Exhibit 10.1

 

SECOND AMENDMENT
TO FINANCING AGREEMENT

SECOND AMENDMENT, dated as of May 26, 2017 (this "Amendment"), to the Financing
Agreement, dated as of August 14, 2015, as amended, restated, supplemented or
otherwise modified from time to time (as so amended, the "Financing Agreement"),
by and among ALJ Regional Holdings, Inc., a Delaware corporation (the "Parent"),
Faneuil, Inc., a Delaware corporation ("Faneuil"), Floors-N-More, LLC, a Nevada
limited liability company ("FNM"), Phoenix Color Corp., a Delaware corporation
("PCC", and together with the Parent, Faneuil, FNM and each other Person that
executes a joinder agreement and becomes a "Borrower" thereunder, each a
"Borrower" and collectively, the "Borrowers"), each subsidiary of the Parent
listed as a "Guarantor" on the signature pages thereto (together with each other
Person that executes a joinder agreement and becomes a "Guarantor" thereunder or
otherwise guaranties all or any part of the Obligations (as hereinafter
defined), each a "Guarantor" and collectively, the "Guarantors"), the lenders
from time to time party thereto (each a "Lender" and collectively,
the "Lenders"), Cerberus Business Finance, LLC, a Delaware limited liability
company ("CBF"), as collateral agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, the "Collateral Agent"), and
PNC Bank, National Association ("PNC"), as administrative agent for the Lenders
(in such capacity, together with its successors and assigns in such capacity,
the "Administrative Agent" and together with the Collateral Agent, each an
"Agent" and collectively, the "Agents").

WHEREAS, the Borrowers, the Guarantors, the Agents and the Lenders wish to amend
certain terms and provisions of the Financing Agreement as hereafter set forth.

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:

1.   Definitions.  All terms used herein that are defined in the Financing
Agreement and not otherwise defined herein shall have the meanings assigned to
them in the Financing Agreement.

2.   Amendments.

(a)   New Definitions.  Section 1.01 of the Financing Agreement is hereby
amended by adding the following definitions, in appropriate alphabetical order:

""Second Amendment" means the Second Amendment to Financing Agreement, dated as
of May 26, 2017, among the Borrowers, the Guarantors, the Agents and the Lenders
party thereto."

 

 

 

 

 

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""Second Amendment Disbursement Letter" means a disbursement letter, in form and
substance reasonably satisfactory to the Collateral Agent, by and among the Loan
Parties, the Agents, the Lenders and the other Persons party thereto, and the
related funds flow memorandum describing the sources and uses of all cash
payments in connection with the transactions contemplated to occur on the Second
Amendment Effective Date."

""Second Amendment Effective Date" has the meaning specified therefor in Section
5 of the Second Amendment."

""Specified Disbursements " has the meaning specified thereof in Section
6.01(s)."

""Vertex Acquisition" means the acquisition of all of the "Transferred Assets"
pursuant to, and as defined in, the Vertex APA."

""Vertex Acquisition Collateral Assignment" means the Collateral Assignment of
Acquisition Documents, dated as of the Second Amendment Effective Date, and in
form and substance satisfactory to the Collateral Agent, made by Faneuil in
favor of the Collateral Agent."

""Vertex APA" means the Asset Purchase Agreement, dated as of May 15, 2017,
between Faneuil, as buyer, and Vertex Business Services, LLC, as seller."

(b)   Existing Definitions.

(i)The definition of "Adjusted Consolidated EBITDA" in Section 1.01 of the
Financing Agreement is hereby amended and restated in its entirety to read as
follows:

