LOAN MODIFICATION AGREEMENT
EXHIBIT 10.1
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LOAN
MODIFICATION
AGREEMENT
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This
Fifth Loan Modification Agreement (“Fifth Modification”) modifies the Loan
Agreement dated February 13, 2007, amended by Amendment No. 1 to Loan Agreement
dated February 12, 2008 (the “First Modification”), by Amendment No. 2
dated June 24, 2008 (the “Second Modification”), by the Third Amendment to
Loan Documents dated September 5, 2008 (the “Third Modification”), and by
the Fourth Amendment to Loan Documents dated May 27, 2009 (as further
amended from time to time, the “Agreement”), regarding a revolving line of
credit in the current maximum principal amount of $14,500,000.00 (the “Loan”),
executed by RADIANT LOGISTICS,
INC., a Delaware
corporation, RADIANT LOGISTICS
GLOBAL SERVICES, INC., a Delaware corporation, RADIANT LOGISTICS PARTNERS,
LLC, a Delaware limited liability company, RADIANT GLOBAL LOGISTICS, INC.
(f/k/a Airgroup Corporation), a Washington corporation, and ADCOM EXPRESS, INC., a
Minnesota corporation (on a joint and several basis referred to herein as
“Borrower”), and BANK OF
AMERICA, N.A. (“Bank”). Terms used in this Fifth Modification
and defined in the Agreement shall have the meaning given to such terms in the
Agreement. For mutual consideration, Borrower and Bank agree to amend
the Agreement as follows:
1.
Borrowing
Base. Section 1.1 of the Agreement is deleted and
replaced with the following:
“Borrowing Base” means
the sum of (a) 80% of the Prime Government Receivables; (b) 80% of the
Commercial Receivables; and (c) 0% of the Unbilled
Receivables. After calculating the Borrowing Base as provided herein,
the Bank may deduct such reserves as the Bank may establish from time to time in
its reasonable judgment, including without limitation, reserves for rent at
leased locations subject to statutory or contractual landlord’s liens, inventory
shrinkage, dilution, customs charges, warehousemen’s or bailees’ charges,
liabilities to growers of agricultural products which are entitled to lien
rights under the federal Perishable Agricultural Commodities Act or any
applicable state law, and the amount of the estimated maximum exposure, as
determined by the Bank from time to time, under any interest rate contracts
which the Borrower enters into with the Bank (including interest rate swaps,
caps, floors, options thereon, combinations thereof, or similar
contracts). To the extent required, the Borrowing Base Certificate
shall be amended to reflect the definition of Borrowing Base
herein.
2. Credit
Limit. In Section 2.1(a)(i) of the Agreement, the amount
of “Fourteen Million Five Hundred Thousand and no/100 ($14,500,000)” is changed
to “Nineteen Million Five Hundred Thousand and no/100 Dollars
($19,500,000).” This change in the credit limit shall also be
reflected on the Borrowing Base Certificate.
3.
Availability
Period. In Section 2.2 of the Agreement, the date
“February 1, 2011” (amended in the First Modification) is changed to
“March 31, 2012.”
4. Interest
Rate. Section 2.5 of the Agreement is deleted and
replaced with the following:
2.5 Interest
Rate.
(a) The
interest rate is a rate per year equal to the greater of the Prime Rate plus the
Applicable Margin (defined below) or the Federal Funds Floating Rate plus
0.50%.
(b) The
Prime Rate is the rate of interest publicly announced from time to time by the
Bank as its Prime Rate. The Prime Rate is set by the Bank based on
various factors, including the Bank’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans. The Bank may price loans to its customers at, above, or below
the Prime Rate. Any change in the Prime Rate shall take effect at the
opening of business on the day specified in the public announcement of a change
in the Bank’s Prime Rate.
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(c) The
Federal Funds Floating Rate for any day is a fluctuating rate of interest equal
to the Federal Funds Rate as published in the Federal Reserve Bank of New York
Statistical Daily Rates for such day (or, if such source is not available, such
alternate source as determined by the Bank).
5. Applicable
Rate. The grid in Section 2.7 of the Agreement is deleted
and replaced with the following grid:
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Applicable
Rate
(in
percentage points per annum)
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Pricing
Level
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Funded
Debt to EBITDA Ratio
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LIBOR
Rate
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Prime
Rate
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Unused
Commitment Fee
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1
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> 1.75:1
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plus
1.75
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minus
0.75
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0.20
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2
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≤
1.75:1 but >
2.50:1
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plus
2.00
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minus
0.50
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0.20
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3
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≤
2.50:1 but >
3.25:1
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plus
2.50
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even
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0.25
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4
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≤
3.25:1 but ≥ 4.0:1
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plus
3.00
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plus
0.50
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0.30
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6. Unused Commitment
Fee. The second sentence in Section 5.1(a) of the
Agreement is deleted and replaced with the following:
The
fee will be calculated based on the Applicable Rate for the Unused Commitment
Fee shown Section 2.7 above.
