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CREDIT AGREEMENT
DATED AS OF APRIL 30, 1999,
AMONG
HUB GROUP, INC.
HUB CITY TERMINALS, INC.,
HUB HOLDINGS, INC.
THE LENDERS
PARTY HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS AGENT
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE CREDITS................................................1
Section 1.1. Term Credit................................................1
Section 1.2. Manner and Disbursement of Loans...........................1
Section 1.3. Appointment of Borrowers as Agents for Each Borrower.......2
Section 1.4. Guaranty Agreements........................................3
SECTION 2. INTEREST, PREPAYMENTS AND APPLICATIONS.....................3
Section 2.1. Interest...................................................3
Section 2.2. Lending Branch.............................................3
Section 2.3. Replacement of Affected Lenders............................3
Section 2.5. Voluntary Prepayments......................................4
Section 2.6. Mandatory Prepayments......................................4
Section 2.7. Place and Application of Payments..........................4
Section 2.8. Notations..................................................5
SECTION 3. DEFINITIONS; INTERPRETATION................................5
Section 3.1. Definitions................................................5
Section 3.2. Interpretation............................................14
SECTION 4. REPRESENTATIONS AND WARRANTIES............................14
Section 4.1. Organization and Qualification............................14
Section 4.2. Corporate Authority and Validity of Obligations...........14
Section 4.3. Hub Group.................................................15
Section 4.4. Use of Proceeds; Margin Stock.............................16
Section 4.5. Financial Reports.........................................16
Section 4.6. No Material Adverse Change................................16
Section 4.7. Full Disclosure...........................................16
Section 4.8. Good Title................................................16
Section 4.9. Litigation and Other Controversies........................17
Section 4.10. Taxes.....................................................17
Section 4.11. Approvals.................................................17
Section 4.12. Affiliate Transactions....................................17
Section 4.13. Investment Company; Public Utility Holding Company........17
Section 4.14. ERISA.....................................................17
Section 4.15. Compliance with Laws......................................18
Section 4.16. Other Agreements..........................................18
Section 4.17. Year 2000 Compliance......................................18
SECTION 5. CONDITIONS PRECEDENT......................................18
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SECTION 6.0. COVENANTS.................................................20
Section 6.1. Maintenance of Business...................................20
Section 6.2. Maintenance of Properties.................................20
Section 6.3. Taxes and Assessments.....................................20
Section 6.4. Insurance.................................................21
Section 6.5. Financial Reports.........................................21
Section 6.6. Inspection................................................22
Section 6.7. Net Worth.................................................23
Section 6.8. Fixed Charge Coverage Ratio...............................23
Section 6.9. Minimum EBITDAM...........................................23
Section 6.10. Cash Flow Leverage Ratio..................................23
Section 6.11. Indebtedness for Borrowed Money...........................23
Section 6.12. Liens.....................................................25
Section 6.13. Investments, Acquisitions, Loans, Advances and
Guaranties...........................................26
Section 6.14. Mergers, Consolidations and Sales.........................28
Section 6.15. Maintenance of Subsidiaries...............................30
Section 6.16. Dividends By Public Hub Company...........................31
Section 6.17. ERISA.....................................................31
Section 6.18. Compliance with Laws......................................31
Section 6.19. Burdensome Contracts With Affiliates......................31
Section 6.20. No Changes in Fiscal Year.................................32
Section 6.21. Formation of Subsidiaries.................................32
Section 6.22. Change in the Nature of Business..........................32
Section 6.23. Guaranty..................................................32
Section 6.24. Year 2000 Assessment......................................32
SECTION 7. EVENTS OF DEFAULT AND REMEDIES............................32
Section 7.1. Events of Default.........................................32
Section 7.2. Non-Bankruptcy Defaults...................................34
Section 7.3. Bankruptcy Defaults.......................................35
SECTION 8. THE AGENT.................................................35
Section 8.1. Appointment and Authorization.............................35
Section 8.2. Rights as a Lender........................................35
Section 8.3. Standard of Care..........................................35
Section 8.4. Costs and Expenses........................................36
Section 8.5. Indemnity.................................................36
SECTION 9. JOINT AND SEVERAL LIABILITY AND GUARANTIES................37
Section 9.1. Joint and Several Liability and Guaranties................37
Section 9.2. Guaranty Unconditional....................................37
Section 9.3. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances.................................38
Section 9.4. Waivers...................................................38
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Section 9.5. Limit on Recovery.........................................39
Section 9.6. Stay of Acceleration......................................39
Section 9.7. Benefit to Guarantors.....................................39
Section 9.8. Guarantor Covenants.......................................39
SECTION 10. MISCELLANEOUS.............................................39
Section 10.1. Withholding Taxes.........................................39
Section 10.2. Non-Business Days.........................................41
Section 10.3. No Waiver, Cumulative Remedies............................41
Section 10.4. Waivers, Modifications and Amendments.....................41
Section 10.5. Costs and Expenses........................................41
Section 10.6. Documentary Taxes.........................................42
Section 10.7. Survival of Representations...............................42
Section 10.8. Participations............................................42
Section 10.9. Assignment Agreements.....................................42
Section 10.10. Notices...................................................43
Section 10.11. Construction..............................................44
Section 10.12. Headings..................................................44
Section 10.13. Severability of Provisions................................44
Section 10.14. Counterparts..............................................44
Section 10.15. Entire Understanding......................................44
Section 10.16. Binding Nature, Governing Law, Etc........................44
Section 10.17. Submission to Jurisdiction; Waiver of Jury Trial..........44
Section 10.18. Confidentiality...........................................45
Section 10.19. No Third Party Rights.....................................46
Signature....................................................................46
Exhibit A - Term Note
Exhibit B - Compliance Certificate
Exhibit C - Subsidiary Guaranty Agreement
Schedule 5.3 - Subsidiaries
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CREDIT AGREEMENT
To each of the Lenders party hereto
Ladies and Gentlemen:
The undersigned, Hub Group, Inc., a Delaware corporation (the "PUBLIC
HUB COMPANY"), Hub City Terminals, Inc., a Delaware corporation ("HUB CHICAGO"),
and Hub Holdings, Inc. a Delaware corporation ("HUB HOLDINGS") (Hub Chicago and
Hub Holdings and the Public Hub Company being hereinafter referred to
collectively as the "BORROWERS" and individually as a "BORROWER"), applies to
you (the "LENDERS") for your several commitments, subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to make a term credit (the "TERM CREDIT") available to
the Borrowers, all as more fully hereinafter set forth.
SECTION 1. THE CREDITS.
SECTION 1.1. TERM CREDIT. (a) GENERALLY. Subject to the terms and
conditions hereof, the Lenders severally agree to make term loans (individually,
from each Lender, its "TERM LOAN" and collectively from more than one Lender,
their "TERM LOANS") to Hub Holdings under the Term Credit in an amount not to
exceed such Lender's Term Commitment set forth on the signature page hereof. The
Term Loans shall be disbursed in a single Borrowing made, if at all, on or
before June 1, 1999, at which time the commitments of the Lenders to make Term
Loans shall expire. Each Lender's Term Loan shall be made against and evidenced
by a single Term Note of the Borrowers, jointly and severally, (individually a
"TERM NOTE" and collectively the "TERM NOTES") payable to the order of such
Lender in the amount of its Term Loan, with each Term Note to be in the form
(with appropriate insertions) attached hereto as Exhibit A. Each Term Note shall
be dated the date of issuance thereof, be expressed to bear interest as set
forth in Section 2 hereof, and be expressed to mature on the Termination Date.
(b) SCHEDULED PAYMENT OF TERM LOANS. The Borrowers shall pay the Term
Loans on the Termination Date, with the amount of such payment to equal all
principal of the Term Loans not sooner paid. The amount of such payment due on
the Term Loans held by each Lender to be equal to its Percentage of such amount.
SECTION 1.2. MANNER AND DISBURSEMENT OF TERM LOANS.
(a) TERM LOANS. Any Borrower shall give written or telephonic notice to
the Agent (which notice shall be irrevocable once given and, if given by
telephone, shall be promptly confirmed in writing) by no later than 11:00 a.m.
(Chicago time) on the date the relevant Borrower requests that the Borrowing of
Term Loans be made to such Borrower, and the Agent shall promptly notify each
Lender of the Agent's receipt of each such notice. Each such notice shall
specify the date of the Borrowing of Term Loans requested (which must be a
Business Day), the Borrower making such Borrowing, and the amount of such
Borrowing. Not later than 1:00 p.m. (Chicago time) on the date specified for the
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Borrowing of Term Loans to be made hereunder, each Lender shall make the
proceeds of its Term Loan comprising part of such Borrowing available to the
Agent in Chicago, Illinois in immediately available funds. Subject to the
provisions of Section 5 hereof, the proceeds of the Borrowing of Term Loans
shall be made available to the relevant Borrower at the principal office of the
Agent in Chicago, Illinois, in immediately available funds, upon receipt by the
Agent from each Lender of its Percentage of such Borrowing.
(b) AGENT RELIANCE ON BANK FUNDING. Unless the Agent shall have been
notified by a Lender prior to 1:00 p.m. (Chicago time) on the date the Borrowing
is to be made hereunder that such Lender does not intend to make the proceeds of
its Term Loan available to the Agent, the Agent may assume that such Lender has
made such proceeds available to the Agent on such date and the Agent may in
reliance upon such assumption make available to the relevant Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Lender and the Agent has made such amount available to such
Borrower, the Agent shall be entitled to receive such amount from such Lender
forthwith upon the Agent's demand, together with interest thereon in respect of
each day during the period commencing on the date such amount was made available
to such Borrower and ending on but excluding the date the Agent recovers such
amount at a rate per annum equal to the effective rate charged to the Agent for
overnight federal funds transactions with member banks of the federal reserve
system for each day as determined by the Agent (or in the case of a day which is
not a Business Day, then for the preceding day). If such amount is not received
from such Lender by the Agent immediately upon demand, (i) the Borrowers will,
on demand, repay to the Agent the proceeds of such Term Loan attributable to
such Lender with interest thereon at a rate per annum equal to the interest rate
applicable to the relevant Term Loan, (ii) the defaulting Lender shall have no
right to participate in any recoveries from any one or more of the Borrowers or
Guarantors in respect of such Term Loan and (iii) all amounts to which the
defaulting Lender would otherwise be entitled under the terms of this Agreement
or any of the other Loan Documents shall first be applied to reimbursing the
Agent for the defaulting Lender's Term Loan, together with interest thereon as
provided for herein. Upon reimbursement to the Agent (pursuant to clauses (i) or
(iii) above or otherwise) of the amount advanced by the Agent in respect of the
defaulting Lender's Term Loan together with interest thereon, the defaulting
Lender shall thereupon be entitled to participate in recoveries from any one or
more of the Borrowers or Guarantors in respect of such Term Loan.
SECTION 1.3. APPOINTMENT OF BORROWERS AS AGENTS FOR EACH BORROWER. Each
Borrower hereby irrevocably appoints each of the other Borrowers as its agent
hereunder to make requests on such Borrower's behalf under Section 1 hereof for
Term Loans to be made to such Borrower and to take any other action contemplated
by the Loan Documents with respect to credit extended hereunder to such
Borrower. The Agent shall be entitled to conclusively presume that any such
action by a Borrower under the Loan Documents is taken on behalf of any one or
more of the Borrowers whether or not the relevant Borrower so indicates. Nothing
in this Section shall preclude a Borrower from acting on its own behalf.
(b) Each Borrower agrees that the Agent may rely upon any written or
telephonic notice given by any person the Agent in good faith believes is an
Authorized Representative without the necessity of independent investigation
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and, in the event any telephonic notice conflicts with the written confirmation,
such telephonic notice shall govern if the Agent and the Lenders have acted in
reliance thereon.
SECTION 1.4. GUARANTY AGREEMENTS. Payment of the Obligations shall be
guaranteed by each Hub Partnership in which one or more of the Borrowers own
100% of the equity interest and by each Wholly-Owned Subsidiary, in each case
pursuant to a Guaranty Agreement. Notwithstanding the foregoing, Hub Highway
Services need not be a Guarantor if and so long as it owns no assets or other
Property other than a non-transferable license from the Department of
Transportation.
SECTION 2. INTEREST, PREPAYMENTS AND APPLICATIONS.
SECTION 2.1. INTEREST. The outstanding principal balance of the Term
Loans shall bear interest (which the Borrowers hereby jointly and severally
promise to pay at the rates and at the times set forth herein) prior to maturity
(whether by lapse of time, acceleration or otherwise) at the rate per annum
determined by adding 1% to the Domestic Rate as in effect from time to time, and
after maturity (whether by lapse of time, acceleration or otherwise), whether
before or after judgment until payment in full thereof, or at the election of
the Required Lenders upon notice to any Borrower during the existence of any
Payment Default, at the rate per annum determined by adding 3% to the Domestic
Rate as in effect from time to time. Any change in the interest rate on the Term
Loans resulting from a change in the Domestic Rate shall be effective on the
date of the relevant change in the Domestic Rate. Interest on the Term Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
for the actual number of days elapsed. Interest on the Term Loans shall be
payable quarterly in arrears on the last day of each March, June, September and
December in each year (commencing June 30, 1999) and at maturity, and interest
after maturity shall be due and payable on demand.
SECTION 2.2. LENDING BRANCH. Each Lender may, at its option, elect to
make, fund or maintain its pro rata share of the Term Loans hereunder at the
branches or offices specified on the signature pages hereof or on any Assignment
Agreement executed and delivered pursuant to Section 10.10 hereof or at such of
its branches or offices as such Lender may from time to time elect; PROVIDED,
that if a Lender at its option (not when required by this Agreement) designates
an alternative lending office or branch as described above, to the extent such
designation would at the time of such redesignation require the Borrowers to pay
any amounts pursuant to Section 10.1 hereof in excess of that for which the
Borrowers would have already been liable had such alternative office or branch
not been used, the Borrowers shall not be liable for such increased amounts.
SECTION 2.3. REPLACEMENT OF AFFECTED LENDERS. At any time any Lender is
an Affected Lender, the Borrowers may replace such Lender as a party to this
Agreement with one or more other bank(s) or financial institution(s) acceptable
to the Agent (which acceptance shall not be unreasonably withheld), such bank(s)
or financial institution(s) to have Term Commitments which total the Affected
Lender's Term Commitment and are otherwise in such amounts as shall satisfy
Section 10.10 hereof (and upon notice from the Borrowers such Affected Lender
shall assign pursuant to an Assignment Agreement, and without recourse or
warranty, its Term Commitment, its Term Loan, its Term Note, and all of its
other rights and obligations hereunder to such replacement bank(s) or other
3
financial institution(s) for a purchase price equal to the sum of the principal
amount of the Term Loan so assigned, all accrued and unpaid interest thereon and
such Affected Lender's ratable share of all other Obligations owed to the
Affected Lender. Any such assumption and purchase shall be made in accordance
with the provisions of Section 10.10 hereof relating to assignments of Term
Loans and Term Commitments.
