Exhibit 10.4

 

CONSENT AND THIRD LOAN MODIFICATION AGREEMENT

 

THIS CONSENT AND THIRD LOAN MODIFICATION AGREEMENT (this “Agreement”), is made
and entered into as of October 3, 2017, by and among WESTERN CAPITAL RESOURCES,
INC., a Delaware corporation (the “Borrower”), EACH OF THE UNDERSIGNED
SUBSIDIARIES OF THE BORROWER (together with the Borrower, collectively, the
“Loan Parties”, and each, individually, a “Loan Party”), and FIFTH THIRD BANK,
an Ohio corporation (together with its successors and assigns, the “Lender”).

 

RECITALS:

 

A.           Pursuant to that certain Credit Agreement dated as of April 21,
2016 by and between Borrower and Lender (as amended, modified, restated or
supplemented from time to time, the “Credit Agreement”), Lender agreed to make
available to Borrower one or more extensions of credit in such amounts as may be
set forth in the Credit Agreement. Unless the context otherwise requires, all
terms used herein without definition shall have the respective definitions
provided therefor in the Credit Agreement.

 

B.           The Loan and Borrower’s obligations under the Credit Agreement, the
Note and the other Loan Documents are secured by, among other things, the
Security Documents.

 

C.           The Borrower, BC Alpha Holdings II, LLC, a Delaware limited
liability company (“BC Alpha Holdings”), BC Alpha LLC, a Delaware limited
liability company (the “Seller”), MBE WorldWide S.p.A., an Itialian Societa per
Azioni, and U.S. Business Holdings, Inc., a Delaware corporation (“Purchaser”),
have negotiated a Purchase and Sale Agreement, dated as of the date hereof (the
“Purchase Agreement”), pursuant to which, among other things, the Seller has
agreed to sell to Purchaser, and the Purchaser has agreed to Purchase from the
Seller, all of the Seller’s shares of capital stock of AlphaGraphics, Inc., a
Delaware corporation (“AlphaGraphics”; and together with BC Alpha Holdings and
Seller, the “Released Loan Parties” and each a “Released Loan Party”).

 

D.           Borrower has requested that Lender consent to the purchase and sale
of the capital stock of AlphaGraphics pursuant to the Purchase Agreement (the
“Acquisition”), release its Liens in the Collateral of each Released Loan Party
and release each Released Loan Party from the Security Documents to which it is
a party, and Lender has agreed to such requests upon the terms and subject to
the conditions contained herein.

 

IN CONSIDERATION of the foregoing Recitals and the agreements, representations
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:

 

SECTION 1. Amendments to Loan Documents.

 

(a)          Schedule 5.12 to the Credit Agreement is amended in its entirety to
read as Schedule 5.12 attached to this Agreement.

 

(b)          Schedule 1 to the Pledge Agreement is amended in its entirety to
read as Schedule 1 attached to this Agreement.

 

 

 

 

(c)          The table contained in Section 23 of the Guaranty Agreement is
amended in its entirety to read as follows:

 

Guarantor Guaranteed Amount J&P Park Acquisitions, Inc. $2,600,000 Restorers
Acquisition, Inc. $1,000,000

 

SECTION 2. Consent to Acquisition; Releases.

 

(a)         Lender hereby (i) consents to the Acquisition, (ii) releases its
Liens in the Collateral of each Released Loan Party, (iii) releases its Liens in
the Collateral of Borrower consisting solely of the Equity Interests of BC Alpha
Holdings, and (iv) releases, discharges and acquits each Released Loan Party
from (1) the Security Documents to which it is a party, (2) the Guaranty
Agreement, and (3) any and all liabilities or obligations under (1) or (2) other
than those that are expressly stated therein to survive termination thereof.

 

(b)         Upon the effectiveness of this Agreement, (i) Lender shall deliver
to AlphaGraphics, or its designee, certificates No. C-165 and C-166 evidencing
Equity Interests of AlphaGraphics, which certificates were previously delivered
in physical form to Lender, (ii) the Released Loan Parties or their designees
shall be authorized to file, at their sole expense, UCC3 amendments terminating
all UCC1 financing statements naming Lender as secured party and any Released
Loan Party as debtor, and (iii) Borrower or its designee shall be authorized to
file, at its sole expense, a UCC3 amendment to the UCC1 financing statement
naming Lender as secured party and Borrower as debtor releasing therefrom the
Equity Interests of BC Alpha Holdings.

