Document:

Exhibit 10.3

 

THE LIENS, SECURITY INTERESTS,
ASSIGNMENTS AND/OR OTHER ENCUMBRANCES GRANTED BY THIS DOCUMENT IS SUBORDINATE TO THE LIENS OF KEYBANK NATIONAL ASSOCIATION, OR
ITS SUCCESSORS OR ASSIGNS, PURSUANT TO THE TERMS OF A SUBORDINATION AGREEMENT DATED AS OF NOVEMBER 1, 2016, AS SUCH AGREEMENT MAY
FROM TIME TO TIME BE AMENDED, RESTATED OR OTHERWISE MODIFIED (OR ANY SUCCESSOR AGREEMENT WHICH REPLACES AND REFERENCES SUCH AGREEMENT).

LOAN AND SECURITY AGREEMENT

Loan and Security Agreement, dated as
of November 1, 2016 (as the same may from time to time be amended, restated, supplemented or otherwise modified, this “Agreement”),
by and between B.R. Johnson, LLC, a Delaware limited liability company (the “Company”), and Regional Brands Inc., a
Delaware corporation (“Lender”).

WITNESSETH:

WHEREAS, the Company desires to obtain
a term loan from Lender and Lender desires to make such loan available to the Company;

WHEREAS, the Company desires to grant
to Lender a security interest in certain collateral to secure the prompt payment and performance in full of the Company’s
obligations hereunder;

WHEREAS, the Company is entering into
that certain Credit and Security Agreement, dated as of the date hereof (as the same may from time to time be amended, restated,
supplemented or otherwise modified, the “Credit Agreement”), with KeyBank National Association;

WHEREAS, capitalized terms used but not
defined in this Agreement shall have the respective meanings given to such terms in the Credit Agreement.

NOW, THEREFORE, in consideration of
the mutual promises, representations and warranties contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.       Loans.
Subject to the terms and conditions of this Agreement, Lender agrees to make a term loan (the “Term Loan”) to the Company
on the date hereof in the aggregate principal amount of $7,500,000.00. The Term Loan shall be evidenced by a promissory note in
the form attached hereto as Exhibit A (the “Note” and, together with this Agreement, the “Loan Documents”).
Payments of principal on the Term Loan will be due and payable as follows: (a) $300,000.00 on the first anniversary of the date
hereof; (b) $500,000.00 on the second anniversary of the date hereof; (c) $600,000.00 on the third anniversary of the date hereof;
(d) $700,000.00 on the fourth anniversary of the date hereof; and (e) the remaining outstanding principal balance of the Term Loan
will be due and payable in full on the fifth anniversary of the date hereof (the “Maturity Date”).

     

     

    

 

2.       Interest.

2.1.       The
Term Loan will bear interest at the rate of six percent (6%) per annum payable in cash on the outstanding principal balance of
the Term Loan. Accrued and unpaid interest will be payable quarterly on January 1, April 1, July 1 and October 1 of each year
during the term of this Agreement, with the first payment due and payable on January 1, 2017. In addition, accrued and unpaid
interest will be payable together with each scheduled payment of principal on the Term Loan and on the Maturity Date. Interest
will be computed on the basis of the actual number of days elapsed, over a year of 365/366 days.

2.2.       Notwithstanding
the rates of interest specified in Section 2.1, or elsewhere herein, effective immediately upon the occurrence of an Event of Default
(as defined in the Note) and for as long thereafter as such Event of Default is continuing, the principal balance of the Term Loan
and the amount of all other Obligations (as defined below) will bear interest at a rate per annum equal to the rate of interest
that would otherwise be applicable thereto pursuant to Section 2.1 plus four percent (4%) per annum (the “Default Interest”);
provided, however, no interest charged thereon shall exceed the maximum amount allowed by law.

3.       Security
Interest.

3.1.       To
secure the prompt payment and performance in full when due, whether by lapse of time, acceleration or otherwise, of all of the
obligations of the Company under the Loan Documents (the “Obligations”), the Company hereby grants to Lender a continuing
security interest in, and a right to set off against, any and all right, title and interest of the Company in and to all of the
Collateral. The parties hereto hereby acknowledge and agree that the security interest created hereby in the Collateral constitutes
continuing collateral security for all of the Obligations, whether now existing or hereafter arising.

3.2.       The
Company covenants that, so long as any of the Obligations remain outstanding, the Company will execute and deliver to Lender and/or
file such agreements, assignments or instruments and do all such other things as Lender may reasonably deem necessary or appropriate
(i) to assure to Lender its security interests hereunder are perfected, including such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as Lender may from time to time reasonably request
in order to perfect and maintain the security interests granted hereunder in accordance with UCC and any other personal property
security legislation in the appropriate state(s) or jurisdiction(s), and (ii) to otherwise protect and assure Lender of its rights
and interests hereunder. The Company hereby authorizes Lender to prepare and file such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as Lender may from time to time deem necessary or
appropriate in order to perfect and maintain the security interests granted hereunder in accordance with the UCC.

