THIRD AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT

Revolving Credit Agreement

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Title: THIRD AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT
Governing Law: Texas Date: 11/17/2005
Industry: Construction Services Sector: Capital Goods

THIRD AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT, Parties: sterling construction co , comerica bank , texas sterling construction l.p.

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EXHIBIT 10.27

THIRD AMENDED AND RESTATED

REVOLVING CREDIT LOAN AGREEMENT

BETWEEN

COMERICA BANK f/k/a

COMERICA BANK-TEXAS

AND

TEXAS STERLING CONSTRUCTION, L.P.

DATED

DECEMBER 23, 2004

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TABLE OF CONTENTS

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SECTION 1. DEFINITIONS......................................................... 1

1.1. Defined Terms....................................................... 1

1.2. Accounting Terms.................................................... 9

1.3. Singular and plural................................................. 9

SECTION 2. COMMITMENT, INTEREST AND FEES....................................... 9

2.1. Commitment.......................................................... 9

2.2. Borrowing Procedures................................................ 9

2.3. Note................................................................ 10

2.4. Interest............................................................ 10

2.5. Renewals and Extensions............................................. 10

2.6. Maximum Rate........................................................ 11

2.7. Fees................................................................ 12

2.8. Basis of Computation................................................ 12

2.9. Prepayments......................................................... 13

2.10. Basis of Payments................................................... 13

2.11. Term Loans.......................................................... 13

SECTION 3. SECURITY............................................................ 13

SECTION 4. CONDITIONS PRECEDENT TO OBLIGATIONS OF BANK......................... 14

4.1. Conditions to First Disbursement.................................... 14

4.2. Conditions to All Disbursements..................................... 16

SECTION 5. WARRANTIES AND REPRESENTATIONS...................................... 17

5.1. Corporate Existence and Power....................................... 17

5.2. Authorization and Approvals......................................... 17

5.3. Valid and Binding Agreement......................................... 17

5.4. Actions, Suits or Proceedings....................................... 18

5.5. Subsidiaries........................................................ 18

5.6. No Liens, Pledges, Collateral Assignments or Security Interests..... 18

5.7. Accounting Principles............................................... 18

5.8. No Adverse Changes.................................................. 18

5.9. Conditions Precedent................................................ 18

5.10. Taxes............................................................... 18

5.11. Compliance with Laws................................................ 18

5.12. Indebtedness........................................................ 19

5.13. Material Agreements................................................. 19

5.14. Margin Stock........................................................ 19

5.15. Pension Funding..................................................... 19

5.16. Misrepresentation................................................... 19

5.17. Equipment........................................................... 19

5.18. Partnership Ownership............................................... 19

5.19. Names Under Which Borrower is Doing Business........................ 20

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SECTION 6. AFFIRMATIVE COVENANTS............................................... 20

6.1. Financial and Other Information..................................... 20

6.2. Insurance........................................................... 24

6.3. Taxes............................................................... 24

6.4. Maintain Corporation and Business................................... 25

6.5. Intentionally Deleted............................................... 25

6.6. Maintain Debt Ratio................................................. 25

6.7. Intentionally Deleted............................................... 25

6.8. Maintain Cash Flow Coverage Ratio................................... 25

6.9. ERISA............................................................... 25

6.10. Use of Loan Proceeds................................................ 26

6.11. Partnership Changes................................................. 26

SECTION 7. NEGATIVE COVENANTS.................................................. 26

7.1. Distributions or Dividends.......................................... 26

7.2. Stock Issuance...................................................... 26

7.3. Stock Acquisition................................................... 26

7.4. Liens and Encumbrances.............................................. 26

7.5. Indebtedness........................................................ 26

7.6. Extension of Credit................................................. 27

7.7. Guarantee Obligations............................................... 27

7.8. Property Transfer, Merger or Lease-Back............................. 27

7.9. Acquire Securities.................................................. 27

7.10. Pension Plans....................................................... 27

7.11. Misrepresentation................................................... 27

7.12. Margin Stock........................................................ 28

7.13. Compliance with Environmental Laws.................................. 28

7.14. Pledge of Receivables............................................... 28

7.15. Intentionally Deleted............................................... 28

7.16. Subordinated Debt-Put Shareholders.................................. 28

7.17. Intentionally Deleted............................................... 28

7.18. Intentionally Deleted............................................... 28

7.19. Notes Receivable from Shareholders.................................. 28

7.20. Non-ordinary Bonus.................................................. 28

7.21. Incur Negative Net Income for Consecutive Quarters.................. 28

SECTION 8. EVENTS OF DEFAULT - ENFORCEMENT - APPLICATION OF PROCEEDS........... 28

8.1. Events of Default................................................... 28

8.2. Acceleration of Indebtedness........................................ 30

8.3. Application of Proceeds............................................. 31

8.4. Cumulative Remedies................................................. 31

SECTION 9. MISCELLANEOUS....................................................... 31

9.1. Independent Rights.................................................. 31

9.2. Covenant Independence............................................... 31

9.3. Waivers and Amendments.............................................. 31

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9.4. GOVERNING LAW....................................................... 31