 

(c)         Released Loan Parties hereby release, discharge and acquit Lender
from any and all claims which any of them has had or may have against Lender in
connection with the Security Documents of any kind, character or description
whatsoever.

 

SECTION 3. Conditions to Actions Set Forth Herein. The effectiveness of this
Agreement and the amendments, releases and other agreements contained herein is
conditioned upon the satisfaction of the following conditions:

 

(a)         Receipt by Lender of this Agreement duly executed by each of the
Loan Parties;

 

(b)         Receipt by the Lender of a true and correct fully-executed copy of
the Purchase Agreement, including all schedules and exhibits thereto;

 

(c)         The closing of the Acquisition upon the terms and subject to the
conditions contained in the Purchase Agreement;

 

 

 

 

 

(d)         Receipt by Lender from or on behalf of Borrower, by not later than
5:00 p.m., Cincinnati, Ohio time, on the date of this Agreement, of the sum of
$4,343,474.41 via federal funds wire transfer into the account described below
in payment of all outstanding principal of and accrued but unpaid interest and
fees on the Acquisition Loans:

 

Bank: Fifth Third Bank ABA No.: 042000314 Account Name: Commercial Loan Wires
Account No.: 72876175 Reference: Western Capital Resources, Inc.   Obligor #
0906381926   Obligation #s 00075 and 00083 Attn: Commercial Loan Payoffs

 

(e)         Receipt by Lender’s counsel, Wielechowski & Fuller, PC, from or on
behalf of Borrower, by not later than 5:00 p.m., Cincinnati, Ohio time, on the
date of this Agreement, of the sum of $3,500 via federal funds wire transfer
into the account described below in payment of Lender’s attorney’s fees and
expenses incurred in connection with the preparation, negotiation and closing of
this Agreement and the transactions related hereto:

 

Bank: Fifth Third Bank ABA No.: 042000314 Account Name: Wielechowski & Fuller,
PC Account No.: 7974171717 Reference: 3009.00045

 

(f)          Receipt by the Lender of such other documents, instruments and
information executed and/or delivered by the Loan Parties as Lender shall
reasonably request.

 

SECTION 4. Consent of Guarantors. Loan Parties (other than Borrower and the
Released Loan Parties), in their capacity as “Guarantors” under their Guaranty
Agreement in favor of Lender dated April 21, 2016 (as any may be amended,
modified, restated or supplemented from time to time, the “Guaranty”), consent
to the terms and provisions of the Agreement and the transactions contemplated
hereby and confirm and agree that: (a) their obligations under the Guaranty
relating to the Guaranteed Obligations (as defined therein) shall be unimpaired
by the Agreement; (b) none of them have any defenses, set offs, counterclaims,
discounts or charges of any kind against Lender with respect to the Guaranty;
and (c) all of the terms and conditions of the Guaranty remain unaltered and in
full force and effect and are hereby ratified and confirmed and apply to the
Guaranteed Obligations, as modified by the Agreement.

 

SECTION 5. Miscellaneous.

 

(a)         Any and all references to any Loan Document in any other Loan
Document shall be deemed to refer to such Loan Document as amended by this
Agreement. This Agreement is deemed incorporated into each of the Loan
Documents. To the extent that any term or provision of this Agreement is or may
be inconsistent with any term or provision in any Loan Document, the terms and
provisions of this Agreement shall control.

 

(b)         Each Loan Party other than the Released Loan Parties hereby
reconfirms and reaffirms all representations and warranties, agreements and
covenants made by it pursuant to the terms and conditions of the Loan Documents
to which it is a party after giving effect to the closing of the transactions
contemplated hereby, except as such representations and warranties, agreements
and covenants may have heretofore been amended, modified or waived in writing in
accordance with such Loan Documents.

 

 

 

 

(c)         Each Loan Party hereby represents and warrants to Lender that (i) it
has the legal power and authority to execute and deliver this Agreement; (ii)
its officers/members/managers have been duly authorized to execute and deliver
this Agreement and all other Loan Documents to which it is a party and bind it
with respect to the provisions hereof and thereof; (iii) no consent, approval,
order or authorization of, or registration or filing with, any third party is
required in connection with the execution, delivery and carrying out of this
Agreement or, if required, has been obtained; and (iv) this Agreement
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms.

