|
AMENDMENT NO. 1 TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
This
Amendment No. 1 to Second Amended and Restated Credit
Agreement (this “ Amendment ”) dated as of
August 28, 2007 is made by and among COVENANT ASSET
MANAGEMENT, INC. , a Nevada corporation (the “
Borrower ”), COVENANT TRANSPORTATION
GROUP, INC. (formerly known as Covenant Transport,
Inc.), a Nevada corporation and the owner of 100% of the
issued and outstanding common stock of the Borrower (the
“ Parent ”), BANK OF AMERICA, N.A., a
national banking association organized and existing under the
laws of the United States (“ Bank of America
”), in its capacity as administrative agent for the
Lenders (as defined in the Credit Agreement (as defined
below)) (in such capacity, the “ Administrative
Agent ”), each of the Lenders signatory hereto and
each of the Subsidiary Guarantors (as defined below) signatory
hereto.
W I T N E S S E T H :
WHEREAS , the Borrower, the Parent, the Administrative
Agent and the Lenders have entered into that certain Second Amended
and Restated Credit Agreement dated as of December 21, 2006 (as
hereby amended and as from time to time hereafter further amended,
modified, supplemented, restated, or amended and restated, the
“ Credit Agreement ”; the capitalized terms used
in this Amendment not otherwise defined herein shall have the
respective meanings given thereto in the Credit Agreement),
pursuant to which the Lenders have made available to the Borrower
various revolving credit facilities, including a letter of credit
facility and a swing line facility;
WHEREAS , the Parent has entered into the Parent Guaranty
and certain Subsidiaries of the Parent (each a “
Subsidiary Guarantor ” and together the “
Subsidiary Guarantors ”) have entered into a
Subsidiary Guaranty pursuant to which it has guaranteed certain or
all of the obligations of the Borrower under the Credit Agreement
and the other Loan Documents, and the Parent, the Borrower and the
Subsidiary Guarantors have entered into various of the Security
Instruments to secure their respective obligations and liabilities
with respect to the Loans and the Loan Documents;
WHEREAS , the Borrower and the Parent have advised the
Administrative Agent and the Lenders that it desires to amend
certain provisions of the Credit Agreement, and the Administrative
Agent and the Lenders signatory hereto are willing to effect such
amendment on the terms and conditions contained in this
Amendment;
NOW, THEREFORE , in consideration of the premises and
further valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
1.
Amendments to Credit Agreement . Subject to
the terms and conditions set forth herein, the Credit
Agreement is hereby amended as follows:
|
|
(a)
|
The
existing definition of “ Applicable Rate ” in
Section 1.02 is deleted in its entirety and the following is
inserted in lieu thereof:
|
“ ‘
Applicable Rate ’ means, from time to time, the
following percentages per annum, based upon the Consolidated
Leverage Ratio as set forth below:
Applicable Rate
|
Pricing
Level
|
Consolidated
Leverage Ratio
|
Commitment
Fee
|
Eurodollar
Rate Loans
––––––––––
Letter
of Credit
Fee
|
Base
Rate
Loans
|
|
1
|
Less
than 2.00x
|
0.175%
|
0.875%
|
0.000%
|
|
2
|
Greater
than or equal to 2.00x but less than 2.50x
|
0.225%
|
1.125%
|
0.000%
|
|
3
|
Greater
than or equal to 2.50x but less than 3.00x
|
0.300%
|
1.500%
|
0.250%
|
|
4
|
Greater
than or equal to 3.00x but less than 3.50x
|
0.375%
|
1.875%
|
0.625%
|
|
5
|
Greater
than or equal to 3.50x
|
0.500%
|
2.250%
|
1.000%
|
“Initially
on the First Amendment Effective Date, the Applicable Rate
shall be pricing level 4. Thereafter, any change in
the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall be determined based upon the
computation of the Consolidated Leverage Ratio set forth in
the Compliance Certificate furnished to the Administrative
Agent pursuant to Section 6.01(a)(ii) and
Section 6.01(b)(ii) , subject to review and
approval of such computations by the Administrative Agent, and
shall be effective commencing on the fifth Business Day
following the date such Compliance Certificate is received
until the fifth Business Day following the date on which a new
Compliance Certificate is delivered or is required to be
delivered, whichever shall first
occur. Notwithstanding the provisions of the two
preceding sentences, if the Borrower shall fail to deliver any
such Compliance Certificate within the time period required by
Section 6.01 , then the Applicable Rate shall be
pricing level 5 from the date such Compliance Certificate was
due until the fifth Business Day following the date the
appropriate Compliance Certificate is so
delivered. In the event the Consolidated Leverage
Ratio in any Compliance Certificate is later determined to
have been inaccurate, the Applicable Rate shall be adjusted
retroactively to the date of delivery of such inaccurate
Compliance Certificate to the percentage corresponding to the
correct Consolidated Leverage Ratio for that date, and such
adjusted Applicable Rate shall be applicable for the same
period as that period during which the Applicable Rate was
incorrectly determined based on the original inaccurate
Consolidated Leverage Ratio.”
