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EXHIBIT 2.5
THIRD AMENDMENT
THIRD AMENDMENT (this "Amendment"), dated as of May 23, 2001,
among QUALITY DISTRIBUTION, INC. (f/k/a MTL Inc.), a Florida corporation (the
"U.S. Borrower"), LEVY TRANSPORT LTD./LEVY TRANSPORT LTEE, a Quebec company and
a Wholly-Owned Subsidiary of the U.S. Borrower (the "Canadian Borrower"), the
Banks party to the Credit Agreement referred to below, LASALLE BANK NATIONAL
ASSOCIATION, THE BANK OF NOVA SCOTIA, BHF-BANK AKTIENGESELLSCHAFT, BANK AUSTRIA
CREDITANSTALT CORPORATE FINANCE, INC. (f/k/a CREDITANSTALT CORPORATE FINANCE,
INC.) and ROYAL BANK OF CANADA, as Co-Agents (in such capacity, each, a
"Co-Agent" and, collectively, the "Co-Agents"), SALOMON BROTHERS HOLDING
COMPANY, INC., as Documentation Agent (in such capacity, the "Documentation
Agent"), BANKERS TRUST COMPANY, as Syndication Agent (in such capacity, the
"Syndication Agent"), and CREDIT SUISSE FIRST BOSTON, as Administrative Agent
(in such capacity, the "Administrative Agent"). All capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the U.S. Borrower, the Canadian Borrower, the Banks,
the Co-Agents, the Documentation Agent, the Syndication Agent and the
Administrative Agent are parties to a Credit Agreement, dated as of June 9, 1998
and amended and restated as of August 28, 1998 (as amended, modified or
supplemented through but not including the date hereof, the "Credit Agreement");
and
WHEREAS, subject to the terms and conditions of this
Amendment, the parties hereto wish to amend certain provisions of the Credit
Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. AMENDMENTS TO CREDIT AGREEMENT.
1. Section 8.01 of the Credit Agreement is hereby amended by
(i) deleting the text "Sections 8.01(a) and (b)" appearing in the first sentence
of clause (d) of such Section and inserting the text "Sections 8.01(a), (b) and
(l)" in lieu thereof and (ii) inserting the following the new clause (l) at the
end of said Section:
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"(l) MONTHLY FINANCIAL STATEMENTS. Within 30 days
after the end of each fiscal month of the U.S. Borrower ending
during the Leverage Covenant Modification Period (unless prior
to such fiscal month the Borrower shall have demonstrated
compliance with a Total Leverage Ratio of less than 4.00 to
1.00 (as set forth in an officer's certificate delivered
pursuant to Section 8.01(d)), the consolidated balance sheet
of the U.S. Borrower and its Subsidiaries as at the end of
such fiscal month and the related consolidated statements of
income and retained earnings and of cash flows for such fiscal
month and for the elapsed portion of the fiscal year ended
with the last day of such fiscal month, all of which shall be
in reasonable detail and certified by the chief financial
officer or other Authorized Officer of the U.S. Borrower that
they fairly present in all material respects the financial
condition of the U.S. Borrower and its Subsidiaries as of the
dates indicated and the results of their operations and
changes in their cash flows for the periods indicated, subject
to normal year-end audit adjustments and the absence of
footnotes.".
2. Section 9.07 of the Credit Agreement is hereby amended by
deleting clause (iii) of the proviso appearing in the first sentence of said
Section and inserting the following new clause (iii) in lieu thereof:
"(iii) the payment, on a quarterly basis, of management fees
to Apollo Group in an aggregate amount not to exceed $125,000 in any
fiscal quarter of the U.S. Borrower pursuant to, and in accordance with
the terms of, the Apollo Management Agreement, so long as (I) no
Default or Event of Default is then in existence or would result
therefrom, (II) no such quarterly payment is made prior to the delivery
of the financial statements required to be delivered pursuant to
Section 8.01(a) for the fiscal quarter for which such payment is to be
made (or, in the case of any payment to be made in a fiscal quarter of
the U.S. Borrower ended December 31, the delivery of the financial
statements required to be delivered pursuant to Section 8.01(b) for the
fiscal year ended on such date) and (III) an Authorized Officer of the
U.S. Borrower shall have delivered to the Agent calculations (in
reasonable detail) demonstrating compliance with a Total Leverage Ratio
of less than or equal to 5.0:1.0 as at the last day of the Test Period
ended on the last day of the fiscal quarter for which each quarterly
payment is to be made; PROVIDED that if for any fiscal quarter of the
U.S. Borrower, such management fees cannot be paid as provided above as
a result of the existence of a Default or Event of Default or the
application of clause (II) or (III) above, such fees shall continue to
accrue and may be paid at such time as all Defaults and Events of
Default have been cured or waived and the conditions to payment set
forth in clauses (II) and (III) have been satisfied and so long as no
Default or Event of Default will exist immediately after giving effect
to the payment thereof;".