""Adjusted Consolidated EBITDA" means, with respect to any period, the
Consolidated EBITDA of the Parent and its Subsidiaries, after giving effect to
(i) adjustments set forth in a due diligence quality of earnings report prepared
by Crowe Horwath received by the Agents prior to the Effective Date and (ii) any
other adjustments agreed to by the Parent and the Agents (such acceptance to be
evidenced in writing). For purposes of this Agreement, monthly Adjusted
Consolidated EBITDA for the following fiscal months shall deemed to be as
follows to give full pro forma effect to the Color Optics Acquisition and Vertex
Acquisition (as if the Color Optics Acquisition and the Vertex Acquisition had
occurred prior to such fiscal months):  (A) fiscal month ended April 30, 2016,
$2,829,616, (B) fiscal month ended May 31, 2016, $2,376,263, (C) fiscal month
ended June 30, 2016, $3,398,876, (D) fiscal month ended July 31, 2016 $3,057,976
(E) fiscal month ended August 31, 2016, $3,467,746, (F) fiscal month ended
September 30, 2016, $2,711,323, (G) fiscal month ended October 31, 2016,
$2,734,015, (H) fiscal month ended November 30, 2016, $2,311,186, (I) fiscal
month ended December 31, 2016, $3,043,918, (J) fiscal month ended January 31,
2017, $2,383,649, (K) fiscal month ended February 29, 2017, $3,060,162 and (L)
fiscal month ended March 31, 2017, $3,387,638; provided, further, that monthly
Adjusted Consolidated EBITDA for the fiscal month ended April 30, 2017 and the
stub period from May 1, 2017 through May 26, 2017 shall also be deemed to give
full pro forma effect to the Vertex Acquisition (as if the Vertex Acquisition
had occurred prior to such fiscal month or stub period, as applicable)."

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(ii)The definition of "Excess Cash Flow" in Section 1.01 of the Financing
Agreement is hereby amended by adding the following proviso immediately prior to
the end of the definition:

"; provided, further, that solely for purposes of calculating the Excess Cash
Flow for Fiscal Year 2017, the Specified Disbursements shall be excluded from
the deductions set forth in this clause (b) without duplication."

(iii)The definition of "Loan Document" in Section 1.01 of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:

""Loan Document" means this Agreement, the PCC Acquisition Collateral
Assignment, the Color Optics Acquisition Collateral Assignment, any Control
Agreement, the Disbursement Letter, the First Amendment Disbursement Letter, the
Fee Letter, any Guaranty, the Intercompany Subordination Agreement, any Joinder
Agreement, any Letter of Credit Application, any Mortgage, the Second Amendment
Disbursement Letter, any Security Agreement, any UCC Filing Authorization
Letter, the Vertex Acquisition Collateral Assignment, any landlord waiver, any
collateral access agreement, any Perfection Certificate and any other agreement,
instrument, certificate, report and other document executed and delivered
pursuant hereto or thereto or otherwise evidencing or securing any Loan, any
Letter of Credit Obligation or any other Obligation."

(iv)The definition of "Permitted Purchase Money Indebtedness" in Section 1.01 of
the Financing Agreement is hereby amended by amending and restating clause (c)
therein in its entirety to read as follows:

"(c)  the aggregate principal amount of all such Indebtedness shall not exceed
(i) $15,000,000 at any time outstanding, (ii) $6,000,000 incurred in the 2016
calendar year, (iii) $7,500,000 incurred in the 2017 calendar year and (iv)
$4,000,000 incurred in any calendar year thereafter."

(c)   Section 2.13 (Incremental Term Loans).  Section 2.13(b) of the Financing
Agreement is hereby amended to replace "$15,000,000 (after giving effect to the
funding of the Term A Loan)" with "$6,900,000 (after giving effect to the
funding of the Revolving Loans on the Second Amendment Effective Date)".

(d)   Section 6.01(s) (Use of Proceeds).  Section 6.01(s) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:

"(s)Use of Proceeds.  The proceeds of the Loans shall be used (y) on the
Effective Date to (i) refinance the Existing Credit Facilities (other than the
Specified Existing Credit Facilities), (ii) pay up to $90,000,000 of the
Purchase Price (as adjusted by working capital adjustments in accordance with
the terms of the PCC Acquisition Agreement) payable pursuant to the PCC
Acquisition Documents, (iii) pay fees and expenses in connection with the
transactions contemplated hereby and (iv) fund working capital of the Borrowers,
(z) on or after the First Amendment Effective Date to (i) fund up to $7,000,000
of the purchase price for the Color Optics Acquisition, (ii) pay up to
$1,700,000 in the aggregate for employee severance expenses incurred and Capital
Expenditures made in connection with the Color Optics