7. Use of
Proceeds. The following is added to subsection (a) of
Section 9.1 of the Agreement:
The
proceeds of Facility No. 1 may also be used for general corporate purposes,
including the repurchase of common stock of Radiant Logistics, Inc. up to
$1,000,000.
8. Funded Debt to EBITDA
Ratio. Section 9.4 of the Agreement is deleted in its
entirety and replaced with the following:
9.4 Funded Debt to EBITDA
Ratio. With respect to Radiant Logistics, Inc., maintain on a
consolidated basis a ratio of Funded Debt to EBITDA not to exceed 4.0 to
1. This ratio will be calculated at the end of each reporting period
for which the Bank requires financial statements from the Borrower, using the
results of the last twelve-month period ending with that reporting
period. As used in this Section 9.4, capitalized terms have the
following meanings:
“Allowable
Add-Backs” means the following expenses associated with acquisitions permitted
by the Agreement: (a) transaction costs (which include legal
costs, due diligence costs and accounting costs), (b) severance costs
(which include medical, unemployment and other costs related to staff
reductions), (c) relocation costs, and (d) restructing costs
(including lease obligations) in response to FAS-141R up to
$1,500,000. The foregoing “add-back” expenses will be allowed in the
quarter the expense occurs and as long as that quarter remains in a trailing
twelve-month calculation.
“Contingent
Liabilities” means those liabilities that are related to earn-out provisions,
determined based upon EBITDA performance of the company being
acquired.
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“EBITDA”
means net income, less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus
depreciation, amortization, plus Equity Credits, and other non-cash charges,
plus Allowable Add-Backs.
“Equity
Credits” means with respect to any measurement period, the sum of expenses
incurred in the ordinary course of business paid through the issuance of common
stock (or options to purchase stock) in Radiant Logistics, Inc.
“Funded
Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long-term debt, less the
non-current portion of subordinated liabilities, and excluding Contingent
Liabilities.
9. Basic Fixed Charge Coverage
Ratio. Section 9.5 of the Agreement is deleted in its
entirety and replaced with the following:
Section 9.5 Basic Fixed Charge Coverage
Ratio. With respect to Radiant Logistics, Inc., maintain on a
consolidated basis a Basic Fixed Charge Coverage Ratio of at least 1.1 to
1. As used herein, “Basic Fixed Charge Coverage Ratio” means the
ratio of (a) the sum of EBITDA (defined in Section 9.4 above), plus
lease expense and rent expense, minus income tax, minus dividends, withdrawals
and other distributions, to (b) the sum of interest expense, lease expense,
rent expense, the current portion of long-term debt (excluding the current
portion of Contingent Liabilities (defined in Section 9.4 above)), and the
current portion of capitalized lease obligations. This ratio will be
calculated at the end of each reporting period for which the Bank requires
financial statements, using the results of the twelve-month period ending with
that reporting period. The current potion of long-term liabilities
will be measured as of the last day of the calculation
period. Amounts outstanding under Facility No. 1 or Facility No. 2
(added by the Second Modification) shall not be considered current obligations
for purposes of the foregoing calculation.
10. Setoff. A
new Section 11.19 is added to the Agreement as follows:
Section 11.19 Set-Off.
(a) In
addition to any rights and remedies of the Bank provided by law, upon the
occurrence and during the continuance of any event of default under this
Agreement, the Bank is authorized, at any time, to set off and apply any and all
Deposits of the Borrower or any Obligor held by the Bank against any and all
Obligations owing to the Bank. The set-off may be made irrespective
of whether or not the Bank shall have made demand under this Agreement or any
guaranty, and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable
Deposits.
(b) The
set-off may be made without prior notice to the Borrower or any other party, any
such notice being waived by the Borrower (on its own behalf and on behalf of
each Obligor) to the fullest extent permitted by law. The Bank agrees
promptly to notify the Borrower after any such set-off and application; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
(c) For
the purposes of this paragraph, “Deposits” means any deposits (general or
special, time or demand, provisional or final, individual or joint) and any
instruments owned by the Borrower or any Obligor that come into the possession
or custody or under the control of the Bank. “Obligations” means all
obligations, now or hereafter existing, of the Borrower to the Bank under this
Agreement and under any other agreement or instrument executed in connection
with this Agreement, and the obligations to the Bank or any
Obligor.
