EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT amends that certain Credit Agreement dated as of May 15,
1997 (the "AGREEMENT"), by and between Transport Corporation of America, Inc., a
Minnesota corporation ("BORROWER") and Firstar Bank of Minnesota, National
Association (the "BANK"). All capitalized terms not otherwise defined herein
shall have the meanings set forth in the Agreement.
1. DEFINITIONS. The following definitions are hereby deleted and replaced
with the following
"ADJUSTED LIBOR RATE" shall mean, for any Interest Period and the
applicable LIBOR Rate Advance, the per annum rate of interest equal to the
sum of (a) one hundred twenty-five basis points (1.25%), plus (b) the per
annum rate (rounded up, if necessary, to the nearest one-sixteenth of one
percent (1/16%)) determined by dividing (i) the LIBOR Rate for such LIBOR
Rate Advance and related Interest Period, by (ii) an amount equal to one
minus the stated maximum rate (expressed as a decimal) of all reserve
requirements (including any basic, marginal, emergency, supplemental,
special or other reserves) that is specified from time to time during an
Interest Period by the Board of Governors of the Federal Reserve System
(or any successor agency) for funding "Eurocurrency Liabilities" pursuant
to Regulation D of such Board or any other then applicable successor
regulation, without benefit of credit or prorations, exemptions or offsets
which might otherwise be available to the Bank from time to time under
Regulation D.
"BORROWING BASE" shall mean an amount equal to the sum of (a)
eighty-five percent (85%) of all Eligible Accounts, plus (b) seventy-five
percent (75%) of the net book value of Eligible Equipment, each as
determined as of the last day of the most recent calendar month and at
such other times as may be required by the Bank.
"BORROWING BASE CERTIFICATE" shall mean the certificate in the form
of Exhibit A to this First Amendment, or such other form prescribed by the
Lender from time-to-time pursuant to Section 6.18 of the Credit Agreement.
"ELIGIBLE EQUIPMENT" shall mean all certificated tractors and
trailers owned by the Borrower as equipment and used for transport in the
ordinary course of the Borrower's business and listed on Schedule B to the
Security Agreement or any schedule of pledged equipment delivered by the
Borrower to the Bank pursuant to Section 6.18(h) of the Credit Agreement,
provided such trucks and trailers:
(a) (i) are subject to a perfected, first priority security
interest in favor of the Bank in accordance with all
applicable state titling statutes and are free and clear of
all other Liens, or (ii) between the Closing Date (as defined
in the North Star Acquisition Agreement) and August 31, 1998,
are subject to a negative pledge granted in accordance to
Section 5 of the First Amendment to Credit Agreement;
(b) are in good condition free from any defects that would
negatively affect the market value thereof in a material way;
(c) are not, as reasonably determined by the Bank, unusable in the
ordinary course of Borrower's business; and
(d) are insured against loss or damage in accordance with the
provisions of the Security Agreement.
"NORTH STAR ACQUISITION AGREEMENT" shall mean that certain Stock
Purchase Agreement By and Among Transport Corporation of America, Inc.,
North Star Transport, Inc. and The Shareholders of North Star Transport,
Inc. dated as of May 20, 1998, a true copy of which has been delivered to
the Bank.
"REVOLVING NOTE" shall mean the Revolving Credit Note dated May 15,
1998, made payable by the Borrower to the order of the Bank in the
original principal amount of $25,000,000.
"TERMINATION DATE" shall mean the earlier of August 31, 1998 or the
date on which an Event of Default has occurred and the Bank determines to
extinguish its commitment hereunder.
2. REVOLVING LOAN. Article III of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"ARTICLE III. REVOLVING LOAN
3.1 NATURE OF LOAN COMMITMENT/MAXIMUM OF ADVANCES. Subject to the terms and
conditions of this Agreement, the Bank shall make Advances to the Borrower
from time to time from the date hereof to the Termination Date in an
aggregate principal amount not to exceed at any time the lesser of (i)
Twenty-Five Million Dollars ($25,000,000) less the sum of (a) the L/C
Amount and (b) the Obligation of Reimbursement or (ii) the Borrowing Base
less the sum of (a) the L/C Amount and (b) the Obligation of Reimbursement
(the "Revolving Credit Commitment"). All Advances pursuant to the
Revolving Credit Commitment, including Advances made by the Bank pursuant
to Section 2.1 for Borrower's Obligation of Reimbursement, shall be
evidenced by the Revolving Note; provided that the Borrower shall be
obligated to pay only the amount that is actually disbursed hereunder,
together with accrued interest on the outstanding balance at the rates
provided in Section 3.4 hereof. The Borrower may borrow, prepay and
reborrow within such limit pursuant to this Agreement and the Revolving
Note.
3.2 TYPES OF ADVANCES; CERTAIN LIMITATIONS. Each Advance by the Bank under the
Revolving Credit Commitment may be either a LIBOR Rate Advance or a Prime
Rate Floating Advance. LIBOR Rate Advances and Prime Rate Floating Rate
Advances may be outstanding at the same time; provided, however, that no
more than eight (8) LIBOR Rate Advances may be outstanding at any one
time. The principal amount of each LIBOR Rate Advance shall be not less
than $100,000 or an integral multiple thereof.
