SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
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This Sixth Amendment to Loan and Security Agreement ("Amendment") is
made as of this 28th day of July, 2004 by and among LASALLE BUSINESS CREDIT,
LLC, a Delaware limited liability company (successor by merger to LASALLE
BUSINESS CREDIT, INC.) ("LENDER"), 0000 Xxxxxx Xxxxxx, 0xx Xxxxx, 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
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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 meaning 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. Amendment to Loan Agreement. Upon the effectiveness of this
Amendment, the Loan Agreement shall be amended as follows:
(a) Amendments to Definitions. Section 1 of the Loan Agreement shall
be amended as follows:
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(i) Amendments to Definitions Related to Financial Covenants and
to Related Loan Provisions.
(A) The definition of "Fixed Charge Coverage Ratio"
contained in Section 1 of the Loan Agreement shall be permanently deleted.
(B) The definition of "Loan Party Group" contained in
Section 1 of the Loan Agreement shall be permanently deleted.
(C) The references to "the Loan Party Group" in the
definitions of "Fiscal Year" and "Pre-Closing Financials" contained in Article 1
of the Loan Agreement and in Section 9(c), Section 11(a), Section 12(h), and
Section 13(d)(ii) of the Loan Agreement shall be replaced with references to
"Stonepath and its Subsidiaries".
(D) The reference to "the Loan Party Group" in Section 14(a)
of the Loan Agreement shall be replaced with a reference to "Stonepath and its
Subsidiaries (excluding the financial results and performance of foreign
operations and Foreign Subsidiaries)".
(E) The definitions of "Capital Expenditure", "Consolidated
EBITDA", "Consolidated Net Income", "Debt Service" and "Interest Expense"
contained in Section 1 of the Loan Agreement shall be amended by permanently
deleting all references therein to the phrase "on a consolidated basis for the
Loan Party Group" and such definition of "Interest Expense" shall be further
amended by replacing all references therein to "the financial statements of the
Loan Party Group" with references to "the financial statements of Stonepath and
its Subsidiaries".
(F) The definition of "Cash Flow Coverage Ratio" contained
in Section 1 of the Loan Agreement shall be amended by deleting such definition
in its entirety and replacing it as follows:
"CASH FLOW COVERAGE RATIO" shall mean, with respect to any fiscal
measurement period, the ratio of (i) Consolidated EBITDA for such
fiscal measurement period to (ii) the sum of (x) the Debt Service for
such fiscal measurement period minus (y) any Equity Issuance Offset
Amount applicable to such fiscal measurement period minus (z) any
Subordinated Debt Offset Amount applicable to such fiscal measurement
period, all of the foregoing calculated for Stonepath and its
Subsidiaries (excluding the financial results and performance of
foreign operations and Foreign Subsidiaries), provided that, for the
avoidance of doubt, the aggregate amount of any Equity Issuance
Offset Amount and any Subordinated Debt Offset Amount applicable to
the above calculation in any fiscal measurement period shall not
exceed the aggregate amounts of expenditures by Loan Parties for
Domestic Earn-Out Payments, loans and/or investments in a Foreign
Subsidiary in respect of Foreign Earn-Out Payments and Capital
Expenditures being offset in such fiscal measurement period.
(G) The definition of "Equity Issuance Earn-Out Offset
Amount" contained in Section 1 of the Loan Agreement shall be amended by
deleting such definition in its entirety and replacing it as follows:
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"EQUITY ISSUANCE OFFSET AMOUNT" shall mean, with respect to any
fiscal measurement period during which either (x) Loan Parties have
made any Domestic Earn-Out Payment and/or (y) Stonepath or any
Domestic Subsidiary has made any loans to and/or investments in a
Foreign Subsidiary to make a Foreign Earn-Out Payment and/or (z)
Stonepath or any Domestic Subsidiary has made any Capital
Expenditure, an amount equal to the lesser of (i) the sum of (A) the
amount of the cash proceeds of any issuance of the shares of capital
stock of Stonepath permitted under the terms and provisions of this
Agreement (specifically including without limitation, Section
13(d)(i)) that were received by Stonepath within 12 calendar months
prior to the date of the earliest occurring such Domestic Earn-Out
Payment or loans to and/or investments in a Foreign Subsidiary in
respect of a Foreign Earn-Out Payment and/or Capital Expenditures
made during such fiscal measurement period minus (B) the amount of
any such cash proceeds that were designated by Loan Parties as
Reserved Outside Source Funds or (ii) the sum of (I) the amount of
such Domestic Earn-Out Payments and loans to and/or investments in
any Foreign Subsidiaries in respect of any Foreign Earn-Out Payments
plus (II) the amount of such Capital Expenditures made during such
fiscal measurement period.
(H) The definition of "Funded Debt" contained in Section 1
of the Loan Agreement shall be amended by deleting such definition in its
entirety and replacing it as follows:
"FUNDED DEBT" shall mean, as at any given date, the sum (without
duplication) of (i) the principal amount outstanding as of such date
of the Revolving Loans plus (ii) the principal amount outstanding as
of such date of any Subordinated Debt and Permitted Secured Mezzanine
Debt plus (iii) the principal amount outstanding as of such date of
any long-term Indebtedness plus (iv) the principal amount outstanding
on any promissory notes payable by the Loan Parties (and their
Subsidiaries) minus (v) an amount equal to the amount of outstanding
checks that are noted on the financial statements of Stonepath and
its Subsidiaries as being classified as incremental borrowings as
Revolving Loans under this Loan Agreement, (provided that such amount
shall not under any circumstances exceed the lesser of (x) $7,500,000
or (y) the amount of Undrawn Availability of Loan Parties as of the
date of computation), all calculated, and as should be reflected as a
liability on a balance sheet, in accordance with GAAP. For the
avoidance of doubt, Earn-Out Payments, whether or not reflected as a
liability on the balance sheet, shall not be Funded Debt for the
purposes hereof.
