Exhibit 10.28

 

 

December 24, 2018

 

Marquis Affiliated Holdings LLC

Marquis Industries, Inc.

2743 Highway 76

Chatsworth, Georgia 30705

Attention: Weston A. Godfrey, Jr.

Facsimile No.: (706) 695-2384

 

  RE: Seventh Amendment to Loan and Security Agreement (this "Agreement")

 

Ladies and Gentlemen:

 

Reference is made to that certain Loan and Security Agreement dated as of July
6, 2015 (as at any time amended, modified, restated or supplemented, the "Loan
Agreement"), among MARQUIS AFFILIATED HOLDINGS LLC, a Delaware limited liability
company ("Holdings"), MARQUIS INDUSTRIES, INC., a Georgia corporation, and
successor by merger with A-O Industries, LLC, a Georgia limited liability
company, Astro Carpet Mills, LLC, a Georgia limited liability company,
Constellation Industries, LLC, a Georgia limited liability company, and S F
Commercial Properties, LLC, a Georgia limited liability company ("Marquis",
together with Holdings, collectively, "Borrowers" and each individually, a
"Borrower"), and BANK OF AMERICA, N.A., a national banking association
("Lender"). Capitalized terms used in this Agreement but not defined herein
shall have the meanings given to such terms in the Loan Agreement.

 

Borrowers and Lender desire to amend the Loan Agreement, on the terms and
subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

1.       Amendments to Loan Agreement.    The Loan Agreement is hereby amended
as follows:

 

(a)       By deleting the definitions of “Base Rate”, “Borrowing”, “EBITDA”,
“Fixed Charges”, “LIBOR”, “LIBOR Loan” and "Permitted Non-Tax Distributions" set
forth in Section 1.1 of the Loan Agreement in their entireties and by
substituting in lieu thereof the following:

 

Base Rate: for any day, a per annum rate equal to the greatest of (a) the Prime
Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c)
LIBOR for a one month interest period as of such day, plus 1.00%; provided, that
in no event shall the Base Rate be less than zero.

 

Borrowing: a group of Loans that are made together on the same day and with the
same interest option.

 

EBITDA: determined on a consolidated basis for Borrowers and Subsidiaries, net
income (which, for the avoidance of doubt, shall be determined by treating rent
as an operating expense), calculated before interest expense, transaction costs
associated with the Transactions not to exceed $1,000,000, provision for income
taxes, depreciation and amortization expense, gains or losses arising from the
sale of capital assets, gains arising from the write-up of assets, and any
extraordinary gains, losses on impairment of long-lived assets and goodwill,
unrealized gains and losses resulting in changes from fair values of derivatives
and financial instruments (including changes in fair value of contingent
consideration related to business combinations), directly related charges
related to the consummation of business combinations, non-cash severance and
restructuring charges, gains arising from the write-up of assets, extraordinary
gains and losses (including losses and gains from extinguishment of debt) and
non-recurring expenses and income which do not represent cash items in such
period (in each case, to the extent included in determining net income);
provided that, notwithstanding the foregoing, gains from the Turf Business Sale
in an amount not exceeding $3,000,000 may be included in the calculation of
EBITDA for any period that includes the date on which the Turf Business Sale is
consummated so long as the Turf Business Sale is consummated on or before
December 31, 2018. For purposes of this Agreement, EBITDA and its components for
the 12 months prior to the Closing Date is as shown on Exhibit A.

 

 

 

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Fixed Charges: the sum of interest expense (other than payment-in-kind) and
principal payments made on Borrowed Money, income taxes paid in cash and
Distributions made (excluding (a) Upstream Payments, (b) Distributions made on
or about the Closing Date that relate to transactions contemplated by the
Marquis SPA Documents, as in effect on the Closing Date, and (c) the Sixth
Amendment Distribution).

 

LIBOR: on any date of determination, the per annum rate of interest (rounded up
to the nearest 1/8th of 1%) determined by Lender at or about 11:00 a.m. (London
time) as of the first calendar day of the month in which such determination is
made, for a one month term, equal to the London interbank offered rate, or any
comparable or successor rate approved by Lender, as published on the applicable
Reuters screen page (or other available source designated by Lender from time to
time); provided, that any comparable or successor rate shall be applied by
Lender, if administratively feasible, in a manner consistent with market
practice; and provided further, that in no event shall LIBOR be less than zero.

 

LIBOR Loan: a Loan that bears interest based on LIBOR.

