (“5J Logistics”), 5J DRIVEAWAY LLC, a Texas Limited Liability company (“5J Driveaway”) and, upon consummation of the Barnhart Acquisition, Barnhart Transportation, LLC, a Pennsylvania limited liability company (“Barnhart Transportation”), LEGEND EQUIPMENT LEASING, LLC, a Pennsylvania limited liability company (“Barnhart Leasing”), BARNHART FLEET MAINTENANCE, LLC, a Pennsylvania limited liability company (“Maintenance”), Route 20 Tank Wash LLC, a Pennsylvania limited liability company (“Tank Wash”), Lake Shore Logistics, LLC, a Pennsylvania limited liability company (“Barnhart Logistics”), and Lake Shore Global Solutions LLC, a Pennsylvania limited liability company (“Global Solutions”), as Borrowers, Skyline Holding, Inc., a Delaware corporation (“Skyline”), as a Loan Guarantor, the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

PRELIMINARY STATEMENTS:

(1)            Contemporaneously with the transactions contemplated by this Agreement, the Loan Parties are entering into the Barnhart Acquisition Agreement and consummating a series of transactions pursuant to which, among other things (a) SMG will acquire the Barnhart Target Companies and (b) SMG will cause Skyline Merger Sub, Inc., a Delaware corporation, to merge with and into Legend Holding with Legend Holding surviving as a wholly-owned subsidiary of SMG, after which SMG will cause Legend Holding to merge with and into Skyline with Legend Holding ceasing to exist and Skyline surviving as a wholly-owned subsidiary of SMG (the “Skyline Merger”).

(2)            The Borrowers have requested that the Lenders extend credit to the Borrowers to (a) refinance certain existing Indebtedness, (b) facilitate the consummation of the Barnhart Acquisition, (c) to pay fees and expenses in connection with the closing of this Agreement and the Transactions, and (d) for working capital and general corporate purposes.

AGREEMENT:

In consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“5J Driveaway” has the meaning assigned to such term in the introductory paragraph.

“5J Logistics” has the meaning assigned to such term in the introductory paragraph.

“5J Oilfield Services” has the meaning assigned to such term in the introductory paragraph.

“5J Specialized” has the meaning assigned to such term in the introductory paragraph.

“5J Transportation” has the meaning assigned to such term in the introductory paragraph.

“5J Trucking” has the meaning assigned to such term in the introductory paragraph.

“ABR”, when used in reference to: (a) a rate of interest, refers to the Adjusted REVSOFR30 Rate, and (b) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted REVSOFR30 Rate.

“Account” has the meaning assigned to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

“Adjusted Daily Simple SOFR” means an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%; provided that if the Adjusted Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Adjusted REVSOFR30 Rate” (i) means an interest rate per annum equal to (a) the REVSOFR30 Rate plus (b) 0.10%; provided that (x) if the Adjusted REVSOFR30 Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement and (y) if the REVSOFR30 Rate shall not be available, then the Adjusted REVSOFR30 Rate shall be equal to the Alternate Base Rate (unless an alternate rate is established in accordance with Section 2.14); and (ii) when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted REVSOFR30 Rate.

“Adjusted Term SOFR Rate” means, for any Interest Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Interest Period, plus (b) 0.10%; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

“Administrative Agent” means JPMorgan Chase Bank, N.A. (or any of its designated branch offices or affiliates), in its capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“Agent-Related Person” has the meaning assigned to it in Section 9.03(d).

“Aggregate Credit Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders at such time.

“Aggregate Revolving Commitment” means, at any time, the aggregate of the Revolving Commitments of all of the Lenders, as increased or reduced from time to time pursuant to the terms and conditions hereof. As of the Effective Date, the Aggregate Revolving Commitment is $25,000,000.

“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders at such time.

“Agreement” has the meaning specified in introductory paragraph hereof.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day plus 1%, provided that, for the purpose of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.14(b)), then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1.0%, such rate shall be deemed to be 1.0% for purposes of this Agreement.

“Ancillary Document” has the meaning assigned to it in Section 9.06(b).

“Annualized Basis” means, for purposes of calculating any amount for any period ending before twelve (12) full calendar months have elapsed after the Effective Date, the product of (a) the actual amount of such item during such period, multiplied by (b) a ratio, the numerator of which is twelve (12), and the denominator of which is the number of full calendar months that have elapsed after the Effective Date through the end of such period.

“Applicable Parties” has the meaning assigned to it in Section 8.03(c).

“Applicable Percentage” means, with respect to any Lender, (a) with respect to Revolving Loans, LC Exposure, Overadvances or Swingline Loans, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Commitment and the denominator of which is the Aggregate Revolving Commitment (provided that, if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the Aggregate Revolving Exposure at that time), and (b) with respect to Protective Advances or with respect to the Aggregate Credit Exposure, a percentage based upon its share of the Aggregate Credit Exposure and the unused Commitments; provided that, in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s Commitment shall be disregarded in the calculations under clauses (a) and (b) above.

“Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR / Alternate Base Rate Spread” (for ABR Loans when ABR is determined by reference to the Alternate Base Rate), the “ABR / REVSOFR30 Spread” (for ABR Loans when ABR is determined by reference to the Adjusted REVSOFR30 Rate), “Term Benchmark Spread”, as the case may be, based upon the Leverage Ratio as of the most recent determination date, provided that, the “Applicable Rate” shall be the applicable rates per annum set forth below in Category 1 during the period from the Effective Date to, and including, the last day of the fiscal quarter of SMG ending on March 31, 2024:

Leverage Ratio	ABR / Alternate Base Rate Spread	ABR / REVSOFR30 Spread	Term Benchmark Spread
Category 1 ≥ 3.0 to 1.0	1.50%	2.50%	2.50%
Category 2 < 3.0 to 1.0	1.25%	2.25%	2.25%

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of SMG based upon SMG’s annual or monthly consolidated financial statements delivered pursuant to Section 5.01 for the last month of each fiscal quarter of SMG, and (b) each change in the Applicable Rate resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the first Business Day of the month following the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Leverage Ratio shall be deemed to be in Category 1 at the option of the Administrative Agent or at the request of the Required Lenders if the Borrowers fail to deliver the annual or monthly consolidated financial statements required to be delivered by it pursuant to Section 5.01 for the last month of any fiscal quarter of SMG, during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that such financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise) and (x) a proper calculation would have resulted in a higher Applicable Rate, the Borrowers shall be required to retroactively pay any additional amount that the Borrowers would have been required to pay if such financial statements had been accurate at the time they were delivered or (y) a proper calculation would have resulted in a lower Applicable Rate, so long as no Event of Default shall have occurred and be continuing, upon written request from Borrower, the Administrative Agent shall apply a credit against the Borrowers’ succeeding interest payments equal to the difference between the amount that was actually paid and the amount that would have been paid, provided that, in the case of this clause (y), such readjustment shall be limited to the time period covered by the most recently ended fiscal quarter of SMG. For the avoidance of doubt, the Administrative Agent shall have no responsibility or obligation to determine the accuracy of any such financial statements.

“Approved Electronic Platform” has the meaning assigned to it in Section 8.03(a).

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Arranger” means JPMorgan Chase Bank, N.A. in its capacity as sole bookrunner and sole lead arranger hereunder.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

“Availability” means, at any time, an amount equal to (a) the lesser of (i) the Aggregate Revolving Commitment and (ii) the Borrowing Base, minus (b) the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings), all as determined by the Administrative Agent in its Permitted Discretion.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“Available Revolving Commitment” means, at any time, the Aggregate Revolving Commitment minus the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Banking Services” means each and any of the following bank services provided to any Loan Party or its Subsidiaries by JPMCB or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, cash pooling services, and interstate depository network services).

“Banking Services Obligations” means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Banking Services Reserves” means all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any order for relief in such proceeding entered in respect thereof, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Barnhart Acquisition” means the acquisition of all of the Equity Interests of the Barnhart Target Companies by SMG pursuant to the Barnhart Acquisition Agreement, and the consummation of the related transactions contemplated thereunder to occur on the Effective Date.

“Barnhart Acquisition Agreement” means that certain Transaction Agreement dated as of the Effective Date, by and among the Barnhart Target Companies, SMG, Legend Holding, the Barnhart Sellers, and the other parties party thereto, together with all schedules, exhibits and other attachments thereto.

“Barnhart Acquisition Documents” means the Barnhart Acquisition Agreement and all agreements, documents instruments executed or delivered pursuant thereto or in connection therewith (other than the Loan Documents or the Term Loan Debt Documents).

“Barnhart Leasing” has the meaning assigned to such term in the introductory paragraph.

“Barnhart Logistics” has the meaning assigned to such term in the introductory paragraph.

“Barnhart Seller Note” means that certain Subordinated Promissory Note dated as of the Effective Date, issued by SMG in favor of Timothy W. Barnhart, Seller Representative, as payee, in the original principal amount of $3,000,000, which shall constitute Subordinated Indebtedness, as the same may be amended, restated or otherwise modified from time to time, to the extent permitted in this Agreement.

“Barnhart Sellers” means, collectively, Bryan S. Barnhart, Timothy W. Barnhart and Timothy W. Barnhart, in his capacity as Trustee of the Timothy W. Barnhart 2017 Revocable Trust.

“Barnhart Target Companies” means, collectively, Barnhart Transportation, LLC, Barnhart Fleet Maintenance, LLC, Lake Shore Global Solutions LLC, Lake Shore Logistics, LLC, Legend Equipment Leasing, LLC, and Route 20 Tank Wash LLC, each a Pennsylvania limited liability company, and each individually is a “Barnhart Target Company”.

“Barnhart Transportation” has the meaning assigned to such term in the introductory paragraph.

“Benchmark” means, initially, with respect to any (i) Adjusted REVSOFR30 Rate Loan, the REVSOFR30 Rate or (ii) Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the REVSOFR30 Rate or Term SOFR Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.14(d).

(1)            the Adjusted Daily Simple SOFR;

(2)            the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower Representative as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower Representative for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan or Adjusted REVSOFR30 Rate Loan, any technical, administrative or operational changes (including changes to the definition of “ABR”, “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1)            in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2)            in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Blocking Regulation” has the meaning assigned to it in Section 3.21.

“Borrower” or “Borrowers” means, individually or collectively, SMG, 5J Logistics, 5J Oilfield Services, 5J Specialized, 5J Transportation, 5J Trucking, 5J Driveaway and, upon consummation of the Barnhart Acquisition, Barnhart Transportation, Barnhart Leasing, Maintenance, Tank Wash, Barnhart Logistics, Global Solutions and each Subsidiary of SMG that becomes a party to this Agreement as a “Borrower” after the Effective Date pursuant to Section 5.14, in each case, until such time as any such Person is released from its obligations under the Loan Documents in accordance with this Agreement.

“Borrower Representative” has the meaning assigned to such term in Section 11.01.

“Borrowing” means (a) a Revolving Borrowing, (b) a Swingline Loan, (c) a Protective Advance and (d) an Overadvance.

“Borrowing Base” means, at any time, the sum of (a) 90% of the Borrowers’ Eligible Accounts at such time, minus (b) Reserves. The Administrative Agent may, in its Permitted Discretion, establish or adjust Reserves, reduce the advance rates set forth above, or reduce one or more of the other elements used in computing the Borrowing Base. If any Accounts acquired in connection with an Acquisition are proposed to be included in the determination of the Borrowing Base, the Administrative Agent shall have conducted a field examination of such Accounts, the results of which shall be satisfactory to the Administrative Agent, and any such field examination shall be disregarded for purposes of the limits on the frequency of field examinations contained in Section 5.06.

“Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit B or another form which is acceptable to the Administrative Agent in its sole discretion.

“Borrowing Request” means a request by the Borrower Representative for a Revolving Borrowing in accordance with Section 2.03.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in Section 6.10(a) or 6.10(b).

“Business Day” means any day (other than a Saturday or a Sunday) on which banks are open for business in New York City or Chicago; provided that, in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings of such RFR Loan, any such day that is only an U.S. Government Securities Business Day.

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of SMG; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of SMG by Persons who were not (i) directors of SMG on the date of this Agreement, nominated, appointed or approved for consideration by shareholders for election by the board of directors of SMG, (ii) approved by the board of directors of SMG as director candidates prior to their election, nor (iii) appointed by directors so nominated, appointed or approved; or (c) SMG shall cease to own, free and clear of all Liens or other encumbrances, directly or indirectly, at least 100% (other than directors’ qualifying shares) of the outstanding voting Equity Interests of any other Borrower on a fully diluted basis (other than pursuant to a transaction expressly permitted by this Agreement).

“Change in Law” means the occurrence after the date of this Agreement of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Protective Advances or Overadvances.

“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term SOFR (or a successor administrator).

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

“Collection Account” has the meaning assigned to such term in the Security Agreement.

“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding commercial Letters of Credit plus (b) the aggregate amount of all LC Disbursements relating to commercial Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers. The Commercial LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate Commercial LC Exposure at such time.

“Commitment” means, with respect to each Lender, the sum of such Lender’s Revolving Commitment, together with the commitment of such Lender to acquire participations in Protective Advances hereunder. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Commitment Fee Rate” means, for any day, a per annum rate equal to (a) 0.50% if average daily Aggregate Revolving Exposure during the preceding calendar quarter was less than or equal to 50% of the Aggregate Revolving Commitments as of the end of such calendar quarter, or (b) 0.375% if average daily Aggregate Revolving Exposure during the preceding calendar quarter was greater than 50% of the Aggregate Revolving Commitments as of the end of such calendar quarter; provided, that, until the first Business Day of the calendar month following the first full calendar quarter ending after the Effective Date, the “Commitment Fee Rate” shall be 0.50% per annum. For purposes of the foregoing, (i) the Commitment Fee Rate shall be determined by the Administrative Agent as of the end of each calendar quarter and (ii) each change in the Commitment Fee Rate shall be effective during the period commencing on and including the first Business Day of the calendar quarter following the determination by the Administrative Agent of such change and ending on the date immediately preceding the effective date of the next such change; provided that the Commitment Fee Rate shall be deemed to be 0.50% per annum at the option of the Administrative Agent or Required Lenders if the Borrower Representative fails to deliver the Borrowing Base Certificate required to be delivered by it pursuant to Section 5.01(f) during the period from the expiration of the time for delivery thereof until such Borrowing Base Certificate is delivered.

“Commitment Schedule” means the Schedule attached hereto identified as such.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” has the meaning assigned to such term in Section 8.03(c).

“Compliance Certificate” means a certificate of a Financial Officer of the Borrower Representative in substantially the form of Exhibit C.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Controlled Disbursement Account” means any account of the Borrowers maintained with the Administrative Agent as a cash management account with a unique ABA routing number which effectively limits the number and frequency of daily check presentments pursuant to and under any agreement between a Borrower and the Administrative Agent, as modified and amended from time to time, and through which all or substantially all check disbursements of a Borrower, any other Loan Party and any designated Subsidiary of a Borrower are made and settled on a daily basis with no uninvested balance remaining overnight.

“Covered Entity” means any of the following:

(i)             a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii)            a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii)           a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning assigned to it in Section 9.21.

“Cox Note” means that certain 6% Secured Promissory Note, dated December 7, 2018, issued by SMG in favor of Denice Cox in the original principal amount of $800,000.

“Cox Subordination Agreement” means that certain Subordination Agreement, dated as of the Effective Date, by and among Denice Cox, the Administrative Agent and the Term Loan Agent, as amended from time to time.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrowers.

“DDA Access Product” means the bank service provided to any Loan Party by JPMCB in its sole discretion consisting of direct access to schedule payments from the Funding Account by electronic, internet or other access mechanisms that may be agreed upon from time to time by JPMCB and the funding of such payments under the Loan Borrowing Option in the DDA Access Product Agreement.

“DDA Access Product Agreement” means JPMCB’s Treasury Services End of Day Investment & Loan Sweep Service Terms, as in effect on the date of this Agreement, as the same may be amended from time to time.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied; (b) has notified any Borrower or any Credit Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations as of the date of certification) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.

“Deficiency Funding Date” has the meaning assigned to such term in Section 2.05(a).

“Dilution Factors” shall mean, without duplication, with respect to any period, the aggregate amount of all deductions, credit memos, returns, adjustments, allowances, bad debt write-offs and other non-cash credits which are recorded to reduce accounts receivable in a manner consistent with current and historical accounting practices of the Borrowers, but excluding any such items that are subsequently billed pursuant to a credit rebill within five (5) Business Days after the date of the applicable invoice such that any accounts receivable are not reduced.

“Dilution Percentage” shall mean, at any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended fiscal months divided by (b) total gross sales for the twelve (12) most recently ended fiscal months.

“Dilution Reserve” shall mean a reserve established by the Administrative Agent in its Permitted Discretion from time to time in an amount equal to the product of (a) the amount by which the Dilution Percentage exceeds 2.50% (if any), multiplied by (b) the Eligible Accounts.

“Disclosed Matters” means the actions, suits, proceedings and environmental matters disclosed in Schedule 3.06.

“Disqualified Stock” means any Equity Interests which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the date which is 180 days after the Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) cash, (ii) debt securities or (iii) any Equity Interests referred to in clause (a) above, in each case at any time prior to the date which is 180 days after the Maturity Date. Notwithstanding the foregoing, any Equity Interests that would constitute Disqualified Stock solely because holders of the Equity Interests have the right to require the issuer of such Equity Interests to repurchase such Equity Interests upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Equity Interests provide that the issuer may not repurchase or redeem any such Equity Interests pursuant to such provisions unless such repurchase or redemption is permitted under the terms of this Agreement.

“Dividing Person” has the meaning assigned to it in the definition of “Division.”

“Document” has the meaning assigned to such term in the Security Agreement.

“Dollars”, “dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the U.S.

“Dominion Period” means any period (a) commencing (i) during which any Event of Default has occurred and is continuing, or (ii) at any time when Availability is less than the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments, in each case, as determined by Administrative Agent in its Permitted Discretion, and (b) ending when (i) no Event of Default has existed for a period of sixty (60) consecutive calendar days and (ii) Availability shall have been at least equal to the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments for a period of sixty (60) consecutive calendar days, in each case, as determined by Administrative Agent in its Permitted Discretion.

“EBITDA” means, for any period, for SMG and its Subsidiaries on a consolidated basis, the sum of:

(a) Net Income for such period, plus

(b) without duplication and to the extent deducted in determining Net Income for such period, the sum of:

(i)             Interest Expense for such period,

(ii)            income tax expense for such period net of tax refunds,

(iii)           all depreciation expense for such period,

(iv)           all amortization expense for such period,

(v)            out-of-pocket transaction costs incurred in connection with the transactions contemplated by this Agreement to occur on or before the Effective Date in an amount not to exceed $3,000,000, unless otherwise approved in writing by Administrative Agent in its Permitted Discretion, and reasonable out-of-pocket costs and expenses incurred (or reimbursed) in connection with any amendment, waiver or other modification to this Agreement or the Term Loan Agreement,

(vi)           any non-recurring fees, cash charges and other cash expenses (including severance costs) made or incurred in connection with the Barnhart Acquisition that are paid or otherwise accounted for within 90 days of the consummation of the Barnhart Acquisition in an amount not to exceed $500,000,

(vii)          out-of-pocket costs, fees and expenses payable to non-Affiliates of any Loan Party and incurred in connection with any Permitted Acquisition, permitted investment, permitted issuance of equity, permitted asset disposition or permitted issuance of debt, in each case, to the extent permitted by the Credit Documents, whether or not consummated; provided, that, the amount of such costs, fees and expenses associated with any such transactions that are not consummated shall not exceed $250,000 in any trailing twelve-month period,

(viii)         non-cash charges (including non-cash charges from asset sales or Acquisition-related non-cash charges, but excluding any non-cash charge that relates to the write-down or write-off of accounts),

(ix)           costs, fees and expenses paid or reimbursed by any Loan Party to independent directors in an aggregate amount not to exceed $100,000 during any twelve (12) month period,

(x)            other non-recurring charges paid in cash during such period which are infrequent or unusual in nature (as determined in accordance with GAAP) and approved by the Administrative Agent in its Permitted Discretion.

minus (c) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (b)(viii) taken in a prior period, (ii) any non-cash or non-operating income and (iii) any non-recurring gains which are infrequent or unusual in nature (as determined in accordance with GAAP).

Notwithstanding the foregoing, (x) the amount included in the calculation of EBITDA pursuant to clause (b)(x) in the aggregate for any measurement period shall not exceed twenty percent (20%) of EBITDA for such measurement period (calculated prior to adding any amounts described in such clause), and (y) for each of the monthly periods set forth below, EBITDA shall be deemed to be the amount set forth opposite such monthly period:

Monthly Period Ended	EBITDA
May 31, 2022	$1,254,906
June 30, 2022	$1,798,235
July 31, 2022	$615,284
August 31, 2022	$1,812,861
September 30, 2022	$1,025,635
October 31, 2022	$815,224
November 30, 2022	$2,009,212
December 31, 2022	$196,929
January 31, 2023	$1,394,495
February 28, 2023	$757,001
March 31, 2023	$571,391
April 30, 2023	$2,426,840

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“EIDL Note-Momentum” means that certain Note, dated June 17, 2020, issued by Momentum in favor of the Small Business Administration in the original principal amount of $90,000.

“EIDL Note-Trinity” means that certain Note, dated May 27, 2020, issued by Trinity in favor of the Small Business Administration in the original principal amount of $150,000.

“EIDL Notes” means, collectively, the EIDL Note-Momentum and the EIDL Note-Trinity.

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for such Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or any Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Eligible Accounts” means, at any time, the Accounts of a Borrower which the Administrative Agent determines in its Permitted Discretion are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below as the basis for the extension of Revolving Loans and Swingline Loans and the issuance of Letters of Credit. Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account of a Borrower:

(a)            which is not subject to a first priority perfected security interest in favor of the Administrative Agent;

(b)            which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent, (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent, and (iii) a Term Loan Lien which is subordinated to the priority of the Lien in favor of the Administrative Agent pursuant to the Intercreditor Agreement;

(c)            (i) with respect to which the scheduled due date is more than 60 days after the date of the original invoice therefor (or 120 days after the date of the original invoice therefor, in the case of any Extended Payment Term Debtor), (ii) which is unpaid more than 90 days after the date of the original invoice therefor (or 120 days after the date of the original invoice therefor, in the case of Extended Payment Term Debtor), or (iii) which has been written off the books of such Borrower or otherwise designated as uncollectible;

(d)            which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible hereunder;

(e)            which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to all Borrowers exceeds 20% or such greater percentage as the Administrative Agent may determine from time to time in its Permitted Discretion with respect to any Account Debtor) of the aggregate amount of Eligible Accounts of all Borrowers, but ineligibility thereof shall be limited to the extent of such excess;

(f)            with respect to which any covenant, representation or warranty contained in this Agreement or in the Security Agreement has been breached or is not true in any material respect (or, with respect to any covenant, representation or warranty which is subject to any materiality qualifier, has been breached or is not true in any respect);

(g)            which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation reasonably satisfactory to the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon such Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis (other than general warranties given in the ordinary course of business) or (vi) relates to payments of interest (but only to the extent thereof);

(h)            for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Borrower or if such Account was invoiced more than once;

(i)             with respect to which any check or other instrument of payment has been returned uncollected for any reason;

(j)             which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws (other than post-petition accounts payable of an Account Debtor that is a debtor-in-possession under the Bankruptcy Code and acceptable to the Administrative Agent in its Permitted Discretion), (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

(k)            which is owed by any Account Debtor which has sold all or substantially all of its assets;

(l)             which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., or the District of Columbia, Canada, or any province of Canada unless, in any such case, such Account is backed by a Letter of Credit or bank guaranty reasonably acceptable to the Administrative Agent which is in the possession of, and is directly drawable by, the Administrative Agent;

(m)           which is owed in any currency other than U.S. dollars or Canadian dollars;

(n)            which is owed by (i) any government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a letter of credit acceptable to the Administrative Agent which is in the possession of, and is directly drawable by, the Administrative Agent, or (ii) any government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative Agent’s satisfaction;

(o)            which is owed by any Affiliate of any Loan Party or any employee, officer, director, agent or stockholder of any Loan Party or any of its Affiliates;

(p)            which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but only to the extent of such indebtedness, or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

(q)            which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

(r)             which is evidenced by any promissory note, chattel paper or instrument;

(s)            which is owed by an Account Debtor (i) located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower (x) has filed such report or qualified to do business in such jurisdiction, (y) is exempt from such filing requirement, or (z) is otherwise not required to make such filing under the Law, or (ii) which is a Sanctioned Person;

(t)             with respect to which such Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business (but only to the extent of any such reduction), or any Account which was partially paid and such Borrower created a new receivable for the unpaid portion of such Account;

(u)            which does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

(v)            which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than such Borrower has or has had an ownership interest in such goods, or which indicates any party other than such Borrower as payee or remittance party;

(w)           which was created on cash on delivery terms; or

(x)            which the Administrative Agent determines may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever.

In the event that an Account of a Borrower which was previously an Eligible Account ceases to be an Eligible Account hereunder, such Borrower or the Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission to the Administrative Agent of the next Borrowing Base Certificate. In determining the amount of an Eligible Account of a Borrower, the face amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that such Borrower may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Borrower to reduce the amount of such Account.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (a) the environment, (b) preservation or reclamation of natural resources, (c) the management, Release or threatened Release of any Hazardous Material or (d) health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equipment” has the meaning assigned to such term in the Security Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of any Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice, concerning the imposition upon any Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Availability” means, at any time, an amount equal to (a) Availability minus (b) the aggregate amount of all outstanding trade payables of the Borrowers which have been unpaid for more than 60 days after the due date therefor (other than trade payables being contested or disputed in good faith), all as determined by the Administrative Agent in its Permitted Discretion.

“Excluded Account” has the meaning assigned to such term in the Security Agreement.

“Excluded Property” means (a) (i) any leasehold interests in real property, whether now held or hereafter acquired, or (ii) any fee-owned interests in real property which (x) are outside of the United States or (y) have a fair market value of less than $1,000,000 or over which the Administrative Agent has not elected to require a mortgage; (b) any asset in respect of which granting a Lien to the Administrative Agent is prohibited by applicable Requirements of Law, other than to the extent that such prohibition would be rendered ineffective pursuant to the UCC or any other applicable law; (c) any asset to the extent a security interest therein could reasonably be expected to result in material adverse tax consequences to any Loan Party as a result of the operation of Section 956 of the Code or any similar or successor provision, as determined in good faith by the Borrower and reasonably agreed by the Administrative Agent; (d) any lease, license, instrument, contract or other agreement or any property subject to a Permitted Lien securing purchase money Indebtedness or Capital Lease Obligations permitted hereby, in each case, to the extent that a grant of a Lien in such lease, license, instrument, contract, agreement or other property would violate or invalidate such lease, license, instrument, contract or agreement or the documents governing such Indebtedness or create a right of termination in favor of, or require the consent of, any other party thereto (other than a Loan Party or any Affiliate thereof), in each case, to the extent such restriction is permitted by Section 6.10 and after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition, and unless the other party thereto has granted such consent or waived such requirement (which the Loan Parties shall use commercially reasonable efforts to obtain); (e) Margin Stock; (f) any intent-to-use trademark application prior to the filing and acceptance by the United States Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto and solely to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intellectual property or result in the cancellation or voiding thereof; (g) any Excluded Account maintained at a financial institution that is not the Administrative Agent, a Lender or an Affiliate of any of the foregoing and solely contains funds held for the benefit of an unaffiliated third Person; (h) any other asset to the extent that Borrowers and Administrative Agent reasonably agree that the benefits of obtaining a Lien in such asset are outweighed by the costs or burdens of providing the same; (i) letter of credit rights other than “supporting obligations” as defined in the UCC or equivalent provisions of the laws of any other applicable jurisdiction with a value of less than $200,000 except to the extent that a security interest may be granted therein by the filing of a financing statement and (j) commercial tort claims other than claims with a value greater than $200,000, except to the extent that a security interest may be granted therein by the filing of a financing statement; provided, however, the “Excluded Property” shall not include any proceeds, products, substitutions or replacements of any Excluded Property (unless such proceeds, products, substitutions or replacements would themselves otherwise constitute Excluded Property); provided, further, if any Excluded Property would have otherwise constituted Collateral ceases to be Excluded Property, such property shall automatically be deemed Collateral at all times from and after such time.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrowers under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f); and (d) any withholding Taxes imposed under FATCA.

“Extended Payment Term Debtor” means any of the following: (a) Helmerich & Payne, Inc. and (b) Westinghouse Air Brake Technologies Corporation (also commonly referred to as Wabtec Corporation).

“Extenuating Circumstance” means any period during which the Administrative Agent has determined in its sole discretion (a) that due to unforeseen and/or nonrecurring circumstances, it is impractical and/or not feasible to submit or receive a Borrowing Request or Interest Election Request by email or fax or through Electronic System, and (b) to accept a Borrowing Request or Interest Election Request telephonically.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“FCA” has the meaning assigned to such term in Section 1.05.

“FCCR Trigger Period” means any period (a) commencing (i) during which any Event of Default has occurred and is continuing, or (ii) at any time when Availability is less than the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments, in each case, as determined by Administrative Agent in its Permitted Discretion, and (b) ending when (i) no Event of Default has existed for a period of forty-five (45) consecutive calendar days and (ii) Availability shall have been at least equal to the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments for a period of forty-five (45) consecutive calendar days, in each case, as determined by Administrative Agent in its Permitted Discretion.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as shall be set forth on the NYFRB’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, provided that, if the Federal Funds Effective Rate as so determined would be less than 0.0%, such rate shall be deemed to be 0.0% for the purposes of this Agreement.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of a Borrower.

“Fixed Charge Coverage Ratio” means, at any date, the ratio of (a) EBITDA minus Unfinanced Capital Expenditures to (b) Fixed Charges, all calculated for the period of twelve consecutive calendar months ended on such date (or, if such date is not the last day of a calendar month, ended on the last day of the calendar month most recently ended prior to such date); provided that, for each of the monthly periods set forth below, the amount of Unfinanced Capital Expenditures included in the calculation above shall be deemed to be the amount set forth opposite such monthly period:

Monthly Period Ended	Unfinanced Capital Expenditures
July 31, 2022	$100
August 31, 2022	$100
September 30, 2022	$100
October 31, 2022	$50
November 30, 2022	$50
December 31, 2022	$78,328
January 31, 2023	$253,793
February 28, 2023	$234,001
March 31, 2023	$535,684
April 30, 2023	$180,524

“Fixed Charges” means, for any period, without duplication, cash Interest Expense, plus prepayments and scheduled payments of principal on Total Funded Indebtedness actually made (excluding any repayments or prepayments of principal on the Loans except in connection with a permanent reduction (or termination) of the Revolving Commitments), plus expenses for taxes paid in cash, plus Restricted Payments paid in cash (other than Restricted Payments paid to a Loan Party), plus Capital Lease Obligation payments, plus cash contributions to any Plan (to the extent not accounted for as a deduction in the calculation of EBITDA), all calculated for SMG and its Subsidiaries on a consolidated basis (other than Restricted Payments) in accordance with GAAP; provided that, for any period ending before twelve (12) full calendar months have elapsed after the Effective Date, (i) the amount of cash Interest Expense and Capital Lease Obligation payments included in Fixed Charges shall be calculated on an Annualized Basis for the period after the Effective Date through the last day of such period, and (ii) the amount of scheduled payments of principal on the Term Loan Debt included in Fixed Charges shall be $4,752,908.76 (without duplication of any actual scheduled payments of principal on the Term Loan Debt during such period).

“Flood Laws” has the meaning assigned to such term in Section 8.10.

“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate, the Adjusted REVSOFR30 Rate or the Adjusted Daily Simple SOFR, as applicable. For the avoidance of doubt, the initial Floor for each of the Adjusted Term SOFR Rate, the Adjusted REVSOFR30 Rate or the Adjusted Daily Simple SOFR shall be 0.00%.

“Foreign Lender” means (a) if a Borrower is a U.S. Person, a Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

“GAAP” means generally accepted accounting principles in the U.S.

“Global Solutions” has the meaning assigned to such term in the introductory paragraph.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Guarantors” means all Loan Guarantors, and the term “Guarantor” means each or any one of them individually.

“Hazardous Materials” means: (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

“Inactive Subsidiary” means each of (i) Momentum Water Transfer Services LLC, a Texas limited liability company, (ii) Jake Oilfield Solutions LLC, a Texas limited liability company, (iii) Trinity Services, L.L.C., a Louisiana limited liability company, and (iv) Big Vehicle & Equipment Company, LLC, a Texas limited liability company, in each case, so long as each such entity (a) has no business operations, (b) has no material assets other than the minimum amount of cash necessary to repay the Indebtedness of such entity existing on the Effective Date in respect of the EIDL Notes or other Indebtedness of such entity identified on Schedule 6.01, (c) owns no Intellectual Property (as defined in the Security Agreement), (d) owns no leasehold interests in real property or fee-owned interests in real property, and (e) has no Indebtedness other than the Indebtedness owing by such entity as of the Effective Date in respect of the EIDL Notes or other Indebtedness of such entity identified on Schedule 6.01; provided, that, if at any time after the Effective Date, any Subsidiary listed in the foregoing clauses (i) through (iv) shall cease to satisfy the requirements to be designated as an “Inactive Subsidiary”, then such Subsidiary shall be deemed to have been formed or acquired by the applicable Loan Party that owns such Subsidiary as of the date when such Subsidiary first ceased to meet the requirements of this definition for purposes of Section 5.14.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business and not overdue by more than 60 days and accounts payable disputed by such Person in its reasonable discretion so long as such Loan Party or such Subsidiary, as applicable, has set aside adequate reserves on its books), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any earn-out or other contingent payment of a similar nature, (l) any other Off-Balance Sheet Liability, (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction, and (n) obligations, contingent or otherwise, with respect to any Disqualified Stock. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a) hereof, Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.03(c).

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the Effective Date, by and between the Administrative Agent and the Term Loan Agent, and acknowledged and agreed to by the Loan Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance herewith and therewith.

