Exhibit 10.1
MODIFICATION AGREEMENT
BY THIS MODIFICATION AGREEMENT (the "Agreement"), made and entered into as
of the 5th day of July, 2006, XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, whose address is Commercial Banking, MAC S4101-251, 000
Xxxx Xxxxxxxxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter called "Lender"), and
UNIVERSAL TECHNICAL INSTITUTE, INC., a Delaware corporation, dba UNIVERSAL
TECHNICAL INSTITUTE OF DELAWARE ("Borrower"), whose address is 00000 Xxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, in consideration of the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby confirm and
agree as follows:
SECTION 1. RECITALS; ACKNOWLEDGEMENTS.
1.1 Borrower and Lender entered into a Credit Agreement dated October 26,
2004 (the "Credit Agreement"), which provided for, among other things, (a) a
line of credit ("Line of Credit") in the maximum aggregate amount of
$30,000,000.00 and (b) standby letters of credit (collectively, the "Standby
Letter of Credit") in the maximum aggregate amount of $20,000,000.00
(collectively, the "Loans"), all upon the terms and conditions contained
therein. All undefined capitalized terms used herein shall have the meaning
given them in the Credit Agreement. The Credit Agreement, the Line of Credit
Note and all other agreements, documents and instruments relating to the Loans
are referred to as the Credit Documents.
1.2 Borrower and Lender desire to modify the Credit Documents as set
forth herein.
SECTION 2. CREDIT DOCUMENTS MODIFICATIONS.
2.1 Section 1.2 of the Credit Agreement is hereby amended to read as
follows:
[Intentionally left blank.]
2.2 Section 1.3(d) of the Credit Agreement is hereby amended to read as
follows:
(d) [Intentionally left blank.]
2.3 Section 4.9(c) of the Credit Agreement is hereby amended to read as
follows:
(c) Current Ratio determined for any fiscal quarter of less than
the CR Requirement. "Current Ratio" is defined as total current assets
divided by total current liabilities which shall include without limitation
any outstanding balance on the Line of Credit, outstanding surety bonds and
any outstanding Letters of Credit under the Line of Credit Commitment),
with "CR Requirement" defined as 0.50 to 1.00 to June 30, 2007, and 0.60 to
1.0 on September 30, 2007 and thereafter.
2.4 The following definitions in Exhibit "A" to the Credit Agreement are
hereby deleted:
Standby Letter of Credit
Standby Letter of Credit Agreement.
2.5 The following definition in Exhibit "A" to the Credit Agreement is
hereby amended to read as follows:
"Loans" means the Line of Credit.
2.6 Exhibit "D" to the Credit Agreement is hereby amended to read as
attached hereto.
SECTION 3. OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.
3.1 All references to the Credit Agreement in the Credit Documents are
hereby amended to refer to the Credit Agreement as hereby amended.
3.2 Borrower acknowledges that the indebtedness evidenced by the Line of
Credit Note is just and owing, that the balance thereof is correctly shown in
the records of Lender as of the date hereof, and Borrower agrees to pay the
indebtedness evidenced by the Line of Credit Note according to the terms
thereof, as herein modified.
3.3 Borrower hereby reaffirms to Lender each of the representations,
warranties, covenants and agreements of Borrower set forth in the Line of Credit
Note and the Credit Agreement, with the same force and effect as if each were
separately stated herein and made as of the date hereof.
3.4 Borrower hereby ratifies, reaffirms, acknowledges, and agrees that
the Line of Credit Note and the Credit Agreement, represent valid, enforceable
and collectible obligations of Borrower, and that there are no existing claims,
defenses, personal or otherwise, or rights of setoff whatsoever with respect to
any of these documents or instruments. In addition, Borrower hereby expressly
waives, releases and absolutely and forever discharges Lender and its present
and former shareholders, directors, officers, employees and agents, and their
separate and respective heirs, personal representatives, successors and assigns,
from any and all liabilities, claims, demands, damages, action and causes of
action, of which Borrower has, or may reasonably be expected to have knowledge,
that Borrower may now have, or has had prior to the date hereof, or that may
hereafter arise with respect to acts, omissions or events occurring prior to the
date hereof and, without limiting the generality of the foregoing, from any and
all liabilities, claims, demands, damages, actions and causes of action, known
or unknown, contingent or matured, arising out of, or in any way connected with,
the Loans. Borrower further acknowledges and represents that no event has
occurred and no condition exists that, after notice or lapse of time, or both,
would constitute a default under this Agreement, the Line of Credit Note or the
Credit Agreement.
