Document

Exhibit 10.4



TWENTIETH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS TWENTIETH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Twentieth Amendment”) is entered into as of this 27th day of Septmeber 2022 (the “Effective Date”), by and among eCapital Asset Based Lending Corp., formerly known as Gerber Finance Inc. (“Lender”), KBS Builders, Inc., a Delaware corporation, (the “Borrower”), ATRM Holdings, Inc., a Minnesota corporation, and Star Equity Holdings, Inc., a Delaware corporation (individually or collectively, as the context may require, “Guarantor”), each Borrower and Guarantor having an address at 53 Forest Ave, Old Greenwich, CT 06870.
RECITALS
A.Borrower has executed and delivered to Lender a certain Promissory Note, dated February 23, 2016, in the original maximum principal sum of Four Million Dollars ($4,000,000.00) (the “Note”) payable to the order of Lender.
B.Lender and Borrower entered into a Loan and Security Agreement dated as of February 23, 2016, as amended by (i) the First Amendment to Loan and Security Agreement dated November 30, 2016, (ii) the Second Amendment to Loan and Security Agreement dated November 30, 2016, (iii) the Third Amendment to Loan and Security Agreement dated June 30, 2017, (iv) the Fourth Amendment to Loan and Security Agreement dated July 19, 2017, (v) the Fifth Amendment to Loan and Security Agreement dated September 29, 2017, (vi) the Sixth Amendment to Loan and Security Agreement dated December 22, 2017, (vii) a series of emails between representatives of the parties sent January 12 - 14, 2018 characterized as a Seventh Agreement of Amendment to Loan and Security Agreement), (viii) the Eight Amendment to Loan and Security Agreement dated October 1, 2018, (ix) the Ninth Amendment to Loan and Security Agreement dated February 22, 2019, (x) the Tenth Amendment to Loan and Security Agreement dated April 1, 2019, (xi) the Eleventh Amendment to Loan and Security Agreement dated April 15, 2019, (xii) Consent and Acknowledgement Agreement and Twelfth Amendment to Loan Agreement dated September 10, 2019, (xiii) the Thirteenth Amendment to Loan and Security Agreement dated January 31, 2020, (xiv) the Fourteenth Amendment to Loan and Security Agreement dated March 5, 2020, (xv) the Fifteenth Amendment to Loan and Security Agreement dated April 1, 2020, (xvi) the Sixteenth Amendment to Loan and Security Agreement dated January 5, 2021, (xvii) the Seventeenth Amendment to Loan and Security Agreement dated February 26, 2021, (xviii) the Eighteenth Amendment to Loan and Security Agreement dated July 30, 2021, and (xix) the Nineteenth Amendment to Loan and Security Agreement dated March 8, 2022 (such Loan and Security Agreement, as so amended and as it may be further amended, restated, supplemented or otherwise modified from time to time, being the “Loan Agreement”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed thereto in the Loan Agreement.
C.The Loans are secured by, among other things, each Guarantor’s guaranty by its execution of the Loan Agreement as a Corporate Credit Party (“Guaranty”).
D.ATRM Holdings, Inc. has executed an Amended and Restated Subordination Agreement dated January 31, 2020 and is a Subordinated Lender as defined in the Loan Agreement.
E.Star Equity Holdings, Inc. has executed an Amended and Restated Subordination Agreement dated July 30, 2021 and is a Subordinated Lender as defined in the Loan Agreement.
F.Star Procurement, LLC has executed an Amended and Restated Subordination Agreement dated January 31, 2020 and is a Subordinated Lender as defined in the Loan Agreement.
G.Star Real Estate Holding USA, Inc. has executed a Subordination Agreement dated July 30, 2021 and is a Subordinated Lender as defined in the Loan Agreement.
H.The Note, the Guaranty, each Subordination Agreement, the Loan Agreement, and all other Credit Documents and Ancillary Loan Documents executed by Borrower and Guarantor, Credit 
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Parties and Ancillary Credit Parties and/or others in connection with the Loans in effect and as amended prior to the date hereof are hereafter collectively referred to as the “Credit Documents”. 
I.Star Equity Holdings, Inc. has advanced and directly provided Seven Million Three Hundred Fifty Thousand Dollars ($7,350,000.00) (“Subordinated Loans”) to Borrower and Lender has agreed to a partial repayment thereof on certain terms and conditions.
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, in consideration of the Recitals above which are incorporated into and made a part of this Twentieth Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.The Credit Documents are hereby amended to change the name of the Lender to “eCapital Asset Based Lending Corp., formerly known as Gerber Finance, Inc.,” a New York corporation.
2.The Amended and Restated Subordination Agreement dated July 30, 2021 executed and delivered by Star Equity Holdings, Inc. is hereby amended to provide that on the Effective Date hereof, Borrower may repay up to One Million Five Hundred Thousand Dollars ($1,500,000.00) of the Subordinated Loans to Star Equity Holdings, Inc. provided that on the date of such repayment:
(a)    there then exists no Event of Default and there shall exist no Event of Default immediately following and as a result of such repayment; and 
(b)    there then exists sufficient Borrower liquidity and capital resources following such repayment such that Borrower will not require additional advances beyond or in excess of the Borrowing Base available pursuant to the Loan Agreement.
3.Borrower and Star Equity Holdings Inc. agree, acknowledge and consent to the foregoing provisions and conditions to the repayment of up to One Million Five Hundred Thousand Dollars ($1,500,000.00) of the Subordinated Loans and acknowledge that the outstanding unpaid balance of the Subordinated Loans following the foregoing repayment is Five Million Eighty Hundred Fifty Thousand Dollars ($5,850,000.00). 
4.Nothing contained herein shall limit, impair, terminate or revoke the obligations of the parties under the Credit Documents, and such obligations shall continue in full force and effect in accordance with the respective terms and provisions of the Credit Documents, as modified hereby. Borrower hereby ratifies and agrees to pay when due all sums due or to become due or owing under the Loan Agreement or the other Credit Documents and the parties shall hereafter faithfully perform all of its obligations under and be bound by all of the provisions of the Credit Documents, as modified hereby, and hereby ratifies and reaffirms all of its obligations and liabilities under the Credit Documents, as modified hereby.
