(6)

Debt

Debt is comprised of the following (in thousands):

	Interest Rates at	December 31,
	December 31, 2015	2015		2014
Outstanding Debt:
PNC $120 million revolving credit facility
$55.0 million LIBOR rate advance	LIBOR + 1.50%	$	55,000	$	—
$4.6 million domestic rate advance	Prime + 0.50%		4,569		—
Key equipment notes	3.75%		83,578		—
Comerica syndicated credit facility
$40 million term loan	LIBOR + 2.50%		40,000		—
$20 million revolving credit facility
$6.0 million LIBOR rate advance	LIBOR + 2.00%		6,000		—
$5.8 million base rate advance	Prime + 1.00%		5,766
Flagstar Bank $40 million unsecured term loan	LIBOR + 3.50%		40,000		—
UBS secured borrowing facility	LIBOR + 1.10%		—		—
Debt paid upon refinancing:
Comerica syndicated credit facility
$120 million revolving credit facility	NA		—		59,500
Swing Line sub-facility	NA		—		370
$60 million equipment financing facility	NA		—		55,428
$50 million term loan	NA		—		50,000
$70 million term loan B	NA		—		70,000
			234,913		235,298
Less current portion			61,488		9,593
Total long-term debt		$	173,425	$	225,705

(6)	Debt—continued

December 2015 Debt Refinancing

On December 23, 2015, Universal and certain of its wholly-owned subsidiaries entered into a combination of secured and unsecured loans with certain lenders. The Company undertook the action as part of its ongoing organizational streamlining efforts to better align sources of capital used in its asset-light businesses and to fix a portion of its variable interest rate bearing debt. Upon closing, the Company and subsidiaries involved borrowed approximately $234.9 million to pay off existing indebtedness, to terminate its syndicated Comerica Bank Revolving Credit and Term Loan Agreement, and to pay fees and expenses associated with the new credit agreements.

$120 million Revolving Credit Facility

Universal Truckload, Inc., Universal Dedicated, Inc., Mason Dixon Intermodal, Inc., Logistics Insight Corp., Universal Logistics Solutions International, Inc., Universal Specialized, Inc., Cavalry Logistics, LLC and Universal Management Services, Inc., (each a wholly-owned subsidiary of the Company, a Borrowing Subsidiary and, collectively, the “Borrowing Subsidiaries”) entered into a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) to provide for a revolving credit facility of up to $120 million (which amount may be increased by up to $30 million upon request). Borrowings under the revolving credit facility may be made until, and mature on, December 23, 2020.

To support daily borrowing and other operating requirements, the revolving credit facility contains a $10.2 million Swing Loan sub-facility and provides for $3.0 million in letters of credit. There were no amounts outstanding under the Swing Loan at December 31, 2015, and no letters of credit were issued against the line.

Borrowings under the Revolving Credit and Security Agreement bear interest at LIBOR or a base rate, plus an applicable margin for each. The applicable margin fluctuates based on the Borrowing Subsidiaries’ quarterly average excess availability, as defined in the Revolving Credit and Security Agreement. Interest on the unpaid balance of all base rate advances is payable quarterly in arrears on the first day of each calendar quarter. Interest on the unpaid balance of each LIBOR based advance of the revolving credit facility is payable on the last day of the applicable LIBOR interest period. At December 31, 2015, interest on a $55.0 million LIBOR rate advance accrued at 1.92% based on 30-day LIBOR, and interest on a $4.6 million domestic rate advance accrued at 4.0% based on PNC’s prime rate.

The Revolving Credit and Security Agreement includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring a minimum fixed charge coverage ratio to be maintained after a triggering event, as defined in the Revolving Credit and Security Agreement. The Revolving Credit and Security Agreement also includes customary mandatory prepayments provisions and is subject to an unused revolving credit line of 0.25%. At December 31, 2015, we were in compliance with the debt covenants.

As security for all indebtedness pursuant to the Revolving Credit and Security Agreement, PNC was granted a first priority perfected security interest in cash, deposits and accounts receivable of the Borrowing Subsidiaries and selected other assets. At December 31, 2015, our $59.6 million revolver advance was secured by, among other assets, net eligible accounts receivable totaling $93.7 million. At December 31, 2015, availability, as defined in the Revolving Credit and Security Agreement, was $24.8 million.

