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84-1463284
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(State or jurisdiction of
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(I.R.S. Employer Identification No.) |
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Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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By:
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/s/ William J. Clough
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William J. Clough
Executive Chairman and CLO
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Exhibit 10.1
10.1 Amended and Restated Forbearance and Line of Credit Agreement, between Orbital Infrastructure Group, Inc. and Streeterville Capital, LLC, effective March 6, 2023.
Amended and Restated
Forbearance and Line of Credit Agreement
THIS AMENDED AND RESTATED FORBEARANCE AND LINE OF CREDIT AGREEMENT (this “Agreement”), dated as of March 6, 2023, is entered into by and among ORBITAL INFRASTRUCTURE GROUP, INC., a Texas corporation (“OIG”), GIBSON TECHNICAL SERVICES, INC., a Georgia corporation (“Gibson,” and together with OIG, the “Company”), and STREETERVILLE CAPITAL, LLC, a Utah limited liability company, its successors and/or assigns (“Investor”).
A. Company and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States Securities and Exchange Commission (the “SEC”).
B. OIG previously issued to Investor the following promissory notes: (1) that certain Promissory Note dated December 20, 2021 in the original principal amount of $16,065,000.00 (the “First Note”), (2) that certain Promissory Note dated May 11, 2021 in the original principal amount of $10,715,000.00 (the “May Note”); (3) that certain Promissory Note dated June 9, 2022 in the original principal amount of $10,715,000.00 (the “June Note”); (4) that certain Promissory Note dated August 2, 2022 in the original principal amount of $8,575,000.00 (the “August Note”); and (5) that certain Promissory Note dated September 29, 2022 in the original principal amount of $5,365,000.00 (the “September Note”) (the May Note, the June Note, the August Note and the September Note collectively, but excluding the First Note, the “Prior Notes”).
C. Subsequent to the issuance of the First Note and the Prior Notes, OIG and Investor entered into that certain Forbearance and Investment Agreement, together with associated documents, instruments and agreements entered into by and among OIG, Investor and certain of OIG’s affiliates dated December 9, 2022 (collectively, the “First Forbearance Agreement”) pursuant to which, among other things, Investor invested an additional $5,000,000.00 in cash (the “First Investment Amount”) and agreed to forbear on various OIG defaults, and whereby OIG issued that certain Secured Promissory Note in the original principal amount of $42,113,840.90 (the “First Forbearance Note”), which First Forbearance Note replaced the Prior Notes and included the First Investment Amount, all as set forth in the First Forbearance Agreement.
D. Subsequent to the issuance of the First Forbearance Note, OIG and Investor entered into that certain Forbearance and Line of Credit Agreement, together with associated documents, instruments and agreements entered into by and among OIG, Investor and certain of OIG’s affiliates dated February 1, 2023 (collectively, the “Second Forbearance Agreement”) pursuant to which, among other things,
Investor agreed to invest up to an additional $15,000,000.00 under a secured line of credit facility (the “Second Investment Amount”) and agreed to forbear on various OIG defaults, and whereby OIG issued that certain Secured Promissory Note in the original principal amount of up to $16,075,000.00 (the “Second Forbearance Note”), all as set forth in the Second Forbearance Agreement.
E. Subsequent to the issuance of the Second Forbearance Note, OIG and Investor entered into that certain Forbearance and Investment Agreement, together with associated documents, instruments and agreements entered into by and among OIG, Investor and certain of OIG’s affiliates dated February 24, 2023 (the “Third Forbearance Agreement”), pursuant to which, among other things, Investor agreed to loan additional amounts pursuant to the Second Forbearance Note, forbear on various OIG defaults, and surrender the First Note in exchange for that certain Secured Promissory Note in the original principal amount of up to $14,881,621.34 (the “Third Forbearance Note”), all as set forth in the Third Forbearance Agreement.
F. The First Forbearance Note, the First Forbearance Agreement, the Second Forbearance Note, the Second Forbearance Agreement, the Third Forbearance Note, and the Third Forbearance Agreement, along with all other associated documents, instruments and agreements entered into by and among OIG, Investor and certain of OIG’s affiliates up until the Effective Date shall hereinafter be referred to as the “Previous Transaction Documents.”
G. As of the date hereof, OIG has failed to meet certain of its obligations under the Previous Transaction Documents and Investor is entitled to exercise various remedies against OIG and its affiliates, including without limitation Gibson.
H. Company has requested that Investor (i) forbear from calling a default under the Previous Transaction Documents, and (ii) invest additional amounts up to $13,800,000.00 under a secured line of credit facility upon the terms and conditions of this Agreement and that certain Amended and Restated Secured Promissory Note in the original principal amount of up to $20,931,076.84, attached hereto as Exhibit A (the “Note,” and together with the First Forbearance Note and the Third Forbearance Note, the “Outstanding Notes”). The Outstanding Notes are the only notes evidencing outstanding debt between the Company and Investor.