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Acquisition, (iii) repay up $1,000,000 in principal amount of Revolving Loans
outstanding as of the First Amendment Effective Date to the extent such
Revolving Loans were used by the Borrowers to make Parent Buybacks in accordance
with the Financing Agreement and (iv) fund general corporate and working capital
purposes of the Borrowers and to pay fees and expenses related to the First
Amendment (the amounts referred to in clauses (i) through (iv) of this clause
(z), the "Term A Loan Disbursements") and (aa) on or after the Second Amendment
Effective Date to (i) fund up to $8,100,000 of the purchase price for the Vertex
Acquisition, (ii) pay up to $3,000,000 in the aggregate for Capital Expenditures
to be made in connection with the Vertex Acquisition and (iii) fund general
corporate and working capital purposes of the Borrowers and to pay fees and
expenses related to the Second Amendment (the amounts referred to in clauses
(ii) and (iii) of this clause (aa), the "Specified Disbursements").  After the
Effective Date, the First Amendment Effective Date and the Second Amendment
Effective Date, the proceeds of the Revolving Loans, the Incremental Term Loans
(if any) and the Letters of Credit will be used for general corporate and
working capital purposes of the Borrowers.

(e)   Section 7.01(a) (Reporting Requirements).  Section 7.01(a) of the
Financing Agreement is hereby amended as follows:

(i)Section 7.01(a)(vi) is hereby amended and restated in its entirety to read as
follows:

"(vi)as soon as available and in any event within 22 days after the end of each
month commencing with the first month ending after the Effective Date, a
Borrowing Base Certificate, current as of the close of business on the last
calendar day of the immediately preceding calendar month, supported by schedules
showing the derivation thereof and containing such detail and other information
as any Agent may request from time to time, provided that (A) the Borrowing Base
set forth in the Borrowing Base Certificate shall be effective from and
including the date such Borrowing Base Certificate is duly received by the
Agents but not including the date on which a subsequent Borrowing Base
Certificate is received by the Agents, unless any Agent disputes the eligibility
of any property included in the calculation of the Borrowing Base or the
valuation thereof by notice of such dispute to the Administrative Borrower and
(B) in the event of any dispute about the eligibility of any property included
in the calculation of the Borrowing Base or the valuation thereof, such Agent's
good faith judgment shall control;".

 

(ii)Section 7.01(a)(xiii) is hereby amended and restated in its entirety to read
as follows:

"(xiii)as soon as possible and in any event within 5 days after execution,
receipt or delivery thereof, copies of any material notices that any Loan Party
executes or receives in connection with the sale or other Disposition of the
Equity Interests of, or all or substantially all of the assets of, any Loan
Party;".

(f)   Section 7.02(g) (Capital Expenditures).  Section 7.02(g) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:

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"(g)Capital Expenditures.  Make or commit or agree to make, or permit any of its
Subsidiaries to make or commit or agree to make, any Capital Expenditure (by
purchase or Capitalized Lease) that would cause the aggregate amount of all
Capital Expenditures made by the Loan Parties and their Subsidiaries to exceed
(i) $8,000,000 in the 2016 calendar year (provided, that any Capital
Expenditures in such calendar year in excess of $4,500,000 (such amount, the
"2016 Excess Amount") shall be financed through the incurrence of Indebtedness
or through one or more Equity Issuances), (ii) $7,500,000 in the 2017 calendar
year (provided, that any Capital Expenditures in such calendar year in excess of
$4,500,000 (such amount, the "2017 Excess Amount") shall be financed through the
incurrence of Indebtedness or through one or more Equity Issuances) and (iii)
$4,500,000 in any calendar year thereafter; provided, however, that if the
amount of the Capital Expenditures permitted to be made in any calendar year is
greater than the actual amount of the Capital Expenditures actually made in such
calendar year (the amount by which such permitted Capital Expenditures for such
calendar year exceeds the actual amount of Capital Expenditures for such
calendar year, the "Excess Amount"), then up to 100% of such Excess Amount (such
amount, the "Carry-Over Amount") may be carried forward to the next succeeding
calendar year (the "Succeeding Calendar Period"); provided that the Carry-Over
Amount applicable to a particular Succeeding Calendar Period may not be carried
forward to another calendar year; provided, further, that no portion of the 2016
Excess Amount or 2017 Excess Amount may be carried forward to any succeeding
calendar year.  Capital Expenditures made by the Loan Parties and their
Subsidiaries in any calendar year shall be deemed to reduce first, the amount
set forth above for such calendar year, and then, the Carry-Over Amount."

