HUB GROUP, INC.
HUB CITY TERMINALS, INC.
AMENDMENT TO CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank LaSalle Bank National Association
Chicago, Illinois Chicago, Illinois
U.S. Bank National Association National City Bank
Des Plaines, Illinois Cleveland, Ohio
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
April 30, 1999 (the "CREDIT AGREEMENT"), as amended and currently in effect, by
and among Hub Group, Inc. (the "PUBLIC HUB COMPANY"), Hub City Terminals, Inc.
for itself and as successor by merger to Hub Holdings, Inc. ("HUB CHICAGO";
together with the Public Hub Company, the "BORROWERS") and you (the "LENDERS").
All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.
The Borrowers have requested that the Lenders modify certain financial
covenants and make certain other amendments to the Credit Agreement and the
Lenders are willing to do so under the terms and conditions set forth in this
amendment (herein, the "AMENDMENT").
1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:
1.01. The definition of "EDITDAM" appearing in Section 4.1 of the Credit
Agreement shall be amended and as so amended shall be restated in its entirety
to read as follows:
""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) if such
period includes the fiscal quarters of the Public Hub Company
ending on December 31, 2000 or March 31, 2001, non-cash
charges during such quarters on the books of the Hub Group in
accordance with GAAP aggregating up to $5,100,000 (for both
such quarters taken together), plus (vi) 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); PLUS (vii) if such period
includes the fiscal quarters of the Public Hub Company ending
on December 31, 2000, March 31, 2001 or June 30, 2001,
severance payments made during such quarters aggregating up to
$1,200,000 (for all such quarters taken together); PLUS (viii)
if such period includes the fiscal quarters of the Public Hub
Company ending on March 31, 2001, June 30, 2001, September 30,
2001 or December 31, 2001, severance payments (in addition to
those accounted for in clause (vii) above) made during such
quarters aggregating up to $600,000 (for all four such
quarters taken together), PLUS (ix) if such period includes
the fiscal quarter of the Public Hub Company ending on
September 30, 2001, the write-off of the receivable due from
Cho Yang Shipping Co., Ltd. during such quarter on the books
of the Hub Group in an amount not in excess of $4,740,000,
PLUS (x) if such period includes the fiscal quarter of the
Public Hub Company ending on December 31, 2002 or March 31,
2003, restructuring charges during such quarters on the books
of the Hub Group in accordance with GAAP (including cash
severance payments) in an aggregate amount not in excess of
$1,000,000."
1.02. Sections 7.8, 7.9 and 7.10 of the Credit Agreement shall be amended
and as so amended shall be restated in their entirety to read, respectively, as
follows:
"SECTION 7.8. FIXED CHARGE COVERAGE RATIO. The Hub
Group shall not, as of the close of each fiscal quarter of
the Public Hub Company specified below, permit the Fixed
Charge Coverage Ratio as of such date to be less than:
FIXED CHARGE COVERAGE RATIO
AS OF THE FISCAL QUARTER ENDING ON: SHALL NOT BE LESS THAN:
9/30/02 0.90 to 1
12/31/02 0.875 to 1
3/31/03 0.80 to 1
6/30/03 0.95 to 1
9/30/03 1.00 to 1
12/31/03 and at all times 1.05 to 1
thereafter
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Notwithstanding anything contained in this Agreement to the
contrary, for purposes of computing the Hub Group's compliance
with this Section, the Hub Group's adjustment of earnings for
the 2001 fiscal year (which was an aggregate EBITDAM
adjustment of $1,800,000 for such year) shall be treated as if
such adjustment had occurred evenly in each fiscal quarter of
such year (I.E. $450,000 per fiscal quarter).