I. This Agreement and the Note amend, restate, replace and supersede in their entirety the Second Forbearance Agreement and the Second Forbearance Note, respectively.
J. This Agreement, the Note and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction Documents”.
NOW, THEREFORE, in consideration of the above recitals, which are contractual in nature and not mere recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Investor hereby agree as follows:
1. Purchase and Sale of Note; Forbearance.
1.1. Purchase of Note. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof, Investor shall pay the First Draw (as defined in the Note) to Gibson.
1.2. Form of Payment. Investor shall transmit the First Draw directly to Gibson via wire transfer of immediately available funds. Additionally, on the Closing Date (as defined below), Investor shall deposit $12,300,000.00 (the “Escrow Amount”) to the law firm of Hansen Black Anderson Ashcraft PLLC (“Escrow Agent”), who shall hold the Escrow Amount in escrow and release each draw amount (excluding the First Draw) (each, a “Draw Amount”) to Gibson only upon satisfaction of the conditions (the “Draw Conditions”) set forth in the Escrow Agreement attached hereto as Exhibit B (the “Escrow Agreement”) and the Note. The Escrow Agent shall release each Draw Amount to Gibson on the dates set forth in the Funding Schedule (as defined in the Escrow Agreement and the Note) in accordance with the Escrow Agreement. Investor and Company agree that while Investor is not waving any past or future Trigger Events (as defined in the Outstanding Notes), any funding conditions inconsistent with the Draw Conditions shall no longer be applicable to Company.
1.3. Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be March 6, 2023, or another mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.
1.4. Collateral for the Note. The Note shall be secured by the collateral set forth under Section 2 of the Note.
1.5. Original Issue Discount. The Note carries an original issue discount of up to $1,263,500.00 (the “OID”), all of which amount is included in the initial principal balance of the Note.
1.6. Forbearance. Notwithstanding anything to the contrary in any Transaction Document or any Previous Transaction Document, provided that (1) no failure of any Draw Condition (as defined in the Note) has occurred, without regard to whether such failure results in any material adverse effect to Investor, and (2) in the absence of fraud, willful misconduct or the violation of applicable law, any of which has a material adverse effect upon Investor or that is substantially likely to have a material adverse effect upon Investor with the passage of time, Investor shall forbear from exercising any of the following remedies under the First Forbearance Note, this Note, the Third Forbearance Note or any subsidiary guaranty prior to June 30, 2023: (i) any foreclosure remedy; (ii) the seeking of the appointment of a receiver; (iii) the participation in any involuntary bankruptcy petition; (iv) the instigation of litigation against the Company or any affiliate; and (v) the notification to the Company or any affiliate that an Event Default (as defined in the Note) has occurred, provided that following the occurrence of a Trigger Event (as defined in the Note), then the interest rate under the First Forbearance Note, this Note and the Third Forbearance Note shall automatically increase to the Default Rate (as defined in the Note).
2. Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.
3. Company’s Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company and its subsidiaries, as applicable, and all necessary actions have been taken; (v) this Agreement and each of the other Transaction Documents have been duly executed and delivered by Company and its subsidiaries, as applicable, and constitute the valid and binding obligations of Company and its subsidiaries, as applicable, enforceable in accordance with their terms; (vi) the execution and delivery of the Transaction Documents by Company and its subsidiaries, the issuance of the Note in accordance with the terms hereof, and the consummation by Company and its subsidiaries of the other transactions contemplated by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s or any subsidiary’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which Company or any subsidiary is a party or by which it or any of its properties or assets are bound, including, without limitation, any listing agreement for the Common Stock, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having jurisdiction over Company, Company’s subsidiaries or any of Company’s any subsidiary’s properties or assets; (vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance of the Note to Investor or the entering into of the Transaction Documents; (viii) none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company or any of its subsidiaries before or by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section 10.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company acknowledges that Investor is not registered as a ‘dealer’ under the 1934 Act; and (xviii) Company has performed due diligence and background research on Investor and its affiliates and has received and reviewed the due diligence packet provided by Investor. Company, being aware of the matters and legal issues described in subsections (xvii) and (xviii) above, acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.