9.5. Survival of Warranties, Etc......................................... 32

9.6. Attorneys' Fees..................................................... 32

9.7. Payments on Saturdays, Etc.......................................... 32

9.8. Binding Effect...................................................... 32

9.9. Maintenance of Records.............................................. 32

9.10. Notices............................................................. 32

9.11. Counterparts........................................................ 32

9.12. Headings............................................................ 32

9.13. Capital Adequacy.................................................... 33

9.14. INDEMNIFICATION BY THE BORROWER..................................... 33

9.15. NO ORAL AGREEMENTS.................................................. 34

9.16. Gender.............................................................. 34

9.17. Intentionally Deleted............................................... 34

9.18. Cross Default; Cross Collateral..................................... 34

9.19. Severability of Provisions.......................................... 34

9.20. Assignment.......................................................... 34

9.21. Omnibus Name Change................................................. 34

9.22. Authorized Filings.................................................. 34

9.23. Assumption of Obligations........................................... 34

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iii

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THIRD AMENDED AND RESTATED

REVOLVING CREDIT LOAN AGREEMENT

THIS THIRD AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT is made

and delivered as of the 23rd day of December, 2004, by and between TEXAS

STERLING CONSTRUCTION, L.P., a Texas limited partnership (the "Borrower"),

successor by entity conversion to Sterling Construction Company (d/b/a

Texas-Sterling Construction, Inc.), a Michigan corporation (the "PREDECESSOR"),

and COMERICA BANK f/k/a Comerica Bank-Texas (the "BANK") and amends and restates

that certain Second Amended and Restated Revolving Credit Loan Agreement between

the Borrower and the Bank dated as of September 23, 2002 (as amended by that

certain First Amendment to Second Amended and Restated Revolving Credit Loan

Agreement dated as of March 1, 2003, that certain Second Amendment to Second

Amended and Restated Revolving Credit Loan Agreement dated as of April 28, 2003,

and that certain Third Amendment to Second Amended and Restated Third Revolving

Credit Loan Agreement dated as of November 12, 2003) (the "PRIOR AGREEMENT").

WITNESSETH:

WHEREAS, the Bank has extended credit to the Borrower in the form

described in the Prior Agreement and the Bank has made such extensions of credit

to the Borrower upon the terms and conditions therein set forth;

WHEREAS, the Borrower desires to increase its revolving line of credit

with the Bank from $14,000,000.00 to $17,000,000.00;

WHEREAS, the Bank is willing to supply such financing to be used by the

Borrower for working capital, general corporate purposes, and to acquire

equipment subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual promises

herein contained, the Borrower and the Bank agree to amend and restate the Prior

Agreement as follows:

SECTION 1. DEFINITIONS.

1.1. Defined Terms. As used herein, the following terms shall have the

following respective meanings:

"EQUIPMENT," "FIXTURES," "GENERAL INTANGIBLES," "GOODS,"

"INSTRUMENTS" and "INVENTORY" shall have the meanings assigned to

them in the UCC in effect on the date of this Agreement.

"AGREEMENT" shall mean this Third Amended and Restated

Revolving Credit Loan Agreement, as same may be renewed, extended,

modified, supplemented, restated, amended, and/or rearranged.

"APPLICABLE MARGIN" shall mean that certain percentage

determined in accordance with Section 2.4 of this Agreement.

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"APPRAISAL" shall mean, until January 21, 2003, that certain

appraisal dated November 23, 1999, prepared by Valuation Technology,

Inc., and covering the Borrower's Equipment prepared pursuant to

Section 6.1.12, and on or after January 21, 2003 (or such earlier

date if said appraisal is completed prior to January 21, 2003), that

certain appraisal of the Borrower's Equipment prepared pursuant to

Section 6.1.11.

"APPROVED MULTIPLE-ADVANCE LOAN" shall mean that certain

multiple-advance loan from Borrower to Sterling-Delaware which is

comprised of (i) a one-time initial advance, made on or about

December 23, 2004, in the maximum principal amount of $5,000,000.00

("Initial Advance"), and (ii) quarterly loan advances ("Quarterly

Advances") which are paid within thirty (30) days of the end of each

fiscal quarter and in the maximum amount of the Quarterly Advance

Amount; provided, however, that the Borrower shall not be entitled

to carry forward to any subsequent quarter any Excess loan advance

resulting from any previous quarter. For purposes hereof, "Excess"

shall mean the difference between the Quarterly Advance Amount and

the amount of the loan advance actually made by the Borrower to

Sterling-Delaware in any given quarter.

"ASSET PURCHASE AGREEMENT" shall mean that certain Asset

Purchase Agreement dated September 23, 2002, by and among Borrower,

Kinsel Industries, Inc., and Tracks of Texas, Inc.

"BANK" shall mean Comerica Bank f/k/a Comerica Bank-Texas, a

Texas banking association.

"BANKRUPTCY CODE" shall mean Title 11 of the United States

Code, as amended, or any successor act or code.

"BORROWER" shall mean Texas Sterling Construction, L.P., a

Texas limited partnership, formerly known as and successor by entity

conversion to Sterling Construction Company (d/b/a Texas Sterling

Construction, Inc.), a Michigan corporation.

