Exhibit 10.20
EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
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This Eighth Amendment to Loan and Security Agreement ("Amendment") is
made as of the 30th day of March, 2005 by and among LASALLE BUSINESS CREDIT,
LLC, a Delaware limited liability company (successor by merger to LASALLE
BUSINESS CREDIT, INC.) ("Lender"), Two Commerce Square, Suite 2610, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000, and STONEPATH GROUP, INC., a Delaware
corporation ("Stonepath"), CONTRACT AIR, INC., a Minnesota corporation
("Contract Air"), DISTRIBUTION SERVICES, INC., a Minnesota corporation
("Distribution Services"), GLOBAL CONTAINER LINE, INC., a Washington corporation
("Global Container"), M.G.R., INC., d/b/a AIR PLUS LIMITED, a Minnesota
corporation ("Air Plus"), NET VALUE, INC., a Delaware corporation ("Net Value"),
STONEPATH LOGISTICS DOMESTIC SERVICES, INC., a Delaware corporation
("Logistics"), STONEPATH LOGISTICS GOVERNMENT SERVICES, INC., f/k/a Transport
Specialists, Inc., a Virginia corporation ("Government Services"), STONEPATH
LOGISTICS INTERNATIONAL SERVICES, INC., a Delaware corporation ("International
Services I"), STONEPATH LOGISTICS INTERNATIONAL SERVICES, INC., f/k/a Global
Transportation Services, Inc., a Washington corporation ("International Services
II"), STONEPATH OFFSHORE HOLDINGS, INC., a Delaware corporation ("Offshore
Holdings"), STONEPATH OPERATIONS INC., a Delaware corporation ("Operations"),
and UNITED AMERICAN ACQUISITIONS AND MANAGEMENT, INC. d/b/a UNITED AMERICAN
FREIGHT SERVICES, INC., a Michigan corporation ("United American", and together
with Stonepath, Contract Air, Distribution Services, Global Container, Air Plus,
Net Value, Logistics, Government Services, International Services I,
International Services II, Offshore Holdings and Operations are referred to
herein collectively as the "Loan Parties" and each individually as an "Loan
Party").
BACKGROUND
A. Loan Parties and Lender are parties to a certain Loan and Security
Agreement dated May 15, 2002 (as it may heretofore have been or may hereafter be
from time to time modified, amended, restated or replaced, the "Loan
Agreement"), pursuant to which Loan Parties established certain financing
arrangements with Lender. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Loan Agreement. The Loan
Agreement and all of the Other Agreements are referred to herein collectively as
the "Initial Loan Documents".
B. Loan Parties and Lender have agreed that certain modification should
be made to the terms and provisions of the Loan Agreement on the terms and
conditions set forth in and according to the provisions of this Amendment.
NOW, THEREFORE, with the foregoing Background incorporated by reference
and made a part hereof and intending to be legally bound, the parties agree as
follows:
1. Confirmation of Indebtedness. Loan Parties confirm and agree that as
of the close of business on March 30, 2005, they are indebted to Lender under
the Loan Documents, without any deduction, defense, setoff, claim or
counterclaim of any nature whatsoever, in the aggregate principal amount of
$13,493,600 comprised of: (a) $13,343,600 outstanding with respect to the
Revolving Credit Loans and (b) $150,000 outstanding with respect to outstanding
Letters of Credit, plus all accrued interest, fees, costs and expenses
(including attorneys' fees) incurred to date in connection with the Loan
Agreement and related agreements.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows:
(a) Amendment of Termination Date. The first sentence of
Section 10 of the Loan Agreement (as previously amended) shall be amended by
deleting the date "January 31, 2006" in the second line of such section and
replacing it with "May 31, 2006."
(b) The borrowing availability reserve ("Special Availability
Reserve") set forth in paragraph 5(a) of that certain Seventh Amendment to Loan
and Security Agreement dated as of November 17, 2004 among the parties hereto
("Seventh Amendment") is hereby increased from $2,500,000 to $2,750,000.
(c) Loan Parties covenant and agree that they shall at all
times have Undrawn Availability of at least $1,500,000.
3. Additional Facility Fee. Loan Parties covenant and agree that, in
consideration for the accommodations and amendments provided for herein, Loan
Parties shall pay to Lender an additional facility fee ("Additional Facility
Fee") equal to $50,000 contemporaneously with the execution hereof, which such
fee shall be nonrefundable.
4. Capital Injection.
(a) Loan Parties covenant and agree that Stonepath will
receive a capital injection, in cash, (as equity or subordinated indebtedness
under terms and agreements acceptable to Lender) of at least $5,000,000
("Required Capital Injection") by no later than April 30, 2005.
(b) If the Required Capital Injection is not received by April
30, 2005, the Special Availability Reserve shall then be automatically and
permanently increased from $2,750,000 to $3,000,000 and a special facility fee
of $100,000 will then be automatically and unconditionally earned by Lender on
May 1, 2005. The Special Availability Reserve shall be further automatically and
permanently increased by $250,000 on each of May 31, 2005, June 30, 2005,
September 30, 2005, December 31, 2005 and March 31, 2006 and (ii) a further
special facility fee of $100,000 shall be automatically and unconditionally
earned by Lender on each of June 1, 2005, July 1, 2005, October 1, 2005, January
1, 2006 and April 1, 2006 if the Required Capital Injection has not been
received by Stonepath prior to the respective applicable date set forth.