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3.5 All terms, conditions and provisions of the Line of Credit Note and
the Credit Agreement are continued in full force and effect and shall remain
unaffected and unchanged except as specifically amended hereby. The Line of
Credit Note and the Credit Agreement, as amended hereby, are hereby ratified and
reaffirmed by Borrower, and Borrower specifically acknowledges the validity and
enforceability thereof.
SECTION 4. GENERAL.
4.1 This Agreement in no way acts as a release or relinquishment of those
rights securing payment of the Loans. Such rights are hereby ratified,
confirmed, renewed and extended by Borrower in all respects.
4.2 The modifications contained herein shall not be binding upon Lender
until Lender shall have received all of the following:
(a) An original of this Agreement, fully executed by the Borrower.
(b) An original Consent and Agreement of Guarantors executed by
each Guarantor.
(c) Such resolutions or authorizations and such other documents as
Lender may require relating to the existence and good standing of the
Borrower and the authority of any person executing this Agreement or other
documents on behalf of the Borrower.
4.3 Borrower shall execute and deliver such additional documents and do
such other acts as Lender may reasonably require to fully implement the intent
of this Agreement.
4.4 Borrower shall pay all costs and expenses, including, but not limited
to, reasonable attorneys' fees incurred by Lender in connection herewith,
whether or not all of the conditions described in Paragraph 4.2 above are
satisfied. Lender, at its option, but without any obligation to do so, may
advance funds to pay any such costs and expenses that are the obligation of the
Borrower, and all such funds advanced shall bear interest at the highest rate
provided in the RLC Note and shall be due and payable upon demand.
4.5 Notwithstanding anything to the contrary contained herein or in any
other instrument executed by Borrower or Lender, or in any other action or
conduct undertaken by Borrower or Lender on or before the date hereof, the
agreements, covenants and provisions contained herein shall constitute the only
evidence of Lender's consent to modify the terms and provisions of the Credit
Agreement. Accordingly, no express or implied consent to any further
modifications involving any of the matters set forth in this Agreement or
otherwise shall be inferred or implied by Lender's execution of this Agreement.
Further, Lender's execution of this Agreement shall not constitute a waiver
(either express or implied) of the requirement that any further modification of
the Loans or of the Line of Credit Note or the Credit Agreement, shall require
the express written approval of Lender; no such approval (either express or
implied) has been given as of the date hereof.
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4.6 Time is hereby declared to be of the essence hereof of the Loans, of
the Line of Credit Note and of the Credit Agreement, and Lender requires, and
Borrower agrees to, strict performance of each and every covenant, condition,
provision and agreement hereof, of the Line of Credit Note and the Credit
Agreement.
4.7 This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their heirs, personal representatives, successors and
assigns.
4.8 This Agreement is made for the sole protection and benefit of the
parties hereto, and no other person or entity shall have any right of action
hereon.
4.9 This Agreement shall be governed by and construed according to the
laws of the State of Arizona.
IN WITNESS WHEREOF, these presents are executed as of the date
indicated above.
UNIVERSAL TECHNICAL INSTITUTE, INC.,
a Delaware corporation, dba UNIVERSAL
TECHNICAL INSTITUTE OF DELAWARE
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chief Financial Officer
BORROWER
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
LENDER
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CONSENT AND AGREEMENT OF GUARANTORS
Each of the undersigned Guarantors executed a Continuing Guaranty (each, a
"Guaranty") as described in the Credit Agreement dated as of October 26, 2004
(as amended from time to time, the "Credit Agreement") between XXXXX FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, and UNIVERSAL TECHNICAL
INSTITUTE, INC., a Delaware corporation, dba UNIVERSAL TECHNICAL INSTITUTE OF
DELAWARE Each of the undersigned Guarantors hereby consents and agrees to the
modifications and all other matters contained in the foregoing Modification
Agreement of even date herewith.
