HUB GROUP, INC.
HUB CITY TERMINALS, INC.
AMENDMENT TO CREDIT AGREEMENT
Harris 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 extend the Revolving
Credit Termination Date to June 24, 2005, 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 last sentence of Section 1.3 of the Credit Agreement shall be
amended and as so amended shall be restated in its entirety to read as follows:
"Each Term Note shall be expressed to mature in installments,
commencing on September 30, 1999 and continuing on the last
day of each calendar quarter occurring thereafter to and
including March 31, 2005, with the principal installments on
the Term Notes to equal (in the aggregate for all the Term
Notes taken together) $1,250,000 per installment through and
including June 30, 2000; $1,500,000 per installment through
and including June 30, 2001; $2,000,000 per installment
through and including March 31, 2005; and with the final
principal installment on all the Term Notes due on June 24,
2005 to equal (in the aggregate for all the Term Notes taken
together) all principal not sooner paid; and the amount of
each installment due on the Term Note held by each Lender
shall be equal to such Lender's Percentage of such
installment."
1.02. The chart appearing in the definition of "APPLICABLE MARGIN"
appearing in Section 4.1 of the Credit Agreement shall be amended and as so
amended, shall be restated to read as follows:
Applicable
Margin For
Domestic Rate
Portion of
Revolving
Credit Loans
and Swing Applicable
"When Following Loans Bearing Margin For
Status Exists Interest with LIBOR Portions Applicable Margin Applicable
For Any Margin Reference to of Revolving For Domestic Rate Margin For
Determination Domestic Rate Credit Loans Portion of Term LIBOR Portions Commitment Fee
Date Is: Is: Loan Is: of Term Loan Is: Is:
Level I Status .50% 2.00% .50% 2.25% .35%
Level II Status .75% 2.25% 1.00% 2.50% .40%
Level III Status 1.25% 2.75% 1.50% 3.00% .45%
Level IV Status 1.50% 3.00% 1.75% 3.25% .50%"
1.03. The definition of the terms "EBITDAM", "LEVEL I STATUS", "LEVEL II
STATUS" and "REVOLVING CREDIT TERMINATION DATE" appearing in Section 4.1 of the
Credit Agreement shall be amended and as so amended shall be restated in their
entirety to read, respectively, 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) all other
non-cash restructuring 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 restructuring charges
do not exceed $1,500,000 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 (vi) 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
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$1,000,000, PLUS (vii) if such period includes any fiscal
quarter of the Public Hub Company ending during the period
from and including March 31, 2003, through and including March
31, 2005, cash restructuring charges aggregating up to
$1,000,000 (for all such quarters taken together) if and only
if consented to in writing by the Required Lenders.
"LEVEL I STATUS" means, for any Determination Date, that as of
the close of the most recently completed fiscal quarter of the
Public Hub Company with reference to which such Determination
Date was set, the Cash Flow Leverage Ratio is less than 2.50
to 1.
"LEVEL II STATUS" means, for any Determination Date, that as
of the close of the most recently completed fiscal quarter of
the Public Hub Company with reference to which such
Determination Date was set, the Cash Flow Leverage Ratio is
greater than or equal to 2.50 to 1 but less than 3.00 to 1.
"REVOLVING CREDIT TERMINATION DATE" means June 24, 2005, or
such earlier date on which the Revolving Credit Commitment is
terminated in whole pursuant to Sections 3.4, 8.2 or 8.3
hereof."