3.3.       The
Company covenants that, so long as any of the Obligations remain outstanding, the Company will defend its interests in the Collateral
against the claims and demands of all other parties claiming an interest therein and keep the Collateral free from all liens, claims
and encumbrances of every nature whatsoever, except for the security interests granted hereunder and under the Credit Agreement,
and for Permitted Liens.

    	 	2	 

     

    

 

3.4.       The
Company hereby irrevocably makes, constitutes and appoints Lender, its nominee or any other person whom Lender may designate as
the Company’s attorney-in-fact with full power and for the limited purpose to sign in the name of the Company any financing
statements, amendments and supplements to financing statements, continuation financing statements, notices and any similar documents
which in Lender’s reasonable discretion would be necessary, appropriate or convenient in order to perfect or maintain perfection
of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable so long
as any of the Obligations remain outstanding.

3.5.       Upon
the occurrence of an Event of Default (as defined in the Note) and during continuation thereof, Lender will have, in addition to
the rights and remedies provided herein or in the Note or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the UCC
applies to the affected Collateral). In addition, Lender will have the right to exercise any one or more of the following remedies
following the occurrence and during the continuance of an Event of Default: (i) to declare all amounts payable under the Loan Documents
to be immediately due and payable without notice or demand to the Company; (ii) to sue for and recover all such payments; (iii)
to take possession of the Collateral, without notice or demand (except to the extent otherwise required by law), wherever it may
be located (and to enter on any premises of the Company for such purpose), without any court order or other process of law (and
the Company hereby waives any and all damages resulting from such taking of possession); and (iv) to pursue any other remedy at
law or in equity not inconsistent with the foregoing.

3.6.       Notwithstanding
any action which Lender may take, the Company will be and remain liable for the payment and performance in full of all Obligations.
The rights and remedies of Lender under the Loan Documents will be cumulative and not exclusive of any other right or remedy which
Lender may have.

3.7.       In
addition to all other sums due Lender with respect to the Obligations, the Company will pay to Lender promptly upon demand all
reasonable documented costs and expenses incurred by Lender, including, but not limited to, reasonable attorneys’ fees and
court costs, in protecting, preserving or obtaining the Collateral, in enforcing payment of the Obligations, in the prosecution
or defense of any action or proceeding by or against Lender or the Company concerning any matter arising out of or in connection
with this Agreement, the Note, any Collateral or any of the Obligations, or otherwise in exercising any of its rights or remedies
hereunder or under applicable law, including, without limitation, any of the foregoing arising in, arising under or related to
a case under Title 11 of the United States Code, as amended, modified, succeeded or replaced form time to time.

3.8.       In
addition to other powers of attorney contained herein, the Company hereby designates and appoints Lender, and each of its designees
or agents, as attorney-in-fact of the Company, irrevocably and with full power of substitution, with authority to do, take and
perform all such acts and things as Lender may reasonably deem to be necessary, proper or convenient in connection with the Collateral,
or in exercising any of its rights or remedies hereunder or under applicable law, upon the occurrence and during the continuation
of an Event of Default. This power of attorney is a power coupled with an interest and will be irrevocable for so long as any of
the Obligations remain outstanding. Lender will be under no duty to exercise or withhold the exercise of any of the rights, powers
and privileges expressly or implicitly granted to it in any of the Loan Documents, and will not be liable for any failure to do
so or any delay in doing so. This power of attorney is conferred on Lender solely to protect, preserve and realize upon its security
interest in the Collateral.

    	 	3	 

     

    

 

3.9.       The
security interest in the Collateral will continue to be effective or be automatically reinstated, as the case may be, if at any
time payment, in whole or in part, of any of the Obligations is rescinded or must otherwise be restored or returned by Lender.
In the event that payment of all or any part of the Obligations is rescinded or must be restored or returned, all reasonable documented
costs and expenses (including without limitation any reasonable legal fees and disbursements) incurred by Lender in enforcing such
reinstatement will be paid promptly upon demand by the Company.

3.10.       Lender
will not be liable under any of the Loan Documents for any acts or omissions other than as a result of its gross negligence or
willful misconduct. In no event will Lender be liable for any special, incidental, indirect, exemplary, consequential or punitive
damages or lost profits for any reason whatsoever.

4.       Representations
of the Company. The Company represents and warrants to Lender as follows:

4.1.       The
Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite
limited liability company power and authority to conduct its business as it is now being conducted and to own, lease and operate
its properties and assets.