5.This Twentieth Amendment and the execution of the other documents required to be executed in connection herewith do not constitute the creation of a new debt or the extinguishment of the debt evidenced by the Credit Documents, nor will they in any way affect or impair the liens and security interests created by the Credit Documents.  The parties agree that the lien and security interests created by the Credit Documents continue to be in full force and effect, unaffected and unimpaired by this Twentieth Amendment and that said liens and security interests shall so continue in their perfection and priority until the Obligations secured by the Credit Documents are fully discharged.  
6.Each of Borrower, Guarantor and the Credit Parties on behalf of itself and its affiliates, heirs, successors and assigns (collectively, “Releasing Parties”), hereby releases and forever discharges Lender, any trustee of the Loans, any servicer of the Loans, each of their respective predecessors-in-interest and successors and assigns, together with the officers, directors, partners, employees, investors, certificate holders and agents of each of the foregoing (collectively, the “Lender Parties”), from all debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, claims, damages, judgments, executions, actions, inactions, liabilities, demands or causes of action of any 
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nature, at law or in equity, known or unknown, which such Releasing Party has or had  prior to and including the date hereof relating in any manner whatsoever to matters arising out of: (a) the Loans, including, without limitation, its funding, administration and servicing; (b) the Credit Documents; or (c) any reserve and/or escrow balances held by Lender or any servicers of the Loans. 
7.Borrower, Guarantor and the Credit Parties, jointly and severally, agree to reimburse, defend, indemnify and hold Lender harmless from and against any and all liabilities, claims, damages, penalties, reasonable expenditures, losses or charges (including, but not limited to, all reasonable legal fees and court costs), which may now or in the future be undertaken, suffered, paid, awarded, assessed or otherwise incurred as a result of or arising out of any fraudulent conduct of Borrower, Guarantor or any Credit Party in connection with this TwentiethAmendment or of any breach of any of the representations or warranties made in any material respect.
8.Borrower agrees to pay all attorneys’ fees and other costs incurred by Lender or otherwise payable in connection with this Twentieth Amendment (in addition to those otherwise payable pursuant to the Credit Documents), which fees and costs are to be paid as of the date hereof.  
9.With respect to all notices or other written communications hereunder, such notice or written communication shall be given in writing, and shall be deemed effective upon delivery pursuant to the Loan Agreement.
10.This Twentieth Amendment and all other documents executed in connection herewith shall each constitute a Credit Document for all purposes under the Note, the Guaranty, the Subordination Agreement, the Loan Agreement and the other Credit Documents. All references in each of the Credit Documents to the Loan Agreement shall be deemed to be a reference to the Loan Agreement as amended by this Twentieth Amendment and as the same may be further amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time. All references in each of the Credit Documents to the Credit Documents or to any particular Credit Document shall be deemed to be a reference to such Credit Documents as amended by this Twentieth Amendment, and as the same may be further amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time. All references in the Credit Documents to a particular section of a Credit Document shall be deemed to be a reference to the particular section of such Credit Document as amended by this Twentieth Amendment, and as the same may be further amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time.
11.Except as expressly amended hereby, each Credit Document shall remain in full force and effect in accordance with its terms and provisions, without any waiver, amendment or modification of any provision thereof.
12.This Twentieth Amendment may not be amended, modified or otherwise changed in any manner except by a writing executed by all of the parties hereto.
13.In case any provision of this Twentieth Amendment shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal and enforceable. The validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  Capitalized terms used in this Twentieth Amendment which are not otherwise defined herein have the meanings ascribed thereto in the Credit Documents.
14.This Twentieth Amendment is binding on, and shall inure to the benefit of the parties hereto, their administrators, executors, and successors and assigns; provided, however, that Borrower, each Credit Party and each Guarantor may only assign its rights hereunder to the extent permitted in the Credit Documents.
15.This Twentieth Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflict of laws provisions of said state.
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16.This Twentieth Amendment constitutes all of the agreements among the parties relating to the matters set forth herein and supersedes all other prior or concurrent oral or written letters, agreements and understandings with respect to the matters set forth herein.
17.This Twentieth Amendment may be executed in any number of counterparts, each of which when so executed is deemed to be an original and all of which taken together constitute but one and the same agreement. Delivery of an executed counterpart of this Twentieth Amendment by facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Twentieth Amendment. Any party delivering an executed counterpart of this Twentieth Amendment by facsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Twentieth Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Twentieth Amendment.
18.BORROWER, GUARANTOR, EACH OF THE CREDIT PARTIES AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS TWENTIETH AMENDMENT, THE CREDIT DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
[Signatures appear on the following pages]
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IN WITNESS WHEREOF, the undersigned have caused this Twentieth Amendment to be executed as of the day and year first above written.
LENDER:
eCAPITAL ASSET BASED LENDING CORP., formerly known as GERBER FINANCE, INC.