1.04. Sections 7.8, 7.9, 7.10 and 7.26 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:
3/31/03 0.80 to 1
6/30/03 0.95 to 1
9/30/03 1.00 to 1
12/31/03 1.05 to 1
3/31/04 1.05 to 1
6/30/04 1.05 to 1
9/30/04 1.05 to 1
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12/31/04 1.05 to 1
3/31/05 1.10 to 1
6/30/05 1.10 to 1
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:
EBITDAM SHALL NOT BE LESS
AS OF THE FISCAL QUARTER ENDING ON: THAN:
3/31/03 $20,000,000
6/30/03 $24,000,000
9/30/03 $25,000,000
12/31/03 $26,000,000
3/31/04 $26,000,000
6/30/04 $26,500,000
9/30/04 $26,500,000
12/31/04 $27,000,000
3/31/05 $27,000,000
6/30/05 $27,500,000
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:
CASH FLOW LEVERAGE RATIO SHALL NOT
AS OF THE FISCAL QUARTER ENDING BE
ON: MORE THAN:
3/31/03 5.50 to 1
6/30/03 4.50 to 1
9/30/03 4.25 to 1
12/31/03 4.00 to 1
3/31/04 4.00 to 1
6/30/04 3.75 to 1
9/30/04 3.75 to 1
12/31/04 3.50 to 1
3/31/05 3.50 to 1
6/30/05 3.25 to 1
7.26. CAPITAL EXPENDITURES. The Hub Group shall not
expend or become obligated for Capital Expenditures during the
fiscal year ending December 31, 2003 in an aggregate amount in
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excess of $9,000,000 and shall not expend or become obligated
for Capital Expenditures during the fiscal year ending
December 31, 2004 in an aggregate amount in excess of
$10,000,000."
1.05. The Commitments of Harris Trust and Savings Bank ("HARRIS") and
U.S. Bank National Association ("U.S. BANK") set forth opposite such Lenders'
names on their respective signature pages of the Credit Agreement or on an
Assignment Agreement delivered pursuant to Section 11.10 of the Credit
Agreement, as the case may be, shall be amended and restated as set forth on
Annex I attached hereto. On the effective date of this Amendment, such Lenders
shall make appropriate adjustments between themselves to reflect the changes in
the Commitments contemplated hereby and the Borrower shall be deemed to have
requested non-ratable Loans to effect such adjustments.
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 Lenders shall have executed
and delivered this Amendment.
2.02. The Borrowers shall have paid to the Agent, for the benefit of the
Lenders such upfront fees as the Borrowers and the Agent have previously agreed.
2.03. The Borrowers shall have executed and delivered to the Agent for
Harris and U.S. Bank new Revolving Credit Notes in the amount of each such
Lender's Revolving Credit Commitment and new Term Notes in the amount of each
such Lender's outstanding principal amount of Term Loans, in each case, after
giving effect to this Amendment (the "NEW NOTES").
2.04. Legal matters incident to the execution and delivery of this
Amendment and the New Notes 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.
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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. The Borrowers and the Guarantors have heretofore executed and
delivered to the Agent that certain Security Agreement dated as of October 15,
2002 and certain other Collateral Documents. The Borrowers and the Guarantors
hereby acknowledge and agree that the Liens created and provided for by the
Collateral Documents continue to secure, among other things, the Obligations
arising under the Credit Agreement as amended hereby; and the Collateral
Documents and the rights and remedies of the Agent thereunder, the obligations
of the Borrowers and the Guarantors thereunder, and the Liens created and
provided for thereunder remain in full force and effect and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in any
manner affect or impair the priority of the liens and security interests created
and provided for by the Collateral Documents as to the indebtedness which would
be secured thereby prior to giving effect to this Amendment.
4.03. 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.
4.04. 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.
4.05. 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 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 February 28, 2003.
HUB GROUP, INC., a Borrower
HUB CITY TERMINALS, INC., a Borrower
By
David P. Yeager
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.
HARRIS 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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ANNEX I
REVISED COMMITMENTS
REVOLVING OUTSTANDING PRINCIPAL
LENDER CREDIT COMMITMENT AMOUNT OF TERM LOANS
Harris Trust and Savings Bank $20,545,603.82 $11,094,626.06
U.S. Bank National Association $13,454,396.18 $7,265,373.94
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
David P. Yeager
Chief Executive Officer
HLX COMPANY, L.L.C., a Guarantor
By
David P. Yeager
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
David P. Yeager
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
David P. Yeager
Chief Executive Officer for each of the
above Guarantors