Exhibit 10.1
LOAN
AGREEMENT
THIS LOAN AGREEMENT (“Loan
Agreement”) is made as of the 28th day of November, 2006, by
and between UNIVERSAL TRUCKLOAD SERVICES, INC. , a
corporation organized and existing under the laws of Michigan with
its principal place of business at 11355 Stephens Road,
Warren, Michigan 48089 (“Borrower”), and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION , a national banking
association organized and existing under the statutes of the United
States of America, with its principal place of business at
165 Madison Avenue, Memphis, Tennessee 38103
(“Bank”).
Recitals of Fact
Borrower has requested that the Bank
commit to make loans and advances and extensions of credit to it on
a revolving credit basis in an amount not to exceed at any one time
outstanding the principal sum of Twenty Million Dollars
($20,000,000.00) (“Committed Amount”). The Bank has
agreed to make such loans and advances and extensions of credit on
the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, incorporating the
Recitals of Fact set forth above and in consideration of the mutual
agreements herein contained, the parties agree as
follows:
AGREEMENTS
SECTION ONE: DEFINITIONS AND
ACCOUNTING TERMS
For the purposes of this Loan
Agreement, the following terms shall have the following meanings
(such meanings to be applicable equally to both the singular and
plural forms of such terms) unless the context otherwise
requires:
“Accounts Receivable
Assets” shall mean all of the accounts, accounts receivable,
chattel paper, instruments, and other obligations of any kind,
whether or not evidenced by an instrument or chattel paper, and
whether or not earned by performance (collectively hereinafter
“Accounts Receivable”) whether now or hereafter
existing, arising out of or in connection with the sale of goods or
the rendering of services, and all rights now or hereafter existing
in and to all security agreements, and other contracts securing or
otherwise relating to any such Accounts Receivable but excluded
from Accounts Receivable are any accounts arising out of the
leasing of trucks, trailers, tractors and equipment; all customer
lists, original books and records, ledger and account cards,
computer tapes, discs and printouts, whether now in existence or
hereafter created pertaining to the foregoing collateral; and all
proceeds (“Proceeds”) of any and all of the foregoing
collateral including, without limitation, all moneys due or to
become due in connection with any of the collateral, guaranties and
security for the payment of such moneys; in each case, whether now
owned or hereafter acquired by the Person and howsoever its
interest therein may arise or appear (whether by ownership, lease,
security interest, claim, or otherwise).
“Business Day” means a
banking business day of the Bank.
“Closing Date” means the
date set out in the first paragraph of this Loan
Agreement.
“Consistent Basis” shall
mean, in reference to the application of Generally Accepted
Accounting Principles, that the accounting principles observed in
the current period are comparable in all material respects to those
applied in the preceding periods.
“Cure Period” shall mean
fifteen (15) days with respect to a Monetary Default and
thirty (30) days with respect to a NonMonetary
Default.
“Debt/Tangible Net Worth
Ratio” shall mean, as of the date of determination, that
ratio determined by a fraction:
(a) the numerator of which is the
Total Liabilities; and
(b) the denominator of which is the
Tangible Net Worth.
“Event of Default” has
the meaning assigned to that phrase in Section Eight.
“Generally Accepted Accounting
Principles” shall mean those principles set forth in Opinion
of the Accounting Principles Board of the American Institute of
Certified Public Accountants and the Financial Accounting Standards
Board, or those principles which have other substantial
authoritative support and are applicable in the circumstances as of
the date of the report, provided however, that with respect to the
calculation of the financial covenants set forth in
Section 6.8 such calculations shall be substantially in
accordance with applicable Interstate Commerce Commission
regulations, but nevertheless to the extent possible, substantially
consistent with Generally Accepted Accounting Principles (as
hereinabove defined).
“Loan” means the
aggregate of (i) unpaid Loan advances from time to time
outstanding pursuant to the provisions of this Loan Agreement, and
(ii) the amount of any outstanding letters of credit issued by
Bank for the account of Borrower (including letters of credit
presently outstanding). Unless the context shall otherwise require,
the terms “extensions of credit” and
“indebtedness,” when used in connection with this Loan,
shall also include any outstanding letters of credit issued by Bank
for the account of the Borrower, and drafts accepted pursuant
thereto, as well as loan advances disbursed to the
Borrower.
