EXHIBIT 10.8
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT ("Amendment") is made as of the
29th day of JUNE, 2004, by and among UNIVERSAL TRUCKLOAD SERVICES, INC., a
corporation organized and existing under the laws of Michigan with its principal
place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Borrower"), UNIVERSAL AM-CAN, LTD., a corporation organized and existing under
the laws of Delaware with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Universal"), THE ▇▇▇▇▇ AND ▇▇▇▇▇ LINES,
INCORPORATED, a corporation organized and existing under the laws of Delaware
with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇ INTERMODAL, INC., a corporation organized and
existing under the laws of Michigan with its principal place of business at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇ Intermodal"), ECONOMY
TRANSPORT, INC., a corporation organized and existing under the laws of Michigan
with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Economy"), and LOUISIANA TRANSPORTATION, INC., a corporation organized
and existing under the laws of Michigan with its principal place of business at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Louisiana") (Universal, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ Intermodal, Economy and Louisiana sometimes herein collectively
referred to as "Co-Borrowers"), 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 ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Bank").
Recitals of Fact
Pursuant to the terms and provisions of that certain Loan Agreement ("Loan
Agreement"), bearing date of the 31st day of December, 2001, among Borrower,
▇▇▇▇▇ ▇▇▇▇▇, Universal and the Bank, the Bank, as amended by First Amendment to
Loan Agreement dated May 11, 2004, among Borrower. ▇▇▇▇▇ ▇▇▇▇▇, Universal and
▇▇▇▇▇ Intermodal, the Bank committed to make loans and advances and extensions
of credit to the Borrower and/or Co-Borrowers 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). Borrower has requested an increase in its loan
and additional subsidiaries of the Borrower are being added as Co-Borrowers of
the loan and, as a result thereof, it is necessary to amend the Loan Agreement.
NOW, THEREFORE, for and in consideration of the premises, as set forth in
the Recitals of Fact, and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, it is agreed by the parties as
follows:
Agreements
1. Section One of the Loan Agreement is hereby amended by adding the
following definitions:
"Economy Security Agreement" means the Security Agreement dated June
29, 2004, executed by Economy and all amendments or modifications thereto,
pledging its Accounts Receivable as security for the Loan.
"Louisiana Security Agreement" means the Security Agreement dated
June 29, 2004, executed by Louisiana and all amendments or modifications
thereto, pledging its Accounts Receivable as security for the Loan.
2. Section One of the Loan Agreement is hereby amended by amending the
definitions of "Account Debtor," "Accounts Receivable," "Accounts," "Loan
Agreement," "Note," "Security Agreements," and "Termination Date," as follows:
"Account Debtor" shall mean any Person, which is now, or hereafter
obligated or indebted to any Co-Borrower on any Account Receivable.
"Accounts Receivable" or "Accounts" shall mean all amounts owed to a
Co-Borrower on account of sales, leases or rentals of goods or services
rendered in the ordinary course of the applicable Co-Borrower's trade or
business, but excluded from this definition are any accounts arising out
of the leasing of trucks, trailers, tractors and equipment.
"Loan Agreement" means this Loan Agreement between the Borrower,
Universal, ▇▇▇▇▇ ▇▇▇▇▇ and the Bank dated December 31, 2001, as amended by
the First Amendment to Loan Agreement dated May 11, 2004, between
Borrower, Universal, ▇▇▇▇▇ Intermodal, ▇▇▇▇▇ ▇▇▇▇▇ and the Bank, as
amended by Second Amendment to Loan Agreement dated June 29, 2004, among
Borrower, Universal, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Intermodal, Economy, Louisiana and
Bank.
"Note" means the promissory note of the Borrower, ▇▇▇▇▇ ▇▇▇▇▇ and
Universal dated December 31, 2001, in the principal amount of Twenty
Million Dollars ($20,000,000.00), payable to the order of the Bank, as
amended by Amended and Restated Promissory Note of Borrower, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ Intermodal and Universal dated May 11, 2004, in the principal amount
of Twenty Million Dollars ($20,000,000.00), as amended by the Second
Amended and Restated Promissory Note of Borrower, ▇▇▇▇▇ ▇▇▇▇▇, Universal,
▇▇▇▇▇ Intermodal, Economy and Louisiana dated June 29, 2004, in the
principal amount of Forty Million Dollars ($40,000,000.00), 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.
"Security Agreements" shall mean the Universal Security Agreement,
the ▇▇▇▇▇ Intermodal Security Agreement, the ▇▇▇▇▇ ▇▇▇▇▇ Security
Agreement, the Economy Security Agreement and the Louisiana Security
Agreement.
