Quarterly Report — Form 10-Q Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 10-Q Form 10-Q (First Quarter Fiscal Year 2009) HTML 416K
2: EX-10.1 Exhibit 10.1 (Amendment No. 1 to Third Amended and HTML 77K Restated Credit Agreement)
3: EX-10.2 Exhibit 10.2 (Description of 2009 Voluntary HTML 13K
Incentive Opportunity)
4: EX-10.3 Exhibit 10.3 (Description of 2009 Named Executive HTML 25K
Officer Bonus Program)
5: EX-31.1 Exhibit 31.1 (Section 302 Certification - David R. HTML 14K
Parker)
6: EX-31.2 Exhibit 31.2 (Section 302 Certification - Richard HTML 14K
B. Cribbs)
7: EX-32.1 Exhibit 32.1 (Section 906 Certification - David R. HTML 10K
Parker)
8: EX-32.2 Exhibit 32.2 (Section 906 Certification - Richard HTML 10K
B. Cribbs)
EX-10.1 — Exhibit 10.1 (Amendment No. 1 to Third Amended and Restated Credit Agreement)
AMENDMENT
NO. 1 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This
AMENDMENT NO. 1 TO THIRD
AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) dated as
of March 27, 2009, is entered into by and among COVENANT TRANSPORT, INC., a
Tennessee corporation (“CTI”), CTG LEASING COMPANY, a Nevada
corporation (“CTGL”), SOUTHERN REFRIGERATED TRANSPORT,
INC., an Arkansas corporation (“SRT”), COVENANT ASSET MANAGEMENT,
INC., a
Nevada corporation (“CAM”), COVENANT TRANSPORT SOLUTIONS,
INC., a Nevada corporation (“CTS”), and STAR TRANSPORTATION, INC., a
Tennessee corporation (“ST”, and together
with CTI, CTGL, SRT, CAM, and CTS, each individually a “Borrower” and
collectively, “Borrowers”), COVENANT TRANSPORTATION GROUP,
INC., a Nevada corporation and the owner (directly or indirectly) of all
of the issued and outstanding capital stock of Borrowers (“Parent” and together
with Borrowers, “Obligors”), the
financial institutions party to the Credit Agreement from time to time as
lenders (collectively, “Lenders”), and BANK OF AMERICA, N.A., a
national banking association, as agent for Lenders (in such capacity, “Agent”). Capitalized
terms used herein and not otherwise defined shall have the meaning assigned such
terms in the Credit Agreement.
R E C I T A L
S:
WHEREAS, the Obligors, the
Lenders and the Agent have entered into that certain Third Amended and Restated
Credit Agreement dated as of September 23, 2008 (as amended and restated through
the date hereof, the “Credit
Agreement”);
WHEREAS, the Parent has
executed that certain Third Amended and Restated Parent Guaranty Agreement dated
as of September 23, 2008 (as amended to the date hereof, the “Parent Guaranty”);
and
WHEREAS, the Obligors, the
Lenders and the Agent desire that the Credit Agreement be amended in certain
respects in accordance with the terms of this Amendment.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
Credit Agreement is hereby amended and the parties hereto covenant and agree as
follows:
1. Recitals. The
foregoing Recitals are accurate and are incorporated herein and made a part
hereof for all purposes.
2. Amendments to Credit
Agreement. Subject to the terms and conditions set forth
herein, the Credit Agreement is hereby amended as
follows:
(a) Amendment of Certain
Definitions Appearing in Section 1.1 of the Credit Agreement. Effective
as of the Amendment Effective Date, the following definitions appearing in
Section 1.1 of the Credit Agreement are hereby amended and restated in their
entirety as follows:
“Applicable Margin:
with respect to any Type of Loan, the margins set forth below, as determined by
the Average Pricing Availability for the most recently ended Fiscal
Quarter:
Level
Average
Pricing Availability
Base
Rate Loans
LIBOR
Loans
I
>$70,000,000
2.50%
3.50%
II
≤$70,000,000
but >$40,000,000
2.75%
3.75%
III
≤$40,000,000
but >20,000,000
3.00%
4.00%
IV
≤$20,000,000
3.25%
4.25%
Through
and including September 30, 2009, margins shall be determined as if Level III
were applicable. Commencing on October 1, 2009, and continuing on the
first day of each Fiscal Quarter thereafter, the margins shall be subject to
increase or decrease based upon the Agent’s determination of Average Pricing
Availability for the most recently ended Fiscal Quarter, with any such change to
be effective on the first day of the Fiscal Quarter. Notwithstanding
the foregoing, if, by the first day of a month, any financial statements and
Compliance Certificate due in the preceding month have not been received, then
the margins shall be determined as if Level IV were applicable, from such day
until the first day of the calendar month following actual
receipt.”