“Interest Election Request” means a request by the Borrower Representative to convert or continue a Borrowing in accordance with Section 2.08.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the first day of each calendar month and the Maturity Date, and (b) with respect to any Term Benchmark Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part (and, in the case of a Term Benchmark Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period) and the Maturity Date.

“Interest Period” means, with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment), as the Borrower Representative may elect; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (c) no tenor that has been removed from this definition pursuant to Section 2.14(e) shall be available for specification in such Borrowing Request or Interest Election Request. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Inventory” has the meaning assigned to such term in the Security Agreement.

“Investment” means, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor provides a Guarantee of Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon in cash (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such transfer or exchange. If any Loan Party thereof sells or otherwise disposes of less than all of the Equity Interests of any Subsidiary of a Loan Party, such Loan Party will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of all Investments made by any Loan Party in such Subsidiary.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means, individually and collectively, each of JPMCB, in its capacity as the issuer of Letters of Credit hereunder, and any other Revolving Lender from time to time designated by the Borrower Representative as an Issuing Bank (in each case, through itself or through one of its designated affiliates or branch offices), with the consent of such Revolving Lender and the Administrative Agent, and their respective successors in such capacity as provided in Section 2.06(i). Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.06 with respect to such Letters of Credit). At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

“Issuing Bank Sublimit” means, as of the Effective Date, (a) $2,500,000, in the case of JPMCB, and (b) such amount as shall be designated to the Administrative Agent and the Borrower Representative in writing by an Issuing Bank; provided that, any Issuing Bank shall be permitted at any time to increase or reduce its Issuing Bank Sublimit upon providing five (5) days’ prior written notice thereof to the Administrative Agent and the Borrower Representative.

“Jake Oilfield” means Jake Oilfield Solutions LLC, a Texas limited liability company.

“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.

“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the Standby LC Exposure at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

“Legend Holding” means Legend Holding RO, Inc., a Delaware corporation.

“Lender Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Lender-Related Person” has the meaning assigned to such term in Section 9.03(b).

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to Section 2.09 or an Assignment and Assumption or otherwise, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption or otherwise. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letters of Credit” means the letters of credit issued pursuant to this Agreement, and the term “Letter of Credit” means any one of them or each of them singularly, as the context may require.

“Letter of Credit Agreement” has the meaning assigned to it in Section 2.06(b).

“Leverage Ratio” means, at any date, the ratio of (a) Total Funded Indebtedness on such date to (b) EBITDA for the period of twelve consecutive calendar months ended on such date (or, if such date is not the last day of a calendar month, ended on the last day of the calendar month most recently ended prior to such date).

“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Borrowing Option” has the meaning assigned to such term in the DDA Access Product Agreement.

“Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, any Letter of Credit Agreement, the Collateral Documents, each Compliance Certificate, the Loan Guaranty, any Obligation Guaranty, the Intercreditor Agreement, the Cox Subordination Agreement, the Fee Letter, and all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Administrative Agent or any Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements, letter of credit applications and any agreements between the Borrower Representative and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations between the applicable Borrower and the Issuing Bank in connection with the issuance by the Issuing Bank of Letters of Credit, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Guarantor” means Skyline and each Subsidiary of SMG (other than the Borrowers) party hereto from time to time that has guaranteed the Secured Obligations pursuant to the Loan Guaranty.

“Loan Guaranty” means Article X of this Agreement.

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans, Overadvances and Protective Advances.

“Maintenance” has the meaning assigned to such term in the introductory paragraph.

“Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, or financial condition of SMG and its Subsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform any of their Obligations or their respective obligations under the Loan Documents, (c) any material portion of the Collateral or the Administrative Agent’s Liens (on behalf of itself and other Secured Parties) on any material portion of the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders under any of the Loan Documents.

“Material Agreement” means any written agreement or arrangement to which a Loan Party or a Subsidiary is party (other than the Loan Documents) (a) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (b) that evidences or relates to any (A) Material Indebtedness or (B) Subordinated Indebtedness.

“Material Indebtedness” means (a) the Term Loan Debt, (b) the Barnhart Seller Note, (c) the Indebtedness evidenced by the EIDL Notes, and (d) any other Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties and their Subsidiaries in an aggregate principal amount exceeding $2,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Loan Parties or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Material Transfers Prohibition” has the meaning assigned to such term in Section 6.04.

“Maturity Date” means the earliest to occur of: (a) July 7, 2026, (b) the date which is ninety-one (91) days prior to the maturity date of any Material Indebtedness (other than the Term Loan Debt) if any such Material Indebtedness is outstanding on or after such date, or (c) any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Momentum” means Momentum Water Transfer Services LLC, a Texas limited liability company.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Income” means, for any period, the consolidated net income (or loss) of SMG and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with SMG or any of its Subsidiaries (subject to Section 1.06), (b) the income (or deficit) of any Person (other than a Subsidiary) in which SMG or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by SMG or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document), any Organizational Document or any Requirement of Law applicable to such Subsidiary, and (d) any income (or loss) from the early extinguishment, modification or forgiveness of Indebtedness.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, minus (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a Disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer of the Borrower Representative).

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that, if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined would be less than 0.0%, such rate shall be deemed to be 0.0% for purposes of this Agreement.

“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

“Obligated Party” has the meaning assigned to such term in Section 10.02.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person (other than operating leases).

“Overadvance” has the meaning assigned to such term in Section 2.05(b).

“Paid in Full” or “Payment in Full” means, (a) the payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (b) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a backup standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 103% of the LC Exposure as of the date of such payment), (c) the payment in full in cash of the accrued and unpaid fees, (d) the payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (e) the termination of all Commitments, and (f) the termination of the Swap Agreement Obligations and the Banking Services Obligations or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Payment” has the meaning assigned to such term in Section 8.06(d).

“Payment Condition” shall be deemed to be satisfied in connection with a Restricted Payment, Investment, Permitted Acquisition or other payment or transaction to which such term applies if:

(a)            no Default has occurred and is continuing or would result immediately after giving effect to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction;

(b)            the Borrowers shall have (i) Availability calculated on a pro forma basis immediately after giving effect to and at all times during the 45-day period immediately prior to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction of not less than the greater of (A) 20% of the Revolving Commitment or (B) $5,000,000, and (ii) a Fixed Charge Coverage Ratio for the trailing twelve months most recently ended for which financial statements have been delivered pursuant hereto calculated on a pro forma basis after giving effect to such Restricted Payment, Investment, Permitted Acquisition or other payment or transaction of not less than 1.20 to 1.00; and

(c)            the Borrower Representative shall have delivered to the Administrative Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent certifying as to the items described in clauses (a) and (b) above and attaching calculations for clause (b).

“Payment Notice” has the meaning assigned to such term in Section 8.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

(a)            such Acquisition is not a hostile or contested acquisition;

(b)            the business acquired in connection with such Acquisition is (i) located in the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Effective Date and any business activities that are substantially similar, related, or incidental thereto;

(d)            as soon as available, but not less than thirty (30) days prior to such Acquisition, the Borrower Representative has provided the Administrative Agent (i) notice of such Acquisition and, (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

(e)            if the Accounts acquired in connection with such Acquisition are proposed to be included in the determination of the Borrowing Base, the Administrative Agent shall have conducted an audit and field examination of such Accounts, the results of which shall be satisfactory to the Administrative Agent;

(f)             if such Acquisition is an acquisition of the Equity Interests of a Person, such Acquisition is structured so that the acquired Person shall become a Wholly-Owned Subsidiary of a Borrower and a Loan Party pursuant to the terms of this Agreement;

(g)            if such Acquisition is an acquisition of assets, such Acquisition is structured so that a Borrower or another Loan Party shall acquire such assets;

(h)            if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

(i)             if such Acquisition involves a merger or a consolidation involving a Borrower or any other Loan Party, such Borrower or such Loan Party, as applicable, shall be the surviving entity;

(j)             no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

(k)            in connection with an Acquisition of the Equity Interests of any Person, all Liens on property of such Person shall be terminated unless the Administrative Agent in its Permitted Discretion consents otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;

(l)             the Borrower Representative shall have delivered to the Administrative Agent the final executed material documentation relating to such Acquisition before the consummation thereof (or such later date as may be approved by Administrative Agent in its sole discretion); and

(m)           the Payment Condition shall be satisfied with respect to such Acquisition, as determined by the Administrative Agent in its Permitted Discretion.

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Encumbrances” means:

(a)            Liens imposed by law for Taxes that are not yet due and payable or are being contested in compliance with Section 5.04;

(d)            deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including (i) those to secure health, safety and environmental obligations and (ii) letters of credit and bank guarantees required or requested by any Governmental Authority in connection with any contract or legal requirement), in each case in the ordinary course of business (but not other Liens to secure such obligations);

(e)            judgment Liens in respect of judgments that do not constitute an Event of Default under Section 7.01(k); and

(f)             matters of record affecting title to any real or leased property and any survey exceptions, encroachments, rights of parties in possession under written leases or occupancy agreements, title defects, easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business, in each case, that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere in any material respect with the ordinary conduct of business of any Borrower or any Subsidiary.

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

(d)            fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e)            money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

“Permitted Liens” means Liens that are permitted under Section 6.02.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

“Prepayment Event” means:

(a) any Disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party or any Subsidiary either constituting ABL Priority Collateral (as defined in the Intercreditor Agreement) or to the extent such Disposition triggers a mandatory prepayment of the Term Loan Debt under the Term Loan Credit Agreement, other than Dispositions described in Section 6.05(a); or

(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party or any Subsidiary with a fair value (when aggregated with all property or assets subject to such event) immediately prior to such event equal to or greater than $100,000, to the extent such event triggers a mandatory prepayment of the Term Loan Debt under the Term Loan Credit Agreement and the Net Proceeds thereof are not applied to prepay the Term Loan Debt; or

(c) the incurrence by any Loan Party or any Subsidiary of any Indebtedness, other than Indebtedness permitted under Section 6.01.

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

“Proceeding” means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

“Projections” has the meaning assigned to such term in Section 5.01(f).

“Protective Advance” has the meaning assigned to such term in Section 2.04.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” has the meaning assigned to it in Section 9.21.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate or the REVSOFR30 Rate, 5:00 a.m. (Chicago time) on the day that is two (2) Business Days preceding the date of such setting, (2) if the RFR for such Benchmark is Daily Simple SOFR, then four (4) Business Days prior to such setting or (3) if such Benchmark is none of the Term SOFR Rate, the REVSOFR30 Rate or Daily Simple SOFR, the time determined by the Administrative Agent in its reasonable discretion.

“Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Relevant Rate” means (i) with respect to any Term Benchmark Borrowing, the Adjusted Term SOFR Rate, (ii) with respect to any Adjusted REVSOFR30 Rate Borrowing, the Adjusted REVSOFR30 Rate, or (iii) with respect to any RFR Borrowing, the Adjusted Daily Simple SOFR, as applicable.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Revolving Exposures and Unfunded Commitments representing more than 50% of the sum of the Aggregate Revolving Exposure and Unfunded Commitments at such time; provided that, at any time there is more than one Lender, “Required Lenders” shall require at least two such Lenders (treating all Lenders that are Affiliates as a single Lender for purposes of this proviso).

“Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, an availability reserve, reserves for accrued and unpaid interest on the Secured Obligations, Banking Services Reserves, volatility reserves, reserves for rent at locations leased by any Loan Party and for consignee’s, warehousemen’s and bailee’s charges, Dilution Reserves, reserves for Inventory shrinkage, reserves for customs charges and shipping charges related to any Inventory in transit, reserves for Swap Agreement Obligations, reserves for contingent or non-contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect to any litigation and reserves for taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means, with respect to any Person, the president, Financial Officer or other executive officer of such Person.

“Reuters” means, as applicable, Thomson Reuters Corp, Refinitiv, or any successor thereto.

“Revolving Borrowing” means Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect.

“Revolving Commitment” means, with respect to each Lender, the amount set forth on the Commitment Schedule opposite such Lender’s name, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C) pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such Revolving Commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04; provided, that at no time shall the Revolving Exposure of any Lender exceed its Revolving Commitment. The initial aggregate amount of the Lenders’ Revolving Commitment is $25,000,000.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Revolving Loans, its LC Exposure and its Swingline Exposure at such time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Protective Advances outstanding at such time, plus (c) an amount equal to its Applicable Percentage of the aggregate principal amount of Overadvances outstanding at such time.

“Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

“REVSOFR30 Rate” means the Term SOFR Reference Rate for a (1) month period, as such rate is published by the CME Term SOFR Administrator, at approximately 5:00 a.m., Chicago time, two (2) U.S. Government Securities Business Days prior to the first (1^st) Business Day of each month, adjusted monthly on the first (1^st) Business Day of each month. Any change in the REVSOFR Rate shall be effective from and include the effective date of such change.

“RFR Borrowing” means, as to any Borrowing, the RFR Loans comprising such Borrowing.

“RFR Loan” means a Loan that bears interest at a rate based on the Adjusted Daily Simple SOFR.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sale and Leaseback Transaction” has the meaning assigned to such term in Section 6.06.

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, His Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Obligations” means all Obligations, together with all (a) Banking Services Obligations and (b) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; provided, however, that the definition of “Secured Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

“Secured Parties” means (a) the Administrative Agent, (b) the Lenders, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (g) the successors and assigns of each of the foregoing.

“Settlement” has the meaning assigned to such term in Section 2.05(d).

“Settlement Date” has the meaning assigned to such term in Section 2.05(d).

“Skyline” has the meaning assigned to such term in the introductory paragraph.

“Skyline Merger” has the meaning assigned to such term in the preliminary statements.

“SMG” has the meaning assigned to such term in the introductory paragraph.

“SOFR” means a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“SOFR Determination Date” has the meaning specified in the definition of “Daily Simple SOFR”.

“SOFR Rate Day” has the meaning specified in the definition of “Daily Simple SOFR”.

“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all standby Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers at such time. The Standby LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate Standby LC Exposure at such time.

“Statements” has the meaning assigned to such term in Section 2.18(f).

“Subordinated Indebtedness” of a Person means (a) the Indebtedness evidenced by the Cox Note, which is subordinated to payment of the Secured Obligations pursuant to the Cox Subordination Agreement, and (b) any other Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of SMG or a Loan Party, as applicable.

“Supported QFC” has the meaning assigned to it in Section 9.21.

“Swap Agreement Obligations” means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate of a Lender.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means JPMCB (or any of its designated branch offices or affiliates), in its capacity as lender of Swingline Loans hereunder. Any consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by JPMCB in its capacity as Administrative Agent or Issuing Bank shall be deemed given by JPMCB in its capacity as Swingline Lender.

“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).

“Tank Wash” has the meaning assigned to such term in the introductory paragraph.

“Target Balance” has the meaning assigned to such term in the DDA Access Product Agreement.

“Term Loan Agent” means Great Rock Capital Partners Management, LLC, in its capacity as administrative agent on behalf of the Term Loan Lenders under the Term Loan Debt Documents.

“Term Loan Credit Agreement” means that certain Credit Agreement dated as of the Effective Date, by and among the Borrowers, the other Loan Parties, the Term Loan Lenders and the Term Loan Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted under this Agreement and the Intercreditor Agreement.

“Term Loan Debt” means the Indebtedness and other obligations owing to the Term Loan Agent and the Term Loan Lenders from time to time under the Term Loan Debt Documents.

“Term Loan Debt Documents” means the “Loan Documents” as defined in the Term Loan Credit Agreement.

“Term Loan Lenders” means the financial institutions party to the Term Loan Credit Agreement as lenders from time to time.

“Term Loan Liens” mean the Liens granted by any Loan Party in favor of the Term Loan Agent to secure Term Loan Debt permitted hereby, so long as such Liens are subject to, and permitted by, the Intercreditor Agreement.

“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.

“Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two (2) U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.

“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.

“Total Funded Indebtedness” means, for any Person as of any date of determination, without duplication, (a) all obligations of such Person for borrowed money (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business or earn-outs or contingent payments unless overdue by more than 60 days), (e) all Guarantees by such Person of Total Funded Indebtedness of others, (f) all Capital Lease Obligations of such Person, and (g) all reimbursement obligations of such Person in respect of drawings or disbursements of letters of credit and letters of guaranty, in each case determined on a consolidated basis for SMG and its Subsidiaries.

“TRAC Lease Agreements” means any equipment lease or similar agreement entered into by either 5J Logistics or Barnhart Leasing, as lessor, pursuant to which a lessor leases certain Equipment to certain lessees who make lease payments to a lessor that grants the lessor a purchase option at the end of the lease.

“Transactions” means the execution, delivery and performance by the Borrowers of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof, the issuance of Letters of Credit hereunder, the granting of Liens by the Loan Parties under the Loan Documents, the incurrence of the Term Loan Debt and the use of proceeds thereof, the granting of the Term Loan Liens, the consummation of the Barnhart Acquisition, the consummation of the Skyline Merger and the payment of fees and expenses incurred in connection with any of the foregoing.

“Trigger Period” means any period (a) commencing (i) during which any Event of Default has occurred and is continuing, or (ii) at any time when Availability is less than the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments, in each case, as determined by Administrative Agent in its Permitted Discretion, and (b) ending when (i) no Event of Default has existed for a period of thirty (30) consecutive calendar days and (ii) Availability shall have been at least equal to the greater of (x) $3,750,000 and (y) 15.0% of the Revolving Commitments for a period of thirty (30) consecutive calendar days, in each case, as determined by Administrative Agent in its Permitted Discretion.

“Trinity” means Trinity Services, L.L.C., a Louisiana limited liability company.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted Term SOFR Rate, the Adjusted REVSOFR30 Rate or the ABR.

“UK Financial Institutions” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“Unfinanced Capital Expenditures” means, for any period, Capital Expenditures made during such period which are not financed from (a) the proceeds of any Indebtedness (other than the Revolving Loans; it being understood and agreed that, to the extent any Capital Expenditures are financed with Revolving Loans, such Capital Expenditures shall be deemed Unfinanced Capital Expenditures), (b) the reinvestment of Net Proceeds of any Disposition as permitted hereunder, or (c) the reinvestment of Net Proceeds of any casualty insurance policies as permitted hereunder.

“Unfunded Commitment” means, with respect to each Lender, the Revolving Commitment of such Lender less its Revolving Exposure.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (a) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (b) any other obligation (including any guarantee) that is contingent in nature at such time; or (c) an obligation to provide collateral to secure any of the foregoing types of obligations.

“U.S.” means the United States of America.

“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regime” has the meaning assigned to it in Section 9.21.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

Section 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Term Benchmark Loan”, an “Adjusted REVSOFR30 Rate Loan” or an “RFR Loan”) or by Class and Type (e.g., a “Term Benchmark Revolving Loan”, an “Adjusted REVSOFR30 Rate Revolving Loan” or an “RFR Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Term Benchmark Borrowing”, an “Adjusted REVSOFR30 Rate Loan” or an “RFR Borrowing”) or by Class and Type (e.g., a “Term Benchmark Revolving Borrowing”, an “Adjusted REVSOFR30 Rate Revolving Loan” or an “RFR Revolving Borrowing”).

Section 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

Section 1.04. Accounting Terms; GAAP. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of SMG or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness under Financial Accounting Standards Board Accounting Standards Codification 470-20 or 2105-03 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

(b)            Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of “Capital Lease Obligations,” the Loan Parties have adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”) and no lease (or similar arrangement conveying the right to use) shall be treated as a capital lease or shall be included in the definition of “Capital Lease Obligations” where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

Section 1.05. Interest Rates; Benchmark Notifications. The interest rate on a Loan denominated in dollars may be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 2.14(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrowers, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

Section 1.06. Pro Forma Adjustments for Acquisitions and Dispositions. To the extent any Borrower or any Subsidiary makes any Permitted Acquisition or Disposition outside the ordinary course of business permitted by Section 6.05 during the period of twelve (12) fiscal months of SMG and its Subsidiaries most recently ended, the Leverage Ratio and the Fixed Charge Coverage Ratio (including each component thereof) shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the Acquisition or the Disposition, and which are (a) factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer of such Borrower), (b) supported by a third party quality of earnings report reasonably acceptable to the Administrative Agent, or (c) otherwise approved in writing by the Administrative Agent in its sole discretion (and certified in a certification by a Financial Officer of such Borrower), in each case, as if such Acquisition or such Disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such twelve-month period.

Section 1.07. Status of Obligations. In the event that any Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

Section 1.08. Letters of Credit. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit available to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit Agreement related thereto, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time) or Rule 3.13 or Rule 3.14 of the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time) or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrowers and each Lender shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

Section 1.09. Divisions. For all purposes under the Loan Documents, in connection with any Division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.

ARTICLE II

The Credits

Section 2.01. Commitments. Subject to the terms and conditions set forth herein, (a) each Lender severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the lesser of (x) the Aggregate Revolving Commitment and (y) the Borrowing Base, subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances and Overadvances pursuant to the terms of Sections 2.04 and 2.05, in each case by making immediately available funds available to the Administrative Agent’s designated account, not later than 10:00 a.m., Chicago time. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

Section 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Protective Advance, any Overadvance and any Swingline Loan shall be made in accordance with the procedures set forth in Sections 2.04 and 2.05.

(b)            Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Term Benchmark Loans as the Borrower Representative may request in accordance herewith, provided that all Borrowings made on the Effective Date must be made as ABR Borrowings but may be converted into Term Benchmark Borrowings in accordance with Section 2.08. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

(c)            At the commencement of each Interest Period for any Term Benchmark Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000. ABR Borrowings may be in any amount. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of six (6) Term Benchmark Borrowings outstanding.

(d)            Notwithstanding any other provision of this Agreement, the Borrower Representative shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

Section 2.03. Requests for Borrowings. To request a Borrowing, the Borrower Representative shall notify the Administrative Agent of such request either in writing (delivered by hand or fax) by delivering a Borrowing Request signed by a Responsible Officer of the Borrower Representative or through Electronic System if arrangements for doing so have been approved by the Administrative Agent (or if an Extenuating Circumstance shall exist, by telephone) not later than (a) in the case of a Term Benchmark Borrowing, 10:00 a.m., Chicago time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, noon, Chicago time, on the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago time, on the date of such proposed Borrowing. Each such Borrowing Request shall be irrevocable and each such telephonic Borrowing Request, if permitted, shall be confirmed immediately upon the cessation of the Extenuating Circumstance by hand delivery, facsimile or a communication through Electronic System to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by a Responsible Officer of the Borrower Representative. Each such written (or if permitted, telephonic) Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)             the name of the applicable Borrower(s);

(ii)            the aggregate amount of the requested Borrowing and a breakdown of the separate wires comprising such Borrowing;

(iii)           the date of such Borrowing, which shall be a Business Day;

(iv)           whether such Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

(v)            in the case of a Term Benchmark Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Term Benchmark Borrowing, then the applicable Borrower(s) shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

Section 2.04. Protective Advances. (a) Subject to the limitations set forth below, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that, the aggregate amount of Protective Advances outstanding at any time shall not at any time exceed 10% of the Aggregate Revolving Commitment; provided further that, the Aggregate Revolving Exposure after giving effect to the Protective Advances being made shall not exceed the Aggregate Revolving Commitment. Protective Advances may be made even if the conditions precedent set forth in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the Liens in favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances shall be ABR Borrowings. The making of a Protective Advance on any one occasion shall not obligate the Administrative Agent to make any Protective Advance on any other occasion. The Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof. At any time that there is sufficient Availability and the conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request the Revolving Lenders to make a Revolving Loan to repay a Protective Advance. At any other time the Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).

Section 2.05. Swingline Loans and Overadvances.

(a)            The Administrative Agent, the Swingline Lender and the Revolving Lenders agree that in order to facilitate the administration of this Agreement and the other Loan Documents, promptly after the Borrower Representative requests an ABR Borrowing, the Swingline Lender may elect to have the terms of this Section 2.05(a) apply to such Borrowing Request by advancing, on behalf of the Revolving Lenders and in the amount requested, same day funds to the Borrowers, on the date of the applicable Borrowing to the Funding Account (each such Loan made solely by the Swingline Lender pursuant to this Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”), with settlement among them as to the Swingline Loans to take place on a periodic basis as set forth in Section 2.05(d). Each Swingline Loan shall be subject to all the terms and conditions applicable to other ABR Loans funded by the Revolving Lenders, except that all payments thereon shall be payable to the Swingline Lender solely for its own account. In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender may, subject to the terms and conditions set forth herein (but without any further written notice required), not later than 1:00 p.m., Chicago time, on each Business Day, make available to the Borrowers by means of a credit to the Funding Account or the Controlled Disbursement Account, the proceeds of a Swingline Loan to the extent necessary to pay items to be drawn on any Controlled Disbursement Account that Business Day subject to the Administrative Agent’s standard procedures for calculating clearing totals each morning; provided that, if on any Business Day there is insufficient borrowing capacity to permit the Swingline Lender to make available to the Borrowers a Swingline Loan in the amount necessary to pay all items to be so drawn on any such Controlled Disbursement Account on such Business Day, then the Borrowers shall be deemed to have requested an ABR Borrowing pursuant to Section 2.03 in the amount of such deficiency to be made on such Business Day. In addition, the Borrowers hereby authorize the Swingline Lender to, and the Swingline Lender may, subject to the terms and conditions set forth herein (but without any further written notice required), to the extent that from time to time on any Business Day funds are required under the DDA Access Product to reach the Target Balance (a “Deficiency Funding Date”), make available to the applicable Borrower the proceeds of a Swingline Loan in the amount of such deficiency up to the Target Balance, by means of a credit to the applicable Funding Account on or before the start of business on the next succeeding Business Day, and such Swingline Loan shall be deemed made on such Deficiency Funding Date. The aggregate amount of Swingline Loans outstanding at any time shall not exceed 10% of the Aggregate Revolving Commitment. The Swingline Lender shall not make any Swingline Loan if the requested Swingline Loan exceeds Availability (before or after giving effect to such Swingline Loan). All Swingline Loans shall be ABR Borrowings.

(b)            Any provision of this Agreement to the contrary notwithstanding, at the request of the Borrower Representative, the Administrative Agent may in its sole discretion (but with absolutely no obligation), on behalf of the Revolving Lenders, (x) make Revolving Loans to the Borrowers in amounts that exceed Availability (any such excess Revolving Loans are herein referred to collectively as “Overadvances”) or (y) deem the amount of Revolving Loans outstanding to the Borrowers that are in excess of Availability to be Overadvances; provided that, no Overadvance shall result in a Default due to Borrowers’ failure to comply with Section 2.01 for so long as such Overadvance remains outstanding in accordance with the terms of this paragraph, but solely with respect to the amount of such Overadvance. In addition, Overadvances may be made even if the condition precedent set forth in Section 4.02(c) has not been satisfied. All Overadvances shall constitute ABR Borrowings. The making of an Overadvance on any one occasion shall not obligate the Administrative Agent to make any Overadvance on any other occasion. The authority of the Administrative Agent to make Overadvances is limited to an aggregate amount not to exceed 10% of the Aggregate Revolving Commitment at any time, no Overadvance may remain outstanding for more than thirty (30) days and no Overadvance shall cause any Revolving Lender’s Revolving Exposure to exceed its Revolving Commitment; provided that, the Required Lenders may at any time revoke the Administrative Agent’s authorization to make Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.

(c)            Upon the making of a Swingline Loan or an Overadvance (whether before or after the occurrence of a Default and regardless of whether a Settlement has been requested with respect to such Swingline Loan or Overadvance), each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swingline Lender or the Administrative Agent, as the case may be, without recourse or warranty, an undivided interest and participation in such Swingline Loan or Overadvance in proportion to its Applicable Percentage of the Revolving Commitment. The Swingline Lender or the Administrative Agent may, at any time, require the Revolving Lenders to fund their participations. From and after the date, if any, on which any Revolving Lender is required to fund its participation in any Swingline Loan or Overadvance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Swingline Loan or Overadvance.

(d)            The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that the Administrative Agent elects, by notifying the Revolving Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon Chicago time on the date of such requested Settlement (the “Settlement Date”). Each Revolving Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Revolving Lender’s Applicable Percentage of the outstanding principal amount of the applicable Loan with respect to which Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago time, on such Settlement Date. Settlements may occur during the existence of a Default and whether or not the applicable conditions precedent set forth in Section 4.02 have then been satisfied. Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s Applicable Percentage of such Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively. If any such amount is not transferred to the Administrative Agent by any Revolving Lender on such Settlement Date, the Swingline Lender shall be entitled to recover from such Lender on demand such amount, together with interest thereon, as specified in Section 2.07.

Section 2.06. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower Representative may request any Issuing Bank to issue Letters of Credit for its own account or for the account of another Borrower denominated in dollars as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a form reasonably acceptable to such Issuing Bank, at any time and from time to time during the Availability Period.

(b)            Notice of Issuance, Amendment, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit), the Borrower Representative shall deliver by hand or facsimile (or transmit through Electronic System, if arrangements for doing so have been approved by the respective Issuing Bank) to an Issuing Bank selected by it and to the Administrative Agent (reasonably in advance of, but in any event no less than three (3) Business Days prior to the requested date of issuance, amendment or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended or extended, and specifying the date of issuance, amendment or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with Section 2.06(c) below), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend or extend such Letter of Credit. In addition, as a condition to any such Letter of Credit issuance, the applicable Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application in each case, as required by the respective Issuing Bank and using such Issuing Bank’s standard form (each, a “Letter of Credit Agreement”). In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control. A Letter of Credit shall be issued, amended or extended only if (and upon issuance, amendment or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment or extension (i) the aggregate LC Exposure shall not exceed $2,500,000, (ii) the aggregate Standby LC Exposure shall not exceed $2,500,000, (iii) the aggregate Commercial LC Exposure shall not exceed $2,500,000, (iv) no Revolving Lender’s Revolving Exposure shall exceed its Revolving Commitment and (v) the Aggregate Revolving Exposure shall not exceed the lesser of (x) the Aggregate Revolving Commitment and (y) the Borrowing Base. Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank’s Issuing Bank Sublimit. Without limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed that the Borrower Representative may from time to time request that an Issuing Bank issue Letters of Credit in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank agrees to consider any such request in good faith. Any Letter of Credit so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit for all purposes of this Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).

An Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

(i)             any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such Issuing Bank in good faith deems material to it, or

(ii)            the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally.

(c)            Expiration Date. Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the applicable Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any extension of the expiration thereof, including, without limitation, any automatic renewal provision, one year after such extension) and (ii) the date that is five Business Days prior to the Maturity Date.

(d)            Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Revolving Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the respective Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrowers on the date due as provided in Section 2.06(e) below, or of any reimbursement payment required to be refunded to the Borrowers for any reason, including after the Maturity Date. Each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments.

(e)            Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., Chicago time, on (i) the Business Day that the Borrower Representative receives notice of such LC Disbursement, if such notice is received prior to 9:00 a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower Representative receives such notice, if such notice is received after 9:00a.m. Chicago time on the day of receipt; provided that, the Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan, as applicable. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the respective Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the respective Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank, as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.

(f)             Obligations Absolute. The Borrowers’ joint and several obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the respective Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder. Neither the Administrative Agent, the Revolving Lenders, nor any Issuing Bank or any of their respective Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms, any error in translation or any consequence arising from causes beyond the control of the respective Issuing Bank; provided that the foregoing shall not be construed to excuse an Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g)            Disbursement Procedures. The Issuing Bank for any Letter of Credit shall, within the time allowed by applicable law or the specific terms of the Letter of Credit following its receipt thereof, examine all documents purporting to represent a demand for payment under such Letter of Credit. Such Issuing Bank shall promptly after such examination notify the Administrative Agent and the applicable Borrower by telephone (confirmed by fax or through Electronic Systems) of such demand for payment if such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h)            Interim Interest. If the Issuing Bank for any Letter of Credit shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is payable; provided that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to Section 2.06(e) above, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of such Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to Section 2.06(e) to reimburse such Issuing Bank for such LC Disbursement shall be for the account of such Lender to the extent of such payment.

(i)             Replacement and Resignation of an Issuing Bank.

(i)             An Issuing Bank may be replaced at any time by written agreement among the Borrower Representative, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (A) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (B) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit or extend or otherwise amend any existing Letter of Credit.

(ii)            Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower Representative and the Lenders, in which case, such resigning Issuing Bank shall be replaced in accordance with Section 2.06(i)(i) above.

(j)             Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower Representative receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account or accounts with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 103% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to any Borrower described in Section 7.01(h) or 7.01(i). Such Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Sections 2.10(b), 2.11(b) or 2.20. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. In addition, and without limiting the foregoing or Section 2.06(c), if any LC Exposure remains outstanding after the expiration date specified in said Section 2.06(c), the Borrowers shall immediately deposit in the LC Collateral Account an amount in cash equal to 103% of such LC Exposure as of such date plus any accrued and unpaid interest thereon. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account and all money or other assets on deposit therein or credited thereto. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in the LC Collateral Account. Moneys in the LC Collateral Account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other Secured Obligations. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3) Business Days after all such Events of Default have been cured or waived as confirmed in writing by the Administrative Agent.

(k)            Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions, and amendments, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Bank issues, amends or extends any Letter of Credit, the date of such issuance, amendment or extension, and the stated amount of the Letters of Credit issued, amended or extended by it and outstanding after giving effect to such issuance, amendment or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which any Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement, and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank.

(l)             Letters of Credit Issued for Account of Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and without derogating from any rights of the Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrowers (i) shall reimburse, indemnify and compensate the Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of a Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. Each Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of the Borrowers, and that each Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

Section 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 2:00 p.m., Chicago time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided that, Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the Borrower Representative by promptly crediting the funds so received in the aforesaid account of the Administrative Agent to the Funding Account; provided that ABR Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained by the Administrative Agent.

(b)            Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.07(a) above and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers each severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of the Borrowers, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing, provided, that any interest received from a Borrower by the Administrative Agent during the period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount shall be solely for the account of the Administrative Agent.

Section 2.08. Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Term Benchmark Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower Representative may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Term Benchmark Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower Representative may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, Overadvances or Protective Advances, which may not be converted or continued.