4.2.       The
Company has all requisite power and authority to execute, deliver and perform the Loan Documents and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the Company of the Loan Documents and the consummation
by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all required limited
liability company action on the part of the Company. Each of the Loan Documents has been duly and validly executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other laws
regarding fraudulent conveyances and preferential transfers and subject to the limitations imposed by general equitable principles
(regardless whether such enforceability is considered in a proceeding at law or in equity).

4.3.       None
of the execution, delivery or performance by the Company of any of the Loan Documents or the consummation of any of the transactions
contemplated hereby or thereby, including, without limitation, the grant by the Company, and perfection, of the security interest
in the Collateral granted hereby, will (a) violate any provision of the organizational or governing documents of the Company, (b)
require any consent, waiver, approval, exemption, declaration, license, authorization or permit of, or filing or registration with
or notification to, any federal, state, municipal or local government, official thereof, governmental or regulatory authority,
agency, commission or department, including courts of competent jurisdiction (each, a “Governmental Authority”), except
for the filing or recording of UCC financing statements, (c) require a consent under, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation,
amendment or acceleration or any obligation) under, or result in the creation of any lien, claim or encumbrance on any of the properties
or assets of the Company pursuant to, any of the terms, conditions or provisions of any indenture, mortgage, note, bond, license,
government registration, contract, lease, franchise, permit, agreement or other instrument or obligation to which the Company is
a party or by which the Company or any of its properties or assets may be bound, or (d) violate any statute, law, rule, regulation,
code or ordinance of any Governmental Authority applicable to the Company or by which the Company or any of its properties or assets
may be bound.

    	 	4	 

     

    

 

4.4.       There
are no actions, suits, proceedings or claims pending or, to the knowledge of the Company, threatened against or affecting the Company
by or before any Governmental Authority which, if adversely determined, would adversely affect (a) the ability of the Company to
perform any of its obligations under any of the Loan Documents or (b) the legality, validity or enforceability of any of the Loan
Documents.

4.5.       Following
the closing of the BRJ Acquisition, the Company will be a solvent entity and a going concern with current liquidity to fund its
operations, and none of the execution, delivery or performance of this Agreement or the Credit Agreement, and no other fact, event,
circumstance or condition has occurred or exists that, would cause the Company to be insolvent.

4.6.       To
the knowledge of the Company, all of the financial statements and other financial information of the Company and BRJ Seller provided
to Lender on or prior to the date hereof are true and correct in all material respects, and fairly present in all material respects
the financial position and results of operations of the Company or BRJ Seller, as applicable, as of and for the applicable periods
covered thereby.

4.7.       The
Company and its representatives have fully disclosed any and all facts that are important and material to Lender’s consideration
of the Term Loan, and no fact, event, condition or occurrence exists that has not been disclosed and would cause a reasonable person
not to make the Term Loan.

4.8.       As
of the date hereof, the address of the Company’s chief executive office and chief place of business is 6960 Fly Road, East
Syracuse, New York. As of the date hereof, the Company’s exact legal name is as shown in this Agreement.

4.9.       Following
the closing of the BRJ Acquisition, the Company will have good, valid and marketable title to the Collateral, free and clear of
all liens, claims and encumbrances of every nature whatsoever other than the security interest created hereby and by the Credit
Agreement, and for Permitted Liens.

    	 	5	 

     

    

 

4.10.       This
Agreement creates a valid security interest in favor of Lender in the Collateral which, when properly perfected, will constitute
a valid, perfected security interest in such Collateral, to the extent such security interest can be perfected by filing under
the UCC, which security interest shall be a second priority security interest until such time as the Credit Agreement has been
terminated in accordance with its terms and shall thereafter be a first priority security interest.

5.       Covenants.
All of the covenants set forth in Article V of the Credit Agreement (the “Covenants”) are hereby incorporated by reference
in this Agreement. For purposes of this Agreement, all references in the Covenants to Agent or any Lender shall be deemed to refer
to Lender hereunder. The Company will be required to comply with all of the Covenants and perform all of its obligations under
the Covenants (including, without limitation, all notice and information delivery requirements) for the benefit of Lender as if
the Covenants were fully set forth herein, and Lender will be entitled to exercise any and all rights and remedies available to
Agent under the Credit Agreement in the event that the Company breaches, defaults or otherwise fails to perform or comply with
any of the Covenants. For purposes of this Agreement, all of the Covenants, and all of Lender’s rights and remedies with
respect thereto, will survive any termination of the Credit Agreement. In the event that (i) any modification of the Covenants
is approved by the Agent, such modification shall automatically apply to this Agreement and (ii) in the event that any Event of
Default under the Credit Agreement is at any time waived by the Agent, such waiver shall be deemed effective with respect to any
Event of Default hereunder caused by the Event of Default under the Credit Agreement.