Equipment Credit Agreement

LGSI Equipment of Indiana, LLC, a wholly-owned subsidiary of the Company (the “Equipment Borrowing Subsidiary”), entered into a Master Security Agreement and five Promissory Notes (collectively the “Equipment Credit Agreement”) with Key Equipment Finance, a division of KeyBank National Association (“KeyBank”). Under the Equipment Credit Agreement, the Equipment Borrowing Subsidiary borrowed approximately $83.6 million. The promissory notes will be repaid in 60 monthly installments, including interest, beginning on January 23, 2016 and bear interest at a fixed rate of 3.75%.

Additionally, all obligations under the Equipment Credit Agreement are guaranteed by Universal Dedicated, Inc., Logistics Insight Corp., Universal Truckload, Inc., Universal Specialized, Inc. and Mason Dixon Intermodal, Inc. (each a wholly-owned subsidiary of the Company) in connection with each subsidiary’s lease of equipment. The Equipment Credit Agreement also includes financial covenants requiring the Equipment Borrowing Subsidiary to maintain a ratio of operating cash flow to fixed charges of not less than 1.1:1, as defined in the agreement. The first test for compliance occurs on March 31, 2016.

(6)	Debt—continued

As security for all indebtedness pursuant to the Equipment Credit Agreement, KeyBank was granted liens on selected titled vehicles of the Equipment Borrowing Subsidiary set forth on various collateral schedules. The Equipment Borrowing Subsidiary may sell or dispose of equipment secured under the Equipment Credit Agreement provided the disposed equipment is replaced with acceptable equipment as collateral, if we pay down of a portion of the loan plus breakage charges and handling charges, as defined in the promissory notes, or if KeyBank, at its option, releases the equipment without pay down or pre-payment. At December 31, 2015, the aggregate principal outstanding pursuant to the five promissory notes totaled $83.6 million, which is collateralized by equipment with an appraised orderly liquidation value of $93.0 million and a carrying amount of $70.5 million.

$60 million Revolving Credit and Term Loan Agreement

Westport Axle Corp., a wholly-owned subsidiary of the Company (“Westport”) entered into a Revolving Credit and Term Loan Agreement (the “Credit Agreement”), with and among the lenders party thereto and Comerica Bank, as administrative agent, arranger and documentation agent, providing for aggregate borrowing facilities of up to $60 million. The Credit Agreement consists of a $40 million term loan and a $20 million revolving credit facility. Borrowings under the term loan were advanced on December 23, 2015 and mature on December 23, 2020. The term loan shall be repaid in 20 equal quarterly installments of $1.5 million over five years beginning March 1, 2016, with the remaining balance due at maturity. Borrowings under the revolving credit facility may be made until, and mature on, December 23, 2020.

Borrowings under the Credit Agreement bear interest at LIBOR or a base rate, plus an applicable margin for each. The applicable margin fluctuates based on Westport’s total debt to EBITDA ratio, as defined in the Credit Agreement. At December 31, 2015, interest on the $40.0 million term loan accrued at 2.92% based on 30-day LIBOR. At December 31, 2015, interest on a $6.0 million LIBOR rate revolving credit advance accrued at 2.42% based on 30-day LIBOR, and interest on a $5.8 million base rate revolving credit advance accrued at 4.50% based on Comerica’s prime rate.

To support daily borrowing and other operating requirements, the revolving credit facility contains a $4.0 million Swing Line sub-facility and provides for $2.0 million in letters of credit. Swing Line borrowings incur interest at either the base rate plus the applicable margin or, alternatively, at a quoted rate offered by Comerica Bank in its sole discretion. There were no amounts outstanding under the Swing Line at December 31, 2015, and no letters of credit were issued against the line.

Interest on the unpaid balance of all revolving credit facility and swing line base rate advances is payable quarterly in arrears commencing on March 1, 2016, and on the first day of each June, September, December and March thereafter. Interest on the unpaid balance of each Eurodollar-based advance of the revolving credit facility is payable on the last day of the applicable Eurodollar interest period. Interest on the unpaid balance of each quoted rate based advance of the swing line is payable on the last day of the applicable quoted rate interest period.

Interest on the unpaid principal of all term loan base rate advances is payable quarterly in arrears commencing on January 1, 2016, and on the first day of each April, July, October and January thereafter. Interest on the unpaid principal of each Eurodollar-based advance of the term loan is payable on the last day of the applicable Eurodollar interest period.