"Termination Date" shall mean the 31st day of August, 2005, 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.
3. Sections 2.1, 2.3 and 3.1 of the Loan Agreement are hereby modified as
follows:
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/or
any Co-Borrower and to issue letters of credit, all in an aggregate
principal amount not to exceed, at any one time outstanding, the lesser of
(a) Forty Million Dollars ($40,000,000.00); or (b) the Borrower's
Borrowing Base, as defined in Section One.
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 Forty Million Dollars
($40,000,000.00), in form substantially the same as the copy of the Note
attached hereto as EXHIBIT "B." The entire principal amount of the Loan
shall be due and payable on the Termination Date. The unpaid principal
balances 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 per annum as specified in the Note. Said interest
shall be payable
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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 and Co-Borrowers 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.
3.1 Required Repayments. In the event that the outstanding principal
balance of the Loan shall at any time exceed the Borrower's Borrowing
Base, the Borrower and/or any Co-Borrower will, within two (2) Business
Days upon discovery of the existence of such excess, make a principal
payment which will reduce the outstanding principal balance of the Loan to
an amount which does not exceed the Borrowing Base.
4. Sections 5.1, 5.2, 5.4 and 5.11 of the Loan Agreement are amended to
read as follows:
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. Each Co-Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware (or Michigan, as to ▇▇▇▇▇ Intermodal, Economy and
Louisiana); each has the power and authority to own its properties and
assets and is duly qualified to carry on their 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 and Security Agreements, executed
pursuant thereto by the Borrower and/or any Co-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 or any Co-Borrower, any provision
of any indenture, agreement or other instrument to which Borrower or any
Co-Borrower is a party, or by which Borrower's or any Co-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
Co-Borrower, or any Subsidiary of the Borrower except for liens and other
encumbrances provided for and securing the indebtedness covered by this
Loan Agreement.
5.4 Title to Assets. Borrower and each Co-Borrower have good and
marketable title to material properties and assets shown to be owned by
them 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
1onger 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.
5.11 Subsidiaries. Borrower owns no Subsidiary actively engaged in
business other than Universal, ▇▇▇▇▇ Intermodal, ▇▇▇▇▇ ▇▇▇▇▇, Economy
Transport, Inc. and Louisiana Transportation, Inc., which are wholly-owned
Subsidiaries. Neither Universal, ▇▇▇▇▇ Intermodal nor ▇▇▇▇▇ ▇▇▇▇▇ own any
Subsidiary.
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5. Section 6.5(iii) of the Loan Agreement is hereby amended to read as
follows:
(iii) Borrower shall furnish to Bank monthly (or at such other
frequency as Bank may require), a Periodic Report (Borrowing Base
Certificate) executed by a duly authorized officer of Borrower
substantially in the form of EXHIBIT "D" attached hereto and each of
Co-Borrower shall also furnish the aging report required under Section
5(f) of the Security Agreements.
6. Section 6.8 of the Loan Agreement is hereby amended to read as follows:
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 June 30, 2004 and as of
the end of each fiscal quarter thereafter, a Tangible Net Worth of
not less than Fifteen Million Dollars ($15,000,000.00).
(ii) As of the fiscal quarter ending June 30, 2004 and as of
the end of each fiscal quarter thereafter, a ratio of total
liabilities to Tangible Net Worth of no more than 4.0 to 1.0.
7. Section 7.2 of the Loan Agreement is hereby amended to read as follows:
7.2 Additional Encumbrances. Pledge or ▇▇▇▇▇ ▇ ▇▇▇▇ on or a security
interest in any of the assets being pledged under any of the Security
Agreements, other than the liens in favor of the Bank.
8. Section Eight of the Loan Agreement is hereby amended in its entirety
to read as follows:
SECTION EIGHT: AFFIRMATIVE AND NEGATIVE COVENANTS OF CO-BORROWERS.
Borrower and each Co-Borrower covenant and agree 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,:
8.1 [Section 8.1 is deleted in its entirety]
8.2 Right of Inspection. Borrower and each Co-Borrower shall 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
each Co-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.
8.3 Further Encumbrances. No Co-Borrower shall pledge or ▇▇▇▇▇ ▇
▇▇▇▇ on or a security interest in any of its assets being pledged under
the Security Agreements, other than the liens in favor of the Bank.