SECTION 2.5. VOLUNTARY PREPAYMENTS. Each Borrower shall have the
privilege of prepaying the Term Notes in whole or in part (provided if such
prepayment is in part, then such prepayment shall aggregate not less than
$100,000 at any Business Day upon written notice to the Agent not later than
11:00 a.m. (Chicago time) on such day, the Agent to promptly so notify the
Lenders, by paying to the Agent for the account of the Lenders the principal
amount to be prepaid and if such a prepayment prepays the Term Note in full
accrued interest thereon to the date of prepayment.
SECTION 2.6. MANDATORY PREPAYMENTS. If after the date of this Agreement
any Borrower or Subsidiary shall receive any proceeds from any incurrence of
indebtedness for borrowed money (including without limitation the Senior Note
Offering, but in any event excluding the Senior Credit Agreement and any
indebtedness permitted under Sections 6.11(b), (c), (e), (f), (l), (m), (n) and
(o)), then Borrower shall promptly notify the Agent of the proceeds to be
received by or for the account of such Borrower or Subsidiary in respect of such
indebtedness. Promptly upon, and in no event later than the third Business Day
after, receipt by the Borrower or such Subsidiary of the proceeds of such
indebtedness, the Borrowers shall prepay the Term Loans in an aggregate amount
equal to 100% of the amount of such proceeds.
SECTION 2.7. PLACE AND APPLICATION OF PAYMENTS. All payments of
principal, interest, fees and other amounts shall be made to the Agent at its
office located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other
place as the Agent may specify) in immediately available and freely transferable
funds at the place of payment. All such payments shall be made without setoff or
counterclaim and without reduction for, and free from, any and all present or
future taxes (except for income or franchise taxes as set forth in Section
10.1(a) hereof), levies, imposts, duties, fees, charges, deductions,
withholdings, restrictions or conditions of any nature imposed by any government
or political subdivision or taxing authority thereof. Payments received by the
Agent after 11:00 a.m. (Chicago time) shall be deemed received as of the opening
of business on the next Business Day. Except as herein provided, all payments
shall be received by the Agent for the ratable account of the Lenders, and shall
be promptly distributed by the Agent ratably to the Lenders in accordance with
their Percentages. No amount paid or prepaid on the Term Loans may be
reborrowed.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Term Loans and other Obligations by
the Agent or any of the Lenders after the occurrence and during the continuance
of an Event of Default shall be remitted to the Agent and distributed as
follows:
(a) first, to the payment of any outstanding reasonable costs
and expenses incurred by the Agent in protecting, preserving or
enforcing rights under this Agreement or any of the other Loan
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Documents, and in any event including all reasonable costs and expenses
of a character which the Borrowers have agreed to pay under Section
10.5 hereof (such funds to be retained by the Agent for its own account
unless it has previously been reimbursed for such costs and expenses by
the Lenders, in which event such amounts shall be remitted to the
Lenders to reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or
other fees or indemnification amounts due under this Agreement or any
of the other Loan Documents other than for principal of the Term Loans,
pro rata as among the Agent and the Lenders in accord with the amount
of such interest and other fees or Obligations owing each;
(c) fourth, to the payment of the principal of the Term
Loans, pro rata as among the Lenders in accord with the respective
amounts thereof owing (whether or not then due) to the Lenders; and
(d) fifth, to Hub Holdings on behalf of the Borrowers (each
Borrower hereby agreeing that is recourse for its share of such payment
shall be to Hub Holdings and not the Agent or any Lender) or to whoever
the Agent reasonably determines to be lawfully entitled thereto.
SECTION 2.8. NOTATIONS. The Term Loan made against each Term Note shall
be recorded by the relevant Lender on its books and records or, at its option in
any instance, endorsed on a schedule to such Lender's Term Note and the unpaid
principal balance so recorded or endorsed by such Lender shall be prima facie
evidence in any court or other proceeding brought to enforce such Term Note of
the principal amount remaining unpaid thereon; provided that the failure of a
Lender to record any of the foregoing shall not limit or otherwise affect the
unconditionally and absolutely joint or several obligation of the Borrowers to
repay the principal amount of each Term Note together with accrued interest
thereon.
SECTION 3. DEFINITIONS; INTERPRETATION.
SECTION 3.1. DEFINITIONS. The following terms when used herein shall
have the following meanings:
"AFFECTED LENDER" means any Lender which has given notice to a
Borrower (which has not been rescinded) of any obligation by the Borrowers to
pay any amount pursuant to Section 10.1 hereof.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
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"AGENT" means Xxxxxx Trust and Savings Bank and any successor thereto
appointed pursuant to Section 8.1 hereof.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"ASSIGNMENT AGREEMENTS" is defined in Section 10.9 hereof.
"AUTHORIZED REPRESENTATIVE" means those persons shown on the list of
officers provided by the Borrowers pursuant to Section 5(e) hereof or on any
update of any such list provided by any Borrower to the Agent, or any further or
different officer of any Borrower so named by any Authorized Representative of
any Borrower in a written notice to the Agent.
"BORROWERS" means Hub Chicago and Hub Holdings and the Public Hub
Company, collectively, and, also, each individually, with all promises and
covenants (including promises to pay) and representations and warranties of and
by the Borrowers made in the Loan Documents or any other instruments or
documents delivered pursuant thereto to be and constitute the joint and several
promises, covenants, representations and warranties of and by each and all of
such corporations.
"BORROWING" means the total of Term Loans made to a given Borrower by
all the Lenders on a single date. The Borrowing of Term Loans is made and
maintained ratably from each of the Lenders according to their Percentages.
"BUSINESS DAY" means any day other than a Saturday or Sunday on which
the Agent is not authorized or required to close in Chicago, Illinois.
"CAPITAL EXPENDITURES" means for any period, the aggregate of all
expenditures (whether paid in cash or accrued as a liability) by the Hub Group
during that period which, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
statement of cash flows of the Hub Group.
"CAPITAL LEASE" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the amount of
the liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"CASH FLOW LEVERAGE RATIO" means, as of any date the same is to be
determined, the ratio of (x) Total Funded Debt as of such date to (y) EBITDAM
for the four consecutive fiscal quarters of the Public Hub Company ending on
such date, or (if none so end) most recently completed prior to such date.
"CASH MATURITIES" means for any period, the aggregate amount of
payments required to be made by the Hub Group in cash during such period, with
respect to principal on all Indebtedness for Borrowed Money (whether at
6
maturity, as a result of mandatory sinking fund redemption, scheduled mandatory
prepayment, acceleration or otherwise); PROVIDED, HOWEVER, Cash Maturities shall
neither mean nor include (i) principal payments on the Senior Credit Agreement,
(ii) principal payments on the Term Credit and (iii) voluntary prepayments.
"CHANGE OF CONTROL EVENT" means the occurrence of any one or more of
the following:
(i) (a) any Person or group of Persons (within the meaning of
Section 13 or 14 of the Exchange Act, but excluding Xxxxxxx X. Xxxxxx,
the descendants of Xxxxxxx X. Xxxxxx (whether natural or adopted), any
spouse of any of the foregoing, any estate of any of the foregoing, any
trust for the benefit of one or more of the foregoing and any Person,
all of the outstanding equity securities of which are owned by any one
or more of the foregoing (collectively, the "XXXXXX FAMILY") and Senior
Management of the Public Hub Company) shall acquire beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of the Voting Stock in the Public Hub Company having at
least 35% of the ordinary voting power over the Public Hub Company and
(b) the Xxxxxx family and Senior Management, collectively, have
beneficial ownership of a lesser percentage of the Voting Stock in the
Public Hub company than such Person or group of Persons; or
(ii) during any period of twelve (12) consecutive months
beginning after the date of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the
Public Hub Company (the "BOARD") and any new director (other than a
director designated by a person who has entered into an agreement with
the Public Hub Company to effect a merger, consolidation or transfer
prohibited by Section 6.14 hereof) whose election or nomination for
election was approved by a vote of at least a majority of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved cease for any reason (other than death) to constitute a
majority of the Board; or
(iii) either or both of Hub Chicago or Hub Holdings shall cease
at any time and for any reason to be a Wholly-Owned Subsidiary of the
Public Hub Company; or
(iv) all of the equity interests in any Hub Partnership shall
cease at any time and for any reason, to be owned, both legally and
beneficially, by Hub Chicago, Hub Holdings and Wholly-Owned
Subsidiaries of Hub Chicago and Hub Holdings, all taken together (it
being understood and agreed that no merger, consolidation or transfer
permitted by Section 6.14 and no dissolution permitted by Section 6.14
hereof and no dissolution or liquidation permitted by Section 6.1
hereof shall constitute a Change of Control Event); or
(v) any "Change of Control" (or words of like import), as
defined in the indenture or other agreement governing the Senior Note
Offering (or any refinancing thereof permitted by this Agreement),
shall occur, the effect of which is to cause the acceleration of any
issue of such indebtedness or to enable any holder of such indebtedness
to cause Borrowers or Subsidiary to repurchase, redeem or retire any
such indebtedness held by such holder prior to its express maturity.
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"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"DEFAULT" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"DIVIDEND NOTES" means the currently outstanding five-year maturity
low-interest rate notes of the Hub Partnerships aggregating approximately
$2,300,000 in principal amount as of the date hereof and evidencing the deferred
portion of the approximately $24,200,000 dividend made in 1996 by the Hub Group.
"DOMESTIC RATE" means, for any day, the greater of (i) the rate of
interest announced by the Agent from time to time as its prime commercial rate,
as in effect on such day (it being understood and agreed that such rate may not
be the Agent's best or lowest rate); and (ii) the sum of (x) the rate determined
by the Agent to be the average (rounded upwards, if necessary, to the next
higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately
10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day
(or, if such day is not a Business Day, on the immediately preceding Business
Day) by two or more Federal funds brokers selected by the Agent for the sale to
the Agent at face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined, PLUS
(y) 1/2 of 1%.
"EBITDAM" means, with reference to any period, Net Income for such
period plus all amounts deducted in arriving at such Net Income amount in
respect of (i) Interest Expense for such period, plus (ii) taxes (including
federal, state and local income taxes) for such period, plus (iii) all amounts
properly charged for depreciation and amortization during such period on the
books of the Hub Group, plus (iv) any deduction for Minority Interest during
such period, plus (v) all other non-cash charges during such period on the books
of the Hub Group in accordance with GAAP to the extent the aggregate amount of
such other non-cash charges do not exceed $2,500,000 during any period of four
consecutive fiscal quarters of the Public Hub Company (prorated appropriately
downward (or upward) for any shorter (or longer) period).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"EVENT OF DEFAULT" means any event or condition identified as such in
Section 7.1 hereof.
"FIXED CHARGE COVERAGE RATIO" means, as of any date the same is to be
determined, the ratio of (x) EBITDAM during the four consecutive fiscal quarters
of the Public Hub Company ending on such date, or (if none so end) most recently
8
completed prior to such date, PLUS (i) Rents during such period MINUS (ii)
Capital Expenditures during such period MINUS (iii) Restricted Payments during
such period to (y) the sum of (i) all Interest Expense during the same such
period PLUS (ii) Cash Maturities during such period PLUS (iii) Rents during such
period.
"FOREIGN PARTNERSHIP" means any partnership that is formed under the
laws of any jurisdiction other than the United States (or any State thereof).
"FOREIGN SUBSIDIARY" means any Subsidiary that is formed under the laws
of any jurisdiction other than the United States (or any State thereof).
"GAAP" means generally accepted accounting principles as in effect from
time to time, as applied by the Public Hub Company on a basis consistent with
the preparation of the Public Hub Company's most recent financial statements
furnished to the Lenders pursuant to Section 6.5 hereof.
"GUARANTEED LIABILITIES" is defined in Section 9.1 hereof.
"GUARANTOR" is defined in Section 9.1 hereof.
"GUARANTY AGREEMENT" means this Agreement as to Guarantors party hereto
and otherwise, either (x) a letter to the Agent in the form of Exhibit C hereto
executed by a Hub Partnership or Subsidiary in each case whereby it acknowledges
it is party hereto as a Guarantor and liable for the Obligations under Section 9
hereof or (y) such other form with similar effect as shall be satisfactory to
the Agent as to form and substance; PROVIDED, HOWEVER, that (i) Hub Partnerships
in which less than 100% of the equity interest therein is owned by one or more
of the Borrowers and (ii) Subsidiaries (other than Wholly-Owned Subsidiaries)
may limit the right of recovery on their Guaranty Agreements.
"HUB CHICAGO" is defined in the introductory paragraph hereof.
"HUB DISTRIBUTION" means Hub Group Distribution Services, an Illinois
general partnership.
"HUB GROUP" means the Borrowers, Subsidiaries and Hub Partnerships,
collectively, and, also, each individually, with all promises and covenants
(including promises to pay) and representations and warranties of and by the Hub
Group made in the Loan Documents or any other instruments or documents delivered
pursuant thereto to be and constitute the joint and several promises, covenants,
representations and warranties of and by each and all of such Persons. The
phrase "ANY MEMBER OF THE HUB GROUP" and derivatives thereof appearing in the
Loan Documents shall be deemed a reference to any or all of the Persons
comprising the Hub Group (as applicable), and without limiting the generality of
the foregoing, the term "HUB GROUP" as used in the Loan Documents shall be
deemed a reference to any one or more of such Persons whether or not such phrase
or any derivative thereof is used in conjunction with such term.
"HUB HOLDINGS" is defined in the introductory paragraph hereof.
9
"HUB PARTNERSHIP" means each limited partnership, limited liability
partnership or limited liability company in which Hub Chicago is a general
partner (or equivalent member in the case of a limited liability company or
partnership) engaged in the business of arranging for the movement of customers'
freight by intermodal container or trailer or by truck. The parties hereto
acknowledge and agree that by virtue of the foregoing definition, Hub
Distribution is not a Hub Partnership.
"INDEBTEDNESS FOR BORROWED MONEY" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business), (iii) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (iv) all Capitalized Lease Obligations of such Person and
(v) all obligations of such Person on or with respect to letters of credit,
bankers' acceptances and other extensions of credit whether or not representing
obligations for borrowed money.