(b)            To make an election pursuant to this Section, the Borrower Representative shall notify the Administrative Agent of such election either in writing (delivered by hand or fax) by delivering an Interest Election Request signed by a Responsible Officer of the Borrower Representative or through Electronic System if arrangements for doing so have been approved by the Administrative Agent (or if an Extenuating Circumstance shall exist, by telephone) by the time that a Borrowing Request would be required under Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable and each such telephonic Interest Election Request, if permitted, shall be confirmed immediately upon the cessation of the Extenuating Circumstance by hand delivery, Electronic System or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by a Responsible Officer of the Borrower Representative.

(c)            Each written (or if permitted, telephonic) Interest Election Request (including requests submitted through Electronic System) shall specify the following information in compliance with Section 2.02:

(i)             the name of the applicable Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)            the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)           whether the resulting Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

(iv)           if the resulting Borrowing is a Term Benchmark Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Term Benchmark Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

(d)            Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)            If the Borrower Representative fails to deliver a timely Interest Election Request with respect to a Term Benchmark Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Representative, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Term Benchmark Borrowing and (ii) unless repaid, each Term Benchmark Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

Section 2.09. Termination and Reduction of Commitments; Increase in Revolving Commitments. (a) Unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date.

(b)            The Borrowers may at any time terminate the Revolving Commitments upon the Payment in Full of the Secured Obligations.

(c)            The Borrowers may from time to time reduce the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $5,000,000 and not less than $5,000,000, and (ii) the Borrowers shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, (A) any Lender’s Revolving Exposure would exceed such Lender’s Revolving Commitment or (B) the Aggregate Revolving Exposure would exceed the lesser of the Aggregate Revolving Commitment and the Borrowing Base.

(d)            The Borrower Representative shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower Representative pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower Representative may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

(e)            The Borrowers shall have the right to increase the Revolving Commitments by obtaining additional Revolving Commitments, either from one or more of the Lenders or another lending institution provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000 (or such lesser amount that represents all remaining availability hereunder), (ii) the Borrower Representative, on behalf of the Borrowers, may make a maximum of three (3) such requests, (iii) after giving effect thereto, the sum of the total of the additional Commitments does not exceed $15,000,000, (iv) the Administrative Agent and the Issuing Bank have approved the identity of any such new Lender, such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and obligations of a “Lender” hereunder, and (vi) the procedure described in Section 2.09(f) have been satisfied. Nothing contained in this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder at any time.

(f)            Any amendment hereto for such an increase or addition shall be in form and substance reasonably satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrowers and each Lender being added or increasing its Commitment. As a condition precedent to such an increase or addition, the Borrowers shall deliver to the Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrowers, certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in Article III and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualifiers), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date, (2) no Default exists and (3) the Borrowers are in compliance (on a pro forma basis) with the covenants contained in Section 6.13 and (ii) legal opinions and documents consistent with those delivered on the Effective Date, to the extent reasonably requested by the Administrative Agent.

(g)            On the effective date of any such increase or addition, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Revolving Commitment shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Loans, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase (or addition) in the Revolving Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower Representative, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Term Benchmark Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods. Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower Representative, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.

Section 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent, and (iii) to the Administrative Agent the then unpaid principal amount of each Overadvance on the earliest of the Maturity Date, the 30^th day after such Overadvance is made and demand by the Administrative Agent.

(b)            At all times during a Dominion Period, on each Business Day, the Administrative Agent shall apply all funds credited to the Collection Account on the immediately preceding Business Day (at the discretion of the Administrative Agent, whether or not immediately available), first to prepay any Protective Advances and Overadvances that may be outstanding, pro rata, and second to prepay the Revolving Loans (including Swingline Loans) and to cash collateralize outstanding LC Exposure; provided, that, so long as no Dominion Period is in effect, the Administrative Agent shall apply all funds credited to the Collection Account on the immediately preceding Business Day into the Funding Account rather than to reduce the Obligations hereunder.

(d)            The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e)            The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

(f)            Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

Section 2.11. Prepayment of Loans. (a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with Section 2.11(f) below and, if applicable, payment of any break funding expenses under Section 2.16.

(b)            Except for Overadvances permitted under Section 2.05, in the event and on such occasion that the Aggregate Revolving Exposure exceeds the lesser of (i) the Aggregate Revolving Commitment and (ii) the Borrowing Base, the Borrowers shall prepay, on demand, the Revolving Loans, LC Exposure and/or Swingline Loans or cash collateralize the LC Exposure in an account with the Administrative Agent pursuant to Section 2.06(j), as applicable, in an aggregate amount equal to such excess.

(c)            Subject to the Intercreditor Agreement, in the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party or any Subsidiary in respect of any Prepayment Event, to the extent not applied to prepay the Term Loan Debt in accordance with the Term Loan Credit Agreement (after any applicable reinvestment period provided thereunder), the Borrowers shall, immediately after such Net Proceeds are received by any Loan Party or any Subsidiary, prepay the Obligations and cash collateralize the LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal to 100% of such Net Proceeds, provided that, in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event”, if the Borrower Representative shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) equipment or other tangible assets to be used in the business of the Loan Parties, and certifying that no Default has occurred and is continuing, then such Net Proceeds shall be deposited in the Qualified Reinvestment Proceeds Blocked Account (as defined in the Term Loan Credit Agreement) or a cash collateral account and such funds shall be used by the applicable Loan Party to prepay the Term Loan Debt or complete the reinvestment as contemplated by this Section; provided, further, that to the extent of any such Net Proceeds therefrom that have not been so applied (whether as a prepayment of the Term Loan Debt or as a reinvestment) by the end of such 180-day period, a prepayment shall be required at such time in an amount equal to such Net Proceeds that have not been so applied.

(d)            All prepayments made pursuant to Section 2.11(a) shall be applied, if made with respect to the Revolving Loans or the Swingline Loans, to prepay such Loans in accordance with the Lenders’ respective Applicable Percentages without a corresponding reduction in the Revolving Commitments and to cash collateralize outstanding LC Exposure.

(e)            [Reserved].

(f)            The Borrower Representative shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by fax) or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, of any prepayment hereunder not later than (i) 10:00 a.m., Chicago time, (A) in the case of prepayment of a Term Benchmark Revolving Borrowing, three (3) Business Days before the date of prepayment, or (B) in the case of prepayment of an ABR Revolving Borrowing, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

Section 2.12. Fees. (a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Revolving Commitments terminate. Commitment fees accrued through and including the first day of each calendar month shall be payable in arrears on such day and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any commitment fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day and the last day of each period but excluding the date on which the Revolving Commitments terminate).

(b)            The Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in each outstanding Letter of Credit, which shall accrue on the daily maximum stated amount then available to be drawn under such Letter of Credit at the same Applicable Rate used to determine the interest rate applicable to Term Benchmark Revolving Loans during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank for its own account a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, which shall accrue at the rate of 0.125% per annum on the daily maximum stated amount then available to be drawn under such Letter of Credit, during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure with respect to Letters of Credit issued by such Issuing Bank, as well as such Issuing Bank’s standard fees and commissions with respect to the issuance, amendment or extension of any Letter of Credit and other processing fees and other standard costs and charges, of such Issuing Bank relating to Letters of Credit as from time to time in effect. Participation fees and fronting fees accrued through and including the last day of each calendar month shall be payable on the first day of each calendar month following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)            The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent, including in the Fee Letter.

(d)            All fees payable hereunder shall be paid on the dates due, in dollars in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

Section 2.13. Interest. (a) The Loans comprising ABR Borrowings (including all Swingline Loans) shall bear interest at the ABR plus the Applicable Rate.

(b)            The Loans comprising each Term Benchmark Borrowing shall bear interest at the Adjusted Term SOFR Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)            Each Protective Advance and each Overadvance shall bear interest at the ABR plus the Applicable Rate for Revolving Loans plus 2%.

(d)            Notwithstanding the foregoing, automatically, during the occurrence and continuance of an Event of Default under Sections 7.01(a), 7.01(b), 7.01(h) and 7.01(i), or, at the option of the Administrative Agent or Required Lenders by written notice to the Borrower Representative (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates), during the occurrence and continuance of any other Event of Default, declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

(e)            Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to Section 2.13(d) above shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Term Benchmark Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(f)             Interest computed by reference to the Term SOFR Rate, REVSOFR30 Rate or Daily Simple SOFR shall be computed on the basis of a year of 360 days. Interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year). In each case interest shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All interest hereunder on any Loan shall be computed on a daily basis based upon the outstanding principal amount of such Loan as of the applicable date of determination. The applicable Alternate Base Rate, Adjusted Daily Simple SOFR, Daily Simple SOFR, Adjusted REVSOFR30 Rate, REVSOFR30 Rate, Adjusted Term SOFR Rate or Term SOFR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

Section 2.14. Alternate Rate of Interest; Illegality.

(a)            Subject to clauses (b), (c), (d), (e) and (f) of this Section 2.14, if:

(i)             the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) (A) prior to commencement of any Interest Period for a Term Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Term SOFR Rate (including because the Term SOFR Reference Rate is not available or published on a current basis), for such Interest Period, (B) at any time, that adequate and reasonable means do not exist for ascertaining the Adjusted REVSOFR30 Rate or the REVSOFR30 Rate (including because the Term SOFR Reference Rate is not available or published on a current basis), or (C) at any time, that adequate and reasonable means do not exist for ascertaining the applicable Adjusted Daily Simple SOFR or Daily Simple SOFR; or

(ii)            the Administrative Agent is advised by the Required Lenders that (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the Adjusted Term SOFR Rate or the Term SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period, (B) at any time, the Adjusted REVSOFR30 Rate or the REVSOFR30 Rate will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing, or (C) at any time, the applicable Adjusted Daily Simple SOFR or Daily Simple SOFR will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing;

then the Administrative Agent shall give notice thereof to the Borrower Representative and the Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrowers deliver a new Interest Election Request in accordance with the terms of Section 2.08 or a new Borrowing Request in accordance with the terms of Section 2.03, (1) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Term Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Borrowing shall instead be deemed to be an Interest Election Request or a Borrowing Request, as applicable, for (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.14(a)(i) or (ii) above or (y) an ABR Borrowing if the Adjusted Daily Simple SOFR also is the subject of Section 2.14(a)(i) or (ii) above and (2) any Borrowing Request that requests an Adjusted REVSOFR30 Rate Borrowing or an RFR Borrowing shall instead be deemed to be a Borrowing Request, as applicable, for an ABR Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan, Adjusted REVSOFR30 Rate Loan or RFR Loan is outstanding on the date of the Borrower Representative’s receipt of the notice from the Administrative Agent referred to in this ‎Section 2.14(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan, Adjusted REVSOFR30 Rate Loan or RFR Loan, then until (x) the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrowers deliver a new Interest Election Request in accordance with the terms of Section 2.08 or a new Borrowing Request in accordance with the terms of Section 2.03, (1) any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, (x) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not also the subject of Section 2.14(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple SOFR also is the subject of Section 2.14(a)(i) or (ii) above, on such day, and (2) any Adjusted REVSOFR30 Rate Loan or any RFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan.

(b)            Notwithstanding anything to the contrary herein or in any other Loan Document (and any Swap Agreement shall be deemed not to be a “Loan Document” for purposes of this Section 2.14), if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(d)            The Administrative Agent will promptly notify the Borrower Representative and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14.

(e)            Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Rate or REVSOFR30 Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)             Upon the Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any request for a Term Benchmark Borrowing, Adjusted REVSOFR30 Rate Borrowing or RFR Borrowing of, conversion to or continuation of Term Benchmark Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted (1) any such request for a Term Benchmark Borrowing into a request for a Borrowing of or conversion to (A) an RFR Borrowing so long as the Adjusted Daily Simple SOFR is not the subject of a Benchmark Transition Event or (B) an ABR Borrowing if the Adjusted Daily Simple SOFR is the subject of a Benchmark Transition Event and (2) any such request for an Adjusted REVSOFR30 Rate Borrowing or RFR Borrowing into a request for an ABR Borrowing. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. Furthermore, if any Term Benchmark Loan, Adjusted REVSOFR30 Rate Loan or RFR Loan is outstanding on the date of the Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a Relevant Rate applicable to such Term Benchmark Loan, Adjusted REVSOFR30 Rate Loan or RFR Loan, then until such time as a Benchmark Replacement is implemented pursuant to this Section 2.14, (1) any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, (x) an RFR Loan so long as the Adjusted Daily Simple SOFR is not the subject of a Benchmark Transition Event or (y) an ABR Loan if the Adjusted Daily Simple SOFR is the subject of a Benchmark Transition Event, on such day and (2) any Adjusted REVSOFR30 Rate Loan or RFR Loan shall on and from such day be converted by the Administrative Agent to, and shall constitute an ABR Loan.

Section 2.15. Increased Costs. (a) If any Change in Law shall:

(i)             impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted Term SOFR Rate or Adjusted REVSOFR30 Rate) or the Issuing Bank;

(ii)            impose on any Lender or the Issuing Bank or the applicable offshore interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

(iii)           subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered as reasonably determined by the Administrative Agent, such Lender or such Issuing Bank (which determination shall be made in good faith (and not on an arbitrary or capricious basis) and generally consistent with similarly situated customers of the Administrative Agent, such Lender or such Issuing Bank, as applicable, under agreements having provisions similar to this Section 2.15, after consideration of such factors as the Administrative Agent, such Lender or such Issuing Bank, as applicable, then reasonably determines to be relevant).

(b)            If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of, or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered as reasonably determined by the Administrative Agent, such Lender or such Issuing Bank (which determination shall be made in good faith (and not on an arbitrary or capricious basis) and generally consistent with similarly situated customers of the Administrative Agent, such Lender or such Issuing Bank, as applicable, under agreements having provisions similar to this Section 2.15, after consideration of such factors as the Administrative Agent, such Lender or such Issuing Bank, as applicable, then reasonably determines to be relevant).

(c)            A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)            Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

Section 2.16. Break Funding Payments.

(a)            With respect to Loans that are not RFR Loans, in the event of (i) the payment of any principal of any Term Benchmark Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (ii) the conversion of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto, (iii) the failure to borrow, convert, continue or prepay any Term Benchmark Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (iv) the assignment of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(b)            With respect to RFR Loans, in the event of (i) the payment of any principal of any RFR Loan other than on the Interest Payment Date applicable thereto (including as a result of an Event of Default or an optional or mandatory prepayment of Loans), (ii) the failure to borrow or prepay any RFR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under ‎Section 2.11 and is revoked in accordance therewith) or (iii) the assignment of any RFR Loan other than on the Interest Payment Date applicable thereto as a result of a request by the Borrowers pursuant to Section 2.18, then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

Section 2.17. Withholding of Taxes; Gross-Up. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(c)            Evidence of Payment. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)            Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e)            Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to setoff and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this Section 2.17(e).

(f)             Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Representative and the Administrative Agent, at the time or times reasonably requested by the Borrower Representative or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower Representative or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower Representative or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower Representative or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), 2.17(ii)(B) and 2.17(ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)            Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

(A)          any Lender that is a U.S. Person shall deliver to the Borrower Representative and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), an executed copy of IRS Form W-9 (or successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)          any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), whichever of the following is applicable:

(1)            in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E (or successor forms), as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E (or successor forms), as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(3)            in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit E-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

(4)            to the extent a Foreign Lender is not the beneficial owner, an executed copy of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-2 or Exhibit E-3, IRS Form W-9 (or successor form), and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-4 on behalf of each such direct and indirect partner;

(C)           any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)           if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Representative and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Representative or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Representative or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g)            Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.17(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.17(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.17(g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)            Survival. Each party’s obligations under this Section shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the Payment in Full of the Secured Obligations).

(i)             Defined Terms. For purposes of this Section 2.17, the term “Lender” includes any Issuing Bank and the term “applicable law” includes FATCA.

Section 2.18. Payments Generally; Allocation of Proceeds; Sharing of Setoffs. (a) The Borrowers shall make each payment or prepayment required to be made by them hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without setoff, recoupment or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, Floor L2, Chicago, Illinois, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

(b)            All payments and any proceeds of Collateral received by the Administrative Agent (subject to the terms of the Intercreditor Agreement) (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrowers), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when a Dominion Period is in effect (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), second, to pay any fees, indemnities, or expense reimbursements then due to the Lenders from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), third, to pay interest due in respect of the Overadvances and Protective Advances, fourth, to pay the principal of the Overadvances and Protective Advances, fifth, to pay interest then due and payable on the Loans (other than the Overadvances and Protective Advances) ratably, sixth, to prepay principal on the Loans (other than the Overadvances and Protective Advances) and unreimbursed LC Disbursements, to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate LC Exposure, to be held as cash collateral for such Obligations, ratably, seventh, to payment of any amounts owing in respect of Banking Services Obligations and Swap Agreement Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.22, and eighth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrowers. Notwithstanding the foregoing amounts received from any Loan Party shall not be applied to any Excluded Swap Obligation of such Loan Party. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Term Benchmark Loan of a Class, except (a) on the expiration date of the Interest Period applicable thereto or (b) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any such event, the Borrowers shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

(c)            At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of any Borrower maintained with the Administrative Agent (and the Administrative Agent will provide reasonably prompt notice of such deduction from any deposit account to the Borrower Representative, provided that failure to provide such notice shall not limit the ability of the Administrative Agent to make such deduction). The Borrowers hereby irrevocably authorize (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans and Overadvances, but such a Borrowing may only constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.03, 2.04 or 2.05, as applicable, and (ii) the Administrative Agent to charge any deposit account of any Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d)            If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

(e)            Unless the Administrative Agent shall have received, prior to any date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank pursuant to the terms hereof or any other Loan Document (including any date that is fixed for prepayment by notice from the Borrower Representative to the Administrative Agent pursuant to Section 2.11(f)), notice from the Borrower Representative that the Borrowers will not make such payment or prepayment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the NYFRB Rate.

Section 2.19. Mitigation Obligations; Replacement of Lenders.

(a)            If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)            If any Lender requests compensation under Section 2.15, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Section 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each party hereto agrees that (x) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower Representative, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (y) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

Section 2.20. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)            fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b)            any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.18(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize the LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower Representative may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower Representative, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by any Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrowers’ obligations corresponding to such Defaulting Lender’s LC Exposure and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (d) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;

(c)            such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02) or under any other Loan Document; provided, that, except as otherwise provided in Section 9.02, this Section 2.20(c) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

(d)            if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i)             all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender’s Revolving Exposure to exceed its Revolving Commitment;

(ii)            if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrowers’ obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)           if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)           if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v)            if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(e)            so long as such Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.20(d), and participating interests in any such newly made Swingline Loan or LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(d)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent shall occur following the date hereof and for so long as such event shall continue or (ii) the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Issuing Bank shall have entered into arrangements with the Borrowers or such Lender, satisfactory to the Issuing Bank to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrowers and the Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage, whereupon such Lender will cease to be a Defaulting Lender; provided that, no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of SMG while that Lender was a Defaulting Lender; provided, further, that, except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

Section 2.21. Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.21 shall survive the termination of this Agreement.

Section 2.22. Banking Services and Swap Agreements. Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or contingent). In addition, each such Lender or Affiliate thereof shall deliver to the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations. The most recent information provided to the Administrative Agent shall be used in determining the amounts to be applied in respect of such Banking Services Obligations and/or Swap Agreement Obligations pursuant to Section 2.18(b) and which tier of the waterfall, contained in Section 2.18(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed. For the avoidance of doubt, so long as JPMCB or its Affiliate is the Administrative Agent, neither JPMCB nor any of its Affiliates providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall be required to provide any notice described in this Section 2.22 in respect of such Banking Services or Swap Agreements.

ARTICLE III

Representations and Warranties.

Each Loan Party represents and warrants to the Lenders that:

Section 3.01. Organization; Powers. Each Loan Party and each Subsidiary is duly organized or formed, validly existing and in good standing (or the equivalent concept as applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and is qualified to do business, and is in good standing (or the equivalent concept as applicable in the relevant jurisdiction), in every other jurisdiction where such qualification is required except where the failure to be so qualified, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 3.02. Authorization; Enforceability. The Transactions are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and, if required, actions by equity holders. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) do not require any consent or approval of any holder of any Equity Interests of a Loan Party or any consent or approval of any other Person under any material agreement of any Loan Party, except such as have been obtained or made and are in full force and effect, (c) will not violate or conflict with, or require any consent under, any Organizational Document of any Loan Party or any Subsidiary, (d) will not violate any Requirement of Law applicable to any Loan Party or any Subsidiary, (e) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary (except, in the case of this clause (e), to the extent that such violation or default, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect), and (f) will not result in the creation or imposition of, or the requirement to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

Section 3.04. Financial Condition; No Material Adverse Change. (a) SMG has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2021 and December 31, 2022, reported on by MaloneBailey LLP, independent public accountants, and (ii) as of and for the fiscal month and the portion of the fiscal year ended May 31, 2023, certified by a Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of SMG and its consolidated Subsidiaries, respectively, as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)            SMG has heretofore furnished to the Lenders the consolidated balance sheet and statements of income, stockholders equity and cash flows of the Barnhart Target Companies (i) as of and for the fiscal years ended December 31, 2021 and December 31, 2022, reported on by Schneider Downs & Co., Inc., independent public accountants, and (ii) as of and for the fiscal month and the portion of the fiscal year ended May 31, 2023, certified by a Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Barnhart Target Companies on a consolidated basis as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments (all of which, when taken as a whole, would not be materially adverse) and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(c)            No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2022.

Section 3.05. Properties. (a) As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by any Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists. Each of the Loan Parties and each of its Subsidiaries has good title to, or (to the knowledge of the Borrowers) valid leasehold interests in, all of its real and personal property material to its business, free of all Liens other than Permitted Liens and other minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)            Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by each Loan Party and each Subsidiary does not, to their knowledge, infringe in any material respect upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, and each Loan Party’s and each Subsidiary’s rights thereto are not subject to any licensing agreement or similar arrangement.

Section 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any Loan Document or the Transactions.

(b)            Except for the Disclosed Matters (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (B) has become subject to any Environmental Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of any basis for any Environmental Liability.

Section 3.07. Compliance with Laws and Agreements; No Default. Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (a) all Requirements of Law applicable to it or its property, and (b) all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing.

Section 3.08. Investment Company Status. No Loan Party or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

Section 3.09. Taxes. Each Loan Party and each Subsidiary has timely filed or caused to be filed all federal income Tax returns and all other material Tax returns and reports required to have been filed and has paid or caused to be paid all federal income Taxes and all other material Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect. No tax liens have been filed.

Section 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.

Section 3.11. Disclosure. (a) The Loan Parties have disclosed to the Lenders all material agreements, instruments and corporate or other restrictions to which any Loan Party or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) on or prior to the Effective Date, when taken as a whole and after giving effect to all supplements and updates thereto, did not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information delivered as of the Effective Date, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered (it being understood by the Administrative Agent and the Lenders that any such Projections are as to future events and are not to be viewed as facts are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and that no assurances can be given that such projections will be realized and that actual results during the period or periods covered by such projections may differ materially from projected results).

Section 3.12. Material Agreements. All Material Agreements to which any Loan Party or any Subsidiary is a party or is bound as of the date of this Agreement are listed on Schedule 3.12. No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Material Agreement to which it is a party beyond applicable notice and cure periods, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 3.13. Solvency. (a) Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

Section 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance due and payable on or prior to the Effective Date have been paid. Each Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their real and personal property in at least such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as are adequate and customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

Section 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to SMG of each and all of SMG’s Subsidiaries, (b) a true and complete listing of each class of each Loan Party’s (other than SMG) authorized Equity Interests and the authorized Equity Interests of each Subsidiary of a Loan Party, all of which issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of SMG and each of its Subsidiaries. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable. There are no outstanding commitments or other obligations of any Loan Party (other than SMG) to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Loan Party (other than SMG).

Section 3.16. Security Interest in Collateral. The provisions of the Collateral Documents will create legal and valid Liens on all of the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and, when financing statements in appropriate form are filed in the applicable filing offices, such Liens will constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable Requirement of Law and (b) Liens perfected only by possession (or notation of a Lien on any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral (or notated its Lien on any such certificate of title).

Section 3.17. Employment Matters. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened. The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Loan Parties, all payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary in all material respects in accordance with and to the extent required by GAAP.

Section 3.18. Margin Regulations. No Loan Party is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of Credit hereunder will be used to buy or carry any Margin Stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated basis) will be Margin Stock.

Section 3.19. Use of Proceeds. The proceeds of the Loans have been used and will be used as set forth in Section 5.08.

Section 3.20. No Burdensome Restrictions. No Loan Party is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

Section 3.21. Anti-Corruption Laws and Sanctions. Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and, to the knowledge of such Loan Party, its employees, and agents, are in compliance with applicable Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) any Loan Party, any Subsidiary, or any of their respective directors or officers or (b) to the knowledge of any such Loan Party or Subsidiary, any of their respective employees or agents of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate applicable Anti-Corruption Laws or applicable Sanctions.

Section 3.22. [Reserved].

Section 3.23. Common Enterprise. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in furtherance of its direct and/or indirect business interests, will be of direct and/or indirect benefit to such Loan Party, and is in its best interest.

Section 3.24. Affected Financial Institutions. No Loan Party is an Affected Financial Institution.

Section 3.25. Plan Assets; Prohibited Transactions. No Loan Party or any of its Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

ARTICLE IV

Conditions

Section 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)            Credit Agreement and Other Loan Documents. The Administrative Agent (or its counsel) shall have received (i) from each party hereto a counterpart of this Agreement signed on behalf of such party (which, subject to Section 9.06(b), may include any Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), (ii) either (A) a counterpart of each other Loan Document signed on behalf of each party thereto or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page thereof) that each such party has signed a counterpart of such Loan Document and (iii) such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders and the other Secured Parties, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(b)            Financial Statements and Projections. The Lenders shall have received (i) audited consolidated financial statements of SMG for the 2021 and 2022 fiscal years, (ii) satisfactory unaudited interim consolidated financial statements of SMG for each fiscal month ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements described in this clause (ii) shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of such Borrowers, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph, (iii) audited consolidated financial statements of the Barnhart Target Companies for the 2021 and 2022 fiscal years, (iv) satisfactory unaudited interim consolidated financial statements of the Barnhart Target Companies for each fiscal month ended after the date of the latest applicable financial statements delivered pursuant to clause (iii) of this paragraph as to which such financial statements are available, and such financial statements described in this clause (iv) shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of such Barnhart Target Companies, as reflected in the audited, consolidated financial statements described in clause (iii) of this paragraph, and (v) satisfactory projections through December 31, 2026.

(c)            Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of each Borrower, its Financial Officers, and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement, or other Organizational Documents, and (ii) a good standing certificate for each Loan Party from its jurisdiction of organization or the substantive equivalent available in the jurisdiction of organization for each Loan Party from the appropriate governmental officer in such jurisdiction.

(d)            No Default Certificate. The Administrative Agent shall have received a certificate, signed by a Financial Officer of each Borrower, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

(f)             Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each jurisdiction where the Loan Parties are organized and where the assets of the Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for Permitted Liens or Liens discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

(g)            Payment of Outstanding Indebtedness. The Administrative Agent shall have received evidence that immediately after the making of the Loans on the Effective Date, any Indebtedness not permitted by Section 6.01 shall be paid in full from the proceeds of the initial Loans or otherwise, and the commitments in respect of such Indebtedness shall be permanently terminated, and all Liens securing payment of any such Indebtedness shall be released and the Administrative Agent shall have received all payoff and release letters, mortgage releases, Uniform Commercial Code Form UCC-3 termination statements or other instruments or agreements as may be suitable or appropriate in connection with the release of any such Liens and satisfactory to the Administrative Agent.

(h)            Funding Account and Borrowing Request. The Administrative Agent shall have received (i) a notice setting forth the deposit account of the Borrowers (the “Funding Account”) to which the Administrative Agent is authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement, which notice may be contained in the Borrowing Request, and (ii) a Borrowing Request in accordance with Section 2.03 with respect to the Revolving Loans to be made on the Effective Date.

(i)             Customer List. The Administrative Agent shall have received a true and complete customer list for each Borrower and its Subsidiaries, which list shall state the customer’s name, mailing address and phone number and shall be certified as true and correct by a Financial Officer of the Borrower Representative.

(j)             Collateral Access Agreements. The Administrative Agent shall have received each Collateral Access Agreement required to be provided pursuant to Section 4.13 of the Security Agreement.

(l)             Borrowing Base Certificate. The Administrative Agent shall have received a Borrowing Base Certificate which calculates the Borrowing Base as of May 31, 2023.

(m)            Closing Availability. After giving effect to all Borrowings to be made on the Effective Date, the issuance of any Letters of Credit on the Effective Date and the payment of all fees and expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current, Excess Availability shall not be less than $5,000,000.

(n)            Term Loan Debt. (i) All conditions precedent to the effectiveness of the Term Loan Credit Agreement and the other Term Loan Debt Documents (as applicable), on terms reasonably acceptable to Administrative Agent, shall have been satisfied or waived by the Term Loan Lenders in accordance with the Term Loan Credit Agreement, (ii) the Term Loan Agent, on behalf of the Term Loan Lenders, shall have executed and delivered the Intercreditor Agreement, which shall be in form and substance reasonably satisfactory to the Administrative Agent, (iii) the Administrative Agent shall have received fully-executed copies of the Term Loan Debt Documents, the terms and conditions of which shall be reasonably acceptable to the Administrative Agent, and (iv) the Borrowers shall have received (or will receive concurrently with the funding of the Loans on the Effective Date) at least $31,600,000 of gross proceeds of the Term Loan Debt funded by the Term Loan Lenders in accordance with the Term Loan Debt Documents.

(o)            Pledged Equity Interests; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(r)             [Reserved].

(s)            Barnhart Acquisition. (i) All conditions precedent to the consummation of the Barnhart Acquisition shall have been satisfied and the Barnhart Acquisition shall have been consummated, or will be consummated substantially concurrently with the funding of the Loans, in all material respects in accordance with the Barnhart Acquisition Documents, (ii) Administrative Agent shall have received a fully-executed copy of each of the Barnhart Acquisition Documents, which shall be in form and substance reasonably satisfactory to the Administrative Agent, and (iii) the Skyline Merger shall have been consummated.

(t)             Insurance. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.10 hereof and Section 4.12 of the Security Agreement.

(u)            Letter of Credit Application. If a Letter of Credit is requested to be issued on the Effective Date, the Administrative Agent shall have received a properly completed letter of credit application (whether standalone or pursuant to a master agreement, as applicable) and the Borrowers shall have executed the Issuing Bank’s master agreement for the issuance of commercial Letters of Credit.

(v)            Tax Withholding. The Administrative Agent shall have received a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(w)            Field Examination. The Administrative Agent or its designee shall have conducted a field examination of the Borrowers’ Accounts and related working capital matters and of the Borrowers’ related data processing and other systems, the results of which shall be satisfactory to the Administrative Agent in its sole discretion.

(x)             Legal and Regulatory Due Diligence. The Administrative Agent and its counsel shall have completed all legal, regulatory, Collateral and financial due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.

(y)            USA PATRIOT Act, Etc. (i) The Administrative Agent shall have received, at least five (5) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to the extent requested in writing of the Borrowers at least ten (10) days prior to the Effective Date, and (ii) to the extent any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has requested, in a written notice to the Borrowers at least ten (10) days prior to the Effective Date, a Beneficial Ownership Certification in relation to each Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).

(z)             Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrowers, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., Chicago time, on the date of this Agreement (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Section 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)            The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

(b)            At the time of and immediately after giving effect to such Borrowing or the issuance, amendment or extension of such Letter of Credit, as applicable, (i) no Default shall have occurred and be continuing and (ii) no Protective Advance shall be outstanding.

(c)            After giving effect to any Borrowing or the issuance, amendment or extension of any Letter of Credit, Availability shall not be less than zero.

Each Borrowing and each issuance, amendment or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a) or (b) of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no obligation to, issue, amend or extend, or cause to be issued, amended or extended, any Letter of Credit for the ratable account and risk of Lenders from time to time if the Administrative Agent believes that making such Loans or issuing, amending or extending, or causing the issuance, amendment or extension of, any such Letter of Credit is in the best interests of the Lenders.

