RILYL B Riley Financial Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934

(Amendment No. 15)*

 

Babcock & Wilcox Enterprises, Inc.

(Name of Issuer)

 

Common Stock, par value $0.01

(Title of Class of Securities)

 

05614L100

(CUSIP Number)

 

Bryant R. Riley

B. Riley Financial, Inc.

11100 Santa Monica Boulevard, Suite 800

Los Angeles, CA 90025

(818) 884-3737

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

January 18, 2024

(Date of Event Which Requires Filing of this Statement)
 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

 

 

CUSIP No. 05614L100

 

1.	Names of Reporting Persons   B. Riley Financial, Inc.
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) ☐
	(b) ☐
3.	SEC Use Only
4.	Source of Funds (See Instructions)   WC, AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  ☐
6.	Citizenship or Place of Organization   Delaware

Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power   0
	8.	Shared Voting Power   27,446,522
	9.	Sole Dispositive Power   0
	10.	Shared Dispositive Power   27,446,522

11.	Aggregate Amount Beneficially Owned by Each Reporting Person   27,446,522
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ☐
13.	Percent of Class Represented by Amount in Row (11)   30.7%*
14.	Type of Reporting Person (See Instructions) HC

 

*

Percent of class is calculated based on 89,371,408 shares of common stock, par value $0.01 (the “Common Stock”), of Babcock & Wilcox Enterprises, Inc. (the “Issuer”) outstanding as of November 3, 2023 as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed with the Securities and Exchange Commission (the “Commission”) on November 9, 2023 (the “10-Q”).

 

 

CUSIP No. 05614L100

 

1.	Names of Reporting Persons   B. Riley Securities, Inc.
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) ☐
	(b) ☐
3.	SEC Use Only
4.	Source of Funds (See Instructions)   WC
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  ☐
6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power   0
	8.	Shared Voting Power   7,602,348
	9.	Sole Dispositive Power   0
	10.	Shared Dispositive Power 7,602,348

11.	Aggregate Amount Beneficially Owned by Each Reporting Person   7,602,348
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ☐
13.	Percent of Class Represented by Amount in Row (11)   8.5%*
14.	Type of Reporting Person (See Instructions) BD

 

*

Percent of class is calculated based on 89,371,408 shares of the Common Stock of the Issuer outstanding as of November 3, 2023, as reported by the Issuer in the 10-Q.

 

 

CUSIP No. 05614L100

 

1.	Names of Reporting Persons   BRF Investments, LLC
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) ☐
	(b) ☐
3.	SEC Use Only
4.	Source of Funds (See Instructions)   WC
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  ☐
6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power   0
	8.	Shared Voting Power   19,844,174
	9.	Sole Dispositive Power   0
	10.	Shared Dispositive Power   19,844,174

11.	Aggregate Amount Beneficially Owned by Each Reporting Person   19,844,174
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ☐
13.	Percent of Class Represented by Amount in Row (11)   22.2%*
14.	Type of Reporting Person (See Instructions) OO

 

*

Percent of class is calculated based on 89,371,408 shares of the Common Stock of the Issuer outstanding as of November 3, 2023, as reported by the Issuer in the 10-Q.

  

 

CUSIP No. 05614L100

 

1.	Names of Reporting Persons Bryant R. Riley
2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)  ☐
	(b)  ☐
3.	SEC Use Only
4.	Source of Funds (See Instructions)   PR, AF
5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ☐
6.	Citizenship or Place of Organization United States of America

Number of Shares Beneficially Owned by Each Reporting Person With	7.	Sole Voting Power   1,485,898
	8.	Shared Voting Power   27,446,522
	9.	Sole Dispositive Power   1,485,898
	10.	Shared Dispositive Power 27,446,522

11.	Aggregate Amount Beneficially Owned by Each Reporting Person   28,932,420
12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)  ☐
13.	Percent of Class Represented by Amount in Row (11)   32.4%*
14.	Type of Reporting Person (See Instructions) IN

 

*

Percent of class is calculated based on 89,371,408 shares of the Common Stock of the Issuer outstanding as of November 3, 2023, as reported by the Issuer in the 10-Q.