|
|
(b)
|
The
existing definition of “Borrowing Base” in Section 1.02
is amended by deleting the phrase “fiscal quarter” from
the first line and inserting “monthly” in lieu
thereof.
|
|
|
(c)
|
The
existing definition of “Consolidated Fixed Charge Coverage
Ratio” in Section 1.02 is amended by deleting the phrase
“twenty-five percent (25%)” from the fifth line and
inserting “twenty percent (20%)” in lieu
thereof.
|
|
|
(d)
|
The
existing definition of “Security Instrument” in Section
1.02 is deleted in its entirety and the following is inserted in
lieu thereof:
|
“ ‘
Security Instruments ’ means, collectively, the
Pledge Agreements, the Security Agreement (and any Security
Joinder Agreement) and all other agreements (including control
agreements), instruments and other documents, whether now
existing or hereafter in effect, pursuant to which the
Borrower, the Parent or any Subsidiary of the Parent or of the
Borrower or other Person shall grant or convey to the
Administrative Agent for the benefit of the Credit Secured
Parties a Lien in, or any other Person shall acknowledge any
such Lien in, property as security for all or any portion of
the Obligations or any other obligation under any Loan
Document.”
|
|
(e)
|
The
following definitions are added to Section 1.02 in the
appropriate alphabetical locations therein:
|
“ ‘
Certificate-of-Title Collateral ’ means all
equipment and other collateral, if any, subject to the
certificate-of-title statutes or regulations of any state to
the extent that such statute or regulations provide for a
security interest to be included on the certificates as a
condition or result of perfection.
“ ‘
First Amendment Effective Date ’ means August 28,
2007.
“ ‘
Net Cash Proceeds ’ means with respect to any
arrangement or arrangements permitted by Section 7.13 ,
the excess of (i) proceeds from such arrangement or
arrangements over (ii) the sum of (A) all
out-of-pocket expenses incurred by the Borrower in connection
with any such arrangement or arrangements, and (B) all
taxes required to be paid or accrued as a consequence of such
arrangement or arrangements.
“ ‘
Sale Collateral ’ means (i) the equipment,
trailers and vehicles set forth on Schedule 1.02A ,
which currently constitute ‘assets held for sale’
on the balance sheet of the Borrower, and (ii) the
equipment, trailers and vehicles set forth on Schedule
1.02B , which are intended to be removed from service and
designated as ‘assets held for sale’ on the
balance sheet of the Borrower within ninety (90) days of the
First Amendment Effective Date in an amount not to exceed
$7,000,000.
“ ‘
Security Agreement ’ means that certain Security
Agreement dated as of the First Amendment Effective Date made
by the Parent, the Borrower, and each other Loan Party in
favor of the Collateral Agent for the benefit of the Credit
Secured Parties, substantially in the form of Exhibit J
attached hereto, as supplemented from time to by
the
execution and delivery of Security Joinder Agreements pursuant
to Section 6.20 or otherwise.