 

(d)         Each Loan Party other than the Released Loan Parties acknowledges
and agrees that each and every document, instrument or agreement, if any, which
at any time has secured payment of the Loan including, but not limited to, the
Security Documents executed in connection therewith, hereby continue to secure
prompt payment when due of the Loan.

 

(e)         Each Loan Party represents and warrants that (i) no Event of Default
exists under the Loan Documents to which it is a party, nor will any occur as a
result of the execution and delivery of this Agreement or the performance or
observance of any provision hereof or contemplated hereby and (ii) it presently
has no claims or actions of any kind at law or in equity against Lender arising
out of or in any way relating to the Loan Documents to which it is a party. Each
Loan Party hereby expressly waives, releases and relinquishes any and all such
defenses, setoffs, claims, counterclaims and causes of action, known or unknown,
which may exist at this time.

 

(f)          This Agreement embodies the entire agreement and understanding
among the parties relating to the subject matter hereof and supersedes all prior
proposals, negotiations, agreements, and understandings relating to such subject
matter. Except as amended or modified hereby, the terms and provisions of the
Loan Documents remain unchanged, are and shall remain in full force and effect
unless and until modified or amended in writing in accordance with their terms,
and are hereby ratified and confirmed. Except as expressly provided in Section
2, this Agreement shall not constitute a waiver, release or consent with respect
to any provision of any Loan Document, a waiver or forbearance of any default or
Event of Default under any Loan Document, or a waiver or release of any of
Lender’s rights and remedies (all of which are hereby reserved).

 

(g)         This Agreement may be signed in any number of counterpart copies and
by the parties to this Agreement on separate counterparts, but all such copies
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission or
electronic mail in “.pdf” format shall be effective as delivery of a manually
executed counterpart. Any party so executing this Agreement by facsimile
transmission or electronic mail shall promptly deliver a manually executed
counterpart, provided that any failure to do so shall not affect the validity of
the counterpart executed by facsimile transmission or electronic mail.

 

(h)         This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina, excluding its conflict of laws rules.

 

[signatures on next page]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

                  WESTERN CAPITAL, INC.     J&P REAL ESTATE, LLC   By:  /s/ John
Quandahl (SEAL)         Name: John Quandahl           Title: CEO     By: By: /s/
Steve Irlbeck (SEAL)         Name: Steve Irlbeck           Title: Manager  
RESTORERS ACQUISITION, INC.     PQH WIRELESS, INC.           By:  /s/ John
Quandahl (SEAL)         Name: John Quandahl   By: By:  /s/ Bill Powers (SEAL)  
Title: CEO   Name: Bill Powers           Title: President          

 

                  GREEN COMMUNICATIONS LLC, an Arizona limited liability company
  GREEN COMMUNICATIONS, LLC, a Washington limited liability company            
  By:  /s/ John Quandahl (SEAL)   By:  /s/ John Quandahl (SEAL) Name: John
Quandahl     Name: John Quandahl   Title: Manager     Title: Manager            
    GREEN COMMUNICATIONS, LLC, an Oregon limited liability company   GO GREEN
LLC                 By:  /s/ John Quandahl (SEAL)   By:  /s/ John Quandahl
(SEAL) Name: John Quandahl     Name: John Quandahl   Title: Manager     Title:
Manager                 BC ALPHA HOLDINGS II, LLC     BC ALPHA, LLC            
    By:  /s/ Gay Burke (SEAL)   By:  /s/ John Quandahl (SEAL) Name: Gay Burke  
  Name: John Quandahl   Title: Manager     Title: Manager  

 

[signatures continued on next page]

 

 

 

 

ALPHAGRAPHICS, INC.     J&P PARK ACQUISITIONS, INC.                 By: By:  /s/
Tommy Auger (SEAL)   By: By:  /s/ Paul Ambrose (SEAL) Name: Tommy Auger    
Name: Paul Ambrose   Title: CFO     Title: President                    

PQH SOUTH LLC                     By: By:  /s/ John Quandahl (SEAL)       Name:
John Quandahl         Title: CEO        

                  FIFTH THIRD BANK                     By:  s/ Charles Arndt    
    Name: Charles Arndt         Title: Senior Vice President