"INTEREST EXPENSE" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the Hub
Group for such period determined in accordance with GAAP.
"LENDER" means Xxxxxx Trust and Savings Bank, the other signatories
hereto (other than any member of the Hub Group) and all other lenders becoming
parties hereto pursuant to Section 10.10 hereof.
"LIEN" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"LOAN DOCUMENTS" means this Agreement, the Term Notes, the Guaranty
Agreements and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"MINORITY INTEREST" means and includes (i) the percentage of each Hub
Partnership's (other than Hub Partnerships wholly-owned by the Public Hub
Company or Hub Holdings) income before taxes allocable to the limited partners
of such Hub Partnership and (ii) the percentage of Hub Distribution's income
before taxes allocable to the partners of Hub Distribution (other than the
Public Hub Company and Hub Chicago).
"NET INCOME" means, with reference to any period, the net income (or
net loss) of the Hub Group for such period as computed on a consolidated basis
in accordance with GAAP, and, without limiting the foregoing, after deduction
from gross income of all expenses and reserves, including reserves for all taxes
on or measured by income, but excluding any extraordinary profits and any
extraordinary losses and also excluding any taxes on such profits and any tax
credits on account of such losses.
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"NET WORTH" means, at any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock, but excluding minority
interest in Subsidiaries) which would appear on the balance sheet of the Hub
Group determined on a consolidated basis in accordance with GAAP.
"OBLIGATIONS" means all obligations of the Hub Group and any of them to
pay principal and interest on the Term Loans, all fees and charges payable
hereunder, and all other payment obligations of each Borrower and Guarantor
arising under or in relation to any Loan Document, in each case whether now
existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
"PAYMENT DEFAULT" means any default which continues beyond any grace
period expressed in any Loan Document as applicable thereto, in the payment when
due of (x) all or any part of the principal of or interest on any Note (whether
at the stated maturity therefor at any other time provided for in this
Agreement), or (y) any obligation to reimburse the Agent for a drawing paid by
the Agent on any Letter of Credit, or (z) of any fee or other Obligation payable
hereunder or under any other Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"PERCENTAGE" means, for each Lender, the percentage of the sum of the
aggregate Term Commitments then in effect (after giving effect to any voluntary
or mandatory reductions thereof), represented by such Lender's Term Commitment
or, if the Term Commitments have been terminated, the percentage held by such
Lender of the aggregate principal amount of all outstanding Term Loans.
"PERSON" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"PLAN" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (i) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PUBLIC HUB COMPANY" is defined in the introductory paragraph hereof.
"RENTS" means, as of any date of determination, the aggregate amount of
payments required to be made by the Borrowers during such period in respect of
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leases or similar arrangements (including without limitation all payments
required under operating and capital leases) under which any Borrower or
Subsidiary is liable as lessee; PROVIDED, HOWEVER, that Rents shall neither mean
nor include payments made on leases of, or similar arrangements for use of,
transportable containers included by the Hub Group in its cost of goods sold in
accordance with GAAP.
"REQUIRED LENDERS" means, as of the date of determinations thereof,
Lenders holding at least 55% of the Term Commitments or, in the event that no
Term Commitments are outstanding hereunder, holding at least 55% in aggregate
principal amount of the Term Loans outstanding hereunder.
"RESTRICTED PAYMENTS" means (without duplication) (i) Restricted
Payments by the Public Hub Company (as defined in Section 6.16 hereof) and (ii)
any payment or other distribution by the Hub Group directly or indirectly to
purchase, redeem or otherwise acquire or retire, or otherwise made on account
of, the interest of any partner or member (other than any Borrower) in any Hub
Partnership.
"SEC" means the federal Securities and Exchange Commission, and any
successor thereto.
"SENIOR CREDIT AGREEMENT" means that certain Credit Agreement dated as
of April 30, 1999 among the Borrowers, the Agent individually and as such Agent
and the Lenders party thereto.
"SENIOR MANAGEMENT" shall mean the president, principal financial
officer, principal accounting officer (or, if there is no such accounting
officer, the controller), any vice president of the Public Hub Company in charge
of a principal business unit, division or function (such as sales,
administration or finance) and any other officer who performs a policy-making
function for the Public Hub Company.
"SENIOR NOTE OFFERING" means an issuance by the Public Hub Company of
up to $50,000,000 in aggregate principal amount of notes to institutional
investors if and so long as the indebtedness represented thereby remains on the
terms set forth in Schedule 6.11(h) hereto or (except to the extent approved in
writing by the Agent and Required Lenders) terms and conditions no more
burdensome in any material respect on any member of the Hub Group than those set
forth in such Schedule.
"SUBSIDIARY" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Public Hub Company, by one or more of
its Subsidiaries, or by the Public Hub Company and one or more of its
Subsidiaries.
"TERM COMMITMENTS" means the commitments of the Lenders to make loans
under the Term Credit in the amounts set forth opposite their signatures hereto
under the heading "TERM COMMITMENT" and opposite their signatures on Assignment
Agreements delivered pursuant to Section 10.10 hereof under the heading "TERM
Commitment".
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"TERM CREDIT" is defined in the introductory paragraph hereto.
"TERM LOAN" is defined in Section 1.1 hereof.
"TERM NOTE" is defined in Section 1.1 hereof.
"TERMINATION DATE" means August 1, 1999.
"TOTAL FUNDED DEBT" means, at any time the same is to be determined,
the aggregate of all Indebtedness for Borrowed Money of the Hub Group at such
time, PLUS (without duplication) all Indebtedness for Borrowed Money of any
other Person which is directly or indirectly guarantied by any member of the Hub
Group or which any member of the Hub Group has agreed (contingently or
otherwise) to purchase or otherwise acquire or in respect of which any member of
the Hub Group has otherwise assured a creditor against loss. In any
determination of Total Funded Debt, in the event the holder's right of recovery
on any guaranty or similar obligation owed to such holder is limited in writing,
the holder's right of recovery on, the Total Funded Debt attributable to such
guaranty or other instrument shall be the amount to which liability thereon has
been so limited.
"UNFUNDED VESTED LIABILITIES" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"VOTING STOCK" of any Person means capital stock or other equity
interest of any class or classes (however designated) having ordinary voting
power for the election of directors or equivalent managers of such Person, other
than stock having such power only by reason of the happening of a contingency.
"WELFARE PLAN" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Public Hub
Company and/or one or more Wholly-Owned Subsidiaries within the meaning of this
definition.
"WORKING CAPITAL" means, at any time the same is to be determined, the
excess, if any, of current assets of the Hub Group minus current liabilities of
the Hub Group, all as determined on a consolidated basis in accordance with
GAAP.
"YEAR 2000 PROBLEM" means any significant risk that computer hardware,
software, or equipment containing embedded microchips essential to the business
or operations of the Borrower or any of its Subsidiaries will not, in the case
of dates or time periods occurring after December 31, 1999, function at least as
13
efficiently and reliably as in the case of times or time periods occurring
before January 1, 2000, including the making of accurate leap year calculations.
SECTION 3.2. INTERPRETATION. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"HEREOF", "HEREIN", and "HEREUNDER" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement; PROVIDED, HOWEVER, that if any change in
GAAP would affect (or would result in a change in the method of calculation of)
any of the covenants set forth in Section 6 or any definition related thereto,
then the Borrowers, the Agent and the Lenders will negotiate in good faith to
amend in accordance with the terms of this Agreement all such covenants and
definitions as would be affected by such change in GAAP to the extent necessary
to maintain the economic terms of such covenants as in effect under this
Agreement immediately prior to giving effect to such changes in GAAP; PROVIDED
FURTHER, HOWEVER, that until the amendment of such covenants and definitions
shall have been agreed upon by the Borrowers and the Required Lenders, the
covenants and definitions in effect immediately prior to such amendment shall
remain in effect and any determination of compliance with any such covenant
shall be construed in accordance with GAAP as in effect immediately prior to
such change in GAAP and consistently applied.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
The Borrowers and Guarantors jointly and severally represent and
warrant to the Agent and Lenders as follows:
SECTION 4.1. ORGANIZATION AND QUALIFICATION. Each Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the state of its incorporation, has full and adequate corporate power to own
its Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not be reasonably likely to have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole.
SECTION 4.2. CORPORATE AUTHORITY AND VALIDITY OF OBLIGATIONS. Each
Borrower has full right and authority to enter into this Agreement and the other
Loan Documents to perform all of its obligations hereunder and under the other
Loan Documents and in the case of each Borrower, to make the borrowings herein
provided for and to issue its Notes in evidence thereof. The Loan Documents
delivered by each Borrower have been duly authorized, executed and delivered by
such Borrower and constitute valid and binding obligations of such Borrower
14
enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by each Borrower of any of the
matters and things herein or therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon any Borrower or any provision of the charter, articles of
incorporation or by-laws of any Borrower or any material covenant, indenture or
agreement of or affecting any Borrower or any of its Properties, or result in
the creation or imposition of any Lien on any Property of either Borrower.
SECTION 4.3. HUB GROUP. Each Guarantor is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not be reasonably likely to have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole. The Hub Partnerships and
Subsidiaries (if any) listed on Schedule 4.3 hereto (as updated from time to
time pursuant to Sections 6.13(g) and 6.24 hereof) are the only Affiliates of
the Borrowers engaged in the business of arranging for the movement of
customers' freight by intermodal container or trailer or by truck. Schedule 4.3
hereto (as so updated) identifies under the appropriate subheading each Hub
Partnership and each Subsidiary (if any), the jurisdiction of its incorporation
or organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Public Hub Company, and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Guarantor are validly issued and
outstanding and all such shares and other equity interests indicated on Schedule
4.3 (as so updated) as owned by the Public Hub Company or any Guarantor, as the
case may be, are so owned, beneficially and of record, by the Public Hub Company
or such Guarantor in each case free and clear of all Liens. There are no
outstanding commitments or other obligations of any Guarantor to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Guarantor. Each
Guarantor has full right, power and authority to execute and deliver this
Agreement or a Guaranty Agreement and any other Loan Documents executed by it
and to perform each and all of the matters and things therein provided for. Each
Loan Document delivered by each Guarantor has been duly authorized, executed and
delivered by such Guarantor and constitutes a valid and binding obligation of
such Guarantor enforceable in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law) and the Loan Documents executed by each
Guarantor do not, nor does the performance or observance by any Guarantor of any
of the matters or things therein provided for, contravene any provision of law
15
or any provision of any charter, articles of incorporation, by-laws, partnership
agreement or articles of organization, as the case may be, of any Guarantor or
any material covenant, indenture or agreement of or affecting the Public Hub
Company or any Guarantor or any of the Public Hub Company's or such Guarantor's
Property, or result in the creation or imposition of any Lien on any of the
Public Hub Company's or such Guarantor's Property.
SECTION 4.4. USE OF PROCEEDS; MARGIN STOCK. The Borrowers shall use all
proceeds of the Term Loans solely for (i) working capital purposes in the
ordinary course of their respective business, (ii) to finance the acquisitions
permitted by this Agreement, (iii) to finance Capital Expenditures and (iv) to
purchase all outstanding limited partnership interests of each Hub Partnership.
Not more than 25% of the total assets of the Public Hub Company or of any other
member of the Hub Group consist of margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System). No part
of the proceeds of any Loan or any other extension of credit made hereunder will
be used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock.
SECTION 4.5. FINANCIAL REPORTS. The consolidated balance sheet of the
Public Hub Company as at December 31, 1998, and the related consolidated
statements of income, retained earnings and cash flows of the Public Hub Company
for the fiscal year then ended, and accompanying notes thereto, which financial
statements are accompanied by the audit report of Xxxxxx Xxxxxxxx LLP,
independent public accountants, heretofore furnished to the Lenders, fairly
present the consolidated financial condition of the Public Hub Company as at
said dates and the consolidated results of their operations and cash flows for
the periods then ended in conformity with GAAP applied on a consistent basis.
Neither the Public Hub Company nor any other member of the Hub Group has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 6.5 hereof.
SECTION 4.6. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998,
except as disclosed in periodic SEC filings by the Public Hub Company, there has
been no change in the condition (financial or otherwise) or business prospects
of the Public Hub Company or the Hub Group, taken as a whole, except those
occurring in the ordinary course of business, none of which individually or in
the aggregate have been materially adverse.
SECTION 4.7. FULL DISCLOSURE. The statements and information furnished
to the Lenders in connection with the negotiation of this Agreement and the
other Loan Documents and the commitment by the Lenders to provide all or part of
the financing contemplated hereby do not, taken as a whole and other than
financial projections or forecasts, contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading, the Lenders acknowledging that as to any
projections furnished to the Lenders, the Borrowers and Hub Partnerships only
represent that the same were prepared on the basis of information and estimates
the Borrowers believed to be reasonable.
SECTION 4.8. GOOD TITLE. The members of the Hub Group each have good
title to their assets as reflected on the most recent consolidated balance sheet
of the Public Hub Company furnished to the Lenders (except for sales of assets
by the Hub Group in the ordinary course of business), subject to no Liens other
than such thereof as are permitted by Section 6.12 hereof.
16
SECTION 4.9. LITIGATION AND OTHER CONTROVERSIES. Except as disclosed in
periodic SEC filings by the Public Hub Company, there is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
the Public Hub Company threatened, against the Public Hub Company or any other
member of the Hub Group which if adversely determined would (a) impair the
validity or enforceability of, or impair the ability of any member of the Hub
Group to perform its obligations under, this Agreement or any other Loan
Document or (b) result in any material adverse change in the financial
condition, Properties, business or operations of the Public Hub Company or the
Hub Group taken as a whole.
SECTION 4.10. TAXES. All tax returns with respect to any income tax or
other material tax required to be filed by the Public Hub Company or any other
member of the Hub Group in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Public Hub
Company or any other member of the Hub Group or upon any of their respective
Properties, income or franchises, which are shown to be due and payable in such
returns, have been paid. The Borrowers do not know of any proposed additional
tax assessment against any member of the Hub Group for which adequate provision
in accordance with GAAP has not been made on its accounts. Adequate provisions
in accordance with GAAP for taxes on the books of the Public Hub Company and
each other member of the Hub Group have been made for all open years, and for
its current fiscal period.
SECTION 4.11. APPROVALs. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of any Borrower or any other Person, is or will be necessary to the
valid execution, delivery or performance by any Borrower of this Agreement or
any other Loan Document.