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3. Section 9.09 of the Credit Agreement is hereby amended by
deleting the table appearing in said Section in its entirety and inserting the
following new table in lieu thereof:
"FISCAL QUARTER ENDED RATIO
--------------------- -----
December 31, 2000 2.00:1.0
March 31, 2001 1.60:1.0
June 30, 2001 1.55:1.0
September 30, 2001 1.55:1.0
December 31, 2001 1.55:1.0
March 31, 2002 1.60:1.0
June 30, 2002 1.65:1.0
September 30, 2002 1.70:1.0
December 31, 2002 1.75:1.0
March 31, 2003 1.80:1.0
June 30, 2003 2.10:1.0
September 30, 2003 2.20:1.0
December 31, 2003 2.25:1.0
March 31, 2004 2.25:1.0
June 30, 2004 2.25:1.0
September 30, 2004 2.25:1.0
December 31, 2004 2.25:1.0
March 31, 2005 2.25:1.0
June 30, 2005 2.25:1.0
September 30, 2005 2.25:1.0
December 31, 2005 2.25:1.0".
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4. Section 9.10 of the Credit Agreement is hereby amended by
deleting the table appearing in said Section in its entirety and inserting the
following new table in lieu thereof:
"FISCAL QUARTER ENDED RATIO
--------------------- -----
December 31, 2000 5.50:1.0
March 31, 2001 5.50:1.0
June 30, 2001 5.95:1.0
September 30, 2001 5.95:1.0
December 31, 2001 5.90:1.0
March 31, 2002 5.75:1.0
June 30, 2002 5.70:1.0
September 30, 2002 5.65:1.0
December 31, 2002 5.60:1.0
March 31, 2003 5.55:1.0
June 30, 2003 4.40:1.0
September 30, 2003 4.30:1.0
December 31, 2003 4.25:1.0
March 31, 2004 4.25:1.0
June 30, 2004 4.15:1.0
September 30, 2004 4.10:1.0
December 31, 2004 4.00:1.0
March 31, 2005 4.00:1.0
June 30, 2005 4.00:1.0
September 30, 2005 4.00:1.0
December 31, 2005 4.00:1.0".
5. Section 9.11(a) of the Credit Agreement is hereby amended
by (i) deleting the amount "$57,000,000" set forth opposite the fiscal year
ended December 31, 2001 in the table appearing in said Section and inserting the
amount "$20,000,000" in lieu thereof and (ii) deleting the amount "$60,000,000"
set forth opposite the fiscal year ended December 31, 2002 in the table
appearing in said Section and inserting the amount "$30,000,000" in lieu
thereof.
6. Section 9 of the Credit Agreement is hereby amended by
inserting the following new Section 9.16 at the end of said Section:
"9.16 LIMITATION ON ENVIRONMENTAL EXPENDITURES. (a)
At all times prior to the end of the Leverage Covenant Modification
Period, no Borrower will, nor will any Borrower permit any of its
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Subsidiaries to, make any Environmental Expenditures, except that
during any fiscal year of the U.S. Borrower occurring prior to the end
of the Leverage Covenant Modification Period, the U.S. Borrower and its
Subsidiaries may (i) make Environmental Expenditures not to exceed
$10,000,000 in the aggregate in any fiscal year and (ii) such
additional Environmental Expenditures in connection with clean-up,
removal and other remedial action expressly required by applicable
Environmental Laws.