ARTICLE V

Affirmative Covenants

Section 5.01. Financial Statements; Borrowing Base and Other Information. The Borrowers will furnish to the Administrative Agent and each Lender:

(a)            within one hundred twenty (120) days after the end of each fiscal year of SMG, its audited consolidated balance sheet and related statements of income or operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Schneider Downs & Co., Inc., MaloneBailey LLP or any other independent public accountants of recognized national standing or otherwise approved by Administrative Agent in its Permitted Discretion (without a “going concern” or like qualification, commentary or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of SMG and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants, if applicable;

(b)            [reserved];

(e)            [reserved];

(f)            as soon as available but in any event on or prior to January 31 of each year of SMG, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and cash flow statement, and a calculation of the projected Fixed Charge Coverage Ratio as of the end of each month) of SMG for each month of the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

(g)            as soon as available but in any event within twenty (20) days after the end of each calendar month or, with respect to any calendar month ending on or before December 31, 2023, within thirty (30) days after the end of each such month (or, during any Trigger Period, weekly, within 3 Business Days after the end of each calendar week, calculated as of the end of such prior week), and at such other times as may be necessary to re-determine Availability or as may be requested by the Administrative Agent, as of the period then ended, a Borrowing Base Certificate and supporting information in connection therewith, together with any additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request;

(h)            as soon as available but in any event within twenty (20) days after the end of each calendar month or, with respect to any calendar month ending on or before December 31, 2023, within thirty (30) days after the end of each such month (or, during any Trigger Period, weekly, within 3 Business Days after the end of each calendar week) and at such other times as may be requested by the Administrative Agent, as of the period then ended, all delivered electronically in a text formatted file acceptable to the Administrative Agent;

(i)             a detailed aging of the Borrowers’ Accounts, including all invoices aged by invoice date and due date (with an explanation of the terms offered), prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the name, address, and balance due for each Account Debtor;

(ii)            a worksheet of calculations prepared by the Borrowers to determine Eligible Accounts, such worksheets detailing the Accounts excluded from Eligible Accounts and the reason for such exclusion;

(iii)           a reconciliation of the Borrowers’ Accounts between (A) the amounts shown in the Borrowers’ general ledger and financial statements and the reports delivered pursuant to clause (i) above and (B) the amounts and dates shown in the reports delivered pursuant to clause (i) above and the Borrowing Base Certificate delivered pursuant to clause (g) above as of such date; and

(iv)           a reconciliation of the loan balance per the Borrowers’ general ledger to the loan balance under this Agreement;

(i)            as soon as available but in any event within twenty (20) days after the end of each calendar month (or within thirty (30) days after the end of each calendar month ending on or before December 31, 2023) and at such other times as may be requested by the Administrative Agent, as of the month then ended, a schedule and aging of the Borrowers’ accounts payable, delivered electronically in a text formatted file acceptable to the Administrative Agent;

(j)            promptly, and in any event within twenty (20) days after the end of each calendar quarter (or within thirty (30) days after the end of each calendar quarter ending on or before December 31, 2023) and at such other times as may be requested by the Administrative Agent, an updated customer list for each Borrower and its Subsidiaries as of a recent date, which list shall state the customer’s name, mailing address and phone number, delivered electronically in a text formatted file acceptable to the Administrative Agent and certified as true and correct by a Financial Officer of the Borrower Representative;

(k)            promptly, and in any event within five (5) Business Days, upon the Administrative Agent’s reasonable request:

(i)             copies of invoices issued by the Borrowers in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;

(ii)            copies of purchase orders, invoices, and shipping and delivery documents in connection with any Equipment purchased by any Loan Party; and

(iii)           a schedule detailing the balance of all intercompany accounts of the Loan Parties;

(l)            promptly, and in any event within five (5) Business Days, upon the Administrative Agent’s request, the Borrowers’ sales journal, cash receipts journal (identifying trade and non-trade cash receipts) and debit memo/credit memo journal as of a recent date;

(m)            promptly, and in any event within five (5) Business Days, upon the Administrative Agent’s request, copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service;

(n)            within twenty (20) days after the end of each March and September, a certificate of good standing or the substantive equivalent available in the jurisdiction of incorporation, formation or organization for each Loan Party from the appropriate governmental officer in such jurisdiction;

(o)            promptly, and in any event within five (5) Business Days, upon the Administrative Agent’s request, a detailed listing of all advances of proceeds of Loans requested by the Borrower Representative for each Borrower during the immediately preceding calendar month and a detailed listing of all intercompany loans made by the Borrowers during such calendar month;

(p)            promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by SMG or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by SMG to its shareholders generally, as the case may be;

(q)            promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that any Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that any Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if a Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, upon the request of the Administrative Agent or any Lender, the applicable Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof;

(r)            promptly following any request therefor, (i) such other information regarding the operations, changes in ownership of Equity Interests (other than Equity Interests of SMG), business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may reasonably request, and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation;

(s)            promptly after receipt thereof by any Borrower or any Subsidiary, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by the SEC or such other agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;

(t)            promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of such Loan Party or any Subsidiary, or any audit of any of them as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request; and

(u)            concurrently with delivery thereof under the Term Loan Credit Agreement, copies of any reports or notices (including any compliance certificates, “Rolling Stock Reports” and “Term Loan Borrowing Base Certificates” (as each such term is defined in the Term Loan Credit Agreement) thereunder) delivered to the Term Loan Agent or Term Loan Lenders pursuant to the Term Loan Credit Agreement, to the extent not otherwise required to be delivered hereunder.

Documents required to be delivered pursuant to Section 5.01(a) or (p) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such documents are posted on a Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent); provided that: (A) upon written request by the Administrative Agent (or any Lender through the Administrative Agent) to the Borrower Representative, the Borrower Representative shall deliver paper copies of such documents to the Administrative Agent or such Lender until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the Borrower Representative shall notify the Administrative Agent and each Lender (by fax or through Electronic Systems) of the posting of any such documents and provide to the Administrative Agent through Electronic Systems electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by any Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents to it and maintaining its copies of such documents.

SMG represents and warrants that each of it, and its Controlling and Controlled entities, in each case, if any (collectively with the Borrowers, the “Relevant Entities”), either (i) has no SEC registered or unregistered, publicly traded securities outstanding, or (ii) files its financial statements with the SEC and/or makes its financial statements available to potential holders of its securities, and, accordingly, SMG hereby (A) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a) and (c) above (limited, in the case of Section 5.01(c), to the financial statements provided for the last month of each calendar quarter) (collectively or individually, as the context requires, the “Financial Statements”), along with the Loan Documents, available to Public-Siders and (B) agree that at the time such Financial Statements are provided hereunder, they shall already have been made available to holders of any such securities. SMG will not request that any other material be posted to Public-Siders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Relevant Entities have no outstanding SEC registered or unregistered, publicly traded securities. Notwithstanding anything herein to the contrary, in no event shall SMG request that the Administrative Agent make available to Public-Siders budgets or any certificates, reports or calculations with respect to the Borrowers’ compliance with the covenants contained herein or with respect to the Borrowing Base.

Section 5.02. Notices of Material Events. The Borrower Representative will furnish to the Administrative Agent (for distribution to each Lender) prompt (but in any event within any time period that may be specified below) written notice of the following:

(a)            the occurrence of any Default hereunder or any “Default” under, and as defined in, the Term Loan Documents;

(b)            receipt of any notice of any investigation by a Governmental Authority or any litigation or Proceeding commenced or threatened against any Loan Party or any Subsidiary that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability, or (vi) asserts liability on the part of any Loan Party or any Subsidiary in excess of $1,000,000 in respect of any tax, fee, assessment, or other governmental charge;

(c)            any filing by a Governmental Authority with respect to a Lien imposed by law for Taxes in excess of $50,000 that are past due and payable (unless being contested in compliance with Section 5.04) or receipt of any other written notice claiming a Lien arising by operation of law that may obtain priority over the Lien in favor of the Administrative Agent by operation of law;

(d)            any loss, damage, or destruction to the Collateral in the amount of $1,000,000 or more, whether or not covered by insurance;

(e)            within two (2) Business Days of receipt thereof, any and all default notices received under or with respect to any leased location or public warehouse where Collateral in the amount of $1,000,0000 or more is located;

(f)             all amendments to the Term Loan Documents, together with a copy of each such amendment;

(g)            within two (2) Business Days after the occurrence thereof, any Loan Party entering into a Swap Agreement or an amendment thereto, together with copies of all agreements evidencing such Swap Agreement or amendment;

(i)             within five (5) Business Days after any Loan Party obtains knowledge of any other development that results, or could reasonably be expected to result in, a Material Adverse Effect; and

(j)             within five (5) Business Days after any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

Each notice delivered under this Section 5.02 (i) shall be in writing, (ii) shall contain a heading or a reference line that reads “Notice under Section 5.02 of the Credit Agreement” and (iii) shall be accompanied by a statement of a Responsible Officer or other executive officer of the Borrower Representative setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, (b) maintain all requisite authority to conduct its business in its jurisdiction of organization and each other jurisdiction in which its business is conducted, except to the extent that the failure to be so qualified in any such other jurisdiction could not reasonably be expected to have a Material Adverse Effect, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03, and (c) carry on and conduct its business in substantially the same fields of enterprise as it is presently conducted (or such other types of business permitted by Section 6.03(c)).

Section 5.04. Payment of Obligations. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except (i) where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) none of the Collateral would become subject to forfeiture or loss as a result of the contest, or (ii) with respect to Taxes and other material liabilities and obligations, to the extent the failure to so pay could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; provided, however, that each Loan Party will, and will cause each Subsidiary to, remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

Section 5.05. Maintenance of Properties. Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, except to the extent such failure could not reasonably be expected to have a Material Adverse Effect.

Section 5.06. Books and Records; Inspection Rights. Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries, in all material respects, are made of all material dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at such Loan Party’s premises field examinations of such Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants (and hereby authorizes the Administrative Agent and each Lender to contact its independent accountants directly) and to provide contact information for each bank where each Loan Party has a depository and/or securities account and each such Loan Party hereby authorizes the Administrative Agent and each Lender to contact the bank(s) in order to request bank statements and/or balances, all at such reasonable times and as often as reasonably requested. Each Loan Party acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to such Loan Party’s assets for internal use by the Administrative Agent and the Lenders. The Loan Parties shall be responsible for the costs of expenses of one (1) field examination during any 12-month period and, at the Administrative Agent’s election, one (1) additional field examination (for the total of two (2) such field examinations during any 12-month period) conducted at any time during any 12-month period after Availability falls below the greater of (x) $2,000,000 and (y) 15.0% of the Aggregate Revolving Commitment; provided, that the Loan Parties shall be responsible for the costs and expenses of all field examinations initiated while an Event of Default has occurred and is continuing (and no prior notice shall be required during the continuance of an Event of Default); provided further, that if any Accounts are acquired in connection with an Acquisition and are proposed to be included in the determination of the Borrowing Base, the Administrative Agent shall have the right to conduct a field examination of such Accounts and any such field examination shall be disregarded for purposes of the limits on field exams contained in this section.

Section 5.07. Compliance with Laws and Material Contractual Obligations. Each Loan Party will, and will cause each Subsidiary to, (a) comply with each Requirement of Law applicable to it or its property (including without limitation applicable Environmental Laws) and (b) perform in all material respects its obligations under Material Agreements to which it is a party, except, in each case of clause (a) or (b), where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Loan Party will maintain in effect and enforce policies and procedures reasonably designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions.

Section 5.08. Use of Proceeds.

(a)            The proceeds of the Loans and the Letters of Credit will be used only (i) to consummate the Barnhart Acquisition and the other Transactions on the Effective Date (including the refinancing of Indebtedness on the Effective Date and the payment of fees and expenses related to the Transactions), and (ii) for working capital and general corporate purposes. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, (x) for any purpose that entails a violation of any of the regulations of the Federal Reserve Board, including Regulations T, U and X or (y) to make any Acquisition other than a Permitted Acquisition.

(b)            No Borrower will request any Borrowing or Letter of Credit, and no Borrower shall use, and each Borrower shall procure that its Subsidiaries and its and their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

Section 5.09. Accuracy of Information. The Loan Parties will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by the Borrowers on the date thereof as to the matters specified in this Section; provided that, with respect to projected financial information, the Loan Parties will only ensure that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

Section 5.10. Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers (a) insurance in such amounts (with no greater risk retention) and against such risks (including, without limitation: loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

Section 5.11. Casualty and Condemnation. The Borrowers will furnish to the Administrative Agent and the Lenders prompt written notice upon obtaining knowledge of any casualty or other insured damage to any material portion of the Collateral with a book value in excess of $250,000 or the commencement of any action or proceeding for the taking of any material portion of the Collateral with a book value in excess of $250,000 or interest therein under power of eminent domain or by condemnation or similar proceeding.

Section 5.12. Appraisals. At any time that the Borrowers obtain any appraisal of their Equipment (including vehicles) pursuant to the Term Loan Credit Agreement, provide a copy thereof to the Administrative Agent concurrently with the delivery thereof to the Term Loan Agent.

Section 5.13. Depository Banks. From and after the date required on Schedule 5.15 (or such later date as may be approved in writing by the Administrative Agent in its sole discretion (including by e-mail notification)), each Borrower and each Subsidiary will maintain the Administrative Agent as its principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity and other deposit accounts for the conduct of its business. Additionally, from and after such date, the Administrative Agent shall be the principal provider of other Banking Services to the Borrowers and their Subsidiaries.

Section 5.14. Additional Collateral; Further Assurances. (a) Subject to applicable Requirement of Law, each Loan Party will cause each Subsidiary formed or acquired after the date of this Agreement (other than any Inactive Subsidiary) to become a Loan Party by executing a Joinder Agreement, concurrently with the formation or acquisition thereof, or such later date as may be approved in writing by the Administrative Agent in its sole discretion. In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to comply with the applicable “know your customer” rules and regulations, including the USA Patriot Act. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor or, if approved by Administrative Agent, a Borrower hereunder and thereupon shall have all of the rights, benefits, duties and obligations in such capacity under the Loan Documents, and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral. The Loan Parties will (concurrently with the formation or acquisition thereof, or such later date as may be approved in writing by the Administrative Agent in its sole discretion) cause to be delivered customary secretary’s certificates and other deliverables, including favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in this Section 5.14), in form, content and scope reasonably satisfactory to the Administrative Agent. The Loan Parties shall notify the Administrative Agent, regarding such Subsidiary, of (i) its jurisdiction of formation, (ii) the number of shares of each class of its Equity Interests outstanding, (iii) the number and percentage of outstanding shares of each class owned (directly or indirectly) by the Loan Parties or any Subsidiary and (iv) the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto.

(b)            Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and each Foreign Subsidiary that constitutes a Loan Guarantor, and (ii) 65% (or such greater percentage that, due to a change in applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in each Foreign Subsidiary (to the extent not a Loan Guarantor) directly owned by such Loan Party to be subject at all times to a first priority (subject to the Term Loan Liens and Permitted Encumbrances which may have priority by operation of Requirements of Law), perfected Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

(c)            Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by any Requirement of Law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.

(d)            If any material assets are acquired by any Loan Party after the Effective Date (other than Excluded Property or assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower Representative will (i) notify the Administrative Agent and the Lenders thereof and, if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii) take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in Section 5.14(c) above, all at the expense of the Loan Parties.

Section 5.15. Post-Closing Obligations. The Loan Parties shall satisfy each requirement set forth on Schedule 5.15 on or before the respective date specified for such requirement (or such later date as may be approved in writing by the Administrative Agent in its sole discretion (including by e-mail notification)).

ARTICLE VI

Negative Covenants

Section 6.01. Indebtedness. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(a)            the Secured Obligations;

(b)            (i) the Term Loan Debt, so long as such Term Loan Debt is subject to the Intercreditor Agreement and is not in excess of the Term Loan Maximum Amount (as defined in the Intercreditor Agreement), and (ii) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with Section 6.01(f) hereof;

(c)            Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party owing to any Borrower or any other Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party owing to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

(d)            Guarantees by any Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any Borrower or any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this Section 6.01(d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

(e)            Indebtedness of any Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with Section 6.01(f) below; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(e) together with any Refinance Indebtedness in respect thereof permitted by Section 6.01(f) below, shall not exceed $1,000,000 at any time outstanding;

(f)            Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness described in Sections 6.01(b), 6.01(e), 6.01(i), 6.01(j) and 6.01(k) hereof (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (i) such Refinance Indebtedness does not increase the principal amount or interest rate of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of such Refinance Indebtedness other than fees and interests are not less favorable to the obligor thereunder than the original terms of such Original Indebtedness, (vi) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness, and (vii) if the Original Indebtedness consists of Term Loan Debt, such Refinancing Indebtedness and the Liens securing such Refinancing Indebtedness must be subject to the Intercreditor Agreement;

(i)            (i) the Barnhart Seller Note and other Subordinated Indebtedness with terms reasonably satisfactory to the Administrative Agent in an aggregate principal amount not exceeding $3,000,000 at any time outstanding (excluding the Barnhart Seller Note) and (ii) any unsecured Indebtedness that consists of deferred purchase price obligations, earn-out obligations or similar contingent obligations arising out of an Acquisition, in each case, on terms reasonably acceptable to Administrative Agent in an aggregate principal amount not exceeding $1,000,000;

(j)            Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(j), together with any Refinance Indebtedness in respect thereof permitted by Section 6.01(f) above, shall not exceed $1,000,000 at any time outstanding;

(k)            Indebtedness arising from the endorsement of instruments for collection in the ordinary course of business;

(l)            Indebtedness consisting of the financing of unpaid insurance premiums of any Loan Party in the ordinary course of business, so long as (i) such Indebtedness shall not be in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the underlying term of such insurance policy (not to exceed 1 year) and (ii) any unpaid amount of such Indebtedness is fully cancelled upon termination of the underlying insurance policy;

(m)            Indebtedness of an Inactive Subsidiary pursuant to an EIDL Note in an aggregate principal amount outstanding not to exceed $265,000; and

(n)            other unsecured Indebtedness in an aggregate principal amount not exceeding $2,000,000.

Section 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

(a)            (i) Liens created pursuant to any Loan Document, and (ii) Term Loan Liens;

(b)            Permitted Encumbrances;

(c)            any Lien on any property or asset of any Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of such Borrower or Subsidiary or any other Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d)            Liens on fixed or capital assets acquired, constructed or improved by any Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by Section 6.01(e), (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of such Borrower or Subsidiary or any other Borrower or Subsidiary;

(e)            any Lien existing on any property or asset prior to the acquisition thereof by any Borrower or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(f)            Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(g)            Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;

(h)            Liens on any property or assets of any Inactive Subsidiary to secure the Indebtedness evidenced by the EIDL Notes; provided that (i) such Lien shall not apply to any property or asset of any Loan Party, and (ii) such Lien shall secure only those obligations which it secures on the Effective Date;

(i)            Liens granted by a Subsidiary that is not a Loan Party in favor of any Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;

(j)            Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into in the ordinary course of business, or the rights of a seller of goods to reclaim those goods (whether arising by operation of law under Article 2 of the UCC or by contract in favor of the reclaiming seller);

(k)            Liens solely on any reasonable and customary cash earnest money deposits, escrow arrangements or similar arrangements made by any Loan Party in connection with any letter of intent or purchase agreement for a Permitted Acquisition or other transaction permitted hereunder;

(l)            leases or subleases of real or personal property granted to other Persons (as lessee thereof) that do not (i) interfere in any material respect with the business of any Borrower and its Subsidiaries, taken as a whole or (ii) secure Indebtedness;

(m)            Liens arising from grants of non-exclusive licenses or sublicenses of intellectual property made in the ordinary course of business;

(a)            ground leases or subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by SMG or any Subsidiary are located;

(b)            Liens purportedly evidenced by any precautionary UCC financing statement evidencing a lease intended to be an operating lease;

(n)            Liens securing the Indebtedness permitted under Section 6.01(l) so long as such Liens ‎attach ‎solely to such insurance policies and the unearned premiums in respect of such insurance ‎policies ‎‎(including any gross unearned premiums and any payment on account of loss which ‎results in ‎reduction of unearned premiums); and

(o)            other Liens not otherwise described in this Section 6.02 securing obligations (other than Total Funded Indebtedness) incurred in the ordinary course of business in an aggregate outstanding amount not to exceed $500,000.

Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.02 may at any time attach to any Loan Party’s Accounts, other than those permitted under clause (a) of the definition of Permitted Encumbrances and Section 6.02(a) above.

Section 6.03. Fundamental Changes. (a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise Dispose of all or any substantial part of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing (i) any Subsidiary of any Borrower may merge into a Borrower in a transaction in which such Borrower is the surviving entity, (ii) any Loan Party (other than SMG) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party (or, if such Loan Party is merged with a Borrower, such Borrower shall be the surviving entity) and (iii) any Subsidiary that is not a Loan Party (including any Inactive Subsidiary) may liquidate or dissolve if the Loan Party which owns such Subsidiary determines in good faith that such liquidation or dissolution is in the best interests of the Loan Parties and such liquidation or dissolution is not materially disadvantageous to the Lenders and all assets of such Subsidiary are transferred to a Loan Party, and (iv) any Subsidiary of SMG that is not a Loan Party may Dispose of all or any substantial part of its assets to any Loan Party, (v) any Loan Guarantor may Dispose of all or any substantial part of its assets to any other Loan Guarantor or any Borrower, and (vi) any Borrower (other than SMG) may Dispose of all or any substantial part of its assets (but not its liabilities) to any other Borrower; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b)            No Loan Party will, nor will it permit any Subsidiary to, consummate a Division as the Dividing Person, without the prior written consent of Administrative Agent. Without limiting the foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without the prior consent of Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in Section 5.14 and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

(e)            No Loan Party will change the accounting basis upon which its financial statements are prepared from GAAP to a different body of accounting principles.

(f)            No Loan Party will change the tax filing elections it has made under the Code without prior written notice to the Administrative Agent.

Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or make any Investment, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

(a)            cash and Permitted Investments;

(b)            investments in existence on the date hereof and described in Schedule 6.04;

(c)            investments by Holdings in the Borrowers and by the Borrowers and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in Section 5.14), (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed $250,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) as of the date of any such investment made by a Loan Party to a Subsidiary that is not a Loan Party, no Event of Default has occurred and is continuing, or would result therefrom;

(d)            loans or advances made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement, (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(c) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed $250,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) as of the date of any such loan or advance made by a Loan Party to a Subsidiary that is not a Loan Party, no Event of Default has occurred and is continuing, or would result therefrom;

(e)            Guarantees constituting Indebtedness permitted by Section 6.01, provided that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d)) shall not exceed $250,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs), and (iii) as of the date of any such Guarantee by a Loan Party of Indebtedness of a Subsidiary that is not a Loan Party, no Event of Default has occurred and is continuing, or would result therefrom;

(f)            loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $200,000 in the aggregate at any one time outstanding;

(g)            leases of Equipment in the form of TRAC Lease Agreements so long as the revenues attributable to such TRAC Lease Agreements do not, in the aggregate, exceed ten percent (10%) of the consolidated gross revenues of the Loan Parties;

(h)            notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(i)            investments in the form of Swap Agreements permitted by Section 6.07;

(j)            investments of any Person existing at the time such Person becomes a Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in connection with a permitted acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(k)            investments received in connection with Dispositions permitted by Section 6.05;

(l)            investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”;

(m)            Permitted Acquisitions;

(n)            Accounts receivable owned by any Borrower or any Subsidiary, if created in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

(o)            investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent Accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

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(p)            deposits made in the ordinary course of business securing obligations or performance under contracts, such as in connection with real estate or personal property leases; and

(q)            other Investments made in cash not otherwise described in this Section 6.04, subject to the satisfaction of the Payment Condition with respect to each such Investment (as determined by the Administrative Agent in its Permitted Discretion).

Notwithstanding the foregoing, in no event shall any Loan Party make, or permit any other Loan Party to make, any Investment (i) that results in or facilitates in any manner any Restricted Payment not otherwise permitted under the terms of Section 6.08, or (ii) in or to any Affiliate or Subsidiary that is not a Loan Party consisting of Intellectual Property (or exclusive rights thereto) constituting Collateral or any other Collateral that is material to the business of SMG and its Subsidiaries (it being understood that any such Collateral with a fair market value in excess of $500,000 shall be deemed to be material to the business of SMG and its Subsidiaries) (the foregoing requirement, the “Material Transfers Prohibition”).

Section 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary to, Dispose of any asset, including any Equity Interest owned by it, nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to another Borrower or another Subsidiary in compliance with Section 6.04), except:

(a)            Dispositions of (i) Inventory or goods held for sale in the ordinary course of business, (ii) obsolete, worn out or surplus equipment or property in the ordinary course of business (including allowing any registrations or applications for registration of immaterial intellectual property to lapse or go abandoned in the ordinary course of business), (iii) cash and Permitted Investments in the ordinary course of business (but not to Affiliates, except as otherwise permitted by the Loan Documents), and (iv) Dispositions of Equipment in accordance with any TRAC Lease in the ordinary course of business;

(b)            Dispositions of assets to any Borrower or any Subsidiary, provided that, (i) any such Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09 and (ii) any such Disposition by a Loan Party to a Subsidiary that is not a Loan Party shall only be permitted to the extent that the Payment Condition shall have been satisfied (as determined by the Administrative Agent in its Permitted Discretion) with respect to each such Disposition;

(c)            Dispositions of delinquent Accounts in connection with the compromise, settlement or collection thereof in the ordinary course of business;

(d)            Dispositions of Permitted Investments and other Investments permitted by Section 6.04;

(e)            Sale and Leaseback Transactions permitted by Section 6.06;

(g)            the termination of any transaction under any Swap Agreement permitted hereunder;

(h)            any Loan Party may lease real or personal property, and may license (or sublicense) intellectual property, in the ordinary course of business, to the extent not (i) interfering in any material respect with the business of any Borrower and its Subsidiaries, taken as a whole or (ii) securing Indebtedness; and

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(i)            Dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets Disposed of in reliance upon this Section 6.05(i) shall not exceed $2,500,000 during any fiscal year of the Borrowers;

provided that all Dispositions permitted hereby (other than those permitted by paragraphs (b) and (f) above) shall be made for fair value and for at least 75% cash consideration. Notwithstanding the foregoing, Material Transfers Prohibition shall also apply to this Section 6.05.

Section 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use (or any other Loan Party or Subsidiary intends to use) for substantially the same purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

Section 6.07. Swap Agreements. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of any Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Borrower or any Subsidiary.

Section 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(iii)            the Loan Parties may make Restricted Payments to purchase stock or stock options of SMG (or its direct or indirect parent) from present or former officers, directors or employees thereof (or of any Loan Party), or make cash payments in lieu of the issuance of fractional shares in connection with any such stock options issued to any of the foregoing, in an aggregate amount not to exceed $1,000,000 in any fiscal year and so long as, before and after giving effect to any such payment, (x) no Default or Event of Default has occurred and be continuing and (y) the Loan Parties are in compliance on a pro forma basis with the financial covenants set forth in Section 6.13; and

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(i)            payment of Indebtedness created under the Loan Documents;

(ii)            payment of regularly scheduled interest and principal payments as and when due (x) in respect of any Indebtedness permitted under Section 6.01 (other than the Term Loan Debt and Subordinated Indebtedness), (y) in respect of any Subordinated Indebtedness to the extent not prohibited by the subordination agreement or subordination provisions applicable thereto, and (z) in respect of the Cox Note or the Indebtedness existing on the Effective Date and described on Schedule 6.01 owing to Red River Bank, in each case, so long as no Event of Default shall have occurred and be continuing or would result from any such payment and the Loan Parties are in compliance on a pro forma basis with Section 6.13;

(iii)            refinancings of Indebtedness to the extent permitted by Section 6.01;

(vi)            (i) payment of regularly scheduled interest (including default interest) and principal payments as and when due in respect of the Term Loan Debt, and (ii) payment of costs, expenses, fees, make-whole premiums, indemnity payments and similar payments (but not payments on account of principal or interest) in respect of the Term Loan Debt;

(vii)            mandatory principal prepayments of the Term Loan Debt (other than any prepayments required pursuant to Section 2.11(c) of the Term Loan Credit Agreement) as and when due in accordance with the terms of the Term Loan Credit Agreement;

(viii)            voluntary principal prepayments of the Term Loan Debt and mandatory principal prepayments of the Term Loan Debt pursuant to Section 2.11(c) of the Term Loan Credit Agreement, so long as, with respect to each such payment, (A) no Default has occurred and is continuing or would result immediately after giving effect to such payment, (B) the Borrowers shall have Availability calculated on a pro forma basis immediately after giving effect to and at all times during the 30-day period immediately prior to such payment of not less than $4,125,000, (C) the Borrowers shall have a Fixed Charge Coverage Ratio for the trailing twelve months most recently ended for which financial statements have been delivered pursuant hereto, calculated on a pro forma basis after giving effect to such payment, of not less than 1.00 to 1.00, (D) the Borrowers shall have provided written notice thereof to the Administrative Agent not less than five (5) Business Days (or such shorter period as may be approved by the Administrative Agent in its sole discretion) prior to making any such payment, and (E) before making any such payment, the Borrower Representative shall have delivered to the Administrative Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent certifying as to compliance with the items described in the foregoing clauses (A), (B) and (C) of this paragraph and attaching calculations for clauses (B) and (C); provided, that, the Loan Parties may voluntarily prepay such Term Loan Debt without satisfaction of the Payment Condition (1) in connection with Refinance Indebtedness in respect thereof in accordance with the terms hereof, (2) by converting or exchanging such Indebtedness for Equity Interests (other than Disqualified Stock) or (3) to the extent such payment is made with the net cash proceeds of the issuance of Equity Interests by SMG (other than Disqualified Stock); and

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Section 6.09. Transactions with Affiliates. No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among any Loan Parties not involving any other Affiliate, (c) any Investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04, (g) the payment of reasonable fees to directors of any Borrower or any Subsidiary who are not employees of such Borrower or Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by a Borrower’s board of directors, and (i) compensation paid to, and indemnities provided for the benefit of, consultants of the Borrowers or their Subsidiaries in the ordinary course of business pursuant to consulting agreements approved by a Borrower’s board of directors.

Section 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets in favor of the Administrative Agent, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions imposed by any Term Loan Debt Document or Refinancing Indebtedness in respect thereof, so long as such restrictions and conditions (x) permit the Liens securing the Secured Obligations under the Loan Documents, (y) permit the Loan Parties to Guarantee the Guaranteed Obligations and (z) do not otherwise violate or contravene the terms of the Intercreditor Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the Disposition of a Subsidiary or all or substantially all of the assets of any Loan Party or any of its Subsidiaries, in each case pending such transaction, provided that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and, (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

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Section 6.11. Amendment of Certain Material Documents. No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness, any Material Indebtedness (other than the Term Loan Debt) or its Organizational Documents, to the extent any such amendment, modification or waiver would be adverse to the Lenders or otherwise prohibited by the terms of any applicable subordination or intercreditor agreement, or (b) any other Material Agreement (other than the Term Loan Debt Documents), the Barnhart Acquisition Agreement or any other definitive acquisition agreement executed in connection with any Permitted Acquisition, to the extent any such amendment, modification or waiver would be adverse to the Lenders in any material respect. In addition, no Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under any Term Loan Debt Document, except to the extent permitted by, and in accordance with, the Intercreditor Agreement.

Section 6.12. No Interline Trust Arrangements. No Loan Party will (a) to enter into any Independent Contractor Agreement or similar document or agreement (or amend an existing Independent Contractor Agreement or similar document) (i) that includes or could reasonably be expected or interpreted to create an “interline arrangement” or constructive trust, (ii) requires any Loan Party segregate, reserve or otherwise set aside or agree to segregate, reserve or otherwise set aside proceeds of such Loan Party’s customer payments or other funds to be paid onwards to independent contractors or operators, or (iii) provides that a Person other than the relevant Loan Party is responsible for payment of fees and charges or other obligations thereunder to the independent contractor or operator, (iv) that provides the independent contractor or operator recourse to such Loan Party’s customer for non-payment by the relevant Loan Party or that conditions payment to the independent contractor or operator on the Loan Party’s receipt of payment by such Loan Party’s customer, (b) receive funds from a customer deposited into a segregated account for a particular independent contractor or operator, or otherwise maintain such funds received from a customer in a manner that is segregated or identified for a particular independent contractor or operator, or (c) make payments under any Independent Contractor Agreement or to any independent contractor or operator from a segregated account.

Section 6.13. Financial Covenants.

(a)            Fixed Charge Coverage Ratio. The Borrowers will not permit the Fixed Charge Coverage Ratio to be less than 1.0 to 1.0 as of the end of any calendar month, commencing with the calendar month ending July 31, 2023; provided that, at any time when no Term Loan Debt is outstanding, the foregoing covenant shall only be tested as of the end of any calendar month while a FCCR Testing Period is in effect, commencing with the most recent calendar month for which Borrowers’ financial statements have been delivered prior to the date on which any FCCR Trigger Period commences and continuing until no FCCR Trigger Period is in effect.

(b)            Minimum Availability. The Borrowers will not permit Availability to be less than $3,750,000 at any time while the Term Loan Debt is outstanding.

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ARTICLE VII

Events of Default

Section 7.01. Events of Default. If any of the following events (“Events of Default”) shall occur:

(a)            the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)            the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(d)            any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence), 5.08, 5.14, 5.15 or in Article VI;

(e)            any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those which constitute a default under another Section of this Article), and such failure shall continue unremedied for a period of (i) 5 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) 20 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement;

(f)            any Loan Party or Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to all grace periods;

(g)            any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this Section 7.01(g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by Section 6.05;

(h)            an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

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(i)            any Loan Party or Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 7.01(h) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(k)            (i) one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 (excluding any portion covered by a solvent and unaffiliated insurer that has not denied coverage) shall be rendered against any Loan Party, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or Subsidiary to enforce any such judgment; or (ii) any Loan Party or Subsidiary shall fail within sixty (60) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(m)            a Change in Control shall occur;

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(p)            except as permitted by the terms of any Collateral Document or the Intercreditor Agreement, (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien (other than (x) with respect to any Term Loan Priority Collateral, the Term Loan Liens or (y) solely as a result of the failure of the Administrative Agent to take any action within its control to maintain the perfection of any Liens created in favor of the Administrative Agent for the benefit of the Secured Parties (excluding any action or inaction based on facts or circumstances for which the Administrative Agent has not been notified in contravention of the provisions of the Loan Documents));

(r)            any material provision of any Loan Document for any reason (other than as expressly permitted hereunder or thereunder) ceases to be valid, binding and enforceable in accordance with its terms in all material respects (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms in any material respect, other than as expressly permitted hereunder or thereunder);

then, and in every such event (other than an event with respect to the Borrowers described in Section 7.01(h) or 7.01(i) above), and at any time thereafter during the continuation of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by written notice to the Borrower Representative, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder and under any other Loan Document, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.06(j) hereof; and in the case of any event with respect to the Borrowers described in Section 7.01(h) or 7.01(i) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding and the cash collateral for the LC Exposure, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder and under any other Loan Documents, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

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ARTICLE VIII

The Administrative Agent

Section 8.01. Authorization and Action.

(a)            Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and each Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender and each Issuing Bank authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender and each Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender’s or such Issuing Bank’s behalf. Without limiting the foregoing, each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, and to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

(b)            As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and each Issuing Bank; provided, however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the Lenders and the Issuing Banks with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided, further, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise of any such instructed action and may refrain from acting until such clarification or direction has been provided. Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)            In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Banks (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature. Without limiting the generality of the foregoing:

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(i)            the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term “agent” (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby; and

(ii)            nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account.

(d)            The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

(e)            No Arranger shall have obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.

(f)            In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(i)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under Sections 2.12, 2.13, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and

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(ii)            to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03). Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

(g)            The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except solely to the extent of the Borrowers’ right to consent pursuant to and subject to the conditions set forth in this Article, no Borrower nor any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

Section 8.02. Administrative Agent’s Reliance, Limitation of Liability, Etc.