“Loan Agreement” means
this Loan Agreement between the Borrower and the Bank.
“Maximum Rate” means the
maximum effective variable contract rate of interest which the Bank
may lawfully charge under applicable statutes and laws from time to
time in effect.
“Monetary Default” shall
mean any default under Section 8 of this Agreement which may
be cured by the payment of money.
“Net Worth” means, as of
the date of determination, the difference between the Total Assets
and the Total Liabilities of Borrower on a consolidated basis, and
is to be determined both as to classification of items and amounts
in accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis.
“Non-Monetary Default”
shall mean any default under Section 8 of this Agreement other
than a Monetary Default.
“Note” means the
promissory note of the Borrower dated of even date herewith in the
principal amount of Twenty Million Dollars ($20,000,000.00),
payable to the order of the Bank which evidences the Loan, as such
note may be modified, renewed or extended from time to time; and
any other note or notes executed at any time to evidence the Loan
in whole or in part.
“Person” means an
individual, partnership, limited liability company, corporation,
trust, unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof.
“Property” means any
interest in any kind of property or asset, whether real, personal
or mixed, tangible or intangible.
“Related Person” shall
mean any Person, other than a publicly traded corporation or
Person, (a) which now or hereafter directly or indirectly
through one or more intermediaries controls, or is controlled by,
or is under common control with, Borrower, or (b) which now or
hereafter beneficially owns or holds five percent (5%) or more
of the capital stock of Borrower, or (c) five percent
(5%) or more of the capital stock of which is beneficially
owned or held by Borrower. For the purposes hereof,
“control” shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership
of voting stock or the right to vote voting stock.
“Subsidiary,”
“Subsidiaries” of any Person means (a) any
corporation, more than fifty percent (50%) of whose stock of
any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time any class or classes of
the capital stock of such corporation shall have or might have
voting power by reason of the happening of an contingency), is at
the time owned by such Person directly or indirectly through
Subsidiaries of such Person; and (b) any partnership,
association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries of such Person has more
than fifty percent (50%) of the equity interest at any
time.
“Tangible Net Worth”
shall mean, as of the date of determination, Net Worth, less
(a) the values assigned to intangibles, e.g., goodwill,
royalties, unamortized bond discount, acquisition costs in excess
of book value, research and development costs, patents, copyrights,
trademarks, tradenames, (b) any accumulated earnings
attributable to interests in the capital stock and retained
earnings of other Persons other than a wholly-owned subsidiary of
the Borrower, (c) deferred assets, and (d) any other
assets properly classified as intangible (except for value assigned
to intrastate operating authority, franchises, licenses and
permits), in accordance with Generally Accepted Accounting
Principles; provided that with respect to the foregoing,
accumulated earnings shall not be deducted from the market value of
any publicly traded securities; and provided, further, that with
respect to the Borrower, any loans due to the Borrower from Centra,
Inc. and any amounts due to the Borrower from any subsidiaries or
affiliates of Centra, Inc. or any affiliate of the Borrower shall
be deducted from Net Worth.
“Termination Date” shall
mean the 31st day of May, 2008, unless such date is extended
pursuant to the provisions of Section 9.12 hereof, in which
event such extended date shall be the Termination Date.
“Total Assets” shall
mean all of the assets of the Borrower, on a consolidated basis,
whether tangible or intangible, determined in accordance with
Generally Accepted Accounting Principles.
“Total Liabilities”
shall mean all obligations of Borrower, on a consolidated basis,
which, in accordance with Generally Accepted Accounting Principles,
are or should be classified as liabilities on a balance
sheet.
“United States” means
the government of the United States of America or any department,
agency, division or instrumentality thereof.
SECTION TWO: COMMITMENT AND
FUNDING
2.1 The Commitment . Subject
to the terms and conditions herein set out, the Bank agrees and
commits, from time to time, from the Closing Date until the
Termination Date, to make loan advances to the Borrower and to
issue letters of credit, all in an aggregate principal amount not
to exceed, at any one time outstanding the sum of Twenty Million
Dollars ($20,000,000.00).
2.2 Funding the Loan; Extending
Credit . Each loan advance hereunder shall be made by
depositing the same to the checking account of the Borrower in
Bank, or in such other manner as the Borrower and Bank may, from
time to time, agree.