4. Company Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full, or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so long as Investor beneficially owns the Note and for at least twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination; (ii) the Common Stock shall be listed or quoted for trading on either NYSE or Nasdaq; (iii) trading in Company’s Common Stock will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease trading on Company’s principal trading market; (iv) Company will not make any Restricted Issuance (as defined below) without Investor’s prior written consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; (v) Company will not enter into any agreement or otherwise agree to any covenant, condition or obligation that locks up, prohibits or otherwise restricts Company’s ability to issue shares of Common Stock for a period of more than sixty (60) days; (vi) Company will not enter into any financing transaction with John Kirkland or any entity owned by or affiliated with John Kirkland; (vii) Company will not enter into any financing transaction with C6 Capital Funding, LLC (“C6 Capital”), TVT Business Funding, LLC (“TVT BF”), and TVT Direct Funding, LLC (“TVT DF,” and together with TVT BF, “TVT”) or any entity owned by or affiliated with C6 Capital or TVT; (viii) Company will not enter into any financing transaction with any party other than Investor that is similar to that certain Agreement for Purchase and Sale of Future Receipts between Company and C6 Capital dated March 31, 2022 or that certain Agreement for Purchase and Sale of Future Receipts between Company and C6 Capital dated April 2, 2022 (the “C6 Agreements”) or any agreements with TVT (the “TVT Agreements”); (ix) Company will not amend, modify, extend or enter into any new intercompany loans; (x) neither Company nor any subsidiary of Company will encumber, mortgage, pledge or grant a security interest in any of its assets or enter into an account control or lockbox agreement nor a sale of revenues or receivables in connection with any financing without Investor’s prior written consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; (xi) within thirty (30) days of the Closing Date, Company will cause its subsidiaries to deliver titles to any assets that have titles that Investor has a security interest in; (xii) Company shall report the entering into of the Transaction Documents on Form 8-K in accordance with applicable law; (xiii) upon Investor’s request, Company will cause its subsidiaries to enter into account control or lockbox agreements providing for control over any bank accounts to which customers make payments on accounts receivables; (xiv) in the event the loan owed in connection with the purchase of Front Line Power Construction, LLC (“Front Line”) is repaid or refinanced, Company will cause Front Line to forgive that certain Intercompany Note issued by Company in favor of Front Line on November 7, 2022 in the original principal amount of $9,500,000.00 and release any associated security interests; (xv) Company will cause any new subsidiaries (including subsidiaries of subsidiaries) to become parties to the applicable collateral securitization documents set forth in Section 1.4 above; (xvi) Company shall fulfill and repay all obligations owing under the Outstanding Notes simultaneously with the sale of all or substantially all of the assets or equity interests of either Front Line Power Construction, LLC (“Front Line”) or Gibson, provided that any lender with a security interest that is senior to Investor’s security interest in the assets or equity interests of Front Line shall be repaid prior to repayment to Investor in the case of a sale of the assets or equity interests of Front Line; and (xvii) Gibson shall maintain a net working capital in an amount sufficient to fund its operations in the ordinary course of business. For purposes hereof: the term “Restricted Issuance” means any issuance of any Company securities that: (a) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, (b) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible following an event of default, the passage of time, or (c) have a fixed conversion price, exercise price or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security (1) due to a change in the market price of Company’s Common Stock since the date of the initial issuance or (2) upon the occurrence of specified or contingent events directly or indirectly related to the business of Company. For avoidance of doubt, the issuance of shares of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted Issuance for purposes hereof if the number of shares of Common Stock to be issued is based upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange.
5. Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Note to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:
5.1. Investor shall have executed this Agreement and the Escrow Agreement and delivered the same to Company.
5.2. Investor shall have delivered the Escrow Amount to Escrow Agent.
6. Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:
6.1. Company shall have executed this Agreement, the Note, and the Escrow Agreement, and delivered the same to Investor.
6.2. Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as Exhibit C evidencing Company’s approval of the Transaction Documents.
6.3. Company shall have delivered or caused to be delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company herein or therein, including without limitation, each subsidiary Acknowledgement and Consent substantially in the forms attached hereto as Exhibit D.
7. Terms of Future Financings. So long as the Note is outstanding, upon any issuance by Company of any security with any term or condition more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more favorable term and such term, at Investor’s option, shall become a part of the Transaction Documents for the benefit of Investor. Additionally, if Company fails to notify Investor of any such additional or more favorable term, but Investor becomes aware that Company has granted such a term to any third party, Investor may notify Company of such additional or more favorable term and such term shall become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable third party. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion rights, interest rates, original issue discounts, stock sale price, conversion price per share, warrant coverage, warrant exercise price, and anti-dilution/conversion and exercise price resets.
8. Affirmation. The Company acknowledges and agrees that a Major Trigger Event (as defined in the First Forbearance Note) has occurred under the First Forbearance Note, that Investor has applied the Trigger Effect (as defined in the First Forbearance Note) with respect to such Trigger Event and that such Trigger Effect is fully earned, and that it does not contest the occurrence of the Major Trigger Event or the application of the Trigger Effect. The Company acknowledges and affirms that the Outstanding Balance of each of the Outstanding Notes as of the date hereof is:
8.1. First Forbearance Note: $53,299,061.21.
8.2. Second Forbearance Note, which is amended, restated, superseded, and replaced with the Note: $6,165,076.84 (this amount has been rolled into and is part of the original outstanding Note balance of $20,931,076.84).
