Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement

On December 30, 2021 (the "Closing Date"), Sterling Construction Company, Inc. (the "Company") entered into a Stock Purchase Agreement (the "Purchase Agreement") with Michael V. Petillo, in his individual capacity ("Mr. Petillo") and as the sellers' representative, the 2020 Audrey Petillo Family Trust and the Michael V. Petillo Family Trust, each a New Jersey trust, Petillo LLC, a Delaware limited liability company ("Petillo LLC"), Petillo NY LLC, a Delaware limited liability company ("Petillo NY LLC"), Petillo Maryland Incorporated, a Maryland corporation ("Petillo MD" and, together with Petillo LLC and Petillo NY LLC, including such companies' legal successors, the "Acquired Companies" or "Petillo"), Petillo NJ Holdings Incorporated, a New Jersey corporation ("NJ Seller"), Petillo NY Holdings Incorporated, a New York corporation ("NY Seller"), and Petillo MD Holdings Incorporated, a Maryland corporation ("MD Seller" and together with NJ Seller and NY Seller, the "Sellers"), pursuant to which the Company acquired all of the issued and outstanding equity interests of the legal successors to the Acquired Companies following their respective reorganizations pursuant to Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the "Acquisition") for the aggregate consideration of $195,000,000 paid on the Closing Date (the "Base Purchase Price") consisting of (i) $175,000,000 in cash (as adjusted based on cash, indebtedness, funded debt, transaction expenses and net working capital); and (ii) 759,447 shares of the Company's common stock, $0.01 par value per share, valued at $20,000,000 (the "Shares"). The Shares are subject to lock-up agreements entered into in connection with the Purchase Agreement for 12 months after the Acquisition closes. The Acquired Companies are engaged in the business of large-scale site infrastructure improvement services, including full-service excavation, underground utility construction, environmental remediation, drainage systems for commercial construction, and water management and distribution systems.

Additionally under the Purchase Agreement, upon the satisfaction of certain operating income thresholds attributable to the Acquired Companies during the five-year period following the Closing Date (the "earn-out period"), subject to Mr. Petillo's continued employment and certain other conditions (each as specified in the Purchase Agreement), the Company is required to make earn-out payments to Sellers in an amount equal to 30% of the aggregate operating income of the Acquired Companies that is in excess of certain specified thresholds calculated as of December 31 of each of the five years following the Closing Date, which earn-out payments are payable during the fiscal year following such determination dates. The earn-out payments are capped at $20,000,000 in the aggregate over the earn-out period.

The Company also entered into employment agreements with Mr. Petillo and certain of the Acquired Companies' key employees. The employment agreement with Mr. Petillo provides for cash retention payments in the aggregate amount of $15,000,000 payable in equal $3,000,000 installments over a five-year period commencing on the first anniversary of the Closing Date.

The Purchase Agreement contains customary representations, warranties and covenants for transactions of this type, including covenants by the Sellers to indemnify the Company for breaches of certain representations, warranties and covenants in the Purchase Agreement, subject to customary exclusions and caps. In connection with its entry into the Purchase Agreement, the Company also bound a customary buyer-side representations and warranties insurance policy (the "R&W Insurance Policy") as additional recourse for certain losses arising out of a breach of the representations and warranties of the Sellers contained in the Purchase Agreement and certain pre-closing taxes of the Acquired Companies. The R&W Insurance Policy is subject to certain policy limits, exclusions, deductibles and other terms and conditions. Sellers' obligation to indemnify the Company for breaches of the representations and warranties contained in the Purchase Agreement that are covered by the R&W Insurance Policy is generally limited to half of the retention under the representations and warranties insurance policy.

The Purchase Agreement contains representations and warranties of the parties, which have been made for the benefit of the other party and should not be relied upon by any other person. Such representations and warranties (i) have been qualified by schedules and exhibits, (ii) are subject to materiality standards that may differ from what may be viewed as material by investors, (iii) are made as of specified dates, and (iv) may have been used for the purpose of allocating risk among the parties rather than establishing matters of fact. Accordingly, the representations and warranties should not be relied upon as characterizations of the actual state of facts.

The foregoing description of the Purchase Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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Credit Agreement Amendment

Effective December 29, 2021, the Company, as borrower, and certain of its subsidiaries, as guarantors (the "Subsidiary Guarantors"), entered into a Third Amendment to Credit Agreement (the "Amendment") with the financial institutions party thereto as lenders (the "Lenders") and BMO Harris Bank N.A., as administrative agent . . .




Item 2.01       Completion of Acquisition or Disposition of Assets.

The information set forth under Item 1.01 to this Current Report on Form 8-K regarding the Purchase Agreement and the Acquisition is incorporated herein by reference.




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

The information set forth under Item 1.01 to this Current Report on Form 8-K

regarding the Amendment is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

On December 30, 2021, the Company issued the Shares to the Sellers as a portion of the Base Purchase Price for the Acquisition. The information set forth under Item 1.01 regarding the Acquisition and related issuance of the Shares is incorporated herein by reference. The Shares were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, in accordance with Regulation D promulgated thereunder, as the offer and sale of the Shares did not involve a public offering. In addition, the Sellers made representations and warranties to the Company in the Purchase Agreement regarding, among other things, each of their status as an accredited investor and investment intent.




Item 9.01          Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The audited consolidated financial statements of Petillo as of and for the year ended December 31, 2020 are filed as Exhibit 99.1 and incorporated by reference herein.

The unaudited consolidated financial statements of Petillo as of and for the nine months ended September 30, 2021 are filed as Exhibit 99.2 and incorporated by reference herein.

The consent of RMG CPA, LLC, Petillo's independent auditor, is attached as Exhibit 23.1.



(b)   Pro Forma Financial Information
The unaudited pro forma condensed combined financial information as of and for the
nine months ended September 30, 2021 and for the year ended December 31, 2020 with
respect to the Acquisition is filed as Exhibit 99.3 and incorporated by reference
herein.

(d)  Exhibits


 Exhibit Number      Description
       2.1             Stock Purchase Agreement, dated as of December 30, 2021, by and
                     among Michael V. Petillo, in his individual capacity and as the
                     sellers' representative, the 2020 Audrey Petillo Family Trust, the
                     Michael V. Petillo Family Trust, Petillo LLC, Petillo NY LLC,
                     Petillo Maryland Incorporated, Petillo NJ Holdings Incorporated,
                     Petillo NY Holdings Incorporated, Petillo MD Holdings Incorporated
                     and Sterling Construction Company, Inc.
      10.1             Third Amendment to Credit Agreement, dated December 29, 2021, by
                     and among Sterling Construction Company, Inc., the subsidiaries of
                     the Company party thereto as Guarantors, the Lenders party thereto
                     and BMO Harris Bank, N.A., as Administrative Agent
      23.1             Consent of RMG CPA, LLC
      99.1             Audited combined financial statements of Petillo as of and for the
                     year ended December 31, 2020
      99.2             Unaudited combined financial statements of Petillo as of and for
                     the nine months ended September 30, 2021
      99.3             Unaudited pro forma condensed combined balance sheet of Sterling
                     Construction Company, Inc. as of September 30, 2021 and statements
                     of operations of Sterling Construction Company, Inc. for the year
                     ended December 31, 2020 and for the nine months ended September 30,
                     2021, after giving effect to the Acquisition and the adjustments
                     described in such pro forma statements
       104           Cover Page Interactive Data File (embedded within the Inline XBRL
                     document)

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