Exhibit 10.1

 

SIXTH AGREEMENT OF AMENDMENT TO REVOLVING LOAN AND

SECURITY AGREEMENT AND OTHER DOCUMENTS

 

 

This Sixth Agreement of Amendment to Revolving Loan and Security Agreement and
Other Documents (this "Amendment") shall be dated and effective as of July 1,
2014 and is by and between STERLING NATIONAL BANK, having an office at 500
Seventh Avenue, New York, New York 10018 ("Sterling"), and any other entity
becoming a lender pursuant to the Loan Agreement (as hereinafter defined) are
individually referred to as a "Lender" and collectively referred to as the
"Lenders", and Sterling as the agent for the Lenders as well as acting for the
benefit of the Lenders (the "Agent"), and SPAR GROUP, INC., a Delaware
corporation, NATIONAL ASSEMBLY SERVICES, INC., a Nevada corporation, SPAR GROUP
INTERNATIONAL, INC., a Nevada corporation, SPAR ACQUISITION, INC., a Nevada
corporation, SPAR TRADEMARKS, INC., a Nevada corporation, SPAR MARKETING FORCE,
INC., a Nevada corporation, SPAR CANADA, INC., a Nevada corporation and SPAR
CANADA COMPANY, an unlimited liability company incorporated in the Province of
Nova Scotia, Canada (either separately, jointly, or jointly and severally,
collectively, the "Borrowers"), each having an address at 333 Westchester
Avenue, South Building, Suite 204, White Plains, New York 10604.

 

WHEREAS, the Borrowers have executed and delivered or have become parties to, as
applicable, a certain Secured Revolving Loan Note dated July 6, 2010 in the
original principal amount of Five Million and 00/100 Dollars ($5,000,000.00),
payable to the order of the Agent, as same was subsequently increased to Six
Million Five Hundred Thousand Dollars ($6,500,000.00) (collectively, the
"Existing Note") and as same (and Sterling’s Commitment to make revolving loan
advances) is being further increased to Seven Million Five Hundred Thousand and
00/100 Dollars ($7,500,000.00) pursuant to an Amended and Restated Secured
Revolving Loan Note of even date herewith in the original principal amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) issued by the
Borrower to Sterling in order to continue and evidence the outstanding
indebtedness under and amend, restate and completely replace the Existing Note
(the "Note");

 

WHEREAS, in connection with the execution and delivery of the Existing Note and
to secure payment and performance of the Note (and prior to its execution, the
Existing Note) and other obligations of the Borrowers to the Agent, the Agent
and the Borrowers have executed or become parties to, as applicable, a certain
Revolving Loan and Security Agreement effective July 6, 2010, as same has been
amended from time to time and as same is hereby further amended pursuant to the
terms of this Amendment (collectively, the "Loan Agreement");

 

WHEREAS, in addition to the Note and the Loan Agreement, the Borrowers and the
Agent have executed and/or delivered certain other collateral agreements,
certificates and instruments perfecting or otherwise relating to the security
interests created, which together with the Note and the Loan Agreement are
hereinafter individually referred to as a "Loan Document" and collectively
referred to as the "Loan Documents";

 

 
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WHEREAS, SPAR Wings & Ink Company, an unlimited liability company incorporated
in the Province of Nova Scotia, Canada merged with SPAR Canada Company with SPAR
Canada Company being the surviving company and National Assembly Services, Inc.,
a New Jersey corporation, merged with National Assembly Services, Inc., a Nevada
corporation, with such Nevada corporation being the surviving company;

 

WHEREAS, the Borrowers have requested that the Agent modify the amount of the
Revolving Loan and make certain other modifications to the terms of the
Revolving Loan evidenced by the Note, the Loan Agreement and the other Loan
Documents to which the Agent has agreed provided the Borrowers enter into this
Amendment;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which being hereby acknowledged, the Agent and the Borrowers hereby agree as
follows:

 

1.      Capitalized terms not defined herein shall have the meaning set forth in
the Loan Agreement.

 

2.      Section 1.1(a) of the Loan Agreement is hereby amended to read in its
entirety as follows:

 

"Lender agrees to provide, in its sole and absolute discretion, advances in the
maximum aggregate amount of $7,500,000.00 to the Borrower for the Revolving Loan
and Letters of Credit ("Commitment"), but not in excess of the Borrower's
Borrowing Base, at one time or from time to time at the request of the Borrower
on a Revolving Loan basis (the "Revolving Loan"), which may be repaid and
reborrowed during the term of this Agreement. The full amount of outstanding
principal and interest on account of the Revolving Loan is to be payable on the
earlier of (i) two (2) years from the date of this Agreement, (ii) as provided
in Article 14 of this Agreement or (iii) upon a Default as provided in this
Agreement."