6.       Survival.
All representations, warranties, covenants and agreements contained in the Loan Documents and in any document, exhibit, schedule
or certificate delivered in connection herewith or incorporated by reference herein will survive the execution and delivery of
this Agreement and the closing of the Term Loan and will not be affected by any investigation at any time made by Lender or on
its behalf.

7.       Miscellaneous.

7.1.       This
Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Ohio without giving
any effect to principles of conflicts of laws. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by this Agreement will be commenced in the state and federal courts sitting in the
County of Cuyahoga, State of Ohio (the “Ohio Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Ohio Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or such Ohio Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY
HERETO HEREBY IRREVOACABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMNT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

    	 	6	 

     

    

 

7.2.       All
notices, requests, demands, instructions and other communications to be given under this Agreement shall be in writing and shall
be deemed given (a) when sent if sent by facsimile or e-mail (or on the immediately following Business Day if sent after the
close of business or on a day that is not a Business Day) with electronic confirmation of delivery thereof, (b) when delivered,
if delivered personally to the intended recipient, (c) one Business Day following sending by overnight delivery via a nationally
recognized overnight courier service, or (d) three Business Days following sending by registered or certified mail, return receipt
requested, postage prepaid and in each case, addressed to a party at the following address for such party:

To the Company:

c/o Lorraine Capital, LLC

591
Delaware Avenue

Buffalo, New York 14202

Attention: Richard Gioia, Member

Facsimile: (940) 382-9966

E-mail: jreich@lorrainecapital.com

 

With a copy (which shall not constitute
notice) to:

Lippes Mathias Wexler Friedman LLP

50 Fountain Plaza, Suite 1700

Buffalo, New York 14202

Attention: Brian J. Bocketti, Esq.

Facsimile: (716) 853-5199

E-mail: bbocketti@lippes.com

 

To Lender:

Regional Brands Inc.

6060 Parkland Boulevard

Cleveland, Ohio 44124

Attention: Brian Hopkins

Facsimile: (216) 825-4001

E-mail: brian@ancora.net

 

With a copy (which shall not constitute
notice) to:

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

Attention: Michael R. Neidell, Esq.

Facsimile: (212) 451-2222

E-mail: mneidell@olshanlaw.com

 

    	 	7	 

     

    

 

7.3.       This
Agreement shall be binding upon and inure to the benefit of the Company, Lender and their respective successors and permitted assigns.
The Company may not assign any of its rights or delegate any of its obligations under all or any part of this Agreement or the
Note without the prior written consent of Lender.

7.4.       This
Agreement, the Note and all exhibits and schedules hereto constitute the entire agreement between the parties hereto in respect
of the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties
in respect of the subject matter hereof.

7.5.       This
Agreement may be amended, modified and supplemented in any and all respects by written agreement of the parties hereto with respect
to any of the terms contained herein. No waiver hereunder shall be effective unless it is in writing, signed by the party against
whom such waiver is sought to be enforced and then only to the extent specifically stated. No failure or delay in exercising any
right, power or privilege hereunder or under applicable law will operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or under
applicable law. The failure of Lender to insist upon strict adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive Lender of the right thereafter to insist upon strict adherence to that term or any other
term of this Agreement.

7.6.       This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall
be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party hereto. Facsimile or .pdf signatures shall have the same force and effect as original signatures.

7.7.       If
any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal,
invalid or unenforceable provision.

7.8.       The
headings in this Agreement are for reference purposes only and shall not constitute a part hereof.

[Signature page follows]

    	 	8	 

     

    

 

IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the day and year first above written.

	 	B.R. JOHNSON, LLC
	 	 
	 	By:	/s/ Justin M. Reich
	 	 	Name:	Justin M. Reich
	 	 	Title:	Manager

 

	 	REGIONAL BRANDS INC.
	 	 
	 	By:	/s/ Brian Hopkins
	 	 	Name:	Brian Hopkins
	 	 	Title:	Chairman and Chief Executive Officer

    	 	9	 

     

    

 

EXHIBIT A

THE INDEBTEDNESS EVIDENCED BY THIS DOCUMENT
IS SUBORDINATE TO THE INDEBTEDNESS OF THE MAKER(S) (OR ANY SUCCESSOR THERETO) TO KEYBANK NATIONAL ASSOCIATION, AS AGENT, OR ANY
OF ITS SUCCESSORS OR ASSIGNS, PURSUANT TO THE TERMS OF A SUBORDINATION AGREEMENT DATED AS OF NOVEMBER 1, 2016, AS SUCH AGREEMENT
MAY FROM TIME TO TIME BE AMENDED, RESTATED OR OTHERWISE MODIFIED (OR ANY SUCCESSOR AGREEMENT WHICH REPLACES AND REFERENCES SUCH
AGREEMENT).