2.3 The Note and Interest
.
(a) All advances with respect to the
Loan shall be evidenced by the promissory note of the Borrower,
payable to the order of the Bank in the principal amount of Twenty
Million Dollars ($20,000,000.00), in form substantially the same as
the copy of the Note attached hereto as
Exhibit “A.” The entire principal amount of
the Loan shall be due and payable on the Termination Date. The
unpaid principal balance of the Loan shall bear interest from the
Closing Date on disbursed and unpaid principal balances (calculated
on the basis of a year of 360 days) at a rate or rates per annum as
specified in the Note. Said interest shall be payable monthly on
the first day of each month after the Closing Date, with the final
installment of interest being due and payable on the Termination
Date, or on such earlier date as the Loan shall become due and
payable.
(b) In the event that the Bank
should at any time agree to increase the Committed Amount, the
Borrower will either execute a new note for the amount of such
increase, or a new note for the aggregate increased Committed
Amount; and in either event, the term “Note,” as used
herein, shall be deemed to mean and include such new note, as the
circumstances shall require.
2.4 [Intentionally
Deleted].
SECTION THREE: REQUIRED PAYMENTS,
PLACE OF PAYMENT, ETC.
3.1 Place of Payments . All
payments of principal and interest on the Loan and all payments of
fees required hereunder shall be made to the Bank, at its address
listed at the beginning of this Agreement (Attention: First Horizon
Business Credit Division), in immediately available
funds.
3.2 Payment on Nonbusiness
Days . Whenever any payment of principal, interest or fees to
be made on the indebtedness evidenced by the Note shall fall due on
a Saturday, Sunday or public holiday under the laws of the State of
Tennessee, such payment shall be made on the next succeeding
Business Day.
SECTION FOUR: CONDITIONS OF
LENDING
4.1 Conditions Precedent to
Closing and Funding Initial Advance . The obligation of the
Bank to fund the initial Loan advance hereunder is subject to the
condition precedent that the Bank shall have received, on or before
the Closing Date, all of the following in form and substance
satisfactory to the Bank:
(a) This Loan Agreement
(b) Note (the “Note”)
from the Borrower, payable to the order of the Bank in the
principal amount of Twenty Million Dollars
($20,000,000.00).
(c) Certified corporate resolutions
of Borrower and certificate(s) of good standing for Borrower from
its state of incorporation and such other states as Bank shall
require, together with a copy of the charter and bylaws of the
Borrower.
(d) If required by Bank, the opinion
of Borrower’s counsel that the transactions herein
contemplated have been duly authorized by all requisite corporate
authority, that this Loan Agreement and the other instruments and
documents herein referred to have been duly authorized, validly
executed and are in full force and effect, and pertaining to such
other matters as the Bank may require.
(e) Such other information and
documentation as Bank shall reasonably deem to be necessary or
desirable in connection with the funding of the Loan.
4.2 Conditions Precedent to All
Credit Extensions . The obligation of the Bank to extend credit
or make loan advances pursuant hereto (including the initial
advance at the Closing Date) shall be subject to the following
additional conditions precedent:
(a) The Borrower shall have
furnished to the Bank each of the items referred to in
Section 4.1 hereof, all of which shall remain in full force
and effect as of the date of such requested credit extension or
loan advance (notwithstanding that the Bank may not have required
any such item to be furnished prior to the Closing
Date).
(b) The Borrower shall not be in
default of any of the terms and provisions hereof, or of any
instrument or document now or at any time hereafter evidencing or
securing all or any part of the Loan indebtedness and extensions of
credit. Each of the Warranties and Representations of the Borrower,
as set out in Section Five hereof shall remain true and correct in
all material respects as of the date of such Loan
advance.
SECTION FIVE: REPRESENTATIONS AND
WARRANTIES
Borrower represents and warrants
that:
5.1 Incorporation . It is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Michigan; it has the power and
authority to own its properties and assets and is duly qualified to
carry on its business in every jurisdiction wherein such
qualification is necessary.