  

 

Explanatory Note

 

This Amendment No. 15 (this “Amendment”) amends and supplements the Schedule 13D filed on November 30, 2018, as amended by Amendment No. 1 to Schedule 13D, filed with the Securities and Exchange Commission (the “SEC”) on April 10, 2019, Amendment No. 2 to the Schedule 13D, filed with the SEC on May 7, 2019, Amendment No. 3 to Schedule 13D, filed with the SEC on July 23, 2019, Amendment No. 4 to Schedule 13D, filed with the SEC on July 29, 2019, Amendment No. 5 to the Schedule 13D, filed with the SEC on May 20, 2020, Amendment No. 6 to Schedule 13D, filed with the SEC on June 11, 2020, Amendment No. 7 to Schedule 13D, filed with the SEC on July 2, 2020, Amendment No. 8 to Schedule 13D, filed with the SEC on September 10, 2020, Amendment No. 9 to Schedule 13D, filed with the SEC on October 2, 2020, Amendment No. 10 to Schedule 13D, filed with the SEC on January 27, 2021, Amendment No. 11 to Schedule 13D, filed with the SEC on February 10, 2021, Amendment No. 12 to Schedule 13D, filed with the SEC on March 26, 2021, Amendment No. 13 to Schedule 13D, filed with the SEC on October 29, 2021, and Amendment No. 14 to Schedule 13D, filed with the SEC on December 26, 2023 (as amended, the “Schedule 13D”), by the Reporting Persons relating to the common stock, par value $0.01 (the “Common Stock”), of Babcock & Wilcox Enterprises, Inc. (the “Issuer”).

 

Information reported in the Schedule 13D remains in effect except to the extent that it is amended, restated or superseded by information contained in this Amendment. Capitalized terms used but not defined in this Amendment have the respective meanings set forth in the Schedule 13D. All references in the Schedule 13D and this Amendment to the “Statement” will be deemed to refer to the Schedule 13D as amended and supplemented by this Amendment.

 

 

Item 4. Purpose of the Transaction

 

Item 4 is amended to add the following:

 

On January 18, 2024 (the “Effective Date”), B. Riley Financial, Inc. (“BRF”) entered into a guaranty (the “Guaranty”) in favor of (i) Axos Bank, in its capacity as administrative agent (the “Administrative Agent”) for the secured parties under that certain Credit Agreement, dated as of the Effective Date among the Issuer, as borrower, the guarantors party thereto, the lenders party thereto and the Administrative Agent (the “Credit Agreement”), and (ii) the secured parties. The description of the Credit Agreement included under Item 1.01 – Entry into a Material Definitive Agreement in the Issuer’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 22, 2024, is incorporated by reference herein.

Subject to the terms and conditions of the Guaranty, BRF has guaranteed certain obligations of the Issuer (subject to certain limitations) under the Credit Agreement, including the obligation to repay outstanding loans and letters of credit and to pay earned interest, fees costs and expenses of enforcing the Guaranty, provided however, that BRF’s obligations with respect to the principal amount of credit extensions and unreimbursed letter of credit obligations under the Credit Agreement shall not at any time exceed $150,000,000 in the aggregate. The foregoing description of the Guaranty is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Guaranty, a copy of which is filed as an exhibit hereto.

 

In consideration for the agreements and commitments under the Guaranty and pursuant to a separate fee and reimbursement agreement (the “Fee Agreement”), the Issuer has agreed to pay BRF a fee equal to 2.00% of the aggregate revolving commitments (as defined in the Credit Agreement) under the Credit Agreement, payable quarterly and, at the Issuer’s election, in cash in full or 50% in cash and 50% in the form of penny warrants. The foregoing description of the Fee Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Fee Agreement, a copy of which is filed as an exhibit hereto.