"BORROWING BASE" shall mean the aggregate of (i) NINETY

PERCENT (90%) of the Forced Sale Value, as determined by the

Appraisal, for each item of Existing Major Equipment and which is to

be curtailed or reduced each month, on the last calendar day of each

calendar month, by ONE AND TWO-TENTHS PERCENT (1.2%) of the

Originally Established Value for each item of Existing Major

Equipment; (ii) EIGHTY PERCENT (80%) of the Cost of new or used

Major Equipment acquired after July 18, 2001, which is to be

scheduled on a spreadsheet to be attached to the Borrowing Base

Certificate, and which is to be curtailed or reduced each month, on

the last calendar day of each month, by ONE AND TWO-TENTHS PERCENT

(1.2%) of EIGHTY PERCENT (80%) of the Cost; and (iii) SEVENTY

PERCENT (70%) of the fair market value of new or used Major

Equipment hereinafter acquired from Insituform, which is to be

scheduled on a spreadsheet to be attached to the Borrowing Base

Certificate, and which is to be curtailed or reduced each

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month, on the last calendar day of each month, beginning on the last

day of October, 2002, by ONE AND TWO-TENTHS PERCENT (1.2%) of

SEVENTY PERCENT (70%) of the Cost.

"BORROWING BASE CERTIFICATE" shall mean a certificate in the

form of EXHIBIT A to this Agreement, completed in all appropriate

respects and executed by the President, Vice President or Treasurer

of the Borrower and setting forth the Borrower's computation of the

Borrowing Base as of the date of such certificate.

"BUSINESS DAY" shall mean a day on which the Bank is open to

carry on its normal commercial lending business.

"COLLATERAL" shall mean any property of the Borrower in the

possession of the Bank, the Stock, any amount in any deposit account

of the Borrower with the Bank and all of the Borrower's Equipment,

Fixtures, General Intangibles, Goods, and Instruments, wherever

located and whether now owned or hereafter acquired, together with

all replacements thereof, substitutions therefor and all proceeds

and products thereof.

"COMMITMENT AMOUNT" shall mean $17,000,000.00. The recital of

a Commitment Amount does not mean that the Bank shall be obligated

to advance such amount.

"CONTRACT RATE" shall mean, as of any date of determination,

the annual rate of interest which, pursuant to Section 2.4 of this

Agreement, would be applicable to the Note if the annual rate of

interest were determined without the Maximum Legal Rate limitation.

"COST" shall mean the purchase price and all other costs

related to the purchase of the Equipment which are eligible to be

capitalized under GAAP, including taxes, transportation, warranties,

set-up charges, instructions, license fees or other miscellaneous

amounts.

"CURRENT ASSETS" shall mean, as of any applicable date of

determination, all cash, non-affiliated customer receivables (which

are not subject to any dispute), and United States government

securities and any other assets classified as current assets under

GAAP of a Person.

"CURRENT LIABILITIES" shall mean, as of any applicable date of

determination, all liabilities of a Person that should be classified

as current in accordance with GAAP.

"DEBT" shall mean, as of any applicable date of determination,

all items of indebtedness, obligation or liability of a Person,

whether matured or unmatured, liquidated or unliquidated, direct or

indirect, absolute or contingent, joint or several, that should be

classified as liabilities in accordance with GAAP.

"DEBT RATIO" shall mean the ratio of Debt to Tangible Net

Worth.

"DEFAULT" shall mean a condition or event which, with the

giving of notice or the passage of time, or both, would become an

Event of Default.

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"DISBURSEMENT DATE" shall mean each date upon which the Bank

makes a loan to the Borrower under Section 2.1 of this Agreement.

"ENVIRONMENTAL LAWS" means any and all federal, state, and

local laws, regulations, and requirements pertaining to health,

safety, or the environment, including, without limitation, the

Comprehensive Environmental Response, Compensation and Liability

Act, as amended, 42 U.S.C. Section 9601 et seq., the Resource

Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et

seq., the Occupational Safety and Health Act, as amended, 29 U.S.C.

Section 651 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et

seq., the Clean Water Act as amended, 33 U.S.C. Section 1251 et

seq., the Toxic Substances Control Act, as amended, 15 U.S.C.

Section 2601 et seq., and all similar laws, regulations, and

requirements of any governmental authority or agency having

jurisdiction over the Borrower or any of its properties or assets,

as such laws, regulations, and requirements may be amended or

supplemented from time to time.

"EQUIPMENT" shall mean equipment of the Borrower in which the

Bank has a validly perfected first lien security interest, which is

in then good working order, and is not damaged, and which is located

within the State of Texas.

"ERISA" shall mean the Employee Retirement Income Security Act

of 1974, as amended, or any successor act or code.

"EURODOLLAR RATE" shall have the meaning ascribed to it in the

Note.

"EVENT OF DEFAULT" shall mean any of those conditions or

events listed in Section 8.1 of this Agreement.

"EXISTING MAJOR EQUIPMENT" shall mean those items of the

Borrower's equipment set forth on the Appraisal that were acquired

on or before July 18, 2001.