(b) Notwithstanding the foregoing, in the event that
the amount of Environmental Expenditures permitted to be made by the
U.S. Borrower and its Subsidiaries pursuant to subclause (i) of Section
9.16(a) above in any fiscal year (before giving effect to any increase
in such permitted expenditure amount pursuant to this clause (b)) is
greater than the amount of such Environmental Expenditures made by the
U.S. Borrower and its Subsidiaries during such fiscal year, such excess
may be carried forward and utilized to make Environmental Expenditures
in the immediately succeeding fiscal year.".
7. The definition of "Applicable Margin" appearing in Section
11 of the Credit Agreement is hereby amended by (i) deleting the first sentence
appearing in said definition in its entirety and inserting the following new
sentence in lieu thereof:
"Applicable Margin" initially shall mean a percentage
equal to (i) in the case of Dollar Revolving Loans and Tranche
A Term Loans maintained as (x) Base Rate Loans, 2.50% and (y)
Eurodollar Loans, 3.50%, (ii) in the case of Tranche B Term
Loans maintained as (x) Base Rate Loans, 2.75% and (y)
Eurodollar Loans, 3.75%, (iii) in the case of Tranche C Term
Loans maintained as (x) Base Rate Loans, 3.00% and (y)
Eurodollar Loans, 4.00%, (iv) in the case of Canadian Prime
Rate Loans, 2.50%, (v) in the case of Bankers' Acceptance
Loans and B/A Equivalent Loans, 3.50% and (vi) in the case of
the Commitment Fee, 0.50%.";
and (ii) deleting the table appearing in said definition in its entirety and
inserting the following new table in lieu thereof:
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B/A/ EQUIVALENT
TRANCHE A TRANCHE B TRANCHE C LOAN BANKER'S TRANCHE A TRANCHE B TRANCHE C
"TOTAL TERM LOAN LOAN TERM ACCEPTANCE TERM LOAN TERM LOAN TERM LOAN
LEVERAGE EURODOLLAR EURODOLLAR EURODOLLAR LOAN/REVOLVING LOAN BASE RATE BASE RATE BASE RATE
RATIO MARGIN MARGIN MARGIN EURODOLLAR MARGIN MARGIN MARGIN MARGIN
-------- ---------- ---------- ---------- ------------------- --------- --------- --------
Greater than
4.50:1
but less
than or
equal to
4.75:1 3.25% 3.75% 4.0% 3.25% 2.25% 2.75% 3.00%
Greater
than 4.25:1
but less
than or
equal to
4.50:1 3.125% 3.50% 3.75% 3.125% 2.125% 2.50% 2.75%
Greater
than or equal
to 4.00:1
but less
than or
equal to
4.25:1 3.00% 3.50% 3.75% 3.00% 2.00% 2.50% 2.75%
Greater
than 3.50:1
but less
than
4.00:1 2.25% 3.00% 3.25% 2.25% 1.25% 2.00% 2.25%
Greater
than 3:00:1
but less
than or
equal to
3.50:1 2.25% 3.00% 3.25% 2.25% 1.25% 2.00% 2.25%
Greater
than
2.50:1.0 but
less than or
equal to
3.00:1 2.125% 3.00% 3.25% 2.125% 1.125% 2.00% 2.25%
Less than
or equal to
2.50:1 2.00% 3.00% 3.25% 2.00% 1.00% 2.00% 2.25%
DOLLAR CANADIAN
"TOTAL REVOLVING PRIME RATE
LEVERAGE LOAN BASE COMMITMENT LOAN
RATIO RATE MARGIN FEE MARGIN
-------- ------------ ---------- ------------
Greater than
4.50:1
but less
than or
equal to
4.75:1 2.25% 0.50% 2.25%
Greater
than 4.25:1
but less
than or
equal to
4.50:1 2.125% 0.50% 2.125%
Greater
than or equal
to 4.00:1
but less
than or
equal to
4.25:1 2.00% 0.50% 2.00%
Greater
than 3.50:1
but less
than
4.00:1 1.25% 0.375% 1.25%
Greater
than 3:00:1
but less
than or
equal to
3.50:1 1.25% 0.375% 1.25%
Greater
than
2.50:1.0 but
less than or
equal to
3.00:1 1.125% 0.25% 1.125%
Less than
or equal to
2.50:1 1.00% 0.25% 1.00%".