3.3 PURPOSE FOR ADVANCES. Except with the prior written consent of the Bank,
all Advances under Article III shall be used exclusively for the
Borrower's working capital and other general business purposes; provided
that up to $15,800,000 of Advances
under Article III may be used for acquisition financing for the purpose of
acquiring North Star Transport.
3.4 COMPUTATION OF INTEREST. The Advances under the Revolving Credit
Commitment shall bear interest on the unpaid principal amount thereof as
follows:
(i) For LIBOR Rate Advances, at a fluctuating rate per annum equal to
the Adjusted LIBOR Rate, and
(ii) For Floating Rate Advances, at a fluctuating rate per annum equal to
the Prime Rate Floating Rate less one hundred forty basis points
(1.40%) per annum.
All interest payable on Advances shall be computed on the basis of
actual days elapsed and a year of 360 days. Interest shall be payable
monthly in arrears on the last business day of each month commencing on
June 30, 1998, and at maturity.
3.5 MATURITY. The Revolving Note shall be expressed to mature on the earlier
of: (i) August 31, 1998 or (ii) upon the occurrence of an Event of
Default. All amounts outstanding under the Revolving Note shall be
immediately due and payable at maturity (whether by acceleration or
otherwise).
3.6 RECORDKEEPING. Bank shall record in its records, the date and amount of
each Advance made thereon by Bank, and each repayment thereof. The
aggregate unpaid principal amount so recorded shall be presumptive
evidence of the principal amount of the Advances owing and unpaid by the
Borrower thereon. The failure to so record any such amount or any error in
so recording any such amount shall not, however, limit or otherwise affect
the Obligations of the Borrower hereunder or under the Revolving Note to
repay the principal amount of the Advances together with all interest
accrued thereon.
3.7 NON-USE FEES. The Borrower agrees to pay the Bank, not later than ten (10)
days after receipt of a statement therefor, a fee equal to one-quarter of
one percent (1/4 %) per annum times the average daily unused portion of
the Revolving Credit Commitment, payable quarterly in arrears commencing
July 1, 1998, and as of the maturity date of the Revolving Note."
3.8 Section 5.6(b) is hereby deleted in its entirety and replaced with the
following:
"CONVERSION OF LIBOR RATE ADVANCES TO FLOATING RATE ADVANCES.
Notwithstanding Section 5.6(a), if such Section would otherwise be
applicable but the Bank could lawfully maintain the LIBOR Rate Advances at
the Prime Rate less 1.40% per annum then, during such period as the Bank
cannot maintain the LIBOR Rate Advances at the Adjusted LIBOR Rate, the
LIBOR Rate Advances shall bear interest at a per rate equal to Prime Rate
less 1.40% per annum in effect from time to time. If the Bank determines
that all events or conditions making it unlawful or impossible for the
Bank to maintain the LIBOR Rate Advances at the Adjusted LIBOR Rate cease
to exist, then Advances may again bear interest at the Adjusted LIBOR
Rate, subject to the other terms and conditions of this Agreement."
4. MANDATORY PREPAYMENT. Section 5.1 is deleted in its entirety and replaced
with the following:
"If at any time the outstanding Obligations of the Borrower exceeds the
Revolving Credit Commitment, the Borrower shall immediately repay the excess."
5. NEGATIVE PLEDGE OF EQUIPMENT. The Borrower agrees that it shall not create
or permit to exist any security interest on any of its trucks and trailers
that have not previously been pledged to any other party, whether now
owned or hereafter acquired. Simultaneously with the execution of this
Amendment, the Borrower shall deliver to the Lender a schedule of such
previously unpledged trucks and trailers, setting forth the net
depreciated book value of each such truck or trailer, certified as correct
by the Borrower's chief financial officer. Borrower agrees that, at the
request of the Lender, it shall promptly deliver certificates of title and
completed applications for notation of the Lender's lien for each such
truck and trailer.
6. PRECONDITIONS TO EFFECTIVENESS. This Amendment shall only become effective
upon (a) the execution of the Amendment and the Revolving Credit Note by
the Borrower and the Bank, and (b) execution and delivery by the Borrower
of (i) the items described in Paragraph 3 above; (ii) a current Borrowing
Base Certificate; (iii) an opinion of Borrower's counsel satisfactory to
the Lender's counsel; and (iv) any and all additional related documents
referred to in this Amendment or as otherwise may be required by the
Lender.
7. CONSENT AND ACKNOWLEDGMENT OF CORPORATE GUARANTORS. By executing the
acknowledgment below, TCA of Ohio, Inc. and Transport International
Express, Inc. (each a "Corporate Guarantor@ and collectively, the
"Corporate Guarantors@) each hereby (a) consents to each and all of the
provisions of this Amendment, and (b) acknowledges and agrees that the
Guaranty executed by it and delivered to the Lender remains in full force
and effect in accordance with its original terms, not subject to any
defense, counterclaim or right of setoff.