"FINANCIAL STATEMENTS" shall mean all those balance sheets,

earnings statements and other financial data (whether of

Sterling-Delaware, SHH, the Borrower, any Subsidiary, any guarantor

or otherwise) which have been furnished to the Bank for the purpose

of, or in connection with, this Agreement and the transactions

contemplated hereby.

"FINANCING STATEMENT" shall mean UCC financing statements

describing the Bank as secured party and the Borrower as debtor

covering the Collateral and otherwise in such form, for filing in

such jurisdictions and with such filing offices as the Bank shall

reasonably deem necessary or advisable.

"FORCED SALE VALUE" shall mean the forced sale value

established for each item of Existing Major Equipment.

"GAAP" shall mean, as of any applicable date of determination,

generally accepted accounting principles consistently applied.

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"GUARANTORS" shall mean, individually and collectively, SHH,

Sterling -- Delaware, and Sterling General, Inc.

"GUARANTY" shall mean a guaranty in the form of EXHIBIT B to

this Agreement pursuant to which the Guarantors unconditionally

guarantee to the Bank repayment of all of the Indebtedness.

"HAZARDOUS SUBSTANCE" means any substance, product, waste,

pollutant, material, chemical, contaminant, constituent, or other

material which is or becomes listed, regulated, or addressed under

any Environmental Law, including, without limitation, asbestos,

petroleum, and polychlorinated biphenyls.

"INDEBTEDNESS" shall mean all loans, advances and indebtedness

of the Borrower to the Bank under this Agreement and the Prior

Agreement, together with all other indebtedness, obligations and

liabilities whatsoever of the Borrower to the Bank, whether matured

or unmatured, liquidated or unliquidated, direct or indirect,

absolute or contingent, joint or several, due or to become due, now

existing or hereafter arising, including the Term Loans.

"INSITUFORM" shall mean, individually and collectively,

Insituform, Inc., a Texas corporation, Kinsel Industries, Inc., a

Texas corporation, and Tracks of Texas, a Texas corporation.

"LOAN DOCUMENTS" shall mean the Prior Agreement, the Term

Notes, and all accompanying prior loan documents, this Agreement,

the agreements or instruments described or referred to in Section 4

hereof, and any and all other agreements or instruments heretofore,

now, or hereafter executed and delivered by the Borrower, any

Guarantor, any Pledgor, or any other Person (other than

participation or similar agreements between the Bank and any other

bank or creditor with respect to any Indebtedness pursuant to this

Agreement) in connection with, or as security for the payment or

performance of, the Prior Agreement, the Term Notes, the Note(s), or

this Agreement, as such agreements may be amended, renewed,

extended, modified, restated, rearranged, increased, and/or

supplemented from time to time.

"MAJOR EQUIPMENT" shall mean the items of Existing Major

Equipment and Equipment acquired after July 18, 2001, which the Bank

agrees to allow the Borrower to include in the Borrowing Base.

"MAXIMUM LEGAL RATE" shall have the meaning set forth in

Section 2.6 of this Agreement.

"NASCIT" shall mean the North Atlantic Smaller Companies

Investment Trust plc.

"NET BOOK VALUE" shall mean the book value established by the

Borrower's books and records subject to the Bank's review and

approval.

"NET CURRENT ASSETS" shall mean Current Assets less Current

Liabilities.

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"NET INCOME" shall mean with respect to any Person, such

Person's net income after the payment of all expenses, including all

taxes.

"NO DEFAULT CERTIFICATE" shall mean that certain certificate

delivered to Bank pursuant to and in accordance with Section 6.1.3

of this Agreement and in the form of the certificate attached hereto

as EXHIBIT J.

"NOTE" shall mean the promissory note conforming to Section

2.3 of this Agreement and in the form of EXHIBIT C to this

Agreement, and any and all renewals, extensions, rearrangements,

amendments, supplements, modifications, and/or increases thereof.

"NOTES RECEIVABLE FROM SHAREHOLDERS" shall mean any promissory

notes payable to the Borrower from its shareholders or other parties

having an ownership interest in the Borrower.

"ORIGINALLY ESTABLISHED VALUE" shall mean ninety percent (90%)

of the Forced Sale Value.

"OTHER MISCELLANEOUS EQUIPMENT" shall mean items of Equipment

owned by the Borrower which are not Existing Major Equipment and

which the Bank allows to be included in the Borrowing Base.

"PBGC" shall mean the Pension Benefit Guaranty Corporation or

any person succeeding to the present powers and functions of the

Pension Benefit Guaranty Corporation.

"PERMITTED LIENS" shall mean:

(a) liens and encumbrances in favor of the Bank;

(b) liens for taxes, assessments or other governmental charges

incurred in the ordinary course of business and not yet past due or

being contested in good faith by appropriate proceedings and, if

requested by the Bank, bonded in a manner satisfactory to the Bank;

worker's compensation, unemployment insurance, social security and

similar statutory obligations;

(d) liens of mechanics, materialmen, carriers, warehousemen or

other like statutory or common law liens securing obligations

incurred in good faith in the ordinary course of business that are

not yet due and payable;

(e) encumbrances consisting of zoning restrictions,

rights-of-way, easements or other restrictions on the use of real

property, none of which materially impairs the use of such property

by the Borrower or any Subsidiary in the operation of the business

for which it is used and none of which is violated in any material

respect by any existing or proposed structure or land use; and

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(f) existing liens described in Schedule 5.6 attached hereto,

subject to such intercreditor agreements or subordination agreements

as the Bank shall require.