“Base Rate: for any
day, a fluctuating rate per annum equal to the highest of (a) the Prime Rate for
such day; (b) the Federal Funds Rate for such day, plus one half of one percent
(0.50%); or (c) LIBOR for a 30 day Interest Period as determined on such day,
plus one percent (1.0%). For purposes of clause (c) above,
LIBOR shall be determined daily and any change in the Base Rate shall take
effect on the day of any change in LIBOR.”
“Fixed Charge Coverage
Ratio: the ratio, determined on a consolidated basis for Parent and its
Subsidiaries for the specified period immediately preceding the date of
determination, of (a) (i) for any period between March 1, 2009 and December 31,2009, EBITDAR minus Capital
Expenditures other than Financed Capital Expenditures, plus the sum of
$3,000,000, or (ii) for any other period, EBITDAR minus Capital
Expenditures other than Financed Capital Expenditures, to (b) Fixed Charges for
such period.”
“LIBOR: for any
Interest Period with respect to a LIBOR Loan, the greater of (a) one and
one-half percent (1.50%) and (b) the per annum rate of interest (rounded upward,
if necessary, to the nearest 1/8th of 1%),
determined by Agent at approximately 11:00 a.m. (London time) two Business Days
prior to commencement of such Interest Period, for a term comparable to such
Interest Period, equal to: (a) the British Bankers Association LIBOR Rate
(“BBA LIBOR”),
as published by Reuters (or other commercially available source designated by
Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate
at which Dollar deposits in the approximate amount of the LIBOR Loan would be
offered by Bank of America’s London branch to major banks in the London
interbank Eurodollar market. If the Board of Governors imposes a
Reserve Percentage with respect to LIBOR deposits, then LIBOR shall be the
foregoing rate, divided by 1 minus the Reserve Percentage.”
“Unused Line
Fee: a fee equal to (a)(i) 0.50% per annum at any time Average
Pricing Availability is less than $42,500,000, or (ii) 0.75% per annum at any
time Average Pricing Availability is greater than or equal to $42,500,000, times
(b) the average daily amount by which the Revolver Commitments exceed the
outstanding principal amount of all Revolver Loans and aggregate undrawn amount
of all outstanding Letters of Credit during any month (or such shorter period if
calculated for the first month following the Amendment Effective Date or on the
Commitment Termination Date).”
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(b) Addition of Certain
Definitions to Section 1.1 of the Credit Agreement. Effective as of the
Amendment Effective Date, the following definitions are hereby added to Section
1.1 of the Credit Agreement in proper alphabetical order as
follows:
“Federal Funds Rate:
for any day, the rate per annum equal to (a) the weighted average of interest
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on the applicable Business Day
(or on the preceding Business Day, if the applicable day is not a Business Day),
as published by the Federal Reserve Bank of New York on the next Business Day;
or (b) if no such rate is published on the next Business Day, the average rate
(rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America
on the applicable day on such transactions, as determined by
Agent.”
“Prime Rate: the rate
of interest announced by Bank of America from time to time as its prime
rate. Such rate is set by Bank of America on the basis of various
factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.”
(c) Change in Field Exam
Frequency. Effective as of the Amendment Effective Date, the reference to
“three field examinations” in clause (i) in Section 10.1.1(b) is hereby deleted
and “four field examinations” inserted in place thereof and in substitution
therefor.