(c) If (and regardless of when) the Required Capital Injection
is received by Stonepath, the Special Availability Reserve shall in any event be
automatically and permanently increased by $250,000 on each of August 31, 2005,
November 30, 2005 and February 28, 2006 and a further special facility fee of
$100,000 shall be automatically and unconditionally earned by Lender on each of
September 1, 2005, December 1, 2005 and March 1, 2006.
(d) To the extent the fees described in this paragraph are
earned by Lender according to the terms hereof, each such fee shall be due and
payable on the respective date earned. Each and every fee earned by Lender
pursuant to this paragraph shall be nonrefundable and in addition to, and not in
lieu of or substitution for, any other fee at any time earned by or payable to
Lender pursuant to the terms of the Loan Agreement. Loan Parties expressly
acknowledge and agree that the fees described in this Agreement have been
specifically negotiated by the parties and shall, as applicable, be earned by
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Lender in consideration of accommodations being made to the Loan Parties by and
the credit risk undertaken by the Lender under this Amendment.
5. Representations and Warranties. Each Loan Party represents and
warrants to Lender that:
(a) All warranties and representations made to Lender under
the Loan Agreement and related agreements and documents are true and correct as
to the date hereof.
(b) The execution and delivery by each Loan Party of this
Amendment and the performance by each such Loan Party of the transactions herein
contemplated (i) are and will be within its powers, (ii) have been authorized by
all necessary corporate action, and (iii) are not and will not be in
contravention of any order of any court or other agency of government, or of any
law, or be in conflict with, result in a breach of, or constitute (with due
notice and/or lapse of time) a default under any such indenture, agreement or
undertaking or result in the imposition of any lien, charge or encumbrance of
any nature on any of the properties of such Loan Party or under the articles or
certificate of incorporation or bylaws or other corporate governance document of
any such Loan Party.
(c) This Amendment and any related agreement or document will
be valid and binding on and enforceable against each Loan Party in accordance
with its respective terms.
6. Collateral. As security for the payment of all Liabilities now or in
the future existing, each Loan Party hereby confirms and agrees that all
security interests and liens granted to Lender by any one of them continue in
full force and effect and shall continue to secure all such Liabilities. All
Collateral remains free and clear of any liens other than Permitted Liens.
Nothing herein contained is intended in any way to impair or limit the validity,
priority and extent of the existing security interest of Lender in and liens
upon the Collateral of any Loan Party.
7. Effectiveness Conditions. This Amendment shall be effective upon
completion of the following conditions precedent (all documents to be in form
and substance satisfactory to Lender and Lender's counsel):
(a) Execution and delivery of this Amendment by all parties
hereto;
(b) Delivery of (i) an incumbency certificate from the
secretary or other appropriate officer of each Loan Party certifying the name,
title and signature of the officer of each such Loan Party executing this
Amendment on behalf of such party and (ii) a copy of the resolutions and/or
written actions or consents of the boards of directors of each Loan Party
authorizing the execution of this Amendment and the performance of the
transactions contemplated hereby, certified as complete and correct and in full
force and effect by the secretary or other appropriate officer of each such Loan
Party;
(c) Payment to Lender of the Additional Facility Fee required
to be paid on the date hereof plus all fees and expenses (specifically including
attorneys' fees) incurred in relation to the preparation and execution of this
Amendment; and
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(d) Execution and/or delivery of any and all other agreements,
instruments and documents requested by Lender to effectuate and implement the
terms hereof.
8. Ratification of Initial Loan Documents. Except as expressly set
forth herein, all of the terms and conditions of the Loan Agreement are hereby
ratified and confirmed and continue unchanged and in full force and effect. All
references to the Loan Agreement shall mean the Loan Agreement as modified by
this Amendment. No modification hereof shall be binding or enforceable unless in
writing and signed by the party against whom enforcement is sought.
9. Governing Law. THIS AMENDMENT, AND ALL MATTERS RELATING HERETO OR
ARISING HEREFROM, SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA (WITHOUT REGARD TO PENNSYLVANIA'S OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS) AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, EXCLUDING PERFECTION
OF THE SECURITY INTERESTS IN COLLATERAL LOCATED OUTSIDE OF THE COMMONWEALTH OF
PENNSYLVANIA, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT
JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED. If any provision of this
Amendment shall be held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or remaining
provisions of this Amendment.
10. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts together shall constitute one and the same respective
agreement. Signature by facsimile shall bind the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Eighth Amendment to
Loan and Security Agreement the day and year first written above.
LENDER:
LASALLE BUSINESS CREDIT, LLC
By: /s/ Xxxxxxx X. Xxxx, Xx.
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Name: Xxxxxxx X. Xxxx, Xx.
Title: Vice President
LOAN PARTIES:
STONEPATH GROUP, INC.
CONTRACT AIR, INC.
DISTRIBUTION SERVICES, INC.
GLOBAL CONTAINER LINE, INC.
M.G.R. INC., d/b/a AIR PLUS LIMITED
NET VALUE, INC.
STONEPATH LOGISTICS DOMESTIC SERVICES, INC.
STONEPATH LOGISTICS GOVERNMENT SERVICES, INC.,
f/k/a Transport Specialists, Inc.
STONEPATH LOGISTICS INTERNATIONAL SERVICES, INC,
a Delaware Corporation
STONEPATH LOGISTICS INTERNATIONAL SERVICES, INC.,
f/k/a/ Global Transportation Services, Inc.,
a Washington Corporation
STONEPATH OFFSHORE HOLDINGS, INC.
STONEPATH OPERATIONS, INC.
UNITED AMERICAN ACQUISITIONS AND MANAGEMENT, INC.
d/b/a UNITED AMERICAN FREIGHT SERVICES, INC.
BY:/s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: President
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