 

Item 5. Interest in Securities of the Issuer

 

Paragraphs (a) and (b) of Item 5 are amended and restated in their entirety as follows:

 

(a) - (b)

  

1.

As of the date hereof, (i) B. Riley Securities, Inc. (“BRS”) beneficially owned directly 7,602,348 shares of Common Stock, representing 8.5% of the Issuer’s Common Stock, and (ii) BRFI beneficially owned directly 19,844,174 shares of Common Stock, representing 22.2% of the Issuer’s Common Stock.

   

2.

BRF is the parent company of BRS and BRFI. As a result, BRF may be deemed to indirectly beneficially own the Shares held by BRS and BRFI.

 

3.

Bryant R. Riley may beneficially own 1,485,898 shares of Common Stock representing 1.7% of the Issuer’s Common Stock, of which (i) 1,217,069 shares are held jointly with his wife, Carleen Riley, (ii) 45,436 shares are held as sole custodian for the benefit of Abigail Riley, (iii) 45,801 shares are held as sole custodian for the benefit of Charlie Riley, (iv) 45,431 shares are held as sole custodian for the benefit of Eloise Riley, (v) 43,810 shares are held as sole custodian for the benefit of Susan Riley, (vi) 50,998 shares are held as sole trustee of the Robert Antin Children Irrevocable Trust and (vii) 37,353 shares are held in Bryant R. Riley’s 401(k) account. Bryant R. Riley may also beneficially own 27,446,522 shares of Common Stock, representing 30.7% of the Issuer’s Common Stock, outstanding or issuable upon the exercise of the Warrants and held directly by BRFI or BRS in the manner specified in paragraph (1) above. Bryant R. Riley disclaims beneficial ownership of the shares held by BRFI and BRS, or the Robert Antin Children Irrevocable Trust in each case except to the extent of his pecuniary interest therein.

 

 

Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Exchange Act, may be deemed to beneficially own the securities of the Issuer owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer it does not directly own or control. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein except to the extent of such Reporting Person’s pecuniary interest therein.

 

As of the date hereof, each of BRS and BRF have shared power to vote or direct the vote of, and to dispose or direct the disposition of, the Shares beneficially owned directly by BRS.

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

Item 6 of the Schedule 13D is hereby amended and supplemented by adding the following:

 

The disclosures set forth in Item 4 are hereby incorporated by reference.

 

Item 7. Material to Be Filed as Exhibits

 

The following documents are filed as exhibits:

 

Exhibit
Number		Description
2		Guaranty, dated January 18, 2024, among B. Riley Financial, Inc., Babcock & Wilcox Enterprises, Inc. and Axos Bank (incorporated by reference to Exhibit 10.1 to B. Riley Financial, Inc.’s Current Report on Form 8-K, filed with the SEC on January 22, 2024)
3*		Fee and Reimbursement Agreement, dated January 18, 2024, between B. Riley Financial, Inc. and Babcock & Wilcox Enterprises, Inc.

 

*	Attached herewith.

 

 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Date: January 22, 2024

 

	B. RILEY FINANCIAL, INC.
	By:	/s/ Bryant R. Riley
	Name:	Bryant R. Riley
	Title:	Co-Chief Executive Officer
	B. RILEY SECURITIES, INC.
	By:	/s/ Andrew Moore
	Name:	Andrew Moore
	Title:	Chief Executive Officer
	BRF INVESTMENTS, LLC.
	By:	/s/ Phillip Ahn
	Name:	Phillip Ahn
	Title:	Authorized Signatory
	/s/ Bryant R. Riley
	Bryant R. Riley

 

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of this filing person), evidence of the representative’s authority to sign on behalf of such person shall be filed with the statement, provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

 

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (see 18 U.S.C. 1001).

 

 

SCHEDULE A

 

Executive Officers and Directors of B. Riley Financial, Inc.