UTI HOLDINGS, INC., an Arizona corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF ARIZONA,
INC., a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
U.T.I. OF ILLINOIS, INC., an Illinois
corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF
CALIFORNIA, INC., a California corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF NORTH
CAROLINA, INC., a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF TEXAS,
INC., a Texas corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF
PENNSYLVANIA, INC., a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF
MASSACHUSETTS, INC., a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
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CLINTON EDUCATION GROUP, INC.,
a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
CUSTOM TRAINING GROUP, INC., a California
corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF NORTHERN
CALIFORNIA, INC., a California corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
UNIVERSAL TECHNICAL INSTITUTE OF PHOENIX,
INC., a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name Xxxxxxxx X. Xxxxxx
Its Chief Financial Officer
GUARANTOR
Dated as of July 5, 2006
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EXHIBIT "D"
COMPLIANCE CERTIFICATE FOR
PERIOD ENDING
_____________, 20___
("REPORTING PERIOD")
Xxxxx Fargo Bank, National Association
MAC S4101-251
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Date: ______________________1
Dear Ladies and Gentlemen:
This Compliance Certificate refers to the Credit Agreement dated as of
October 26, 2004 (as it may hereafter be amended, modified, extended or restated
from time to time, the "Credit Agreement"), between Universal Technical
Institute, Inc., a Delaware corporation ("Borrower"), and Xxxxx Fargo Bank,
National Association ("Bank"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 4.3(c) of the Credit Agreement, the undersigned, the
chief financial officer of Borrower, hereby certifies that:
Enclosed are the required financial statements for the [fiscal quarter]
[fiscal year] ending for the Borrower as required under Section 4.3 of the
Credit Agreement, which fairly and accurately present in all material respects
the financial condition and results of the operation of the Borrower.
To the best of the undersigned's knowledge, no "Event of Default" and/or
other event that with the passing of time or the giving of notice or both would
become an Event of Default has occurred [or if so, specifying the nature and
extent thereof and any corrective actions taken or to be taken].
As of the last day of the Reporting Period, the computations below were
true and correct:
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1 To be submitted within forty-five (45) days after the end of each fiscal
quarter (120 days after the end of each fiscal year).
I. Section 4.9(a) - NET INCOME AFTER TAXES
Net Income After Taxes $_____________
Net Income After Taxes Minimum Requirement $ 3,500,000
II. Section 4.9(b) - TOTAL LIABILITIES TO TANGIBLE NET WORTH
Liabilities:
Current Liabilities $_____________
Plus: Noncurrent Liabilities $_____________
Less: EITF 97-10 Liabilities
up to $30,000,000 ($____________)
Less: Subordinated Debt ($____________)
Equals: Total Liabilities $____________A
Tangible Net Worth:
Total Assets $_____________
Less: Total Liabilities ($____________)
Less: Intangible Assets ($____________)
Equals: Tangible Net Worth $____________B
DNW Ratio (A divided by B) Equals: 1.00
DNW Ratio Maximum Requirement
December 31, 2004 to
June 30, 2005 3.50:1.00
September 30, 2005
to June 30, 2006 2.00:1.00
September 30, 2006 and
thereafter 1.50:1.00
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III. Section 4.9(c) - CURRENT RATIO
Numerator: Current Assets $____________A
divided by
Denominator: Current Liabilities (including $____________B
Line of Credit balance
outstanding surety bonds and
outstanding Letters of Credit
under The Line of Credit
Commitment)
Current Ratio equals ___________A/B
Current Ratio Minimum Requirement
To June 30, 2007 0.50:1.00
September 30, 2007 and
thereafter 0.60:1.00
IV. Section 4.9(d) - TANGIBLE NET WORTH
Amount $_____________
Minimum Requirement $_____________
UNIVERSAL TECHNICAL INSTITUTE, INC.,
a Delaware corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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