(g)   Borrowing Base.  Notwithstanding anything to the contrary contained in the
Financing Agreement, Accounts Receivable acquired by Borrowers in connection
with the Vertex Acquisition may, to the extent such Accounts Receivable
otherwise meet all of the eligibility criteria set forth in the definition of
Eligible Accounts Receivable, constitute Eligible Accounts Receivable prior to
the Administrative Agent completing a Field Survey and Audit with respect to
such assets.

(h)   Schedules to Financing Agreement.  Certain Schedules to the Financing
Agreement and Security Agreement are hereby amended and restated and replaced in
their entirety with the Schedules attached as Annex I and Annex II,
respectively, hereto.

3.   Reaffirmation of Security Agreement.  Each of the Loan Parties reaffirms
the grant of security interests in the Collateral (as defined in the Security
Agreement) and the grant of the Liens pursuant to the terms of the Security
Agreement to the Collateral Agent for the benefit of the Secured Parties, which
grant of security interest and Liens shall continue in full force and effect
during the term of Financing Agreement, as amended by this Amendment, and any
renewals or extensions thereof and shall continue to secure the
Obligations.  The Schedules to the Security Agreement are hereby amended and
restated and replaced in their entirety with the Schedules attached as Annex III
hereto.

4.   Representations and Warranties.  Each Loan Party hereby represents and
warrants to the Agents and the Lenders as follows:

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(a)   Organization, Good Standing, Etc.  Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the state or jurisdiction of its
organization or formation, (ii) has all requisite power and authority to conduct
its business as now conducted and as presently contemplated and, in the case of
the Borrowers, to make the borrowings hereunder, and to execute and deliver this
Amendment, and to consummate the transactions contemplated hereby and by the
Financing Agreement, as amended hereby, and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except (solely for the purposes of this
subclause (iii)) where the failure to be so qualified and in good standing would
not reasonably be expected to have a Material Adverse Effect.

(b)   Authorization, Etc.  The execution and delivery by each Loan Party of this
Amendment, and the performance by each Loan Party of this Amendment and the
Financing Agreement, as amended hereby (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene (A) any of such Loan
Party's Governing Documents, (B) any applicable material Requirement of Law or
(C) any material Contractual Obligation binding on or otherwise affecting such
Loan Party or any of its properties, (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any Loan Document) upon
or with respect to any of its properties, and (iv) do not and will not result in
any default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable such
Loan Party operations or any of its properties, except, in the case of clause
(iv), to the extent where such contravention, default, noncompliance,
suspension, revocation, impairment, forfeiture or nonrenewal could not
reasonably be expected to have a Material Adverse Effect.

(c)   Governmental Approvals.  No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority is required in
connection with the due execution and delivery of this Amendment by any Loan
Party, and the performance by any Loan Party of this Amendment and the Financing
Agreement, as amended hereby.

(d)   Enforceability of Amendment.  This Amendment is, and each other Loan
Document to which any Loan Party is or will be a party, when delivered
hereunder, will be, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.

5.   Conditions to Effectiveness.  This Amendment shall become effective only
upon satisfaction in full (or waiver by the Agents), in a manner satisfactory to
the Agents, of the following conditions precedent (the first date upon which all
such conditions shall have been satisfied being herein called the "Second
Amendment Effective Date"):

(a)   The Agents shall have received this Amendment, duly executed by the Loan
Parties, each Agent and each Lender.

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(b)   The representations and warranties contained in this Amendment, in the
Financing Agreement and in each other Loan Document, certificate or other
writing delivered to any Agent or any Lender pursuant hereto or thereto on or
prior to the date hereof are true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
or warranties that already are qualified or modified as to materiality or
"Material Adverse Effect" in the text thereof, which representations and
warranties shall be true and correct in all respects subject to such
qualification) on and as of the Second Amendment Effective Date as though made
on and as of the Second Amendment Effective Date, except to the extent that any
such representation or warranty expressly relates solely to an earlier date (in
which case such representation or warranty shall be true and correct in all
material respect on and as of such earlier date (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to materiality or "Material Adverse Effect"
in the text thereof, which representations and warranties shall be true and
correct in all respects subject to such qualification)).