 

Name and Position		Present Principal Occupation		Business Address		Citizenship
Bryant R. Riley Chairman of the Board of Directors and Co-Chief Executive Officer		Chief Executive Officer of B. Riley Capital Management, LLC; Co-Executive Chairman of B. Riley Securities, Inc.; and Chairman of the Board of Directors and Co-Chief Executive Officer of B. Riley Financial, Inc.		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Thomas J. Kelleher Co-Chief Executive Officer and Director		Co-Chief Executive Officer and Director of B. Riley Financial, Inc.; Co-Executive Chairman of B. Riley Securities, Inc.; and President of B. Riley Capital Management, LLC		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Phillip J. Ahn Chief Financial Officer and Chief Operating Officer		Chief Financial Officer and Chief Operating Officer of B. Riley Financial, Inc.		30870 Russell Ranch Rd Suite 250 Westlake Village, CA 91362		United States
Kenneth Young 1 President		President of B. Riley Financial, Inc.; and Chief Executive Officer of B. Riley Principal Investments, LLC		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Alan N. Forman Executive Vice President, General Counsel and Secretary		Executive Vice President, General Counsel and Secretary of B. Riley Financial, Inc.		299 Park Avenue, 21st Floor New York, NY 10171		United States
Howard E. Weitzman Senior Vice President and Chief Accounting Officer		Senior Vice President and Chief Accounting Officer of B. Riley Financial, Inc.		30870 Russell Ranch Rd Suite 250 Westlake Village, CA 91362		United States
Robert L. Antin 2 Director		Co-Founder of VCA, Inc., an owner and operator of Veterinary care centers and hospitals		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Robert D’Agostino Director		President of Q-mation, Inc., a supplier of software solutions		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Renée E. LaBran Director		Founding partner of Rustic Canyon Partners (RCP), a technology focused VC fund		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Randall E. Paulson Director		Special Advisor to Odyssey Investment Partners, LLC, a private equity investment firm		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Michael J. Sheldon Director		Chairman and Chief Executive Officer of Deutsch North America, a creative agency – Retired		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Mimi Walters Director		U.S. Representative from California’s 45th Congressional District – Retired		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States
Mikel Williams Director		Chief Executive Officer and Director of privately held Targus International, LLC, supplier of carrying cases and accessories		11100 Santa Monica Blvd. Suite 800 Los Angeles, CA 90025		United States

 

1

As of the close of business on the date hereof, Kenneth Young directly owned 1,492,183 shares of Common Stock. The individual purchase prices and transaction data are available publicly on Kenneth Young’s Section 16 filings with the SEC. Kenneth Young has the sole power to vote and dispose of such shares of Common Stock and the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such shares of Common Stock.

2

As of the close of business on the date hereof, Robert L. Antin directly owned 76,802 shares of Common Stock. The aggregate purchase price of the 76,802 shares of Common Stock that were purchased by Robert L. Antin with personal funds is approximately $940,253. Robert L. Antin has the sole power to vote and dispose of such Common Stock and the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Common Stock.

 

 

ANNEX I

 

Transactions within the Past 60 Days

 

Trade Date

Transaction

Amount of Securities

Price per Share of Common Stock

Reporting Person

12/19/2023

Redemption from Limited Partnership

704,721

$

-

Bryant R. Riley

 

 

11

 

Exhibit 3

 

B. RILEY FINANCIAL, INC.

11100 Santa Monica Blvd.

Suite 800

Los Angeles, CA 90025

 

Babcock & Wilcox Enterprises, Inc.