(I) The definition of "Funded Debt to EBITDA Ratio"
contained in Section 1 of the Loan Agreement shall be amended by deleting such
definition in its entirety and replacing it with the following two new
definitions, each in the proper alphabetical place:
"DOMESTIC FUNDED DEBT TO CONSOLIDATED EBITDA RATIO" shall mean, with
respect to any fiscal measurement period, the ratio of (i) Funded
Debt measured as of the last day of such fiscal measurement period to
(ii) Consolidated EBITDA for such fiscal measurement period, all of
the foregoing calculated for Stonepath and its Subsidiaries
(excluding the financial results and performance of foreign
operations and Foreign Subsidiaries).
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"WORLDWIDE FUNDED DEBT TO CONSOLIDATED EBITDA RATIO" shall mean, with
respect to any fiscal measurement period, the ratio of (i) Funded
Debt measured as of the last day of such fiscal measurement period to
(ii) Consolidated EBITDA for such fiscal measurement period, all of
the foregoing calculated for Stonepath and its Subsidiaries
(including the financial results and performance of foreign
operations and Foreign Subsidiaries) , provided that in calculating
the Consolidated EBITDA of Stonepath and its Subsidiaries (including
the financial results and performance of foreign operations and
Foreign Subsidiaries) for purposes of calculating this ratio, the
amount calculated under clause (iii) of the definition of
Consolidated EBITDA shall be deemed to be zero (0).
(J) The following new definition shall be added to Section 1
of the Loan Agreement in its proper alphabetical place:
"SUBORDINATED DEBT OFFSET AMOUNT" shall mean, with respect to any
fiscal measurement period during which either (x) Loan Parties have
made any Domestic Earn-Out Payment and/or (y) Stonepath or any
Domestic Subsidiary has made any loans to and/or investments in a
Foreign Subsidiary to make a Foreign Earn-Out Payment and/or (z)
Stonepath or any Domestic Subsidiary has made any Capital
Expenditure, an amount equal to the lesser of (i) the sum of (A) the
amount of the cash proceeds of any unsecured Subordinated Debt and/or
Permitted Secured Mezzanine Debt incurred by any one or more Loan
Parties in accordance with and as permitted under the terms and
provisions of this Agreement (specifically including without
limitation, the limitations of Section 13(b) and the requirement that
any such unsecured Subordinated Debt or Permitted Secured Mezzanine
Debt be subject to a written subordination agreement in form and
substance acceptable to and executed by and delivered to Lender) that
were received by the applicable Loan Parties within 12 calendar
months prior to the date of the earliest occurring such Domestic
Earn-Out Payment or loans to and/or investments in a Foreign
Subsidiary in respect of a Foreign Earn-Out Payment and/or Capital
Expenditures made during such fiscal measurement period minus (B) the
amount of any such cash proceeds that were designated by Loan Parties
as Reserved Outside Source Funds or (ii) the sum of (I) the amount of
such Domestic Earn-Out Payments and loans to and/or investments in
any Foreign Subsidiaries in respect of any Foreign Earn-Out Payments
plus (II) the amount of such Capital Expenditures made during such
fiscal measurement period.
(ii) Amendment to Definition of "Applicable Margin" to Revise
Pricing Grid. The first two paragraphs of the definition of "Applicable Margin"
contained in Section 1 of the Loan Agreement shall be amended by deleting such
paragraphs in their entirety and replacing them as follows:
"APPLICABLE MARGIN" shall mean, initially, a percentage
equal to (i) with respect to Prime Rate Loan, zero (0), (ii) with
respect to LIBOR Rate Loans, 2.00% and (iii) with respect to Letter
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of Credit Fees, 2.00%, provided that such percentage shall be
reviewed (and if applicable, adjusted) semi-annually on the dates
that are five (5) Business Days after the dates upon which Agent
shall receive each Annual Financial Statements and June Quarterly
Financial Statements (each such date, an "Interest Adjustment Date"),
with such adjustment being based on the Domestic Funded Debt to
Consolidated EBITDA Ratio as reflected on such Annual Financial
Statements or June Quarterly Financial Statements (as applicable), as
follows:
Domestic Funded Debt to
Consolidated EBITDA Ratio Prime Rate Loans LIBOR Rate Loans Letter of Credit Fees
------------------------- ---------------- ---------------- ---------------------
Less than 2.00:1.00 zero (0) 2.00% 2.00%
Equal to or Greater than 2.00:1.00
but Equal to or Less than 2.49:1.00 zero (0) 2.25% 2.25%
Equal to or Greater than 2.50:1.00
but Equal to or Less than 2.99:1.00 0.25% 2.50% 2.50%
Equal to or Greater than 3.00:1.00 0.50% 2.75% 2.75%
The first such review (and, if applicable, adjustment) of
the Applicable Margin shall occur on the Interest Adjustment Date
following the delivery of the Annual Financial Statements for the
fiscal year ending December 31, 2004. Any adjustment of the
Applicable Margin made on any Interest Adjustment Date shall be
effective as of such Interest Adjustment Date until (but not
including) the next following Interest Adjustment Date (each such
period being an "Interest Adjustment Period"). The Applicable Margin
as determined on each Interest Adjustment Date shall apply to all
LIBOR Rate Loans for which the Interest Period commences during that
respective Interest Adjustment Period, but shall not apply to any
LIBOR Rate Loan for which the Interest Period commenced prior to such
respective Interest Adjustment Period. If Loan Parties fail to
deliver their Annual Financial Statements or June Quarterly Financial
Statements (as applicable) within the time required by subsection
9(c), the Applicable Margin shall be adjusted, as of the last date
provided for delivery of such statements under such subsection 9(c),
to equal the highest percentage that would apply under the above
pricing grid, and such Applicable Margin shall be effective for the
period beginning on such date and ending on the date that is five (5)
Business Days after the date upon which Lender shall actually receive
such Annual Financial Statements or June Quarterly Financial
Statements (as applicable), which date shall be deemed to be an
Interest Adjustment Date, at which time the Applicable Margin shall
be reviewed and (if applicable) adjusted according to the provisions
hereof.