SECTION 7.9. MINIMUM EBITDAM. The Hub Group shall, as
of the close of each fiscal quarter of the Public Hub Company
specified below, maintain EBITDAM for the four fiscal quarters
of the Public Hub Company then ended of not less than:
AS OF THE FISCAL EBITDAM SHALL
QUARTER ENDING ON: NOT BE LESS THAN:
9/30/02 $24,000,000
12/31/02 $21,500,000
3/31/03 $20,000,000
6/30/03 $24,000,000
9/30/03 $25,000,000
12/31/03 and at all times $26,000,000
thereafter
Notwithstanding anything contained in this Agreement to the
contrary, for purposes of computing the Hub Group's compliance
with this Section, the Hub Group's adjustment of earnings for
the 2001 fiscal year (which was an aggregate EBITDAM
adjustment of $1,800,000 for such year) shall be treated as if
such adjustment had occurred evenly in each fiscal quarter of
such year (I.E. $450,000 per fiscal quarter).
SECTION 7.10. CASH FLOW LEVERAGE RATIO. The Hub
Group shall not, 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:
AS OF THE FISCAL CASH FLOW LEVERAGE
QUARTER ENDING RATIO SHALL NOT BE
ON: MORE THAN:
9/30/02 4.75 to 1
12/31/02 5.25 to 1
3/31/03 5.50 to 1
6/30/03 4.50 to 1
9/30/03 4.25 to 1
12/31/03 and at all times 4.00 to 1
thereafter
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Notwithstanding anything contained in this Agreement to the
contrary, for purposes of computing the Hub Group's compliance
with this Section, the Hub Group's adjustment of earnings for
the 2001 fiscal year (which was an aggregate EBITDAM
adjustment of $1,800,000 for such year) shall be treated as if
such adjustment had occurred evenly in each fiscal quarter of
such year (I.E. $450,000 per fiscal quarter)."
1.03. Section 7.13(m) of the Credit Agreement shall be amended and as
so amended shall be restated in its entirety to read as follows:
"(m) intentionally omitted;"
1.04. Section 7.26 of the Credit Agreement shall be amended and as so
amended shall be restated in its entirety to read as follows:
"7.26. CAPITAL EXPENDITURES. The Hub Group shall not
expend or become obligated for Capital Expenditures during the
fiscal year ending December 31, 2002 in an aggregate amount in
excess of $15,000,000 and shall not expend or become obligated
for Capital Expenditures during the fiscal year ending
December 31, 2003 in an aggregate amount in excess of
$9,000,000."
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
2.01. The Borrowers, the Guarantors and the Required Lenders shall have
executed and delivered this Amendment.
2.02. The Senior Note Offering shall have been modified by written
instrument (the "SENIOR NOTE AMENDMENT") in form and substance reasonably
satisfactory to the Agent to effect a modification of the terms and conditions
thereof such that the same are no more burdensome on the Borrowers than the
corresponding provisions of the Credit Agreement after giving effect to the
modifications contemplated by this Amendment.
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2.03. The Borrowers shall have paid to the Agent, for the ratable benefit
of the Lenders which have executed and delivered to counsel for the Agent a
counterpart of this Amendment no later than 5:00 p.m. (Chicago time) on October
15, 2002, an amendment fee in an amount equal to 0.15% of such executing
Lenders' Revolving Credit Commitments and outstanding Term Loans (the "AMENDMENT
FEE"), such Amendment Fee to be fully earned and due and payable to such
executing Lenders upon such Lenders' execution of this Amendment.
2.04. The Borrowers and the Guarantors shall have executed and delivered
the Collateral Documents.
2.05. Legal matters incident to the execution and delivery of this
Amendment, the Senior Note Amendment and the Collateral Documents shall be
reasonably satisfactory to the Agent and its counsel.
3. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment,
the Borrowers hereby represent to the Lenders that as of the date hereof, the
representations and warranties set forth in Section 5 of the Credit Agreement
are and remain true and correct in all material respects (except to the extent
the same expressly relate to an earlier date and except that for purposes of
this paragraph the representations contained in Section 5.5 shall be deemed to
refer to the most recent financial statements of the Public Hub Company
delivered to the Lenders) and the Borrowers are in full compliance with all of
the terms and conditions of the Credit Agreement after giving effect to this
Amendment and no Default or Event of Default has occurred and is continuing
under the Credit Agreement or shall result after giving effect to this
Amendment.