(a)            Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (including, for the avoidance of doubt, in connection with the Administrative Agent’s reliance on any Electronic Signature transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

(b)            The Administrative Agent shall be deemed not to have knowledge of any (i) notice of any of the events or circumstances set forth or described in Section 5.02 unless and until written notice thereof stating that it is a “notice under Section 5.02” in respect of this Agreement and identifying the specific clause under said Section is given to the Administrative Agent by the Borrower Representative, or (ii) notice of any Default or Event of Default unless and until written notice thereof (stating that it is a “notice of Default” or a “notice of an Event of Default”) is given to the Administrative Agent by the Borrower Representative, a Lender or the Issuing Bank. Further, the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be such items) expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

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(c)            Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel (including counsel to the Borrowers), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

Section 8.03. Posting of Communications.

(a)            The Borrowers agree that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Lenders and the Issuing Bank by posting the Communications on IntraLinks™, DebtDomain, SyndTrak, ClearPar or any other electronic system chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).

(b)            Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, the Issuing Bank and each Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there may be confidentiality and other risks associated with such distribution. Each of the Lenders, the Issuing Bank and each Borrower hereby approves distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

(c)            THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

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“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or Issuing Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

(d)            Each Lender and Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender’s or Issuing Bank’s (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

(e)            Each of the Lenders, Issuing Bank and each Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.

(f)            Nothing herein shall prejudice the right of the Administrative Agent, any Lender or Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

Section 8.04. The Administrative Agent Individually. With respect to its Commitment, Loans (including Swingline Loans) and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or Issuing Bank, as the case may be. The terms “Issuing Bank”, “Lenders”, “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders, as applicable. The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Bank.

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Section 8.05. Successor Administrative Agent.

(a)            The Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to the Lenders, the Issuing Bank and the Borrower Representative, whether or not a successor Administrative Agent has been appointed. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank. In either case, such appointment shall be subject to the prior written approval of the Borrower Representative (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent. Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

(b)            Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Bank and the Borrowers, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties and continue to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Collateral Document, including any action required to maintain the perfection of any such security interest), and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender and Issuing Bank. Following the effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

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Section 8.06. Acknowledgements of Lenders and Issuing Bank.

(a)            Each Lender and each Issuing Bank represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender or Issuing Bank, in each case in the ordinary course of business, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender and each Issuing Bank agrees not to assert a claim in contravention of the foregoing), (iii) it has, independently and without reliance upon the Administrative Agent, any Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder and (iv) it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender or such Issuing Bank, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities. Each Lender and each Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrowers and their Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b)            Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan Document pursuant to which it shall have become a Lender hereunder.

(c)            Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to a Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys’ fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

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(d)            Erroneous Payments.

(i)            Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 8.06(d) shall be conclusive, absent manifest error.

(ii)            Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(iii)            Each Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by any Borrower or any other Loan Party.

(iv)            Each party’s obligations under this Section 8.06(d) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.

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Section 8.07. Collateral Matters.

(a)            Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with respect to a Secured Party’s right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof. In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the UCC. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

(b)            In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the obligations under which constitute Secured Obligations, will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document. By accepting the benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

(c)            The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(b). The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

Section 8.08. Credit Bidding. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

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Section 8.09. Certain ERISA Matters.

(a)            Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that at least one of the following is and will be true:

(i)            such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

(ii)            the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

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(iii)            (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv)            such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)            In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that none of the Administrative Agent, any Arranger, or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).

(c)            The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Agreement and any other Loan Documents, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

Section 8.10. Flood Laws. JPMCB has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”). JPMCB, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws. However, JPMCB reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

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ARTICLE IX

Miscellaneous

Section 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

(i)            if to any Loan Party, to the Borrower Representative at:

SMG Industries Inc.

20475 State Hwy 249, Suite 450

Houston, TX 77070

Attention: Matthew Flemming

Email: [* * *]

(ii)            if to the Administrative Agent, JPMCB in its capacity as an Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

1900 N. Akard, 3^rdFloor

Dallas, Texas 75201

Attention: SMG Portfolio Manager

Facsimile No: [* * *]

Email: [* * *]

with a copy to (which shall not constitute notice):

Winston & Strawn LLP

2121 N. Pearl Street, Suite 900

Dallas, Texas 75201

Attention: Jordan M. Klein

Email: JMKlein@winston.com

(iii)            if to any other Lender or Issuing Bank, to it at its address or facsimile number set forth in its Administrative Questionnaire.

All such notices and other communications (A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received, (B) sent by facsimile shall be deemed to have been given when sent, provided that if not given during normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (C) delivered through Electronic Systems or Approved Electronic Platforms, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

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(b)            Notices and other communications to any Borrower, any Loan Party, the Lenders and the Issuing Banks hereunder may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable, or pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the Administrative Agent and the Borrower Representative (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by Electronic Systems or Approved Electronic Platforms, as applicable, pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

(c)            Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

Section 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

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(b)            Except as provided in the first sentence of Section 2.09(f) (with respect to any commitment increase) and subject to Section 2.14(c), 2.14(d) and 2.14(e) and Section 9.02(e) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender); provided that, a waiver of any condition precedent set forth in Section 4.02 or the waiver of any Default or mandatory prepayment shall not constitute an increase of any Commitment of any Lender, (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby (provided that (x) any amendment or modification of the financial covenants in this Agreement (or any defined term used therein) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B) and (y) only the consent of the Required Lenders shall be necessary to reduce or waive any obligation of the Borrowers to pay interest or any other amount at the applicable default rate), (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.09(d) or Section 2.18(b) or 2.18(d) in a manner that would alter the ratable reduction of Commitments or the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (E) increase the advance rates set forth in the definition of Borrowing Base or add new categories of eligible assets, without the written consent of each Revolving Lender (other than any Defaulting Lender), (F) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (G) change Section 2.20 without the consent of each Lender (other than any Defaulting Lender), (H) release any Guarantor from its obligations under the Loan Guaranty (except as otherwise permitted herein or in the other Loan Documents, including pursuant to Section 9.02(c) below), without the written consent of each Lender (other than any Defaulting Lender), or (I) except as provided in Section 9.02(c) or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender (other than any Defaulting Lender); provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be (it being understood that any amendment to Section 2.20 shall require the consent of the Administrative Agent, the Issuing Bank and the Swingline Lender); provided further that no such agreement shall amend or modify the provisions of Section 2.06 without the prior written consent of the Administrative Agent and the Issuing Banks. The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04. Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrowers and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.

(c)            The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations, and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Subsidiary pursuant to a transaction permitted hereby, the Administrative Agent is authorized to release any Loan Guaranty provided by such Subsidiary, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $1,000,000 during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Borrowers as to the value of any Collateral to be so released, without further inquiry). Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

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(d)            If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers, the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower Representative, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

(e)            Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower Representative only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

Section 9.03. Expenses; Limitation of Liability; Indemnity; Etc. (a) Expenses. The Loan Parties shall, jointly and severally, pay all (i) reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent (but limited to one primary counsel to Administrative Agent, one local counsel to Administrative Agent in each reasonably necessary jurisdiction, and one specialty counsel to Administrative Agent in each reasonably necessary specialty area) in connection with the syndication and distribution (including, without limitation, via the internet or through any Electronic System or Approved Electronic Platform) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender (but limited to one primary counsel to Administrative Agent, the Issuing Bank and the Lenders, taken as a whole, one local counsel in each reasonably necessary jurisdiction, and one specialty counsel in each reasonably necessary specialty area, and in the event of any actual or potential conflict of interest, additional counsel for each group of similarly situated Persons), in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Expenses being reimbursed by the Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with:

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(A)            subject to the limitations contained herein, appraisals and insurance reviews;

(C)            background checks regarding senior management of the Loan Parties, as deemed necessary or appropriate in the sole discretion of the Administrative Agent;

(D)            Taxes, fees and other charges for (1) lien and title searches and title insurance and (2) recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

(E)            sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

All of the foregoing fees, costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

(b)            Limitation of Liability. To the extent permitted by applicable law (i) neither any Borrower nor any Loan Party shall assert, and each Borrower and each Loan Party hereby waives, any claim against the Administrative Agent, any Arranger, any Issuing Bank and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a “Lender-Related Person”) for any Liabilities arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this Section 9.03(b) shall relieve any Borrower or any Loan Party of any obligation it may have to indemnify an Indemnitee, as provided in Section 9.03(c), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

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(c)            Indemnity. The Loan Parties shall, jointly and severally, indemnify the Administrative Agent, each Arranger, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all Liabilities and related expenses, including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, (ii) the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (iii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iv) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (v) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by a Loan Party for Taxes pursuant to Section 2.17, or (vi) any actual or prospective Proceeding relating to any of the foregoing, whether or not such Proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted primarily from (x) the gross negligence or willful misconduct of such Indemnitee or (y) the material breach in bath faith by such Indemnitee of its express obligations under this Agreement pursuant to a claim initiated by a Loan Party. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF EACH BORROWER AND EACH BORROWER AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE. This Section 9.03(c) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(d)            Lender Reimbursement. Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraphs (a), (b) or (c) of this Section 9.03 to the Administrative Agent, each Issuing Bank and the Swingline Lender, and each Related Party of any of the foregoing Persons (each, an “Agent-Related Person”) (to the extent not reimbursed by a Loan Party and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which such payment is sought under this Section (or, if such payment is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), and agrees to indemnify and hold each Agent-Related Person harmless from and against any and all Liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent-Related Person in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent-Related Person under or in connection with any of the foregoing; provided that the unreimbursed expense or Liability or related expense, as the case may be, was incurred by or asserted against such Agent-Related Person in its capacity as such; provided, further, that no Lender shall be liable for the payment of any portion of such Liabilities, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted primarily from such Agent-Related Person’s gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and Payment in Full of the Secured Obligations.

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(e)            Payments. All amounts due under this Section 9.03 shall be payable promptly, and in any event not later than three (3) Business Days after written demand therefor.

Section 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by any Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)            the Borrower Representative, provided that the Borrower Representative shall be deemed to have consented to any such assignment of all or a portion of the Revolving Loans and Commitments unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided further that no consent of the Borrower Representative shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B)            the Administrative Agent;

(D)            the Swingline Lender.

Notwithstanding anything set forth to the contrary in this Agreement or any other Loan Document, JPMCB may assign, without Borrower Representative’s consent as set forth in clause (b)(i)(A) of this Section 9.04, all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) to one or more assignees, whether or not related to JPMCB.

(ii)            Assignments shall be subject to the following additional conditions:

(A)            except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower Representative and the Administrative Agent otherwise consent, provided that no such consent of the Borrower Representative shall be required if an Event of Default has occurred and is continuing;

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(B)            each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(C)            the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500; and

For the purposes of this Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means (a) a natural person, (b) a Defaulting Lender or its Lender Parent, (c) a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that, with respect to clause (c), such holding company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business or (d) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

(iii)            Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

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(iv)            The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)            Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(d), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)            Any Lender may, without the consent of, or notice to, the Borrowers, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and/or obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.17(g) will be delivered to the Borrowers and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under Section 9.04(b) above; and (B) shall not be entitled to receive any greater payment under Section 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

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Each Lender that sells a participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.19(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(b) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d)            Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until Payment in Full of the Obligations. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

Section 9.06. Counterparts; Integration; Effectiveness; Electronic Execution. (a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

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(b)            Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of any Borrower or any other Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, each Borrower and each Loan Party hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Borrowers and the Loan Parties, Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (B) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (D) waives any claim against any Lender-Related Person for any Liabilities arising solely from the Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of any Borrower and/or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND 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.

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Section 9.07. Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other obligations at any time owing, by such Lender, the Issuing Bank or any such Affiliate, to or for the credit or the account of any Loan Party against any and all of the Secured Obligations held by such Lender, the Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, the Issuing Bank or their respective Affiliates shall have made any demand under the Loan Documents and although such obligations may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or the Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The applicable Lender, the Issuing Bank or such Affiliate shall notify the Borrower Representative and the Administrative Agent of such setoff or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff or application under this Section. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank or their respective Affiliates may have.

Section 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

(c)            Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

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(d)            Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (c) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(e)            Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

Section 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

Section 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower Representative, (h) to any Person providing a Guarantee of all or any portion of the Secured Obligations, (i) on a confidential basis to a Lender’s current or prospective investors or other financing sources, (j) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrowers, or (k) on a confidential basis to (1) any rating agency in connection with rating any Borrower or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein.

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For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION 9.12) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY, AND ITS AFFILIATES, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

Section 9.13. Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Federal Reserve Board) for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

Section 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

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Section 9.15. Disclosure. Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

Section 9.16. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the other Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

Section 9.17. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the NYFRB Rate to the date of repayment, shall have been received by such Lender.

Section 9.18. Marketing Consent.

The Borrowers hereby authorize JPMCB and its affiliates (collectively, the “JPMCB Parties”), at their respective sole expense, and without any prior approval by the Borrowers, to include any Borrower’s name and logo in advertising, marketing, tombstones, case studies and training materials, and to give such other publicity to this Agreement as the JPMCB Parties may from time to time determine in their sole discretion. The foregoing authorization shall remain in effect unless and until the Borrower Representative notifies JPMCB in writing that such authorization is revoked.

Section 9.19. Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

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(b)            the effects of any Bail-In Action on any such liability, including, if applicable:

(i)            a reduction in full or in part or cancellation of any such liability;

(ii)            a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)            the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

Section 9.20. No Fiduciary Duty, Etc. (a) Each Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to each Borrower with respect to the Loan Documents and the transactions contemplated herein and therein and not as a financial advisor or a fiduciary to, or an agent of, any Borrower or any other person. Each Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, each Borrower acknowledges and agrees that no Credit Party is advising any Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. Each Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated herein or in the other Loan Documents, and the Credit Parties shall have no responsibility or liability to any Borrower with respect thereto.

(c)            In addition, each Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which a Borrower may have conflicting interests regarding the transactions described herein and otherwise. No Credit Party will use confidential information obtained from any Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with such Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies. Each Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to any Borrower, confidential information obtained from other companies.

Section 9.21. Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

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In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

Section 9.22. Joint and Several. Each Borrower hereby unconditionally and irrevocably agrees it is jointly and severally liable to the Administrative Agent, the Issuing Banks and the Lenders for the Secured Obligations. In furtherance thereof, each Borrower agrees that wherever in this Agreement it is provided that a Borrower is liable for a payment, such obligation is the joint and several obligation of each Borrower. Each Borrower acknowledges and agrees that its joint and several liability under this Agreement and the Loan Documents is absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever by the Administrative Agent, any Issuing Bank, any Lender or any other Person. Each Borrower’s liability for the Secured Obligations shall not in any manner be impaired or affected by who receives or uses the proceeds of the credit extended hereunder or for what purposes such proceeds are used, and each Borrower waives notice of borrowing requests issued by, and loans or other extensions of credit made to, other Borrowers. Each Borrower hereby agrees not to exercise or enforce any right of exoneration, contribution, reimbursement, recourse or subrogation available to such Borrower against any party liable for payment under this Agreement and the Loan Documents unless and until the Administrative Agent, each Issuing Bank and each Lender have been paid in full and all of the Secured Obligations are satisfied and discharged following termination or expiration of all commitments of the Lenders to extend credit to the Borrowers. Each Borrower’s joint and several liability hereunder with respect to the Secured Obligations shall, to the fullest extent permitted by applicable law, be the unconditional liability of such Borrower irrespective of (i) the validity, enforceability, avoidance or subordination of any of the Secured Obligations or of any other document evidencing all or any part of the Secured Obligations, (ii) the absence of any attempt to collect any of the Secured Obligations from any other Loan Party or any Collateral or other security therefor, or the absence of any other action to enforce the same, (iii) the amendment, modification, waiver, consent, extension, forbearance or granting of any indulgence by the Administrative Agent or any Lender with respect to any provision of any instrument executed by any other Loan Party evidencing or securing the payment of any of the Secured Obligations, or any other agreement now or hereafter executed by any other Loan Party and delivered to the Administrative Agent, (iv) the failure by the Administrative Agent or any Lender to take any steps to perfect or maintain the perfected status of its Lien upon, or to preserve its rights to, any of the Collateral or other security for the payment or performance of any of the Secured Obligations or the Administrative Agent’s release of any Collateral or of its Liens upon any Collateral, (v) the release or compromise, in whole or in part, of the liability of any other Loan Party for the payment of any of the Secured Obligations, (vi) any increase in the amount of the Secured Obligations beyond any limits imposed herein or in the amount of any interest, fees or other charges payable in connection therewith, in each case, if consented to by any other Borrower, or any decrease in the same, or (vii) any other circumstance that might constitute a legal or equitable discharge or defense of any Loan Party. After the occurrence and during the continuance of any Event of Default, the Administrative Agent may proceed directly and at once, without notice to any Borrower, against any or all of Loan Parties to collect and recover all or any part of the Secured Obligations, without first proceeding against any other Loan Party or against any Collateral or other security for the payment or performance of any of the Secured Obligations, and each Borrower waives any provision that might otherwise require the Administrative Agent or the Lenders under applicable law to pursue or exhaust remedies against any Collateral or other Loan Party before pursuing such Borrower or its property. Each Borrower consents and agrees that neither the Administrative Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Loan Party or against or in payment of any or all of the Secured Obligations.

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ARTICLE X

Loan Guaranty

Section 10.01. Guaranty. Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and outside attorneys’ and paralegals’ fees and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”; provided, however, that the definition of “Guaranteed Obligations” shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for purposes of determining any obligations of any Loan Guarantor). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

Section 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, any Loan Guarantor, any other guarantor of, or any other Person obligated for, all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

Section 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than Payment in Full of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any other Person, whether in connection herewith or in any unrelated transactions.

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(c)            Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than Payment in Full of the Guaranteed Obligations).

Section 10.04. Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower, any Loan Guarantor or any other Obligated Party, other than Payment in Full of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party or any other Person. Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been Paid in Full. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

Section 10.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has against any Obligated Party or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

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Section 10.06. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

Section 10.07. Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

Section 10.08. Termination. Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under Article VII hereof as a result of any such notice of termination.

Section 10.09. Taxes. Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law. If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.

Section 10.10. Maximum Liability. Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law. In determining the limitations, if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

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Section 10.11. Contribution.

(c)            This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

(e)            The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations and the termination of this Agreement.

Section 10.12. Liability Cumulative. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

Section 10.13. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guarantee in respect of a Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 10.13 shall remain in full force and effect until the termination of all Swap Obligations. Each Qualified ECP Guarantor intends that this Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

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ARTICLE XI

The Borrower Representative

Section 11.01. Appointment; Nature of Relationship. SMG is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in the Funding Account, at which time the Borrower Representative shall promptly disburse such Loans to the appropriate Borrower(s), provided that, in the case of a Revolving Loan, such amount shall not exceed Availability. The Administrative Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 11.01.

Section 11.02. Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

Section 11.03. Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.

Section 11.04. Notices. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Event of Default hereunder referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Administrative Agent and the Lenders. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.

Section 11.05. Successor Borrower Representative. Upon the prior written consent of the Administrative Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative. The Administrative Agent shall give prompt written notice of such resignation to the Lenders.

Section 11.06. Execution of Loan Documents; Borrowing Base Certificate. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including, without limitation, the Borrowing Base Certificates and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

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Section 11.07. Reporting. Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to the Borrower Representative a copy of its Borrowing Base Certificate and any other certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Borrowing Base Certificates and Compliance Certificate required pursuant to the provisions of this Agreement.

(Signature Pages Follow)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above written.

	Borrowers:

	SMG Industries Inc.


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Interim Chief Executive Officer

	5J DRIVEAWAY LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

	5J LOGISTICS SERVICES LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

	5J OILFIELD SERVICES LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

	5J SPECIALIZED LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

	5J TRANSPORTATION LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

Signature Page to Credit Agreement

	5J TRUCKING, LLC


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

	BARNHART FLEET MAINTENANCE, LLC


	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	BARNHART TRANSPORTATION, LLC


	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LAKE SHORE GLOBAL SOLUTIONS LLC


	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LAKE SHORE LOGISTICS, LLC


	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LEGEND EQUIPMENT LEASING, LLC


	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

Signature Page to Credit Agreement

	ROUTE 20 TANK WASH LLC



	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	Chief Financial Officer

	LOAN GUARANTOR:

	SkYLINE HOLDING, Inc.


	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Chief Executive Officer

Signature Page to Credit Agreement

	JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent, Issuing Bank and Swingline Lender


	By	/s/ Andy Yang
	Name:	Andy Yang
	Title:	Authorized Signatory

Signature Page to Credit Agreement

COMMITMENT SCHEDULE

Lender	Revolving Commitment		Commitment
JPMorgan Chase Bank, N.A.	$	25,000,000.00	$	25,000,000.00
Total	$	25,000,000.00	$	25,000,000.00

Exhibit 10.5

Execution Version

INTERCREDITOR AGREEMENT

This Intercreditor Agreement (as amended, restated or otherwise modified from time to time, this “Agreement”), dated as of July 7, 2023, is entered into by and among JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “ABL Representative”) for the ABL Secured Parties (as defined below), GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC, as Term Loan Representative (in such capacity, with its successors and assigns, and as more specifically defined below, the “Term Loan Representative”) for the Term Loan Secured Parties (as defined below), and each of the Loan Parties (as defined below) party hereto.

WHEREAS, (a) SMG INDUSTRIES INC., a Delaware corporation (“SMG”), (b) 5J TRUCKING, LLC, a Texas limited liability company (“5J Trucking”), (c) 5J OILFIELD SERVICES, LLC, a Texas limited liability company (“5J Oilfield Services”), (d) 5J SPECIALIZED LLC, a Texas limited liability company (“5J Specialized”), (e) 5J TRANSPORTATION LLC, a Texas limited liability company (“5J Transportation”), (f) 5J LOGISTICS SERVICES LLC, a Texas limited liability company (“5J Logistics”), (g) 5J DRIVEAWAY LLC, a Texas limited Liability company (“5J Driveaway”) and, upon the consummation of the Closing Date Transactions, (h) BARNHART TRANSPORTATION, LLC, a Pennsylvania limited liability company (“Barnhart Transportation”), (i) LEGEND EQUIPMENT LEASING, LLC, a Pennsylvania limited liability company (“Barnhart Leasing”), (j) BARNHART FLEET MAINTENANCE, LLC, a Pennsylvania limited liability company (“Maintenance”), (k) ROUTE 20 TANK WASH LLC, a Pennsylvania limited liability company (“Tank Wash”), (l) LAKE SHORE LOGISTICS, LLC, a Pennsylvania limited liability company (“Barnhart Logistics”), (m) LAKE SHORE GLOBAL SOLUTIONS LLC, a Pennsylvania limited liability company (“Global Solutions” and, together with SMG, 5J Trucking, 5J Oilfield Services, 5J Specialized, 5J Transportation, 5J Logistics, 5J Driveaway, Barnhart Transportation, Barnhart Leasing, Maintenance, Tank Wash and Barnhart Logistics, collectively, the “Borrowers”), (n) SKYLINE HOLDING, INC., a Delaware corporation (“Skyline), and successor by merger with Legend Holding RO, Inc., a Delaware corporation, as a Loan Guarantor, (o) the other ABL Loan Parties (as defined below) party thereto, (p) the ABL Representative and (q) the ABL Creditors (as defined below) party thereto are parties to that certain Credit Agreement dated as of the date hereof (as amended, amended and restated, extended, renewed, replaced, refinanced, supplemented or otherwise modified from time to time as permitted hereunder, the “ABL Agreement”), pursuant to which the ABL Creditors have agreed to make loans and extend other financial accommodations to the Borrowers, and such loans and other financial accommodations are guaranteed by certain of the Loan Parties;

WHEREAS, the Borrowers, the other Term Loan Parties (as defined below) party thereto, the Term Loan Representative and the Term Loan Creditors (as defined below) party thereto are parties to that certain Credit Agreement dated as of the date hereof (as amended, amended and restated, extended, renewed, replaced, refinanced, supplemented or otherwise modified from time to time as permitted hereunder, the “Term Loan Agreement”), pursuant to which such financial institutions and other entities have agreed to make term loans to the Borrowers, which term loans are guaranteed by the Term Loan Parties (other than the Borrowers);

WHEREAS, the ABL Loan Parties have granted to the ABL Representative Liens in the Collateral (each as defined below) as security for payment and performance of the ABL Obligations (as defined below); and

WHEREAS, the Term Loan Parties have granted to the Term Loan Representative Liens in the Collateral as security for payment and performance of the Term Loan Obligations (as defined below).

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows:

SECTION 1.        Definitions; Rules of Construction.

1.1               UCC Definitions. The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit, Letter of Credit Rights, Records and Supporting Obligations.

1.2               Defined Terms. The following terms, as used herein, have the following meanings:

“ABL Accordion Amount” means the aggregate amount of increases to the revolving loan commitments pursuant to Section 2.09 of the ABL Agreement (or any similar provisions in any permitted refinancing) in an aggregate amount not to exceed $15,000,000.

“ABL Agreement” has the meaning set forth in the first WHEREAS clause of this Agreement.

“ABL Creditors” means, collectively, the “Lenders” and the “Secured Parties”, each as defined in the ABL Agreement.

“ABL DIP Financing” has the meaning set forth in Section 5.2(a).

“ABL Documents” means the ABL Agreement, each ABL Security Document, each ABL Guarantee and each other “Loan Document” as defined in the ABL Agreement.

“ABL Guarantee” means any guarantee by any Loan Party of any or all of the ABL Obligations.

“ABL Lien” means any Lien created by the ABL Security Documents.

“ABL Loan Maximum Amount” means, as of any date of determination, an amount equal to:

(a)       an amount equal to (i) $27,500,000, plus (ii) 110% of the ABL Accordion Amount, plus (iii) interest (including default interest), fees, indemnities, expenses and other charges arising under any ABL Document (in each case to the extent accruing or chargeable in accordance with the terms of the ABL Documents as in effect on the date hereof or permitted to be amended in accordance herewith) (other than Excess ABL Debt), in each case, to the extent capitalized and added to the principal balance of the loans, minus (iv) the aggregate amount of all permanent reductions of the Revolving Commitments (as defined in the ABL Agreement as in effect on the date hereof), calculated without giving effect to any reduction or termination of the Revolving Commitments (A) to the extent such reduction or termination causes the then outstanding revolving loans under such Revolving Commitments at the time of such termination to exceed such Revolving Commitments (it being understood and agreed that the amount under this subclause (iv)(A) will be increased by the amount of all principal payments applied to such outstanding revolving loans constituting such excess), (B) in connection with a refinancing thereof, (C) following an event of default under the ABL Documents or at maturity of the ABL Obligations, and (D) resulting from the commencement of an Insolvency Proceeding with respect to one or more of the Loan Parties, plus

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(b)       the aggregate outstanding amount of the obligations owed to the ABL Creditors or any of their affiliates with respect to Banking Services Obligations and Swap Agreement Obligations; provided that the aggregate amount of Banking Services Obligations and Swap Agreement Obligations shall not exceed the sum of (i) $5,000,000, plus (ii) the amount of any Reserves (as defined in the ABL Agreement as in effect on the date hereof) established by the ABL Representative for any Banking Services Obligations or Swap Agreement Obligations; plus

(c)       the aggregate outstanding amount of the obligations owed to the ABL Creditors with respect to Protective Advances (as defined in the ABL Agreement as in effect on the date hereof) up to a maximum aggregate amount of $2,500,000 plus 10% of the ABL Accordion Amount; plus

(d)        $1,250,000 plus 5% of the ABL Accordion Amount in connection with any ABL DIP Financing.

“ABL Loan Party” means each Borrower and each direct or indirect affiliate or shareholder (or equivalent) of each Borrower or any of its affiliates that is now or hereafter becomes a party to any ABL Document, including without limitation any guarantor of the ABL Obligations; sometimes, collectively referred to as the “ABL Loan Parties”.

“ABL Obligations” means (a) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made pursuant to the ABL Agreement or any ABL DIP Financing by the ABL Creditors, (b) all reimbursement obligations (if any) and interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the ABL Agreement, (c) all Swap Agreement Obligations (as defined in the ABL Agreement as in effect on the date hereof), (d) all Banking Services Obligations (as defined in the ABL Agreement as in effect on the date hereof) and (e) all guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the ABL Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any ABL Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any Term Loan Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the ABL Secured Parties and the Term Loan Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

“ABL Priority Collateral” means all Collateral consisting of the following:

(1)

Accounts, other than Accounts which constitute identifiable proceeds of Term Loan Priority Collateral (including any Accounts, arising from any sale, lease (other than leasing of equipment in the ordinary course of business) or other disposition or any casualty or condemnation event in respect of Term Loan Priority Collateral);

(2)

Inventory;

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(3)

Instruments, Documents and Chattel Paper (other than Instruments, Documents and Chattel Paper arising from or constituting TRAC Lease Agreements) evidencing or substituted for the foregoing (provided, that to the extent any of the foregoing also relates to Term Loan Priority Collateral, only that portion related to the items referred to in the clauses within this definition shall be included in the ABL Priority Collateral);

(4)

all Deposit Accounts (other than Term Loan Priority Accounts) with any bank or other financial institution (including all cash, cash equivalents, financial assets, negotiable instruments and other evidence of payment, and other funds on deposit therein or credited thereto, and including any cash or funds on deposit in any Term Loan Priority Account that does not constitute identifiable Proceeds of Term Loan Priority Collateral or Qualified Reinvestment Proceeds (as defined in the Term Loan Agreement, as in effect on the date hereof));

(5)

all Securities Accounts (other than Term Loan Priority Accounts) with any securities intermediary (including any and all Investment Property held therein or credited thereto, and including any Investment Property held in, or credited to, any Term Loan Priority Account that does not constitute identifiable Proceeds of Term Loan Priority Collateral);

(6)

all accessions to, substitutions for and replacements of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing; and

(7)

to the extent not otherwise included, all Proceeds (including without limitation, all insurance proceeds with respect to any of the foregoing items referred to in the preceding clauses (1) through (6)), Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing and fifty percent (50%) of all proceeds of any tax refunds, Commercial Tort Claims and business interruption insurance;

provided, however, that, any Collateral, regardless of type, received in exchange for ABL Priority Collateral pursuant to an Enforcement Action in accordance with the terms of the ABL Agreement and this Agreement shall be treated as ABL Priority Collateral under this Agreement, the Term Loan Security Documents and the ABL Security Documents; provided, further, that ABL Priority Collateral shall exclude all Term Loan Priority Collateral (other than Term Loan Priority Collateral which is treated as ABL Priority Collateral as set forth in the first proviso above), it being understood and agreed that the ABL Secured Parties remain entitled to the benefit of their second priority Lien in any such Term Loan Priority Collateral as set forth in Section 2 of this Agreement.

“ABL Priority Debt” means all ABL Obligations other than Excess ABL Debt.

“ABL Priority Obligations Payment Date” means the first date on which (a) the ABL Obligations (other than those that constitute Unasserted Contingent Obligations and Excess ABL Debt) have been indefeasibly paid in cash in full (or cash collateralized or defeased in accordance with the terms of the ABL Documents), (b) all commitments to extend credit under the ABL Documents have been terminated, (c) there are no outstanding letters of credit or similar instruments issued under the ABL Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the ABL Documents), and (d) so long as the Term Loan Priority Obligations Payment Date shall not have occurred, the ABL Representative has delivered a written notice to the Term Loan Representative stating that the events described in clauses (a), (b) and (c) have occurred to the satisfaction of the ABL Secured Parties.

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“ABL Representative” has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement ABL Agreement, the ABL Representative shall be the Person identified as such in such Agreement.

“ABL Secured Parties” means the ABL Representative, the ABL Creditors and any other holders of the ABL Obligations.

“ABL Security Documents” means the “Collateral Documents” as defined in the ABL Agreement, and any other documents that are designated under the ABL Agreement as “ABL Security Documents” for purposes of this Agreement.

“Access Period” means, with respect to each parcel or item of Term Loan Priority Collateral, the period, following the commencement of any Enforcement Action, which begins on the earlier of (a) the day on which the ABL Representative provides the Term Loan Representative with the notice of its election to request access to such parcel or item of Term Loan Priority Collateral pursuant to Section 3.4(c) and (b) the fifth Business Day after the Term Loan Representative provides the ABL Representative with notice that the Term Loan Representative (or its agent) has obtained physical possession or control of such parcel or item of Term Loan Priority Collateral and ends on the earliest of (i) the day which is 90 days after the date (the “Initial Access Date”) on which the ABL Representative initially obtains the ability to take physical possession of, remove or otherwise control physical access to, or actually uses, such parcel or item of Term Loan Priority Collateral plus such number of days, if any, after the Initial Access Date that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to associated ABL Priority Collateral, (ii) the date on which all or substantially all of the ABL Priority Collateral associated with such parcel or item of Term Loan Priority Collateral is sold, collected or liquidated, (iii) the ABL Priority Obligations Payment Date and (iv) the date on which the default which resulted in such Enforcement Action has been cured or waived in writing.

“Ancillary Document” has the meaning set forth in Section 10.14.

“Banking Services Obligations” means “Banking Services Obligations” as defined in the ABL Agreement as in effect on the date hereof.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.

“Borrowers” has the meaning set forth in the first WHEREAS clause of this Agreement.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

“Collateral” means all assets, whether now owned or hereafter acquired by any Loan Party, in which a Lien is granted or purported to be granted at any time to any ABL Secured Party for any ABL Obligation or any Term Loan Secured Party as security for any Term Loan Obligation. For the avoidance of doubt, (a) no Real Property constitutes Collateral on the date hereof and (b) unless and until any Mortgage is granted or purported to be granted on any Real Property as security for any ABL Obligations or Term Loan Obligations, no Real Property shall constitute Collateral.

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“Comparable Security Document” means, in relation to any Senior Collateral subject to any Senior Security Document, that Junior Security Document that creates a security interest in the same Senior Collateral, granted by the same Loan Party, as applicable.

“Copyright Licenses” means any and all agreements granting any right in, to or under Copyrights (whether a Loan Party is licensee or licensor thereunder).