11. Collateral. In
connection with the Agreement, Radiant Logistics Global Services, Inc. and Bank
entered into that certain Security Agreement (Multiple Use) dated
February 6, 2007 (as amended, the “Global Services Security Agreement”),
and Radiant Logistics Partners, LLC and Bank entered into that certain Security
Agreement (Multiple Use) dated February 6, 2007 (as amended, the “Partners
Security Agreement” and together with the Global Services Security Agreement,
the “Security Agreements”). Pursuant to the terms of the Third
Modification, Radiant Logistics, Inc., Airgroup Corporation and Adcom Express,
Inc. each became a “Pledgor” and party to the Partners Security Agreement
granting to Bank a security interest in the Collateral (as described
therein). Each Borrower hereby reaffirms its assignment and grant of
security made in the Security Agreements in favor of Bank. Airgroup
Corporation is now known as Radiant Global Logistics, Inc. and as such,
reaffirms its assignment and grant of security interest provided in the Partners
Security Agreement in favor of Bank.
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The
following property is added to the definition of “Collateral” in each Security
Agreement as new Sections 1(i) and (j) and each Borrower (and as used below
“Pledgor”) hereby assigns and grants to Bank a security interest in the
following now owned or hereafter acquired property:
(i) All
of the Pledgor’s deposit accounts with the Bank. The Collateral shall include
any renewals or rollovers of the deposit accounts, any successor accounts, and
any general intangibles and choses in action arising therefrom or related
thereto.
(j) All
instruments, notes, chattel paper, documents, certificates of deposit,
securities and investment property of every type. The Collateral
shall include all liens, security agreements, leases and other contracts
securing or otherwise relating to the foregoing.
Each
Borrower authorizes Bank to file any and all Uniform Commercial Code financing
statements, amendments (including name change amendments) and/or continuation
statements in the jurisdictions deemed proper by Bank to perfect its security
interest in the Collateral granted by each Borrower under the Security
Agreements, as modified hereby. Each Borrower further authorizes Bank
to file Uniform Commercial Code financing statements and/or amendments
describing the Collateral as “all assets.”
12. Representations and
Warranties. When Borrower signs this Fifth Modification,
Borrower represents and warrants to Bank that: (a) there is no
event that is, or with notice or lapse of time or both would be, an event of
default under the Agreement except those events, if any, that have been
disclosed in writing to Bank or waived in writing by Bank, (b) the
representations and warranties in the Agreement are true as of the date of this
Fifth Modification as if made on the date of this Fifth Modification,
(c) this Fifth Modification does not conflict with any law, agreement, or
obligation by which Borrower is bound, and (d) this Fifth Modification is
within Borrower’s powers, has been duly authorized, and does not conflict with
any of Borrower’s organizational papers.
13. Conditions. This
Fifth Modification will be effective when Bank receives the following items, in
form and content acceptable to Bank:
(a) If
required by Bank, evidence that the execution, delivery, and performance by each
Borrower of this Fifth Modification and any instrument or agreement required
under this Fifth Modification have been duly authorized.
(b) Payment
by Borrower of all costs, expenses, and attorneys’ fees (including allocated
costs for in-house legal services) incurred by Bank in connection with this
Fifth Modification.
14. Other
Terms. Except as specifically amended by this Fifth
Modification or any prior amendment, all other terms, conditions, and
definitions of the Agreement, and all other documents, instruments, or
agreements entered into with regard to the Loan, shall remain in full force and
effect.
15. FINAL
AGREEMENT. BY
SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES
THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT
SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS
AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT
LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY
PROVIDES TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY
EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.
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16. WASHINGTON
NOTICE. ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
DATED as
of March 25, 2010.
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Bank:
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Borrower:
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BANK
OF AMERICA, N.A.
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| By |
/s/
M. T. Xxxxxxxx
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By |
/s/
Xxxx X. Xxxxx
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M.
Xxxxx Xxxxxxxx, Vice President
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Xxxx
X. Xxxxx, Chief Executive Officer
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RADIANT
LOGISTICS GLOBAL SERVICES, INC.
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By |
/s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, President
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RADIANT
LOGISTICS PARTNERS, LLC
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By |
/s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Managing Member
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RADIANT
GLOBAL LOGISTICS, INC.
(f/k/a
AIRGROUP CORPORATION)
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By |
/s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, President
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ADCOM
EXPRESS, INC.
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By |
/s/
Xxxx X. Xxxxx
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Xxxx
X. Xxxxx, Chief Executive Officer
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Federal
law requires Bank of America, N.A. (the “Bank”) to provide the
following notice. The notice is not part of the foregoing
agreement or instrument and may not be altered. Please read the
notice carefully.
USA
PATRIOT ACT NOTICE
Federal
law requires all financial institutions to obtain, verify and record information
that identifies each person who opens an account or obtains a
loan. The Bank will ask for the Borrower’s legal name, address, tax
ID number or social security number and other identifying
information. The Bank may also ask for additional information or
documentation or take other actions reasonably necessary to verify the identity
of the Borrower, guarantors or other related persons.
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