8.3. Third Forbearance Note: $14,918,867.28.
9. No Waivers. Neither the entering into this Agreement nor the implementation of any of the transactions contemplated hereby shall constitute a waiver of any of Investor’s rights or Company’s prior defaults under the Previous Transaction Documents, nor shall they have any effect on the Company’s obligations under the Previous Transaction Documents or any other obligation, duty, or covenant contained in any document, instrument or agreement entered into or delivered to Investor by the Company or any affiliate thereof, except as expressly set forth in this Agreement. Investor hereby expressly reserves all of its rights and remedies under the Previous Transaction Documents. Company acknowledges and agrees that as of the date of any future Trigger Events (as defined in each of the Outstanding Notes) under the Outstanding Notes, if any, the Trigger Effect (as defined in each of the Outstanding Notes) for each such Trigger Event shall be fully earned and added to the Outstanding Balance (as defined in each of the Outstanding Notes) of the applicable note as of the date of such Trigger Event.
10. Miscellaneous. The provisions set forth in this Section 10 shall apply to this Agreement, as well as all other Transaction Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section 10 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.
10.1. Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit E) arising under this Agreement or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E attached hereto (the “Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section 10.3 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.
10.2. Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 10.9 below prior to bringing or filing, any action that is related in any way to the Transaction Documents or any transaction contemplated herein or therein, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing law and venue provisions set forth in this Section 10.2 are material terms to induce Investor to enter into the Transaction Documents and that but for Company’s agreements set forth in this Section 10.2 Investor would not have entered into the Transaction Documents.
10.3. Specific Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any party unless the Note is being paid in full simultaneously with such issuance. Company specifically acknowledges that Investor’s right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.
10.4. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.hellosign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.5. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.
10.6. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.
10.7. Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents shall govern.
10.8. Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.
10.9. Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):
If to Company:
Orbital Infrastructure Group, Inc.
Attn: James O’Neil
5444 Westheimer Road, Suite 1650 Houston,
Texas 77056
If to Investor:
Streeterville Capital, LLC
Attn: John Fife
303 East Wacker Drive, Suite 1040 Chicago,
Illinois 60601
With a copy to (which copy shall not constitute notice):
Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan Hansen
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043
10.10. Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.
10.11. Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
10.12. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
10.13. Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers
conferred in this Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.
10.14. Attorneys’ Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The “prevailing party” shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against both parties, then the arbitrator shall determine the “prevailing party” by taking into account the relative dollar amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or other proceedings affecting Company’s creditors’ rights and involving a claim under the Note; then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.
10.15. Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
10.16. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.
THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
10.17. Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other Transaction Documents.
10.18. Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue influence by Investor or anyone else.
10.19. Document Imaging. Investor shall be entitled, in its sole discretion, to image or
make copies of all or any selection of the agreements, instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including, without limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of the same force and effect as the original manually executed document.
10.20. Release and Waiver of Claims. Upon Gibson’s receipt of the First Draw, OIG and Gibson, for themselves and on behalf of all subsidiaries, affiliates, employees, officers, directors, managers, partners, agents and attorneys, forever and irrevocably releases and waives all claims, demands, actions and causes of action of every kind, whether sounding in contract, in tort, by law or otherwise, whether known or unknown (except for any claims arising from fraud), that they may have against Investor, its subsidiaries, affiliates, employees, officers, directors, managers, partners, agents and attorneys.
[Remainder of page intentionally left blank; signature page follows]
IN WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.
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INVESTOR:
Streeterville Capital, LLC |
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John M. Fife, President |
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COMPANY:
Orbital Infrastructure Group, Inc. |
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By: |
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Printed Name: |
James F. O’Neil |
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Title: |
Chief Executive Officer |
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Gibson Technical Services, Inc. |
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By: |
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Printed Name: |
James F. O’Neil |
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Title: |
Director |
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[Signature Page to Amended and Restated Forbearance and Line of Credit Agreement]
ATTACHED EXHIBITS:
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Exhibit A |
Note |
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Exhibit B |
Escrow Agreement |
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Exhibit C |
Secretary’s Certificate |
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Exhibit D |
Acknowledgment and Consent |
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Exhibit E |
Arbitration Provisions |
EXHIBIT E
ARBITRATION PROVISIONS
1. Dispute Resolution. For purposes of this Exhibit E, the term “Claims” means any disputes, claims, demands, causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s pursuit of an injunction or other Claim pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the doctrines of claim preclusion, issue preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate arbitration in the future. The parties to this Agreement (the “parties”) hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The term “Claims” specifically excludes a dispute over Calculations. The parties to the Agreement hereby agree that the arbitration provisions set forth in this Exhibit E (“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.
2. Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”) (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.
3. The Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.
4. Arbitration Proceedings. Arbitration between the parties will be subject to the following:
4.1 Initiation of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section 10.9 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 10.9 of the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to Section 10.9 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.
4.2 Selection and Payment of Arbitrator.
(a) Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.
(b) If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to Investor.
(c) If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.
(d) The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.
(e) Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties.Subject to Paragraph 4.10 below, if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3 Applicability of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.
4.4 Answer and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.
4.5 Related Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act.
4.6 Discovery. Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a) Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:
(i) To facts directly connected with the transactions contemplated by the Agreement.
(ii) To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less expensive than in the manner requested.
(b) No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts),(ii) more than fifteen (15) requests for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.
(c) All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d) In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e) Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in the expert report.
4.6 Dispositive Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.
4.7 Confidentiality. All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information upon the written request of either party.
4.8 Authorization; Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.
4.9 Relief. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary or punitive damages.
4.10 Fees and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5. Arbitration Appeal.
5.1 Initiation of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’ agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2 Selection and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration panel (the “Appeal Panel”).
(a) Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b) If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.
(c) If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already agreed to serve shall remain on the Appeal Panel.
(d) The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.
(d) Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3 Appeal Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.
5.4 Timing.
(a) Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.
(b) Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5 Appeal Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6 Relief. The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may not award exemplary or punitive damages.
5.7 Fees and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation in connection with the Appeal).
6. Miscellaneous.
6.1 Severability. If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions shall remain unaffected and in full force and effect.
6.2 Governing Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles therein.
6.3 Interpretation. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation of, these Arbitration Provisions.
6.4 Waiver. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party granting the waiver.
6.5 Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
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Exhibit 10.2
10.2 Amended and Restated Secured Promissory Note in the face amount of $20,931,076.84. dated March 6, 2023, issued by Orbital Infrastructure Group, Inc. to Streeterville Capital, LLC.
AMENDED AND RESTATED SECURED PROMISSORY NOTE
| Up to $20,931,076.84 | March 6, 2023 |
FOR VALUE RECEIVED, ORBITAL INFRASTRUCTURE GROUP, INC., a Texas corporation (“Orbital”), and Gibson Technical Services, Inc., a Georgia corporation (“Gibson” and, together with Orbital, the “Borrower”), promises to pay in lawful money of the United States of America to the order of STREETERVILLE CAPITAL, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), the principal sum of up to $20,931,076.84, or such portion thereof advanced by Lender to Borrower (“Draws”, as defined below), which Draws, excluding the Draws funded by Lender under the Original Note (as defined below) prior to the date hereof (the “Prior Draws”), shall not exceed $13,800,000.00 (the “Maximum Draw Amount”), together with all other amounts due under this Amended and Restated Secured Promissory Note (this “Note”). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the A&R LOC Agreement (as defined below). Certain other capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.
This Note amends, restates, replaces and supersedes, in its entirety, that certain Secured Promissory Note in the original principal amount of up to $16,075,000.00 (the “Original Note”) that was previously issued to Lender by Borrower on February 1, 2023, pursuant to that certain Forbearance and Line of Credit Agreement by and between Borrower and Lender on the same date. This Note is issued on March 6, 2023 (the “Restatement Date”) pursuant to that certain Amended and Restated Forbearance and Line of Credit Agreement by and between Borrower and Lender of the same date (the “A&R LOC Agreement”) in replacement of and substitution for, and not as a novation or satisfaction of the Original Note.
This Note carries an OID of up to $1,263,500.00, of which $297,500.00 is fully earned as of the Restatement Date. In addition, Borrower agrees to pay a restructuring fee of $1,458,490.30 (the “Restructuring Fee”), which is fully earned as of the Restatement Date. Moreover, Borrower incurred interest under the Original Note prior to the Restatement Date totaling $19,491.74 (the “Prior Interest”). The OID, the Restructuring Fee and the Prior Interest are all included initial principal balance of this Note.
1. Payment; Etc.
1.1. Payment. The Outstanding Balance shall be repaid on or before June 30, 2023 (the “Due Date”); provided that no Draws may be advanced to Borrower after June 27, 2023. Borrower will make all payments of sums due hereunder to Lender at Lender’s address set forth in the A&R LOC Agreement, or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and late charges, then to accrued interest and finally to principal.