5.2 Power and Authority . The
execution, delivery and performance of this Loan Agreement and the
Note, executed pursuant thereto by the Borrower, have been duly
authorized by all requisite action and will not violate any
provision of law, any order of any court or other agency of
government, the Articles of Incorporation or Bylaws of the
Borrower, any provision of any indenture, agreement or other
instrument to which Borrower is a party, or by which
Borrower’s properties or assets are bound, or be in conflict
with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of Borrower or any
Subsidiary of the Borrower except for liens and other encumbrances
provided for and securing the indebtedness covered by this Loan
Agreement.
5.3 Financial Condition
.
(a) (i) The audited financial
statements of Borrower for the fiscal year ended as of
December 31, 2005, on a consolidated basis for the year then
ended, a copy of which has been furnished to the Bank, together
with any explanatory notes therein referred to and attached
thereto, and the unaudited financial statements of the Borrower for
the quarter ended as of June 30, 2006, on a consolidated
basis, a copy of which has been furnished to the Bank, fairly
present the financial condition of Borrower as of the date of said
balance sheet and the results of its operations for said periods.
Such financial statements have been prepared in accordance with
Generally Accepted Accounting Principles applied on a consistent
basis maintained through the period involved.
(b) There has been no material
adverse change in the business, properties or condition, financial
or otherwise, of Borrower since the 30th day of June,
2006.
5.4 Title to Assets .
Borrower has good and marketable title to material properties and
assets shown to be owned by it as reflected on the balance sheet
referred to in Section 5.3 hereof, except for (i) such
assets as have been disposed of since said date as no longer used
or useful in the conduct of business, (ii) Accounts Receivable
collected and properly accounted for, and (iii) items which
have been amortized in accordance with Generally Accepted
Accounting Principles applied on a consistent basis.
5.5 Litigation . There is no
action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending, or, to
the knowledge of the Borrower threatened against or affecting
Borrower, or any properties or rights of Borrower, which, if
adversely determined, would materially and adversely affect the
financial condition of Borrower.
5.6 Taxes . Borrower has
filed or caused to be filed all federal, state or local tax returns
which are required to be filed, and has paid all taxes as shown on
said returns or on any assessment received by it, to the extent
that such taxes have become due, except as otherwise permitted by
the provisions hereof (see Section 6.4).
5.7 Contracts or Restrictions
Affecting Borrower . Borrower is not a party to any agreement
or instrument or subject to any charter or other corporate
restrictions adversely affecting its business, properties or
assets, operations or financial condition.
5.8 No Default . Borrower is
not in default in the performance, observance or fulfillment of any
of the obligations, covenants, or conditions contained in any
agreement or instrument to which it is a party, which does or will
in the foreseeable future materially and adversely affect the
business or operations of Borrower.
5.9 ERISA . Borrower is in
compliance with all applicable provisions of the Employees
Retirement Income Security Act of 1974 (“ERISA”), and
all other laws, state or federal, applicable to any
employees’ retirement plan maintained or established by
it.
SECTION SIX: AFFIRMATIVE
COVENANTS OF BORROWER
Borrower covenants and agrees that
from the date hereof and until payment in full of the principal of
and interest on the Loan, unless the Bank shall otherwise consent
in writing, such consent to be at the discretion of the Bank,
Borrower will:
6.1 Business and Existence .
Perform all things necessary to preserve and keep in full force and
affect its existence, rights and franchises, comply with all laws
applicable to it and continue to conduct and operate its
business.
6.2 Maintain Property .
Maintain, preserve, and protect all franchises, and trade names and
preserve all the remainder of its properties used or useful in the
conduct of its business substantially as conducted and operated
during the present and preceding fiscal year; preserve all the
remainder of its properties used or useful in the conduct of its
business and keep the same in good repair, working order and
condition, and from time to time make, or cause to be made, all
needed and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection
therewith may be properly conducted at all times.
6.3 Insurance . At all times
maintain in some company or companies (having a Best’s rating
of A- or better) approved by Bank, comprehensive public
liability insurance covering claims for bodily injury, death, and
property damage, with minimum limits satisfactory to the Bank, but
in any event not less than those amounts customarily maintained by
companies in the same or substantially similar business;
6.4 Obligations, Taxes and
Liens . Pay all of its indebtednesses and obligations promptly
in accordance with normal terms and practices of its business and
pay and discharge or cause to be paid and discharged promptly all
taxes, assessments, and governmental charges or levies imposed upon
it or upon any of its income, profits, or properties, real,
personal or mixed, or upon any part thereof, before the same shall
become in default, as well as all lawful claims for labor,
materials, and supplies which otherwise, if unpaid, might become a
lien or charge upon such properties or any part thereof; provided,
however, that the Borrower shall not be required to pay and
discharge or to cause to be paid and discharged any such tax,
assessment, trade payable, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate
proceedings satisfactory to Bank, and Bank shall be furnished, if
Bank shall so request, bond or other security protecting it against
loss in the event that such contest should be adversely
determined.