"PERSON" shall mean any individual, corporation, partnership,

joint venture, association, trust, unincorporated association, joint

stock company, government, municipality, political subdivision or

agency or other entity.

"PLEDGE AGREEMENT" shall mean that certain Supplemental

Security Agreement in the form of EXHIBIT E to this Agreement by

which Sterling -- Delaware pledges to the Bank a security interest

in the Stock.

"PLEDGOR" shall mean any Person who pledges, mortgages, grants

a lien in, assigns, or otherwise signs any document making its

assets serve as security for all or any portion of the Indebtedness.

"PRIME RATE" shall mean that annual rate of interest

designated by the Bank as its base rate and which is changed by the

Bank from time to time. The Prime Rate may not necessarily be the

lowest rate charged by the Bank on credit facilities such as this.

"PUT EXERCISE NOTES" shall mean those certain five-year

Promissory Notes dated December 22, 2004, executed by

Sterling-Delaware, and payable to the Put Shareholders and those

certain five-year Promissory Notes dated November 13, 2004, executed

by Sterling-Delaware, and payable to the Put Shareholders.

"PUT SHAREHOLDERS" shall mean James D. Manning, Patrick T.

Manning, Joseph P. Harper, Sr., Terry D. Williamson, Jeffrey

Manning, Brian R. Manning, Joseph P. Harper, Jr., Anthony F.

Colombo, Kevin J. Manning, Linda Manning, Karen Williamson, Hare &

Co., Maarten D. Hemsley, and Robert M. Davies.

"QUARTERLY ADVANCE AMOUNT" shall mean $200,000.00.

"REVOLVING LOAN" or "LOAN" shall mean an advance made by the

Bank to the Borrower under Section 2.1 of this Agreement on a

Disbursement Date. Collectively, all such advances, and any and all

renewals, extensions, rearrangements, amendments, modifications,

and/or increases thereof, are referred to as "REVOLVING LOANS" or

"LOANS".

"SECURITY AGREEMENT" shall mean the Supplemental Security

Agreement in the form of EXHIBIT F to this Agreement pursuant to

which the Borrower grants to the Bank a security interest in its

Equipment, Fixtures and General Intangibles, wherever located and

whether now owned or hereafter acquired, together with all

replacements thereof, substitutions therefor and all proceeds and

products thereof.

"SHH" shall mean Sterling Houston Holdings, Inc., a Delaware

corporation, formerly Sterling Construction Company, a Delaware

corporation.

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"STERLING -- DELAWARE" shall mean Sterling Construction

Company, Inc., a Delaware corporation, formerly known as Oakhurst

Company, Inc., a Delaware corporation.

"STOCK" shall mean 100% of the common stock of SHH owned by

Sterling -- Delaware.

"SUBORDINATED DEBT" shall mean the subordinated indebtedness

of Sterling-Delaware to the Put Shareholders in the original

aggregate amount of $11,200,000.00.

"SUBSIDIARY" shall mean any corporation or other entity of

which securities or other ownership interests having ordinary voting

power to elect a majority of the board of directors or other

individuals performing similar functions are at the time owned,

directly or indirectly, by the Borrower (or any Guarantor or any

Pledgor) or by one or more subsidiaries or other entities owned or

controlled by the Borrower (or any Guarantor or any Pledgor) and/or

one or more of its subsidiaries.

"TANGIBLE NET WORTH" of any Person shall mean, as of any

applicable date of determination, the difference between (i) the

book value of all assets of such Person (other than Notes

Receivables from Shareholders, patents, patent rights, trademarks,

trade names, franchises, copyrights, licenses, goodwill, and similar

intangible assets) after all appropriate deductions (including,

without limitation, reserves for doubtful receivables, obsolescence,

depreciation and amortization), all as determined in accordance with

GAAP, and (ii) all Debt of such Person.

"TERM LOAN NO. 1" shall have the meaning as defined in Section

2.11.1, and any and all renewals, extensions, rearrangements,

amendments, modifications, and/or increases thereof.

"TERM LOAN NO. 2" shall have the meaning as defined in Section

2.11.2, and any and all renewals, extensions, rearrangements,

amendments, modifications, and/or increases thereof.

"TERM LOANS" shall mean, individually and collectively, Term

Loan No. 1 and Term Loan No. 2.

"TERM NOTES" shall mean those certain promissory notes

evidencing the indebtedness arising under the Term Loans.

"TERMINATION DATE" shall mean May 1, 2007.

"TOTAL LIABILITIES" shall mean all of the liabilities of any

Person and its subsidiaries on a consolidated basis as classified

according to GAAP.

"UCC" shall mean the Uniform Commercial Code as in effect in

the State of Texas and as amended from time to time.

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"UCC-3s" shall mean duly authorized assignments, amendments,

or termination statements (whichever the Bank shall require)

covering liens in the Collateral in favor of lenders other than the

Bank.

"WORKING CAPITAL" shall mean Current Assets less Current

Liabilities.