“ ‘
Security Joinder Agreement ’ means each Security
Joinder Agreement, substantially in the form thereof attached
to the Security Agreement, executed and delivered by the
Parent, the Borrower and any other Loan Party, as applicable,
to the Collateral Agent pursuant to Section 6.20 or
otherwise.”
|
|
(f)
|
The
following Section 2.05(d) is inserted after Section
2.05(c) :
|
“(d) At
any time the Borrower enters into any arrangement or
arrangements permitted by Section 7.13 after the First
Amendment Effective Date, the Borrower shall make a prepayment
of the Outstanding Amount of the Revolving Loans in an amount
equal to one hundred percent (100%) of Net Cash Proceeds from
each such arrangement or arrangements. Each such
prepayment will be made within ten (10) Business Days of
receipt of such Net Cash Proceeds and upon not less than five
(5) Business Days’ prior written notice to the
Administrative Agent, which notice shall include a certificate
of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the
Net Cash Proceeds of such arrangement or
arrangements. Each such prepayment shall be
applied to the Revolving Loans of the Lenders in
accordance with their respective Applicable Percentage and
shall automatically reduce the Aggregate Commitment of each
Lender according to it Applicable
Percentage.”
|
|
(g)
|
Section 4A.01 is deleted in its entirety and the following is
inserted in lieu thereof:
|
“
4A.01
Security. As security for the
full and timely payment and performance of all Obligations,
the Borrower shall, and shall cause all other Loan Parties to,
on or before the Closing Date (and in the case of any security
interest granted pursuant to the Security Agreement, subject
to Section 6.22 , on or before the First Amendment
Effective Date), do or cause to be done all things necessary
in the opinion of the Administrative Agent and its counsel to
grant to the Collateral Agent for the benefit of the Credit
Secured Parties a duly perfected first priority security
interest in all Collateral subject to no prior Lien or other
encumbrance or restriction on transfer (other than
restrictions on transfer imposed by applicable securities
laws).”
|
|
(h)
|
Section 4A.04 is deleted in its entirety and the following is
inserted in lieu thereof:
|
“
4A.04
Information Regarding
Collateral . The Borrower represents,
warrants and covenants that (i) the chief executive office of
the Borrower and each other Loan Party (each, a “
Grantor ”) at the First Amendment Effective Date
is located at the address or addresses specified on
Schedule 4A.04 , and (ii) Schedule 4A.04
contains a true and complete list of (a) the exact legal name,
jurisdiction of formation, and address of each Grantor, (b)
the exact legal name, jurisdiction of formation, and each
location of the chief executive office of each Grantor at any
time since December 1, 1999, and (c) each trade name,
trademark or other trade style used by any Grantor since
August 1, 2002 and the purposes for which it was
used. Borrower shall not change, and shall not
permit any
other
Grantor to change, its name, jurisdiction of formation (whether by
reincorporation, merger or otherwise), the location of its chief
executive office, or use or permit any other Grantor to use, any
additional trade name, trademark or other trade style, except upon
giving not less than thirty (30) days’ prior written notice
to the Administrative Agent and the Collateral Agent and taking or
causing to be taken all such action at Borrower’s or such
other Grantor’s expense as may be reasonably requested by the
Administrative Agent or the Collateral Agent to perfect or maintain
the perfection of the Lien of the Collateral Agent in
Collateral.”