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9. Sections 9.3, 9.4, 9.5, 9.6 and 9.8 of the Loan Agreement are hereby
amended to read as follows:
9.3 Representation or Warranty. Any representation or warranty made
by the Borrower herein or in any of the Security Agreements, or in any
report, certificate, financial statement or other writing furnished in
connection with or pursuant to this Loan Agreement shall prove to be
false, misleading or incomplete in any material respect on the date as of
which made or any representation or warranty made by any Co-Borrower in
any of the Security Agreements, or in any report, certificate, financial
statement or other writing furnished in connection with or pursuant to the
Security Agreements or this Loan Agreement shall prove to be false,
misleading or incomplete in any material respect on the date as of which
made; or
9.4 Covenants. The Borrower or any Co-Borrower defaults in the
performance or observance of any covenant, condition, agreement or
undertaking on its part to be performed or observed, as contained herein,
in any of the Security Agreements or in any other instrument or document
which now or hereafter evidences, secures or relates to all or any part of
the Loan or any extensions of credit made pursuant hereto; or
9.5 Bankruptcy, Etc. The Borrower or any Co-Borrower shall make an
assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a custodian,
receiver or any trustee for it or him or a substantial part of its, his or
her assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter
in effect; or if there shall have been filed any such petition or
application, or any such proceeding shall have been commenced against
Borrower or any Co-Borrower in which an order for relief is entered or
which remains undismissed for a period of thirty (30) days or more; or
Borrower or any Co-Borrower by any act or omission shall indicate its, his
or her consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a
custodian, receiver or any trustee for it or him or any substantial part
of any of its, his or her properties, or shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a
period of thirty (30) days or more; or any Co-Borrower shall generally not
pay its, his or her debts as such debts become due; or
9.6 Concealment of Property, Etc. The Borrower or any Co-Borrower
shall have concealed, removed, or permitted to be concealed or removed,
any part of its, his or her property, with intent to hinder, delay or
defraud its, his or her creditors or any of them, or made or suffered a
transfer of any of its, his or her property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or shall have made
any transfer of its, his or her property to or for the benefit of a
creditor at a time when other creditors similarly situated have not been
paid; or shall have suffered or permitted, while insolvent, any creditor
to obtain a lien upon any of its, his or her property through legal
proceedings or distraint which is not vacated within thirty (30) days from
the date thereof; or
9.8 Notice and Cure Periods. The occurrence of any foregoing events
listed in Sections 9.1, 9.2, 9.3, 9.4, 9.5, 9.6 and 9.7 hereof shall be an
Event of Default if the same remains uncured in full after the Bank has
provided written notice to Borrower, and to the applicable Co-Borrower (as
the case may be) of such default and Borrower's or the applicable
Co-Borrower's failure to cure within the applicable Cure Period.
10. Section 10.4 of the Loan Agreement is hereby modified to read as
follows:
10.4 Survival of Agreements; Assignments. All agreements,
representations and warranties made herein shall survive the delivery of
the Note. This Loan Agreement shall be binding upon, and inure to the
benefit of the parties hereto and their respective heirs, successors, and
permitted assigns, except that the Borrower shall not have the right to
assign its rights
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hereunder or any interest therein and Bank shall not have the right to
assign any part of the Loan or grant participations therein without the
consent of the Borrower whose consent shall not be unreasonably withheld;
provided Borrower consents to the participation in the Loan by Branch
Banking & Trust Company ("BB&T"). Furthermore, BB&T shall not have any
right to assign or grant any interest in their participation in the Loan
without the consent of the Borrower whose consent shall not be
unreasonably withheld.
11. Section 10.14 of the Loan Agreement is hereby modified to read as
follows:
10.14 Fees and Expenses. The Borrower agrees to pay, or reimburse
the Bank for, the actual out of pocket expenses, including reasonable
counsel fees and fees of any accountants, inspectors or other similar
experts, on a time and charges basis, as reasonably deemed necessary by
the Bank, incurred by the Bank in connection with the development,
preparation, execution, amendment, recording, administration [excluding
the salary of Bank's employees and Bank's normal and usual overhead
expenses, but including the costs of any field exams of Borrower and each
Co-Borrower, which, so long as there is no Event of Default, shall not
exceed Four Thousand Dollars ($4,000.00) annually] or enforcement of, or
the preservation of any rights under this Loan Agreement, the Note, the
Security Agreements, and any other instrument or document which now or
hereafter secures the Loan.
12. Section 10.22 of the Loan Agreement is hereby deleted in its entirety.
13. Exhibit "A" to the Loan Agreement is hereby deleted in its entirety
and inserted in lieu thereof is EXHIBIT "A" attached hereto.
