Exhibit 10.12
FIRST AMENDMENT TO AMENDED AND RESTATED
MANAGEMENT AND ADVISORY AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED MANAGEMENT AND ADVISORY AGREEMENT
(this "Amendment"), effective as of October 1, 2014 (the "Effective Date"), is
by and between Western Capital Resources, Inc., a Minnesota corporation (the
"Company"), and Blackstreet Capital Management, LLC, a Delaware limited
liability company ("BCM").
WHEREAS, the Company and BCM are parties to that certain Amended and Restated
Management and Advisory Agreement dated as of June 21, 2012 (the "Original
Agreement"), pursuant to which, among other things, the Company retained BCM to
provide certain management and advisory services to the Company.
WHEREAS, subject to the terms and conditions of this Amendment, the parties
desire to amend the Original Agreement and acknowledge the waiver by BCM of
certain fees owing to it under the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1.
Amendment to Section 2(a). Section 2(a) of the Original Agreement is
hereby deleted in its entirety and restated as follows:
(a)
Management Fees.
(i)to pay to BCM (or an affiliate of BCM designated by it) annual management
fees equal to the greater of (1) $330,750 per annum (increasing 5% per year)
(the "Base Fee") or (2) 5% of EBITDA (defined below) per annum (the
"EBITDA-Based Fee") in exchange for the services provided to the Company by BCM,
as more fully described in Section 1 of this Agreement, with such fee being
payable by the Company in accordance with Section 2(a)(ii) by ACH or wire
transfer of immediately available funds. As used herein, "EBITDA" shall mean the
Company's net income plus net interest expense plus taxes, depreciation and
amortization plus any fees payable hereunder plus any fees payable to any member
of the Company's board of directors plus any one-time and/or non-recurring
expenses and any non-cash items.
(ii)Payment of the fees set forth in Section 2(a)(i) above shall be made as
follows:
(A)During the period commencing October 1, 2014 and ending December 31, 2015
(the "Initial Period"):
1
(1)Prior to the first day of each month, BCM will invoice the Company for the
one-twelfth (1/12th) of the Base Fee (the "Monthly Base Fee") and the Company
shall immediately pay such Monthly Base Fee amounts to BCM.
(2)As soon as the monthly financial reports (and EBITDA information) for any
month during the Initial Period are available (approximately 30-45 days after
the end of such month), BCM shall determine whether (1) five percent (5%) of the
Company's EBITDA for such month (the "Monthly EBITDA-Based Fee") was greater or
less than the applicable Monthly Base Fee and the amount of such difference and
(2) the Company's projected consolidated EBITDA for the subsequent twelve (12)
month period would result in BCM earning the Base Fee or the EBITDA-Based Fee
for such twelve (12) month period.
(3)If, as a