 

3.      The first paragraph of Section 1.1(b) of the Loan Agreement is hereby
amended to read in its entirety as follows:

 

"The term "Borrowing Base" means an amount equal to the lesser of (i) Seven
Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00) or the sum of
(ii) up to eighty-five percent (85%) of the face amount of the Borrower's
"Qualified Accounts" plus (iii) the lesser of (A) up to sixty-five percent (65%)
of the face amount of the Borrower's otherwise Qualified Accounts which are
unbilled for not more than up to sixty (60) days following completion of service
or product, or (B) Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00), but which, in no event, shall exceed fifty percent (50%) of the
Borrowing Base (in each case all less reserves determined by Agent for
advertising allowances, warranty claims and other contingencies) as that term is
defined in this Agreement, plus (iv) up to Five Hundred Thousand and 00/100
Dollars ($500,000.00) of the full unpaid and outstanding balance of any standby
letters of credit which Lenders in their sole and absolute discretion may issue
on account of the Borrower, which letters of credit are to be fully and
separately cash collateralized."

 

 
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4.      The Capital Expenditures covenant set forth in Section 7.16 in the Loan
Agreement is hereby amended to read in its entirety as follows:

 

"The Borrower is not to enter into any agreement to purchase or pay for, or
become obligated to pay for, capital expenditures in an amount aggregating in
excess of $1,600,000.00 during any fiscal year."

 

5.      Section 6.7(g) of the Loan Agreement is hereby deleted and replaced with
"[Intentionally Deleted]".

 

6.     All references in the Loan Agreement and the other Loan Documents, if
any, to (a) (i) SPAR Wings & Ink Company shall hereafter be to and mean SPAR
Canada Company, and (ii) National Assembly Services, Inc., the New Jersey
corporation, shall hereafter be to and mean National Assembly Services, Inc.,
the Nevada corporation, in each case whether by name or defined term, as a
"Borrower" or otherwise; and (b) the "Note" or "Notes", whether by name, as a
"Loan Document" or otherwise, shall hereafter be to and mean the Amended and
Restated Secured Revolving Loan Note dated July 1, 2014, in the original maximum
principal amount of Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000.00), made payable by the Borrower to the order of Sterling, as
amended, and issued in order to continue and evidence the outstanding
indebtedness under and amend, restated and completely replace the Existing Note
and any other note(s) that may be issued by Borrower to evidence the Revolving
Loan.

 

7.      In the event of any ambiguity or inconsistency between the Loan
Documents and this Amendment, the language and interpretation of this Amendment
shall be deemed binding and paramount.

 

8.      The Borrowers hereby represent and warrant to the Agent that:

 

(a)     Each and every of the representations and warranties set forth in the
Loan Agreement and the other Loan Documents are true in all material respects as
of the date hereof and with the same effect as though made on the date hereof
(except as and to the extent limited to reference dates), and are hereby
incorporated herein in full by reference as if fully restated herein in its
entirety;

 

 
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(b)     No Default or event of Default and no event or condition which, with the
giving of notice or lapse of time or both, would constitute such a default or
event of Default, now exists or would exist under any Loan Document after giving
effect hereto;

 

(c)     There are no defenses or offsets to its outstanding obligations under
the Loan Agreement or any of the other Loan Documents executed in connection
therewith, and if any such defenses or offsets exist without the knowledge of
the Borrowers, the same are hereby waived;

 

(d)     The Borrowers are not subject to any legal or contractual restrictions
on their ability to enter into this Amendment;

 

(e)      The individual(s) executing this Amendment on behalf of the Borrowers
has the requisite power and authority to execute and deliver this Amendment and
that all action necessary to authorize the execution, delivery and performance
of this Amendment has been duly taken, and this Amendment is being duly executed
and delivered by the officer or other representative authorized to execute and
deliver this Amendment; and

 

(f)     As of the date hereof, the Borrowers are each duly formed, validly
existing, and in good standing under the laws of the jurisdiction of its
formation and each is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which such qualification
is required.