1200 E Market Street – Suite 650

Akron, OH 44305 USA

 

January 18, 2024

 

Fee and Reimbursement Agreement

 

Ladies and Gentlemen:

 

This Fee and Reimbursement Agreement (this “Agreement”) is delivered in connection with that certain Guaranty, dated as the date hereof (as amended, restated, amended and restated, refinanced, extended, supplemented or otherwise modified in writing from time to time, the “Guaranty”), by and among B. Riley Financial, Inc. (“Guarantor” or “us”), Axos Bank, and Babcock & Wilcox Enterprises, Inc. (“B&W or “you”). Reference is also made to that certain Credit Agreement, dated as of the date hereof (as in effect on the date hereof, and as amended, modified, extended, restated, renewed, replaced, or supplemented from time to time in accordance with the terms hereof, the “Credit Agreement”), by, among others, B&W as the Borrower, the guarantors party thereto from time to time, the Lenders party thereto from time to time, and Axos Bank, as Administrative Agent, L/C Issuer and Swingline Lender. All capitalized terms used herein shall have the meanings assigned to them in the Guaranty, or if not defined in the Guaranty, in the Credit Agreement.

 

1.	Fees; Expense Reimbursement; Indemnity

 

As consideration for the agreements and commitments under the Guaranty, you agree to pay a guaranty fee (the “Guaranty Fee”) in an annual amount equal to 2.00% of Aggregate Revolving Commitments under the Credit Agreement as of the date hereof; provided that if there is any change to the Aggregate Revolving Commitments following the date hereof, the parties may negotiate and agree on a new guaranty fee. One-quarter of the annual Guaranty Fee shall be due and payable in advance on each January [18], April [18], July [18], and October [18] so long as the Guaranty remains outstanding (each such date of payment being a “Fee Payment Date”) until the occurrence of the Facility Termination Date. Any quarterly payment of the Guaranty Fee may, at the Borrower’s election, be (i) paid in cash in full or (ii) satisfied with a payment in cash in respect of 50% of such Guaranty Fee with the remaining 50% of such Guaranty Fee paid in the form of penny warrants for shares of common stock of B&W with the number of underlying shares for such payment based on the 20 day VWAP determined by the parties in good faith and exercisable on a cash or cashless basis (the “Equity Election”). The Borrower shall provide the Guarantor with written notice of any Equity Election at least five (5) Business Days prior to the related Fee Payment Date

 

 

B&W shall not effect the exercise of any portion of a warrant issued pursuant to this agreement, and the Guarantor shall not have the right to exercise any portion of a warrant, and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect thereto, the aggregate number of shares of common stock of B&W that would be issued pursuant to this agreement and the transactions contemplated hereby would be equal to or greater than a number shares of common stock of B&W representing 19.99% of the shares of common stock of B&W outstanding on the date of this agreement (which number of shares shall be reduced, on a share-for-share basis, by the number of shares of common stock of B&W issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this agreement under applicable rules of The New York Stock Exchange or any other principal market on which the common stock may be listed or quoted) (the “Exchange Cap”), unless stockholder approval is obtained to issue in excess of the Exchange Cap.

 

The Borrower agrees to enter into a registration right agreement with the Guarantor within 45 days after the date hereof, which registration right agreement shall provide the Guarantor with certain customary resale registration rights with respect to the common stock of B&W underlying the penny warrants issued hereunder and shall be in form and substance reasonably satisfactory to the parties.

 

You agree to (i) pay and reimburse the Guarantor for the full amount of any payment made by or on behalf of the Guarantor under the Guaranty in respect of the Guaranteed Obligations and (ii) the indemnification, contribution and other provisions set forth in Appendix I attached hereto. All amounts due under this paragraph shall be due and payable (x) in the case of obligations under subsection (i) of the immediately previous sentence, immediately on demand and (y) with respect to all other amounts due under this paragraph, within 15 days of written demand therefor (provided that all such obligations under clauses (x) and (y) shall be automatically due and payable without demand therefor in the event any such demand is prohibited by applicable law). Your obligations hereof are in addition to all rights of reimbursement, indemnity and subrogation as the Guarantor has under the Guaranty or applicable law or equity, but for the avoidance of doubt there shall be no requirement for you to pay any duplicative amounts. This provision shall be superseded by the applicable provisions of a junior secured promissory note when entered by the Guarantor and the Issuer with respect to the subject matter of this paragraph.