The revolving credit facility is subject to a facility fee, which is payable quarterly in arrears, of either 0.25% or 0.50%, depending on Westport’s ratio of total debt to EBITDA. Other than in connection with Eurodollar-based advances or quoted rate advances that are paid off and terminated prior to an applicable interest period, there are no premiums or penalties resulting from prepayment. Borrowings outstanding at any time under the revolving credit facility are limited to the value of eligible accounts receivable and inventory of Westport, pursuant to a monthly borrowing base certificate. At December 31, 2015, our $11.8 million revolver advance was secured by, among other assets, net eligible accounts receivable and inventory of $17.6 million and $7.1 million, respectively. At December 31, 2015, availability, as defined in the Credit Agreement, was $6.8 million.

The Credit Agreement requires Westport to repay the borrowings made under the term loan and the revolving credit facility as follows: 50% (which percentage shall be reduced to 0% subject to Westport attaining a certain leverage ratio) of Westport’s annual excess cash flow, as defined; 100% of the net cash proceeds if we sell Westport’s machining division; 50% of net proceeds from certain equity issuances; 100% of proceeds from the issuance of certain indebtedness; and 100% of net proceeds from the sale of certain assets, insurance and condemnation proceeds.

(6)	Debt—continued

As security for all indebtedness pursuant to the syndicated Credit Agreement, Comerica Bank, as lead arranger, was granted first perfected security interest on all of Westport’s tangible and intangible property and in assets acquired in the future. The Company also pledged 100% of its equity interest in Westport. The Credit Agreement also contains a “springing” guaranty requiring the Company to guarantee the indebtedness under certain events, as defined in the Credit Agreement and guarantee.

The Credit Agreement includes financial covenants requiring Westport to maintain a minimum fixed charge coverage ratio, minimum quarterly EBITDA amounts, as defined in the Credit Agreement, and a maximum debt to EBITDA ratio, as well as customary affirmative and negative covenants and events of default. At December 31, 2015, we were in compliance with the debt covenants.

No later than 90 days after closing, Westport shall execute and deliver a Rate Management Agreement (or other interest rate swap agreements), as defined in the Credit Agreement, with respect to the term loan, based on a notional amount of not less than $12.0 million and a duration of two years.

$40 million Loan and Financing Agreement

The Company entered into a Loan and Financing Agreement (the “Loan Agreement”) with Flagstar Bank, F.S.B. (“Flagstar”) to provide for a $40.0 million unsecured term loan. Proceeds of the unsecured term loan were advanced on December 23, 2015, and the outstanding principal balance is due on or before July 15, 2016. Borrowings under the unsecured term loan bear interest at LIBOR, plus 3.5%, and interest on the unpaid balance is payable monthly commencing on February 1, 2016. The Company may voluntarily repay the loan in whole or in part at any time, subject to certain customary breakage costs. At December 31, 2015, the outstanding principal balance was $40.0 million and interest accrued at 3.92%.

The Loan Agreement provides for a conversion option whereby Flagstar has preliminarily agreed to refinance the unsecured term loan with $40.0 million of secured real estate term notes with UTSI Finance, Inc. (“UTSI Finance”), a wholly-owned subsidiary of the Company. Each UTSI Finance real estate term note will be secured by a first mortgage on a particular parcel of real estate and improvements included in the collateral pool, as defined in the agreement. Refinancing under the secured real estate term notes is subject to, among other things, the satisfaction of all conditions at conversion including satisfactory receipt and review of appraisals, environmental and title work, and insurance policies with respect to the assets in the collateral pool. Our evaluation of this conversion option resulted in short-term classification of the loan balance.

Debt Paid Upon Refinancing

Comerica syndicated credit facility

The Company’s Revolving Credit and Term Loan Agreement dated August 28, 2012, as amended, (the “Credit Agreement”) with and among the lenders parties thereto and Comerica Bank, as administrative agent, provided for aggregate borrowing facilities of up to $300 million. The Credit Agreement, consisted of a $120 million revolving credit facility, a $60 million equipment credit facility, a $50 million term loan, and a $70 million term loan B. Additionally, the Credit Agreement provided for up to $5 million in letters of credit, which letters of credit reduce availability under the revolving credit facility. On December 23, 2015, the Credit Agreement was paid in full and terminated.