PROMISSORY NOTE

	$7,500,000.00	November 1, 2016

 

FOR VALUE RECEIVED, B.R. Johnson, LLC
(“Borrower”) hereby promises to pay to the order of Regional Brands Inc. (“Lender”), in lawful money of
the United States of America, the principal sum of Seven Million Five Hundred Thousand Dollars ($7,500,000.00). Capitalized terms
used but not defined herein shall have the respective meanings given to such terms in the Loan and Security Agreement, dated as
of November 1, 2016, between Borrower and Lender (the “Loan and Security Agreement”). The principal of this Note will
be payable on each date provided for in Section 1 of the Loan and Security Agreement.

Borrower also promise to pay interest
on the unpaid principal amount of the Term Loan, from the date of this Note until the payment in full thereof, at the rate per
annum set forth in Section 2.1 of the Loan and Security Agreement. Such interest will be payable on each date provided for in such
Section 2.1; provided, however, that interest (including Default Interest) on any principal portion which is not paid when due
will be payable on demand. All payments of principal of and interest on this Note shall be made in immediately available funds.

All payments by Borrower of principal
of and interest on this Note will be made to Lender at its address referred to in Section 7.2 of the Loan and Security Agreement.
If any payment becomes due on a day other than a business day, the due date thereof shall be extended until the next succeeding
business day, and interest shall be payable at the applicable rate during such extension.

Borrower hereby authorizes Lender to
endorse on Schedule 1 (or continuation thereof) annexed to this Note the date and amount of the Term Loan made to Borrower and
all payments of principal amounts in respect of such Term Loan, which endorsements shall, absent manifest error, be conclusive
evidence of the outstanding principal amount of the Term Loan; provided, however, that the failure by Lender to make any such notation
with respect to the Term Loan or any payment thereof shall not limit or otherwise affect the obligations of Borrower under this
Note.

The delay or failure to exercise any
right hereunder shall not waive such right. The undersigned hereby waives demand, presentment, protest, notice of dishonor or nonpayment,
notice of protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of
this Note, any and all delays or lack of diligence in collection hereof and assents to each and every extension or postponement
of the time of payment or other indulgence.

    	 	10	 

     

    

 

Lender may, at any time, present this
Note or any sum payable hereunder to Borrower in satisfaction of any sum due or payable by Lender to Borrower for any reason whatsoever.

The payment and performance of Borrower’s
obligations under this Note are secured by a security interest in the Collateral, as defined and provided in the Loan and Security
Agreement.

The occurrence of any one or more of
the following events shall constitute an Event of Default: (a) the failure to pay principal of this Note as and when due within
five (5) Business Days of the date such payment is due; (b) the failure to pay interest on this Note or any other payment required
to be made to Lender under any Loan Document within five (5) Business Days of the date such payment is due; (c) any representation
or warranty of Borrower contained in the Loan and Security Agreement shall prove to have been incorrect, false or misleading in
any material respect on or as of the date made or shall have become inaccurate in any material respect; (d) Borrower shall have
breached or failed to perform or comply with any covenant contained in the Loan and Security Agreement (including the Covenants,
after giving effect to any applicable grace or cure period contained in the Credit Agreement); (f) there shall have occurred an
Event of Default under the Credit Agreement; (g) (i) any material provision, in the reasonable judgment of Lender, of any Loan
Document shall at any time for any reason cease to be valid and binding and enforceable against Borrower; (ii) the validity, binding
effect or enforceability of any Loan Document against Borrower shall be contested by Borrower; (iii) Borrower shall deny that it
has any or further liability or obligation under any Loan Document; (iv) any Loan Document shall be terminated, invalidated or
set aside, or be declared ineffective or inoperative or in any way cease to give or provide to Lender the benefits purported to
be created thereby; (v) any security interest purported to be created with respect to the Collateral shall be asserted by Borrower
not to be a valid and perfected security interest on the Collateral and of the same effect and priority purported to be created
thereby; or (vi) except as specifically agreed to in writing by Lender, any applicable Loan Document for any reason (other than
pursuant to the terms thereof) ceases to create a valid and perfected security interest (subject to Permitted Liens) in any of
the Collateral; (h) a proceeding is filed or commenced against Borrower for bankruptcy, reorganization, dissolution or liquidation
which, in the case of an involuntary proceeding, is not dismissed or discontinued within sixty (60) days, or Borrower voluntarily
or involuntarily terminates or dissolves or is terminated or dissolved; or (g) the insolvency of, the appointment of a custodian,
trustee, liquidator or receiver for any of the property of, an assignment for the benefit of creditors by, or the filing of a petition
under bankruptcy, insolvency or debtor’s relief law, or for any readjustment of indebtedness, composition or extension by
or against, Borrower.

