Item
1.01 Entry into a Material Definitive Agreement.
On
March 10, 2023, Unique logistics International, Inc. (the “Company”) entered into a financing agreement (the “Financing
Agreement,” capitalized terms used but not otherwise defined herein have the same definitions given to such terms in the Financing
Agreement) and related fee letter (“Fee Letter”) as borrower with certain of its subsidiaries party thereto as guarantors,
the lenders party thereto, CB Agent Services LLC, as origination agent, and Alter Domus (US) LLC, as collateral agent and administrative
agent. The Financing Agreement provides for an initial senior secured term loan in a principal amount of $4,210,526.32 and a delayed
draft term loan in an aggregate principal amount of up to $14,789,473.68.
The
proceeds of such term loans may be used to (i) pay fees and expenses related to entering into the Financing Agreement and the related
transaction documents and the acquisitions of those certain entities contemplated by that certain Stock Purchase Agreement between the
Company and seller thereunder (the “Seller”) and those separate certain Share Sale and Purchase Agreements, as previously
reported on the Company’s Current Report on Form 8-K filed on February 27, 2023 (the “Acquisitions”), (ii) redeem
certain of the notes issued to the Seller in connection with the Acquisition, and (iii) pay fees and expenses related of the transactions
contemplated by that certain Agreement and Plan of Merger, dated as of December 18, 2022, by and among Edify Acquisition Corp., a Delaware
corporation, Edify Merger Sub, Inc., a Nevada corporation, and the Company, as previously reported on the Company’s Current Report
on Form 8-K filed on December 19, 2022. The Company’s obligations under the Financing Agreement are or will be guaranteed by certain
of its domestic subsidiaries as set forth in the Financing Agreement. Such obligations, including the guarantees, are secured by substantially
all of the personal property of the Company and the subsidiary guarantors, pursuant to a security agreement (“Security Agreement”),
dated March 10, 2023.
Each
term loan under the Financing Agreement shall be, at the option of the Company, either a Base Rate Loan or a SOFR Loan. Base Rate Loans
shall bear interest at a rate per annum equal to the Base Rate plus 9.00% per annum. SOFR Loans shall bear interest at a rate per annum
equal to Adjusted Term SOFR plus 10.00% per annum. Under certain circumstances, a default interest rate will apply on all obligations
during the existence of an event of default under the Financing Agreement at a per annum rate equal to 3.00% above the interest rate
otherwise applicable to such obligations.
The
Financing Agreement requires that the Loan Parties and their subsidiaries make certain mandatory prepayments (“Mandatory Prepayments”)
including paying a certain percentage of Excess Cash Flow and the proceeds of Extraordinary Receipts. Any Mandatory Prepayments or repayment
in full of the term loans will be subject to early termination fees in an amount equal to (a) a make-whole amount equal to (a) 1.35 times
the aggregate original principal amount of the term loans funded under the Financing Agreement minus (b) the sum of (i) any interest
paid to the Financing Agreement plus (ii) any Upfront Fees equal to 5.00% the amount of proceeds of Loans under the Agreement, Agency
Fees, and Exit Fees equal to 5.00% of the aggregate original principal amount of the term loans paid pursuant to the Loan Documents,
plus (iii) any principal amounts of the term loans paid as of the date of such prepayment or repayment. No make-whole amount will be
owing or payable by the Company in respect of optional prepayment on or prior to the date that is nine (9) months following the effective
date of the Financing Agreement.
The
Financing Agreement contains customary representations, warranties, events of default and covenants by the Loan Parties and their subsidiaries,
subject to customary materiality, material adverse effect and knowledge qualifiers. The Financing Agreement also contains (a) certain
affirmative covenants that impose certain reporting obligations on the Loan Parties and their subsidiaries, (b) certain negative covenants
that generally limit, subject to various exceptions, the Loan Parties and their subsidiaries from taking certain actions, including,
without limitation, incurring indebtedness, making investments, incurring liens, paying dividends and engaging in mergers and consolidations,
sale and leasebacks and asset dispositions, and (c) financial maintenance covenants in the form of a maximum leverage ratio and minimum
liquidity. Obligations under the Financing Agreement may be declared due and payable upon the occurrence and during the continuance of
customary events of default.
In
connection with the Financing Agreement, Fee Letter, and Security Agreement, the Company also entered into several related documents.
These include a Collateral Assignment assigning rights and rights of enforcement regarding warranties, representation, covenants and
indemnities made by Seller under the Acquisition documents, an Intercompany Subordination Agreement through which each of the subsidiaries
agreed to subordinate the indebtedness the Company owed to such subsidiary to the Company’s obligations under the Financing Agreement,
and an Agent Fee Letter with Alter Domus (US) LLC governing the payment of Alter Domus (US) LLC’s service as collateral agent and
administrative agent.
In
connection with the foregoing, the Company’s current senior lender entered into an intercreditor agreement with Alter Domus (US)
LLC, dated March 10, 2023, through which the senior lender confirmed the relative priority of the security interests in the assets and
properties of the Company and its subsidiaries and related matters. The Company is not a party to the intercreditor agreement.
The
foregoing summaries of the Financing Agreement, Fee Letter, Security Agreement, Collateral Assignment, Intercompany Subordination Agreement,
and Agent Fee Letter set forth herein are qualified in their entirety by references to such documents, filed as Exhibits 10.1, 10.2,
10.3, 10.3, 10.4, 10.5 and 10.6 hereto, respectively, which are incorporated by reference herein.
The
Financing Agreement and the related Loan Documents contain representations and warranties by each of the parties thereto, which were
made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the Financing Agreement
and the related Loan Documents were made solely for the benefit of the parties to such agreements; are subject to limitations agreed
upon by the contracting parties, including being qualified by confidential disclosure schedules; may have been made for the purposes
of allocating contractual risk between the parties to such agreements instead of establishing these matters as facts; and are subject
to standards of materiality applicable to the contracting parties that may differ from those applicable to investors. Investors should
not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts
or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations,
warranties and covenants may change after the date of such agreement, which subsequent information may or may not be fully reflected
in the Company’s public disclosures.