8. REPRESENTATIONS REAFFIRMED. The Borrower and each Corporate Guarantor
hereby warrants and represents to the Lender that (a) each and all of the
representations and warranties set forth and contained in the Loan
Agreement and the other Loan Documents are true, correct and complete in
all respects as of the date hereof, and (b) no Default or Event of Default
has occurred and is continuing as of the date hereof.
9. NO WAIVERS. The Borrower and each Corporate Guarantor hereby acknowledges
and agrees that by executing and delivering this Agreement to the Lender
it is not waiving any existing Defaults or Event of Default, whether known
or unknown, nor is the Lender waiving any of its rights or remedies under
the Loan Agreement or any of the Loan Documents, provided, however that
the Bank does consent to Borrower entering into and consummating the
transaction contemplated by the North Star Acquisition Agreement in
accordance with the terms thereof, and the Bank hereby waives any Event of
Default under Section 6.23 of the Agreement for doing so.
10. NO SET-OFF. The Borrower and each Corporate Guarantor acknowledges to and
agrees with the Lender that no events, conditions or circumstances have
arisen or exist as of the date hereof which would give the Borrower the
right to assert a defense, counterclaim and/or setoff to any claim by the
Lender for payment of the Obligations, and if any so exist as of the date
hereof, whether know or unknown, absolute or contingent, liquidated or
unliquidated, the same are hereby waived.
11. RELEASE. The Borrower and each Corporate Guarantor hereby releases the
Lender and each of its officers, directors, agents, employees, legal
counsel and other representatives from any and all claims, demands, causes
of action, liability, damage, loss, cost and expense arising from and/or
which it has paid, incurred or sustained or believe it has paid, incurred
or sustained, known or unknown, absolute or contingent, liquidated or
unliquidated, as a result of or related to (a) the transactions evidenced
by or related to the Loan Documents and any and all other documents,
agreements or instruments related thereto, or (b) any acts or omissions of
the Lender or any of its officers, directors, agents, employees, legal
counsel or other representatives in connection therewith or related
thereto, or (c) the extension or denial of credit.
12. MERGER. All prior oral and written communications, commitments, alleged
commitments, promises, alleged promises, agreements and alleged agreements
by or between the Lender and the Borrower are hereby merged into this
Agreement and the Loan Documents, and shall not be enforceable unless
expressly set forth in this Agreement and the Loan Documents.
13. NO OTHER AMENDMENTS. Except as expressly amended hereby or as previously
amended in writing, each of the Loan Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
original terms.
14. LEGAL EXPENSES. The Borrower shall pay and will reimburse the Bank on
demand for all reasonable out-of-pocket expenses incurred by the Bank
relating to this Amendment, including without limitation reasonable
attorneys' fees and legal expenses incurred for the preparation of this
Amendment.
15. COUNTERPARTS. This Amendment may be signed in any number of counterparts,
each of which shall be considered as an original, but when taken together
shall constitute one document.
16. AUTHORIZATION. The Borrower and each Corporate Guarantor represents and
warrants that the execution, delivery and performance of this Amendment
and the documents referenced herein are within the corporate powers of the
Borrower and have been duly authorized by all necessary corporate action.
IN WITNESS WHEREOF, the parties have executed this Amendment as of this
_____ day of ________, 1998.
FIRSTAR BANK OF MINNESOTA,
NATIONAL
ASSOCIATION
By:
-----------------------------------
Its:
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TRANSPORT CORPORATION OF AMERICA,
INC.
By:
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Its:
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ACKNOWLEDGMENT OF CORPORATE GUARANTORS:
TCA OF OHIO, INC. TRANSPORT INTERNATIONAL EXPRESS, INC.
By: By:
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Its: Its:
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EXHIBIT A
BORROWING BASE CERTIFICATE
TO: Firstar Bank of Minnesota, National Association (the "Bank")
Pursuant to the Credit Agreement between Transport Corporation of America,
Inc. ("Borrower") and the Bank ("Credit Agreement") dated May 15, 1997, as
amended, the undersigned hereby certifies and warrants that as of _________,
19___, the Borrower Base was as follows:
RECEIVABLES AND EQUIPMENT
Total Accounts $_________________
Less: Ineligible Accounts ($_________________)
Eligible Accounts $_________________
Times 85% = Borrowing Base Amount $_________________
Eligible Equipment (net book value) $_________________
Times 75% = Borrowing Base Amount $_________________
Total Borrowing Base $_________________
Revolving Loans $_________________
Undrawn Letters of Credit $_________________
Total Loans & Letters of Credit $_________________
Margin or (Deficiency) $_________________
The person signing this Borrowing Base Certificate on behalf of the
Borrower represents that he or she or it is authorized to do so by such party
and that it is true and correct to the best of his or her knowledge.
This Borrowing Base Certificate is subject to, and does not modify or in
any way affect the terms and conditions of the Credit Agreement. The terms and
conditions of the Credit Agreement shall supersede and control any inconsistent
terms or conditions of the Borrowing Base Certificate.
Transport Corporation of America, Inc.
Date _____________, 19____ --------------------------------------
Authorized Signature and Title