1.2. Draws. Borrower acknowledges the Prior Draws totaled $4,250,000.00. Lender and Borrower are parties to that certain Escrow Agreement dated as of the Restatement Date (the “Escrow Agreement”) whereby, among other things, Lender shall place into escrow the Maximum Draw Amount as of the Restatement Date and agrees that Escrow Agent (as defined in the Escrow Agreement) shall release Draws to Gibson in accordance with the funding schedule attached hereto as Exhibit A (the “Funding Schedule”), subject only to the Draw Conditions, as set forth and defined in Section 1.3 below. The first Draw shall be released on March 6, 2023, in the amount of $1,500,000.00 (the “First Draw”). The Escrow Agent shall fund each draw amount (each, a “Draw Amount”) from the Escrow Account only to a bank account owned and controlled by Gibson and only (i) upon the receipt by Escrow Agent of a duly executed certificate from each Borrower which (a) certifies that such Borrower has met all Draw Conditions prior to the disbursement of each Draw Amount in the amount and on the date set forth on the Funding Schedule, and (b) requests an amount equal to or less than the maximum allotted Draw Amount for the relevant draw date, or (ii) an order of a court of competent jurisdiction, a copy of which is delivered to the Escrow Agent by either of the Borrowers or the Lender, that instructs the Escrow Agent as to the distribution of some or all of the Escrow Amount.
1.3. Draw Conditions. The following shall be preconditions to each Draw Amount being funded: (i) neither of the Borrowers have filed for bankruptcy protection, sought the appointment of a receiver, or taken any action that would result in the dissolution or winding up of either of OIG or Gibson; (ii) the creditors of either OIG or Gibson have not filed an involuntary bankruptcy petition or sought the appointment of a receiver, which petition or request for appointment has remained in force for a period of more than fifteen (15) days; (iii) Gibson has net working capital in an amount sufficient to fund its operations in the ordinary course of business; (iv) the Company has not authorized any lien or pledge to be attached to either the stock or assets of OIG, Gibson or any of OIG’s affiliates that did not exist as of February 1, 2023, except for increases of outstanding balances in the ordinary course of business solely in accordance with financing agreements already in place as of such date (and to the extent such unauthorized lien or pledge has been attached, the Company will exercise commercially reasonable efforts, in good faith, to have such lien or pledge removed) (each of (i) through (iv), a “Draw Condition,” collectively the “Draw Conditions”).
1.4. Prepayment Premium. Borrower may pay all or any portion of the Outstanding Balance earlier than it is due; provided that in the event Borrower elects to prepay all or any portion of the Outstanding Balance, it shall pay to Lender one hundred fifteen percent (115%) of the portion of the Outstanding Balance Borrower elects to prepay. Early payments of less than all principal, fees and interest outstanding will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s remaining obligations hereunder.
1.5. Debt Reduction Amount. Beginning in the month of March 2023 and for each of the following three (3) calendar months thereafter, Borrower will be obligated to reduce the aggregate outstanding balance owing by Borrower to Lender under the Outstanding Notes (as defined in the A&R LOC Agreement) by $2,500,000.00 (the “Debt Reduction Amount”) per month. The parties agree that in the event Borrower fails to reduce the aggregate outstanding balance under the Outstanding Notes by the Debt Reduction Amount in a given month during the applicable period, then Lender’s sole and exclusive remedy shall be to receive, as liquidated damages, a two- and one-half percent (2.5%) increase to the Outstanding Balance of this Note for such month, which amount shall be added automatically to the Outstanding Balance at such time. For the avoidance of doubt, failure to reduce the outstanding balance of the Outstanding Notes by the Debt Reduction Amount in a given month will not be considered a Trigger Event hereunder. For the further avoidance of doubt, this Section 1.5 is not merged or integrated with any similar provision in other prior transaction documents involving Borrower and Lender, nor are any similar provisions in any prior transaction documents involving Borrower and Lender merged or integrated with this Section 1.5. All such provisions remain as a separate and continuing obligations.
1.6. Mandatory Prepayment. Borrower covenants and agrees to make a mandatory prepayment to Lender equal to fifty percent (50%) of the Outstanding Balance on April 1, 2023.
1.7. Interest. Interest will accrue on Outstanding Balance at the rate of nine percent (9%) per annum. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note.
1.8. OID. A pro rata portion of the OID will be added to the Outstanding Balance and become fully earned each time a Draw is funded hereunder.
1.9. Milestone Events. In the event Borrower fails to achieve any of the events set forthon Exhibit B (each, a “Milestone Event”) by the applicable milestone deadline also set forth on Exhibit B (each, a “Milestone Deadline”), then for each such failure, the outstanding balance of this Note shall increase by an amount equal to the aggregate outstanding balances of (i) the First Forbearance Note (as defined in the A&R LOC Agreement), (ii) this Note, and (iii) the Third Forbearance Note (as defined in the A&R LOC Agreement), immediately prior to such failure multiplied by one percent (1.0%) and shall be fully earned as of the date of each such failure.