 

You also agree to reimburse all of our out-of-pocket fees and expenses, including, without limitation, those of Sullivan & Cromwell LLP and King & Spalding LLP incurred in connection with the negotiation of the Guaranty and this Agreement on our behalf and from time to time incurred in connection with the transactions contemplated by the Guaranty and this Agreement; provided that such legal fees and expenses of Sullivan & Cromwell LLP shall have been paid on the date hereof to the extent invoiced at least one (1) Business Day prior to the date hereof. In addition, (i) you shall not take any action in breach of the Guaranty or enter into any amendment, modification or supplement to the Credit Agreement that is not expressly permitted under the Guaranty without the consent of the Guarantor and (ii) you shall promptly notify us upon the occurrence of any Default or Event of Default under the Credit Agreement.

 

You agree that once paid, the fees or any part thereof payable hereunder will not be refundable under any circumstances. All fees payable hereunder will be paid in immediately available funds, shall not be subject to reduction by way of setoff or counterclaim. All payments shall be without withholding or deduction for any and all present or future taxes, except to the extent required by law (with an appropriate gross up for any such taxes withheld or deducted as required by law).

 

 

2.

Inspection Rights.

 

The Borrower acknowledges and agrees that to the extent the Administrative Agent chooses to exercise its inspection rights pursuant to Section 6.10 of the Credit Agreement, the Borrower shall notify the Guarantor of such occurrence, and the Borrower shall use its commercially reasonable efforts to ensure that Guarantor (or its representatives, independent contractors or professionals, as applicable) shall be permitted to accompany the Administrative Agent (or its representatives, independent contractors or professionals, as applicable) on such visit or inspection.

 

3.

Governing Law.

 

This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York.

 

4.

Miscellaneous.

 

This Agreement may not be amended or any provision hereof waived or modified except by an agreement in writing signed by each of the parties hereto. The captions in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper- based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

5.

Post-Closing Undertaking.

 

You agree that (i) within thirty (30) days after the date hereof (or such other date as the Guarantor may agree in writing), B&W and its applicable subsidiaries shall deliver a junior secured promissory note with the aggregate principal amount of such note equal to the aggregate amounts advanced or deemed advanced from time to time by the Guarantor under the Guaranty or other guaranty, reimbursement, indemnity or other similar agreements with you, and each other agreement, security agreement, intercreditor agreement, pledge agreement, mortgage or other instrument, all in form and substance reasonably satisfactory to the Guarantor and (ii) within sixty (60) days after the date hereof (or such date as is agreed to by Axos Bank), you shall cause to be delivered a customary intercreditor agreement, in form and substance to be reasonably satisfactory to Axos Bank and the Guarantor, by and between Axos Bank, as first lien holder, and the Guarantor, as second lien holder, and acknowledged by you.

 

You also agree to take all necessary actions to create a legal, valid, binding and enforceable security interest of the Guarantor in the Collateral, and perfect such liens of the Guarantor as a second priority lien, in a manner and within any time requirements as reasonably agreed by the Guarantor.

 

[Remainder of Page Intentionally Left Blank. Signature Page Follows.]

 

 

If the foregoing correctly sets forth our understanding, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof, whereupon this Agreement shall become a binding agreement between us.

 

	Sincerely,
	B. RILEY FINANCIAL, INC.
	By:	/s/ Phillip Ahn
	Name:	Phillip Ahn
	Title	Chief Financial Officer & Chief Operating Officer

 

ACCEPTED AND AGREED:
BABCOCK & WILCOX ENTERPRISES, INC.
By:	/s/ Rodney E. Carlson
Name:	Rodney E. Carlson
Title:	Treasurer

 

[Signature Page to Fee and Reimbursement Agreement]

 

 

Appendix I

 

Indemnity Agreement

 

B&W hereby agrees to defend, indemnify and hold harmless Guarantor and its affiliates (as defined in Rule 405 under the Securities Act of 1933, as amended) and their respective directors, officers, members, managers, employees, agents and controlling persons (Guarantor and each such person being an “Indemnified Party”) from and against all losses, claims, damages and liabilities (or actions, including shareholder actions, in respect thereof), joint or several to which an Indemnified Party may become subject under any applicable federal or state law, or otherwise, which are related to or result from the performance by an Indemnified Party of the Guaranty or otherwise related to the Guaranty or the Credit Agreement and will promptly reimburse any Indemnified Party for all reasonable expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense arising from any threatened or pending claim, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by B&W or the Administrative Agent.

