SECOND AMENDMENT TO EQUIPMENT FINANCING AGREEMENT
THIS SECOND AMENDMENT TO EQUIPMENT FINANCING AGREEMENT,
dated as of June 30, 1994 (this "Amendment"), amends the
Equipment Financing Agreement, dated as of August 1, 1988, as
amended by the First Amendment to Equipment Financing Agreement
dated as of April 8, 1990, (as so previously amended, the
"Agreement"), among Matlack, Inc., a Pennsylvania corporation
(the "Company"), Continental Bank (formerly known as
Continental Bank N.A.) ("Continental"), First Fidelity Bank,
N.A. (together with Continental, the "Banks") and Continental
as collateral agent for the Banks. Terms defined in the
Agreement are, unless otherwise defined herein or the context
otherwise requires, used herein as defined therein.
WHEREAS, the parties hereto have entered into the
Agreement, which provides for the Banks to extend certain
credit facilities to the Company from time to time; and
WHEREAS, the parties hereto desire to amend the Agreement
in certain respects as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties
hereto agree as follows:
SECTION 1 AMENDMENTS. Effective as of June 30, 1994, the
Agreement shall be amended in accordance with Sections 1.1
through 1.13 below.
SECTION 1.1 Definitions. Section 1.1 of the Agreement is
hereby amended by inserting the following definitions in proper
alphabetical order:
"Applicable Margin" means the rate per annum set forth
below at such time as the Company's Fixed Coverage Ratio
calculated as at the end of any fiscal quarter for the four
fiscal quarters then ending is within one of the ranges
described below:
Fixed Coverage Charge Ratio Applicable Margin
Greater than or equal to 1.75 to 1.00
1.25%
Greater than or equal to 1.60 to 1.00
1.50%
but less than 1.75 to 1.00
Greater than or equal to 1.45 to 1.00
1.75%
but less than 1.60 to 1.00
Greater than or equal to 1.30 to 1.00
2.00%
but less than 1.45 to 1.00
Greater than or equal to 1.15 to 1.00
2.25%
but less than 1.30 to 1.00
Less than 1.15 to 1.00 2.50%
The Applicable Margin shall be determined by reference to
the financial statements delivered pursuant to Section 8.1 (c)
and (b) and any change shall be effective as of the first day
of the second month after the end of any fiscal quarter.
"Eurodollar Rate" is defined in Section 4.1(c).
"Eurodollar Rate (Reserve Adjusted)" is defined in Section
4.1(c).
"Eurodollar Rate Advance" means an Advance which bears
interest at all times during an Interest Period applicable to
such Advance, at a fixed rate of interest determined by
reference to the Eurodollar Rate (Reserve Adjusted).
"Eurodollar Office" means relative to any Bank, the office
of such Bank as designated from time to time by notice from
such Bank to the Company whether or not outside the United
States, which shall be making or maintaining Eurodollar Rate
Advances of such Bank hereunder.
"Eurocurrency Reserve Percentage" is defined in Section
4.1(c).
"Fixed Charge Coverage Ratio" means for the period of four
fiscal quarters then ending, the ratio of (i) the total of (a)
net income plus (b) interest expense plus (c) rental and lease
expenses plus (d) income tax expense plus (e) depreciation
expense plus (f) amortization to (ii) (a) interest expenses
plus (b) $3,000,000 plus (c) current maturities of long term
debt as of the end of such period plus (d) rental and lease
expense plus (e) 20% of average outstanding amounts of the
Advances for the fiscal quarter then ending.
SECTION 1.2 The definitions in Section 1.1 of the
Agreement are hereby amended and restated to read in their
entirety as follows:
"Banking Day" means (i) any day on which banks are open for
business in Chicago, Illinois and Philadelphia, Pennsylvania
and (ii) with respect to Eurodollar Rate Advances, any day on
which dealings are carried on in the interbank eurodollar
market.
"Interest Period" means with respect to any Quoted Rate
Advance the period of 30, 60, or 90 days, or with respect to
any Eurodollar Rate Advance the period beginning on (and
including) the date on which such Eurodollar Rate Advance is
made or continued as or converted into, a Eurodollar Rate
Advance and ending on (but excluding) the day one or two weeks,
or one, two, or three months thereafter (or, with respect to a
one, two or three month Interest Period, if such month has no
numerically corresponding day, on the last Banking Day of such
month or if such corresponding day is not a Banking Day on the
next Banking Day unless such next Banking Day is in another
calendar month, then on the preceding Banking Day), in each
case as selected by the Company; provided that no Quoted Rate
Advance or Eurodollar Rate Advance shall have an interest
period ending after a date on which a principal payment is due
unless there are Reference Advances or other Quoted Rate
Advances or Eurodollar Rate Advances with Interest Periods
ending prior to such Payment Date in a sufficient amount to
permit such payment without breaking an Interest Period; and
provided further, that no more than five Interest Periods shall
be in effect at any time.