Borrower agrees that if an Event of Default
occurs under this Note, then the unpaid principal balance of this Note, together with interest and other amounts owing in respect
thereof, including but not limited to all fees and expenses provided for in the Loan and Security Agreement, will immediately become
due and payable without notice or demand. In addition, Lender will have all of the rights and remedies provided in the Loan and
Security Agreement and by law. Borrower agrees to pay to Lender all expenses incurred by Lender, including reasonable attorneys’
fees, in enforcing and collecting this Note.

    	 	11	 

     

    

 

In the event any one or more of the provisions
of this Note shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in
the event that any one or more of the provisions of this Note operate to invalidate this Note, then and in either of those events,
such provision or provisions only shall be deemed null and void and shall not affect any other provision of this Note, and the
remaining provisions of this Note shall remain operative and in full force and effect and shall in no way be affected, prejudiced
or disturbed thereby.

Borrower further agrees to indemnify
and hold harmless Lender from and against any and all damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) which Lender may incur by reason of Borrower’s failure promptly to pay when
due any indebtedness evidenced by this Note.

This Note may not be prepaid by Borrower.
This Note shall be paid without deduction by reason of any set-off, defense or counterclaim of Borrower.

The Note shall be governed by and construed
in accordance with the laws of the State of Ohio, without giving any effect to principles of conflicts of law, and shall be binding
upon the successors and permitted assigns of Borrower and shall inure to the benefit of the successors and assigns of Lender. Exclusive
jurisdiction relating to this Note shall vest in the Ohio Courts.

	 	B.R. JOHNSON, LLC
	 	 
	 	By:	/s/ Justin M. Reich
	 	 	Name:	Justin M. Reich
	 	 	Title:	Manager

    	 	12	 

     

    

 

SCHEDULE 1

	
        Date
	
        Amount
        of Loan
	
        Amount
        of 

        Principal Repaid
	
        Unpaid
        

        Principal Amount

	November 1, 2016	$7,500,000.00Exhibit 10.4

 

MANAGEMENT SERVICES AGREEMENT

This Management
Services Agreement, dated as of November 1, 2016, is entered into by and between B.R. JOHNSON, LLC, a Delaware limited liability
company (the “Company”) and LORRAINE CAPITAL, LLC, a New York limited liability company (“Lorraine”).

WHEREAS,
the Company desires to engage Lorraine to render certain management services to the Company and Lorraine desires to provide such
services to the Company.

NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

Section 1.             Services.

1.1           Engagement
of Lorraine. The Company hereby retains Lorraine to render the management services described in this Section 1 during the term
of this Agreement, and Lorraine hereby agrees to provide such services to the Company during the term hereof.

1.2          Management
Services. During the term of this Agreement, Lorraine agrees to:

(a)       provide
management services to the Company, including monitoring the business of the Company and conducting periodic reviews and analyses
of such business as reasonably requested by the Company or by Regional Brands Inc., a Delaware corporation (“Regional
Brands”);

(b)       evaluate
potential merger and acquisition opportunities, including financial modeling, industry research, management evaluation and other
due diligence services, in each case as reasonably requested by the Company or by Regional Brands; and

(c)       manage
all accounting/financial duties and reporting functions including preparing and distributing monthly and quarterly unaudited financial
statements and annual audited financial statements as well as annual budgets as may be reasonably requested by the Company or by
Regional Brands, including, with respect to such financial statements, in sufficient time and in such form and substance as are
needed to enable Regional Brands to timely file the reports filed by it under the Securities Exchange Act of 1934, as amended,
and assist and support Regional Brands’ compliance with applicable requirements of the Securities Exchange Act of 1934, as
amended, the Securities Act of 1933, as amended, the Sarbanes-Oxley Act of 2002, and the rules and regulations of the Securities
and Exchange Commission promulgated under each of the foregoing.

     

     

    

1.3          Extent
of Services. In carrying out its obligations under this Section 1, Lorraine shall devote such of its time and personnel as
may be reasonably required to discharge its obligations to provide services hereunder and shall have regard to the objectives of
the Company and of Regional Brands with respect to their respective businesses and any specific instructions from time to time
communicated in writing by the Company or by Regional Brands to Lorraine with respect to the respective businesses of the Company
and Regional Brands and the services provided hereunder. Lorraine shall perform the services hereunder with the same degree of
care, skill and prudence customarily exercised by it in respect of its own business, operations and affairs. Lorraine shall be
free to render similar services to others.

Section 2.              Expense Reimbursement and Compensation.

2.1           Reimbursement
of Expenses. Lorraine shall be reimbursed within ten (10) business days after the submission to the Company of a reasonably
detailed invoice for any out-of-pocket expenses reasonably incurred by Lorraine or any of its personnel in connection with the
provision of the services described in Section 1 hereof, but not to exceed $25,000 annually without Regional Brands’ prior
written consent; provided that Lorraine shall not be entitled to any reimbursement hereunder for any of its general overhead, including,
compensation or benefits payable to its employees.