SECTION 4.12. AFFILIATE TRANSACTIONS. Neither the Public Hub Company nor
any other member of the Hub Group is a party to any contracts or agreements with
any of its Affiliates on terms and conditions which are less favorable (x) in
the case of any transaction between any Borrower and any Affiliate, to such
Borrower than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other, (y) in the case of a transaction
between any Guarantor and an Affiliate (other than a Borrower), to such
Guarantor than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other and (z) in the case of a
transaction between any member of the Hub Group (other than a Borrower or a
Guarantor) and an Affiliate (other than a Borrower or a Guarantor), to such
member of the Hub Group than would be usual and customary in similar contracts
or agreements between Persons not affiliated with each other.
SECTION 4.13. INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY.
Neither the Public Hub Company nor any other member of the Hub Group is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or a "public
utility holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.14. ERISA. The Public Hub Company and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
17
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.15. COMPLIANCE WITH LAWS. The Public Hub Company and each
other member of the Hub Group are in substantial compliance with the
requirements of all federal, state and local laws, rules and regulations
applicable to or pertaining to their Properties or business operations
(including, without limitation, the Occupational Safety and Health Act of 1970,
the Americans with Disabilities Act of 1990, and laws and regulations
establishing quality criteria and standards for air, water, land and toxic or
hazardous wastes and substances), except insofar as non-compliance with which
would not have a material adverse effect on the financial condition, Properties,
business or operations of the Public Hub Company or the Hub Group taken as a
whole. Neither the Public Hub Company nor any other member of the Hub Group has
received written notice to the effect that its operations are not in compliance
with any of the requirements of applicable federal, state or local
environmental, health and safety statutes and regulations or are the subject of
any governmental investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action would have a material
adverse effect on the financial condition, Properties, business or operations of
the Public Hub Company or the Hub Group taken as a whole.
SECTION 4.16. OTHER AGREEMENTS. Neither the Public Hub Company nor any
other member of the Hub Group is in default under the terms of any covenant,
indenture or agreement of or affecting the Public Hub Company, any other member
of the Hub Group or any of their Properties, which default if uncured would have
a material adverse effect on the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as a whole.
SECTION 4.17. The Borrowers have conducted a comprehensive review and
assessment of the computer applications of the Borrowers and their Subsidiaries,
with respect to any defect in their computer software, data bases, hardware,
controls and peripherals related to the occurrence of the year 2000 or the use
at any time of any date which is before, on and after December 31, 1999, in
connection therewith. Based on the foregoing review, assessment and inquiry, the
Borrowers believe that no such defect could reasonably be expected to have a
material adverse effect on the business or financial affairs of the Public Hub
Company or the Hub Group taken as a whole.
SECTION 5. CONDITIONS PRECEDENT.
The obligation of the Lenders to make any Term Loan under this
Agreement is subject to the following conditions precedent:
(a) each of the representations and warranties set forth in
Section 4 hereof and in the other Loan Documents shall be true and
correct in all material respects as of such time, except to the extent
the same expressly relate to an earlier date;
18
(b) the Hub Group shall be in full compliance with all of the
terms and conditions of this Agreement and of the other Loan Documents,
and no Default or Event of Default shall have occurred and be
continuing or would occur as a result of making such Term Loan;
(c) after giving effect to such extension of credit, the
aggregate principal amount of the Term Loans outstanding shall not
exceed the Term Commitment;
(d) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Agent or any Lender (including,
without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect;
(e) the Agent shall have received the following for the
account of the Lenders (each to be properly executed and completed) and
the same shall have been approved as to form and substance by each
Lender:
(i) the Term Notes;
(ii) the Guaranty Agreements from Guarantors not
party hereto;
(iii) copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Agreement
and the other Loan Documents to the extent the Agent or its
counsel may reasonably request;
(iv) an incumbency certificate containing the name,
title and genuine signatures of each of the Borrowers'
Authorized Representatives;
(f) legal matters incident to the execution and delivery of
this Agreement and the other Loan Documents and to the transactions
contemplated hereby shall be satisfactory to each Lender and its
counsel; and the Agent shall have received for the account of the
Lenders the favorable written opinion of counsel for the Hub Group in
form and substance satisfactory to the Agent and its counsel;
(g) the Agent shall have received evidence reasonably
satisfactory to it that the aggregate consideration to be expended by
the Hub Group for Hub Chicago's acquisition of all limited partnership
interests in the Hub Partnerships shall not exceed $120,000,000 and
shall be pursuant to a purchase agreement all in form and substance
satisfactory to the Agent and the Required Lenders;
(h) the Agent shall have received for the account of the
Lenders a good standing certificate for each Borrower and Guarantor
(dated as of the date no earlier than 10 days prior to the date hereof)
from the office of the secretary of state of the state of its
organization; and
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(i) the Agent shall have received for the account of the
Lenders such other agreements, instruments, documents, certificates and
opinions as the Agent or the Lenders may reasonably request.
Any request for a Borrowing hereunder shall constitute a representation and
warranty as to the facts specified in subsections (a) through (c), both
inclusive, above.
SECTION 6. COVENANTS.
The Borrowers and Guarantors agree jointly and severally that, so long
as any credit is available to or in use by the Borrowers hereunder, except to
the extent compliance in any case or cases is waived in writing by the Required
Lenders:
SECTION 6.1. MAINTENANCE OF BUSINESS. (a) The Borrowers and Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary to,
(x) preserve and maintain its existence and (y) preserve and keep in force and
effect all licenses, permits and franchises necessary to the proper conduct of
its business; PROVIDED, HOWEVER, that the Borrowers, Hub Partnerships and
Subsidiaries (x) may take any action permitted by Section 6.14 hereof, (y) may
dissolve or liquidate any Hub Partnership concurrent with Hub Chicago's or Hub
Holdings acquisition of all partnership interests therein and (z) may dissolve
or liquidate any Subsidiary or Hub Partnership if (1) such dissolution or
liquidation would not have a material adverse effect on (i) the financial
condition, Properties, business or operations of the Public Hub Company or the
Hub Group taken as a whole, (ii) the ability of any Borrower or Guarantor to
perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents of the rights or remedies of the
Agent or any Lender thereunder and (2) in the case of each dissolution or
liquidation of a Guarantor, all the assets of such Guarantor are transferred to
a Borrower or Guarantor in compliance with Section 6.14 hereof.
(b) Without limiting the generality of the foregoing, the Borrowers
shall, or shall cause a Wholly-Owned Subsidiary to, maintain a license from the
Department of Transportation permitting such Borrower or Subsidiary, as the case
may be, to serve as a broker for the Hub Group in arranging for the Hub Group's
transportation of general commodities by motor vehicle.
SECTION 6.2. MAINTENANCE OF PROPERTIES. The Borrowers and Hub
Partnerships shall maintain, preserve and keep its property, plant and equipment
in good repair, working order and condition (ordinary wear and tear excepted)
and shall from time to time make all needful and proper repairs, renewals,
replacements, additions and betterments thereto so that at all times the
efficiency thereof shall be fully preserved and maintained, and the Public Hub
Company shall cause each Subsidiary to do so in respect of Property owned or
used by it.
SECTION 6.3. TAXES AND ASSESSMENTs. The Borrowers and Hub Partnerships
shall duly pay and discharge, and the Public Hub Company shall cause each
Subsidiary to duly pay and discharge, all material taxes, rates, assessments,
fees and governmental charges upon or against it or its Properties, in each case
before the same become delinquent and before penalties accrue thereon, unless
and to the extent that the same are being contested in good faith and by
20
appropriate proceedings which prevent enforcement of the matter under contest
and adequate reserves are provided therefor.
SECTION 6.4. INSURANCE. The Borrowers and Hub Partnerships shall insure
and keep insured, and the Public Hub Company shall cause each Subsidiary to
insure and keep insured, with good and responsible insurance companies, all
insurable Property owned by it which is of a character usually insured by
Persons similarly situated and operating like Properties against loss or damage
from such hazards and risks, and in such amounts, as are insured by Persons
similarly situated and operating like Properties; and the Companies and Hub
Partnerships shall insure, and the Public Hub Company shall cause each
Subsidiary to insure, such other hazards and risks (including employers' and
public liability risks) with good and responsible insurance companies as and to
the extent usually insured by Persons similarly situated and conducting similar
businesses. Either Company shall upon request furnish to the Agent a certificate
setting forth in summary form the nature and extent of the insurance maintained
pursuant to this Section.
SECTION 6.5. FINANCIAL REPORTS. The Borrowers and Hub Partnerships
shall, and the Public Hub Company shall cause each Subsidiary to, maintain a
standard system of accounting in accordance with GAAP and shall furnish to the
Agent and each Lender and its duly authorized representatives such information
respecting the business and financial condition of the Borrowers and Hub
Partnerships and Subsidiaries as the Agent may reasonably request; and without
any request, shall furnish to the Agent:
(a) as soon as available, and in any event within 45 days
after the close of each fiscal quarter of the Public Hub Company, a
copy of the consolidated balance sheet of the Hub Group as of the last
day of such period and the consolidated statements of income, retained
earnings and cash flows of the Hub Group for the quarter and the fiscal
year-to date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in
the previous fiscal year, prepared by the Public Hub Company in
accordance with GAAP and certified by its President or chief financial
officer;
(b) as soon as available, and in any event within 90 days
after the close of each annual accounting period of the Public Hub
Company, a copy of the consolidated balance sheet of the Hub Group as
of the close of such period and the consolidated statements of income,
retained earnings and cash flows of the Hub Group for such period, and
accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied
by an unqualified opinion thereon of Xxxxxx Xxxxxxxx LLP or another
firm of independent public accountants of recognized national standing,
to the effect that the financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Hub Group as of the close of
such fiscal year and the results of their operations and cash flows for
the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance
with generally accepted auditing standards and, accordingly, such
examination included such tests of the accounting records and such
other auditing procedures as were considered necessary in the
circumstances;
21
(c) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of the operations and financial
affairs of any member of the Hub Group given to it by its independent
public accountants;
(d) as soon as available, and in any event within 60 days
after the close of each annual accounting period of the Public Hub
Company, a copy of the operating budget of the Hub Group for such
period, such budget to project in reasonable detail, cash receipts and
cash uses (broken down month-by-month); and
(e) promptly after knowledge thereof shall have come to the
attention of any responsible executive officer of any Company, written
notice of any threatened or pending litigation or governmental
proceeding or labor controversy against the Public Hub Company or any
other member of the Hub Group which, if adversely determined, would
materially and adversely affect the financial condition, Properties,
business or operations of the Public Hub Company or the Hub Group taken
as a whole or of the occurrence of any Change of Control Event or any
Default or Event of Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to
subsections (a) and (b) of this Section shall be accompanied by a written
certificate in the form attached hereto as Exhibit B signed by the President or
chief financial officer of the Public Hub Company to the effect that to the best
of such officer's knowledge and belief no Default or Event of Default has
occurred during the period covered by such statements or, if any such Default or
Event of Default has occurred during such period, setting forth a description of
such Default or Event of Default and specifying the action, if any, taken by the
Public Hub Company to remedy the same. Such certificate shall also set forth the
calculations supporting such statements in respect of Sections 6.7, 6.8, 6.9 and
6.10 of this Agreement. It is understood and agreed that if and so long as the
Public Hub Company files Forms 10-K and 10-Q with the SEC, the Borrowers may
deliver such forms to the Agent in lieu of the information required for the
corresponding accounting periods in subsections (a) and (b) above.
SECTION 6.6. INSPECTION. The Borrowers and Hub Partnerships shall, and
the Public Hub Company shall cause each Subsidiary to, permit the Agent and each
Lender and their duly authorized representatives and agents to visit and inspect
any of the Properties, corporate books and financial records of each member of
the Hub Group, to examine and (subject to Section 10.5 hereof), at the sole cost
and expense of the Lenders, make copies of the books of accounts and other
financial records of each member of the Hub Group, and to discuss the affairs,
finances and accounts of each member of the Hub Group with, and to be advised as
to the same by, its officers, employees and independent public accountants (and
by this provision the Hub Group hereby authorizes such accountants to discuss
with the Agent and any Lender the finances and affairs of each member of the Hub
Group) at such reasonable times and reasonable intervals as the Agent or such
Lender may designate; PROVIDED, HOWEVER, that (i) except upon the occurrence and
during the continuation of any Default or Event of Default, (x) such visitations
and inspections shall be made only with reasonable advance notice to a Company
and during normal business hours of the member of the Hub Group being visited or
inspected and (y) the Agent and each Lender agrees to use reasonable efforts to
22
coordinate its visits and inspections under this Section so as not to be
unreasonably burdensome on the member of the Hub Group being visited or
inspected and (ii) any discussions between a Lender or the Agent and the Hub
Group's accountants held by virtue of the authority granted by this Section
shall be with the right of an executive officer of the Public Hub Company to be
in attendance.
SECTION 6.7. NET WORTH. The Hub Group shall at all times maintain its
Net Worth at not less than the Minimum Required Amount. For purposes of this
Section 6.7, the term "MINIMUM REQUIRED AMOUNT" shall mean $105,000,000 through
September 29, 1999 and shall increase (but never decrease) as of September 30,
1999 and as of the close of each fiscal quarter of the Public Hub Company
thereafter by twenty-five percent (25%) of Net Income (if positive) for the
fiscal quarter of the Public Hub Company then ended.
SECTION 6.8. FIXED CHARGE COVERAGE RATIO. The Hub Group shall not, as
of the last day of each fiscal quarter of the Public Hub Company (commencing on
March 31, 1999), permit the Fixed Charge Coverage Ratio to be less than (i) 1.15
to 1.0 from the date hereof through and including December 30, 2001 and (ii)
1.25 to 1.0 thereafter.
SECTION 6.9. MINIMUM EBITDAM. The Hub Group shall as of the last day of
each fiscal quarter of the Public Hub Company (commencing on March 31, 1999)
maintain EBITDAM for the four fiscal quarters of the Public Hub Company then
ended at not less than (i) $35,000,000 from the date hereof through and
including December 30, 2000 and (ii) $40,000,000 from December 31, 2000 and
thereafter.