SECTION 1.3 The definition of "Payment Date" in the
Agreement is hereby amended by inserting after the words
"Quoted Rate Advance" the words "or any Eurodollar Rate
Advance".
SECTION 1.4 Amendment to Section 2.2. Section 2.2 of the
Agreement is hereby amended and restated to read in its
entirety as follows:
Borrowing Procedures. Each Advance shall be made pro rata
by the Banks upon telephonic notice by 10:00 a.m., Chicago time
on the date of the proposed Advance in the case of a Reference
Advance or a Quoted Rate Advance, and on not less than three
and not more than five Banking Days, in the case of a
Eurodollar Rate Advance (promptly confirmed in writing) by the
Company to each Bank. Each notice shall specify (i) the
borrowing date, which day shall be a Banking Day and (ii) the
amount and type of Advance and (iii) if such Advance is to be a
Quoted Rate Advance or a Eurodollar Rate Advance, the initial
Interest Period for such Advance. In the case of a Quoted Rate
Advance, each Bank shall determine its own Quoted Rate with
respect thereto. The Banks will pay to the Company the amount
of the Advance on the date designated in the notice of
borrowing upon receipt of the documents required under Sections
10 and 11 with respect to such Advance. Each Quoted Rate
Advance or Reference Rate Advance payment of principal with
respect thereto shall be in a minimum aggregate amount of
$100,000 or an integral multiple thereof. Each Eurodollar Rate
Advance and payment of principal with respect thereto shall be
in a minimum aggregate amount of $500,000.
SECTION 1.5 Amendment to Section 2.3. Section 2.3 of the
Agreement is hereby amended and restated to read in its
entirety as follows:
Continuation and/or Conversion of Advances. The Company
may elect (i) to continue any Quoted Rate Advance or any
Eurodollar Rate Advance from the current Interest Period of
such Advance into a subsequent Interest Period to begin on the
last day of such current Interest Period; (ii) to convert any
outstanding Quoted Rate Advance into a Eurodollar Rate Advance;
(iii) to convert any outstanding Eurodollar Rate Advance into a
Quoted Rate Advance; or (iv) to convert any outstanding
Reference Advance into a Quoted Rate Advance or into a
Eurodollar Rate Advance, giving telephonic notice by 10:00 a.m.
(promptly confirmed in writing) to the Banks of such
continuation or conversion, specifying the date, amount and
the Interest Period, if applicable. In the case of a
conversion into or a continuation of a Eurodollar Rate Advance,
the Company must give notice of such continuation or conversion
on not less than three, not more than five, Banking Days. In
the case of a requested continuation of, or conversion to, a
Quoted Rate Advance, each Bank shall determine its own Quoted
Rate with respect thereto. Absent notice of continuation or
conversion, each Quoted Rate Advance or Eurodollar Rate Advance
shall automatically convert into a Reference Advance on the
last day of the current Interest Period for such Advance,
unless paid in full on such last day. No Advance shall be
converted into a Quoted Rate Advance or into a Eurodollar Rate
Advance and no Quoted Rate Advance or Eurodollar Rate Advance
shall be continued less than thirty days before the Termination
Date or after a notice of termination pursuant to Section 14 or
at any time that an Event of Default or an Unmatured Event of
Default shall exist.
SECTION 1.6 Amendment to Section 4.1. Section 4.1 of the
Agreement is hereby amended by inserting the following new
Section 4.1(c) after Section 4.1(b) and before Section 4.1(c)
which is hereby renumbered to become Section 4.1(d):
(c) Eurodollar Rate Advances. The unpaid principal of the
Eurodollar Rate Advances shall bear interest, during each
Interest Period applicable thereto, at a rate per annum
equal to the sum of the Eurodollar Rate (Reserve Adjusted)
for such Interest Period plus the Applicable Margin in
effect for such Interest Period. Interest on Eurodollar
Rate Advances prior to maturity shall be payable on each
Payment Date.
The "Eurodollar Rate (Reserve Adjusted)" means, relative to
any Eurodollar Advance to be made, continued or maintained as,
or converted into, a Eurodollar Rate Advance for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1.00 - Eurocurrency Reserve
Percentage
"Eurodollar Rate" means, relative to any Interest Period
for Eurodollar Rate Advances, the rate of interest equal to the
average (rounded upwards, if necessary, to the nearest 1/16 of
1%) of the rates per annum at which U.S. Dollar deposits in
immediately available funds are offered to Continental's
Eurodollar Office in the interbank market as at or about 10:00
a.m. Chicago time two Banking Days prior to the beginning of
such Interest Period for delivery on the first day of such
Interest Period, and in an amount approximately equal to the
amount of Continental's Eurodollar Rate Advance and for a
period approximately equal to such Interest Period.