2. Security. This Note is secured by: (a) those certain Security Agreements dated December 9, 2022 by and between Orbital and Lender, Lender and Orbital Power, Inc. a Texas corporation (“OPI”), Lender and Gibson, Lender and IMMCO, Inc., a Georgia corporation (“IMMCO”), Lender and Coax Fiber Solutions, Inc., a Georgia corporation (“Coax”), Lender and Full Moon Telecom, LLC, a Florida limited liability company (“Full Moon”), and Lender and Orbital Solar Services, LLC, a North Carolina limited liability company (“OSS”), each as the same may be amended from time to time (the “Security Agreements”), whereby Borrower and its aforementioned affiliates granted a security interest in all of their assets in favor of Lender to secure the performance of certain obligations owed to Lender, as more specifically set forth in the Security Agreements, all the terms and conditions of which are hereby incorporated into and made a part of this Note; (b) those certain Equity Interest Pledge Agreements dated December 9, 2022 by and between Borrower and Lender, and Lender and Gibson, as each may be amended from time to time (the “Pledge Agreements”), whereby Borrower and Gibson pledged all of their right, title and interest in and to their stock and limited liability company interests in various Subsidiaries (as defined in the Pledge Agreements) to secure the performance of certain obligations owed to Lender, as more specifically set forth in the Pledge Agreements, all the terms and conditions of which are hereby incorporated into and made a part of this Note; and (c) those certain Guaranties dated December 9, 2022 by and between Lender and OPI, Lender and Gibson, Lender and IMMCO, Lender and Coax, Lender and Full Moon, Lender and OPI, and Lender and OSS, each as the same by amended from time to time, the (“Guaranties”),whereby the aforementioned affiliates agreed to guarantee the performance of certain obligations owed to by Borrower to Lender, as more specifically set forth in the Guaranties, all the terms and conditions of which are hereby incorporated into and made a part of this Note.
3. INTENTIONALLY LEFT BLANK.
4. Trigger Events; Defaults; Remedies.
4.1. Trigger Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) a receiver, trustee or other similar official shall be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; (c) Borrower becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (d) Borrower makes a general assignment for the benefit of creditors; (e) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (g) the occurrence of a Fundamental Transaction without Lender’s prior written consent; (h) Borrower fails to observe or perform any covenant set forth in Section 4 of the A&R LOC Agreement; (i) failure to seek the Approval (as defined below) in accordance with the provisions of Section 7 below; (j) Borrower or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant, obligation, condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document (as defined in the A&R LOC Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the A&R LOC Agreement; (k) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor, trustor, or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or misleading in any material respect when made or furnished; (l) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written notice to Lender; (m) any money judgment, writ or similar process is entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; or (n) Borrower, any affiliate of Borrower, or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in any Other Agreements.
4.2. Trigger Event Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance by applying the Trigger Effect (subject to the limitation set forth below).
4.3. Defaults. At any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that Borrower cure the Trigger Event within five (5) Trading Days. If Borrower fails to cure the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of default hereunder (each, an “Event of Default”).
4.4. Default Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses (b), (c), (d), (e) or (f) of Section 4.1, an Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender for the Trigger Event to become an Event of Default. At any time following the occurrence of any Event of Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of twenty-two percent (22%) per annum or the maximum rate permitted under applicable law (“Default Interest”). In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.4. No such rescission or annulment shall affect any subsequent Trigger Event or Event of Default or impair any right consequent thereon.
5. Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note.
6. Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
7. Issuance Cap. Notwithstanding anything to the contrary contained in this Note or any other documents, instruments or agreements between Borrower and Lender, Borrower and Lender agree that the total cumulative number of shares of Common Stock issued to Lender in connection with the Outstanding Notes and any other documents, instruments or agreements may not exceed the requirements of Nasdaq Listing Rule 5635(d) (the “Issuance Cap”), except that such limitation will not apply following Approval (defined below). At such time as Borrower reaches the Issuance Cap, so as not to violate the 20% limit established in Listing Rule 5635(d), Borrower will use its best efforts to obtain stockholder approval of the issuance of Common Stock to repay the Note and the other notes outstanding by Borrower in favor of Lender, in accordance with the requirements of Nasdaq Listing Rule 5635(d) (the “Approval”). If Borrower fails to obtain the Approval on the first attempt, Borrower will continue seeking shareholder Approval at every shareholder meeting thereafter until the Approval is obtained. For the avoidance of doubt, failure to obtain the Approval will not be considered an Event of Default hereunder, but the failure to seek the Approval would be considered an Event of Default hereunder.
8. Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the A&R LOC
Agreement to determine the proper venue for any disputes are incorporated herein by this reference.
9. Arbitration of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in the A&R LOC Agreement) set forth as an exhibit to the A&R LOC Agreement.