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(iii) New Definition - "June Quarterly Financial Statements".
The following new definition shall be added to Section 1 of the Loan Agreement
in its proper alphabetical place:
"JUNE QUARTERLY FINANCIAL STATEMENTS" shall mean each set of
internally prepared financial statements for the quarterly fiscal
period ending as of June 30 of each year for Stonepath and its
Subsidiaries, together with the Compliance Certificate related
thereto, as required to be delivered to Lender by Loan Parties under
clause (ii) of Section 9(c) hereof.
(iv) Amendment to Definition to "Maximum Loan Limit" to Increase
Revolving Loan Facility. The definition of "Maximum Loan Limit" contained in
Section 1 of the Loan Agreement shall be amended by deleting such definition in
its entirety and replacing it as follows:
"MAXIMUM LOAN LIMIT" shall mean, at any time, an amount equal to
$25,000,000.
(v) New Definition - "Permitted Secured Mezzanine Debt". The
following new definition shall be added to Section 1 of the Loan Agreement in
its proper alphabetical place:
"PERMITTED SECURED MEZZANINE DEBT" shall mean a secured subordinated
debt facility entered into by any one or more of the Loan Parties
(and any Indebtedness incurred by such Loan Parties under such
secured subordinated debt facility) that (i) is entered into by such
Loan Parties only upon receiving the prior written consent of Lender
approving (a) the identity of the lenders extending credit to the
Loan Parties under, (b) the maximum principal amounts to be
borrowed/made available to borrowers under and (c) the terms and
conditions of such secured subordinated debt facility, which consent
shall be given or withheld by Lender in the exercise of its sole
discretion, (ii) is subject to a subordination and intercreditor
agreement in form and substance satisfactory to Lender in the
exercise of its sole discretion (which agreement, among other things,
shall provide for the subordination of any liens on the assets of
such Loan Parties securing such subordinated debt facility to the
liens of Lender on the Collateral securing the Liabilities hereunder)
and (iii) has a maturity date that is at least thirty (30) days after
the last day of the Term hereunder.
(b) Amendment to Unused Line Fee. Section 4(c)(ii) of the Loan
Agreement shall be amended by deleting such section in its entirety and
replacing it as follows:
Unused Line Fee: Loan Parties shall pay to Lender an unused line fee
in United States Dollars of 0.35% of the difference between (x) the
Maximum Loan Limit and (y) the average daily balance of the
outstanding Revolving Loans plus the average outstanding Letter of
Credit Obligations for each month, provided that, for any month
during which both (1) any Permitted Secured Mezzanine Debt and/or
Subordinated Debt is outstanding and (2) the average daily balance of
the outstanding Revolving Loans plus the average outstanding Letter
of Credit Obligations for such month is less than $5,000,000 (the
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difference (if any) as of any given month between the average daily
balance of the outstanding principal balance of such Revolving Loan
and outstanding Letter of Credit Obligations for such month and
$5,000,000, the "Threshhold Deficit Amount"), the unused line fee
shall be calculated as follows: (A) an unused line fee in United
States Dollars of 0.35% of the difference between (I) the amount of
the Maximum Loan Limit and (II) $5,000,000 and (B) an unused line fee
in United States Dollars of 1.50% of the Threshold Deficit Amount.
Such unused line fees shall be fully earned by Lender and payable
monthly in arrears on the first Business Day of each month. Said fees
shall be calculated on the basis of a 360 day year for the actual
number of days elapsed.
(c) Amendment to Terms of Prepayment Fee to Reflect Extension of
Maturity Date. Section 4(c)(iii) of the Loan Agreement shall be amended by
deleting such section in its entirety and replacing it as follows:
Prepayment Fee: In the event that (except as otherwise provided in
Subsection 4(c)(viii) below) Loan Parties prepay all of the
Liabilities hereunder, including all of the principal outstanding
under the Revolving Loans, and elect to terminate this Agreement
prior to the last day of the Term, which Loan Parties may elect to do
at any time but only upon 90 days prior written notice to Lender,
Loan Parties shall pay to Lender a prepayment fee ("PREPAYMENT FEE")
in United States Dollars equal to (i) 1.0% of the Maximum Loan Limit
if such prepayment occurs on or prior to May 15, 2006, and (ii) 0.5%
of the Maximum Loan Limit if such prepayment occurs after May 15,
2006 but prior to the last day of the Term.