$120 million Revolving Credit Facility

The revolving credit facility was available to refinance existing indebtedness and to finance working capital through, and mature on, August 28, 2017. Two interest rate options were applicable to advances borrowed pursuant to the facility: Eurodollar-based advances and base rate advances. Eurodollar-based advances bore interest at 30, 60 or 90-day LIBOR rates plus an applicable margin, which varied from 1.35% to 2.10% based on our ratio of total debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined. As an alternative, base rate advances bore interest at a base rate, as defined, plus an applicable margin, which also varied based on our ratio of total debt to EBITDA in a range from 0.35% to 1.10%. The base rate is the greater of the prime rate announced by Comerica Bank, the federal funds effective rate plus 1.0%, or the daily adjusting LIBOR rate plus 1.0%. At December 31, 2014, interest accrued at 2.02% based on 30-day LIBOR.

(6)	Debt—continued

The revolving credit facility also contained a $10.0 million Swing Line sub-facility and a $5.0 million letter of credit sub-facility. The Swing Line provided for borrowings of up to $7.0 million from Comerica Bank and $3.0 million from KeyBank, so long as the Comerica Bank and KeyBank advances did not exceed $10.0 million in the aggregate. Swing Line borrowings incurred interest at either the base rate plus the applicable margin or, alternatively, at a quoted rate offered by the applicable Swing Line lender in its sole discretion. At December 31, 2014, there was $0.4 million outstanding under the Swing Line and interest accrued at 4.10% based on the prime rate. We did not have any letters of credit issued against the revolving credit facility.

Interest on the unpaid balance of all revolving credit facility and swing line base rate advances was payable quarterly in arrears commencing on October 1, 2012, and on the first day of each October, January, April and July thereafter. Interest on the unpaid balance of each Eurodollar-based advance of the revolving credit facility was payable on the last day of the applicable Eurodollar interest period. Interest on the unpaid balance of each quoted rate based advance of the swing line was payable on the last day of the applicable quoted rate interest period.

The revolving credit facility was subject to a facility fee, payable quarterly in arrears, of either 0.25% or 0.50%, depending on our ratio of total debt to EBITDA. Other than in connection with Eurodollar-based advances or quoted rate advances that were paid off and terminated prior to an applicable interest period, there were no premiums or penalties resulting from prepayment. Borrowings outstanding at any time under the revolving credit facility were limited to the value of eligible accounts receivable of our principal operating subsidiaries, pursuant to a monthly borrowing base certificate. At December 31, 2014, our $59.5 million revolver advance was secured by, among other assets, net eligible accounts receivable totaling $122.4 million, of which, $104.1 million were available for borrowing against pursuant to the agreement.

$60 million Equipment Credit Facility

The equipment credit facility was available to refinance existing indebtedness and to finance capital expenditures including in connection with acquisitions. Borrowings under the equipment credit facility could be made until August 28, 2015, and such borrowings were being repaid in quarterly installments equal to 1/28th of the aggregate amount of borrowings under the equipment credit facility commencing on January 1, 2014.

The two interest rate options that applied to revolving credit facility advances also applied to equipment credit facility advances. Eurodollar-based advances bear interest at 30, 60 or 90-day LIBOR rates plus an applicable margin, which varied from 1.60% to 2.60% based on our ratio of total debt to EBITDA. Base rate advances bore interest at a base rate, as defined, plus an applicable margin, which also varied based on our ratio of total debt to EBITDA in a range from 0.60% to 1.60%. The equipment credit facility was subject to an unused fee, payable quarterly in arrears, of 0.50%. At December 31, 2014, interest accrued at 2.52% based on 30-day LIBOR.

Interest on the unpaid balance of all equipment credit facility base rate advances was payable quarterly in arrears commencing on October 1, 2012, and on the first day of each October, January, April and July thereafter. Interest on the unpaid balance of each Eurodollar-based advance of the equipment credit facility was payable on the last day of the applicable Eurodollar interest period.

$50 million Term Loan

Proceeds of the term loan were advanced on October 1, 2012 and used to refinance existing indebtedness of LINC. The outstanding principal balance was due on August 28, 2017, to the extent not already reduced by mandatory or optional prepayments. The applicable interest rate on the effective date of the term loan indebtedness was the base rate. Base rate advances bore interest at a defined base rate plus an applicable margin which varied from 1.50% to 2.25%, based on our ratio of total debt to EBITDA. Thereafter, we could convert base rate advances to Eurodollar-based advances, which bear interest at 30, 60 or 90-day LIBOR rates plus an applicable margin which varied from 2.50% to 3.25%, based on our ratio of total debt to EBITDA. At December 31, 2014, interest accrued at 3.17% based on 30-day LIBOR.