(c)   No Default or Event of Default shall have occurred and be continuing on
the Second Amendment Effective Date or would result from this Amendment becoming
effective in accordance with its terms.

(d)   After giving effect to the Revolving Loans to be made on the Second
Amendment Effective Date and the payment of all fees (including the fees payable
pursuant to Section 2.06 and Section 12.04 of the Financing Agreement), costs
and expenses in connection with this Amendment, Availability shall not be less
than $8,500,000 and (ii) all liabilities of the Loan Parties shall be
current.  The Administrative Borrower shall deliver to the Collateral Agent a
certificate of the chief financial officer of the Administrative Borrower
certifying as to the matters set forth in clauses (i) and (ii) above and
containing a reasonably detailed calculation of Availability.

(e)   All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental
Authority or other Person required in connection with the making of the
Revolving Loans on the Second Amendment Effective Date shall have been obtained
and shall be in full force and effect.

(f)   There shall exist no claim, action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental authority which relates to the Loans or which could reasonably be
expected to have a Material Adverse Effect.

(g)   The Agents and the Lenders shall have received all documentation and other
information reasonably requested prior to the Second Amendment Effective Date
that is required by bank regulatory authorities under applicable
"know-your-customer" and anti-money laundering rules and regulations, including
the Patriot Act, and all such documentation and other information shall be in
form and substance reasonably satisfactory to the Agents and the Lenders.

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(h)   The Collateral Agent shall have determined, in its reasonable discretion,
that no event or development shall have occurred since September 30, 2016 which
could reasonably be expected to have a Material Adverse Effect.

(i)   The making of the Revolving Loans on the Second Amendment Effective Date
shall not contravene any law, rule or regulation applicable to any Secured Party
(it being understood that as of the date hereof, the Agents and the Lenders do
not have knowledge of any applicable law, rule or regulation that would cause
the Loans to be made or issued by the Agents and the Lenders to be in
contravention of any law, rule or regulation applicable to any Agent or any
Lender).

(j)   The Borrowers shall have paid on or before the Second Amendment Effective
Date all fees, costs, expenses and taxes then payable pursuant to Section 2.06
of the Financing Agreement and Section 12.04 of the Financing Agreement.

(k)   The Agents shall have received the financial statements, Compliance
Certificate and other information required under Section 7.01(a)(ii) and (iv) of
the Financing Agreement for the fiscal quarter ending March 31, 2017.

(l)   The Agents shall have received evidence, in form and substance reasonably
satisfactory to them, that not less than $4,800,000 has been contributed by the
Parent in the form of cash equity contributions (which shall be in the form of
common stock or preferred stock constituting Qualified Equity Interests) (the
"Vertex Equity Contribution").  The proceeds of the Vertex Equity Contribution
and the Revolving Loans made on the Second Amendment Effective Date (such
Revolving Loans not to exceed $8,100,000) shall be sufficient to consummate the
Vertex Acquisition and pay all related fees and expenses.

(m)   The Administrative Agent shall have received an amendment fee equal to
$20,000 which Borrowers acknowledge was fully earned and payable upon execution
of this Amendment.

(n)   The Collateral Agent shall have received on or before the Second Amendment
Effective Date the following, each in form and substance reasonably satisfactory
to the Collateral Agent and, unless indicated otherwise, dated the Second
Amendment Effective Date:

(i)the Second Amendment Disbursement Letter, duly executed by the Agents, the
Lenders and the Loan Parties;

(ii)the results of searches for any effective UCC financing statements, tax
Liens or judgment Liens filed against any Loan Party or its property, which
results shall not show any such Liens (other than Permitted Liens);

(iii)a certificate of an Authorized Officer of each Loan Party, certifying (A)
as to copies of the Governing Documents of such Loan Party, together with all
amendments thereto (including, without limitation, a true and complete copy of
the charter, certificate of formation, certificate of limited partnership or
other publicly filed organizational document of each Loan Party certified as of
a recent date not more than 30 days prior to the