 

9.      It is expressly understood and agreed that all collateral security for
the extensions of credit set forth in the Loan Agreement is and shall continue
to be collateral security for all extensions of credit provided under the Loan
Agreement as herein amended. Without limiting the generality of the foregoing,
the Borrowers hereby absolutely and unconditionally confirm that each document
and instrument executed by the Borrowers pursuant to the Loan Agreement
continues in full force and effect, is hereby ratified and confirmed and is and
shall continue to be applicable to the Loan Agreement (as herein amended).

 

10.    The amendment set forth herein is limited precisely as written and shall
not be deemed to (a) be a consent to or a waiver of any other term or condition
of the Loan Agreement, the Loan Documents or any of the documents referred to
therein, or (b) prejudice any right or rights which the Agent may now have or
may have in the future under or in connection with the Loan Agreement, the Loan
Documents or any documents referred to therein, as amended. Whenever the Loan
Agreement is referred to in the Loan Agreement, the Loan Documents or any of the
instruments, agreements or other documents or papers executed and delivered in
connection therewith, it shall be deemed to mean the Loan Agreement and other
Loan Documents as amended hereby.

 

11.    The Borrowers agree to sign, deliver and file any additional documents
and take any other actions that may reasonably be required by the Agent
including, but not limited to, affidavits, resolutions, or certificates for the
full and complete consummation of the matters covered by this Amendment.

 

 
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12.    This Amendment is binding upon, inures to the benefit of, and is
enforceable by, the heirs, personal representatives, successors and assigns of
the parties hereto. This Amendment is not assignable by the Borrowers without
the prior written consent of the Agent, provided, however, that this Amendment
shall be deemed to be assigned with any assignment of the Loan Agreement consent
to by the Agent.

 

13.    To the extent that any provision of this Amendment is determined by any
court or legislature to be invalid or unenforceable in whole or in part either
in a particular case or in all cases, such provision or part thereof is to be
deemed surplusage. If that occurs, it shall not have the effect of rendering any
other provision of this Amendment invalid or unenforceable and this Amendment is
to be construed and enforced as if such invalid or unenforceable provision or
part thereof were omitted.

 

14.    This Amendment may only be changed or amended by a written agreement
signed by all of the parties. By execution of this Amendment, the Agent is not
to be deemed to consent to any future renewal, extension or amendment of the
Revolving Loan or the Loan Documents.

 

15.    This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original. Said counterparts shall constitute but one and the
same instrument and shall be binding upon each of the undersigned individually
as fully and completely as if all had signed but one instrument.

 

16.    This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York without giving effect to New
York’s conflict of laws principles that would defer to the substantive laws of
any other jurisdiction.

 

17.    The parties to this Amendment acknowledge that each has had the
opportunity to consult independent counsel of their own choice, and that each
has relied upon such counsel’s advice concerning this Amendment, the
enforceability and interpretation of the terms contained in this Amendment and
the consummation of the transaction and matters covered by this Amendment.

 

18.    The Borrowers agree that they shall be obligated for the payment of the
Agent’s reasonable legal fees incurred in connection with the preparation of
this Amendment.

 

 
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The undersigned have caused this Amendment to be executed as of the day and year
first above written.

 

 

STERLING NATIONAL BANK

 

 

 

 

 

 

By:

   

 

 

Name:

Ronald J. Bongiovanni

 

 

Title:

First Vice President

 

 

SPAR GROUP, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

NATIONAL ASSEMBLY SERVICES, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

 

SPAR GROUP INTERNATIONAL, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

      

 

SPAR ACQUISITION, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

SPAR TRADEMARKS, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

  

-Signatures Continued on Following Page-

 

 
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SPAR MARKETING FORCE, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

 

SPAR CANADA, INC.

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

 

SPAR CANADA COMPANY

 

 

 

 

 

 

By:

   

 

 

Name:

James R. Segreto

 

 

Title:

Chief Financial Officer, Treasurer and Secretary

 

 

 

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