(d) Amendment to Rate of Letter of Credit Fees. The first sentence
of Section 4(c)(iv) of the Loan Agreement shall be amended by deleting such
sentence in its entirety and replacing it as follows:
Loan Parties shall remit to Lender a letter of credit fee in United
States Dollars in an amount equal to Applicable Margin applied as a
per annum rate to the aggregate undrawn face amount of each Letter of
Credit for each day such letter of credit is to be outstanding, which
fee shall be payable monthly in advance on (x) the date of issuance
of each such Letter of Credit (for the time period from such date of
issuance through the last day prior to the first Business Day of the
month following the month in which such issuance occurs) and (y) on
the first Business Day of each month thereafter during any portion of
which month such Letter of Credit is to be outstanding (for the time
period from such first Business Day through the earlier of (i) the
last day prior to the first Business Day of the following month or
(ii) the expiration date of such Letter of Credit).
(e) Amendment to Extend Termination Date. The first sentence of
Section 10 of the Loan Agreement shall be amended by deleting such first
sentence in its entirety and replacing it as follows:
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THIS AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL MAY 15,
2007 (THE PERIOD FROM THE DATE HEREOF THROUGH SUCH DATE, THE "TERM")
UNLESS (A) THE DUE DATE OF THE LIABILITIES IS ACCELERATED PURSUANT TO
SECTION 16 HEREOF; OR (B) LOAN PARTIES ELECT TO TERMINATE THIS
AGREEMENT AT ANY TIME BY GIVING LENDER AT LEAST NINETY BUSINESS DAYS
NOTICE OF SUCH ELECTION AND BY PAYING ALL OF THE LIABILITIES IN FULL
(INCLUDING ANY APPLICABLE BREAKAGE COST OR PREPAYMENT FEE) AND BY
EITHER (X) PROVIDING CASH COLLATERAL IN AN AMOUNT EQUAL TO 105% OF
THE UNDRAWN FACE AMOUNT OF ALL OUTSTANDING LETTERS OF CREDIT OR (Y)
OBTAINING THE AGREEMENT OF ALL BENEFICIARIES ON EACH OF THE
OUTSTANDING LETTERS OF CREDIT TO THE TERMINATION THEREOF AND ALSO
DELIVERING ALL ORIGINAL COPIES OF EACH SUCH LETTER OF CREDIT TO
LENDER.
(f) Amendment to Negative Covenant Regarding Indebtedness. Section
13(b) of the Loan Agreement shall be amended by deleting such section in its
entirety and replacing it as follows:
INDEBTEDNESS.
No Loan Party shall create, incur, assume or become obligated
(directly or indirectly), for any loans or other indebtedness of
borrowed money other than the Loans, except that Loan Parties may (i)
incur either or both of (x) unsecured Subordinated Debt in an amount
not to exceed $25,000,000 in principal outstanding in the aggregate
for all Loan Parties at any one time and/or (y) Permitted Secured
Mezzanine Debt; (ii) maintain the present indebtedness listed on
Schedule 11(n) hereto; and (iii) incur unsecured indebtedness to
trade creditors in the ordinary course of business on standard terms.
(g) Amendment to Amount of Undrawn Availability Required for
Permitted Acquisitions. Clause (D) of Section 13(d)(ii) of the Loan Agreement
shall be amended by deleting such clause in its entirety and replacing it as
follows:
(D) Loan Parties shall, and after giving effect to the funding of
such proposed acquisition, (1) prior to the consummation of such
proposed acquisition, have had a Sixty Day Minimum Undrawn
Availability as of the date of such consummation of at least
$5,000,000 (provided that, from and after November 15, 2005, the
amount of such required Sixty Day Minimum Undrawn Availability shall
be $7,500,000) and (2) have Undrawn Availability as of the date of
such consummation of at least $5,000,000 (provided that, from and
after November 15, 2005, the amount of such required minimum Undrawn
Availability shall be $7,500,000); provided that, when calculating
the Undrawn Availability and Sixty Day Average Undrawn Availability
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of Loan Parties for the purposes of this Subsection 13(d)(ii), (x)
Other Pledged Cash and Pledged Cash at LaSalle shall only be included
if held in an investment account and (y) outstanding Accounts of the
newly acquired Loan Party as of the date of closing on such
acquisition which are then determined to be Eligible Accounts under
the terms hereof shall be included as if such amount of Eligible
Accounts had been in existence and owned by Loan Parties during the
prior 60 days,
(h) Amendment to Delete Provision Restricting Financial Covenants to
Domestic Operations. Section 13(d)(iii)(D) of the Loan Agreement shall be
amended by deleting such section in its entirety and replacing it as follows:
[RESERVED]
(i) Amendment to Funded Debt to Consolidated EBITDA Ratio. Section
14(b) of the Loan Agreement shall be amended by deleting such section in its
entirety and replacing it as follows:
FUNDED DEBT TO CONSOLIDATED EBITDA RATIOS.
(a) Domestic Funded Debt to Consolidated EBITDA Ratio. Loan Parties
shall maintain a Domestic Funded Debt to Consolidated EBITDA Ratio,
measured quarterly as at the end of each fiscal quarter on the basis
of a rolling four quarter fiscal measurement period, of not more than
3.75 to 1.00.