(i)
Section 6.01(e) is deleted in its entirety and the
following is inserted in lieu thereof:
“(e) as
soon as practical and in any event within fifteen (15) days
after the end of each month, the Borrower shall deliver to the
Administrative Agent and each Lender a Borrowing Base
Certificate in the form of Exhibit I
;”
(j)
Section 6.20 is deleted in its entirety and the
following is inserted in lieu thereof:
“6.20
New Subsidiaries . Simultaneously with
the acquisition or creation of any Subsidiary of the Borrower or
the Parent, the Borrower and the Parent shall cause to be delivered
to the Administrative Agent and the Collateral Agent (or to either
of them as may be specified) each of the following:
“(a) to
the Administrative Agent, if such Subsidiary is a Domestic
Subsidiary, a Subsidiary Guaranty Joinder Agreement executed
by such Subsidiary;
“(b) to
the Administrative Agent, a Security Joinder Agreement
executed by such Subsidiary;
“(c) if
the Subsidiary Securities issued by such Subsidiary that are,
or are required to become, Pledged Interests, shall be owned
by the Borrower or by a Subsidiary of the Parent or the
Borrower who has not then executed and delivered to the
Collateral Agent a Pledge Agreement granting a Lien to the
Collateral Agent, for the ratable benefit of the Credit
Secured Parties, in such equity interests, a Pledge Joinder
Agreement or a Pledge Agreement, as applicable, executed by
the Borrower or by the Subsidiary that directly owns such
Subsidiary Securities, with appropriate conforming changes
(or, as to the Pledged Interests issued by any Direct Foreign
Subsidiary of the Borrower or the Parent, in a form acceptable
to the Administrative Agent and the Collateral Agent), and if
such Subsidiary Securities shall be owned by the Parent or a
Subsidiary of the Parent who has previously executed a Pledge
Agreement or Pledge Joinder Agreement, a Pledge Agreement
Supplement in the form required by such Pledge Agreement
pertaining to such Subsidiary Securities;
“(d) to
the Collateral Agent, if the Pledged Interests issued by such
Subsidiary constitute securities under Article 8 of the
Uniform Commercial Code (i) the certificates representing 100%
of such Subsidiary Securities and (ii) duly executed, undated
stock powers or other appropriate powers of assignment in
blank affixed thereto;
“(e) (i)
Uniform Commercial Code financing statements on form UCC-1 or
otherwise duly executed by the pledgor as ‘Debtor’
and naming the Collateral Agent, for the benefit of the Credit
Secured Parties, as ‘Secured Party,’ in form,
substance and number sufficient in the reasonable opinion of
the Administrative Agent and the Collateral Agent and its
special counsel to be filed in all Uniform Commercial Code
filing offices and in all jurisdictions in which filing is
necessary or advisable to perfect in favor of the Collateral
Agent, for the benefit of the Credit Secured Parties, the Lien
on such Subsidiary Securities; (ii) if the Pledged Interests
issued by such Subsidiary do not constitute securities and
such Subsidiary has not elected to have such interests treated
as securities under Article 8 of the applicable Uniform
Commercial Code, a control agreement sufficient to confer
control (within the meaning of Section 9-106 of the Uniform
Commercial Code), and otherwise in form and substance
acceptable to the Collateral Agent; and (iii) such other
Uniform Commercial Code financing statements, control
agreements, or other documents as are required to perfect, or
to confer first priority status upon, the security interest of
the Secured Parties in any Collateral, including without
limitation, with respect to Certificate-of-Title Collateral,
certificates of title by the registrar of motor vehicles or
other appropriate authority in the applicable jurisdiction
(including any notation or other indication of the security
interest), as requested by the Collateral Agent;
“(f) an
opinion of counsel to such Subsidiary dated as of the date of
delivery of the Subsidiary Guaranty and other Loan Documents
provided for in this Section 6.20 and addressed to the
Administrative Agent, the Collateral Agent and the Lenders, in
form and substance reasonably acceptable to the Administrative
Agent and the Collateral Agent (which opinion may include
assumptions and qualifications of similar effect to those
contained in the opinions of counsel delivered pursuant to
Section 4.01(a) ); and
“(g) current
copies of the Organizational Documents of such Subsidiary,
minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors, partners,
or appropriate committees thereof (and, if required by such
Organizational Documents or applicable law, of the
shareholders, members or partners) of such Subsidiary
authorizing the actions and the execution and delivery of
documents described in this Section 6.20
.”
|
|
(k)
|
The
following Section 6.22 is inserted after Section 6.21
:
|
“
6.22
Post-Amendment Action
. Within ninety (90) days (or such longer period as
the Administrative Agent and the Collateral Agent shall agree)
following the First Amendment Effective Date, the Borrower
shall complete all other actions, recordings and filings
(including the making of any notation or other indication of
security interest on any certificate of title by the registrar
of motor vehicles or other appropriate authority in the
applicable jurisdiction)
|