10. Cancellation. After repayment of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.
11. Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.
12. Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold, assigned or transferred by Lender to any of its affiliates without the consent of Borrower, so long as such transfer is in accordance with applicable federal and state securities laws.
13. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the A&R LOC Agreement titled “Notices.”
14. Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages.
15. Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.
16. Joint and Several Liability. Both Orbital and Gibson are jointly and severally liable for all liabilities, amounts and obligations hereunder and a breach, Default, Trigger Event, or failure to observe any obligation, covenant, commitment or duty by one is deemed also to have been committed by the other.
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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Restatement Date.
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BORROWER: Orbital Infrastructure Group, Inc. |
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By: |
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Name: |
James F. O’Neil |
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Title: |
Chief Executive Officer |
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Gibson Technical Services, Inc. |
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By: |
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Name: |
James F. O’Neil |
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Title: |
Director |
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ACKNOWLEDGED, ACCEPTED AND AGREED:
LENDER:
STREETERVILLE CAPITAL, LLC
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| John M. Fife, President |
[Signature Page to Secured Promissory Note]
EXHIBIT A
FUNDING SCHEDULE
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Date |
Maximum Draw Amount |
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3/6/2023 |
$1,500,000.00* |
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3/14/2023 |
$1,500,000.00 |
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3/21/2023 |
$1,000,000.00 |
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3/28/2023 |
$1,000,000.00 |
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4/4/2023 |
$1,000,000.00 |
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4/11/2023 |
$1,000,000.00 |
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4/18/2023 |
$1,000,000.00 |
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4/25/2023 |
$1,000,000.00 |
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5/2/2023 |
$1,000,000.00 |
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5/9/2023 |
$1,000,000.00 |
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5/16/2023 |
$1,000,000.00 |
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6/6/2023 |
$900,000.00 |
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6/27/2023 |
$900,000.00 |
*To be transmitted from Lender directly to Gibson
EXHIBIT B
MILESTONE EVENTS AND MILESTONE DEADLINES
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Milestone Events |
Milestone Deadlines |
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Open sale process to 3rd party buyers for Gibson and Front Line Power Construction, LLC, a Texas limited liability company (“Front Line”), by distributing CIM and opening data-room access |
March 31, 2023 |
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Receive binding bids for sale of Gibson and Front Line |
May 26, 2023 |
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Entering into of purchase and sale agreements for sale of Gibson and Front Line |
June 16, 2023 |
ATTACHMENT 1
DEFINITIONS
For purposes of this Note, the following terms shall have the following meanings:
A1. “Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or reverse splits of its outstanding and authorized shares of Common Stock to meet Nasdaq listing requirements or (b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.
A2. “Major Trigger Event” means any Trigger Event occurring under Sections 4.1(a) - 4.1(i).
A3. “Mandatory Default Amount” means the Outstanding Balance following the application of the Trigger Effect.
A4. INTENTIONALLY LEFT BLANK.
A5. “Minor Trigger Event” means any Trigger Event that is not a Major Trigger Event.
A6. “OID” means an original issue discount.
A7. “Other Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement or a material agreement that affects Borrower’s ongoing business operations.
A8. “Outstanding Balance” means as of any date of determination, the sum of any Prior Draws funded, the First Draw, plus any Draw Amount funded, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, offset, or otherwise, plus the portion of the OID that becomes fully earned, the Restructuring Fee, accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and fees incurred under this Note.
A9. “Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred, with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred; provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times hereunder with respect to Minor Trigger Events. For avoidance of doubt, the Trigger Effect shall be fully earned and applied to the Outstanding Balance as of the date that any applicable Trigger Event occurs.
A10. “Trading Day” means any day on which Nasdaq (or such other principal market for the Common Stock) is open for trading.
Document And Entity Information |
Mar. 06, 2023 |
|---|---|
| Document Information [Line Items] | |
| Entity, Registrant Name | Orbital Infrastructure Group, Inc. |
| Document, Type | 8-K |
| Document, Period End Date | Mar. 06, 2023 |
| Entity, File Number | 0-29923 |
| Entity, Incorporation, State or Country Code | TX |
| Entity, Tax Identification Number | 84-1463284 |
| Entity, Address, Address Line One | 5444 Westheimer Road |
| Entity, Address, Address Line Two | Suite 1650 |
| Entity, Address, City or Town | Houston |
| Entity, Address, State or Province | TX |
| Entity, Address, Postal Zip Code | 77056 |
| City Area Code | 832 |
| Local Phone Number | 467-1420 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity, Emerging Growth Company | false |
| Title of 12(b) Security | Common stock |
| Trading Symbol | OIG |
| Security Exchange Name | NASDAQ |
| Amendment Flag | false |
| Entity, Central Index Key | 0001108967 |
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