4. MISCELLANEOUS.
4.01. Each Borrower and each Guarantor acknowledges and agrees that,
except as modified by this Amendment, all of the Loan Documents to which it is a
party remain in full force and effect for the benefit and security of, among
other things, the Obligations as modified hereby. Each Borrower and each
Guarantor further acknowledges and agrees that all references in such Loan
Documents to the Obligations shall be deemed a reference to the Obligations as
so modified. Each Borrower and each Guarantor further agrees to execute and
deliver any and all instruments or documents as may be reasonably required by
the Agent or the Required Lenders to confirm any of the foregoing.
4.02. Except as specifically amended hereby, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as
specifically amended hereby.
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4.03. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
4.04. The Borrowers agree to pay, jointly and severally, all reasonable
out-of-pocket costs and expenses incurred by the Agent in connection with the
preparation, execution and delivery of this Amendment, the Collateral Documents,
the Intercreditor Agreement and the documents and transactions contemplated
hereby, including the reasonable fees and expenses of counsel for the Agent with
respect to the foregoing.
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Dated as of October 15, 2002.
HUB GROUP, INC., a Borrower
HUB CITY TERMINALS, INC., a Borrower
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
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Accepted and agreed to as of the date and year last above written.
XXXXXX TRUST AND SAVINGS BANK
By
Name:_____________________________________
Title:____________________________________
U.S. BANK NATIONAL ASSOCIATION
By
Name:_____________________________________
Title:____________________________________
LASALLE BANK NATIONAL ASSOCIATION
By
Name:_____________________________________
Title:____________________________________
NATIONAL CITY BANK
By
Name:_____________________________________
Title:____________________________________
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GUARANTORS' CONSENT
The undersigned heretofore executed and delivered to the Lenders the
Guaranty Agreement. The undersigned hereby consent to the Amendment to the
Credit Agreement as set forth above and confirm that the Guaranty Agreement and
all of the obligations of the undersigned thereunder remain in full force and
effect. The undersigned further agree that their consent to any further
amendments to the Credit Agreement shall not be required as a result of this
consent having been obtained, except to the extent, if any, required by the
Guaranty Agreement.
HUB CHICAGO HOLDINGS, INC., a Guarantor
By
Xxxxx X. Xxxxxx
Chief Executive Officer
HLX COMPANY, L.L.C., a Guarantor
By
Xxxxx X. Xxxxxx
Vice Chairman and Chief Executive Officer
QSSC, INC.
QUALITY SERVICES, L.L.C.,
QUALITY SERVICES OF KANSAS, L.L.C.
QUALITY SERVICES OF NEW JERSEY, L.L.C.
Q.S. OF ILLINOIS, L.L.C.
Q.S. OF GEORGIA, L.L.C.
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the
above Guarantors
HUB GROUP ALABAMA, LLC
HUB GROUP ATLANTA, LLC
HUB GROUP BOSTON, LLC
HUB GROUP CANADA, L.P.
HUB GROUP CLEVELAND, LLC
HUB GROUP DETROIT, LLC
HUB GROUP FLORIDA, LLC
HUB GROUP GOLDEN GATE, LLC
HUB GROUP INDIANAPOLIS, LLC
HUB GROUP KANSAS CITY, LLC
HUB GROUP LOS ANGELES, LLC
HUB GROUP MID ATLANTIC, LLC
HUB GROUP NEW ORLEANS, LLC
HUB GROUP NEW YORK STATE, LLC
HUB GROUP NEW YORK-NEW JERSEY, LLC
HUB GROUP NORTH CENTRAL, LLC
HUB GROUP OHIO, LLC
HUB GROUP PHILADELPHIA, LLC
HUB GROUP PITTSBURGH, LLC
HUB GROUP PORTLAND, LLC
HUB GROUP ST. LOUIS, LLC
HUB GROUP TENNESSEE, LLC
HUB CITY TEXAS, L.P.
HUB GROUP TRANSPORT, LLC
HUB GROUP ASSOCIATES, INC.
HUB FREIGHT SERVICES, INC.
HUB HIGHWAY SERVICES
HUB GROUP DISTRIBUTION SERVICES, LLC
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of
the above Guarantors
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