SECTION 6.10. The Hub Group shall as of the close of each fiscal quarter
of the Public Hub Company specified below, permit the Cash Flow Leverage Ratio
as of such date to be more than:
CASH FLOW LEVERAGE
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING MORE THAN:
the date hereof 12/30/99 3.85 to 1
12/31/99 6/29/00 3.75 to 1
6/30/00 12/30/00 3.25 to 1
12/31/00 6/29/01 3.00 to 1
6/30/01 12/30/01 2.75 to 1
12/31/01 and at all times thereafter 2.50 to 1
SECTION 6.11. INDEBTEDNESS FOR BORROWED MONEY. The Borrowers and the Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, issue, incur, assume, create or have outstanding any Indebtedness for
Borrowed Money; PROVIDED, HOWEVER, that the foregoing shall not restrict nor
operate to prevent:
23
(a) the Obligations;
(b) purchase money indebtedness and Capitalized Lease
Obligations secured by Liens permitted by Section 6.12(d) hereof in an
aggregate amount not to exceed $30,000,000 at any one time outstanding;
(c) indebtedness permitted by Section 6.13(l) hereof;
(d) unsecured indebtedness evidenced by the Dividend Notes;
(e) interest rate protection, currency swap and foreign
exchange arrangements entered into in connection with bona fide hedging
operations;
(f) performance bonds and surety or appeal bonds obtained in
the ordinary course of business;
(g) the unsecured indebtedness evidenced by the Senior Credit
Agreement (in an aggregate amount not to exceed $100,000,000);
(h) the unsecured indebtedness (in an aggregate amount not to
exceed $50,000,000) on the Senior Note Offering, the proceeds of which
are to be used to make the mandatory prepayment pursuant to Section 2.6
hereof;
(i) the currently outstanding unsecured indebtedness of Hub
Holdings incurred in connection with the acquisition of Quality
Intermodal Corporation in the approximate amount of $6,000,000;
(j) the currently outstanding unsecured indebtedness
evidenced by the $2,000,000 promissory note made by Hub Group, Inc. in
favor of American President Lines, Inc., due May 2, 1999;
(k) indebtedness of Hub Group Associates, Inc. on its line of
credit with Cass Bank & Trust provided the aggregate principal amount
outstanding thereon does not exceed $5,000,000 at any one time;
(l) indebtedness assumed in an acquisition permitted by
Section 6.13(m) hereof provided such indebtedness is not incurred in
connection with or in contemplation of such acquisition;
(m) initial or successive refinancings of (but not any
increases in) the Indebtedness for Borrowed Money listed in subsections
(d), (g), (h), (i), (j), (k) and (l) above on terms and conditions on
the whole no more burdensome in any material respect on the relevant
obligors;
(n) investments permitted by Section 6.13(g) hereof; and
24
(o) other indebtedness of the Hub Group aggregating not more
than $10,000,000 at any one time outstanding.
SECTION 6.12. LIENS. The Borrowers and Hub Partnerships shall not, nor
shall the Public Hub Company permit any Subsidiary to, create, incur or permit
to exist any Lien of any kind on any Property owned by the Company or any
Subsidiary; PROVIDED, HOWEVER, that the foregoing shall not apply to nor operate
to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges and Liens in the nature of good faith cash deposits in
connection with tenders, contracts or leases to which any member of the
Hub Group is a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the obligation
is not for borrowed money and that the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and
adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' and other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Hub Group
secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in
excess of $1,000,000 at any one time outstanding or, if in excess of
$1,000,000, is secured by assets (including cash) not at any time
exceeding $1,000,000 in value;
(d) Liens on property of any member of the Hub Group created
solely for the purpose of securing indebtedness permitted by Section
6.11(b) hereof, representing or incurred to finance, refinance or
refund the purchase price of Property, provided that no such Lien shall
extend to or cover other Property of any member of the Hub Group other
than the respective Property so acquired, and the principal amount of
indebtedness secured by any such Lien shall at no time exceed the
original purchase price of such Property;
(e) banker's Liens and similar Liens (including set-off
rights) in respect of bank deposits;
(f) the retained interest of a lessor in connection with any
lease;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which do not
materially detract from the value of the Property subject thereto; and
25
(h) Liens on the assets of the Hub Group securing not more
than $5,000,000 of the indebtedness permitted by Section 6.11 hereof.
SECTION 6.13. INVESTMENTS, ACQUISITIONS, LOANS, ADVANCES AND GUARANTIES.
The Borrowers and Hub Partnerships shall not, nor shall the Public Hub Company
permit any Subsidiary to, directly or indirectly, make, retain or have
outstanding any investments (whether through purchase of stock or obligations or
otherwise) in, or loans or advances (other than for travel advances and other
similar cash advances made to officers and employees in the ordinary course of
business) to, any other Person, or acquire all or any substantial part of the
assets or business of any other Person or division thereof, or be or become
liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other Person, or otherwise agree to provide funds for payment
of the obligations of another, or supply funds thereto or invest therein or
otherwise assure a creditor of another against loss, or apply for or become
liable to the issuer of a letter of credit which supports an obligation of
another; PROVIDED, HOWEVER, that the foregoing shall not apply to nor operate to
prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one
year of the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
Xxxxx'x Investors Services, Inc. ("MOODY'S") and at least A-1 by
Standard & Poor's Corporation ("S&P") maturing within 270 days of the
date of issuance thereof;
(c) investments in certificates of deposit issued by any
United States commercial bank having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less or in
eurodollar time deposits maturing not more than one year from the date
of acquisition thereof placed with any such commercial bank;
(d) marketable direct obligations of any State of the United
States or any local government or political subdivision thereof rated
at least AA by S&P or the equivalent thereof by Moody's;
(e) repurchase agreements with a term of not more than seven
days fully collateralized by instruments permitted as investments
hereunder under subsections (a), (b), (c) or (d) above entered into
with any bank meeting the qualifications specified in subsection (c)
above;
(f) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest primarily,
in investments of the type described in subsections (a), (b), (c), (d)
and (e) above;
(g) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
26
(h) interest rate protection, currency swap and foreign
exchange arrangements entered into in connection with bona fide hedging
operations;
(i) accounts or notes receivable arising in the ordinary
course of business;
(j) investments in securities of trade creditors or customers
received in settlement of obligations or pursuant to any plan or
reorganization or similar arrangement upon the bankruptcy or insolvency
or such trade creditors or customers;
(k) the Dividend Notes;
(l) loans and advances by each Borrower to other members of
the Hub Group not otherwise permitted by this Section provided that (i)
the member of the Hub Group receiving such loan or advance either is
(x) a Borrower or Hub Partnership which is a Guarantor and in which
100% of the equity interest is owned, both legally and beneficially, by
any one or more of the Borrowers or (y) if not a Person described in
clause (i)(x) of this subsection (l), a member of the Hub Group which
is or concurrently therewith becomes a Guarantor of the principal of
the Obligations in an amount not less than the principal amount of such
loan or advance and (ii) the aggregate amount of all such loans and
advances permitted by clause (i)(y) of this subsection (l) to all such
Guarantors, taken together, does not exceed $10,000,000 at any one time
outstanding;
(m) acquisitions of all or any substantial part of the assets
or business of any other Person or division thereof (the "TARGET")
engaged in the transportation business, or of a majority of the Voting
Stock of such a Person, or of equity interests in any Hub Partnership,
provided in each case that (i) no Default or Event of Default exists or
would exist after giving effect to such acquisition, (ii) the Board of
Directors or other governing body of such Person whose Property, or
Voting Stock or other interests in which, are being so acquired has
approved the terms of such acquisition, (iii) any Borrower shall have
delivered to the Agent an updated Schedule 4.3 to reflect any new
Subsidiary or Hub Partnership resulting from such acquisition; (iv) the
aggregate amount expended by the Hub Group as consideration for such
acquisition (and in any event (1) including as such consideration, any
indebtedness assumed or incurred as a result of such acquisition, and
(2) excluding as such consideration, any equity securities issued by
the Public Hub Company as consideration for such acquisition), when
taken together with the aggregate amount expended as consideration
(including indebtedness and excluding equity securities as aforesaid)
for all other acquisitions permitted under this Section 6.13(m) during
the same fiscal year of the Public Hub Company, does not exceed
$15,000,000; (v) the Target's "EBITDAM" (computed in a manner
consistent with the calculation of EBITDAM for the Borrowers, but
excluding subsection (iv) of the definition of "EBITDAM" hereof) for
Target's four most recently completed fiscal quarters is positive; (vi)
the Cash Flow Leverage Ratio (calculated on a pro forma basis as if
such acquisition had occurred on the date of commencement of the fourth
fiscal quarter of the Public Hub Company preceding the date of
acquisition in question) is in compliance with Section 6.10 hereof;
27
(n) the acquisitions by Hub Chicago or Hub Holdings of all of
the partnership and other equity interests in all Hub Partnerships that
are not Wholly-Owned Subsidiaries on the date hereof which acquisitions
are made substantially concurrent with the initial Loan hereunder;
(o) non-cash consideration received in connection with sales
of Property permitted by Section 6.14 hereof;
(p) loans by Hub Group Associates, Inc. to, or other
investments by Hub Group Associates, Inc. in, the Hub Partnerships and
Subsidiaries (other than the Borrowers and Guarantors), provided such
loans and other investments aggregate not more than $5,000,000 at any
one time outstanding;
(q) investments in, or loans to, Subsidiaries of the Hub
Partnerships engaged primarily in the ordinary course of their
respective businesses in providing drayage services for the Hub Group's
intermodal transportation jobs provided such investments, loans and
advances aggregate not more than $10,000,000 at any one time
outstanding;
(r) Obligations of the Guarantors and the Borrowers under the
Loan Documents; and
(s) any guarantees of the Guarantors and the Borrowers of the
Senior Credit Agreement and the Senior Note Offering.
In determining the amount of investments, acquisitions, loans, advances and
guaranties permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guaranties shall be taken at
the amount of obligations guaranteed thereby, unless specifically limited to a
lesser amount, in which case such guarantee shall be taken at such specified
lesser amount.
SECTION 6.14. MERGERS, CONSOLIDATIONS AND SALES. The Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, be a party to any merger or consolidation, or sell, transfer, lease or
otherwise dispose of all or any substantial part of its Property in a single
transaction or series of related transactions, including any disposition of
Property as part of a sale and leaseback transaction, or in any event sell or
discount (with or without recourse) any of its notes or accounts receivable;
PROVIDED, HOWEVER, that this Section shall not apply to nor operate to prevent
the following:
(a) any member of the Hub Group may sell its inventory in the
ordinary course of its business;
(b) any member of the Hub Group may sell or otherwise dispose
of obsolete and worn out equipment in the ordinary course of its
business; and
28
(c) any Subsidiary may consolidate with or merge into a
Borrower or a Guarantor so long as:
(i) in the case of such a transaction involving a
Borrower, (1) a Borrower is the surviving or continuing
corporation and (2) the net worth of such Borrower will not be
reduced immediately after giving effect to such transaction;
(ii) subject to the provisions of clause (i) above,
in the case of such a transaction involving a Guarantor, (1) a
Guarantor is the surviving or continuing corporation, (2) the
Borrowers own, both legally and beneficially, at least the
same percentage equity interest in such Guarantor after any
such event as the Borrowers did immediately prior to the
consummation of such event, (3) the net worth of such
Guarantor will not be reduced immediately after giving effect
to such transaction and (4) the Lenders' right of recovery on
such Guarantor's Guaranty Agreement is not limited by its
terms or if limited, equals the sum (if applicable) of the
limits on the rights of recovery on each Guaranty Agreement
(if any) of the parties to such merger or consolidation;
(iii) at the time of such merger or consolidation and
immediately after giving effect thereto, no Default or Event
of Default shall occur or be continuing;
(iv) no litigation shall be pending or threatened
which challenges the validity or propriety of such merger or
consolidation;
(v) the Agent shall have received a certificate from
the President or chief financial officer of the Public Hub
Company confirming that the foregoing conditions set forth in
this subsection (c) have been satisfied and such other
assurances as the Agent or Required Lenders shall in good
faith require to confirm that such conditions have been
satisfied; and
(vi) such merger or consolidation shall have no
material adverse effect on (i) the financial condition,
Properties, business or operations of the Public Hub Company
or the Hub Group taken as a whole, (ii) the ability of any
Borrower or Guarantor to perform its obligations under the
Loan Documents or (iii) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Agent
or any Lender thereunder; and
(d) any Hub Partnership which is a Guarantor may transfer all
its assets to any Wholly-Owned Subsidiary, whether or not in connection
with the dissolution of such Hub Partnership, PROVIDED that
(i) at the time of such transfer and immediately
after giving effect thereto, no Default or Event of Default
shall occur or be continuing;
29
(ii) the transferee in such transaction immediately
after giving effect thereto shall have a net worth not less
than the net worth of such Guarantor immediately prior to such
transfer;
(iii) such transferee is a Guarantor;
(iv) no litigation shall be pending or threatened
which challenges the validity or propriety of such transfer;
(v) the Agent shall have received a certificate from
the President or chief financial officer of the Public Hub
Company confirming that the foregoing conditions set forth in
this subsection (d) have been satisfied and such other
assurances as the Agent or Required Lenders shall in good
faith require to confirm that such conditions have been
satisfied; and
(vi) such transfer shall have no material adverse
effect on (i) the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as
a whole, (ii) the ability of any Borrower or Guarantor to
perform its obligations under the Loan Documents or (iii) the
validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or any Lender thereunder; and
(e) any Borrower may transfer its assets to another Borrower
and any Wholly-Owned Subsidiary which is a Guarantor may transfer its
assets to any Borrower or another Wholly-Owned Subsidiary.
Any sale, lease or other disposition of 15% or more of the total assets of any
Borrower shall be deemed "SUBSTANTIAL" for the foregoing purposes.
SECTION 6.15. MAINTENANCE OF SUBSIDIARIES. The Borrowers and the Hub
Partnerships shall not assign, sell or transfer, and the Public Hub Company
shall not permit any Subsidiary to issue, assign, sell or transfer, any equity
interests in a Hub Partnership or Hub Distribution or any shares of capital
stock of or other equity interests in a Subsidiary; PROVIDED that the foregoing
shall not operate to prevent
(a) the issuance, sale and transfer to any Person of any
shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person
as a director of such Subsidiary;
(b) the issuance of such stock or equity interests to a
member of the Hub Group, provided that in the case of the issuance of
any stock or other equity interest in a Guarantor, 100% of the equity
interest in such Guarantor is owned, both legally and beneficially, by
the Borrowers after giving effect to such issuance; and
(c) any other transfer of any stock or other equity interest
in a Guarantor to any one or more of the Borrowers.