"Eurocurrency Reserve Percentage" means, relative to any
Interest Period for Eurodollar Rate Advances, the reserve
percentage (expressed as a decimal) equal to the daily average
during such Interest Period of the percentages in effect on
each day of such Interest Period, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor), for
determining reserve requirements applicable to "Eurocurrency
Liabilities", as currently defined in Regulation D of the Board
of Directors of the Federal Reserve System ("Regulation D").
For purposes of this definition, any Eurodollar Rate Advances
hereunder shall be deemed to be "Eurocurrency Liabilities" as
defined in Regulation D.
SECTION 1.7 Amendment to Section 4.3. Section 4.3 of the
Agreement is hereby amended by inserting after the words
"Quoted Rate Advance" the words "and each Eurodollar Rate
Advance".
SECTION 1.8 Amendment to Section 4. Section 4 of the
Agreement is hereby amended by inserting immediately following
Section 4.3 of the Agreement the following Section 4.4, 4.5,
4.6, and 4.7:
Section 4.4 Eurodollar Rate Lending Unlawful. If any
Bank shall determine (which determination shall, upon notice
thereof to the Company, be conclusive and binding on the
Company) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is
unlawful, for such Bank to make, continue or maintain any
Advance as, or to convert any Advance into a Eurodollar Rate
Advance, the obligations of all Banks to make, continue,
maintain or convert into any such Advances shall, upon such
determination, forthwith be suspended until such Bank shall
notify the Company that the circumstances causing such
suspension no longer exist, and all Eurodollar Rate Advances
shall automatically convert into Reference Advances at the end
of the then current Interest Periods with respect thereto or
sooner, if required by such law or assertion.
Section 4.5 Deposits Unavailable. If either Bank
shall have determined that by reason of circumstances affecting
its relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to
Eurodollar Rate Advances, then upon notice from the said Bank
to the Company and the Banks, the obligations of all Banks to
make or continue any Advances as, or to convert any Advances
into, Eurodollar Advances shall forthwith be suspended until
said Bank shall notify the Company and the Banks that the
circumstances causing such suspension no longer exist.
Section 4.6 Increased Eurodollar Rate Advances Costs,
etc. The Company agrees to reimburse each Bank if as a result
of any change in any law, rule, regulation, treaty or directive
or in the administration or interpretation thereof, or
compliance by any Bank with any request or directive (whether
or not having force of law) with respect to any such change
from any court, central bank, governmental authority, agency or
instrumentality, or comparable agency there is any increase in
the cost to such Bank of, or any reduction in the amount of any
sum receivable by such Bank in respect of, making, continuing
or maintaining (or of its obligation to make, continue or
maintain) any Advances as, or of converting (or of its
obligation to convert) any Advances into, a Eurodollar Rate
Advances. Such Bank shall promptly notify the Company in
writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Bank for
such increased cost or reduced amount. Such additional amounts
shall be payable by the Company directly to such Bank within
five days of its receipt of such notice, and such notice shall
be rebuttably presumptively correct.
Section 4.7 Funding Losses. In the event any Bank
shall incur any loss or expense (including any loss or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to make, continue
or maintain any portion of the principal amount of any Advance
as, or to convert any portion of the principal amount of any
Advance into, a Eurodollar Rate Advance) as a result of:
(a) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Rate Advances on a date
other than the schedules last day of the Interest Period
applicable thereto;
(b) Any Advances not being made as Eurodollar Rate
Advances in accordance with Section 2.2; or
(c) any Advances not being continued as, or converted
into Eurodollar Rate Advances in accordance with Section 2.3,
then, upon the written notice of such Bank to the Company (with
a copy to the Banks), the Company shall, within five days, of
its receipt thereof, pay directly to such Bank such amount as
will (in the reasonable determination of such Bank) reimburse
such Bank for such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the
Company.
SECTION 1.9 Amendment to Section 5.2. Section 5.2 of the
Agreement is hereby amended by inserting after the words
"Quoted Rate Advance" the words "or a Eurodollar Rate Advance".
SECTION 1.10 Amendment to Section 8. Section 8 of the
Agreement is hereby amended by adding the following new Section
8.24 immediately following Section 8.23.
8.24 Fixed Charge Coverage Ratio. Not permit ont
he last day of each fiscal quarter the Fixed
Charge Coverage Ratio for the Company and its
Subsidiaries on a consolidated basis to be
less than 1.0 to 1.0.
SECTION 1.11 Amendment to Section 8.6. Section 8.6 of the
Agreement is hereby amended by deleting the amount
"$35,000,000" and replacing it with "$40,000,000".