(b) Worldwide Funded Debt to Consolidated EBITDA Ratio. Loan Parties
shall maintain a Worldwide Funded Debt to Consolidated EBITDA Ratio,
measured quarterly as at the end of each fiscal quarter on the basis
of a rolling four quarter fiscal measurement period, of not more than
4.00 to 1.00.
2. Bridge Loan Facility.
(a) Lender and Loan Parties hereby agree that, subject to the
following terms and conditions, and to the terms and conditions of the Loan
Agreement and the Other Documents, Lender shall, upon the written request of
Loan Parties and subject to the satisfaction of certain other conditions as
described below, make a bridge term loan in United States Dollars to Loan
Parties in the principal amount of Five Million Dollars ($5,000,000) (such loan,
the "Bridge Loan"). Loan Parties may make such a written request for the making
and funding of the Bridge Loan at any time from and after the effectiveness of
this Amendment until the date that is one hundred twenty (120) days after such
effective date of this Amendment by delivering to Lender (i) a Notice of Bridge
Loan Funding Request in the form of Exhibit A to this Amendment executed by
Stonepath, (ii) a Bridge Loan Note in the form of Exhibit B to this Amendment
executed by all Loan Parties and (iii) payment of the Bridge Loan Closing Fee
described in Section 3(b)(ii) of this Amendment below (the date on which such
request shall be made and such conditions shall be fulfilled and such Bridge
Loan shall be made and funded, the "Bridge Loan Funding Date") provided that,
Lender shall not be required to so make or fund the Bridge Loan if on the date
of any such request by the Loan Parties, an Event of Default, or event that with
the passing of time or giving of notice, or both, shall become an Event of
Default, shall exist. If no such request shall be made by Loan Parties by the
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date that is one hundred twenty (120) days after the effective date of this
Amendment, the obligation and commitment of Lender to make such a Bridge Loan at
the request of Loan Parties a described in this paragraph (a) shall expire and
terminate. Notwithstanding anything to the contrary contained in this paragraph
(a) or anything else in this Amendment, if at any time following the effective
date of this Amendment but prior to the delivery by Loan Parties of a Notice of
Bridge Loan Funding Request and the making and funding of the Bridge Loan as
provided for hereunder, any Loan Party shall receive any cash proceeds from any
equity issuances by Stonepath (other than from the exercise of outstanding
warrants or stock options) and/or the incurrence of any Subordinated Debt and/or
any Permitted Secured Mezzanine Debt by any one or more Loan Parties, then the
obligations and commitment of Lender to make the Bridge Loan at the request of
Loan Parties as described in this paragraph (a) shall expire and terminate.
(b) Such Bridge Loan shall mature and all principal outstanding
thereunder (along with all accrued unpaid interest outstanding as of such date)
shall be due and payable on the date that is one hundred twenty (120) days
following the effective date of this Amendment (such date, the "Bridge Loan
Maturity Date"), provided that, if at any time after the Bridge Loan Funding
Date and before the Bridge Loan Maturity Date, any Loan Party shall receive any
cash proceeds from any equity issuances by Stonepath (other than from the
exercise of outstanding warrants or stock options) and/or the incurrence of any
Subordinated Debt and/or any Permitted Secured Mezzanine Debt by any one or more
Loan Parties (in each case to the extent any such equity issuance or incurrence
of Subordinated Debt or Permitted Secured Mezzanine Debt is permitted under the
terms of the Loan Agreement), Loan Parties shall remit to Lender one hundred
percent (100%) of such cash proceeds (net of any reasonable costs and expenses
of such equity issuance or Subordinated Debt or Permitted Secured Mezzanine
Debt) as a mandatory prepayment of the Bridge Loan. Loan Parties may also
voluntarily prepay the Bridge Loan in whole or in part at any time.
(c) The Bridge Loan shall bear interest from and after the Bridge
Loan Funding Date until such Bridge Loan is indefeasibly paid in cash in full at
a per annum rate of interest equal to the Prime Rate in effect from time to
time, plus Two Percent (2.00%), provided that upon the occurrence of any Event
of Default and during the existence thereof, the Bridge Loan shall bear interest
at a per annum rate of interest equal to the Prime Rate in effect from time to
time, plus Four Percent (4.00%). Such rate of interest shall increase or
decrease by any amount equal to each increase or decrease in the Prime Rate
effective on the effective date of each such change in the Prime Rate. All
interest on the Bridge Loan shall be calculated on the basis of a 360 day year
for the actual number of days elapsed. Such interest shall be payable in United
States Dollars on the first Business Day of each month in arrears, provided that
(x) any voluntary or mandatory prepayment of the Bridge Loan shall be applied
first to any accrued and unpaid interest outstanding as of the date of such
prepayment and (y) all outstanding accrued and unpaid interest shall be due and
payable in full on the Bridge Loan Maturity Date.
(d) The Bridge Loan, including all principal and interest thereon at
the rates described above (which rates shall be applicable to the Bridge Loan
after maturity, the occurrence of any Event of Default, acceleration, entry of
any judgment or the commencement of any bankruptcy or other insolvency
proceeding (whether or not a claim for such interest shall be allowable or
allowed in such proceeding)) shall be part of the Liabilities under the Loan
Agreement and shall be secured by the grant by the Loan Parties of a security
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interest in the Collateral to secure the Liabilities. As a part of such
Liabilities, the Bridge Loan shall be subject to all the provisions and terms
and conditions of the Loan Agreement and the other Initial Loan Documents,
including without limitation the provisions of Section 10 and Section 16 of the
Loan Agreement regarding acceleration.