2.2          Fees.

(a)       Subject
to subsections (c) and (d) below, as compensation for the services provided pursuant to this Agreement, the Company shall pay Lorraine
an annual fee in the amount of the greater of (i) $75,000 or (ii) five percent (5%) of the annual EBITDA (as defined below) of
the Company (the “Management Fee”), payable in quarterly installments, in arrears, and payable on a pro-rated
basis for any partial months.

(b)       EBITDA
shall be determined by mutual agreement of Lorraine and Regional Brands. In the event that Lorraine and Regional Brands are unable
to agree upon EBITDA for the applicable period within twenty (20) days after their commencement of discussions regarding the calculation
of EBITDA, they shall submit any items in dispute (“Disputed Amounts”) for resolution to an independent public
accounting firm to be agreed upon by Lorraine and Regional Brands (the “Independent Accountant”), who shall
resolve the Disputed Amounts only and determine EBITDA accordingly. The Independent Accountant’s decision for each Disputed
Amount must be within the range of values assigned to each such item by Lorraine, on the one hand, and Regional Brands, on the
other hand. The Independent Accountant shall make a determination as soon as practicable and in any event within thirty (30) days
after its engagement, and its resolution of the Disputed Amounts and resulting determination of EBITDA shall be conclusive and
binding upon the parties hereto and may be entered as a final judgment in any court of competent jurisdiction. The fees and expenses
of the Independent Accountant shall be paid by the Company.

(c)       In
the event that EBITDA for any fiscal year ended during the term of this Agreement is negative, any such negative amount shall offset
(on a dollar-for-dollar basis) any positive EBITDA achieved during the next subsequent fiscal year only for purposes of determining
Lorraine’s entitlement to, and the amount of, the Management Fee hereunder. Notwithstanding the foregoing, in no event shall
the Management Fee be less than $75,000 for any fiscal year.

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(d)       Within
one hundred fifty (150) days after the end of each fiscal year, the Management Fees calculated and paid pursuant to subsections
(a), (b) and (c) above shall be increased or decreased to the extent that the actual, aggregate EBITDA for such fiscal year, determined
in the manner provided above based on the Company’s audited financial statements for such fiscal year, is higher or lower
than the EBITDA calculated in connection with the quarterly calculations above. The amount of any adjustment, if any, shall be
offset against or added to the amount of Management Fees due and owing for subsequent quarterly payment(s) due or, at the election
of Regional in the event of a downward adjustment, refunded to the Company by Lorraine.

(e)       “EBITDA”
shall mean the normalized earnings of the Company, for the applicable measurement period, before interest, taxes, depreciation
and amortization, determined in accordance with generally accepted accounting principles consistently applied.  For purposes
of normalizing earnings, earnings will be calculated without giving effect to extraordinary or non-recurring gains or losses, whether
from sales of assets (other than inventory sold in the ordinary course of business) or from other sources.

Section 3.             Term; Termination.

3.1          Term
of Agreement. This Agreement shall become effective on the date hereof and shall continue in full force and effect unless and
until terminated in accordance with Section 3.2(a) below.

3.2          Termination.

(a)       Termination.
Either party hereto or Regional Brands may terminate this Agreement upon sixty (60) days’ prior written notice to the
other party for any reason or for no reason. In connection with any such termination, Lorraine agrees to cooperate with the
Company in transitioning any responsibilities of Lorraine to a new service provider. Further, this Agreement shall terminate
upon the consummation of a Company Sale (as defined in the Limited Liability Company Agreement, dated as of November 1, 2016, of the Company (as the same may be amended and/or restated from time to time, the “LLC
Agreement”)).

(b)       Effect
of Termination. From and after the effective date of any termination pursuant to Section 3.2(a) hereof, the Company shall have
no liability to Lorraine for any compensation hereunder, and Lorraine shall have no obligation to perform services hereunder. Upon
effectiveness of the termination of this Agreement, Lorraine shall return to the Company all original records belonging to the
Company. Lorraine will maintain confidential and, except to the extent required by law or legal process, not disclose to others
any information or records received by it from or on behalf of the Company in connection with the performance of this Agreement,
which obligation will survive any termination of this Agreement. Notwithstanding anything to the contrary contained herein, in
the event of termination of this Agreement, the Company shall remain obligated to reimburse the Lorraine for its expenses incurred
prior to the effectiveness of such termination in accordance with, and subject to, the provisions of Section 2.1 hereof.

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(c) Transition
Services. Following a termination of this Agreement by Regional Brands pursuant to Section 3.2(a) above, Regional Brands may
elect, by notice to Lorraine, to engage Lorraine to continue to provide management services to the Company hereunder for a period
of no less than six (6) months. In consideration of providing such services, the Company shall pay Lorraine a fee in the amount
of ten percent (10%) of the EBITDA for such period. The management fees payable hereunder shall be calculated by the Company and
paid within twenty (20) days of the end of such six (6) month period. Any dispute regarding the amount of management fees payable
under this Section shall be finally determined by the Independent Accountant pursuant to Section 2.2(b).