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SECTION 6.16. DIVIDENDS BY PUBLIC HUB COMPANY. The Public Hub Company
shall not (a) declare or pay any dividends on or make any other distributions in
respect of any class or series of its capital stock (other than dividends
payable solely in its capital stock) or (b) directly or indirectly purchase,
redeem or otherwise acquire or retire any of its capital stock (such
non-excepted declarations, dividends, distributions, purchases, redemptions and
acquisitions being hereinafter referred to as "RESTRICTED PAYMENTS BY THE PUBLIC
HUB COMPANY") if at the time of any such Restricted Payment by the Public Hub
Company, or immediately after giving effect thereto, any Default or Event of
Default shall occur or be continuing; PROVIDED, HOWEVER, that this Section shall
not prevent the Public Hub Company from paying any dividend within 60 days after
the date of its declaration thereof if at such date of declaration, such
dividend would (if then paid) have complied with this Section.
SECTION 6.17. ERISA. The Borrowers and Hub Partnerships shall, and the
Public Hub Company shall cause each Subsidiary which is a member of its
Controlled Group to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed might result
in the imposition of a Lien against any of its Properties. The Company and Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary which
is a member of its Controlled Group to, promptly notify the Agent of (i) the
occurrence of any reportable event (as defined in Section 4043B of ERISA, other
than an event for which the 30-day notice requirement has been waived) with
respect to a Plan, (ii) receipt of any notice from the PBGC of its intention to
seek termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event with respect to any Plan which would result in the incurrence by any
member of the Controlled Group of any material liability, fine or penalty, or
any material increase in the contingent liability of any member of the
Controlled Group with respect to any post-retirement Welfare Plan benefit, which
liability, contingent liability, fine or penalty would have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole.
SECTION 6.18. COMPLIANCE WITH LAWS. The Borrowers, and the Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary to,
comply in all respects with the requirements of all federal, state and local
laws, rules, regulations, ordinances and orders applicable to or pertaining to
their Properties or business operations, non-compliance with which would have a
material adverse effect on the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as a whole.
SECTION 6.19. BURDENSOME CONTRACTS WITH AFFILIATES. The Borrowers, and
the Hub Partnerships shall not, nor shall the Public Hub Company permit any
Subsidiary to, enter into any contract, agreement or business arrangement with
any of its Affiliates on terms and conditions which are less favorable to (x) in
the case of a transaction between any Borrower and an Affiliate, to such
Borrower than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other, (y) in the case of a transaction
between any Guarantor and an Affiliate (other than a Borrower), to such
Guarantor than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other and (z) in the case of a
transaction between any member of the Hub Group (other than a Borrower or a
31
Guarantor) and an Affiliate (other than a Borrower or a Guarantor), to such
member of the Hub Group than would be usual and customary in similar contracts
or agreements between Persons not affiliated with each other.
SECTION 6.20. NO CHANGES IN FISCAL YEAR. No member of the Hub Group
shall change its fiscal year from its present basis without prior written notice
to the Agent.
SECTION 6.21. FORMATION OF SUBSIDIARIES. Except for existing
Subsidiaries designated on Schedule 4.3 hereto, the Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, form or acquire any Subsidiary without prior written notice to the Agent.
SECTION 6.22. CHANGE IN THE NATURE OF BUSINESS. The Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, engage in any business or activity if as a result the general nature of any
member of the Hub Group would be changed in any material respect from the
general nature of the business engaged in by any member of the Hub Group on the
date of this Agreement.
SECTION 6.23. GUARANTY. As a condition to establishing or acquiring (i)
any Hub Partnership (other than a Foreign Partnership) in which 100% of the
equity interest is owned directly or indirectly, by one or more of the Borrowers
or (ii) any Wholly-Owned Subsidiary (other than any Foreign Subsidiary), unless
the Lenders otherwise agree in their sole discretion, the Borrowers shall (i)
cause such Hub Partnership or Wholly-Owned Subsidiary, as the case may be, to
execute a Guaranty Agreement, (ii) cause such Hub Partnership or Wholly-Owned
Subsidiary to deliver documentation similar to that described in Sections
5(e)(ii), 5(e)(iii) and 5(g) hereof relating to the authorization for, execution
and delivery of, and validity of, such Hub Partnership's or Wholly-Owned
Subsidiary's obligations as a Guarantor and otherwise hereunder in form and
substance satisfactory to the Agent, and (iii) deliver an updated Schedule 4.3
to reflect the new Hub Partnership or Wholly-Owned Subsidiary.
SECTION 6.24. The Hub Group shall take reasonable action to remedy any
failure by its computer-based and other systems to effectively process dates,
including dates before, on and after January 1, 2000, without experiencing any
Year 2000 Problem to the extent such failure is within the Hub Group's power to
remedy and the failure to remedy such failure would reasonably be expected to
have a material adverse effect on the business or financial affairs of the
Public Hub Company or the Hub Group taken as a whole. At the request of the
Agent, the Hub Group will provide the Agent with such information as the Agent
may reasonably request as to the capability of the Hub Group to conduct its
business and operations before, on and after January 1, 2000, without
experiencing a Year 2000 Problem causing a material adverse effect on the
business or financial affairs of the Public Hub Company or the Hub Group taken
as a whole.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES.
SECTION 7.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "EVENT OF DEFAULT" hereunder:
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(a) default in the payment when due of all or any part of the
principal of any Term Note (whether at the stated maturity thereof or
at any other time provided for in this Agreement); or
(b) default for more than three (3) Business Days in the
payment when due of any part of the interest on any Term Note (whether
at the stated maturity thereof or at any other time provided for in
this Agreement) or in the payment when due of any fee or other
Obligation payable by any Borrower hereunder or under any other Loan
Document; or
(c) default in the observance or performance of Section 6.11
hereof if the aggregate amount of Indebtedness for Borrowed Money
incurred in contravention of such Section (whether or not in the same
transaction) exceeds $1,000,000; default in the observance or
performance of Section 6.12 hereof if the amount of obligations secured
by Liens prohibited by such Section (whether or not in the same
transaction) exceeds $1,000,000; default in the observance or
performance of any covenant set forth in Section 6.13 hereof if the
aggregate amount of investments, loans, advances and guarantees made in
contravention of such Section (whether or not in the same transaction)
aggregate in excess of $1,000,000; or default in the observance or
performance of Section 6.14 or 6.16 hereof;
(d) any other default in the observance or performance of any
of Sections 6.11, 6.12 or 6.13 hereof or default in the observance or
performance of any other provision hereof or of any other Loan Document
which default in each case is not remedied within thirty (30) days
after the earlier of (i) the date on which such failure shall first
become known to any executive officer of any Borrower or (ii) written
notice thereof is given to any Borrower by the Agent or any Lender; or
(e) any representation or warranty made by any Borrower or
any Guarantor herein or in any other Loan Document, or in any statement
or certificate furnished by it pursuant hereto or thereto, or in
connection with any extension of credit made hereunder, proves untrue
in any material respect as of the date of the issuance or making
thereof; or
(f) any of the Loan Documents shall for any reason not be or
shall cease to be in full force and effect with respect to any Borrower
or any Guarantor, or any of the Loan Documents is declared to be null
and void as a result of any challenge brought by any Borrower or any
Guarantor; or
(g) default shall occur under any Indebtedness for Borrowed
Money issued, assumed or guarantied by the Hub Group or any Subsidiary
in an aggregate amount exceeding $1,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and
such default shall continue for a period of time sufficient to permit
the acceleration of the maturity of any such Indebtedness for Borrowed
Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due
(whether by lapse of time, acceleration or otherwise); or
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(h) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount more than $1,000,000 in excess of the amount covered
by insurance from an insurer who has acknowledged its liability thereon
shall be entered or filed against the Hub Group or any Subsidiary or
against any of their Property and which remains unvacated, unbonded,
unstayed or unsatisfied for a period of 30 days; or
(i) any Borrower or any member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess
$1,000,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan
or Plans having aggregate Unfunded Vested Liabilities in excess of
$1,000,000 (collectively, a "MATERIAL PLAN") shall be filed under Title
IV of ERISA by any Borrower or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any
Material Plan against any Borrower or any member of its Controlled
Group to enforce payment of a withdrawal liability in excess of
$1,000,000 under Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or
(j) any member of the Hub Group shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i) through (v) above, or (vii) fail to contest in
good faith any appointment or proceeding described in Section 7.1(k)
hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for any member of the Hub Group or
any substantial part of any of its Property, or a proceeding described
in Section 7.1(j)(v) shall be instituted against any member of the Hub
Group, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 days.
SECTION 7.2. NON-BANKRUPTCY DEFAULTS. When any Event of Default
described in subsection (a) through (i), both inclusive, of Section 7.1 has
occurred and is continuing, the Agent shall, upon the request of the Required
Lenders, by notice to any Borrower, take one or more of the following actions:
34
(a) declare the principal of and the accrued interest on the
Term Notes to be forthwith due and payable and thereupon the Term
Notes, including both principal and interest and all fees, charges and
other Obligations payable hereunder and under the other Loan Documents,
shall be and become immediately due and payable without further demand,
presentment, protest or notice of any kind; and
(b) enforce any and all rights and remedies available to it
under the Loan Documents or applicable law.
SECTION 7.3. BANKRUPTCY DEFAULTS. When any Event of Default described
in subsection (j) or (k) of Section 7.1 has occurred and is continuing, then the
Term Notes, including both principal and interest, and all fees, charges and
other Obligations payable hereunder and under the other Loan Documents, shall
immediately become due and payable without presentment, demand, protest or
notice of any kind. In addition, the Agent may exercise any and all remedies
available to it under the Loan Documents or applicable law.
SECTION 8. THE AGENT
SECTION 8.1. APPOINTMENT AND AUTHORIZATION. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders expressly agree that
the Agent is not acting as a fiduciary of the Lenders in respect of the Loan
Documents, the Borrowers or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Lenders except as expressly set forth herein. Subject to the appointment of
a successor Agent as specified below, the Agent may resign at any time by
sending 20 days prior written notice to any Borrower and the Lenders. In the
event of any such resignation, the Required Lenders may appoint a new agent with
(except if any Event of Default then exists) the consent of the Public Hub
Company (which consent shall not be unreasonably withheld), which shall succeed
to all the rights, powers and duties of the Agent hereunder and under the other
Loan Documents. Any resigning Agent shall be entitled to the benefit of all the
protective provisions hereof with respect to its acts as an agent hereunder, but
no successor Agent shall in any event be liable or responsible for any actions
of its predecessor. If the Agent resigns and no successor is appointed, the
rights and obligations of such Agent shall be automatically assumed by the
Required Lenders and the Borrowers shall be directed to make all payments due
each Lender hereunder directly to such Lender.
SECTION 8.2. RIGHTS AS A LENDER. The Agent has and reserves all of the
rights, powers and duties hereunder and under the other Loan Documents as any
Lender may have and may exercise the same as though it were not the Agent and
the terms "LENDER" or "LENDERS" as used herein and in all of such documents
shall, unless the context otherwise expressly indicates, include the Agent in
its individual capacity as a Lender.
SECTION 8.3. STANDARD OF CARE. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
35
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent makes no representations
or warranties of any kind or character to the Lenders with respect to the
validity, enforceability, genuineness, perfection, value, worth or
collectibility hereof or of the Term Notes or any of the other Obligations or of
any of the other Loan Documents. Neither the Agent nor any director, officer,
employee, agent or representative thereof (including any security trustee
therefor) shall in any event be liable for any clerical errors or errors in
judgment, inadvertence or oversight, or for action taken or omitted to be taken
by it or them hereunder or under the other Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct. The Agent shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, certificate,
warranty, instruction or statement (oral or written) of anyone (including anyone
in good faith believed by it to be authorized to act on behalf of the
Borrowers), unless it has actual knowledge of the untruthfulness of same. The
Agent may execute any of its duties hereunder by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Lenders for the default
or misconduct of any such agents or attorneys-in-fact selected with reasonable
care. The Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agencies hereby created and its duties hereunder, and shall
incur no liability to anyone and be fully protected in acting upon the advice of
such counsel. The Agent shall be entitled to assume that no Default or Event of
Default exists unless notified to the contrary by a Lender. The Agent shall in
all events be fully protected in acting or failing to act in accord with the
instructions of the Required Lenders. The Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by the Agent by reason of taking or continuing to take any
such action. The Agent may treat the owner of any Term Note as the holder
thereof until written notice of transfer shall have been filed with the Agent
signed by such owner in form satisfactory to the Agent. Each Lender acknowledges
that it has independently and without reliance on the Agent or any other Lender
and based upon such information, investigations and inquiries as it deems
appropriate made its own credit analysis and decision to extend credit to the
Borrowers. It shall be the responsibility of each Lender to keep itself informed
as to the creditworthiness of the Hub Group and the Agent shall have no
liability to any Lender with respect thereto.
SECTION 8.4. COSTS AND EXPENSES. Each Lender agrees to reimburse the
Agent for all costs and expenses suffered or incurred by the Agent or any
security trustee in performing its duties hereunder and under the other Loan
Documents, or in the exercise of any right or power imposed or conferred upon
the Agent hereby or thereby, to the extent that the Agent is not promptly
reimbursed for same by the Borrowers, all such costs and expenses to be borne by
the Lenders ratably in accordance with the amounts of their respective Term
Commitments. If any Lender fails to reimburse the Agent for such Lender's share
of any such costs and expenses, such costs and expenses shall be paid pro rata
by the remaining Lenders, but without in any manner releasing the defaulting
Lender from its liability hereunder.
SECTION 8.5. INDEMNITY. The Lenders shall ratably, in accordance with
its Percentage, indemnify and hold the Agent, and its directors, officers,
employees, agents and representatives (including as such any security trustee
therefor) harmless from and against any liabilities, losses, costs and expenses
36
suffered or incurred by them hereunder or under the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Borrowers and except to the extent that any event giving rise to
a claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. If any Lender defaults in its obligations hereunder,
its share of the obligations shall be paid pro rata by the remaining Lenders,
but without in any manner releasing the defaulting Lender from its liability
hereunder.
SECTION 9. JOINT AND SEVERAL LIABILITY AND GUARANTIES.
SECTION 9.1. JOINT AND SEVERAL LIABILITY AND GUARANTIES. To induce the
Lenders to provide the credit described herein and in consideration of benefits
expected to accrue to each Guarantor by reason of the Term Commitments and for
other good and valuable consideration, receipt of which is hereby acknowledged,
each Borrower, each Hub Partnership party hereto and each Hub Partnership in
which 100% of the equity interest is owned on or at any time after the date
hereof by one or more of the Borrowers and each Wholly-Owned Subsidiary and each
other member of the Hub Group which executes and delivers a Guaranty Agreement
(the Borrowers and such Hub Partnerships, Subsidiaries and other members of the
Hub Group being hereinafter referred to individually as a "GUARANTOR" and
collectively as the "GUARANTORS") hereby unconditionally and irrevocably
guarantee jointly and severally to the Agent, the Lenders and each other holder
of any of the Obligations, and each Borrower hereby unconditionally and
irrevocably agrees to be jointly and severally liable to the Agent, the Lenders
and such holders for, the due and punctual payment of all present and future
Obligations and Hedging Liability (collectively, "GUARANTEED LIABILITIES") as
and when the same shall become due and payable, whether at stated maturity, by
acceleration or otherwise, according to the terms hereof and thereof. In case of
failure by the Borrowers punctually to pay any Guaranteed Liabilities guarantied
hereby or for which the Borrowers agree hereby to be jointly and severally
liable, each Guarantor hereby unconditionally agrees jointly and severally to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration
or otherwise, and as if such payment were made by the Borrowers.