3. Fees.
(a) Amendment Fee. Loan Parties covenant and agree that, in
consideration for the accommodations and amendments provided for herein, Loan
Parties shall pay to Lender an amendment fee of Fifty Thousand Dollars ($50,000)
(the "Amendment Fee"), which Amendment Fee shall be due and payable and fully
earned and non-refundable on the date of the execution of this Amendment.
(b) Bridge Loan Commitment and Closing Fees. Loan Parties covenant
and agree that, in consideration for the commitment to make the Bridge Loan on
and subject to the terms and conditions of Section 2 of this Amendment above,
Loan Parties shall pay to Lender certain commitment and closing fees as follows:
(i) Loan Parties covenant and agree that, Loan Parties shall pay
to Lender an initial commitment fee of Fifteen Thousand Dollars ($15,000) (the
"Bridge Loan Commitment Fee"), which Bridge Loan Commitment Fee shall be due and
payable and fully earned and non-refundable on the date of the execution of this
Amendment.
(ii) Loan Parties further covenant and agree that if Loan
Parties shall elect to exercise their rights under Section 2 of this Amendment
above to request that the Bridge Loan be made and funded by Lender, then, in
connection and concurrently with Loan Parties delivery of the Notice of Bridge
Loan Funding Request as described in Section 2 of this Amendment above, Loan
Parties shall pay to Lender a closing fee of Thirty-Five Thousand Dollars
($35,000) (the "Bridge Loan Closing Fee"), which Bridge Loan Closing Fee shall
be due and payable and fully earned and non-refundable on the date that Lender
shall fund the Bridge Loan.
4. Representations and Warranties.
Each Loan Party, including without limitation the New Loan Party,
represents and warrants to Lender that:
(a) All warranties and representations made to Lender under the Loan
Agreement and the other Initial Loan 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.
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(c) This Amendment, the Fifth Amended and Restated Note (as defined
below) and any assignment, instrument, document or agreement executed and
delivered in connection herewith, will be valid and binding on and enforceable
against each Loan Party in accordance with its respective terms.
(d) No Event of Default, or event which, with the passage of time or
giving of notice, or both, will become an Event of Default, has occurred and is
continuing under the Loan Agreement or any of the other Initial Loan Documents.
5. Collateral.
As security for the payment of all Loans now or in the future made by
Lender to Loan Parties (including without limitation the New Loan Party) and for
the payment or other satisfaction of all other Liabilities (including without
limitation any Bridge Loan made as contemplated by Section 2 of this Amendment
above), 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.
6. 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) Execution and delivery of a Fifth Amended and Restated Revolving
Note dated as of the date hereof in the original principal amount of $25,000,000
("Fifth Amended and Restated Note") by all of the Loan Parties reflecting the
increase in the Maximum Loan Limit provided for in Section 2 above;
(c) 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 and
the Fifth Amended and Restated Note 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 Fifth
Amended and Restated Note 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;
(d) Payment to Lender of the Amendment Fee and the Bridge Loan
Commitment Fee, 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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(e) Execution and/or delivery of any and all other agreements,
instruments and documents requested by Lender to effectuate and implement the
terms hereof and the Initial Loan Documents.
7. Ratification of Initial Loan Documents.
Except as expressly set forth herein, all of the terms and conditions
of the Loan Agreement and Initial Loan Documents 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.
8. 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.
9. 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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[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Sixth Amendment to
Loan and Security Agreement the day and year first written above.
LENDER:
LASALLE BUSINESS CREDIT, LLC
By:____________________________________
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:____________________________________
Name: Xxxx X. Xxxxx
Title: Treasurer
14
EXHIBIT A TO SIXTH AMENDMENT
----------------------------
NOTICE OF BRIDGE LOAN FUNDING REQUEST
-------------------------------------
{LETTERHEAD OF STONEPATH GROUP, INC.}
Date: [ __________, 2004]
LaSalle Business Credit, LLC
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Xx.
Pursuant to 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") between Stonepath Group, Inc. and
those certain of its Subsidiaries named as "Loan Parties" therein (the "Loan
Parties") and LaSalle Business Credit, LLC (the "Lender"), Stonepath Group,
Inc., acting as Borrowing Agent on behalf of the Loan Parties under the Loan
Agreement, hereby requests in writing that on ___________, 2004 (the "Bridge
Loan Funding Date"), Lender make and fund the Bridge Loan in the amount of
$5,000,000 as provided for under and on the terms and conditions set forth in
Section 2 of the Sixth Amendment to Loan and Security Agreement among Lender and
Loan Parties dated July 28, 2004 (the "Sixth Amendment"). Capitalized terms not
otherwise defined herein shall have the respective meanings given such terms in
the Loan Agreement and the Sixth Amendment.
In connection with the above request for the making and funding of the
Bridge Loan, Borrowing Agent, acting on behalf of all Loan Parties, hereby
requests that a Prime Rate Loan in the amount of the Bridge Loan Closing Fee be
made on the date hereof under Section 2(a)(ii) of the Loan Agreement and that
the proceeds of such Prime Rate Loan be disbursed to Lender, for its own
account, in payment and satisfaction of the Bridge Loan Closing Fee as provided
for in the Sixth Amendment as a condition to the making and funding of the
Bridge Loan.