Section 4.             Miscellaneous.

4.1          Assignment.
Neither Lorraine nor the Company may assign this Agreement or their respective rights or obligations hereunder to any third party;
provided, however, that Lorraine may assign any or all of its rights or obligations hereunder to an entity which
controls, is controlled by, or is under common control with Lorraine.

4.2           Notices.
All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed
to have been duly given (a) when delivered personally, (b) if sent by facsimile, when receipt thereof is acknowledged at the telecopy
number below, (c) the day following the day on which the same has been delivered prepaid for overnight delivery to a national air
courier service, (d) five (5) business days following deposit in the United States Mail, certified, postage prepaid, to the respective
addresses of the parties as set forth below:

If to the Company,             B.R. Johnson, LLC

to:                                      6960 Fly Road

East Syracuse, New York 13057

Attention:

Email:

Fax:

 

and                                     Regional Brands Inc.

6060 Parkland Boulevard 

Cleveland, Ohio 44124

Attention: Brian Hopkins216-825-4000

Email: brian@ancora.net

Fax:(216) 825-4001

If to Lorraine, to:
               Lorraine Capital, LLC

591 Delaware Avenue

Buffalo, New York 14202

Attention: Justin Reich

Email: jreich@lorrainecapital.com

Fax:(940) 382-9966

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4.3          Waiver;
Remedies. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be
a waiver of any other breach of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Agreement. Any waiver hereunder must be in writing. All rights and remedies which the Company
or Lorraine may have under this Agreement are cumulative and in addition to any rights or remedies under applicable law or in equity.
Any amendment, modification, or waiver of any provision of this Agreement must be in writing shall require the prior approval of
the Board of Managers and the members of the Company as provided in the LLC Agreement.

4.4           Binding
Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the Company and Lorraine and their
respective successors and permitted assigns.

4.5           No
Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by
any person not a party to this Agreement, except that Regional Brands shall be an express third-party beneficiary of this Agreement
and shall have the right to enforce all rights and remedies of the Company and/or Regional Brands under, or with respect to, this
Agreement.

4.6           Headings.
The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation
of this Agreement.

4.7           Counterparts;
Governing Law. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles. Counterparts may be delivered via
facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes.

4.8          Relationship
of Parties. The parties agree that Lorraine in the performance of its duties hereunder is an independent contractor acting
as the agent of the Company, and that nothing contained herein shall constitute either party as employee or legal representative
of the other for any purpose whatsoever, nor shall this Agreement be deemed to create any form of business organization, joint
venture, or partnership between the parties hereto or as giving Lorraine any type of property interest in the Company, nor is any
party granted any right or authority to assume or create any obligation or responsibility on behalf of the other party, except
as otherwise provided herein, nor shall any party be in any way liable to the other party for any debt of the other. The Company
acknowledges that neither Lorraine nor any of its principals is registered under any federal or state law, rule or regulation as
an investment advisor or securities broker or dealer and agrees that Lorraine, unless and until registered, shall not be subject
to restrictions thereunder in its relationship with the Company, including without limitation the nature and amount of compensation
received for services hereunder.

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4.9          Entire
Agreement. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof.

4.10        Indemnification.
The Company hereby agrees to indemnify and hold Lorraine, its managers, members, officers, employees and agents harmless from,
against, for and in respect of any loss, obligation, claim, liability, settlement payment, award, judgment, fine, penalty, interest
charged, expense, damage or deficiency or other charge or expense (including reasonable attorneys’ fees and disbursements
and related court filing fees, court costs, witness fees and similar matters, in each case whether incurred in a third party action
or an action to enforce this Agreement) incurred or required to be paid as a result of or arising out of its entering into this
Agreement or its providing services hereunder; provided, however, that a party shall not be entitled to any indemnification pursuant
to this Section 4.10 if a court of competent jurisdiction has finally determined that such party is guilty of actual fraud, willful
misconduct or gross negligence.

 

[Signature
Page Follows]

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IN
WITNESS WHEREOF,
the parties have
entered into this
Agreement as of
the date first
above written.

	B.R. JOHNSON, LLC
	 	 
	 	 
	By: 	
        /s/ Justin M. Reich

        

	 	Name:	Justin M. Reich
	 	Title:	Manager
	 	 
	 	 
	LORRAINE CAPITAL, LLC
	 	 
	 	 
	By: 	/s/ Justin M. Reich
	 	Name:	Justin M. Reichu 
	 	Title:	Member

 

 

 

 

 

 

[Signature Page to Management Services
Agreement]

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