“Copyrights” means all United States, state and foreign copyrights, including but not limited to copyrights in software and databases, and all “Mask Works” (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now or hereafter in force, and with respect to any and all of the foregoing: (a) all registrations and applications therefor, (b) all extensions and renewals thereof, (c) all rights corresponding thereto throughout the world, (d) all rights to sue for past, present and future infringements thereof, (e) all licenses, claims, damages and proceeds of suit arising therefrom, and (f) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license, assignment, or other disposition thereof.

“Enforcement Action” means, with respect to the ABL Obligations or the Term Loan Obligations, the exercise of any rights and remedies with respect to any Collateral securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies under, as applicable, the ABL Documents or the Term Loan Documents, or applicable law, including without limitation the exercise of any rights of set-off or recoupment, and the exercise of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code; provided, that the following shall not constitute an “Enforcement Action”: (i) the establishment of borrowing base reserves, excluding assets from the borrowing base, or the establishment of other terms or conditions for revolving loans or letters of credit, (ii) the changing of advance rates or advance sublimits, (iii) the imposition of a default rate or a late fee, (iv) the taking of any action in connection with the attempt to receive, or the receipt of, collections of ABL Priority Collateral in the ordinary course by ABL Representative or ABL Secured Parties, (v) the suspension or termination of the commitments to lend under the ABL Documents, including upon the occurrence of a default or the existence of an overadvance, (vi) the filing of a proof of claim in any Insolvency Proceeding, (vii) the consent by ABL Representative to the disposition by any Loan Party of any of the ABL Priority Collateral (other than in connection with liquidation of the ABL Priority Collateral at the request of ABL Representative), (viii) the consent by Term Loan Representative to the disposition by any Loan Party of any of the Term Loan Priority Collateral (other than in connection with liquidation of the Term Loan Priority Collateral at the request of Term Loan Representative), and (ix) the acceleration of the Term Loan Obligations or the ABL Obligations.

“Excess ABL Debt” means the sum of (a) the portion of the principal amount of the loans outstanding under the ABL Documents and the undrawn amount of outstanding letters of credit that is in excess of the ABL Loan Maximum Amount, plus (b) the portion of interest and fees that accrues or is charged with respect to that portion of the principal amount of the loans and letters of credit described in clause (a) of this definition, plus (c) Banking Services Obligations and Swap Agreement Obligations in excess of the cap set forth in clause (b) of the definition of ABL Loan Maximum Amount.

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“Excess Debt” means Excess ABL Debt or Excess Term Loan Debt, as applicable.

“Excess Term Loan Debt” means the sum of (a) the portion of the principal amount of the loans outstanding under the Term Loan Documents that is in excess of the Term Loan Maximum Amount, plus (b) the portion of interest and fees that accrues or is charged with respect to that portion of the principal amount of the loans described in clause (a) of this definition.

“Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

“Intellectual Property” means, collectively, Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets, and Trade Secret Licenses.

“Junior Collateral” means with respect to any Junior Secured Party, any Collateral on which it has a Junior Lien.

“Junior Documents” means, collectively, with respect to any Junior Obligations, any provision pertaining to such Junior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Junior Obligation.

“Junior Liens” means (a) with respect to any ABL Priority Collateral, (i) all Liens securing the Term Loan Priority Debt until the ABL Priority Obligations Payment Date, (ii) following the ABL Priority Obligations Payment Date until the Term Loan Priority Obligations Payment Date, all Liens securing the Excess ABL Debt, and (iii) following the Term Loan Priority Obligations Payment Date, all Liens securing the Excess Term Loan Debt and (b) with respect to any Term Loan Priority Collateral, (i) all Liens securing the ABL Priority Debt until the Term Loan Priority Obligations Payment Date, (ii) following the Term Loan Priority Obligations Payment Date until the ABL Priority Obligations Payment Date, all Liens securing the Excess Term Loan Debt, and (iii) following the ABL Priority Obligations Payment Date, all Liens securing the Excess ABL Debt.

“Junior Obligations” means (a) with respect to any ABL Priority Collateral, all Term Loan Priority Debt until the ABL Priority Obligations Payment Date, then the Excess ABL Debt until the Term Loan Priority Obligations Payment Date, and then the Excess Term Loan Debt and (b) with respect to any Term Loan Priority Collateral, all ABL Priority Debt until the Term Loan Priority Obligations Payment Date, then the Excess Term Loan Debt until the ABL Priority Obligations Payment Date, and then the Excess ABL Debt.

“Junior Priority Standstill Period” has the meaning set forth in Section 3.1.

“Junior Representative” means (a) with respect to any ABL Obligations or any ABL Priority Collateral, the Term Loan Representative until the ABL Priority Obligations Payment Date, then the ABL Representative, until the Term Loan Priority Obligations Payment Date, and then the Term Loan Representative, and (b) with respect to any Term Loan Obligations or any Term Loan Priority Collateral, the ABL Representative until the Term Loan Priority Obligations Payment Date, then the Term Loan Representative, until the ABL Priority Obligations Payment Date, and then the ABL Representative.

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“Junior Secured Parties” means (a) with respect to the ABL Priority Collateral, all Term Loan Secured Parties until the ABL Priority Obligations Payment Date, then all ABL Secured Parties until the Term Loan Priority Obligations Payment Date, then all Term Loan Secured Parties and (b) with respect to the Term Loan Priority Collateral, all ABL Secured Parties until the Term Loan Priority Obligations Payment Date, then all Term Loan Secured Parties until the ABL Priority Obligations Payment Date, then all ABL Secured Parties.

“Junior Security Documents” means with respect to any Junior Secured Party, the Security Documents that secure the Junior Obligations.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, hypothecation, assignment, assignation, debenture, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Lien Priority” means with respect to any Lien of the ABL Representative or Term Loan Representative in the Collateral, the order of priority of such Lien specified in Section 2.1.

“Loan Documents” means, collectively, the ABL Documents and the Term Loan Documents.

“Loan Party” means, collectively, the ABL Loan Parties and the Term Loan Parties. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.

“Mortgage” has the meaning set forth in Section 2.6(a).

“Patent License” means all agreements granting any right in, to, or under Patents (whether any Loan Party is licensee or licensor thereunder).

“Patents” means all United States and foreign patents and certificates of invention, or similar industrial property rights, now or hereafter in force, and with respect to any and all of the foregoing, (a) all applications therefore, (b) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (c) all rights corresponding thereto throughout the world, (d) all inventions and improvements described therein, (e) all rights to sue for past, present and future infringements thereof, (f) all licenses, claims, damages, and proceeds of suit arising therefrom, and (g) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license, assignment, or other disposition thereof.

“Person” means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, unincorporated organization, association, institution, entity, party, including any government and any political subdivision, agency or instrumentality thereof.

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“Post-Petition Interest” means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding (or would accrue but for the commencement of an Insolvency Proceeding), whether or not allowed or allowable in any such Insolvency Proceeding.

“Priority Collateral” means the ABL Priority Collateral or the Term Loan Priority Collateral.

“Proceeds” means (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“Purchase Option Trigger Event” means the occurrence of any of the following events: (a) an Event of Default under (and as defined in) the ABL Documents, if such Event of Default remains uncured or unwaived for at least thirty (30) consecutive days and the requisite ABL Creditors have not agreed to forbear from the exercise of remedies; (b) an Event of Default under (and as defined in) the Term Loan Documents resulting from the failure of any Loan Party to make any payment under the Term Loan Documents when due (whether at the maturity thereof, or upon demand therefor or upon acceleration of maturity or otherwise) and such Event of Default has not been waived, cured or remedied in accordance with the terms of the Term Loan Documents and has continued for a period thirty (30) consecutive days and the requisite Term Loan Creditors have not agreed to forbear from the exercise of remedies; (c) the commencement by any Secured Party of an Enforcement Action; or (d) the commencement of an Insolvency Proceeding by or against any Loan Party.

“Real Property” means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

“Related Parties” means, with respect to any specified Person, such Person’s affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s affiliates.

“Replacement ABL Agreement” has the meaning set forth in the definition of “ABL Agreement.”

“Replacement Term Loan Agreement” has the meaning set forth in the definition of “Term Loan Agreement.”

“Secured Obligations” means the ABL Obligations and the Term Loan Obligations.

“Secured Parties” means the ABL Secured Parties and the Term Loan Secured Parties.

“Security Documents” means, collectively, the ABL Security Documents and the Term Loan Security Documents.

“Senior Collateral” means with respect to any Senior Secured Party, any Collateral on which it has a Senior Lien.

“Senior Documents” means, collectively, with respect to any Senior Obligation, any provision pertaining to such Senior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Senior Obligation.

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“Senior Excess Debt” means (a) with respect to ABL Priority Collateral, all Excess ABL Debt, and (b) with respect to any Term Loan Priority Collateral, all Excess Term Loan Debt.

“Senior Liens” means (a) with respect to the ABL Priority Collateral, (i) all Liens securing the ABL Priority Debt until the ABL Priority Obligations Payment Date, (ii) following the ABL Priority Obligations Payment Date until the Term Loan Priority Obligations Payment Date, all Liens securing the Term Loan Priority Debt, and (iii) following the Term Loan Priority Obligations Payment Date, all Liens securing the ABL Obligations, and (b) with respect to the Term Loan Priority Collateral, (i) all Liens securing the Term Loan Priority Debt until the Term Loan Priority Obligations Payment Date, (ii) following the Term Loan Priority Obligations Payment Date until the ABL Priority Obligations Payment Date, all Liens securing the ABL Priority Debt, and (iii) following the ABL Priority Obligations Payment Date, all Liens securing the Term Loan Obligations.

“Senior Obligations” means (a) with respect to any ABL Priority Collateral, all ABL Priority Debt until the ABL Priority Obligations Payment Date, then the Term Loan Priority Debt until the Term Loan Priority Obligations Payment Date, and then the Excess ABL Debt, and (b) with respect to any Term Loan Priority Collateral, all Term Loan Priority Debt until the Term Loan Priority Obligations Payment Date, then the ABL Priority Debt until the ABL Priority Obligations Payment Date, then the Excess Term Loan Debt.

“Senior Obligations Payment Date” means (a) with respect to ABL Priority Debt, the ABL Priority Obligations Payment Date, and (b) with respect to any Term Loan Priority Debt, the Term Loan Priority Obligations Payment Date.

“Senior Representative” means (a) with respect to any ABL Priority Collateral, the ABL Representative until the ABL Priority Obligations Payment Date, then the Term Loan Representative until the Term Loan Priority Obligations Payment Date, and then the ABL Representative, and (b) with respect to any Term Loan Priority Collateral, the Term Loan Representative until the Term Loan Priority Obligations Payment Date, then the ABL Representative until the ABL Priority Obligations Payment Date, and then the Term Loan Representative.

“Senior Secured Parties” means (a) with respect to the ABL Priority Collateral, all ABL Secured Parties until the ABL Priority Obligations Payment Date, then all Term Loan Secured Parties until the Term Loan Priority Obligations Payment Date, and then all ABL Secured Parties, and (b) with respect to the Term Loan Priority Collateral, all Term Loan Secured Parties until the Term Loan Priority Obligations Payment Date.

“Senior Security Documents” means with respect to any Senior Secured Party, the Security Documents that secure the Senior Obligations.

“Swap Agreement Obligations” means “Swap Agreement Obligations” as defined in the ABL Agreement as in effect on the date hereof.

“Term Loan Agreement” has the meaning set forth in the second WHEREAS clause of this Agreement.

“Term Loan Creditors” means the “Lenders” and the “Secured Parties”, each as defined in the Term Loan Agreement.

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“Term Loan DIP Financing” has the meaning set forth in Section 5.2(b).

“Term Loan Documents” means each Term Loan Agreement, each Term Loan Security Document, each Term Loan Guarantee and each other “Loan Document” as defined in the Term Loan Agreement.

“Term Loan Guarantee” means any guarantee by any Loan Party of any or all of the Term Loan Obligations.

“Term Loan Lien” means any Lien created by the Term Loan Security Documents.

“Term Loan Maximum Amount” means, as of any date of determination, an amount equal to:

(a)       (i) $34,854,664, plus (ii) interest (including default interest), fees, indemnities, expenses and other charges arising under any Term Loan Document (in each case to the extent accruing or chargeable in accordance with the terms of the Term Loan Documents as in effect on the date hereof or permitted to be amended in accordance herewith) (other than Excess Term Loan Debt), in each case, to the extent capitalized and added to the principal balance of the loans, minus (iii) the aggregate amount of all principal payments of the Term Loan Obligations (other than in connection with a refinancing thereof), plus

(b)        $1,584,303 in connection with any Term Loan DIP Financing.

“Term Loan Obligations” means (a) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the Term Loan Agreement or any Term Loan DIP Financing by the Term Loan Creditors, and (b) all guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the Term Loan Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Term Loan Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any ABL Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the ABL Secured Parties and the Term Loan Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

“Term Loan Party” means the Borrowers and each direct or indirect affiliate or shareholder (or equivalent) of each Borrower or any of its affiliates that is now or hereafter becomes a party to any Term Loan Document, including without limitation any guarantor of the Term Loan Obligations; sometimes, collectively referred to as the “Term Loan Parties”.

“Term Loan Priority Accounts” means (a) the Qualified Reinvestment Proceeds Blocked Account (as defined in the Term Loan Agreement, as in effect on the date hereof), which is subject to a control agreement in favor of, and subject to the first priority lien of, the Term Loan Representative, and which account is intended to solely contain Qualified Reinvestment Proceeds (as defined in the Term Loan Agreement, as in effect on the date hereof), and (b) any other Deposit Account or Securities Account established after the date hereof, which is subject to a control agreement in favor of, and subject to the first priority lien of, the Term Loan Representative, and which account is intended to solely contain Term Loan Priority Collateral or identifiable proceeds of the Term Loan Priority Collateral; provided, however, any cash, Investment Property or other funds deposited in any such Term Loan Priority Account that do not constitute identifiable proceeds of the Term Loan Priority Collateral or Qualified Reinvestment Proceeds (as defined in the Term Loan Agreement, as in effect on the date hereof) shall be ABL Priority Collateral (notwithstanding the deposit therein) and shall be transferred to a Deposit Account or Securities Account constituting ABL Priority Collateral reasonably promptly after the Term Loan Agent or any Loan Party obtains knowledge thereof.

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“Term Loan Priority Collateral” means all Collateral other than ABL Priority Collateral; provided, however, that, any Collateral, regardless of type, received in exchange for Term Loan Priority Collateral pursuant to an Enforcement Action in accordance with the terms of the Term Loan Agreement and this Agreement shall be treated as Term Loan Priority Collateral under this Agreement, the Term Loan Security Documents and the ABL Security Documents; provided, further, that Term Loan Priority Collateral shall exclude all ABL Loan Priority Collateral (other than ABL Loan Priority Collateral which is treated as Term Loan Priority Collateral as set forth in the first proviso above), it being understood and agreed that the Term Loan Secured Parties remain entitled to the benefit of their second priority Lien in any such ABL Loan Priority Collateral as set forth in Section 2 of this Agreement. Fifty percent (50%) of all proceeds of any tax refunds, Commercial Tort Claims and business interruption insurance shall constitute Term Loan Priority Collateral.

“Term Loan Priority Debt” means all Term Loan Obligations other than Excess Term Loan Debt.

“Term Loan Priority Obligations Payment Date” means the first date on which (a) the Term Loan Obligations (other than those that constitute Unasserted Contingent Obligations and Excess Term Loan Debt) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Term Loan Documents have been terminated, and (c) so long as the ABL Priority Obligations Payment Date shall not have occurred, the Term Loan Representative has delivered a written notice to the ABL Representative stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the Term Loan Secured Parties.

“Term Loan Representative” has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement Term Loan Agreement, the Term Loan Representative shall be the Person identified as such in such Agreement.

“Term Loan Secured Parties” means the Term Loan Representative, the Term Loan Creditors and any other holders of the Term Loan Obligations.

“Term Loan Security Documents” means the “Collateral Documents” as defined in the Term Loan Agreement and any documents that are designated under the Term Loan Agreement as “Term Loan Security Documents” for purposes of this Agreement.

“Trade Secret Licenses” means any and all agreements granting any right in or to Trade Secrets (whether a Loan Party is licensee or licensor thereunder).

“Trade Secrets” means all trade secrets and all other confidential or proprietary information and know-how, whether or not reduced to a writing or other tangible form, now or hereafter in force, owned or used in, or contemplated at any time for use in, the business of any Loan Party, including with respect to any and all of the foregoing: (a) all documents and things embodying, incorporating, or referring in any way thereto, (b) all rights to sue for past, present and future infringement thereof, (c) all licenses, claims, damages, and proceeds of suit arising therefrom, and (d) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license, assignment, or other dispositions thereof.

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“Trademark Licenses” means any and all agreements granting any right in or to Trademarks (whether a Loan Party is licensee or licensor thereunder).

“Trademarks” means all United States, state and foreign trademarks, service marks, certification marks, collective marks, trade names, corporate names, d/b/as, business names, fictitious business names, Internet domain names, trade styles, logos, other source or business identifiers, designs and general intangibles of a like nature, rights of publicity and privacy pertaining to the names, likeness, signature and biographical data of natural persons, now or hereafter in force, and, with respect to any and all of the foregoing: (a) all registrations and applications therefor, (b) the goodwill of the business symbolized thereby, (c) all rights corresponding thereto throughout the world, (d) all rights to sue for past, present and future infringement or dilution thereof or for any injury to goodwill, (e) all licenses, claims, damages, and proceeds of suit arising therefrom, and (f) all payments and royalties and rights to payments and royalties arising out of the sale, lease, license assignment or other disposition thereof.

“Unasserted Contingent Obligations” means, at any time, ABL Obligations or Term Loan Obligations, as applicable, for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any ABL Obligation or Term Loan Obligation, as applicable, and (b) with respect to ABL Obligations contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of ABL Obligations or Term Loan Obligations, as applicable, for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in New York and, to the extent applicable, in all other jurisdictions.

1.3               Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (f) any references to the ABL Agreement “as in effect on the date hereof” shall include any amendments or modifications thereto that are made with the written consent of the Term Loan Representative, and (g) any references to the Term Loan Agreement “as in effect on the date hereof” shall include any amendments or modifications thereto that are made with the written consent of the ABL Representative.

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SECTION 2.         Lien Priority.

2.1               Lien Subordination. Notwithstanding the date, manner or order of grant, attachment or perfection of any Junior Lien in respect of any Collateral or of any Senior Lien in respect of any Collateral and notwithstanding any provision of the UCC, any applicable law, any Security Document, any alleged or actual defect or deficiency in any of the foregoing or any other circumstance whatsoever, the Junior Representative, on behalf of each Junior Secured Party, in respect of such Collateral hereby agrees that:

(a)                any Senior Lien in respect of such Collateral, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be and shall remain senior and prior to any Junior Lien in respect of such Collateral (whether or not such Senior Lien is subordinated to any Lien securing any other obligation); and

(b)                any Junior Lien in respect of such Collateral, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Senior Lien in respect of such Collateral.

2.2               Prohibition on Contesting Liens. In respect of any Collateral, the Junior Representative, on behalf of each Junior Secured Party, in respect of such Collateral agrees that it shall not, and hereby waives any right to:

(a)                contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity or enforceability of any Senior Lien on such Collateral; or

(b)                demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or similar right which it may have in respect of such Collateral or the Senior Liens on such Collateral, except to the extent that such rights are expressly granted in this Agreement.

2.3               Nature of Obligations. The Term Loan Representative on behalf of itself and the other Term Loan Secured Parties acknowledges that a portion of the ABL Obligations represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the Term Loan Secured Parties and without affecting the provisions hereof. The ABL Representative on behalf of itself and the other ABL Secured Parties acknowledges that Term Loan Obligations may be replaced or refinanced without notice to or consent by the ABL Secured Parties and without affecting the provisions hereof. The Lien Priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the ABL Obligations or the Term Loan Obligations, or any portion thereof.

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2.4               No New Liens.

(a)                Until the ABL Priority Obligations Payment Date, no Term Loan Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Term Loan Obligation which assets are not also subject to the Lien of the ABL Representative under the ABL Documents, subject to the Lien Priority set forth herein. If any Term Loan Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any Term Loan Obligation which assets are not also subject to the Lien of the ABL Representative under the ABL Documents, subject to the Lien Priority set forth herein, then the Term Loan Representative (or the relevant Term Loan Secured Party) shall, without the need for any further consent of any other Term Loan Secured Party and notwithstanding anything to the contrary in any other Term Loan Document be deemed to also hold and have held such lien for the benefit of the ABL Representative as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Representative in writing of the existence of such Lien.

(b)                Until the Term Loan Priority Obligations Payment Date, no ABL Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any ABL Obligation which assets are not also subject to the Lien of the Term Loan Representative under the Term Loan Documents, subject to the Lien Priority set forth herein. If any ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any ABL Obligation which assets are not also subject to the Lien of the Term Loan Representative under the Term Loan Documents, subject to the Lien Priority set forth herein, then the ABL Representative (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such lien for the benefit of the Term Loan Representative as security for the Term Loan Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the Term Loan Representative in writing of the existence of such Lien.

(c)                Notwithstanding the foregoing, any Liens securing ABL DIP Financing or Term Loan DIP Financing shall be governed by Section 5 and not this Section 2.4.

2.5               Separate Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (a) the grants of Liens pursuant to the ABL Security Documents and the Term Loan Security Documents constitute two separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Collateral, the Term Loan Obligations are fundamentally different from the ABL Obligations and should be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties and the Term Loan Secured Parties in respect of the Collateral constitute claims in the same class (rather than separate classes of senior and junior secured claims), then the ABL Secured Parties and the Term Loan Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of ABL Obligation claims and Term Loan Obligation claims against the Loan Parties (with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or Term Loan Priority Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), the ABL Secured Parties or the Term Loan Secured Parties, respectively, shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest that is available from each pool of Priority Collateral for each of the ABL Secured Parties and the Term Loan Secured Parties, respectively, before any distribution is made in respect of the claims held by the other Secured Parties, with the other Secured Parties hereby acknowledging and agreeing to turn over to the respective other Secured Parties amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries.

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2.6               Agreements Regarding Actions to Perfect Liens.

(a)                The ABL Representative agrees on behalf of itself and the other ABL Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “Mortgages”) now or hereafter filed against Real Property in favor of or for the benefit of the ABL Representative shall contain the following notation:

“The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to Great Rock Capital Partners Management, LLC, as Term Loan Representative, in accordance with the provisions of the Intercreditor Agreement dated as of July 7, 2023, as amended, restated or otherwise modified from time to time.”

(b)                Each of the ABL Representative and the Term Loan Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code) over Collateral pursuant to the ABL Security Documents or the Term Loan Security Documents, as applicable, such possession or control is also for the benefit of the Term Loan Representative and the other Term Loan Secured Parties or the ABL Representative and the other ABL Secured Parties, as applicable, solely to the extent required to perfect their security interest in such Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the ABL Representative or the Term Loan Representative (or any third party acting on either such Person’s behalf) with respect to such Collateral or provide the Term Loan Representative, any other Term Loan Secured Party, the ABL Representative or any other ABL Secured Party, as applicable, with any rights with respect to such Collateral beyond those specified in this Agreement, the ABL Security Documents and the Term Loan Security Documents, as applicable; provided, that subsequent to the occurrence of the ABL Priority Obligations Payment Date (so long as the Term Loan Priority Obligations Payment Date shall not have occurred), the ABL Representative shall (i) deliver to the Term Loan Representative, at the Loan Parties’ sole cost and expense, the Collateral in its possession or control together with any necessary endorsements to the extent required by the Term Loan Documents or (ii) direct and deliver such Collateral as a court of competent jurisdiction otherwise directs; provided, further, that subsequent to the occurrence of the Term Loan Priority Obligations Payment Date (so long as the ABL Priority Obligations Payment Date shall not have occurred), the Term Loan Representative shall (A) deliver to the ABL Loan Representative, at the Loan Parties’ sole cost and expense, the Collateral in its possession or control together with any necessary endorsements to the extent required by the ABL Documents or (B) direct and deliver such Collateral as a court of competent jurisdiction otherwise directs. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the ABL Secured Parties and the Term Loan Secured Parties and shall not impose on the ABL Secured Parties or the Term Loan Secured Parties any obligations in respect of the disposition of any Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

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SECTION 3.        Enforcement Rights.

3.1               Exclusive Enforcement. Until the Senior Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the Senior Secured Parties shall have the exclusive right to take and continue any Enforcement Action (including the right to credit bid their debt) with respect to the Senior Collateral, without any consultation with or consent of any Junior Secured Party (but subject to the proviso set forth in Section 5.1); provided, however, that, the Junior Representative (or any person authorized by it) may commence an Enforcement Action after the passage of a period of one hundred twenty (120) days from the date of delivery of a notice in writing to the Senior Representative of the Junior Representative’s intention to exercise its right to take any such Enforcement Actions (the “Junior Standstill Period”); provided, further, however, that (a) notwithstanding anything herein to the contrary, neither the Junior Representative nor any other Junior Secured Party will exercise any rights or remedies with respect to any Senior Collateral if, notwithstanding the expiration of the Junior Standstill Period, the Senior Representative or the other Senior Secured Parties (or any person authorized by them) shall have commenced the exercise of any of their rights or remedies with respect to all or any material portion of the Senior Collateral (prompt notice of such exercise to be given to the Junior Representative) and are reasonably diligently pursuing in good faith the exercise thereof, (b) in the event that at any time after the Junior Representative has sent a notice to the Senior Representative to commence the Junior Standstill Period, the default or event of default under the Junior Documents that was the basis for such notice is cured or waived in accordance with the terms of the applicable Junior Documents, then such notice shall automatically and without further action of the parties be deemed rescinded and no Junior Standstill Period shall be deemed to have been commenced, (c) the Junior Representative or any other Junior Secured Party, as applicable, shall provide written notice to the Senior Representative promptly upon commencing any exercise of rights or remedies with respect to the Senior Collateral, and (d) any Senior Collateral or any proceeds of Senior Collateral received by the Junior Representative or such other Junior Secured Party in connection with any such exercise of rights or remedies with respect to the Senior Collateral (net of documented, reasonable out-of-pocket costs actually incurred in connection with such enforcement and allocable to the enforcement with respect to such Senior Collateral, including reasonable attorneys’ fees and expenses) shall be applied in accordance with Section 4.1 hereof. Upon the occurrence and during the continuance of a default or an event of default under the Senior Documents, the Senior Representative and the other Senior Secured Parties may take and continue any Enforcement Action with respect to the Senior Obligations and the Senior Collateral in such order and manner as they may determine in their sole discretion in accordance with the terms and conditions of the Senior Documents.

3.2               Standstill and Waivers. Each Junior Representative, on behalf of itself and the other Junior Secured Parties, agrees that, until the Senior Obligations Payment Date has occurred, but subject to the termination of the Junior Standstill Period to the extent permitted by Section 3.1 and the proviso set forth in Section 5.1:

(a)                they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien on any Senior Collateral that secures any Junior Obligation pari passu with or senior to, or to give any Junior Secured Party any preference or priority relative to, the Liens on the Senior Collateral securing the Senior Obligations;

(b)                they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Senior Collateral by any Senior Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) in respect of the Senior Collateral by or on behalf of any Senior Secured Party;

(c)                they have no right to (i) direct either the Senior Representative or any other Senior Secured Party to exercise any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents in respect of the Senior Collateral or (ii) consent or object to the exercise by the Senior Representative or any other Senior Secured Party of any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents with respect to the Senior Collateral or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (c), whether as a junior lien creditor in respect of the Senior Collateral or otherwise, they hereby irrevocably waive such right);

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(d)                they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Senior Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no Senior Secured Party shall be liable for, any action taken or omitted to be taken by any Senior Secured Party with respect to the Senior Collateral or pursuant to the Senior Documents in respect of the Senior Collateral;

(e)                they will not commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of any Senior Collateral, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Senior Collateral; and

(f)                 they will not seek, and hereby waive any right, to have the Senior Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Senior Collateral.

3.3               Judgment Creditors. In the event that any Term Loan Secured Party becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the ABL Liens and the ABL Obligations) to the same extent as all other Liens securing the Term Loan Obligations are subject to the terms of this Agreement. In the event that any ABL Secured Party becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Term Loan Liens and the Term Loan Obligations) to the same extent as all other Liens securing the ABL Obligations are subject to the terms of this Agreement.

3.4               Cooperation; Sharing of Information and Access.

(a)                The Term Loan Representative, on behalf of itself and the other Term Loan Secured Parties, agrees that each of them shall take such actions as the ABL Representative shall request in connection with the exercise by the ABL Secured Parties of their rights set forth herein in respect of the ABL Priority Collateral. The ABL Representative, on behalf of itself and the other ABL Secured Parties, agrees that each of them shall take such actions as the Term Loan Representative shall request in connection with the exercise by the Term Loan Secured Parties of their rights set forth herein in respect of the Term Loan Priority Collateral.

(b)                In the event that the ABL Representative shall, in the exercise of its rights under the ABL Security Documents or otherwise, receive possession or control of any books and Records of any Loan Party which contain information identifying or pertaining to the Term Loan Priority Collateral, the ABL Representative shall promptly notify the Term Loan Representative of such fact and, upon request from the Term Loan Representative and as promptly as practicable thereafter, either make available to the Term Loan Representative such books and Records for inspection and duplication or provide to the Term Loan Representative copies thereof. In the event that the Term Loan Representative shall, in the exercise of its rights under the Term Loan Security Documents or otherwise, receive possession or control of any books and records of any Loan Party which contain information identifying or pertaining to any of the ABL Priority Collateral, the Term Loan Representative shall promptly notify the ABL Representative of such fact and, upon request from the ABL Representative and as promptly as practicable thereafter, either make available to the ABL Representative such books and records for inspection and duplication or provide the ABL Representative copies thereof. The Term Loan Representative hereby irrevocably grants the ABL Representative a non-exclusive worldwide license or right to use, to the maximum extent permitted by applicable law and to the extent of the Term Loan Representative’s interest therein, exercisable without payment of royalty or other compensation (but at the expense of the ABL Secured Parties, to the extent incurred by the ABL Representative in connection with the use thereof), to use any of the Intellectual Property now or hereafter owned by, licensed to, or otherwise used by the Loan Parties in order for ABL Representative and ABL Secured Parties to collect, purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute or otherwise dispose of any asset included in the ABL Priority Collateral in connection with the liquidation, disposition or realization upon the ABL Priority Collateral in accordance with the terms and conditions of the ABL Security Documents and the other ABL Documents. The Term Loan Representative agrees that any sale, transfer or other disposition of any of the Loan Parties’ Intellectual Property (whether by foreclosure or otherwise) will be subject to the ABL Representative’s rights as set forth in this Section 3.4.

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(c)                If the Term Loan Representative, or any agent or representative of the Term Loan Representative, or any receiver, shall, after the commencement of any Enforcement Action, obtain possession or physical control of any of the Term Loan Priority Collateral, the Term Loan Representative shall promptly notify the ABL Representative in writing of that fact, and the ABL Representative shall, within ten Business Days thereafter, notify the Term Loan Representative in writing as to whether the ABL Representative desires to exercise access rights under this Agreement. In addition, if the ABL Representative, or any agent or representative of the ABL Representative, or any receiver, shall obtain possession or physical control of any of the Term Loan Priority Collateral in connection with an Enforcement Action, then the ABL Representative shall promptly notify the Term Loan Representative that the ABL Representative is exercising its access rights under this Agreement and its rights under Section 3.4 under either circumstance. Upon delivery of such notice by the ABL Representative to the Term Loan Representative, the parties shall confer in good faith to coordinate with respect to the ABL Representative’s exercise of such access rights, with such access rights to apply to any parcel or item of Term Loan Priority Collateral access to which is reasonably necessary to enable the ABL Representative during normal business hours to convert ABL Priority Collateral consisting of raw materials and work-in-process into saleable finished goods and/or to transport such ABL Priority Collateral to a point where such conversion can occur, to otherwise prepare ABL Priority Collateral for sale and/or to arrange or effect the sale of ABL Priority Collateral, all in accordance with the manner in which such matters are completed in the ordinary course of business. Consistent with the definition of “Access Period,” access rights will apply to differing parcels or items of Term Loan Priority Collateral at differing times, in which case, a differing Access Period will apply to each such parcel or items. During any pertinent Access Period, the ABL Representative and its agents, representatives and designees shall have an irrevocable, non-exclusive right to have access to, and a rent-free right to use, the relevant parcel or item the Term Loan Priority Collateral for the purposes described above. The ABL Representative shall take proper and reasonable care under the circumstances of any Term Loan Priority Collateral that is used by the ABL Representative during the Access Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by the ABL Representative or its agents, representatives or designees and the ABL Representative shall comply with all applicable laws in all material respects in connection with its use or occupancy or possession of the ABL Priority Collateral. The ABL Representative shall indemnify and hold harmless the Term Loan Representative and the Term Loan Creditors for any injury or damage to Persons or property (ordinary wear-and-tear excepted) caused by the acts or omissions of Persons under its control; provided, however, that the ABL Representative and the ABL Creditors will not be liable for any diminution in the value of Term Loan Priority Collateral caused by the absence of the ABL Priority Collateral therefrom. The ABL Representative and the Term Loan Representative shall cooperate and use reasonable efforts to ensure that their activities during the Access Period as described above do not interfere materially with the activities of the other as described above, including the right of Term Loan Representative to show the Term Loan Priority Collateral to prospective purchasers and to ready the Term Loan Priority Collateral for sale. Consistent with the definition of the term “Access Period,” if any order or injunction is issued or stay is granted or is otherwise effective by operation of law that prohibits the ABL Representative from exercising any of its rights hereunder, then the Access Period granted to the ABL Representative under this Section 3.4 shall be stayed during the period of such prohibition (provided, that the ABL Representative is acting in good faith and in a commercially reasonable fashion to lift any such injunction or stay) and shall continue thereafter for the number of days remaining as required under this Section 3.4. The Term Loan Representative shall not foreclose or otherwise sell, remove or dispose of any of the Term Loan Priority Collateral during the Access Period with respect to such Collateral if such Collateral is reasonably necessary to enable the ABL Representative to convert, transport or arrange to sell the ABL Priority Collateral as described above.