Interest on the unpaid principal of all term loan base rate advances was payable quarterly in arrears commencing on October 1, 2012, and on the first day of each October, January, April and July thereafter. Interest on the unpaid principal of each Eurodollar-based advance of the term loan was payable on the last day of the applicable Eurodollar interest period.

(6)	Debt—continued

$70 million Term Loan B

Proceeds of the term loan were advanced on December 19, 2013 and used to finance the acquisition of Westport. The outstanding principal balance was due on August 28, 2017, to the extent not already reduced by mandatory or optional prepayments. The applicable interest rate on the effective date of the term loan indebtedness was the base rate. Base rate advances bore interest at a defined base rate plus an applicable margin which varied from 1.50% to 2.25%, based on our ratio of total debt to EBITDA. Thereafter, we could convert base rate advances to Eurodollar-based advances, which bore interest at 30, 60 or 90-day LIBOR rates plus an applicable margin which varied from 2.50% to 3.25%, based on our ratio of total debt to EBITDA. At December 31, 2014, interest accrued at 3.17% based on 30-day LIBOR.

Interest on the unpaid principal of all term loan base rate advances was payable quarterly in arrears commencing on January 1, 2014, and on the first day of each January, April, July and October thereafter. Interest on the unpaid principal of each Eurodollar-based advance of the term loan was payable on the last day of the applicable Eurodollar interest period.

The Credit Agreement required us to repay the borrowings made under the term loan facilities and the equipment credit facility as follows: 50% (which percentage shall be reduced to 0% subject to the Company attaining a certain leverage ratio) of our annual excess cash flow, as defined; 100% of net cash proceeds of certain asset sales; and 100% of certain insurance and condemnation proceeds. Mandatory prepayments of the term loans were $1.0 million as of December 31, 2014. We could voluntarily repay outstanding loans under each of the facilities at any time, subject to certain customary “breakage” costs with respect to LIBOR-based borrowings. In addition, we could elect to permanently terminate or reduce all or a portion of the revolving credit facility.

All obligations under the Credit Agreement were unconditionally guaranteed by the Company’s material U.S. subsidiaries, and the obligations of the Company and such subsidiaries under the Credit Agreement and such guarantees were secured by, subject to certain exceptions, substantially all of their assets. The Credit Agreement also could, in certain circumstances, limit our ability to pay dividends or distributions. The Credit Agreement included annual, quarterly and ad hoc financial reporting requirements and financial covenants requiring the Company to maintain maximum leverage ratios and a minimum fixed charge coverage ratio, as well as customary affirmative and negative covenants and events of default. Specifically, we could not exceed a maximum senior debt to EBITDA ratio, as defined, of 2.5:1 and a maximum total debt to EBITDA ratio, as defined, of 3.0:1. We must also maintain a fixed charge coverage ratio, as defined, of not less than 1.25:1. At December 31, 2014, the Company was in compliance with its debt covenants.

UBS Secured Borrowing Facility

We also maintain a secured borrowing facility at UBS Financial Services, Inc. (“UBS”), using our marketable securities as collateral for the short-term line of credit. The line of credit bears an interest rate equal to LIBOR plus 1.10% (effective rate of 1.53% at December 31, 2015), and interest is adjusted and billed monthly. No principal payments are due on the borrowing; however, the line of credit is callable at any time. The amount available under the line of credit is based on a percentage of the market value of the underlying securities. If the equity value in the account falls below the minimum requirement, we must restore the equity value, or UBS may call the line of credit. We did not have any amounts outstanding under our line of credit at December 31, 2015 or 2014, and the maximum available borrowings under the line of credit were $7.4 million and $6.9 million, respectively.

(6)	Debt—continued

Maturities

The following table reflects the maturities of our principal repayment obligations as of December 31, 2015 (in thousands):

Years Ending December 31	PNC Revolving Credit Facility		KeyBank Equipment Promissory Notes		Comerica Revolving Credit Facility		Comerica Term Loan		Flagstar Unsecured Term Loan		Total
2016	$	—	$	15,488	$	—	$	6,000	$	40,000	$	61,488
2017		—		16,078		—		6,000		—		22,078
2018		—		16,692		—		6,000		—		22,692
2019		—		17,329		—		6,000		—		23,329
2020		59,569		17,991		11,766		16,000		—		105,326
Total	$	59,569	$	83,578	$	11,766	$	40,000	$	40,000	$	234,913