SECTION 9.2. GUARANTY UNCONDITIONAL. The obligations of each Guarantor
as a guarantor or joint and several obligor under the Loan Documents, including
this Section 9, shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Borrower or of any other
Guarantor under this Agreement or any other Loan Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the Borrowers, any other Guarantor, or
37
any of their respective assets, or any resulting release or discharge
of any obligation of any Borrower or of any other Guarantor contained
in any Loan Document;
(d) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against the Agent, any Lender or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against any Borrower, any other Guarantor or any other Person
or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or against
any Borrower or any other Guarantor for any reason of this Agreement or
of any other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrowers or any
other Guarantor of the principal of or interest on any Term Note or any
other amount payable by them under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by
the Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantors under the Loan Documents.
SECTION 9.3. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. Each Guarantor's obligations under this Section 9 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Term Notes and all other amounts payable by the
Borrowers under this Agreement and all other Loan Documents shall have been paid
in full. If at any time any payment of the principal of or interest on any Term
Note or any other amount payable by the Borrowers under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of any Borrower or of any Guarantor, or otherwise,
each Guarantor's obligations under this Section 9 with respect to such payment
shall be reinstated at such time as though such payment had become due but had
not been made at such time.
SECTION 9.4. WAIVERS. (a) GENERAL. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by the
Agent, any Lender or any other Person against the Borrowers, another Guarantor
or any other Person.
(b) SUBROGATION AND CONTRIBUTION. Each Guarantor hereby agrees not to
exercise or enforce any right of exoneration, contribution, reimbursement,
recourse or subrogation available to such Guarantor against any Person liable
for payment of the Guaranteed Liabilities, or as to any security therefor,
38
unless and until the full amount owing on the Guaranteed Liabilities has been
paid and the Term Commitments have terminated; and the payment by such Guarantor
of any amount pursuant to any of the Loan Documents on account of credit
extended to any other Borrower shall not in any way entitle such Guarantor to
any right, title or interest (whether by way of subrogation or otherwise) in and
to any of the Guaranteed Liabilities or any proceeds thereof or any security
therefor unless and until the full amount owing on the Guaranteed Liabilities
has been paid and the Term Commitments have terminated.
SECTION 9.5. LIMIT ON RECOVERY. Notwithstanding any other provision
hereof or of the Term Notes, the right of recovery against each Guarantor under
this Section 9 or against a Borrower on the Term Notes issued by it shall not
(to the extent required by or as may be necessary or desirable to ensure the
enforceability against such Guarantor of its obligations hereunder or thereunder
in accordance with the laws of the jurisdiction of its incorporation or where it
carries on business) exceed (x) the amount which would render such Guarantor's
obligations under this Section 9 and the Term Notes void or voidable under
applicable law, including without limitation fraudulent conveyance law minus (y)
$1.00.
SECTION 9.6. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrowers under this Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of any
of the Borrowers, all such amounts otherwise subject to acceleration under the
terms of this Agreement or the other Loan Documents shall nonetheless be payable
jointly and severally by the Guarantors hereunder forthwith on demand by the
Agent made at the request of the Required Lenders.
SECTION 9.7. BENEFIT TO GUARANTORS. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.
SECTION 9.8. GUARANTOR COVENANTS. Each Guarantor shall take such action
as any Borrower is required by this Agreement to cause such Guarantor to take,
and shall refrain from taking such action as any Borrower is required by this
Agreement to prohibit such Guarantor from taking.
SECTION 10. MISCELLANEOUS.
SECTION 10.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING.
Except as otherwise required by law and subject to Section 10.1(b) hereof, each
payment by any Borrower under this Agreement and under any other Loan Document
shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes and franchise taxes on the recipient)
imposed by or within the jurisdiction in which such Borrower is domiciled, any
jurisdiction from which such Borrower makes any payment, or (in each case) any
political subdivision or taxing authority thereof or therein. If any such
39
withholding is so required, the Borrowers shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Lender and the Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount which that Lender or the Agent
(as the case may be) would have received had such withholding not been made. If
the Agent or any Lender pays any amount in respect of any such taxes, penalties
or interest, the Borrower shall reimburse the Agent or such Lender for that
payment on demand in the currency in which such payment was made. If any
Borrower pays any such taxes, penalties or interest, it shall deliver official
tax receipts evidencing that payment or certified copies thereof to the Lender
or Agent on whose account such withholding was made (with a copy to the Agent if
not the recipient of the original) on or before the thirtieth day after payment.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) (a
"NON-U.S. LENDER") represents and warrants to the Borrowers and the Guarantors
that as of the date such Person first becomes a Lender hereunder, payments made
hereunder to such Lender are exempt from withholding of United States federal
income taxes. Each Non-U.S. Lender agrees that such Lender shall submit to any
Borrower and the Agent on or before the earlier of the date the initial
Borrowing is made hereunder and 30 days after the date hereof (or, if such
Lender is an assignee lender under Section 10.9 and was not previously a Lender
hereunder, within 30 days of first becoming a Lender), two duly completed and
signed copies of either Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding under the Code on all amounts to be received
by such Lender, including fees, pursuant to the Loan Documents and the Term
Loans) or Form 4224 (relating to such Lender and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Term Loans) of
the United States Internal Revenue Service. Thereafter and from time to time,
each Lender shall submit to any Borrower and the Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by any Borrower in a written notice,
directly or through the Agent, to such Lender and (ii) required under
then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents or the Term Loans.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof which occurs after such Lender becomes a
Lender hereunder, that it is unable to submit to any Borrower or the Agent any
form or certificate that such Lender is obligated to submit pursuant to
subsection (b) of this Section 10.1 or that such Lender is required to withdraw
or cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Lender shall
promptly notify any Borrower and Agent of such fact and the Lender shall to that
extent not be obligated to provide any such form or certificate and will be
entitled to withdraw or cancel any affected form or certificate, as applicable.
Notwithstanding the foregoing, the Borrowers shall not be required to pay any
additional amounts to the Agent or any Lender pursuant to Section 10.1(a) hereof
to the extent that the obligation to pay such additional amounts would not have
arisen but for a failure by the Agent or such Lender to comply with the
provisions of Section 10.1(b).
40
SECTION 10.2. NON-BUSINESS DAYS. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
SECTION 10.3. NO WAIVER, CUMULATIVE REMEDIES. No delay or failure on the
part of any Lender or on the part of any holder of any of the Obligations in the
exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Lenders and
any of the holders of the Obligations are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
SECTION 10.4. WAIVERS, MODIFICATIONS AND AMENDMENTS. Any provision
hereof or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
PROVIDED, HOWEVER, that:
(a) no such amendment, modification or waiver shall increase
the amount or extend the term of any Lender's Term Commitment or reduce
the amount of any principal of or interest rate applicable to, or
extend the maturity of, any Obligation owed to any Lender or reduce the
amount of the fees to which any Lender is entitled hereunder, in each
case without the consent of such Lender; and
(b) without the consent of all Lenders, no such amendment,
modification, or waiver shall release any Guaranty Agreement or waive
any requirement hereunder for a Guaranty Agreement or change this
Section or change the definition of "REQUIRED LENDERS" or change the
number of Lenders required to take any action hereunder or under any of
the other Loan Documents.
No amendment, modification or waiver of the Agent's protective provisions shall
be effective without the prior written consent of the Agent.
SECTION 10.5. COSTS AND EXPENSES. The Borrowers agree to pay on demand
the reasonable costs and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of this Agreement, the other
Loan Documents and the other instruments and documents to be delivered hereunder
or thereunder, and in connection with the transactions contemplated hereby or
thereby, and in connection with any consents hereunder or waivers or amendments
hereto or thereto, including the reasonable fees and expenses of Messrs. Xxxxxxx
and Xxxxxx, counsel for the Agent, with respect to all of the foregoing (whether
or not the transactions contemplated hereby are consummated). The Borrowers
further agree to pay to Agent and the Lenders and any other holders of the
Obligations all reasonable costs and expenses (including court costs and
41
reasonable attorneys' fees), if any, incurred or paid by the Agent, the Lenders
or any other holders of the Obligations in connection with any Event of Default
or in connection with the enforcement of this Agreement or any of the other Loan
Documents or any other instrument or document delivered hereunder or thereunder.
The Borrowers further agree to indemnify and save the Lenders, the Agent and any
security trustee for the Lenders harmless from any and all liabilities, losses,
costs and expenses incurred by the Lenders or the Agent in connection with any
action, suit or proceeding brought against the Agent, or any security trustee or
any Lender by any Person (but excluding attorneys' fees for litigation solely
between the Lenders to which any Borrower is not a party) which arises out of
the transactions contemplated or financed hereby or out of any action or
inaction by the Agent, any security trustee or any Lender hereunder or
thereunder, except for such thereof as is caused by the gross negligence or
willful misconduct of the party seeking to be indemnified.
SECTION 10.6. DOCUMENTARY TAXES. The Borrowers agree to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
SECTION 10.7. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
SECTION 10.8. PARTICIPATIONS. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "PARTICIPANT"), provided that (i) no Participant shall thereby acquire any
direct rights under this Agreement, (ii) no Lender shall agree with a
Participant not to exercise any of such Lender's rights hereunder without the
consent of such Participant except for rights which under the terms hereof may
only be exercised by all Lenders and (iii) no sale of a participation in
extensions of credit shall in any manner relieve the selling Lender of its
obligations hereunder.
SECTION 10.9. ASSIGNMENT AGREEMENTS. Each Lender may, from time to time
upon at least five Business Days' prior written notice to the Agent, assign to
other commercial lenders part of its rights and obligations under this Agreement
(including without limitation the indebtedness evidenced by the Term Notes then
owned by such assigning Lender, together with an equivalent proportion of its
Term Commitment to make a Term Loan hereunder) pursuant to written agreements
executed by such assigning Lender, such assignee lender or lenders, the
Borrowers and the Agent, which agreements shall specify in each instance the
portion of the indebtedness evidenced by the Term Notes which is to be assigned
to each such assignee lender and the portion of the Percentage of the Term
Commitment of the assigning Lender to be assumed by it (the "ASSIGNMENT
AGREEMENTS"); PROVIDED, HOWEVER, that (i) each such assignment shall be of a
constant, and not a varying, percentage of the assigning Lender's rights and
obligations under this Agreement and the assignment shall cover the same
42
percentage of such Lender's Percentage of the Term Commitment, Term Loans and
Term Notes; (ii) unless the Agent and (except during an Event of Default) the
Borrowers otherwise consent, the aggregate amount of the Term Commitment, Term
Loans and Term Notes of the assigning Lender being assigned pursuant to each
such assignment (determined as of the effective date of the relevant Assignment
Agreement) shall in no event be less than $5,000,000 and shall be an integral
multiple of $1,000,000; (iii) the Agent and (except during any Event of Default)
any of the Borrowers must each consent, which consent shall not be
unreasonably withheld, to each such assignment to a party which was not already
a Lender party to this Agreement or any Affiliate of such Lender; (iv) the
assigning Lender must pay to the Agent a processing and recordation fee of
$3,500 and any out-of-pocket attorneys' fees and expenses incurred by the Agent
in connection with such Assignment Agreement and (v) no assignment or delegation
may be made if, at the time of and by reason of such assignment and delegation,
any Borrower would then be obligated to pay any amount under Section 10.1 hereof
in excess of what it would have been required to pay thereunder had no such
assignment been made. Upon the execution of each Assignment Agreement by the
assigning Lender thereunder, the assignee lender thereunder, the Borrowers and
the Agent and payment to such assigning Lender by such assignee lender of the
purchase price for the portion of the indebtedness of the Borrowers being
acquired by it, (i) such assignee lender shall thereupon become a "LENDER" for
all purposes of this Agreement with Term Commitment in the amounts set forth in
such Assignment Agreement and with all the rights, powers and obligations
afforded a Lender hereunder, (ii) such assigning Lender shall have no further
liability for funding the portion of its Term Commitment assumed by such other
Lender and (iii) the address for notices to such assignee Lender shall be as
specified in the Assignment Agreement executed by it. Concurrently with the
execution and delivery of such Assignment Agreement, the Borrowers shall execute
and deliver a Term Note to the assignee Lender in the amount of its Term
Commitment and a new Term Note to the assigning Lender in the amount of its Term
Commitment after giving effect to the reduction occasioned by such assignment,
all such Term Notes to constitute "TERM NOTES" for all purposes of this
Agreement and of the other Loan Documents.
SECTION 10.10. NOTICES. Except as otherwise specified herein, all notices
hereunder shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, in the case of the Borrowers, or on the appropriate
signature page hereof, in the case of the Lenders and the Agent, or such other
address or telecopier number as such party may hereafter specify by notice to
the Agent and any of the Borrowers given by United States certified or
registered mail, by telecopy or by other telecommunication device capable of
creating a written record of such notice and its receipt. Notices hereunder to
the Borrowers shall be addressed to:
Hub Group, Inc.
000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
43
addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
SECTION 10.11. CONSTRUCTION. Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
of the other Loan Documents, the covenants and agreements contained herein being
in addition to and not in substitution for the covenants and agreements
contained in the other Loan Documents.
SECTION 10.12. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and are not a part of this Agreement for any other
purpose.
SECTION 10.13. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. All rights, remedies and powers provided in this Agreement and the
other Loan Documents may be exercised only to the extent that the exercise
thereof does not violate any applicable mandatory provisions of law, and all the
provisions of this Agreement and the other Loan Documents are intended to be
subject to all applicable mandatory provisions of law which may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement or the other Loan Documents invalid or unenforceable.
SECTION 10.14 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 10.15. ENTIRE UNDERSTANDING. This Agreement together with the
other Loan Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and any prior agreements, whether written
or oral, with respect thereto are superseded hereby except for prior
understandings related to fees payable to the Agent upon the initial closing of
the transactions contemplated hereby.