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(d)                Notwithstanding the foregoing contained in clause (c) above, in the event that the Term Loan Representative shall, after a default or an event of default under the Term Loan Documents, acquire physical control or possession of any of the Term Loan Priority Collateral consisting of equipment, the Term Loan Representative shall negotiate in good faith with the ABL Representative regarding the ABL Secured Parties’ access and use rights with respect to such equipment so long as such access and use period does not interfere with the Term Loan Representative’s Enforcement Actions with respect to such equipment in any material respect.

3.5               No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6 hereof, if any ABL Secured Party or Term Loan Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Loan Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Loan Secured Party.

3.6               Actions Upon Breach.

(a)                If any ABL Secured Party or Term Loan Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Collateral, such Loan Party, with the prior written consent of the ABL Representative or the Term Loan Representative, as applicable, may interpose as a defense or dilatory plea the making of this Agreement, and any ABL Secured Party or Term Loan Secured Party, as applicable, may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.

(b)                Should any ABL Secured Party or Term Loan Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Collateral (including, without limitation, any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, any ABL Secured Party or Term Loan Secured Party (in its own name or in the name of the relevant Loan Party), as applicable, or the relevant Loan Party, may obtain relief against such ABL Secured Party or Term Loan Secured Party, as applicable, by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each of the ABL Representative on behalf of each ABL Secured Party and the Term Loan Representative on behalf of each Term Loan Secured Party that (i) the ABL Secured Parties’ or Term Loan Secured Parties’, as applicable, damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Term Loan Secured Party or ABL Secured Party, as applicable, waives any defense that the Loan Parties and/or the Term Loan Secured Parties and/or ABL Secured Parties, as applicable, cannot demonstrate damage and/or be made whole by the awarding of damages.

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SECTION 4.        Application of Proceeds of Senior Collateral; Dispositions and Releases of Lien; Notices and Insurance.

4.1               Application of Proceeds.

(a)                Application of Proceeds of Senior Collateral. The Senior Representative and Junior Representative hereby agree that all Senior Collateral, and all Proceeds thereof, received by either of them in connection with the collection, sale or disposition of Senior Collateral pursuant to an Enforcement Action or other exercise of remedies shall be applied,

(i)                first, to the payment of costs and expenses (including reasonable attorneys’ fees and expenses and court costs) of the Senior Representative in connection with such Enforcement Action,

(ii)              second, to the payment of the Senior Obligations in accordance with the Senior Documents until the Senior Obligations Payment Date,

(iii)             third, to the payment of the Junior Obligations (other than Excess Debt in respect thereof) in accordance with the terms thereof,

(iv)             fourth, to the payment of the Senior Excess Debt in accordance with the terms thereof until paid in full,

(v)              fifth, to the payment of the Excess Debt in respect of the Junior Obligations in accordance with the terms thereof until paid in full, and

(vi)              sixth, the balance, if any, to the Loan Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

(b)                Limited Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the Senior Representative shall have no obligation or liability to the Junior Representative or to any Junior Secured Party, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each party under the terms of this Agreement.

(c)                Segregation of Collateral. Until the occurrence of the Senior Obligations Payment Date, any Senior Collateral that may be received by any Junior Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the Senior Representative, for the benefit of the Senior Secured Parties, in the same form as received, with any necessary endorsements, and each Junior Secured Party hereby authorizes the Senior Representative to make any such endorsements as agent for the Junior Representative (which authorization, being coupled with an interest, is irrevocable); provided that, the ABL Representative shall be entitled to deem all ordinary course collections and payments deposited in any Deposit Account (other than Term Loan Priority Accounts and any amounts obtained with actual knowledge (at or prior to the time of deposit into such Deposit Account) that such amounts constitute proceeds of Term Loan Priority Collateral) to be ABL Priority Collateral.

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4.2               Releases of Liens. Upon any release, sale or disposition of Senior Collateral permitted pursuant to the terms of the Senior Documents that results in the release of the Senior Lien on any Senior Collateral (including without limitation any sale or other disposition pursuant to any Enforcement Action following five (5) days prior written notice to the Junior Representative, but excluding any sale or other disposition not pursuant to an Enforcement Action that is prohibited by the Junior Documents, and any release of the Senior Lien due to the occurrence of the Senior Obligations Payment Date), the Junior Lien on such Senior Collateral (excluding any portion of the proceeds of such Senior Collateral remaining after the Senior Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person; provided, that the proceeds of such Senior Collateral are applied to the Senior Obligations in accordance with the Senior Documents as in effect on the date hereof. The Junior Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the Senior Representative shall request to evidence any release of the Junior Lien described in this Section 4.2. The Junior Representative hereby appoints the Senior Representative and any officer or duly authorized person of the Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Junior Representative and in the name of the Junior Representative or in the Senior Representative’s own name, from time to time, in the Senior Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable). Notwithstanding the foregoing, (y) the Senior Representative shall conduct each Enforcement Action in accordance in all material respects with applicable law, and (z) any sale, lease, exchange, transfer or other disposition of any Collateral to any Affiliate of a Loan Party pursuant to an Enforcement Action shall be no more favorable to such Affiliate than would be obtained in a comparable arm’s length transaction.

4.3               Certain Real Property Notices; Insurance.

(a)                [Reserved].

(b)                The Term Loan Representative shall give the ABL Representative at least 30 days written notice prior to commencing any Enforcement Action against any Real Property owned by any Loan Party at which ABL Priority Collateral is stored or otherwise located or to dispossess any Loan Party from such Real Property.

(c)                Proceeds of Collateral include insurance proceeds and therefore the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Representative and Term Loan Representative shall each be named as additional insureds or loss payees, as applicable, with respect to all insurance policies relating to the Collateral in accordance with and to the extent required by the ABL Documents and the Term Loan Documents, respectively. Until the ABL Priority Obligations Payment Date, the ABL Representative shall have the sole and exclusive right, as against the Term Loan Representative, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral. Until the Term Loan Priority Obligations Payment Date, the Term Loan Representative shall have the sole and exclusive right, as against the ABL Representative, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of Term Loan Priority Collateral. All proceeds of such insurance shall be remitted to the ABL Representative or the Term Loan Representative, as the case may be, in accordance with and to the extent required by the ABL Documents and the Term Loan Documents, respectively, and each of the Term Loan Representative and ABL Representative shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1.

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SECTION 5.         Insolvency Proceedings.

5.1               Filing of Motions. Until the Senior Obligations Payment Date has occurred, the Junior Representative agrees on behalf of itself and the other Junior Secured Parties that no Junior Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Senior Collateral, including, without limitation, with respect to the determination of any Liens or claims held by the Senior Representative (including the validity and enforceability thereof) or any other Senior Secured Party in respect of any Senior Collateral or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided, that the Junior Representative may (a) file a proof of claim in an Insolvency Proceeding, and (b) file any necessary responsive or defensive pleadings in opposition of any motion or other pleadings made by any Person objecting to or otherwise seeking the disallowance of the claims of the Junior Secured Parties on the Senior Collateral, subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on the Junior Representative imposed hereby.

5.2               Financing Matters.

(a)                If any Loan Party becomes subject to any Insolvency Proceeding in the United States at any time prior to the ABL Priority Obligations Payment Date, and if the ABL Representative or the other ABL Secured Parties desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “ABL DIP Financing”), then the Term Loan Representative agrees, on behalf of itself and the other Term Loan Secured Parties, that each Term Loan Secured Party (i) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such ABL DIP Financing on the grounds of a failure to provide “adequate protection” for the Term Loan Representative’s Lien on the Collateral to secure the Term Loan Obligations or on any other grounds (and will not request any adequate protection solely as a result of such ABL DIP Financing) and (ii) will subordinate (and will be deemed hereunder to have subordinated) the Term Loan Liens on any ABL Priority Collateral to (A) such ABL DIP Financing on the same terms as the ABL Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (B) any adequate protection provided to the ABL Secured Parties and (C) any “carve-out” agreed to by the ABL Representative or the other ABL Secured Parties, so long as (w) the principal amount of such ABL DIP Financing plus the outstanding principal amount of other ABL Obligations does not exceed the ABL Loan Maximum Amount, (x) the Term Loan Representative retains its Lien on the Collateral to secure the Term Loan Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the Term Loan Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such ABL DIP Financing is junior and subordinate to the Lien of the Term Loan Representative on the Term Loan Priority Collateral, (y) all Liens on ABL Priority Collateral securing any such ABL DIP Financing shall be senior to or on a parity with the Liens of the ABL Representative and the ABL Creditors securing the ABL Obligations on ABL Priority Collateral and (z) if the ABL Representative receives a replacement or adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations, and such replacement or adequate protection Lien is on any of the Term Loan Priority Collateral, (1) such replacement or adequate protection Lien on such post-petition assets which are part of the Term Loan Priority Collateral (the “Term Post-Petition Assets”) is junior and subordinate to the Lien in favor of the Term Loan Representative on the Term Loan Priority Collateral and (2) the Term Loan Representative also receives a replacement or adequate protection Lien on such Term Post-Petition Assets of the debtor to secure the Term Loan Obligations. In no event will any of the ABL Secured Parties seek to obtain a priming Lien on any of the Term Loan Priority Collateral and nothing contained herein shall be deemed to be a consent by Term Loan Secured Parties to any adequate protection payments using Term Loan Priority Collateral.

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(b)                If any Loan Party becomes subject to any Insolvency Proceeding in the United States at any time prior to the Term Loan Priority Obligations Payment Date, and if the Term Loan Representative or the other Term Loan Secured Parties desire to consent (or not object) or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “Term Loan DIP Financing”), then the ABL Representative agrees, on behalf of itself and the other ABL Secured Parties, that each ABL Secured Party (i) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to such Term Loan DIP Financing on the grounds of a failure to provide “adequate protection” for the ABL Representative’s Lien on the Collateral to secure the ABL Obligations or on any other grounds (and will not request any adequate protection solely as a result of such Term Loan DIP Financing) and (ii) will subordinate (and will be deemed hereunder to have subordinated) the ABL Liens on any Term Loan Priority Collateral to (A) such Term Loan DIP Financing on the same terms as the Term Loan Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (B) any adequate protection provided to the Term Loan Secured Parties and (C) any “carve-out” agreed to by the Term Loan Representative or the other Term Loan Secured Parties, so long as (w) the principal amount of such Term Loan DIP Financing plus the outstanding principal amount of other Term Loan Obligations does not exceed the Term Loan Maximum Amount, (x) the ABL Representative retains its Lien on the Collateral to secure the ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the ABL Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such Term Loan DIP Financing is junior and subordinate to the Lien of the ABL Representative on the ABL Priority Collateral, (y) all Liens on Term Loan Priority Collateral securing any such Term Loan DIP Financing shall be senior to or on a parity with the Liens of the Term Loan Representative and the Term Loan Creditors securing the Term Loan Obligations on Term Loan Priority Collateral and (z) if the Term Loan Representative receives a replacement or adequate protection Lien on post-petition assets of the debtor to secure the Term Loan Obligations, and such replacement or adequate protection Lien is on any of the ABL Priority Collateral, (1) such replacement or adequate protection Lien on such post-petition assets which are part of the ABL Priority Collateral (the “ABL Post-Petition Assets”) is junior and subordinate to the Lien in favor of the ABL Representative on the ABL Priority Collateral and (2) the ABL Representative also receives a replacement or adequate protection Lien on such ABL Post-Petition Assets of the debtor to secure the ABL Obligations. In no event will any of the Term Loan Secured Parties seek to obtain a priming Lien on any of the ABL Priority Collateral, and nothing contained herein shall be deemed to be a consent by the ABL Secured Parties to any adequate protection payments using ABL Priority Collateral. All Liens granted to the Term Loan Representative or the ABL Representative in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement.

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5.3               Relief From the Automatic Stay. Until the ABL Priority Obligations Payment Date, the Term Loan Representative agrees, on behalf of itself and the other Term Loan Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any ABL Priority Collateral, without the prior written consent of the ABL Representative. Until the Term Loan Priority Obligations Payment Date, the ABL Representative agrees, on behalf of itself and the other ABL Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Term Loan Priority Collateral, without the prior written consent of the Term Loan Representative. In addition, neither the Term Loan Representative nor the ABL Representative shall seek any relief from the automatic stay with respect to any Collateral without providing 30 days’ prior written notice to the other, unless otherwise agreed by both the ABL Representative and the Term Loan Representative.

5.4               No Contest. The Junior Representative, on behalf of itself and the Junior Secured Parties, agrees that, prior to the Senior Obligations Payment Date, none of them shall contest (or support any other Person contesting) (a) any request by the Senior Representative or any Senior Secured Party for adequate protection of its interest in the Senior Collateral (unless in contravention of Section 5.2(a) or (b), as applicable), or (b) any objection by the Senior Representative or any Senior Secured Party to any motion, relief, action, or proceeding based on a claim by the Senior Representative or any Senior Secured Party that its interests in the Senior Collateral (unless in contravention of Section 5.2 (a) or (b), as applicable) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the Senior Representative as adequate protection of its interests are subject to this Agreement.

5.5               Avoidance Issues. If any Senior Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Junior Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

5.6               Asset Dispositions in an Insolvency Proceeding. Neither the Junior Representative nor any other Junior Secured Party shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any Senior Collateral that is supported by the Senior Secured Parties, and the Junior Representative and each other Junior Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale of any Senior Collateral supported by the Senior Secured Parties and to have released their Liens on such assets; provided, that the net proceeds of such Senior Collateral are applied in accordance with Section 4.1 hereof; provided further that this Section 5.6 shall not apply to any case of a sale or disposition of Real Property unless the ABL Representative has received at least ninety (90) days prior notice of the consummation of any such sale.

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5.7               Other Matters. To the extent that the Senior Representative or any Senior Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Junior Collateral, the Senior Representative agrees, on behalf of itself and the other Senior Secured Parties, not to assert any of such rights without the prior written consent of the Junior Representative; provided, that if requested by the Junior Representative, the Senior Representative shall timely exercise such rights in the manner requested by the Junior Representative, including any rights to payments in respect of such rights.

5.8               Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.

SECTION 6.         Term Loan Documents and ABL Documents.

(a)                The Term Loan Documents may be amended, supplemented, or otherwise modified in accordance with their terms and the Term Loan Obligations may be refinanced, in each case without notice to, or the consent of, the ABL Secured Parties, all without affecting the lien subordination or other provisions of this Agreement; provided, that, in the case of a refinancing, the holders of such refinancing debt shall have bound themselves (in a writing addressed to ABL Representative) to the terms of this Agreement; provided further, that each Loan Party and the Term Loan Representative, on behalf of itself and the Term Loan Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Term Loan Documents, without the prior written consent of ABL Representative (which it shall be authorized to consent to based upon an affirmative vote of the ABL Creditors holding no more than a majority of the debt under the ABL Agreement), to the extent that such amendment or other modification:

(i)                 contravenes the provisions of this Agreement;

(ii)               increases the “Applicable Margin” or similar component of the cash pay portion of any interest rate by more than 3.00 percentage points per annum (excluding increases resulting from the accrual of interest at the default rate);

(iii)             changes to earlier dates any dates upon which payments of principal or interest are due thereon or increases the amount of any scheduled payments of principal;

(iv)              make earlier the scheduled maturity date under the Term Loan Agreement, other than (A) upon an acceleration of the Term Loan Obligations or (B) after the occurrence and during the continuance of an Event of Default (as defined in the Term Loan Agreement), including in connection with any restructuring or forbearance agreement;

(v)                changes any covenants, defaults, or events of default under the Term Loan Agreement or any other Term Loan Document (including the addition of covenants, defaults, or events of default not contained in the Term Loan Agreement or other Term Loan Documents as in effect on the date hereof) to restrict any Loan Party from making payments of the ABL Obligations or amending the ABL Documents that would otherwise be permitted under the Term Loan Documents as in effect on the date hereof;

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(vi)              changes the redemption, mandatory prepayment, or defeasance provisions thereof (or adds any new prepayment) to require payments on earlier dates from any dates upon which payments of principal or interest are due with respect thereto or increases the amount of any payments required to be made thereunder;

(vii)            (A) removes or negates the requirement in Section 2.11(d) or Section 2.11(g) of the Term Loan Agreement that the Loan Parties shall hold at all times any Net Proceeds (as defined in the Term Loan Agreement) received from a Casualty Event or an Asset Sale (each as defined in the Term Loan Agreement) in a Term Loan Priority Account until such Net Proceeds (as defined in the Term Loan Agreement) are (x) applied to the Term Loan Obligations or (y) reinvested in accordance with Section 2.11(d) or Section 2.11(g) of the Term Loan Agreement, as applicable, or (B) removes or makes more restrictive the ability of the Loan Parties to reinvest such Net Proceeds (as defined in the Term Loan Agreement); or

(viii)          contractually subordinate the Liens of the Term Loan Representative or any other Term Loan Secured Party upon any Term Loan Priority Collateral to any other secured obligations of the Loan Parties secured by Liens upon the Term Loan Priority Collateral, except as may be permitted by this Agreement in connection with any Insolvency Proceeding.

(b)                The ABL Documents may be amended, supplemented, or otherwise modified in accordance with their terms and the ABL Obligations may be refinanced, in each case without notice to, or the consent of, the Term Loan Secured Parties, all without affecting the lien subordination or other provisions of this Agreement; provided, that, in the case of a refinancing, the holders of such refinancing debt shall have bound themselves (in a writing addressed to Term Loan Representative) to the terms of this Agreement; provided further, that, each Loan Party and the ABL Representative, on behalf of itself and the ABL Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the ABL Documents, without the prior written consent of Term Loan Representative (which it shall be authorized to consent to based upon an affirmative vote of the Term Loan Creditors holding no more than a majority of the debt under the Term Loan Agreement), to the extent that such amendment or other modification:

(i)                 contravenes the provisions of this Agreement;

(ii)               increases the “Applicable Rate” or similar component of the interest rate by more than 3.00 percentage points per annum (excluding increases resulting from (A) increases in the underlying reference rate not caused by an amendment, supplement, modification or refinancing of the ABL Agreement, (B) the application of the pricing grid set forth in the ABL Agreement, or (C) the accrual of interest at the default rate);

(iii)             make earlier the scheduled maturity date under the ABL Agreement, other than (A) upon an acceleration of the ABL Obligations, (B) in accordance with the definition of “Maturity Date” in the ABL Agreement as in effect on the date hereof, or (C) after the occurrence and during the continuance of an Event of Default (as defined in the ABL Agreement), including in connection with any restructuring or forbearance agreement;

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(iv)              changes any covenants, defaults, or events of default under the ABL Agreement or any other ABL Document (including the addition of covenants, defaults, or events of default not contained in the ABL Agreement or other ABL Documents as in effect on the date hereof) to restrict any Loan Party from making payments of the Term Loan Obligations or amending the Term Loan Documents that would otherwise be permitted under the ABL Documents as in effect on the date hereof;

(v)                modifies (or has the effect of a modification of) the mandatory prepayment provisions of the ABL Agreement or any ABL Document in a manner that makes them more restrictive to Loan Parties, other than after the occurrence and during the continuance of, or in connection with the waiver of, a default or event of default under the ABL Agreement; or

(vi)              contractually subordinate the Liens of the ABL Representative or any other ABL Secured Party upon any ABL Priority Collateral to any other secured obligations of the Loan Parties secured by Liens upon the ABL Priority Collateral, except as may be permitted by this Agreement in connection with any Insolvency Proceeding.

(c)                In the event the Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Security Document or changing in any manner the rights of any parties thereunder, in each case solely with respect to any Senior Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Comparable Security Document without the consent of or action by any Junior Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided, that, (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any Junior Security Document, except to the extent that a release of such Lien is permitted by Section 4.2, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the Junior Secured Parties and does not affect the Senior Secured Parties in a like or similar manner shall not apply to the Junior Security Documents without the consent of the Junior Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable to the Junior Representative under the Junior Loan Documents shall be made without the prior written consent of the Junior Representative and (iv) notice of such amendment, waiver or consent shall be given to the Junior Representative no later than 30 days after its effectiveness; provided, that the failure to give such notice shall not affect the effectiveness and validity thereof.

SECTION 7.         Purchase Option.

7.1               Notice of Exercise. Upon the occurrence of a Purchase Option Trigger Event, all or a portion of the Term Loan Creditors, acting as a single group, shall have the option at any time upon five (5) Business Days’ prior written notice to the ABL Representative to purchase all of the ABL Obligations from the ABL Secured Parties (other than the exclusion, at the purchasers’ option, of the amount of ABL Obligations in excess of the ABL Loan Maximum Amount). Such notice from such Term Loan Creditors to the ABL Representative shall be irrevocable.

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7.2               Purchase and Sale. On the date specified by the relevant Term Loan Creditors in the notice contemplated by Section 7.1(a) above (which shall not be less than five (5) Business Days, nor more than twenty (20) calendar days, after the receipt by the ABL Representative of the notice of the relevant Term Loan Creditor’s election to exercise such option), the ABL Creditors shall sell to the relevant Term Loan Creditors, and the relevant Term Loan Creditors shall purchase from the ABL Creditors, the ABL Obligations elected for purchase in accordance with Section 7.1 (the “ABL Purchase Amount”). Any sale and assignment by the ABL Creditors as provided herein shall not operate to terminate or impair the Loan Parties’ obligations (i) to pay the Excess ABL Debt (if the purchasers elect to exclude the ABL Obligations in excess of the ABL Loan Maximum Amount from the ABL Purchase Amount) or (ii) to reimburse reasonable and documented expenses and indemnify the ABL Secured Parties (or any other Person) under the ABL Documents or otherwise, all of which shall survive any such sale and assignment (all such obligations, together with ABL Secured Parties’ rights under the ABL Documents solely to the extent necessary to collect such obligations, the “Retained Interest”). Notwithstanding anything herein to the contrary, after consummation of any purchase of ABL Obligations in accordance with this Section 7, the Retained Interest shall be secured by the Collateral, but the ABL Secured Parties (and any other holder of the Retained Interest) shall not have any right to vote or consent to any amendment, waiver or modification except that the consent of ABL Representative shall be required for those matters that require the agreement of each ABL Secured Party or each directly affected ABL Secured Party under the terms of the ABL Agreement. Subject to the foregoing, the ABL Representative, on behalf of the ABL Secured Parties (and any other holder of the Retained Interest) agrees that, after consummation of any purchase of the ABL Obligations in accordance with this Section 7, the Term Loan Representative and the Term Loan Secured Parties shall have the exclusive right to amend or terminate the ABL Documents in their sole discretion, it being agreed that no such amendment or termination shall provide for the termination or forgiveness, in whole or in part, of any rights of any Person with respect to the Retained Interest (and, as between each ABL Secured Party (and any other holder of the Retained Interest), on one hand, and the Loan Parties, on the other hand).

7.3               Payment of Purchase Price. Upon the date of such purchase and sale, the relevant Term Loan Creditors, shall (a) pay to the ABL Representative for the benefit of the ABL Creditors (with respect to a purchase of the ABL Obligations) as the purchase price therefor the full amount of all the ABL Purchase Amount then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses), (b) furnish cash collateral to the ABL Representative in a manner and in such amounts as the ABL Representative determines is reasonably necessary to secure the ABL Representative, the ABL Secured Parties, letter of credit issuing banks and applicable affiliates in connection with any issued and outstanding letters of credit, hedging obligations and cash management obligations secured by the ABL Documents, (c) with respect to a purchase of the ABL Obligations, agree to reimburse the ABL Representative, the ABL Secured Parties and letter of credit issuing banks for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the ABL Obligations, and/or as to which the ABL Representative has not yet received final payment, (d) agree to reimburse the ABL Secured Parties and letter of credit issuing banks, in respect of indemnification obligations of the Loan Parties under the ABL Documents, as to matters or circumstances known to the ABL Representative at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Secured Parties or letter of credit issuing banks, as applicable, and (e) agree to indemnify and hold harmless the ABL Secured Parties and letter of credit issuing banks, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the ABL Obligations as a direct result of any acts by any Term Loan Secured Party occurring after the date of such purchase. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account in New York, New York as the ABL Representative may designate in writing for such purpose. In addition, any ABL Obligations in excess of the ABL Loan Maximum Amount not purchased pursuant to this Section 7 shall continue to be secured by the Collateral in accordance with the terms of the ABL Documents and the ABL Secured Parties shall retain all rights with respect thereto, including the right to receive payments in respect of such Excess ABL Debt in accordance with the priorities set forth in this Agreement.

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7.4               Limitation on Representations and Warranties. Such purchase shall be expressly made without representation or warranty of any kind by any selling party (or the ABL Representative) and without recourse of any kind, except that the selling party shall represent and warrant: (a) the amount of the ABL Obligations being purchased from it, (b) that such ABL Secured Party owns such ABL Obligations free and clear of any Liens or encumbrances and (c) that such ABL Secured Party has the right to assign such ABL Obligations and the assignment is duly authorized.

7.5               Agency Resignation/Replacement. In the event that any one or more of the Term Loan Creditors exercises and consummates the purchase option set forth in this Section 7, (i) ABL Representative shall have the right, but not the obligation, to immediately resign under the ABL Documents, and (ii) the purchasing Term Loan Creditors shall have the right, but not the obligation, to require ABL Representative to immediately resign under the ABL Documents.

SECTION 8.         Reliance; Waivers; etc.

8.1               Reliance. The ABL Documents are deemed to have been executed and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The Term Loan Representative, on behalf of it itself and the other Term Loan Secured Parties, expressly waives all notice of the acceptance of and reliance on this Agreement by the ABL Representative and the other ABL Secured Parties. The Term Loan Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The ABL Representative, on behalf of itself and the other ABL Secured Parties, expressly waives all notices of the acceptance of and reliance on this Agreement by the Term Loan Representative and the other Term Loan Secured Parties.

8.2               No Warranties or Liability. The Term Loan Representative and the ABL Representative acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectibility or enforceability of any other ABL Document or any Term Loan Document. Except as otherwise provided in this Agreement, the Term Loan Representative and the ABL Representative will be entitled to manage and supervise the respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

8.3               No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the ABL Documents or the Term Loan Documents.

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SECTION 9.         Obligations Unconditional.

All rights, interests, agreements and obligations hereunder of the Senior Representative and the Senior Secured Parties in respect of any Collateral and the Junior Representative and the Junior Secured Parties in respect of such Collateral shall remain in full force and effect regardless of:

(a)                any lack of validity or enforceability of any Senior Document or any Junior Document and regardless of whether the Liens of the Senior Representative and Senior Secured Parties are not perfected or are voidable for any reason;

(b)                any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Junior Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Document or any Junior Document;

(c)                any exchange, release or lack of perfection of any Lien on any Collateral or any other asset, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Junior Obligations or any guarantee thereof;

(d)                the commencement of any Insolvency Proceeding in respect of any Loan Party; or

(e)                any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of any Secured Obligation or of any Junior Secured Party in respect of this Agreement.

SECTION 10.    Miscellaneous.

10.1           Rights of Subrogation. The Term Loan Representative, for and on behalf of itself and the Term Loan Secured Parties, agrees that no payment to the ABL Representative or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle the Term Loan Representative or any Term Loan Secured Party to exercise any rights of subrogation in respect thereof until the ABL Priority Obligations Payment Date. Following the ABL Priority Obligations Payment Date, the ABL Representative agrees to execute such documents, agreements, and instruments as the Term Loan Representative or any Term Loan Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Representative are paid by such Person upon request for payment thereof. The ABL Representative, for and on behalf of itself and the ABL Secured Parties, agrees that no payment to the Term Loan Representative or any Term Loan Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Representative or any ABL Secured Party to exercise any rights of subrogation in respect thereof until the Term Loan Priority Obligations Payment Date. Following the Term Loan Priority Obligations Payment Date, the Term Loan Representative agrees to execute such documents, agreements, and instruments as the ABL Representative or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Loan Obligations resulting from payments to the Term Loan Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Term Loan Representative are paid by such Person upon request for payment thereof.

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10.2           Further Assurances. Each of the Term Loan Representative and the ABL Representative will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the other party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable the ABL Representative or the Term Loan Representative to exercise and enforce its rights and remedies hereunder; provided, however, that no party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 10.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 10.2.

10.3           Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Loan Document, the provisions of this Agreement shall govern.

10.4           Continuing Nature of Provisions. Subject to Section 5.5, this Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the earlier of the date (a) the ABL Obligations are paid in U.S. Dollars in full in cash or immediately available funds and all commitments, if any, to extend credit to or for the benefit of the Loan Parties are terminated or have expired and (b) the Term Loan Obligations are paid in U.S. Dollars in full in cash or immediately available funds. This is a continuing agreement and the ABL Secured Parties and the Term Loan Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, any Loan Party on the faith hereof.

10.5           Amendments; Waivers.

(a)                No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by the ABL Representative and the Term Loan Representative, and, in the case of amendments or modifications of Sections 3.5, 3.6, 4.1(a), 10.7 or 10.8 that directly affect the rights or duties of any Loan Party, such Loan Party.

(b)                [Reserved].

10.6           Information Concerning Financial Condition of the Loan Parties. Each of the Term Loan Representative and the ABL Representative hereby assume responsibility for keeping itself informed of the financial condition of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the ABL Obligations or the Term Loan Obligations. The Term Loan Representative and the ABL Representative hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances (except as otherwise provided in the ABL Documents and Term Loan Documents). In the event the Term Loan Representative or the ABL Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation to (a) provide any such information to such other party or any other party on any subsequent occasion, (b) undertake any investigation not a part of its regular business routine, or (c) disclose any other information.

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10.7           Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.

10.8           Submission to Jurisdiction; JURY TRIAL WAIVER.

(a)                Each ABL Secured Party, each Term Loan Secured Party and each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each such party hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each such party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the any ABL Secured Party or Term Loan Secured Party may otherwise have to bring any action or proceeding against any Loan Party or its properties in the courts of any jurisdiction.

(b)                Each ABL Secured Party, each Term Loan Secured Party and each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, (i) any objection it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section and (ii) the defense of an inconvenient forum to the maintenance of such action or proceeding.

(c)                Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.9. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

(d)                EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

10.9           Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, emailed or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or email or five days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section 10.9) shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

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10.10        Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the ABL Secured Parties and Term Loan Secured Parties and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.

10.11        Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

10.12        Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

10.13        Other Remedies. For avoidance of doubt, it is understood that nothing in this Agreement shall prevent any ABL Secured Party or any Term Loan Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the ABL Documents or the Term Loan Documents, as applicable, or to demand payment under any guarantee in respect thereof.

10.14        Counterparts; Integration; Effectiveness; Electronic Execution. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement or any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Agreement and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement or such Ancillary Document, as applicable. This Agreement shall become effective when it shall have been executed by each party hereto. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided, that nothing herein shall require the ABL Representative to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the ABL Representative has agreed to accept any Electronic Signature, the ABL Representative shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Term Loan Representative or any Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (b) upon the request of the ABL Representative, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Term Loan Representative and each Loan Party hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among any of the parties hereto, Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) the ABL Representative may, at its option, create one or more copies of this Agreement and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of its business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement and/or such Ancillary Document based solely on the lack of paper original copies of this Agreement and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against the ABL Representative or any Related Party of the ABL Representative for any losses, claims (including intraparty claims), demands, damages or liabilities of any kind arising solely from the ABL Representative’s reliance on or use of Electronic Signatures and/or transmission by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any such liabilities arising as a result of the failure of the Term Loan Representative or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

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10.15        Additional Loan Parties. Borrowers shall cause each Person that becomes a Loan Party after the date hereof to become a party to this Agreement by execution and delivery by such Person of a Joinder Agreement in the form of Annex 1 hereto.

10.16        Reciprocal Rights. The parties agree that the provisions of Sections 3, 4.2, 4.3(c), 5.2, 5.3, 5.4, 5.6 and 10.1, including, as applicable, the defined terms referenced therein (but only to the extent used therein), which govern the relationship, and certain rights, restrictions, and agreements, between the ABL Secured Parties with respect to the ABL Obligations, on the one hand, and the Term Loan Secured Parties with respect to the Term Loan Obligations, on the other hand, shall, (a) from and after the ABL Priority Obligations Payment Date and until the payment in full of the Term Loan Debt, apply to and govern, mutatis mutandis, the relationship between the Term Loan Secured Parties with respect to the Term Loan Debt, on the one hand, and the ABL Secured Parties with respect to the Excess ABL Debt, on the other hand and (b) from and after the Term Loan Priority Obligations Payment Date and until the payment in full of the ABL Obligations, apply to and govern, mutatis mutandis, the relationship between the ABL Secured Parties with respect to the ABL Obligations, on the one hand, and the Term Loan Secured Parties with respect to the Excess Term Loan Debt, on the other hand.

[SIGNATURE PAGES TO FOLLOW]

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

	JPMORGAN CHASE BANK, N.A., as ABL Representative for and on behalf of the ABL Secured Parties

	By:	/s/ Andy Yang
	Name:	Andy Yang
	Title:	Authorized Signatory

	Address for Notices:

	JPMorgan Chase Bank, N.A.
	1900 N. Akard Street, 3^rd Floor
	Dallas, TX 75201
	Attention: SMG Portfolio Manager
	Facsimile No: [***]
	Email: [***]

	With a copy to:

	Winston & Strawn LLP
	2121 N. Pearl Street, Suite 900
	Dallas, TX 75201
	Attention: Jordan M. Klein
	Email: JMKlein@winston.com

Signature Page to Intercreditor Agreement (SMG Industries)

[Signatures Continued from Previous Page]

	GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC, as Term Loan Representative for and on behalf of the Term Loan Secured Parties

	By:	/s/ Kathleen Auda
	Name:	Kathleen Auda
	Title:	Chief Risk Officer

	Address for Notices:

	If to Term Loan Agent or Term Loan Creditors:

	GRC SPV Investments, LLC
	c/o Great Rock Capital Partners Management, LLC
	285 Riverside Avenue
	Westport, CT 06880
	Attention: Tom Keefe
	Email: [***]

	With a copy to:

	Blank Rome LLP
	717 Texas Avenue, Suite 1400
	Houston, TX 77002
	New York, NY 10020
	Attention: Sarah H. Frazier
	Telecopy: (713) 583-5720
	Email: sarah.frazier@blankrome.com

Signature Page to Intercreditor Agreement (SMG Industries)

[Signatures Continued from Previous Page]

	Borrowers:

	SMG INDUSTRIES INC.