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8. The definition of "Applicable Excess Cash Flow Percentage"
appearing in Section 11 of the Credit Agreement is hereby amended by (i)
deleting the text "75%" appearing in said definition and inserting the text
"100% (or, in the event that at any time after the Third Amendment Effective
Date, the U.S. Borrower shall have certified in an officers' certificate
delivered pursuant to Section 8.01(d) (attaching the calculations therefor in
reasonable detail) that the U.S. Borrower has complied with the original
financial covenants set forth in Section 9.09 and 9.10 (as in effect prior to
the Third Amendment Effective Date) for the two consecutive fiscal quarters then
last ended, 75%)" in lieu thereof and (ii) deleting the text "50%" appearing in
said definition and inserting the text "75% (or, (or, in the event that at any
time after the Third Amendment Effective Date, the U.S. Borrower shall have
certified in an officers' certificate delivered pursuant to Section 8.01(d)
(attaching the calculations therefor in reasonable detail) that the U.S.
Borrower has complied with the original financial covenants set forth in Section
9.09 and 9.10 (as in effect prior to the Third Amendment Effective Date) for the
two consecutive fiscal quarters then last ended, 50%)" in lieu thereof.
9. The definition of "PIK Trigger Date" appearing in Section
11 of the Credit Agreement is hereby amended by deleting the text "shall mean
the third anniversary of the Restatement Effective Date" appearing in said
definition and inserting the text "shall mean the later to occur of (x) the
third anniversary of the Restatement Effective Date and (y) the date of the
first declaration by the Board of Directors of the Borrower of a cash Dividend
on PIK Preferred Stock" in lieu thereof.
10. Section 11 of the Credit Agreement is hereby further
amended by inserting the following new definitions in appropriate alphabetical
order in said Section:
"Environmental Expenditures" shall mean, with respect
to any Person, for any period, all expenditures by such Person
to undertake any removal, remedial or other corrective action
with respect to any hazardous materials on any Real Property
previously, currently or hereafter owned, leased or operated
by such Person or any Program Affiliate of such Person.
"Leverage Covenant Modification Period" shall mean
the period commencing on the Third Amendment Effective Date
and ending on March 31, 2003.
"Third Amendment Effective Date" shall have the
meaning provided in the Third Amendment to this Agreement,
dated as of May 23, 2001.
II. MISCELLANEOUS PROVISIONS.
1. In order to induce the Banks to enter into this Amendment,
each of the U.S. Borrower and the Canadian Borrower hereby represents and
warrants that:
(a) no Default or Event of Default exists as of the Third
Amendment Effective Date (as defined below), both immediately before
and immediately after giving effect to this Amendment;
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(b) all of the representations and warranties contained in the
Credit Agreement or the other Credit Documents are true and correct in
all material respects on the Third Amendment Effective Date both
immediately before and after giving effect to this Amendment, with the
same effect as though such representations and warranties had been made
on and as of the Third Amendment Effective Date (it being understood
that any representation or warranty made as of a specific date shall be
true and correct in all material respects as of such specific date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the U.S. Borrower and the Administrative
Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the
"Third Amendment Effective Date") when the U.S. Borrower, the Canadian Borrower,
the Administrative Agent and the Banks constituting the Required Banks shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile transmission) the same
to the Administrative Agent at its Notice Office.
6. So long as the Third Amendment Effective Date occurs, the
U.S. Borrower shall pay to each Bank which has executed a counterpart hereof on
or prior to 12:00 Noon (New York time) on the later to occur of June 1, 2001 or
the Third Amendment Effective Date, a consent fee equal to 0.25% of the sum of
(x) its Revolving Loan Commitment as in effect on the Third Amendment Effective
Date and (y) the aggregate principal amount of its Term Loans outstanding on the
Third Amendment Effective Date. All fees payable pursuant to the immediately
preceding sentence shall be paid to the Administrative Agent within one Business
Day after the later date specified in the immediately preceding sentence, which
fees shall be distributed by the Administrative Agent to the relevant Banks in
the amounts specified in the immediately preceding sentence.
7. From and after the Third Amendment Effective Date, all
references in the Credit Agreement and each of the Credit Documents to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
modified hereby.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
QUALITY DISTRIBUTION INC. (f/k/a MTL Inc.)