(d) Amendment of Fixed Charge
Coverage Ratio Covenant. Effective as of January 1, 2009, Section 10.3 of
the Credit Agreement is hereby amended and restated in its entirety as
follows:
10.3 Fixed
Charge Coverage Ratio. At all times during the term hereof,
maintain a Fixed Charge Coverage Ratio as of the last day of each of the
following periods of at least the ratio set forth below:
3. Name
Change. Effective as of the Amendment Effective Date, the
Agent and Lenders consent to the change of the name of Covenant Transport
Solutions, Inc. to “Integrated Transportation Solutions,
Inc.” Borrowers shall provide to Agent a certified copy of the
Articles of Amendment filed with the Nevada Secretary of State effecting such
change within ten (10) days of filing same. From and after the date
of filing of such Articles of Amendment, any reference in any of the Loan
Documents to Covenant Transport Solutions, Inc. shall thereafter be deemed to be
a reference to Integrated Transportation Solutions, Inc.
4. Effectiveness; Conditions
Precedent. The amendments herein provided shall be effective
upon the satisfaction of the following conditions precedent (the “Amendment Effective
Date”):
(a) The Agent
shall have received each of the following documents or instruments in form and
substance acceptable to the Agent:
(i) one
or more counterparts of this Amendment, duly executed by each of the Borrowers,
the Parent and the Required Lenders; and
(ii) such
other documents, instruments, opinions, certifications, undertakings, further
assurances and other matters as the Agent shall reasonably request.
(b) All fees and
expenses payable to the Agent and the Lenders (including (x) an amendment fee to
each Lender that executes and returns this Amendment to the Agent by 3:00 pm EDT
on March 27, 2009, shall have
been paid to the Agent, for the account of each such Lender, equal to 37.5 basis
points multiplied
by each such Lender’s Commitment on the date of this Amendment, and (y)
all reasonable fees and expenses of counsel to the Agent (estimated to date)
shall have been paid in full (without prejudice to final settling of accounts
for such fees and expenses).
5. Acknowledgment of the
Obligors. The Borrowers and Parent, as Obligors, hereby acknowledge and
agree that, to the best of their knowledge: (a) none of the Obligors has any
defense, offset, or counterclaim with respect to the payment of any sum
owed to the Lenders or the Agent under the Loan Documents, or with respect to
the performance or observance of any warranty or covenant contained in the
Credit Agreement or any of the other Loan Documents; and (b) the Lenders and the
Agent have performed all obligations and duties owed to the Obligors through the
date of this Amendment.
6. Consent and Reaffirmation of
Parent Guaranty. Parent hereby consents, acknowledges and agrees to the
amendments and consent set forth herein and hereby confirms and ratifies in all
respects the Parent Guaranty to which Parent is a party (including without
limitation the continuation of Parent’s payment and performance obligations
thereunder upon and after the effectiveness of this Amendment and the amendments
contemplated hereby) and the enforceability of the Parent Guaranty against
the Parent in accordance with its terms.
7. Representations and
Warranties of the Obligors. The Borrowers and Parent, as Obligors,
represent and warrant to the Lenders and the Agent that:
(a) Compliance with Loan
Agreement. On the date hereof, and after giving effect to this Amendment,
no Default or Event of Default has occurred and is continuing;
(b) Representations and
Warranties. On the date hereof, and after giving effect to this
Amendment, the representations and warranties of each Obligor in the Loan
Documents are true and correct in all material respects (except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects
as of such earlier date);
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(c) Power and Authority.
Each Obligor is duly authorized to execute, deliver and perform this Amendment.
The execution, delivery and performance of this Amendment and the Credit
Agreement, as amended hereby, have been duly authorized by all necessary action,
and do not (a) require any consent or approval of the Agent, other than those
already obtained; (b) contravene the Organic Documents of any Obligor; (c)
violate or cause a default under any Applicable Law, Material Contract or
Material License; or (d) result in or require the imposition of any Lien (other
than Permitted Liens) on any Property of any Obligor; and
(d) Enforceability. This
Amendment and the Credit Agreement, as amended hereby, are legal, valid and
binding obligations of each Obligor, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally.