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	Interim CEO

	5J DRIVEAWAY LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J LOGISTICS SERVICES LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J OILFIELD SERVICES, LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J SPECIALIZED LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	5J TRANSPORTATION LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

Signature Page to Intercreditor Agreement (SMG Industries)

	5J TRUCKING, LLC

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

	BARNHART FLEET MAINTENANCE, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	BARNHART TRANSPORTATION, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LAKE SHORE GLOBAL SOLUTIONS LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LAKE SHORE LOGISTICS, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LEGEND EQUIPMENT LEASING, LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

Signature Page to Intercreditor Agreement

	ROUTE 20 TANK WASH LLC

	By:	/s/ Timothy W. Barnhart
	Name:	Timothy W. Barnhart
	Title:	CFO

	LOAN GUARANTORS:

	SKYLINE HOLDING, INC.

	By:	/s/ Matthew C. Flemming
	Name:	Matthew C. Flemming
	Title:	CEO

Address for Notices to Loan Parties:

SMG Industries Inc.

20475 State Hwy 249, Suite 450

Houston, TX 77070

Attention: Matthew Flemming

Email: [***]

Signature Page to Intercreditor Agreement

ANNEX 1

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of ________ ____, 20__, is executed by ________________________________, a _________________ (the “New Subsidiary”) in favor of JPMORGAN CHASE BANK, N.A. (“ABL Representative”) and GREAT ROCK CAPITAL PARTNERS MANAGEMENT, LLC (“Term Loan Representative”), in their capacities as ABL Representative and Term Loan Representative, respectively, under that certain Intercreditor Agreement (the “Intercreditor Agreement”), dated as of July 7, 2023 among the ABL Representative, the Term Loan Representative and each of the Loan Parties party thereto. All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Intercreditor Agreement.

The New Subsidiary, for the benefit of the ABL Representative and the Term Loan Representative, hereby agrees as follows:

1.       The New Subsidiary hereby acknowledges the Intercreditor Agreement and acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Intercreditor Agreement and shall have all of the obligations of a Loan Party thereunder as if it had executed the Intercreditor Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Intercreditor Agreement.

2.       The address of the New Subsidiary for purposes of Section 10.09 of the Intercreditor Agreement is as follows:

____________________________________

3.       THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE NEW SUBSIDIARY HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, as of the day and year first above written.

	[NEW SUBSIDIARY]

	By:
	Name:
	Title:

Exhibit 10.6

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made as of this 7th day of July, 2023 (the “Effective Date”) by and between SMG Industries Inc., a Delaware corporation, (hereinafter referred to as “Company”) and Bryan S. Barnhart an individual (hereinafter referred to as “Employee”), each of Company and Employee may be referred to herein individually as a “Party” and collectively as the “Parties”.

W I T N E S S E T H:

WHEREAS, the Company has entered into a purchase agreement to acquire (the “Transaction”) all of the outstanding membership interests of Barnhart Transportation, LLC and certain affiliated companies (“Barnhart”);

WHEREAS, Company desires that Employee be engaged as Chief Executive Officer (“CEO”) of Company following the closing of the Transaction (the “Closing”), in addition to Employee’s current role and employment with Barnhart; and

WHEREAS, Employee is willing to be engaged as the CEO of Company in the manner provided for herein, and to perform the duties of the CEO of Company upon the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein set forth it is agreed as follows:

1.            Employment. Company hereby engages Employee as the CEO of Company, and Employee will remain employed by Barnhart following the Closing.

2.            Term. Subject to Section 9 and Section 10 below, the term of this Agreement shall be for a period of thirty-six (36) months commencing on the Closing (the “Term”). If the Transaction is not consummated for any reason, this Agreement shall be null and void. The Term of this Agreement shall be automatically extended for additional one (1) year periods, unless either party notifies the other in writing at least ninety (90) days prior to the expiration of the then existing Term of its intention not to extend the Term. During the Term, Employee shall devote substantially all of his business time and efforts to Company, Barnhart, and his duties as CEO. For purposes of clarity, Employee’s real estate business interests are known to Company, and the anticipated time he devotes thereto is not deemed to conflict with his obligations set forth herein; provided however, Employee acknowledges that his real estate business interests must not interfere with his ability to satisfy his job responsibilities hereunder.

3.            Duties. The Employee shall have operational and managerial responsibility presently granted by Company and shall perform those functions generally performed by persons of such title and position. The Company may change, add or subtract duties and responsibilities of Employee from time to time as needed. Employee shall report directly to the Company’s Board of Directors.

4.            Compensation.

a.               (i)             Employee shall be paid a base pay of $275,000 annually during the Term of this Agreement (“Base Compensation”). Employee shall be paid bi-weekly and in accordance with the policies of the Company during the term of this Agreement, but not less than twice a month. The Base Compensation shall be subject to review by the Company’s Compensation Committee (the “Committee”) on an annual basis.

(ii)            Employee is eligible for performance bonus compensation (“Bonus”) in accordance with the Barnhart Strategic Compensation Plan, which Employee shall earn in the event that Company attains certain quarterly and annual Key Performance Indicators (“KPIs”) as ratified by the Committee annually, and subject to any public company bonus requirements. The Company shall pay any Bonus as earned on a quarterly basis and promptly after its determination that the KPIs have been attained, subject to any annual adjustments based upon Company performance and annual KPIs after the completion of the Company’s fiscal year. The Board may from time to time approve additional bonus plans, grants or awards for Employee, in each case as the Board deems appropriate in its sole discretion.

b.            Company shall include Employee in its health insurance program, which shall include payment of premiums in accordance with the Company’s current policies.

c.            Employee shall have the right to participate in any other employee benefit plans established by Company and maintained generally for other executives, including but not limited to any 401(k) plan.

d.            Employee shall be entitled to four (4) weeks of paid vacation per year. Employee may carry-over to 2024 up to one (1) week of unused vacation; provided that five (5) weeks is the maximum vacation time that Employee may hold at any time. The Parties agree that subject to the foregoing, the vacation time is a ‘use it or lose it’ policy, as it does not carry over to other years and cannot be cashed in in lieu of use.

5.            Expenses. Employee shall be reimbursed for all of his actual out-of-pocket expenses incurred in the performance of his duties hereunder, provided such expenses are reasonably acceptable to Company, which approval shall not be unreasonably withheld by Company, for business related travel and entertainment expenses. Employee shall submit to Company detailed receipts, according to IRS guidelines, with respect thereto. Company shall also reimburse Employee for Employee’s monthly cell phone costs, all to be used for business purposes related to Company.

6.            Secrecy. At no time shall Employee disclose to anyone any confidential or secret information (not already constituting information available to the public) concerning (a) internal affairs or proprietary business operations of Company, or (b) any trade secrets, new product developments, patents, programs or programming, especially unique processes or methods.

7.            Withholding Taxes. All payments and benefits to Employee under the Agreement shall be subject to and reduced by any federal, state and / or local taxes or other amounts required to be withheld under any applicable law.

8.            Noncompetition, Nonsolicitation, and Confidentiality Agreement. Contemporaneously with execution of this Agreement, Employee has executed and agreed to be bound by that certain Non-Competition, Non-Solicitation, and Confidentiality Agreement by and between Company and Employee dated even date herewith (the “Confidentiality Agreement”). The terms and conditions of that Noncompetition Agreement are incorporated herein and made a part hereof by this reference.

9.            Termination.

a.            Termination by Company: (i) Company may terminate this Agreement upon written notice for Cause. For purposes hereof, “Cause” shall mean (A) Employee’s actions or omissions as could reasonably be expected to have a material adverse effect on the business and affairs of Company, (B) the Employee’s violation of either the Company’s Code of Ethics as then in effect, or any lawfully imposed employee guidelines known to Employee, as reasonably determined by the Management Committee of the Board in its sole discretion from time to time, (C) the Employee’s disregard of lawful instructions of Company’s Board consistent with Employee’s position and relating to the business of Company, or neglect of duties or failure to act, which, in each case, could reasonably be expected by Employee to have a material adverse effect on the business and affairs of Company or Company’s affiliates, (D) engaging by the Employee in conduct that constitutes activity in violation of the Confidentiality Agreement with Company or Company’s affiliates, (E) the commission, indictment, plea of guilty or no contest, or conviction of Employee of a felony; and/or (F) the habitual abuse of controlled substances. Notwithstanding anything to the contrary in this Section 9(a)(i), Company may not terminate Employee’s employment under this Agreement for Cause unless Employee shall have first received notice from the Board advising Employee of the specific acts or omissions alleged to constitute Cause, and, if such acts are curable, such acts or omissions continue after Employee shall have had a reasonable opportunity (at least 10 days from the date Employee receives the notice from his supervisor) to correct the acts or omissions so complained of, and fails to do so.

(ii)            This Agreement automatically shall terminate upon the death of Employee, except that Employee’s estate shall be entitled to receive any amounts that Employee would have been entitled to receive under Section 9(a)(iii) below if his employment had terminated pursuant to Section 9(a)(i) above.

(iii)           In the event that Employee’s employment is terminated for Cause pursuant to Section 9(a)(i) or pursuant to Section 9(a)(ii) above, Employee shall be entitled to receive: (a) any owed or accrued past due Base Compensation, (b) unreimbursed business expenses, and (c) accrued, but unused benefits due under applicable law, if any, all of (a) — (c) shall be measured through the termination date in accordance with Section 9(a)(i) above and shall be referred to collectively as the “Accrued Benefits”. In the event that Employee’s employment is terminated for Cause pursuant to Section 9(a)(i) or pursuant to Section 9(a)(ii) above, Employee shall not be entitled to receive any additional amounts from the Company except for the Accrued Benefits upon termination of employment and Company shall have no further obligation to compensate Employee pursuant to Section 4 above or otherwise.

b.            Termination by Employee:

(i)             Employee may terminate this Agreement for without Good Reason upon thirty (30) days written notice to Company.

(ii)            Employee may terminate this Agreement upon written notice for Good Reason. For purposes hereof, “Good Reason” shall mean, without the Employee’s consent, (A) Employee’s principal location for providing services hereunder is assigned or transferred to a location more than 50 miles away from the current location in North East, Pennsylvania, (B) a material reduction in Employee’s job duties (which shall not be triggered by the Company’s oversight of Barnhart), (C) Company fails to make any payment of Base Compensation within five (5) days of when due to Employee, or (D) Company breaches in any material respect any term of this Agreement not involving a payment of Base Compensation or Bonus and fails to cure such breach within ten (10) days of receipt of written notice of such breach from the Employee..

10.          Consequences of Termination of Employment.

a.            If the Company shall terminate Employee’s employment under this Agreement without Cause as outlined in Section 9(a)(i) above, the following shall apply:

(i)             Subject to the conditions outlined below, Employee shall be entitled to receive: (a) the Accrued Benefits, and (b) six (6) month’s Base Compensation at Employee’s then current annual salary rate (the “Severance Benefits”), and Company shall have no further obligation to compensate Employee pursuant to Section 4 above or otherwise.

(ii)            Employee shall not be entitled to the Severance Benefits, other than the Accrued Benefits or other amounts required under applicable law, unless and until Employee signs and does not rescind a release of claims in favor of the Company and its affiliates within 45 days following the Employee’s final date of employment.

b.            If Employee shall terminate his employment under this Agreement without Good Reason as outlined in Section 9(b)(i) above, Employee shall only be entitled to receive the Accrued Benefits and Company shall have no further obligation to compensate Employee pursuant to Section 4 above or otherwise.

c.            Employee shall terminate his employment under this Agreement for Good Reason as outlined in Section 9(b)(ii) above, the following shall apply:

(i)             Subject to the conditions outlined below, Employee shall be entitled to receive the Severance Benefits, and Company shall have no further obligation to compensate Employee pursuant to Section 4 above or otherwise.

(ii)            Employee shall not be entitled to the Severance Benefits under Section 10(b)(i), other than the Accrued Benefits or other amounts required under applicable law, unless and until Employee signs and does not rescind a release of claims in favor of the Company and its affiliates within 45 days following the Employee’s final date of employment.

11.          Remedies. Company recognizes that because of Employee’s special talents, in the event of termination by Company hereunder (except a termination for Cause under Section 9(a)(i)) or in the event of a termination by Employee (except a termination without Good Reason), before the end of the agreed Term, the Company acknowledges and agrees that the provisions of this Agreement regarding payment of Severance Benefits constitute fair and reasonable provisions for the consequences of such termination, do not constitute a penalty, and such payments and benefits shall not be limited or reduced by amounts Employee might earn or be able to earn from any other employment or ventures during the remainder of the agreed term of this Agreement.

12.          Excise Tax. In the event that any payment or benefit received or to be received by Employee in connection with a termination of his employment with Company would constitute a “parachute payment” within the meaning of Code Section 280G or any similar or successor provision to 280G and/or would be subject to any excise tax imposed by Code Section 4999 or any similar or successor provision then Company shall assume all liability for the payment of any such tax and Company shall immediately reimburse Employee on a “grossed-up” basis for any income taxes attributable to Employee by reason of such Company payment and reimbursements.

13.          Attorneys’ Fees and Costs. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which he may be entitled. For purposes of this Agreement, “prevailing party” shall include, without limitation, the party obtaining substantially the relief sought, whether by compromise, settlement, or judgment.

14.          Entire Agreement; Survival. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated herein and supersedes, effective as of the date hereof any prior agreement or understanding between Company and Employee with respect to Employee’s employment by Company. The unenforceability of any provision of this Agreement shall not affect the enforceability of any other provision. This Agreement may not be amended except by an agreement in writing signed by the Employee and the Company, or any waiver, change, discharge or modification as sought. Waiver of or failure to exercise any rights provided by this Agreement and in any respect shall not be deemed a waiver of any further or future rights.

The provisions of Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17 and 18 shall survive the termination of this Agreement.

15.          Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code, and shall be interpreted and construed consistently with such intent. The payments to the Employee pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible. To the extent the timing of any amount of nonqualified deferred compensation payable under this Agreement is determined by reference to the Executive’s termination of employment, such term will be deemed to refer to the Executive’s “separation from service” within the meaning of Section 409A of the Code.

16.          Assignment. This Agreement shall not be assigned to other parties without the written consent of Company and Employee, which may be withheld for any reason.

17.          Governing Law. This Agreement and all the amendments hereof, and waivers and consents with respect thereto shall be governed by the laws of the commonwealth of Pennsylvania, without regard to the conflicts of laws principles thereof.

18.          Notices. All notices, responses, demands or other communications under this Agreement shall be in writing and shall be deemed to have been given when

a.             delivered by hand;

b.             email transmission (with a confirming copy sent via U.S. Certified Mail, return receipt requested); or

c.             received by the addressee as sent by express delivery service (receipt requested)

in each case to the appropriate addresses indicated below or to such other address as such party may designate for itself by notice to the other parties; provided that any change of address furnished by Employee to Company for purposes of updating Company’s payroll records shall be deemed to constitute notice of address change under this Agreement unless otherwise specifically requested in writing by Employee:

(i)             if to the Company:

20475 State Hwy 249, Suite 450

Houston, Texas 77070
Telephone: 713-955-3497
Email: [***]

(ii)            if to the Employee:

To the last known email and physical address on file with the Company.

19.          Severability of Agreement. Should any part of this Agreement for any reason be declared invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion, which remaining provisions shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including any such part, parts or portions which may, for any reason, be hereafter declared invalid.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day and year first above written.

Employee

Signature:

/s/ Bryan S. Barnhart

Printed Name: Bryan S. Barnhart

SMG Industries Inc.

Signature:

/s/ Matthew C. Flemming

Name: Matthew C. Flemming

Title: Interim CEO

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT DATED JULY 7, 2023]

Exhibit 10.7

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made as of this 7^th day of July, 2023 (the “Effective Date”) by and between SMG Industries Inc., a Delaware corporation, (hereinafter referred to as “Company”) and Timothy W. Barnhart an individual (hereinafter referred to as “Employee”), each of Company and Employee may be referred to herein individually as a “Party” and collectively as the “Parties”.

W I T N E S S E T H:

WHEREAS, Company desires that employ Employee be engaged as the Chief Financial Officer (“CFO”) of Company following the closing of the Transaction (the “Closing”), in addition to Employee’s current role and employment with Barnhart; and

WHEREAS, Employee is willing to be engaged as the CFO of Company in the manner provided for herein, and to perform the duties of the CFO of Company upon the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein set forth it is agreed as follows:

1.            Employment. Company hereby engages Employee as the CFO of Company, and Employee will remain employed by Barnhart following the Closing.

2.            Term. Subject to Section 9 and Section 10 below, the term of this Agreement shall be for a period of thirty-six (36) months commencing on the Closing (the “Term”). If the Transaction is not consummated for any reason, this Agreement shall be null and void. The Term of this Agreement shall be automatically extended for additional one (1) year periods, unless either party notifies the other in writing at least ninety (90) days prior to the expiration of the then existing Term of its intention not to extend the Term. During the Term, Employee shall devote substantially all of his business time and efforts to Company, Barnhart, and his duties as CFO. For purposes of clarity, Employee’s real estate business interests are known to Company, and the anticipated time he devotes thereto is not deemed to conflict with his obligations set forth herein; provided however, Employee acknowledges that his real estate business interests must not interfere with his ability to satisfy his job responsibilities hereunder.

4.            Compensation.

b.            Company shall include Employee in its health insurance program, which shall include payment of premiums in accordance with the Company’s current policies.

9.            Termination.

(iii)            In the event that Employee’s employment is terminated for Cause pursuant to Section 9(a)(i) or pursuant to Section 9(a)(ii) above, Employee shall be entitled to receive: (a) any owed or accrued past due Base Compensation, (b) unreimbursed business expenses, and (c) accrued, but unused benefits due under applicable law, if any, all of (a) — (c) shall be measured through the termination date in accordance with Section 9(a)(i) above and shall be referred to collectively as the “Accrued Benefits”. In the event that Employee’s employment is terminated for Cause pursuant to Section 9(a)(i) or pursuant to Section 9(a)(ii) above, Employee shall not be entitled to receive any additional amounts from the Company except for the Accrued Benefits upon termination of employment and Company shall have no further obligation to compensate Employee pursuant to Section 4 above or otherwise.

b.            Termination by Employee:

(i)             Employee may terminate this Agreement for without Good Reason upon thirty (30) days written notice to Company.

10.         Consequences of Termination of Employment.

a.             If the Company shall terminate Employee’s employment under this Agreement without Cause as outlined in Section 9(a)(i) above, the following shall apply:

c.             Employee shall terminate his employment under this Agreement for Good Reason as outlined in Section 9(b)(ii) above, the following shall apply:

11.         Remedies. Company recognizes that because of Employee’s special talents, in the event of termination by Company hereunder (except a termination for Cause under Section 9(a)(i)) or in the event of a termination by Employee (except a termination without Good Reason), before the end of the agreed Term, the Company acknowledges and agrees that the provisions of this Agreement regarding payment of Severance Benefits constitute fair and reasonable provisions for the consequences of such termination, do not constitute a penalty, and such payments and benefits shall not be limited or reduced by amounts Employee might earn or be able to earn from any other employment or ventures during the remainder of the agreed term of this Agreement.

12.         Excise Tax. In the event that any payment or benefit received or to be received by Employee in connection with a termination of his employment with Company would constitute a “parachute payment” within the meaning of Code Section 280G or any similar or successor provision to 280G and/or would be subject to any excise tax imposed by Code Section 4999 or any similar or successor provision then Company shall assume all liability for the payment of any such tax and Company shall immediately reimburse Employee on a “grossed-up” basis for any income taxes attributable to Employee by reason of such Company payment and reimbursements.

13.         Attorneys’ Fees and Costs. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which he may be entitled. For purposes of this Agreement, “prevailing party” shall include, without limitation, the party obtaining substantially the relief sought, whether by compromise, settlement, or judgment.

14.         Entire Agreement; Survival. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated herein and supersedes, effective as of the date hereof any prior agreement or understanding between Company and Employee with respect to Employee’s employment by Company. The unenforceability of any provision of this Agreement shall not affect the enforceability of any other provision. This Agreement may not be amended except by an agreement in writing signed by the Employee and the Company, or any waiver, change, discharge or modification as sought. Waiver of or failure to exercise any rights provided by this Agreement and in any respect shall not be deemed a waiver of any further or future rights.

The provisions of Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17 and 18 shall survive the termination of this Agreement.

15.         Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code, and shall be interpreted and construed consistently with such intent. The payments to the Employee pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible. To the extent the timing of any amount of nonqualified deferred compensation payable under this Agreement is determined by reference to the Executive’s termination of employment, such term will be deemed to refer to the Executive’s “separation from service” within the meaning of Section 409A of the Code.

16.         Assignment. This Agreement shall not be assigned to other parties without the written consent of Company and Employee, which may be withheld for any reason.

17.         Governing Law. This Agreement and all the amendments hereof, and waivers and consents with respect thereto shall be governed by the laws of the commonwealth of Pennsylvania, without regard to the conflicts of laws principles thereof.

18.         Notices. All notices, responses, demands or other communications under this Agreement shall be in writing and shall be deemed to have been given when

a.            delivered by hand;

b.            email transmission (with a confirming copy sent via U.S. Certified Mail, return receipt requested); or

c.             received by the addressee as sent by express delivery service (receipt requested)

(i)             if to the Company:

20475 State Hwy 249, Suite 450

Houston, Texas 77070
Telephone: 713-955-3497
Email: [***]

(ii)            if to the Employee:

To the last known email and physical address on file with the Company.

19.         Severability of Agreement. Should any part of this Agreement for any reason be declared invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion, which remaining provisions shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including any such part, parts or portions which may, for any reason, be hereafter declared invalid.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day and year first above written.

Employee

Signature:

/s/ Timothy W. Barnhart

Printed Name: Timothy W. Barnhart

SMG Industries Inc.

Signature:

/s/ Matthew C. Flemming

Name: Matthew C. Flemming

Title: Interim CEO

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT DATED JULY 7, 2023]

Exhibit 99.1

FOR IMMEDIATE RELEASE

SMGI Announces Successful Recapitalization and Acquisition of Barnhart Transportation, a Leading Logistics Services Provider Based in Pennsylvania

Houston, Texas, – July 10, 2023 – SMG Industries Inc. (“SMGI” or the “Company”) (OTCQB: SMGI), a growth-oriented transportation services company focused on the domestic infrastructure logistics market, is pleased to announce the successful acquisition and merger of the Barnhart Transportation group of companies (“Barnhart”), a 20 year-old established logistics service provider based in Pennsylvania. The successful closing of this strategic acquisition not only approximately doubles SMGI's annual revenue and increase its adjusted EBITDA, but also brings operational and revenue diversification, strengthens the Company's balance sheet and adds exceptional expertise to its leadership team. The total acquisition consists of Barnhart Transportation, LLC, Barnhart Fleet Maintenance, LLC, Lake Shore Logistics, LLC, Lake Shore Global Solutions, LLC, Legend Equipment Leasing, LLC and Route 20 Tank Wash, LLC, which specializes in a wide range of transportation services, including full truck load, dry bulk, liquids, intermodal, LTL, heavy haul, drayage, transload, and an "asset lite" brokerage business. The consummation of this acquisition significantly contributes to SMGI’s revenue diversification and expansion efforts, as well as creates valuable cross-selling opportunities.

Based on audited pro forma 2022 combined revenues of $153 million and pro forma 2022 estimated adjusted EBITDA of $18.2 million (including $2.5 million in estimated cost saving synergies), this acquisition positions SMGI as a leading regional transportation and logistics player across multiple markets in the United States. With the completion of this transaction, SMGI’s balance sheet is significantly improved, including a large increase in the book value of the combined company. Additionally, overall leverage defined as debt as a multiple of adjusted EBITDA is reduced significantly, debt service costs have been reduced significantly, resulting in enhanced equity value, and accelerating our plans to list our common stock on a national securities exchange.

Commenting on the acquisition, Mr. Matt Flemming, Chairman of SMGI, expressed his enthusiasm, stating, "The acquisition of Barnhart by SMGI creates an attractive and diversified platform. We anticipate that the combined entity will establish itself as a larger, scalable, and more diversified transportation business, emerging as a regional leader in Texas, the Southwest and the Eastern Seaboard. Furthermore, the combination will enhance customer relationships, reduce cyclicality and decrease customer concentration. With more than 500 non-overlapping customers, the cross-selling opportunities from a broader range of assets, capabilities, and services offers exciting opportunities for the growth of the combined company. We are thrilled to welcome Barnhart’s talented employees to the SMGI team and believe this transaction positions us well to deliver enhanced growth and significant value creation for employees, customers and shareholders."

Tim and Bryan Barnhart, the experienced leaders behind Barnhart Transportation, bring a wealth of experience, expertise and leadership to SMGI. Over the past two decades, they have successfully diversified the company's footprint to meet evolving customer needs. Their commitment to operational excellence and financial prudence has established a foundation of fiscal responsibility and sustainability.

"Anticipating market trends and making strategic investments have been key to staying ahead in the dynamic global logistics market," explained Tim Barnhart, the company's new Chief Financial Officer and Board member. With Tim's financial acumen guiding prudent decision-making and capital allocation, and Bryan's operational focus optimizing processes and driving efficiency, the company is well-positioned for continued growth and success.

"Within the combined entity, we see tremendous opportunities for growth and success," emphasized Tim Barnhart. As CFO and Board member, his dedication lies in fostering fiscal discipline, capitalizing on operational efficiencies, and cultivating a culture of continuous improvement. Leveraging the expertise of the outstanding team at SMG Industries, the company aims to establish a robust financial foundation, implement cost-saving measures, and capitalize on attractive growth opportunities within the transportation and logistics industry.

Bryan Barnhart, the newly appointed CEO and Board member, brings extensive experience in the transportation industry, making him well-suited to lead the combined entity towards a new era of success. "The acquisition of Barnhart Transportation by SMG Industries is a significant milestone for both companies," stated Bryan Barnhart. Together, management will leverage the transformative partnership to create a larger, more diversified transportation business, solidifying its position as a global leader. The merger unlocks attractive growth opportunities, strengthens customer relationships, and increases market capitalization. Combining its collective vision and strategic approach, the companies are poised to propel the company to new heights and set new benchmarks within the industry.

Steven Madden, SMGI’s Chief Transition Officer and Board member, stated “We are excited to join forces with Barnhart Transportation. We believe this merger creates value of 1+1=3 immediately. We have worked hard since those difficult Covid days to transform SMGI along with the help of Jimmy Frye (President of 5J Trucking and Board member) into a healthier, more profitable, turn-key, customer-focused, diversified, domestic infrastructure transportation company force. This acquisition and merger is just the beginning, and the Barnhart’s are a perfect fit culturally, operationally, and financially. It provides the necessary platform to springboard us organically and inorganically giving us more capacity for expansion while gaining experienced, proven industry leaders and managers. This merger will also provide additional strategic business units for both geographic regions. Most importantly, this acquisition helps our customers, employees and increases value to our shareholders.”

Transaction Highlights

This transaction provided a complete refinance, improving the combined balance sheet with lower leverage and younger, more diversified assets and adds capacity and scale with additional strategic business units for both geographic regions while creating synergies for immediate costs savings,

The Barnhart management team has historical operational excellence, technological command of its business systems and a profitable track record,

Growth areas of Barnhart include non-hazardous liquids, a sizable brokerage division and intermodal business segment that complement SMGI’s super heavy haul and engineered over dimensional freight business,

SMGI and Barnhart have more than 500 current non-overlapping customers and a broader service mix leading to significant cross-selling opportunities by catering to more of the needs of key customers,

The integration of Barnhart's expertise in dry bulk and non-hazardous liquid freight shipping, will expand and scale the service offerings of both companies,

Estimated annual cost savings of approximately $2.5 million resulting from the elimination of corporate and real estate cost redundancies,

Barnhart boasts an experienced management team committed to the success of the combined entity with Bryan Barnhart becoming CEO of SMGI and Tim Barnhart becoming CFO,

It is anticipated that SMGI's public company structure will support its “buy and build” strategy of future acquisition by providing access to liquidity for ongoing operations and future mergers and acquisitions. SMGI intends to apply for listing to a national securities exchange to enhance access to public capital markets and create a more attractive capital structure,

In connection with the transaction, existing SMGI debt holders agreed to convert more than $25 million of existing SMGI debt into the common stock of SMGI to consummate the transaction, which reduced leverage and improved liquidity.

Transaction Details:

Barnhart Purchase: The acquisition cost amounts to $53.25 million, with $26.0 million paid in cash at closing. As part of the transaction, the principal owners of Barnhart received $19.25 million of the purchase price in the form of SMGI common stock, received $5.0 million of SMGI preferred stock and received a $3.0 million promissory note from SMGI.

Financing Structure: The transaction was financed through a $25.0 million revolving credit facility from a national lender, with $16.4 million available and $10.9 million funded at closing, leaving $5.5 million of additional liquidity available on the revolving credit facility after closing. In addition, a $31.7 million senior secured term loan facility with a term loan lender was utilized to fund the purchase price. The proceeds from these two new senior secured lenders were used to finance the acquisition, refinance a portion of SMGI's existing debt that didn’t convert into SMGI common stock at closing, and to cover associated transaction and professional fees and expenses.

B. Riley Securities, Inc. acted as the exclusive advisor for the transaction and Faegre Drinker Biddle & Reath LLP served as legal advisor to SMGI.

Forward-Looking Statements

This press release contains certain "forward-looking statements" with respect to our financial condition, business strategies, growth opportunities, acquisitions, listing plans and objectives of management, and other matters. Statements in this press release that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and involve a number of risks and uncertainties.

Forward-looking statements, including, without limitation, those relating to our future business prospects, listing plans, financial condition and acquisitions, whenever they occur in this press release are necessarily estimates reflecting the best judgment of the Company's senior management at the time such statements were made. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors include, among others, the risks and uncertainties discussed more fully under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

About SMG Industries Inc.: SMG Industries is a growth-oriented transportation services company focused on the domestic infrastructure logistics market. Through several of the Company’s wholly-owned subsidiaries branded as the “5J Transportation Group,” it offers specialized heavy haul, super heavy haul, flatbed, brokerage, and drilling rig mobilization services. 5J’s engineered permitted jobs can support up to 500-thousand-pound loads including infrastructure cargo associated with bridge beams, wind energy, power generation components, compressors, refinery and construction equipment. SMG Industries is headquartered in Houston, Texas and has facilities in Floresville, Hempstead, Henderson, Houston, Odessa, Palestine, Victoria, Texas and Fort Mill, South Carolina. Read more at www.5J-Group.com and www.SMGIndustries.com

About Barnhart Transportation, LLC: Barnhart Transportation and its affiliate companies offer a comprehensive range of logistical services to meet the global demands of their customer base. Established in 2003 as a domestic flatbed hauler, the company has since expanded its service lines to encompass a diverse array of capabilities. In addition to its domestic freight operations, which now include dry bulk, non-hazardous liquid, heavy haul, and intermodal transportation, the Company has established operations in brokerage, international freight forwarding and warehousing, allowing door to door service around the world.

Barnhart operates northern and southern transportation terminals with accessibility to east coast international shipping ports. Barnhart Transportation is headquartered in North East, Pennsylvania with service terminals in Moncks Corner and North Charleston, South Carolina. The Barnhart family of companies combined with SMGI consists of Barnhart Transportation, LLC, Barnhart Fleet Maintenance, LLC, Lake Shore Logistics, LLC, Lake Shore Global Solutions, LLC, Legend Equipment Leasing, LLC and Route 20 Tank Wash, LLC. Our team is truly 'Driven By You,' the customer. Learn more at www.Barnhart-trans.com

Source: SMG Industries Inc. +1-713-955-3497

Contact:
Stan Abiassi – Market Street Capital, Inc.
stan@marketstreetcp.com
713-338-9415

Non-GAAP Financial Measures

In addition to certain traditional GAAP financial measures, we have presented in this press release “pro forma 2022 estimated adjusted EBITDA” for the combined company, which is a non-GAAP financial measure. This non-GAAP financial measure is being used by management and the Company’s board of directors to evaluate the anticipated benefits of the transaction. This non-GAAP financial measure should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP, and an analysis of non-GAAP financial measures should be used in conjunction with results presented in accordance with GAAP.

December 31, 2022 Adjusted EBITDA Reconciliation Table
For SMGI and Barnhart Transportation

SMG Industries, Inc.		Barnhart Transportation
Net Income	(11,610,240)	Net Income	6,041,866
Plus:		Plus:
Depreciation & Amort	5,328,366	Depreciation & Amort	4,385,250
Interest	9,431,681	Interest	142,532
Tax	(130,043)	Tax	34,337

EBITDA	3,019,764	EBITDA	10,603,985

Adjustments to EBITDA		Adjustments to EBITDA
Non cash Stock based compensation	61,043	Subtract gain on sale of equipment	(549,198)
Stock issued for debt extension	643,467	Accounting Consulting /Audit Fees	4,950
Consulting expenses	200,161	Discontinued Ops	1,009,053
Transaction M&A expenses	36,641	Legal Expenses	26,082
CTO Services	249,997	Consulting Fees	13,500
Duplicative CFO costs	109,521	ERC Prep Fees	266,011
Discontinued Ops / Legal	22,074	Software Upgrade/Bad Debt JWP	31,573
Total Adjustments	1,322,904	Total Adjustments	801,971

Adjusted EBITDA	$ 4,342,668	Adjusted EBITDA	$ 11,405,956

Combined Total

2022 Pro Forma EBITDA Calculation
SMGI Adjusted EBITDA		4,342,668
Target Adjusted EBITDA		11,405,956
Estimated Cost Saving Synergies		2,500,000

2022 Total Pro forma Adjusted EBITDA		$ 18,248,624

Cover	Jul. 06, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 06, 2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-54391
Entity Registrant Name	SMG INDUSTRIES INC.
Entity Central Index Key	0001426506
Entity Tax Identification Number	51-0662991
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	20475 State Hwy 249
Entity Address, Address Line Two	Suite
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77070
City Area Code	713
Local Phone Number	955-3497
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false