1.2. Accounting Terms. All accounting terms not specifically defined in

this Agreement shall be construed in accordance with GAAP.

1.3. Singular and plural. Where the context herein requires, the singular

number shall be deemed to include the plural, and vice versa.

SECTION 2. COMMITMENT, INTEREST AND FEES.

2.1. Commitment. Subject to the terms and conditions of this Agreement,

the Bank agrees to make loans to the Borrower on a revolving basis of such

amount as the Borrower shall request pursuant to Section 2.2 of this Agreement

until the Termination Date, up to an aggregate principal amount outstanding at

any time not to exceed the lesser of (a) the Commitment Amount or (b) the

Borrowing Base, provided that each Disbursement Date under this Agreement must

be a Business Day, and the principal amount of each Revolving Loan made under

this Agreement shall be in the aggregate amount of $25,000.00 or an integral

multiple thereof.

2.2. Borrowing Procedures.

2.2.1 Notice. The Borrower shall give the Bank notice of the

Borrower's desire for a Revolving Loan by 2:00 p.m. (Houston, Texas time)

on the day of the requested advance. Such notice shall be by telephone

communication from an officer of the Borrower who has been given access by

the Borrower to a security code given to the Borrower by the Bank. Such

notice shall specify the proposed Disbursement Date and the principal

amount of the proposed advance for such Revolving Loan. A written

confirmation of each request shall be given by the Borrower to the Bank

within two (2) Business days after any oral advance request; written

confirmation shall be by confirmed facsimile transmission or by U.S. mail.

2.2.2 Bank Obligations. The Bank agrees to make the Revolving Loan

on the Disbursement Date as set forth in a notice to the Bank from the

Borrower conforming to the requirements of Section 2.2.1 by crediting the

Borrower's general deposit account with the Bank in the amount of such

Revolving Loan, provided, however, that the Bank shall not be so obligated

if:

(a) Any of the conditions precedent set forth in Section 4 of

this Agreement shall not have been satisfied or waived by the Bank

in accordance with Section 9.3 of this Agreement; or

(b) Such proposed Revolving Loan would cause the aggregate

unpaid principal amount of the Revolving Loans outstanding under

this Agreement to exceed the lesser of (i) the Commitment Amount or

(ii) the Borrowing Base on the Disbursement Date.

2.2.3 Intentionally Deleted.

<PAGE>

2.2.4 Intentionally Deleted.

2.3. Note. The Revolving Loans shall be evidenced by the Note, executed by

the Borrower, dated the date of this Agreement, payable to the Bank on the

Termination Date (unless sooner accelerated pursuant to the terms of this

Agreement), and in the principal amount of the original Commitment Amount. The

date and amount of each Revolving Loan made by the Bank and of each repayment of

principal thereon received by the Bank shall be recorded by the Bank in its

records or, at the option of the Bank, on a schedule attached to the Note. The

aggregate unpaid principal amount so recorded by the Bank shall constitute the

best evidence of the principal amount owing and unpaid on the Note, provided,

however, that the failure by the Bank so to record any such amount or any error

in so recording any such amount (whether on the schedule attached to the Note or

otherwise) shall not limit or otherwise affect the obligations of the Borrower

under this Agreement or the Note to repay the principal amount of all the

Revolving Loans together with all interest accrued or accruing thereon.

2.4. Interest. Subject to the provisions of Section 2.6 below, the Note

shall bear interest on the outstanding principal balance from time to time

outstanding under the Note at a variable rate equal to the Prime Rate or the

Eurodollar Rate (as defined in the Note) plus, depending upon the Borrower's

Debt Ratio, calculated pursuant to Section 6.6 hereof, the following Applicable

Margin:

<TABLE>

APPLICABLE EURODOLLAR APPLICABLE PRIME

RATE MARGIN RATE MARGIN DEBT RATIO

--------------------- ---------------- ----------------------------------

2.00% Zero Less than or equal to 1.65

2.50% .25% Greater than 1.65 and less than or

equal to 1.85

3.00% .50% Greater than 1.85

</TABLE>

The above rate shall be established effective beginning on the first day

of the following calendar quarter based upon receipt of the financial

information necessary to determine the Debt Ratio for the preceding calendar

quarter, and shall remain in effect through the end of the following calendar

quarter until the Bank is in possession of the financial information necessary

to calculate the Debt Ratio for the next calendar quarter. The interest rates

called for above shall remain in effect until the maturity of the Note, whether

such maturity is by acceleration or otherwise, and after maturity, interest

shall accrue at a rate equal to six percent (6%) per annum plus the rate

otherwise prevailing hereunder, but not to exceed the Maximum Legal Rate, as

defined below. Interest shall be payable to the extent then accrued on the first

day of each calendar month, beginning March 1, 2005, until maturity (whether by

acceleration or otherwise) and from and after such maturity, on demand. The rate

of interest applicable to the Note shall change as and when the Bank's Prime

Rate changes.

2.5. Renewals and Extensions. Renewals and extensions, if any, of any Loan

shall he at the Bank's discretion and shall be evidenced by such documents and

instruments as the Bank may require in its sole discretion. The Bank shall not

be obligated to accommodate any renewals and extensions.