 

Permitted Non-Tax Distributions: Distributions by Holdings to holders of its
Equity Interests so long as the following conditions are satisfied with respect
to each such Distribution: (a) no Default or Event of Default has occurred or
would result from such Distribution, (b) Lender has received the financial
statements required under Section 10.1.2(a)(ii), (c) Lender has received
evidence that after giving effect to the consummation of such Distribution,
Borrowers shall maintain a Fixed Charge Coverage Ratio of at least 1.1 to 1.0 on
a pro forma basis, measured as of the most recently ended month for which
Obligors have delivered the financial statements required under Section
10.1.2(a) or (b), as the case may be, for the twelve month period then ended,
(d) Availability on each day during the 60 day period immediately preceding such
Distribution calculated on a pro forma basis assuming such Distribution occurred
on the first day of such period (including any Loans made hereunder to finance
such Distribution) shall be greater than or equal to $4,000,000, and (e)
Availability, on the date of such Distribution, immediately after giving pro
forma effect to the consummation of such Distribution (including any Loans made
hereunder to finance such Distribution) shall be greater than or equal to
$4,000,000.

 

(b)       By adding the following new definition of “Turf Business Sale” to
Section 1.1 of the Loan Agreement in the proper alphabetical order:

 

Turf Business Sale: the sale by Borrowers of assets constituting Borrowers’ turf
line of business pursuant to a certain Bill of Sale and Assignment and
Assumption Agreement dated December 20, 2018, between Marquis and Viridian
Fibers, LLC.

 

(c)       By deleting the definitions of “Interest Period” and “Notice of
Conversion/Continuation” in Section 1.1 of the Loan Agreement in their
entireties.

 

(d)       By deleting the references to “Base Rate Revolver Loans” in Section
2.3.2 of the Loan Agreement and by substituting in lieu thereof, in each case, a
reference to “Revolver Loans”.

 

(e)       By deleting the first sentence of Section 3.1.1(a) of the Loan
Agreement and by substituting in lieu thereof the following:

 

The Obligations shall bear interest at LIBOR, plus the Applicable Margin for
LIBOR Loans (or, if LIBOR is not available for any reason, at the Base Rate in
effect from time to time, plus the Applicable Margin for Base Rate Loans).

 

(f)       By deleting clause (i) of Section 3.1.1(c) of the Loan Agreement and
by substituting in lieu thereof the following:

 

(i) on the first day of each month;

 

(g)       By deleting Section 3.1.2, 3.1.3 and 3.1.4 of the Loan Agreement in
their entireties and by substituting in lieu thereof the following:

 

3.1.2.       [Reserved]

 

 

 

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3.1.3.       [Reserved]

 

3.1.4.       Interest Rate Not Ascertainable. If, due to any circumstance
affecting the London interbank market, Lender determines that adequate and fair
means do not exist for ascertaining LIBOR on any applicable date on the basis
provided herein, then Lender shall immediately notify Borrowers of such
determination. Until Lender notifies Borrowers that such circumstance no longer
exists, the obligation of Lender to make LIBOR Loans shall be suspended, no
further Loans may be made as LIBOR Loans, and all Loans shall constitute Base
Rate Loans.

 

(h)       By deleting the reference to “, 3.9” in Section 3.3 of the Loan
Agreement.

 

(i)       By deleting Sections 3.5 and 3.6 of the Loan Agreement in its entirety
and by substituting in lieu thereof the following:

 

3.5       Illegality. If Lender determines that any Applicable Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for Lender to perform any of its obligations hereunder, to make, maintain, fund
or charge applicable interest or fees with respect to any Loan or Letter of
Credit, or to determine or charge interest based on LIBOR, or any Governmental
Authority has imposed material restrictions on the authority of Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank
market, then, on notice thereof by Lender to Borrower Agent, any obligation of
Lender to perform such obligations, to make, maintain or fund such Loan or issue
such Letter of Credit (or to charge interest or fees otherwise applicable
thereto), or to continue as a LIBOR Loan, shall be suspended until Lender
notifies Borrower Agent that the circumstances giving rise to such determination
no longer exist. Upon delivery of such notice, all Loans shall bear interest as
specified in Section 3.1.

 

3.6       Inability to Determine Rates. Lender will promptly notify Borrower
Agent if, in connection with any Loan or request with respect to a Loan, Lender
determines for any reason that (a) Dollar deposits are not being offered to
banks in the London interbank Eurodollar market for the applicable Loan amount;
(b) adequate and reasonable means do not exist for determining LIBOR for the
Loan (including with respect to calculation of the Base Rate); or (c) LIBOR does
not adequately and fairly reflect the cost to Lender of funding or maintaining
the Loan. Thereafter, Lender's obligation to make or maintain LIBOR Loans and
utilization of the LIBOR component in determining Base Rate shall be suspended
until Lender withdraws the notice. Upon receipt of the notice, Borrower Agent
may revoke any pending request for funding, conversion or continuation of a
LIBOR Loan or, failing that, will be deemed to have requested a Base Rate Loan,
and Lender may immediately convert any LIBOR Loan to a Base Rate Loan.
Notwithstanding the foregoing, Lender may propose an alternative interest rate
for the applicable Loan, which Borrower Agent may elect to apply to the Loan.