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Second Amendment Effective Date by an appropriate official of the jurisdiction
of organization of such Loan Party which shall set forth the same complete name
of such Loan Party as is set forth herein and the organizational number of such
Loan Party, if an organizational number is issued in such jurisdiction), (B) as
to a copy of the resolutions of such Loan Party authorizing (1) the borrowings
hereunder and the transactions contemplated by this Amendment and the other Loan
Documents to which such Loan Party is or will be a party, and (2) the execution,
delivery and performance by such Loan Party of this Amendment and each other
Loan Document to which such Loan Party is or will be a party and the execution
and delivery of the other documents to be delivered by such Person in connection
herewith and therewith, (C) the names and true signatures of the representatives
of such Loan Party authorized to sign each Loan Document (in the case of a
Borrower, including, without limitation, Notices of Borrowing, LIBOR Notices and
all other notices under this Amendment and the other Loan Documents) to which
such Loan Party is or will be a party and the other documents to be executed and
delivered by such Loan Party in connection herewith and therewith, together with
evidence of the incumbency of such authorized officers and (D) as to the matters
set forth in Sections 5(b) and 5(c) of this Amendment;

(iv)a certificate of the chief financial officer of the Parent certifying
compliance with the covenants set forth in Section 7.03 of the Financing
Agreement, as amended hereby;

(v)a certificate of the appropriate official(s) of the jurisdiction of
organization and, except to the extent such failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect, each jurisdiction of
foreign qualification of each Loan Party certifying as of a recent date not more
than 30 days prior to the Second Amendment Effective Date as to the subsistence
in good standing of, and the payment of taxes by, such Loan Party in such
jurisdictions;

(vi)a certificate of the chief financial officer of the Parent, certifying as to
the solvency of the Loan Parties, taken as a whole (after giving effect to the
Loans made on the Second Amendment Effective Date), which certificate shall be
substantially in the form of the certificate delivered on the Effective Date
pursuant to Section 5.01(d)(xi);

(vii)fully executed copies of the Vertex APA and the Vertex Acquisition
Collateral Assignment, each in form and substance satisfactory to the Collateral
Agent;

(viii)(A) a termination of security interest in Intellectual Property for each
assignment for security recorded by any Person at the United States Patent and
Trademark Office or the United States Copyright Office and covering any
intellectual property of Vertex Business Services, LLC that constitutes
Transferred Assets (as defined in the Vertex APA), and (B) UCC-3 termination
statements for all UCC-1 financing statements filed by any Person and covering
any portion of the Collateral that includes Transferred Assets; and

(ix)a Notice of Borrowing pursuant to Section 2.02 of the Financing Agreement.

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6.   Continued Effectiveness of the Financing Agreement and Other Loan
Documents.  Each Loan Party hereby (i) acknowledges and consents to this
Amendment, (ii) confirms and agrees that the Financing Agreement and each other
Loan Document to which it is a party is, and shall continue to be, in full force
and effect and is hereby ratified and confirmed in all respects except that on
and after the Second Amendment Effective Date all references in any such Loan
Document to "the Financing Agreement", the "Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Financing Agreement shall
mean the Financing Agreement as amended by this Amendment, and (iii) confirms
and agrees that to the extent that any such Loan Document purports to assign or
pledge to the Collateral Agent for the benefit of the Secured Parties, or to
grant to the Collateral Agent for the benefit of the Secured Parties a security
interest in or Lien on, any Collateral as security for the Obligations of the
Loan Parties from time to time existing in respect of the Financing Agreement
(as amended hereby) and the other Loan Documents, such pledge, assignment and/or
grant of the security interest or Lien is hereby ratified and confirmed in all
respects.  This Agreement does not and shall not affect any of the obligations
of the Loan Parties, other than as expressly provided herein, including, without
limitation, the Loan Parties' obligations to repay the Loans in accordance with
the terms of Financing Agreement, or the obligations of the Loan Parties under
any Loan Document to which they are a party, all of which obligations shall
remain in full force and effect.  Except as expressly provided herein, the
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Agents, any Issuing Lender or any
Lender under the Financing Agreement or any other Loan Document, nor constitute
a waiver of any provision of the Financing Agreement or any other Loan Document.