8. Effect on Credit
Agreement. Except as specifically amended hereby, the terms and
provisions of the Credit Agreement and the other Loan Documents are, in all
other respects, ratified and confirmed and remain in full force and effect.
Except as expressly set forth herein, the amendments provided herein shall not
by implication or otherwise limit, constitute a waiver of, or otherwise affect
the rights and remedies of the Lenders or the Agent under the Credit Agreement
or any other Loan Document, nor shall they constitute a waiver of any Event of
Default, nor shall they alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document. Each of the amendments provided
herein shall apply and be effective only with respect to the provisions of the
Credit Agreement specifically referred to by such amendments. No
reference to this Amendment need be made in any notice, writing, or other
communication relating to the Credit Agreement and the other Loan Documents, any
such reference to the Credit Agreement and the other Loan Documents to be deemed
a reference thereto as respectively amended by this Amendment. All references to
the Credit Agreement and the other Loan Documents in any document, instrument,
or agreement executed in connection with the Credit Agreement and the other Loan
Documents will be deemed to refer to the Credit Agreement and the other Loan
Documents as respectively amended hereby.
9. Fees and Expenses.
The Company hereby agrees to pay all reasonable out-of-pocket expenses incurred
by the Agent in connection with the preparation, negotiation, and consummation
of this Amendment, and all other documents related hereto.
10. Instrument Pursuant to
Credit Agreement. This Amendment is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
11. Further
Acts. Each of the parties to this Amendment agrees that at any
time and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things
as such other party may reasonably request in order to effect the purposes of
this Amendment.
12. Successors. This
Amendment shall be binding upon and inure to the benefit of Obligors, Agent,
Lenders, and their respective successors and permitted assigns, except that (a)
no Obligor shall have the right to assign its rights or delegate its obligations
under this Amendment or any Loan Documents; and (b) any assignment by a Lender
must be made in compliance with Section 13.3 of the Credit
Agreement.
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13. Governing Law. THIS
AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS
RELATING TO NATIONAL BANKS).
14. Consent to Forum;
Arbitration. EACH OBLIGOR, HEREBY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER
THE STATE OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO THIS
AMENDMENT, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN
ANY SUCH COURT. EACH OBLIGOR, IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND
DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER
JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
14.3.1 OF THE CREDIT AGREEMENT. Nothing herein shall limit the right
of Agent or any Lender to bring proceedings against any Obligor in any other
court, nor limit the right of any party to serve process in any other manner
permitted by Applicable Law. Nothing in this Amendment shall be deemed to
preclude enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction. Notwithstanding the foregoing, Section 14.14 of the Credit
Agreement is incorporated herein by reference and shall apply to this Amendment.
15. Counterparts. This
Amendment may be executed in counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of a signature page of any Loan Document by telecopy or
electronic mail shall be as effective as delivery of a manually executed
counterpart of such agreement.
16. Severability.
Wherever possible, each provision of this Amendment shall be interpreted in such
manner as to be valid under Applicable Law. If any provision is found to be
invalid under Applicable Law, it shall be ineffective only to the extent of such
invalidity and the remaining provisions of this Amendment shall remain in full
force and effect.
17. Entire Agreement.
This Amendment, together with all the Loan Documents (collectively, the “Relevant Documents”),
sets forth the entire understanding and agreement of the parties hereto in
relation to the subject matter hereof and supersedes any prior negotiations and
agreements among the parties relating to such subject matter. No
promise, condition, representation or warranty, express or implied, not set
forth in the Relevant Documents shall bind any party hereto, and no such party
has relied on any such promise, condition, representation or
warranty. Each of the parties hereto acknowledges that, except as
otherwise expressly stated in the Relevant Documents, no representations,
warranties or commitments, express or implied, have been made by any party to
the other in relation to the subject matter hereof or thereof. None
of the terms or conditions of this Amendment may be changed, modified, waived or
canceled orally or otherwise, except in writing and in accordance with Section 14.1 of the Credit
Agreement.
[Remainder
of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this
Amendment has been executed and delivered as of the date set forth
above.