14. The Loan Agreement is further modified and amended by the addition
thereto of a new exhibit, being EXHIBIT "B," in form and substance substantially
the same as EXHIBIT "B" attached to this Amendment.
15. Acquisition. It is understood that Borrower, or one of its existing
subsidiaries who is already a Co-Borrower, may be acquiring AFA Enterprises,
Inc. ("AFA") and its subsidiaries ("AFA Subsidiaries"), certain of which AFA
Subsidiaries [namely, Great American Lines, Inc. and Great American Logistics,
Inc. (the "New Co-Borrowers")] the Borrower wishes to make parties to this
Agreement as additional Co-Borrowers. The Bank consents to certain AFA
Subsidiaries being made parties to this Agreement so as to become Co-Borrowers
under the following terms:
(a) Borrower provides Bank evidence satisfactory to Bank of that
Borrower, or one of the Co-Borrowers, has acquired AFA and the AFA
Subsidiaries including the New Co-Borrowers, AFA is the subsidiary of the
Borrower or one of the Co-Borrowers and the New Co-Borrowers are
subsidiaries of AFA and that such subsidiaries are the only subsidiaries
of AFA that have or generate Accounts Receivables.
(b) Borrower has provided UCC lien searches on each New Co-Borrower
showing no liens or encumbrances filed against the assets of the New
Co-Borrower.
(c) Borrower, Co-Borrowers and each New Co-Borrower execute and
deliver to Bank a Third Amendment to the Loan Agreement, attached as
EXHIBIT "1" hereto, and a Third Amended and Restated Note, attached as
EXHIBIT "2" hereto.
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(d) Each New Co-Borrower shall enter into a Security Agreement, the
forms of which are attached hereto as EXHIBITS "3" AND "4."
(e) Each of Universal, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Intermodal, Economy and
Louisiana shall enter into an amendment to their respective Security
Agreements in form attached as EXHIBITS "5," "6," "7," "8" AND "9" hereto.
(f) Borrower shall provide charter, by-laws, certificates of good
standing on each New Co-Borrower and certificates of no-change on
Borrower, Universal, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Intermodal, Economy and Louisiana,
certified by the secretary of each corporation, as well as resolutions
from each of the Borrower, Universal, ▇▇▇▇▇ Dixon, Mason, International,
Louisiana and each of the New Co-Borrowers authorizing the execution,
delivery and performance of the transactions contemplated by this Section.
(g) An opinion of counsel for Borrower, each Co-Borrower and each
New Co-Borrower in form similar to the opinions previously provided but
also addressing the law of the state of Pennsylvania, as to each New
Co-Borrower.
(h) Borrower agrees to pay for all expenses (including reasonable
attorney's fees and expenses on a time and charge basis) with respect to
the modification.
(i) Borrower shall have provided to Bank UCC-1's in the form
attached as EXHIBIT "10" hereto.
16. All terms and provisions of the Loan Agreement which are inconsistent
with the provisions of this Amendment are hereby modified and amended to conform
hereto; and, as so modified and amended, the Loan Agreement is hereby ratified,
approved and confirmed. Except as otherwise may be expressly provided herein,
this Amendment shall become effective as of the date set forth in the initial
paragraph hereof.
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17. All references in all Loan Documents to the Loan Agreement shall,
except as the context may otherwise require, be deemed to constitute references
to the Loan Agreement as amended hereby.
18. This Second Amendment to Loan Agreement may be executed in any number
of counterparts by the different parties hereto, each of which when so executed
and delivered shall be deemed an original and all of which when taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Borrower, Co-Borrowers' and the Bank have caused
this Agreement to be executed by their respective officers, duly authorized so
to do, all as of the day and year first above written.
UNIVERSAL TRUCKLOAD SERVICES, INC., UNIVERSAL AM-CAN, LTD.,
a Michigan corporation a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Title: President Title: President
BORROWER
FIRST TENNESSEE BANK NATIONAL THE ▇▇▇▇▇ AND ▇▇▇▇▇ LINES,
ASSOCIATION INCORPORATED
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Title: Loan Officer Title: President
BANK
ECONOMY TRANSPORT, INC.,
a Michigan corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title: President
LOUISIANA TRANSPORTATION, INC.,
a Michigan corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: President
▇▇▇▇▇ ▇▇▇▇▇ INTERMODAL, INC.,
a Michigan corporation
By: /s/ ▇. ▇. ▇▇▇▇▇▇
-----------------------------
Title: President
CO-BORROWERS
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