6.5 Financial Reports and Other
Data .
(a) Furnish to the Bank as soon as
available, and in any event within one hundred twenty
(120) days after the end of each fiscal year of Borrower,
consolidated balance sheets and statements of income and surplus of
Borrower which have been certified by an independent Certified
Public Accountant acceptable to the Bank, showing the financial
condition of Borrower and at the close of such year and the results
of operations during such year; and, within ninety (90) days
after the end of each fiscal quarter, financial statements similar
to those mentioned above, on a consolidating basis, not audited,
such balance sheets to be as of the end of each such quarter, and
such statements of income and surplus to be for the period from the
beginning of the fiscal year to the end of such quarter, in each
case subject only to audit and year-end adjustment. Borrower shall
use good faith efforts to submit the unaudited financial statements
as certified by the Treasurer or other appropriate financial
officer (“Certifying Officer”). Borrower’s
failure to submit a certificate of the Certifying Officer with the
unaudited financial statements shall not constitute an Event of
Default, but any submission of Borrower shall automatically have
been deemed to make the certifications in the preceding sentence
when Borrower submits any financial statements to the Bank. The
certificate of the Certifying Officer shall state that the attached
financial statement, together with any explanatory notes therein
referred to and attached thereto, is correct and complete and
fairly presents the financial condition of the Borrower as of the
date of the financial statement, and the results of its operations
for the period ending on the date reflected in said financial
statement; and that such financial statement has been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis maintained throughout the period
involved.
(b) Borrower’s delivery to
Bank of each set of financial statements pursuant to
Section 6.5(a) hereof shall constitute a certification to the
effect that such financial statements set forth the information
required in order to establish whether the Borrower was in
compliance with the requirements set forth in Section 6.8 of
this Agreement during and as of the end of the period covered by
the financial statements then being furnished.
6.6 Notice of Default . At
the time of Borrower’s first knowledge or notice, furnish the
Bank with written notice of the occurrence of any event or the
existence of any event, circumstance, or condition which
constitutes or upon notice, lapse of time, or both, would
constitute an Event of Default under the terms of this Loan
Agreement.
6.7 [Intentionally Deleted
]
6.8 Financial Covenants .
Maintain the following financial status as of the end of each
fiscal quarter of the Borrower as hereinafter set forth, on a
consolidated basis with all subsidiaries, and each defined term
used in this Section 6.8, or incorporated or used in the
calculations herein required of any defined term, shall be
determined on a consolidated basis of Borrower. and all
subsidiaries:
(i) as of the fiscal quarter ending
December 31, 2006, and as of the end of each fiscal quarter
thereafter, a Debt to Tangible Net Worth Ratio not to exceed 1.0 to
1.0;
(ii) as of the fiscal quarter ending
December 31, 2006, and as of the end of each fiscal quarter
thereafter, a Tangible Net Worth of not less than Eighty-Five
Million Dollars ($85,000,000.00); and
(iii) as of the fiscal quarter
ending December 31, 2006, and as of the end of each fiscal
quarter thereafter, net profits of at least One Dollar ($1.00) for
said fiscal quarter.
6.9 Right of Inspection .
Permit the Bank, upon two (2) Business Days notice to visit
and inspect any of the properties, corporate books and financial
reports of the Borrower and to discuss its affairs, finances and
accounts with its principal officers, at all such reasonable times
and as often as the Bank may reasonably request.
SECTION SEVEN: NEGATIVE COVENANTS
OF BORROWER
Borrower covenants and agrees that
at all times from and after the Closing Date, unless the Bank shall
otherwise consent in writing, such consent to be at the discretion
of the Bank, it will not, either directly or indirectly:
7.1 Sale of Assets . Sell,
transfer or dispose (other than in the normal course of business)
of all or a substantial part of it