<PAGE>

2.6. Maximum Rate. The following provisions shall control this Agreement

and the Note:

(a) No agreements, conditions, provision or stipulations

contained in this Agreement or in any other agreement between the

Borrower and the Bank, or the occurrence of an Event of Default, or

the exercise by the Bank of the right to accelerate the payment of

the maturity of principal and interest, or to exercise any option

whatsoever contained in this Agreement or any other agreement

between the Borrower and the Bank, or the arising of any contingency

whatsoever, shall entitle the Bank to collect, in any event,

interest exceeding the maximum rate of nonusurious interest allowed

from time to time by applicable state or federal laws as now or as

may hereinafter be in effect (the "MAXIMUM LEGAL RATE") and in no

event shall the Borrower be obligated to pay interest exceeding such

Maximum Legal Rate, and all agreements, conditions or stipulations,

if any, which may in any event or contingency whatsoever operate to

bind, obligate or compel the Borrower to pay a rate of interest

exceeding the Maximum Legal Rate shall be without binding force or

effect, at law or in equity, to the extent only of the excess of

interest over such Maximum Legal Rate (the "EXCESS"). In the event

any interest is charged in excess of the Maximum Legal Rate, the

Borrower acknowledges and stipulates that any such charge shall be

the result of an accidental and bona fide error, and such Excess

shall be, first, applied to reduce the principal of any obligations

due, and, second, returned to the Borrower, it being the intention

of the parties hereto not to enter at any time into an usurious or

otherwise illegal relationship. The parties hereto recognize that

with fluctuations in the prime commercial interest rate from time to

time announced by the Bank such an unintentional result could

inadvertently occur. By the execution of this Agreement, the

Borrower covenants that (a) the credit or return of any Excess shall

constitute the acceptance by the Borrower of such Excess, and (b)

the Borrower shall not seek or pursue any other remedy, legal or

equitable, against the Bank based, in whole or in part, upon the

charging or receiving of any interest in excess of the Maximum Legal

Rate. For the purpose of determining whether or not any Excess has

been contracted for, charged or received by the Bank, all interest

at any time contracted for, charged or received by the Bank in

connection with the Borrower's obligations shall be amortized,

prorated, allocated and spread in equal parts during the entire term

of this Agreement. If at any time the rate of interest payable

hereunder shall be computed on the basis of the Maximum Legal Rate,

any subsequent reduction in the Contract Rate shall not reduce such

interest thereafter payable hereunder below the amount computed on

the basis of the Maximum Legal Rate until the aggregate amount of

such interest accrued and payable under this Agreement equals the

total amount of interest which would have accrued if such interest

had been at all times computed solely on the basis of the Contract

Rate.

(b) Unless preempted by federal law, the rate of interest from

time to time in effect hereunder shall not exceed the "indicated

rate ceiling" from time to time in effect as provided in Chapter 303

of the Texas Finance Code.

incorporated into every document or communication relating to the

Indebtedness which sets

<PAGE>

forth or prescribes any account, right or claim or alleged account,

right or claim of the Bank with respect to the Borrower (or any

other obligor in respect of the Indebtedness), whether or not any

provisions of this Section 2.6 is referred to therein. All such

documents and communications and all figures set forth therein

shall, for the sole purpose of computing the extent of the

obligations asserted by the Bank thereunder, be automatically

recomputed by the Borrower or any other obligor, and by any court

considering the same, to give effect to the adjustments or credits

required by this Section 2.6.

(d) If the applicable state or federal law is amended in the

future to allow a greater rate of interest to be charged under this

Agreement than is presently allowed by applicable state or federal

law, then the limitation of interest hereunder shall be increased to

the maximum rate of interest allowed by applicable state or federal

law, as amended, which increase shall be effective hereunder on the

effective date of such amendment, and all interest charges owing to

the Bank by reason thereof shall be payable upon demand.

(e) The provisions of Chapter 346 of the Texas Finance Code

are specifically declared by the parties hereto not to be applicable

to this Agreement or any other agreements executed in connection

herewith or therewith or to the transactions contemplated hereby or

thereby.

2.7. Fees.

2.7.1 Commitment Fee. The Borrower agrees to pay to the Bank a

commitment fee for the period from and including the date of this

Agreement to the Termination Date equal to one-quarter of one percent (1/4

of 1%) per annum on the average daily difference between the Commitment

Amount and the aggregate unpaid principal balance of the Revolving Loans.

Such commitment fee shall be payable on the first Business Day of April,

July, October and January, beginning April 1, 2005, and on the Termination

Date, for the periods ending on such dates.

2.7.2 Preparation Fees. Simultaneously with the execution of this

Agreement, the Borrower shall pay to the Bank the amount of the Bank's

expenses (including reasonable attorney's fees and disbursements) incurred

by the Bank in connection with the preparation of this Agreement and

related instruments.

2.7.3 Modification Fee. Prior to the execution hereof, the Borrower

has delivered to the Bank a $15,000.00 modification fee. Borrower

acknowledges that this fee has been delivered to the Bank in connection

with the Bank's expenditure of time and effort in reviewing financial

information concerning the Borrower and the Guarantors, and such fee may

be retained by the Bank whether the indebtedness described herein is

prepaid, whether as a result of acceleration or otherwise.