7.   Loans.  The Borrowers confirm and acknowledge that as of the close of
business on May 23, 2017, the Borrowers were indebted to (a) the Revolving Loan
Lenders for Revolving Loan Obligations in the aggregate principal amount of
$793,717.63 and Letter of Credit Obligations in the aggregate principal amount
of $2,700,000.00 and (b) the Term Loan Lenders for Term Loan Obligations in the
aggregate principal amount of $95,330,401.00 in each case without any deduction,
defense, setoff, claim or counterclaim, of any nature, plus all fees, costs and
expenses incurred to date in connection with the Financing Agreement and other
Loan Documents.

8.   Release.  Each Loan Party hereby acknowledges and agrees that:  (a) neither
it nor any of its Affiliates has any claim or cause of action against any Agent
or any Lender (or any of their respective Affiliates, officers, directors,
employees, attorneys, consultants or agents) and (b) each Agent and each Lender
has heretofore properly performed and satisfied in a timely manner all of its
obligations to such Loan Party and its Affiliates under the Financing Agreement
and the other Loan Documents.  Notwithstanding the foregoing and the Lenders
wish (and each Loan Party agrees) to eliminate any possibility that any past
conditions, acts, omissions, events or circumstances would impair or otherwise
adversely affect any of the Agents' and the Lenders' rights, interests, security
and/or remedies under the Financing Agreement and the other Loan
Documents.  Accordingly, for and in consideration of the agreements contained in
this Amendment and other good and valuable consideration, each Loan Party (for
itself and its Affiliates and the successors, assigns, heirs and representatives
of each of the foregoing) (collectively, the "Releasors") does hereby fully,
finally, unconditionally and irrevocably release and forever discharge each
Agent, each Lender and each of their respective Affiliates, officers, directors,
employees, attorneys, consultants and agents (collectively,

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the "Released Parties") from any and all debts, claims, obligations, damages,
costs, attorneys' fees, suits, demands, liabilities, actions, proceedings and
causes of action, in each case, whether known or unknown, contingent or fixed,
direct or indirect, and of whatever nature or description, and whether in law or
in equity, under contract, tort, statute or otherwise, which any Releasor has
heretofore had or now or hereafter can, shall or may have against any Released
Party by reason of any act, omission or thing whatsoever done or omitted to be
done on or prior to the Second Amendment Effective Date arising out of,
connected with or related in any way to this Amendment, the Financing Agreement
or any other Loan Document, or any act, event or transaction related or
attendant thereto, or the agreements of any Agent or any Lender contained
therein, or the possession, use, operation or control of any of the assets of
each Loan Party, or the making of any Loans or other advances, or the management
of such Loans or advances or the Collateral on or prior to the Second Amendment
Effective Date.

9.   Miscellaneous.

(a)   This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.  Delivery of an executed counterpart of this Amendment by
facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart of this Amendment.  

(b)   Section and paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Amendment for any other
purpose.

(c)   This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
IN THE STATE OF NEW YORK.

(d)   Each Loan Party hereby acknowledges and agrees that this Amendment
constitutes a "Loan Document" under the Financing Agreement.  Accordingly, it
shall be an Event of Default under the Financing Agreement if (i) any
representation or warranty made by a Loan Party under or in connection with this
Amendment shall have been untrue, false or misleading in any material respect
when made, or (ii) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in this Amendment.

(e)   Any provision of this Amendment that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

(f)   The Borrowers will pay on demand all reasonable and documented
out-of-pocket fees, costs and expenses of the Agents and the Lenders in
connection with the preparation, execution and delivery of this Amendment or
otherwise payable under the Financing Agreement, including, without limitation,
reasonable fees, disbursements and other charges of counsel to the Agents and
the Lenders.

[remainder of page intentionally left blank]

11

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

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

 

 

BORROWERS:

 

 

 

 

 

 

 

ALJ REGIONAL HOLDINGS, INC.

 

 

 

 

 

 

 

By:

 

/s/ Jess Ravich

 

 

 

 

Name: Jess Ravich

 

 

 

 

Title: Executive Chairman

 

 

 

 

 

 

 

FANEUIL, INC.

 

 

 

 

 

 

 

By:

 

/s/ Anna Van Buren

 

 

 

 

Name: Anna Van Buren

 

 

 

 

Title: President & CEO

 

 

 

 

 

 

 

FLOORS-N-MORE, LLC

 

 

 

 

 

 

 

By:

 

/s/ Steve Chesin

 

 

 

 

Name: Steve Chesin

 

 

 

 

Title: CEO/President

 

 

 

 

 

 

 

PHOENIX COLOR CORP.