The undersigned, as an authorized officer of Borrowing Agent, hereby
certifies on behalf of Borrowing Agent and all other Loan Parties, that as of
the date hereof, no Event of Default, or event that with the passing of time or
giving of notice, or both, shall become an Event of Default exists, that all of
the other conditions to the making of the Bridge Loan as set forth in the Fourth
Amendment (including the delivery to Lender by Loan Parties of the Bridge Loan
Note executed by all Loan Parties) and of a Prime Rate Loan in the amount of the
Bridge Loan Closing Fee as set forth in the Loan Agreement have been satisfied
and that this request for the making and funding of the Bridge Loan and the
making of a Prime Rate Loan to pay the Bridge Loan Closing Fee complies with all
of the terms and provisions of the Loan Agreement as amended by the Sixth
Amendment.
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The proceeds of the Bridge Loan should be disbursed as follows:
[ ]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Bridge
Loan Funding Request as of the date first set forth above.
_____________________________________
Name:
Title: [[_________________] of Stonepath Group, Inc.
16
EXHIBIT B TO SIXTH AMENDMENT
----------------------------
BRIDGE LOAN NOTE
----------------
No. _______
Executed as of the 28th day of July, 0000
Xxxxxx: $5,000,000
FOR VALUE RECEIVED, the Undersigned (jointly and severally, if more
than one) promises to pay to the order of LASALLE BUSINESS CREDIT, LLC, a
Delaware limited liability company (successor by merger to LASALLE BUSINESS
CREDIT, INC.) (hereinafter, together with any holder hereof, called "LENDER"),
at the office of the Lender located at 0000 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxxxx XX 00000, the principal sum of FIVE MILLION DOLLARS ($5,000,000).
The Undersigned (jointly and severally, if more than one) further promises to
pay interest on the outstanding principal amount hereof from the date hereof
until payment in full hereof at the rates provided for in that 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") between the Undersigned and Lender and the related Sixth
Amendment to Loan and Security Agreement dated as of the date hereof among the
Undersigned and Lender (as it may hereafter be from time to time modified,
amended, restated or replaced, the "Sixth Amendment").
This Bridge Loan Note ("Note") is issued in connection with and is
delivered pursuant to Section 2 of the Sixth Amendment and is entitled to all of
the benefits and security of the Loan Agreement and the Sixth Amendment. All of
the terms, covenants and conditions of the Loan Agreement (including without
limitation the Sixth Amendment) and the Other Agreements are hereby made a part
of this Note and are deemed incorporated herein in full. All terms which are
capitalized and used herein (which are not otherwise defined herein) shall have
the meanings ascribed to such terms in the Loan Agreement and the Sixth
Amendment.
Principal hereunder and accrued interest hereon shall be payable
pursuant to the terms of the Loan Agreement and the Sixth Amendment.
Notwithstanding the foregoing, the entire unpaid principal balance and accrued
interest on this Note shall be due and payable immediately upon termination of
the Loan Agreement pursuant to Section 10 of the Loan Agreement or upon
acceleration of the Liabilities pursuant to Section 16 of the Loan Agreement.
The Undersigned (and each one of them, if more than one) hereby
authorizes the Lender to charge any deposit or loan account of the Undersigned
(and each one of them, if more than one) for all sums due hereunder. If payment
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day, and interest
shall be payable thereon at the rate specified during such extension.
Credit shall be given for payments made in the manner and at the times
provided in the Loan Agreement. It is the intent of the parties that the rate of
interest and other charges to the Undersigned under this Note shall be lawful;
therefore, if for any reason the interest or other charges payable hereunder are
found by a court of competent jurisdiction, in a final determination, to exceed
17
the limit which Lender may lawfully charge the Undersigned, then the obligation
to pay interest or other charges shall automatically be reduced to such limit
and if any amount in excess of such limit shall have been paid, then such amount
shall be refunded to the Undersigned.
The principal and all accrued interest hereunder may be prepaid by the
Undersigned, in part or in full, at any time.
Upon the occurrence and during the existence of an Event of Default,
Lender shall have all of the rights and remedies set forth in the Loan Agreement
(including the Sixth Amendment) and the Other Agreements.
The Undersigned (and each one of them, if more than one) waives the
benefit of any law that would otherwise restrict or limit Lender in the exercise
of its right, which is hereby acknowledged, to set-off against the Liabilities
(including all amounts owing under this Note), without notice and at any time
hereafter, any indebtedness matured or unmatured owing from Lender to the
Undersigned (or any one of them). The Undersigned (and each one of them, if more
than one) waives every defense, counterclaim or setoff which the Undersigned (or
any one of them) may now have or hereafter may have to any action by Lender in
enforcing this Note and/or any of the other Liabilities, or in enforcing
Lender's rights in the Collateral and ratifies and confirms whatever Lender may
do pursuant to and in accordance with the terms hereof and of the Loan Agreement
(including the Sixth Amendment) and with respect to the Collateral and agrees
that Lender shall not be liable for any error in judgment or mistakes of fact or
law.
Time is of the essence with respect to the obligations of the
Undersigned under this Note. The Undersigned, any other Person liable with
respect to the Liabilities and any and all endorsers and accommodation parties,
and each one of them, if more than one, waive any and all presentment, demand,
notice of dishonor, protest, and all other notices and demands in connection
with the enforcement of Lender's rights hereunder.