SECTION 10.16. BINDING NATURE, GOVERNING LAW, ETC. This Agreement shall
be binding upon the Borrowers and its successors and assigns, and shall inure to
the benefit of the Agent and the Lenders and the benefit of their successors and
assigns, including any subsequent holder of an interest in the Obligations. The
Borrowers may not assign their rights hereunder without the written consent of
the Lenders. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 10.17. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. The
Borrowers hereby submit to the non-exclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Borrowers irrevocably waive, to
44
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. EACH BORROWER, THE AGENT, AND EACH LENDER HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
SECTION 10.18. CONFIDENTIALITY. Each of the Agent and the Lenders agrees
that it will use its best efforts not to disclose without the prior consent of
the Public Hub Company (other than to its employees, auditors, counsel or other
professional advisors, to Affiliates or to another Lender if the Lender or such
Lender's holding or parent company in its sole discretion determines that any
such party should have access to such information) any information with respect
to the Borrowers, the Hub Partnerships or any of Subsidiaries of the Public Hub
Company which is furnished pursuant to this Agreement; PROVIDED, HOWEVER, that
the Agent or any Lender may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, to the
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
45
extent permitted or deemed advisable by counsel, (d) in order to comply with any
law, order, regulation or ruling applicable to the Agent or such Lender and (e)
to any prospective transferee in connection with any contemplated transfer of
any of the Term Notes or any interest therein by such Lender; FURTHER PROVIDED,
HOWEVER, that such prospective transferee executes an agreement with such Lender
containing provisions substantially identical to those contained in this
Section.
SECTION 10.19. NO THIRD PARTY RIGHTS. Nothing expressed or implied herein
is intended to give, or shall be construed to give, any Person, other than the
parties hereto and their permitted successors and assigns hereunder, any benefit
or legal or equitable right, remedy or claim under or by virtue of this
agreement or any under or by virtue of any provisions herein.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 30th day of April, 1999.
HUB GROUP, INC., a Borrower
HUB CITY TERMINALS, INC., a Borrower
HUB HOLDINGS, INC., a Borrower
QUALITY INTERMODAL CORPORATION, a Guarantor
HUB CHICAGO HOLDINGS, INC., a Guarantor
Q.S. OF ILLINOIS, INC. , a Guarantor
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
HLX COMPANY, LLC, a Guarantor
By
Xxxxx X. Xxxxxx
Vice Chairman and Chief Executive Officer
46
HUB CITY ALABAMA, L.P.
HUB CITY ATLANTA, L.P.
HUB CITY BOSTON, L.P.
HUB CITY CANADA, L.P.
HUB CITY CLEVELAND, L.P.
HUB CITY DETROIT, L.P.
HUB CITY FLORIDA, L.P.
HUB CITY GOLDEN GATE, L.P.
HUB CITY INDIANAPOLIS, L.P.
HUB CITY KANSAS CITY, L.P.
HUB CITY LOS ANGELES, L.P.
HUB CITY MID ATLANTIC, L.P.
HUB CITY NEW ORLEANS, L.P.
HUB CITY NEW YORK STATE, L.P.
HUB CITY NEW YORK-NEW JERSEY, L.P.
HUB CITY NORTH CENTRAL, L.P.
HUB CITY OHIO, L.P.
HUB CITY PHILADELPHIA, L.P.
HUB CITY PITTSBURGH, L.P.
HUB CITY PORTLAND, L.P.
HUB CITY ST. LOUIS, L.P.
HUB CITY TENNESSEE, L.P.
HUB CITY TEXAS, L.P.
By: Hub City Terminals, Inc.
Its: General Partner for each of the above
Partnerships as Guarantors
By
Xxxxx X. Xxxxxx
Chief Executive Officer
47
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it
should receive or obtain any payment (whether by voluntary payment, by
realization upon collateral, by the exercise of rights of set-off or banker's
lien, by counterclaim or cross action, or by the enforcement of any rights under
this Agreement, any of the other Loan Documents or otherwise) in respect of the
Obligations in a greater amount than such Lender would have received had such
payment been made to the Agent and been distributed among the Lenders as
contemplated by Section 2.7 hereof then in that event the Lender receiving such
disproportionate payment shall purchase for cash without recourse from the other
Lenders an interest in the Obligations of the Borrowers to such Lenders in such
amount as shall result in a distribution of such payment as contemplated by
Section 2.7 hereof. In the event any payment made to a Lender and shared with
the other Lenders pursuant to the provisions hereof is ever recovered from such
Lender, the Lenders receiving a portion of such payment hereunder shall restore
the same to the payor Lender, but without interest.
Percentage of Commitments:
Term Commitment: XXXXXX TRUST AND SAVINGS BANK
$40,000,000 (100%)
By
Name:______________________________
Title:_____________________________
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
00
XXXXXXX X
XXXX
Xxxxxxx, Xxxxxxxx
$_______________ April __, 1999
On the Termination Date, for value received, the undersigned, Hub
Group, Inc., a Delaware corporation (the "PUBLIC HUB COMPANY"), Hub City
Terminals, Inc., a Delaware corporation ("HUB CHICAGO"), and Hub Holdings, Inc.,
a Delaware corporation ("HUB HOLDINGS") (the Public Hub Company, Hub Chicago and
Hub Holdings being hereinafter referred to collectively as the "BORROWERS")
hereby jointly and severally promise to pay to the order of
________________________ (the "LENDER"), at the principal office of Xxxxxx Trust
and Savings Bank in Chicago, Illinois, the principal sum of
_______________________ and no/100 Dollars ($___________).
This Note evidences the loan made or to be made to the Borrowers by the
Lenders under the Term Credit provided for under that certain Credit Agreement
dated as of April 30, 1999, among the Borrowers, Xxxxxx Trust and Savings Bank,
individually and as Agent thereunder, and the other Lenders which are now or may
from time to time hereafter become parties thereto (said Credit Agreement, as
the same may be amended, modified or restated from time to time, being referred
to herein as the "CREDIT AGREEMENT") and the Borrowers hereby jointly and
severally promise to pay interest at the office described above on the loan
evidenced hereby at the rates and at the times and in the manner specified
therefor in the Credit Agreement.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
The Borrowers hereby jointly and severally promise to pay all costs and
expenses (including attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Borrowers hereby waive presentment for payment and demand. THIS NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
2
EXHIBIT B
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as Agent under,
and the Lenders party to, the Credit Agreement
described below
This Compliance Certificate is furnished to the Agent and the Lenders
pursuant to that certain Credit Agreement dated as of April 30, 1999, by and
among Hub Group, Inc. (the "PUBLIC HUB COMPANY"), Hub City Terminals, Inc., and
Hub Holdings, Inc. and certain of their affiliates and you (the "CREDIT
AGREEMENT"). Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________________ of the
Public Hub Company;
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Hub Group during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of any
event which constitutes a Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below;
4. The financial statements required by Section 6.5 of the Credit
Agreement and being furnished to you concurrently with this Certificate fairly
present the consolidated financial condition of the Public Hub Company as at
said dates and the consolidated results of their operations and cash flows for
the periods then ended in conformity with GAAP applied on a consistent basis;
and
5. The Attachment hereto sets forth financial data and computations
evidencing the Hub Group compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Hub Group has taken, is taking, or proposes to
take with respect to each such condition or event:
======================================================================
======================================================================
======================================================================
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 19___.
HUB GROUP, INC.
By
Name:_________________________________
Title:________________________________
2
ATTACHMENT TO COMPLIANCE CERTIFICATE
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
Compliance Calculations for Credit Agreement
Dated as of April 30, 1999
Calculations as of _____________, 19___
---------------------------------------------------------------------------
A. NET WORTH (SECTION 7.7)
1. Net Worth, as defined $____________
2. As listed in Section 7.7 for the date
of this Certificate, Net Worth must
not be less than the Minimum
Required Amount $________
3. Company is in compliance? Yes/No
(circle yes or no)
D. FIXED CHARGE COVERAGE RATIO (SECTION 7.8)
1. Net Income, as defined ____________
2. Amounts deducted in arriving at
Net Income in respect of ____________
(a) Interest Expense, as defined ____________
(b) Federal, State and local income taxes ____________
(c) Depreciation and amortization ____________
(d) Minority Interest as defined ____________
(e) Other non-cash charges ____________
3. Sum of Lines 1 and 2 (a), (b), (c), (d)
and (e) ("EBITDAM") ____________
4. Rents, as defined ____________
5. The sum of EBITDAM (Line 3) and
Rent (Line 4) ____________
6. Capital Expenditures ____________
7. Restricted Payments, as defined ____________
8. The sum of Capital Expenditures
(Line 6) and Restricted Payments (Line 7) ____________
9. Interest Expense, as defined ____________
10. Cash Maturities, as defined ____________
11. Sum of Lines 4, 9 and 10
("FIXED CHARGES") ____________
12. Ratio of (i) the difference between
Line 5 and Line 8 to (ii) Fixed
Charges (Line 8) ("FIXED CHARGE
COVERAGE RATIO") :1.00
13. As listed in Section 7.8 for the
date of this Certificate, the
Fixed Charge Leverage Ratio shall
be less than 1
14. Company in compliance? Yes/No
(circle yes or no)
C. MINIMUM EBITDAM (SECTION 7.9)
1. EBITDAM (Line B3 Above) ____________
2. As listed in Section 7.9 for the date
of this Certificate, EBITDAM shall
not be less than ____________
3. Company in compliance?
(circle yes or no) ____________
2
D. CASH FLOW LEVERAGE RATIO (SECTION 7.10)
1. Total Funded Debt, as defined ____________
2. EBITDAM (from B3 above) ____________
3. Ratio of Total Funded Debt. (Line 1)
to EBITDAM (Line 2) ("CASH FLOW
LEVERAGE RATIO") _________
4. As listed in Section 7.10, for the
date of this Certificate, the Cash
Flow Leverage Ratio shall not be
greater than 2.5:1
5. Company in compliance? Yes/No
(circle yes or no)
3
EXHIBIT C
GUARANTEE AGREEMENT
_______________, 19___
XXXXXX TRUST AND SAVINGS Bank, as
Agent for the Lenders party to
the Credit Agreement dated as of
April 30, 1999 among Hub Group,
Inc., Hub City Terminals, Inc.,
Hub Holdings, Inc., certain
Guarantors, such Lenders and such
Agent (the "CREDIT AGREEMENT")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [NAME OF GUARANTOR], a [JURISDICTION OF ORGANIZATION]
[CORPORATION] [PARTNERSHIP], hereby elects to be a "GUARANTOR" for all purposes
of the Credit Agreement, effective from the date hereof. The undersigned
confirms that the representations and warranties set forth in Section 4 of the
Credit Agreement are true and correct in all material respects as to the
undersigned as of the date hereof.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 9 thereof, to the same extent and with the same force and
effect as if the undersigned were a direct signatory thereto.
[INSERT THE FOLLOWING WHEN GUARANTOR IS NOT WHOLLY-OWNED]
NOTWITHSTANDING ANYTHING IN THE CREDIT AGREEMENT OR HEREIN TO THE
CONTRARY, THE LIABILITY OF THE UNDERSIGNED HEREUNDER IS LIMITED TO ___________
DOLLARS ($__________) PLUS INTEREST ON ALL TERM LOANS HEREBY GUARANTEED PLUS ALL
COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES) INCURRED BY THE AGENT
OR ANY LENDER IN ENFORCING COLLECTION HEREOF.
This Agreement shall be construed in accordance with and governed by
the internal laws of the State of Illinois.
Very truly yours,
[NAME OF GUARANTOR]
By
Name:___________________________________
Title:__________________________________
2
SCHEDULE 4.3
SUBSIDIARIES
STATE OF % OWNED BY
ORGANIZATION PUBLIC HUB
NAME INCORP. COMPANY OTHER OWNERSHIP
HLX Company, L.L.C. Delaware 50% 50% owned by Hub Holdings
Hub Group Associates, Inc. Illinois 0% Each Hub Partnership and Hub
("HGAI") Distribution own 1 share in this
entity
Hub Chicago Holdings, Inc. Delaware 0% 100% owned by Hub Chicago
Hub Highway Services Illinois Partnership 0% Each Hub Partnership is a
partner in this entity
Hub Group Distribution Services Illinois Partnership 63.05% Hub Chicago owns 1.95% and one
individual owns the other 35%
Hub Holdings, Inc. Delaware 100%
Q.S. of Illinois, Inc. Illinois 0% Wholly owned by Hub Chicago
Quality Intermodal Corporation Texas 0% Wholly owned by Hub Holdings
Quality Services, L.L.C. Missouri 0% 75% owned by Hub City St. Louis,
L.P. and
25% owned by HGAI
Quality Services of Kansas, L.L.C. Kansas 0% 75% owned by Hub City Kansas
City, L.P. and 25% owned by HGAI
Quality Services of New Jersey 0% 75% owned by Hub City New
New Jersey, L.L.C. York-New Jersey, L.P. and 25%
owned by HGAI
Quality Services of Michigan, L.L.C. Michigan 0% 75% owned by Hub City Detroit,
L.P. and 25% owned by HGAI
Q.S. of Georgia, L.L.C. Georgia 0% 75% owned by Hub City Atlanta,
L.P. and 25% owned by HGAI
Hub Freight Services, Inc. Delaware 0% 100% owned by HGAI
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PARTNERSHIPS
Jurisdiction of
% owned by Incorporation/
Name Hub Public Company organization
Hub City Alabama, L.P. 100% Delaware
Hub City Atlanta, L.P. 100% Delaware
Hub City Boston, L.P. 100% Delaware
Hub City Canada, L.P. 100% Delaware
Hub City Cleveland, L.P. 100% Delaware
Hub City Detroit, L.P. 100% Delaware
Hub City Florida, L.P. 100% Delaware
Hub City Golden Gate, L.P. 100% Delaware
Hub City Indianapolis, L.P. 100% Delaware
Hub City Kansas City, L.P. 100% Delaware
Hub City Los Angeles, L.P. 100% Delaware
Hub City Mid Atlantic, L.P. 100% Delaware
Hub City New Orleans, L.P. 100% Delaware
Hub City New York State, L.P. 100% Delaware
Hub City New York-New Jersey, L.P. 100% Delaware
Hub City North Central, L.P. 100% Delaware
Hub City Ohio, L.P. 100% Delaware
Hub City Philadelphia, L.P. 100% Delaware
Hub City Pittsburgh, L.P. 100% Delaware
Hub City Portland, L.P. 100% Delaware
Hub City St. Louis, L.P. 100% Delaware
Hub City Tennessee, L.P. 100% Delaware
Hub City Texas, L.P. 100% Delaware
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