By:    /s/ Elena Goynatsky                    
    Name: Elena Goynatsky
    Title:   Senior Vice President


BORROWER:
KBS BUILDERS, INC.


By:     /s/ Thatcher Butcher                    
    Name: Thatcher Butcher
    Title:    President


GUARANTOR:
ATRM HOLDINGS, INC.


By:     /s/ David J. Noble                    
    Name: David J. Noble
    Title:   President


STAR EQUITY HOLDINGS, INC.


By:    /s/ Richard K. Coleman                    
     Name: Richard K. Coleman
    Title:   Chief Executive Officer


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[Signature Page to Twentieth Amendment to Loan and Security Agreement-Consent Page Follows]







CONSENT TO TWENTIETH AMENDMENT 
TO LOAN AND SECURITY AGREEMENT
We hereby consent and agree to the attached terms of the Twentieth Amendment to Loan and Security Agreement.
ATRM HOLDINGS, INC.
(as Creditor pursuant to Amended and Restated Subordination Agreement
 dated January 31, 2020)




By:     /s/ David J. Noble                    
    Name: David J. Noble
    Title:   President


STAR PROCUREMENT, LLC
(as Creditor pursuant to Amended and Restated Subordination Agreement
 dated January 31, 2020)




By:     /s/ David J. Noble                    
    Name:  David Noble
    Title:    Manager


STAR EQUITY HOLDINGS, INC.
(as Creditor pursuant to Amended and Restated Subordination Agreement
 dated July 30, 2021)




By:     /s/ Richard K. Coleman                        
    Name:   Richard K. Coleman
    Title:     Chief Executive Officer


STAR REAL ESTATE HOLDINGS USA, INC.
(As Creditor pursuant to Subordination Agreement dated July 30, 2021)




By:    /s/ David J. Noble                    
    Name:  David J. Noble
    Title:     President and Chief Executive Officer
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[End of Signature Page to Consent to Twentieth Amendment to Loan and Security Agreement]