 

 

 

 

 

 

 

By:

 

/s/ Marc Reisch

 

 

 

 

Name: Marc Reisch

 

 

 

 

Title: Chairman, Phoenix

 

 

 

GUARANTORS:

 

 

 

 

 

 

 

FANEUIL TOLL OPERATIONS LLC

 

 

 

 

 

 

 

By:

 

/s/ Anna Van Buren

 

 

 

 

Name: Anna Van Buren

 

 

 

 

Title: President & CEO

 

 

 

 

 

 

 

PCC EXPRESS, INC.

 

 

 

 

 

 

 

By:

 

/s/ Marc Reisch

 

 

 

 

Name: Marc Reisch

 

 

 

 

Title: Chairman, Phoenix

 

Second Amendment to Financing Agreement

 

 

 

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

 

 

 

 

 

 

 

 

PHOENIX (MD.) REALTY, LLC

 

 

 

 

 

 

 

By:

 

/s/ Marc Reisch

 

 

 

 

Name: Marc Reisch

 

 

 

 

Title: Chairman, Phoenix

 

 

 

 

 

 

 

 

COLLATERAL AGENT:

 

 

 

 

 

 

 

CERBERUS BUSINESS FINANCE, LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Chief Operating Officer,

          Chief Credit Officer

 

 

 

ADMINISTRATIVE AGENT AND LENDER:

 

 

 

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION

 

 

 

 

 

 

 

By:

 

/s/ Jacqueline Mackenzie

 

 

 

 

Name: Jacqueline Mackenzie

 

 

 

 

Title: Vice President

 

 

 

LENDERS:

 

 

 

 

 

 

 

CERBERUS ASRS FUNDING LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

Second Amendment to Financing Agreement

 

 

 

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

 

 

 

CERBERUS AUS LEVERED HOLDINGS LP

 

 

 

 

 

 

 

By:

 

CAL I GP Holdings LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

 

 

 

 

 

 

CERBERUS AUS LEVERED II LP

 

 

 

 

 

 

 

By:

 

CAL II GP LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

 

 

 

 

CERBERUS ICQ LEVERED  LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

CERBERUS ICQ OFFSHORE LEVERED LP

 

 

 

 

 

By:

 

Cerberus ICQ Offshore GP LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

 

 

 

 

 

 

CERBERUS KRS LEVERED LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

Second Amendment to Financing Agreement

 

 

 

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

 

 

 

 

 

 

 

 

CERBERUS LOAN FUNDING XV L.P.

 

 

 

 

 

 

 

By:

 

Cerberus ICQ GP, LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

 

 

CERBERUS LOAN FUNDING XVI LP

 

 

 

 

 

 

 

By:

 

Cerberus PSERS GP, LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

 

 

CERBERUS LOAN FUNDING XVII LTD.

 

 

 

 

 

 

 

By:

 

Cerberus ASRS Holdings LLC

 

 

Its:

 

Attorney-in-fact

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

 

 

 

 

CERBERUS LOAN FUNDING XVIII L.P.

 

 

 

 

 

 

 

By:

 

Cerberus LFGP XVIII, LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

Second Amendment to Financing Agreement

 

 

 

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

 

 

 

 

 

 

 

 

CERBERUS N-1 FUNDING LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

CERBERUS OFFSHORE LEVERED III LP

 

 

 

 

 

 

 

By:

 

COL III GP, Inc.

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

CERBERUS OFFSHORE LEVERED LOAN OPPORTUNITIES MASTER FUND II, L.P.

 

 

 

 

 

 

 

By:

 

Cerberus Levered Opportunities Master Fund II GP, LLC

 

 

Its:

 

General Partner

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Senior Managing Director

 

 

 

 

CERBERUS SWC LEVERED II LLC

 

 

 

 

 

 

 

By:

 

/s/ Joseph Naccarato

 

 

 

 

Name: Joseph Naccarato

 

 

 

 

Title: Vice President

 

 

 

 

Second Amendment to Financing Agreement

 

 

 

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

Annex I

 

[see attached Financing Agreement schedules]

 

 

 

 

 

 

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

Annex II

 

[see attached Security Agreement schedules]