 

B&W also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to B&W or its security holders or creditors related to or arising out of Guarantor’s performance under the Guaranty, except to the extent that any loss, claim, damage or liability is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted primarily from Guarantor’s willful misconduct or gross negligence.

 

Promptly after receipt by an Indemnified Party of notice of any intention or threat to commence an action, suit or proceeding or notice of the commencement of any action, suit or proceeding, such Indemnified Party will, if a claim in respect thereof is to be made against B&W pursuant hereto, promptly notify B&W in writing of the same. In case any such action is brought against any Indemnified Party and such Indemnified Party notifies B&W of the commencement thereof, B&W may elect to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and an Indemnified Party may employ counsel to participate in the defense of any such action provided, that the employment of such counsel shall be at the Indemnified Party’s own expense, unless (i) the employment of such counsel has been authorized in writing by B&W, (ii) the Indemnified Party has reasonably concluded (based upon advice of counsel to the Indemnified Party) that there may be legal defenses available to it or other Indemnified Parties that are different from or in addition to those available to B&W, or that a conflict or potential conflict exists (based upon advice of counsel to the Indemnified Party) between the Indemnified Party and B&W that makes it impossible or inadvisable for counsel to the Indemnifying Party to conduct the defense of both B&W and the Indemnified Party (in which case B&W will not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) B&W has not in fact employed counsel reasonably satisfactory to the Indemnified Party to assume the defense of such action within a reasonable time after receiving notice of the action, suit or proceeding, in each of which cases the reasonable fees, disbursements and other charges of such counsel will be at the expense of B&W; provided, further, that in no event shall B&W be required to pay fees and expenses for more than one firm of attorneys (in addition to local counsel) representing Indemnified Parties unless the defense of one Indemnified Party is unique or separate from that of another Indemnified Party subject to the same claim or action. Any failure or delay by an Indemnified Party to give the notice referred to in this paragraph shall not affect such Indemnified Party’s right to be indemnified hereunder, except to the extent that such failure or delay causes actual harm to B&W, or prejudices its ability to defend such action, suit or proceeding on behalf of such Indemnified Party.

 

 

If the indemnification provided for in this Agreement is for any reason held unenforceable by or unavailable to an Indemnified Party, B&W agrees to contribute to the losses, claims, damages and liabilities for which such indemnification is held unenforceable or is unavailable (i) in such proportion as is appropriate to reflect the relative benefits to B&W, on the one hand, and Guarantor, on the other hand, of the transactions contemplated by the Guaranty and this Agreement or, (ii) if (but only if) the allocation provided for in clause (i) is for any reason unenforceable or unavailable, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of B&W, on the one hand and Guarantor, on the other hand, as well as any other relevant equitable considerations. B&W agrees that for the purposes of this paragraph the relative benefits to the B&W and Guarantor of the Guaranty and this Agreement shall be deemed to be in the same proportion that the total value of the Guaranty bear to the fees paid or to be paid to Guarantor pursuant to this Agreement. Notwithstanding the foregoing, B&W expressly agrees that Guarantor shall not be required to contribute any amount in excess of the amount by which fees paid Guarantor hereunder exceeds the amount of any damages which Guarantor has otherwise been required to pay.

 

B&W agrees that without Guarantor’s prior written consent, which shall not be unreasonably withheld, it will not, and will not permit any of its affiliates to, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification or contribution could be sought under the provisions of this Agreement, unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action or proceeding.

 

 

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