THIS NOTE, AND ALL MATTERS RELATED HERETO AND ARISING HEREFROM, SHALL
BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA (WITHOUT REGARD TO ITS OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS
OF LAWS) AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND
IN ALL OTHER RESPECTS, INCLUDING, WITHOUT LIMITATION, THE LEGALITY OF THE
INTEREST RATE AND OTHER CHARGES, and shall be binding upon the Undersigned (and
each one of them, if more than one) and the Undersigned's successors (and each
of them, if more than one). The Undersigned may not assign any of their rights
or obligations and liabilities under this Note. If this Note contains any blanks
when executed by the Undersigned (or any one of them, if more than one), the
Lender is hereby authorized, without notice to the Undersigned (or any one of
them, if more than one) to complete any such blanks according to the terms upon
which the loan or loans were granted. Wherever possible, each provision of this
Note shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or be
invalid under such law, such provision shall be severable, and be ineffective to
the extent of such prohibition or invalidity, without invalidating the remaining
provisions of this Note. If more than one Person shall execute this Note, the
term "UNDERSIGNED" as used herein shall mean all parties signing this Note, and
each one of them, and all such parties, their respective successors and
permitted assigns, shall be jointly and severally obligated hereunder.
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No delay or failure on the part of Lender in the exercise of any right
or remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise by Lender of any right or
remedy preclude any other right or remedy. Except as provided in the Loan
Agreement, after an Event of Default, Lender, at its option exercisable in its
sole discretion, may enforce its rights against any Collateral securing this
Note or against any other Person primarily or secondarily liable for the
indebtedness evidenced by this Note without enforcing its rights against the
Undersigned (or any one or more of them) or any other property of or
indebtedness due or to become due to the Undersigned (or any one or more of
them). Each Undersigned agrees that, without releasing or impairing such
Undersigned's liability hereunder, Lender may at any time release, surrender,
substitute or exchange any Collateral securing this Note and may at any time
release any Person (including any one or more of the Undersigned) primarily or
secondarily liable for the indebtedness evidenced by this Note.
To induce the Lender to make the loan(s) evidenced by this Note, the
Undersigned (and each one of them, if more than one) (i) irrevocably agrees
that, subject to Lender's sole and absolute election, ALL ACTIONS OR PROCEEDINGS
IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO THIS NOTE OR
THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF
PHILADELPHIA, COMMONWEALTH OF PENNSYLVANIA, AND EACH UNDERSIGNED HEREBY CONSENTS
AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED
WITHIN SAID CITY AND STATE; AND (II) WAIVES ANY OBJECTION BASED ON FORUM
NON-CONVENIENS. IN ADDITION, LENDER AND THE UNDERSIGNED (OR ANY ONE OF THEM, IF
MORE THAN ONE) EACH HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS NOTE, THE LIABILITIES,
THE COLLATERAL, OR ANY ALLEGED TORTIOUS CONDUCT BY THE UNDERSIGNED OR LENDER OR
WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE
RELATIONSHIP BETWEEN THE UNDERSIGNED AND LENDER. In addition, the Undersigned
agrees that all service of process shall be made as provided in the Loan
Agreement.
IF PERMITTED BY LAW, EACH UNDERSIGNED HEREBY AUTHORIZES AND EMPOWERS
ANY ATTORNEY OF ANY COURT OF RECORD UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT
UNDER THE LOAN AGREEMENT TO APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH
UNDERSIGNED WITHOUT PRIOR NOTICE TO SUCH UNDERSIGNED OR PRIOR OPPORTUNITY TO BE
HEARD FOR SUCH SUMS AS SHALL HAVE BECOME DUE UNDER THE LOAN AGREEMENT (INCLUDING
THE SIXTH AMENDMENT), THIS NOTE AND ALL OTHER LIABILITIES AND OTHER OBLIGATIONS
UNDER THE LOAN AGREEMENT OF SUCH UNDERSIGNED TO LENDER, WITH OR WITHOUT
DECLARATION, WITH COSTS OF SUIT (INCLUDING THE GREATER OF SEVEN THOUSAND FIVE
HUNDRED DOLLARS ($7,500.00) OR TEN PERCENT (10%) OF THE MAXIMUM PRINCIPAL AMOUNT
ADDED AS REASONABLE ATTORNEYS' FEES AND DISBURSEMENTS) AND RELEASE OF ERROR,
WITHOUT STAY OF EXECUTION. IF A COPY OF THIS NOTE, VERIFIED BY AFFIDAVIT OF
19
LENDER OR SOMEONE ON BEHALF OF LENDER, SHALL HAVE BEEN FILED IN SUCH ACTION, IT
SHALL NOT BE NECESSARY TO FILE THE ORIGINAL NOTE AS A WARRANT OF ATTORNEY. THE
AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST SUCH UNDERSIGNED
SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT
EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT
THERETO; THE AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS, FROM
TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS LENDER SHALL
DEEM NECESSARY OR DESIRABLE, FOR ALL OF WHICH THIS NOTE SHALL BE A SUFFICIENT
WARRANT.
As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "Undersigned" shall be so construed.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, and intending to be legally bound, each of the
Undersigned, if more than one, has executed this Bridge Loan Note on the date
above set forth.
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:____________________________________
Name: Xxxx X. Xxxxx
Title: Treasurer
[SIGNATURE PAGE TO REVOLVING NOTE]
================================================================================
FOR LENDER USE ONLY
Officer's Initials: __________
Approval: __________
21