SECTION 1.12 Amendment to Section 8.10. Section 8.10 of
the Agreement is hereby amended by deleting the amount
"$1,000,000" and replacing it with "$11,000,000" and by
deleting the amount "$10,000,000" and replacing it with
"$45,000,000" and by deleting the period at the end of such
paragraph and inserting thereafter the following:
; provided however, that if by May 30, 1995, the
Company has not exercised lease options to lease 300 additional
tractors, the above mentioned amounts shall be reduced to
$8,500,000 and $35,000,000 respectively, provided further, that
if said amounts have been reduced pursuant to the foregoing
proviso and thereafter the Company shall lease additional
tractors, those amounts may be increased at the request of the
Company and the consent of the Banks (which consent shall not
be unreasonably withheld) to reflect said leases, but in no
event shall such amounts be increased above $11,000,000 and
$45,000,000 respectively; and provided further, that if the
Company exercises its option to cancel leases with respect to
units presently being leased by it, the above mentioned amounts
shall be reduced by the amounts of payments applicable to said
units.
Section 1.13 Amendment to Exhibit C. Exhibit C to
the Agreement is hereby amended to state in its entirely as set
forth in Exhibit C hereto.
SECTION 2 CONDITIONS PRECEDENT. This Amendment shall
become effective when each of the conditions precedent set
forth in this Section 2 shall have been satisfied, and notice
thereof shall have been given by the Banks to the Company.
SECTION 2.1 Receipt of Documents. The Banks shall have
received all of the following documents duly executed, dated
the date hereof or such other date as shall be acceptable to
the Banks, and in form and substance satisfactory to the Banks:
(a) Amendment. This Amendment, duly executed by the
Company and the Banks.
(b) Notes. The Second Amended and Restated Notes of
the Company in substantially the form of Exhibit C hereto.
(c) Consents. Copies, certified by the secretary or
an assistant secretary of the Company, of all documents
evidencing any necessary corporate action, consents and
governmental approvals (if any) with respect to this
Amendment and the other documents described herein.
(d) Secretary's Certificate. A certificate of the
secretary or an assistant secretary of the Company, as to
(i) resolutions of the Board of Directors of the Company
then in full force and effect authorizing the execution,
delivery and performance of this Amendment and each other
document described herein, and (ii) the incumbency and
signatures of those offices of the Company authorized to
act with respect to this Amendment and each other document
described herein.
SECTION 2.2 Compliance with Warranties, No Default, etc.
Both before and after giving effect to the effectiveness of
this Amendment, the following statements by the Company shall
be true and correct (and the Company, by its execution of this
Amendment, hereby represents and warrants unto each Bank that
such statements are true and correct as at such times):
(a) the warranties set forth in Section 7 of the
Agreement shall be true and correct with the same effect as
if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties
shall be true and correct as of such earlier date); and
(b) no Default shall have then occurred and be
continuing, and neither the Company, any other Obligor, nor
any of its Subsidiaries shall be in material violation of
any law or governmental regulation or court order or
decree.
SECTION 3 WARRANTIES. To induce the Banks to enter into
this Amendment, the Company hereby reaffirms, as of this date
hereof, its warranties contained in Section 7 of the Agreement,
and the Company additionally represents and warrants unto each
Bank as follows:
SECTION 3.1 Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by the Company of this
Amendment are within the Company's corporate powers, have been
duly authorized by all necessary corporate action, and do not
(a) contravene the Company's organizational documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on
or affecting the Company; or
(c) result in, or require the creation or imposition
of, any Lien on any of the Company's properties.
SECTION 3.2 Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body
or other Person is required for the due execution, delivery or
performance by the Company of this Amendment.
SECTION 3.3 Validity, etc. This Amendment constitutes the
legal, valid and binding obligations of the Company enforceable
in accordance with its terms.
SECTION 4 MISCELLANEOUS.
SECTION 4.1 Continuing Effectiveness, etc. This Amendment
shall be deemed to be an amendment to the Agreement, and the
Agreement, as amended hereby, shall remain in full force and
effect and is hereby ratified, approved and confirmed in each
and every respect. After the effectiveness of this Amendment
in accordance with its terms, all references to the Agreement
in any document, instrument, agreement or writing shall be
deemed to refer to the Agreement as amended hereby.
SECTION 4.2 Severability. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Amendment or
affecting the validity or enforceability of such provision in
any other jurisdiction.
SECTION 4.3 Headings. The various headings of this
Amendment are inserted for convenience only and shall not
affect the meaning or interpretation of this Amendment or any
provisions hereof.
SECTION 4.4 Execution in Counterparts. This Amendment may
be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.
SECTION 4.5 Governing Law. THIS AMENDMENT SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF ILLINOIS.
SECTION 4.6 Successors and Assigns. This Amendment shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
MATLACK, INC.
By /s/ G. J. Trippitelli
Title: President
CONTINENTAL BANK
By /s/ Thomas H. Pearson
Title: Vice President
FIRST FIDELITY BANK, N.A.
By /s/ Grainne M. Pergolini
Title: Vice President