By:
------------------------------------------------
Name:
Title:
LEVY TRANSPORT LTD./LEVY TRANSPORT LTEE
By:
------------------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
Individually and as Administrative Agent
By:
------------------------------------------------
Name:
Title:
By:
------------------------------------------------
Name:
Title:
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BANKERS TRUST COMPANY,
Individually and as Syndication Agent
By:
------------------------------------------------
Name:
Title:
CITICORP USA, INC.
By:
------------------------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION, Individually and as
Co-Agent
By:
------------------------------------------------
Name:
Title:
By:
------------------------------------------------
Name:
Title:
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00
XXX XXXX XX XXXX XXXXXX,
as Co-Agent
By:
------------------------------------------------
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
------------------------------------------------
Name:
Title:
BALANCED HIGH YIELD FUND II LTD.,
By: BHF-BANK AKTIENGESELLSCHAFT, acting through its
New York Branch, as Attorney-in-Fact
By:
------------------------------------------------
Name:
Title:
By:
------------------------------------------------
Name:
Title:
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
(f/k/a Creditanstalt Corporate Finance, Inc.), as
Co-Agent
By:
------------------------------------------------
Name:
Title:
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By:
------------------------------------------------
Name:
Title:
ROYAL BANK OF CANADA, as Co-Agent
By:
------------------------------------------------
Name:
Title:
COMERICA BANK, N.A.
By:
------------------------------------------------
Name:
Title:
THE MITSUBISHI TRUST AND BANKING CORPORATION
By:
------------------------------------------------
Name:
Title:
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BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By:
------------------------------------------------
Name:
Title:
SOCIETE GENERALE
By:
------------------------------------------------
Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO
By:
------------------------------------------------
Name:
Title:
METROPOLITAN LIFE INSURANCE COMPANY
By:
------------------------------------------------
Name:
Title:
HE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
------------------------------------------------
Name:
Title:
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XXXXXX XXXXXXX XXXX XXXXXX PRIME INCOME TRUST
By:
------------------------------------------------
Name:
Title:
OXFORD STRATEGIC INCOME FUND
By: Xxxxx Xxxxx Management,
as Investment Advisor
By:
------------------------------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:
------------------------------------------------
Name:
Title:
SANKATY HIGH YIELD ASSET PARTNERS, L.P.
By:
------------------------------------------------
Name:
Title:
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ARCHIMEDES FUNDING, L.L.C.
By:
------------------------------------------------
Name:
Title:
ARCHIMEDES FUNDING II, L.L.C.
By:
------------------------------------------------
Name:
Title:
CERES FINANCE LTD.
By:
------------------------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
By:
------------------------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING IV, LP
By:
------------------------------------------------
Name:
Title:
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ING HIGH INCOME PRINCIPAL PRES. HOLDINGS
By:
------------------------------------------------
Name:
Title:
KZH ING-2 LLC
By:
------------------------------------------------
Name:
Title:
KZH STERLING LLC
By:
------------------------------------------------
Name:
Title:
KZH ING-3 LLC
By:
------------------------------------------------
Name:
Title:
OASIS COLLATERALIZED HIGH INCOME PORTFOLIO I
By:
------------------------------------------------
Name:
Title:
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SENIOR INCOME TRUST
By:
------------------------------------------------
Name:
Title:
TRANSAMERICA LIFE & ANNUITY COMPANY
By:
------------------------------------------------
Name:
Title:
AERIES FINANCE LTD.
By:
------------------------------------------------
Name:
Title:
ELC (CAYMAN) LTD.
By:
------------------------------------------------
Name:
Title:
ELC (CAYMAN) LTD., CDO SERIES 1999-I
By:
------------------------------------------------
Name:
Title:
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ELC (CAYMAN) LTD., CDO SERIES 1999-II
By:
------------------------------------------------
Name:
Title:
GREAT POINT CLO 1999-I LTD.
By:
------------------------------------------------
Name:
Title:
AVALON CAPITAL II
By:
------------------------------------------------
Name:
Title: ARCHIMEDES FUNDING III, L.L.C.
By:
------------------------------------------------
Name:
Title: TEXTRON FINANCIAL CORPORATION
By:
------------------------------------------------
Name:
Title:
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