2.8. Basis of Computation. The amount of all interest and fees hereunder

shall be computed for the actual number of days elapsed on the basis of a year

consisting of 360 days.

<PAGE>

2.9. Prepayments.

2.9.1 Mandatory Prepayments. The Borrower shall pay to the Bank the

amount, if any, by which the aggregate unpaid principal amount of all

Revolving Loans from time to time exceeds the Borrowing Base, together

with all interest accrued and unpaid on the amount of such excess, but

without other premium or penalty. Such prepayment shall be immediately due

and owing upon the occurrence of any such excess and, at the option of the

Bank, any mandatory prepayment made under this Section 2.9.1 will reduce

the Commitment Amount.

2.10. Basis of Payments. All sums payable by the Borrower to the Bank

under this agreement shall be paid directly to the Bank at its principal office

in immediately available funds, without set-off, deduction or counterclaim.

2.11. Term Loans.

2.11.1 The Bank has made the Borrower a Term Loan ("TERM LOAN NO.

1") as described in that certain note dated May 28, 1998 in the maximum

amount of $500,000.00 and which bears interest at a fixed rate of nine and

three-tenths percent (9.3%) per annum and attached hereto as EXHIBIT H.

The Term Loan is secured by, among other things, a first lien Deed of

Trust upon property described in part as that certain 7.225 acre tract

improved with a 5,913 square foot service center located at 20800 Fernbush

Drive, Houston, Texas. The advances under the Term Loan have been limited

to the lesser of eighty-three percent (83%) of the cost or appraised value

of the headquarters and distribution center described above.

2.11.2 The Bank has also made a term loan ("TERM LOAN NO. 2") to the

Borrower in the maximum amount of $1,100,000.00, as described in the note

attached hereto as EXHIBIT I. Term Loan No. 2 is secured by, among other

things, a second lien Deed of Trust on the property described in Section

2.11.1.

SECTION 3. SECURITY.

To secure full and timely performance of the Borrower's covenants set out

in this Agreement and to secure the repayment of the Note and all other

Indebtedness whatsoever of the Borrower to the Bank, the Borrower agrees to

grant and assign a lien upon and security interest in the Collateral pursuant to

the Security Agreement, the Pledge Agreement, the Financing Statement and other

instruments and agreements satisfactory to the Bank.

Borrower hereby acknowledges that notice of intent to terminate, by any

creditor who has entered into a subordination or intercreditor agreement, which

would result in such intercreditor agreement becoming partially or wholly

ineffective, shall represent, at the Bank's election, an unsatisfactory interest

in the Collateral.

The Bank shall release from all liens (and execute any UCC releases

reasonably requested by Borrower as to) any U.S. 59 Contract Equipment or Port

Contract Equipment returned by Borrower to Sellers as provided in the definition

of "Borrowing Base".

<PAGE>

SECTION 4. CONDITIONS PRECEDENT TO OBLIGATIONS OF BANK.

4.1. Conditions to First Disbursement. The obligations of the Bank under

this Agreement are subject to the occurrence, prior to or on the Disbursement

Date first occurring, of each of the following conditions, any or all of which

may be waived in whole or in part by the Bank in writing:

4.1.1 Documents Executed and Filed. The Borrower shall have executed

(or caused to be executed) and delivered to the Bank and, as appropriate,

there shall have been filed with such filing offices as the Bank shall

deem appropriate, the following:

(a) the Note;

(b) this Agreement;

(d) the Pledge Agreement;

(e) the Financing Statement;

(f) the Guaranties;

(g) the UCC-3s;

(h) the Section 26.02 Notice; and

(i) the UCC-1s.

4.1.2 Certified Resolutions. The Borrower shall have furnished to

the Bank a copy of the unanimous consent of all of the partners of

Borrower's partnership authorizing the execution, delivery, and

performance of this Agreement, the borrowing hereunder, the Note and any

other documents contemplated by this Agreement, as applicable, which shall

have been certified by an authorized representative of the Borrower as of

the Disbursement Date first occurring.

4.1.3 Certified Resolutions. The Borrower shall have furnished to

the Bank a copy of resolutions of the Board of Directors of SHH, and any

Guarantor, or any Pledgor authorizing the execution, delivery and

performance of this Agreement, any guaranty agreement or pledge agreement

and any other documents contemplated by this Agreement, as applicable,

which shall have been certified by the Secretary or Assistant Secretary of

such party as of the Disbursement Date first occurring.

4.1.4 Certificate of Limited Partnership. The Borrower shall have

furnished to the Bank a copy of the Certificate of Limited Partnership,

including all amendments thereto, and all other charter documents of the

Borrower, all of which shall have been certified by the state agency

issuing the same as of a date reasonably near the Disbursement Date first

occurring.

4.1.5 Certified Articles. The Borrower shall have furnished to the

Bank a copy of the articles of incorporation, including all amendments

thereto, and all other charter

<PAGE>

documents of SHH, and any Guarantor, or Pledgor, and all of which shall

have been certified by the state agency issuing the same as of a date

reasonably near the Disbursement

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