 

(j)       By deleting the phrase “converting to or continuing” from the last
clause of Section 3.7.1 of the Loan Agreement.

 

(k)       By deleting Section 3.9 of the Loan Agreement in its entirety and by
substituting in lieu thereof the following:

 

3.9       [Reserved]

 

(l)       By deleting Section 4.1.1(a) of the Loan Agreement in its entirety and
by substituting in lieu thereof the following:

 

(a)       To request a Loan, Borrower Agent shall give Lender a Notice of
Borrowing by 11:00 a.m. on the requested funding date. Notices received by
Lender after such time shall be deemed received on the next Business Day. Each
Notice of Borrowing shall be irrevocable and shall specify (A) the Borrowing
amount and (B) the requested funding date (which must be a Business Day).

 

(m)       By deleting the references to “Base Rate Revolver Loan” in Section
4.1.1(b) and (c) of the Loan Agreement and by substituting in lieu thereof, in
each case, a reference to “Revolver Loan”.

 

 

 

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(n)       By deleting the phrase “or Notice of Continuation/Conversion, if
applicable,” from Section 4.1.2 of the Loan Agreement.

 

(o)       By deleting Section 4.2 of the Loan Agreement in its entirety.

 

4.2.       [Reserved]

 

(p)       By deleting the third sentence of Section 5.1 of the Loan Agreement in
its entirety, and by deleting the phrase “, but whenever possible, any
prepayment of Loans shall be applied first to Base Rate Loans and then to LIBOR
Loans” from the last sentence of such section.

 

(q)       By deleting Section 10.2.17 of the Loan Agreement in its entirety and
by substituting in lieu thereof the following:

 

10.2.17. Affiliate Transactions. Enter into or be party to any transaction with
an Affiliate, except (a) transactions contemplated by the Loan Documents or the
Marquis SPA Documents; (b) payment of reasonable compensation to officers and
employees for services actually rendered, and loans and advances permitted by
Section 10.2.7; (c) payment of customary directors' fees and indemnities; (d)
transactions solely among Borrowers; (e) transactions with Affiliates
consummated prior to the Closing Date, as shown on Schedule 10.2.17; (f) payment
by Holdings to Live or an Affiliate of Live of management fees in an amount not
exceeding $150,000 in any Fiscal Quarter; and (g) transactions with Affiliates
in the Ordinary Course of Business, upon fair and reasonable terms fully
disclosed to Lender and no less favorable than would be obtained in a comparable
arm's-length transaction with a non-Affiliate. Notwithstanding anything to the
contrary contained herein, in no event shall any Borrower or any Subsidiary make
any loans or other advances of money to Marquis SPE at any time.

 

(r)       By adding the following new Section 10.2.20 to the Loan Agreement
immediately after Section 10.2.19 thereof:

 

10.2.20. Management Fees. Pay any management or similar fees to any Person other
than payments described in Section 10.2.17(f) and made in accordance therewith,
or amend or otherwise modify any agreement with any Person governing the payment
by any Borrower of management or similar fees.

 

(s)       By deleting the reference to “3.1.2,” in Section 12.3.1 of the Loan
Agreement.

 

(t)       By deleting the reference to “Base Rate Revolver Loans” in Section
12.4 of the Loan Agreement and by substituting in lieu thereof a reference to
“Revolver Loans”.

 

2.       Conditions Precedent. The effectiveness of the amendments contained in
Section 1 hereof is subject to the satisfaction of each of the following
conditions precedent, in form and substance satisfactory to Lender, unless
satisfaction thereof is specifically waived in writing by Lender:

 

(a)       Lender shall have received a counterpart of this Agreement, duly
executed by Borrowers;

 

(b)       Lender shall have received a secretary’s certificate for each
Borrower, in substantially the forms attached hereto;

 

(c)       No Default or Event of Default shall exist either before or after
giving effect to the terms of this Agreement; and

 

(d)        Lender shall have received such other agreements, instruments and
documents as Lender may reasonably request.

 

4.       Miscellaneous.

 

(a)       Each Borrower hereby ratifies and reaffirms the Obligations, the Loan
Agreement, each of the other Loan Documents and all of such Borrower's
covenants, duties, indebtedness and liabilities under the Loan Agreement and the
other Loan Documents.

 

 

 

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(b)       Each Borrower acknowledges and stipulates that the Loan Agreement and
the other Loan Documents executed by such Borrower are legal, valid and binding
obligations of such Borrower that are enforceable against such Borrower in
accordance with the terms thereof; all of the Obligations are owing and payable
without defense, offset or counterclaim (and to the extent there exists any such
defense, offset or counterclaim on the date hereof, the same is hereby waived by
such Borrower); the security interests and liens granted by such Borrower in
favor of Lender are duly perfected, first priority security interests and liens;
and as of the close of business on December 18, 2018, (i) the unpaid principal
amount of the Revolver Loans totaled $5,748,354.55, and (ii) outstanding Letters
of Credit totaled $72,715.00.

 

(c)       Each Borrower represents and warrants to Lender, to induce Lender to
enter into this Agreement, that no Default or Event of Default exists
immediately prior to and immediately after giving effect to this Agreement,
including, without limitation, pursuant to Section 11.1(f) due to any breach
under (i) a certain guaranty from Marquis in favor of STORE CAPITAL
ACQUISITIONS, LLC, a Delaware limited liability company ("STORE"), with respect
to the obligations owing by MARQUIS REAL ESTATE HOLDINGS, LLC, a Delaware
limited liability company ("SPE"), to STORE under certain lease and loan
documentation to which SPE and STORE are parties from time to time, or (ii)
certain lease documentation between Marquis and Banc of America Leasing &
Capital, LLC, as in existence from time to time; the execution, delivery and
performance of this Agreement have been duly authorized by all requisite
corporate or limited liability company action on the part of such Borrower and
this Agreement has been duly executed and delivered by such Borrower; and all of
the representations and warranties made by such Borrower in the Loan Agreement
are true and correct in all material respects on and as of the effective date of
this Agreement (except for representations and warranties that expressly relate
to an earlier date). This Agreement shall be part of the Loan Agreement and a
breach of any representation, warranty or covenant herein shall constitute an
Event of Default.

 

(d)       Except as otherwise expressly provided in this Agreement, nothing
herein shall be deemed to amend or modify any provision of the Loan Agreement or
any of the other Loan Documents, each of which shall remain in full force and
effect. This Agreement is not intended to be, nor shall it be construed to
create, a novation or accord and satisfaction, and the Loan Agreement as herein
modified shall continue in full force and effect.

 

(e)       This Agreement shall be effective when accepted by Lender (notice of
which acceptance is hereby waived), whereupon this Agreement shall be a contract
governed by and construed in accordance with the internal laws of the State of
Georgia and shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. This Agreement may be executed in
any number of counterparts and by different parties to this Agreement on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same agreement.
Any signature delivered by a party by facsimile or other electronic transmission
shall be deemed to be an original signature hereto.

 

(f)       To induce Lender to enter into this Amendment, each Borrower hereby
releases, acquits and forever discharges Lender, and all officers, directors,
agents, employees, successors and assigns of Lender, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature
(if there be any), whether absolute or contingent, disputed or undisputed, at
law or in equity, or known or unknown, that such Borrower now has or ever had
against Lender arising under or in connection with any of the Loan Documents or
otherwise. Each Borrower represents and warrants to Lender that such Borrower
has not transferred or assigned to any Person any claim that such Borrower ever
had or claimed to have against Lender.

 

(g)       To the fullest extent permitted by Applicable Law, the parties hereto
each hereby waives the right to trial by jury in any action, suit, counterclaim
or proceeding arising out of or related to this Agreement.

 

[Remainder of page intentionally left blank;

signatures appear on following pages.]

 

 

 

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The parties hereto have caused this Agreement to be duly executed and delivered
by their respective duly authorized officers on the date first written above.

 

   

LENDER:

 

BANK OF AMERICA, N.A.

 

By: /s/ Steven Siravo

Name: Steven Siravo

Title: Senior Vice President

 

 

 

[Signatures continue on following page.]

 

 

 

 

 

 

 

 

 

 

 

 

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ATTEST:

 

/s/ Tony Isaac

Tony Isaac, Secretary

 

[COMPANY SEAL]

 

BORROWERS:

 

MARQUIS AFFILIATED HOLDINGS LLC

 

By: /s/ Jon Isaac

Jon Isaac, President and Chief Executive Officer

 

 

ATTEST:

 

/s/ Tim Young

Tim Young, Secretary

 

[CORPORATE SEAL]

 

MARQUIS INDUSTRIES, INC.

 

By: /s/ Weston A. Godfrey, Jr.

Weston A. Godfrey, Jr., Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

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